Jurisdiction of the Labor Arbiter

CONTINENTAL MICRONESIA, INC. v. JOSEPH BASSO +

GR Nos. 178382-83, Sep 23, 2015

Facts: Petitioner Continental Micronesia, Inc. (CMI) was a foreign corporation

licensed to do business in the Philippines. Respondent Basso was a US citizen who
resided in the Philippines prior to his death.

In 1990, Basso was offered by petitioner the position of General Manager of its
Philippine branch. Basso accepted the offer and signed the employment contract.

In 1995, Basso received a letter form petitioner’s Vice President, informing him that
he has agreed to work in CMI as consultant on a need-basis effective February 1,
1996 – July 31, 1996. However, Basso will not receive any monetary compensation
but will continue being covered by the CMI insurance, among others.

In March 1996, Basso inquired from CMI his status of employment. CMI responded
that pursuant to the employment contract dated February 1, 1991, Basso could be
terminated at will upon a 30-day notice. He was also informed that his counter-
proposal was rejected and thus terminated from his employment effective January
31, 1996.

Basso filed a complaint for illegal dismissal. CMI moved to dismiss for lack of
jurisdiction over the person of CMI and the subject matter of the controversy.

The Labor Arbiter dismissed Basso’s complaint. He held that the terms and
provisions of the employment contract show that the parties did not intend to apply
the Labor Code of the Philippines. He held that the contract was executed in the US,
thus, US laws apply.

On appeal, the NLRC set aside the LA’s decision. It ruled that the LA acquired
jurisdiction over the case when CMI voluntarily