April 1990 - Philippine Supreme Court Decisions/Resolutions
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G.R. No. 85840 April 26, 1990 - SERVANDO’S INCORPORATED v. SECRETARY OF LABOR AND EMPLOYMENT, ET AL.:
SECOND DIVISION
[G.R. No. 85840. April 26, 1990.]
SERVANDO’S INCORPORATED, Petitioner, v. THE SECRETARY OF LABOR AND EMPLOYMENT AND THE REGIONAL DIRECTOR, REGION VI, DEPARTMENT OF LABOR AND EMPLOYMENT, Respondents.
Torres, Valencia, Ciocon, Dabao, Valencia & De la Paz Law Offices for Petitioner.
SYLLABUS
1. LABOR LAW; REGIONAL DIRECTOR; POWER TO ADJUDICATE EMPLOYEES’ MONEY CLAIM; REQUISITES. — The power then of the Regional Director (under the present state of the law) to adjudicate employees’ money claims is subject to the concurrence of all the requisites provided under Sec. 2 of RA 6715, to wit: (1) the claim is presented by an employee or person employed in domestic or household service, or househelper; (2) the claim arises from employer-employee relations; (3) the claimant does not seek reinstatement; and (4) the aggregate money claim of each employee or househelper does not exceed P5,000.00.
2. ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR. — Going over the records of this case, we note that the aggregate claims of each of the fifty four (54) employees of herein petitioner are over and above the amount of P5,000.00. Under the circumstances, the power to adjudicate such claims belongs to the Labor Arbiter who has the exclusive jurisdiction over employees’ claims where the aggregate amount of the claim for each employee exceeds P5,000.00.
2. ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR. — Going over the records of this case, we note that the aggregate claims of each of the fifty four (54) employees of herein petitioner are over and above the amount of P5,000.00. Under the circumstances, the power to adjudicate such claims belongs to the Labor Arbiter who has the exclusive jurisdiction over employees’ claims where the aggregate amount of the claim for each employee exceeds P5,000.00.
D E C I S I O N
PADILLA, J.:
This is a petition for certiorari to set aside the 23 August 1988 order of the Secretary of Labor, 1 sustaining the Director of the Department of Labor and Employment, Region VI, in holding herein petitioner company liable to fifty four (54) of its employees in the aggregate amount of P964,952.50, representing their alleged wage differentials. The antecedent facts of the case are as follows:chanrob1es virtual 1aw library
On 28 April 1987, the Labor Standards and Welfare Office conducted a routine inspection of petitioner’s establishment. On that same date, petitioner was furnished copy of a Notice of Inspection Result and apprised of its violations of the labor standards/occupational health and safety measures, that were discovered in the course of the inspection, namely:jgc:chanrobles.com.ph
"LABOR STANDARDS LAWS:chanrob1es virtual 1aw library
1. Some of the employees are underpaid under Wage Order No. 4, covering the period from May 1, 1984 to June 15, 1984 averaging from P6.00 below for salary and P9.00 below for living allowance.
2. Some of the employees are underpaid under Wage Order No. 5, covering the period from June 16, 1984 to October 31, 1984 averaging from P7.00 below for salary and P3.00 for living allowance.
3. Some of the employees are underpaid under Wage Order No. 6 covering the period from November 1, 1984 to present averaging from P12.00 below for salary and P11.00 below for living allowance.
