WPP Marketing Communications, Inc., Et Al. vs. Jocelyn M. Galera

WPP Marketing Communications, Inc., et al. vs. Jocelyn M. Galera GR No. 169207; March 25, 2010 Jocelyn M. Galera vs. WPP Marketing Communications, Inc., et al. GR No. 169239; March 25, 2010 Facts: Petitioner Jocelyn M. Galera is an American citizen, who was hired by respondent John Steedman, Chairman of WPP Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in Hong Kong, China, to work in the Philippines for private respondent WPP Marketing Communications, Inc. (WPP), a corporation registered and operating under the laws of Philippines. Under the employment contract, Galera would commence employment on September 1, 1999, with the position of Managing Director of Mindshare Philippines. Thus, without obtaining an alien employment permit, Galera commenced her employment with WPP Philippines on the said date. It was only after four months from the time she commenced employment that private respondent WPP filed before the Bureau of Immigration an application for petitioner Galera to receive a working visa. In the application, she was designated as Vice-President of WPP. Petitioner alleged that she was constrained to sign the application in order that she could remain in the Philippines and retain her employment. On December 14, 2000, private respondent Galera was verbally informed by Steedman that her employment had been terminated. She received her termination letter the following day. Her termination prompted Galera to commence a complaint for illegal dismissal before the labor arbiter. The labor arbiter found WPP, Steedman, Webster, and Lansang liable for illegal dismissal and damages. Furthermore the labor arbiter stated that Galera was not only illegally dismissed but was also not accorded due process, saying that Galera was not given an opportunity by WPP to defend herself and explain her side. Thus, WPP did not observe both substantive and procedural due process in terminating Galera’s employment. The labor arbiter ordered WPP to reinstate Galera and to pay her backwages, transportation and housing benefits, and moral and exemplary damages, among others. On appeal, the NLRC reversed the labor arbiter’s ruling. The NLRC ruled that Galera was WPP’s Vice-President, and therefore, a corporate officer at the time she was removed by the Board of Directors on 14 December 2000. The NLRC ruled that the labor arbiter had no jurisdiction over the case because being a corporate officer, a case arising from her termination is considered as an intra-corporate dispute, which was cognizable by the Securities and Exchange Commission under P.D. 902-A (but now by the Regional Trial Courts designated as Commercial Courts by the Supreme Court pursuant to Section 5.2 of RA No.8799).

The Court of Appeals reversed the NLRC. It ruled that Galera’s appointment by the Board of Directors of the WPP as Vice President for Media had no legal effect as WPP’s by-laws provided for only one Vice-President, which at that time was occupied. Furthermore, WPP’s by-laws did not include a managing director as among its corporate officers. The Court of Appeals ordered WPP to pay Galera backwages and separation pay, as well as housing benefits, moral and exemplary damages, and attorney’s fees, among others. The case was subsequently elevated to the Supreme Court.

Issues: 1. Is Galera an employee or a corporate officer of WPP? 2.

Did the labor arbiter have jurisdiction over the case?

3.

Was Galera illegally dismissed?

4. Is Galera entitled to collect the award of backwages and damages even if she did not have an alien employment permit when she commenced her employment in the Philippines?

Ruling (First Issue): Galera is an employee of WPP. She is not a corporate officer of WPP. An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of WPP’s Board of Directors is an appointment to a nonexistent corporate office. WPP’s by-laws provided for only one Vice-President. At the time of Galera’s appointment on December 31, 1999, WPP already had one VicePresident in the person of Webster. Galera cannot be said to be a director of WPP also because all five directorship positions provided in the by-laws are already occupied. The appellate court further justified that Galera was an employee and not a corporate officer by subjecting WPP and Galera’s relationship to the four-fold test: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. The appellate court found that Sections 1 and 4 of the employment contract mandate where and how often she is to perform her work; Sections 3, 5, 6 and 7 show that wages she receives are completely controlled by WPP; and Sections 10 and 11 clearly state that she is subject to the regular disciplinary procedures of WPP.

(Second Issue): The Labor Arbiter had jurisdiction over the illegal dismissal complaint filed by Galera. Galera being an employee, the Labor Arbiter and the NLRC had jurisdiction over her illegal dismissal complaint. Article 217 of the Labor Code vests the Labor Arbiter with the jurisdiction to hear and decide, among others termination disputes, involving workers, whether agricultural or non-agricultural. (Third Issue): Yes, WPP’s dismissal of Galera lacked both substantive and procedural due process. WPP failed to prove any just or authorized cause for Galera’s dismissal. WPP was unable to substantiate the allegations of Steedman’s December 15, 2000 letter to Galera, (questioning her leadership and competence). Galera, on the other hand, presented documentary evidence in the form of congratulatory letters, including one from Steedman, which contents are diametrically opposed to the December 15, 2000 letter. Also, the law requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality. WPP’s acts clearly show that Galera’s dismissal did not comply with the two-notice rule.

(Fourth Issue): No, Galera could not claim the employees benefits she is entitled under Philippine Labor Laws. The law and the rules are consistent in stating that the employment permit must be acquired prior to employment. Article 40 of the Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides, among others, that if an alien enters the country under a non-working visa and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment permit. Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the violation of the Philippine labor laws requiring aliens to secure work permits before their employment. We hold that the status quo must prevail in the

present case and we leave the parties where they are. This ruling, however, does not bar Galera from seeking relief from other jurisdictions.