G.R. No. 80039 . April 18, 1989. ERNESTO M. APODACA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, JOSE M. MIRASOL and INTRANS PHILS., INC., respondents.
FACTS

Petitioner Ernesto M. Apodaca was employed by respondent Intrans Phils., Inc. On August 28, 1985, he was persuaded by respondent Jose M. Mirasol to subscribe to 1,500 corporate shares, totaling P150,000.00, making an initial payment of P37,500.00. He was later appointed President and General Manager but resigned on January 2, 1986. Subsequently, on December 19, 1986, Apodaca filed a complaint with the NLRC against the private respondents for payment of various monetary claims, including unpaid wages and allowances, amounting to P17,060.07.
In their position paper, private respondents admitted the monetary claim but sought to set it off against Apodaca’s unpaid balance for his stock subscription, which they claimed amounted to P95,439.93. Apodaca contested this set-off, arguing there was no formal call or notice for payment of the unpaid subscription, rendering the obligation unenforceable. The labor arbiter ruled in favor of Apodaca, ordering payment of the P17,060.07, citing Article 103 of the Labor Code which prohibits withholding earned wages. On appeal, the NLRC reversed the arbiter’s decision, upholding the set-off as valid.

ISSUE

The primary issues are: (1) Whether the NLRC has jurisdiction to resolve a claim concerning unpaid stock subscriptions; and (2) Assuming jurisdiction, whether such an obligation can be lawfully set off against an employee’s monetary claims from the employer.

RULING

The Supreme Court granted the petition, setting aside the NLRC decision. On jurisdiction, the Court held that the NLRC has no authority to adjudicate the intra-corporate dispute regarding unpaid stock subscriptions. Such matters fall within the exclusive original jurisdiction of the Securities and Exchange Commission under Presidential Decree No. 902-A. Consequently, the NLRC committed grave abuse of discretion by ruling on the validity of the set-off based on the subscription debt.
Assuming arguendo that the NLRC could take cognizance, the Court ruled the set-off was invalid on substantive grounds. First, an unpaid subscription becomes due only upon a formal call for payment by the corporation’s board of directors. No such resolution or notice to petitioner was presented; thus, the obligation was not yet due and demandable, making any deduction premature. Second, even if the debt were due, Article 113 of the Labor Code strictly enumerates the only instances where wage deductions are permissible: for insurance premiums with employee consent, for union dues under a check-off agreement, or as authorized by law or the Secretary of Labor. A debt arising from a stock subscription does not fall under any of these exceptions. Therefore, the employer’s unilateral set-off against earned wages and benefits was illegal. The Court ordered private respondents to pay Apodaca P17,060.07 with legal interest from the filing of the complaint.