research memo

7/23/2019 Research Memo

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RESEARCH MEMORANDUM RE: WILLY CO

Facts:

1. Allied Banking Corporation (ABC) is a duly registered Banking Entity

in the Philippines engaged in the Business of Commercial Bankingtrust functions and other similar acti!ities as the Bangko "entral ngPilipinas (B"P) may declare appropriate. #he Bank $asincorporated on Aprill 11 1%&&.

'. r. illy Co (r. Co) is one of the incorporators and foundingmem*ers of ABC. r. Co had su*stantial o$nership in ABC ha!ing*een su*scri*ed to +,&-, common shares representing 1.1&/o$nership in the *ank.

+. r. Co $as also a mem*er of the Board of 0irectors and sat asice Chairman of the Board since August 12 '331. #he iceChairman of the Board is one of the offices created *y the By45a$sof ABC $ho performs the functions of the Chairman of the Board inthe latter6s a*sence and other duties and po$ers as may *eprescri*ed *y the Board.

. r. Co seeks to a!ail of the retirement *enefits pursuant to ABC6sretirement plan. 7o$e!er the 7uman 8esources 0i!ision intimatedto him that he is not entitled to the same.

9ssues:

1. 9s r. Co an employee or a corporate officer

'. Can r. Co a!ail of the retirement *enefits and pro!ided for in the8etirement Plan of ABC

+. hat are the remedies r. Co may pursue

Ans$ers and 0iscussion:

Willy Co is a Corporate Officer and Generally Not Covered by Labor Laws

;Corporate t of Presidential 0ecree %3'4A arethose officers of the corporation $ho are gi!en that character *y theCorporation Code or *y the corporation6s *y4la$s (Garcia v. Eastern

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Telecommunications Pil.! "nc.! et al.! G.#. Nos. $%&$$' $%&$)&*)+!,pril $)! -/0.

r. Co cannot *e considered a corporate officer for the reason thatan ;office= is created *y the charter of the corporation and the officer is

elected *y the directors or stockholders $hile an ;employee= usuallyoccupies no office and generally is employed not *y action of the directorsor stockholders *ut *y the managing officer of the corporation $ho alsodetermines the compensation to *e paid to such employee. (O1ol v.2limmers World "nternational! )3 2C#, /%0.

#here are stark differences $hich may distinguish an employee froma corporate officer. hi*it an employer4employee relationship the accepted ruleis that the elements or circumstances relating to the follo$ing matters shall*e e>amined and considered:

1. #he selection and engagement of the employees?'. #he payment of $ages?+. #he po$er of dismissal? and. #he po$er to control the employees6 conduct.

#he a*o!ementioned elements are clearly not present in this case. r.Co has su*

Willy Co is Neverteless Entitled to #etirement 8enefits! 9avin7 beenTreated as a 6ember of te Plan

hile r. Co cannot *e considered an employee of the corporationhe is ne!ertheless entitled to the retirement *enefits pro!ided for under

ABC6s retirement plan.

#he 8etirement Plan defines an employee as ;any full timeemployee holding a permanent and regular position@employment in the

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Company and e>cludes casual contractual emergency and su*stituteemployees.=

"ec. 1 of Article 9 of the 8etirement Plan pro!ides that;em*ership in the Plan shall *e automatic for all full time regular and

permanent employees of the Company.=

r. Co has *een ice Chairman of ABC since '331. As such he hasperformed !arious functions in such capacity $ith the Bank. As a matter offact the Position of the ice President of the Chairman of the Boardreuires the performance of certain duties similar to that of an employee:

"ection -. 9CE4C7A98A


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deed as against the other party and his pri!ies in this case the treatmentgi!en to r. Co as a mem*er of the 8etirement Plan (2pouses Cien vs.2ta. Lucia #ealty! G.#. No. $)-/! &$ ;anuary -%0 . ABC is thereforeestopped from denying r. Co6s status as an employee.

Le7al #emedies and 2teps Willy Co 6ay

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