THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD. vs.

NLRC
FACTS:
Marcelo Santos was an overseas worker in Oman. In June 1988, he was recruited by Palace Hotel in Beijing,
China. Due to higher pay and benefits, Santos agreed to the hotels job offer and so he started working there in
November 1988. The employment contract between him and Palace Hotel was however without the intervention of
the Philippine Overseas Employment Administration (POEA) because he was only recommended to the latter by a
close friend. In August 1989, Santos was notified by Palace Hotel that he was going to be laid off because of
business reverses. In September of the same year, Santos was officially terminated from Palace Hotel.
Santos filed a complaint for illegal dismissal against Manila Hotel Corporation (MHC) and Manila Hotel International,
Ltd. (MHIL). The Palace Hotel and its officers were impleaded but no summons were served upon it because they
are situated in the Peoples Republic of China. MHC is a government owned and controlled corporation. It owns 50%
of MHIL, a foreign corporation (Hong Kong). MHIL manages the affairs of the Palace Hotel. The labor arbiter ruled in
favor of Santos. The National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter.
ISSUE:
Whether or not the NLRC has jurisdiction over the case
HELD:
No, the NLRC has no jurisdiction over the case.
Forum Non-Conveniens
The NLRC was a seriously inconvenient forum.
1.
The only link that the Philippines has in this case is the fact that Santos is a Filipino;
2.
However, the Palace Hotel and MHIL are foreign corporations MHC cannot be held liable because it
merely owns 50% of MHIL, it has no direct business in the affairs of the Palace Hotel. The veil of corporate
fiction cant be pierced because it was not shown that MHC is directly managing the affairs of MHIL. Hence,
they are separate entities.
3.
Santos contract with the Palace Hotel was not entered into in the Philippines;
4.
Santos contract was entered into without the intervention of the POEA (had POEA intervened, NLRC still
does not have jurisdiction because it will be the POEA which will hear the case);
5.
MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers are not residents
of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining to the case. It is not
competent to determine the facts because the acts complained of happened outside our jurisdiction. It cannot
determine which law is applicable. And in case a judgment is rendered, it cannot be enforced against the Palace
Hotel (in the first place, it was not served any summons).