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 Galeras
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 arbiters ruling. The NLRC ruled that Galera
was WPPs 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 Galeras appointment by the
Board of Directors of the WPP as Vice President for Media had no legal effect as
WPPs by-laws provided for only one Vice-President, which at that time was
occupied. Furthermore, WPPs 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 attorneys 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 WPPs by-laws resulted in a finding that Galeras appointment as a corporate
officer (Vice-President with the operational title of Managing Director of Mindshare)
during a special meeting of WPPs Board of Directors is an appointment to a nonexistent corporate office. WPPs by-laws provided for only one Vice-President. At the
time of Galeras 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 Galeras 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 employers 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, WPPs dismissal of Galera lacked both substantive and procedural due process.
WPP failed to prove any just or authorized cause for Galeras dismissal. WPP was
unable to substantiate the allegations of Steedmans 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 employers decision to dismiss him. Failure to comply
with the requirements taints the dismissal with illegality. WPPs acts clearly show
that Galeras 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 Galeras 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.