OCCUPATIONAL HEALTH AND SAFETY:chanrob1es virtual 1aw library
1. There were some obstacles in the passageway of the bodega as the waste materials are being scattered in the aisle.
2. The fire extinguisher is not being displayed inside the bodega." 2
On 22 May 1987, the Regional Office issued a subpoena duces tecum requiring petitioner to submit its payrolls and daily time records, with a warning that failure to comply with the same will be deemed a waiver of its right to present evidence. Petitioner ignored said warning.chanrobles virtual lawlibrary
On 17 June 1987, the Labor Standards and Welfare Officer submitted his report to the Regional Director, recommending the issuance of an order to require petitioner to pay fifty four (54) of its employees the amount of P964,952.50, based on the computation made by the Labor Standards and Welfare Office, representing the deficiencies in wages and allowances of said employees. 3
Adopting the recommendation made by the Labor Standards and Welfare Office, the Regional Director issued the 2 July 1987 Order, 4 requiring petitioner to pay its employees the total amount of P964.952.50 as differentials, summarized as follows:jgc:chanrobles.com.ph
"1. Noel Cadiao P 36,208.49
2. Tranquilino Villaruel 18,132.64
3. Edwin Cabaluna 27,269.99
4. Herdiolyn Garcia 27,572.99
5. Eunice Dela Torre 22,041.67
6. Alfredo Canabe 22,041.67
7. Julie Salon Cabaluna 22,041.67
8. Asuncion Zamora 31,966.54
9. Marilou Loceno 31,814.99
10. Sandra Cadiao 31,814.99
11. Menchie Ygonia 31,814.99
12. Imelda Perlin 31,814.99
13. Julianita Salucio 10,491.37
14. Rene Zarcino 10,491.37
15. Gertrudes V. Besana 13,218.36
16. Gilda Pahilanga 10,491.37
17. Denia Pacheco 10,491.37
18. Susan Gonzaga 10,491.37
19. Flor Gardo 10,491.37
20. Emma Tortusa 13,218.36
21. Salvador Moleta, Jr. 10,491.37
22. Ditto Fernandez 10,491.37
23. Ma. Fe Termil 13,218.36
24. Ma. Helen P. Yap 13,218.36
25. Tito Dalaorao 16,248.36
26. Lorenda Dima-ala 10,480.75
27. Nena Makilan 10,491.37
28. Nenita Sumagaysay 10,491.37
29. Felecidad Baticados 10,491.37
30. Julie Baylon 10,491.37
31. Dorina Leonidas 22,199.00
32. Marlene Espinosa 22,199.00
33. Daisy Anoche 19,221.55
34. Bernadette Chavez 9,221.55
35. Monica Tejedo 19,221.55
36. Melanie Guancia 19,221.55
37. Merlinda Poblete 19,221.55
38. Edna Delas Marias 19,221.55
39. Angelica Salon 10,491.37
40. Teresa Narvas 10,491.37
41. Rogelia Guinabo 10,491.37
42. Elizabeth Cuadra 10,491.37
43. Liza Encabo 19,221.55
44. Jovita Milleno 16,248.36
45. Oscar Gonzaga 10,642.87
46. Doris Tabaculde 22,062.17
47. Johnny Delgado 13,521.37
48. Lolita Noble 18,483.00
49. Tarcila Dimamay 20,604.00
50. Anita Gravino 24,391.53
51. Ely Blancia 18,483.00
52. Estela Cerna 6,703.87
53. Laila Yee 19,506.12
54. Eulalio Agnes 33,357.27
__________
GRAND TOTAL P964,952.50" 5
Petitioner was likewise ordered to clear the passageway of its warehouse of waste materials, and to put up fire extinguishers in their proper places pursuant to the occupational safety and health rules.
A motion for reconsideration of said order was filed by petitioner, but the same was denied. On appeal, the Secretary of Labor in his order of 23 August 1988 affirmed the orders of the Regional Director. 6 Hence this petition.chanrobles virtual lawlibrary
The sole issue raised in this case is whether or not the Regional Director has the jurisdiction to hear and decide cases involving recovery of wages and other monetary claims and benefits of workers and employees.
The jurisdiction of the Regional Director to adjudicate money claims of workers and employees is governed by Articles 129 and 217 of the Labor Code, as amended by Secs. 2 and 9, respectively, of RA 6715, which provide that:jgc:chanrobles.com.ph
"Sec. 2. Article 129 of the Labor Code of the Philippines, as amended, is hereby further amended to read as follows:chanrob1es virtual 1aw library
‘Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided, further; That the aggregate money claims of each employee or househelper do not exceed Five thousand pesos (P5,000.00) . . ." (Emphasis supplied)
"Sec. 9. Article 217 of the same Code, as amended, is hereby further amended to read as follows:chanrob1es virtual 1aw library
‘Article 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:chanrob1es virtual 1aw library
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding Five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.
