Case # 11

Austria v. NLRC
G.R. No. 124382, August 16, 1999

KTA: Relationship of the church as an employer and the minister as an employee is purely secular in nature
because it has no relation with the practice of faith, worship or doctrines of the church, such affairs are
governed by labor laws. The Labor Code applies to all establishments, whether religious or not.

Facts:

The Seventh Day Adventists(SDA) is a religious corporation under Philippine law. The petitioner was a pastor
of the SDA for 28 years from 1963 until 1991, when his services were terminated.

On various occasions from August to October 1991, Austria received several communications form Ibesate,
the treasurer of the Negros Mission, asking him to admit accountability and responsibility for the church tithes
and offerings collected by his wife, Thelma Austria, in his district and to remit the same to the Negros Mission.

The petitioner answered saying that he should not be made accountable since it was Pastor Buhat and Ibesate
who authorized his wife to collect the tithes and offerings since he was very ill to be able to do the collecting.

A fact-finding committee was created to investigate. The petitioner received a letter of dismissal citing:
1) Misappropriation of denominational funds;
2) Willful breach of trust;
3) Serious misconduct;
4) Gross and habitual neglect of duties; and
5) Commission of an offense against the person of employer's duly authorized representative as grounds for
the termination of his services.

Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, and sued the SDA for reinstatement
and backwages plus damages. Decision was rendered in favor of petitioner.

SDA appealed to the NLRC. Decision was rendered in favor of respondent.

Issue:

1. Whether or not the termination of the services of the petitioner is an ecclesiastical affair, and, as such,
involves the separation of church and state.

2. Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner
against the SDA.

Held/Ratio:

1. No. The matter at hand relates to the church and its religious ministers but what is involved here is
the relationship of the church as an employer and the minister as an employee, which is purely secular because
it has no relationship with the practice of faith, worship or doctrines. The grounds invoked for petitioners
dismissal are all based on Art. 282 of Labor Code.

2. Yes. SDA was exercising its management prerogative (not religious prerogative) to fire an employee which
it believes is unfit for the job. It would have been a different case if Austria was expelled or excommunicated
from the SDA.