G.R. No. 157376. October 2, 2007.
Corazon C. Sim, petitioner, vs. National Labor Relations Commission and Equitable PCI-Bank, respondents.

FACTS

Corazon Sim was employed by Equitable PCI-Bank, a Philippine corporation, and was assigned to its Frankfurt Representative Office, eventually promoted to Manager. In September 1999, she was dismissed by the bank’s European head due to alleged loss of trust and confidence from mismanagement and misappropriation of funds. Sim filed an illegal dismissal case before the Labor Arbiter. The bank contested jurisdiction, denying an employer-employee relationship and arguing Philippine labor laws had no extraterritorial application since Sim was hired and assigned abroad.
The Labor Arbiter dismissed the complaint primarily for lack of jurisdiction, ruling the Philippine labor relations system is limited to the territory of the Philippines. The Arbiter alternatively held that, assuming jurisdiction, the dismissal was valid due to loss of trust and confidence. The NLRC affirmed this decision. Sim did not file a motion for reconsideration with the NLRC but directly elevated the case to the Court of Appeals via a petition for certiorari under Rule 65.

ISSUE

The primary issue is whether the Court of Appeals correctly dismissed Sim’s petition for certiorari for failure to first file a motion for reconsideration with the NLRC. A secondary, substantive issue is whether the NLRC correctly declined jurisdiction over Sim’s illegal dismissal case based on the extraterritorial application of Philippine labor laws.

RULING

The Supreme Court denied the petition, upholding the CA’s dismissal. On procedural grounds, the Court ruled that a motion for reconsideration is an indispensable prerequisite to a Rule 65 petition for certiorari, as it affords the lower tribunal an opportunity to correct its own error. The exceptions to this rule are strict and enumerated. Sim’s mere assertion that filing such a motion would be “futile and useless” is insufficient; a petitioner cannot unilaterally dispense with the requirement without showing a concrete, compelling reason. As Sim failed to qualify under any exception, the CA correctly dismissed her petition.
On the substantive jurisdictional issue, the Court clarified, obiter dictum, that the Labor Arbiter and NLRC erred in declining jurisdiction. The ruling in Philippine National Bank v. Cabansag establishes that where the employer is a Philippine corporation, Philippine labor laws apply regardless of the place of execution of the contract or the employee’s place of assignment. This upholds the state’s policy to protect overseas Filipino workers. The employer-employee relationship remained governed by Philippine law, not Italian law. However, this pronouncement did not alter the dispositive ruling, as the procedural lapse alone was fatal to Sim’s petition. The factual findings on the validity of dismissal, being supported by evidence, were thus left undisturbed.