Manila Hotel v.

NLRC

Facts:
In May 1988, 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
hotel’s job offer and started working there in November 1988. The employment contract
between him and Palace Hotel was however, executed without the intervention of the Philippine
Overseas Employment Administration (POEA). In August 1989, Palace Hotel notified Santos that
he will be laid off due to business reverses. In September 1989, he was officially terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was impleaded
but no summons was served upon it. MHC is a government owned and controlled corporation. It
owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL manages the affair of the Palace
Hotel. The labor arbiter who handled the case ruled in favor of Santos. The National Labor
Relations Commission (NLRC) affirmed the labor arbiter.

Issue:
Whether or not the NLRC has jurisdiction over the case.

Held:
No. The NLRC is an inconvenient forum for the following reasons: First: The only link that
the Philippines has in this case is the fact that Santos is a Filipino; Second: The Palace Hotel and
MHIL are foreign corporations – Thus, 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 can’t
be pierced because it was not shown that MHC is directly managing the affairs of MHIL. Hence,
they are separate entities; Third: Santos’ contract with the Palace Hotel was not entered into in
the Philippines; Fourth; 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) and Fifth: 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).
The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
 (2) that the Philippine court is in a position to make an intelligent decision as to the law
and the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.

None of the above conditions are apparent in the case at bar.