x x x’"
In order to fully appreciate the previous rulings of the Court on the power of the Regional Directors to adjudicate money claims of workers and employees, there is a need to trace back the grant of said power by legislation. Prior to the enactment of RA 6715, Art. 217 of the Labor Code, as amended, conferred on the Labor Arbiters the original and exclusive jurisdiction to hear and decide all cases involving household services, and all money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees’ compensation, social security, medicare and maternity benefits. The Regional Director was not empowered to share in that original and exclusive jurisdiction conferred on Labor Arbiters by Art. 217. 7
Subsequently, Executive Order (EO) 111 was promulgated on 24 December 1986, Section 2 8 of which amended Article 128 par. (b) of the Labor Code, as amended, by granting the Minister of Labor or his duly authorized representative the power to order and administer compliance with standards and other labor legislations.
In the case of Briad Agro Development Corp. v. de la Cerna and Camus Engineering Corp. v. Sec. of Labor, 9 applying EO 111, the Court recognized the concurrent jurisdiction of the Secretary of Labor (or Regional Directors) and the Labor Arbiters to pass on employees’ money claims, including those cases over which the Labor Arbiters had previously exercised exclusive jurisdiction. However, in a subsequent modificatory resolution in the Briad Agro case, dated 9 November 1989, the Court modified its original decision in view of the enactment of RA 6715, and upheld the power of the Regional Directors to adjudicate employees’ money claims subject to the conditions set forth in Section 2 of said law (RA 6715).
The power then of the Regional Director (under the present state of the law) to adjudicate employees’ money claims is subject to the concurrence of all the requisites provided under Sec. 2 of RA 6715, to wit: (1) the claim is presented by an employee or person employed in domestic or household service, or househelper; (2) the claim arises from employer-employee relations; (3) the claimant does not seek reinstatement; and (4) the aggregate money claim of each employee or househelper does not exceed P5,000.00.
Going over the records of this case, we note that the aggregate claims of each of the fifty four (54) employees of herein petitioner are over and above the amount of P5,000.00. Under the circumstances, the power to adjudicate such claims belongs to the Labor Arbiter who has the exclusive jurisdiction over employees’ claims where the aggregate amount of the claim for each employee exceeds P5,000.00.chanroblesvirtualawlibrary
WHEREFORE, the petition is GRANTED. The order of respondent Secretary of Labor dated 23 August 1988 and the order of respondent Regional Director dated 2 July 1987 are SET ASIDE. The case is REFERRED to the appropriate Labor Arbiter for proper determination. No costs.
SO ORDERED.
Melencio-Herrera, Paras, Sarmiento and Regalado, JJ., concur.
On 28 April 1987, the Labor Standards and Welfare Office conducted a routine inspection of petitioner’s establishment. On that same date, petitioner was furnished copy of a Notice of Inspection Result and apprised of its violations of the labor standards/occupational health and safety measures, that were discovered in the course of the inspection, namely:jgc:chanrobles.com.ph
"LABOR STANDARDS LAWS:chanrob1es virtual 1aw library
1. Some of the employees are underpaid under Wage Order No. 4, covering the period from May 1, 1984 to June 15, 1984 averaging from P6.00 below for salary and P9.00 below for living allowance.
2. Some of the employees are underpaid under Wage Order No. 5, covering the period from June 16, 1984 to October 31, 1984 averaging from P7.00 below for salary and P3.00 for living allowance.
3. Some of the employees are underpaid under Wage Order No. 6 covering the period from November 1, 1984 to present averaging from P12.00 below for salary and P11.00 below for living allowance.
OCCUPATIONAL HEALTH AND SAFETY:chanrob1es virtual 1aw library
1. There were some obstacles in the passageway of the bodega as the waste materials are being scattered in the aisle.
2. The fire extinguisher is not being displayed inside the bodega." 2
On 22 May 1987, the Regional Office issued a subpoena duces tecum requiring petitioner to submit its payrolls and daily time records, with a warning that failure to comply with the same will be deemed a waiver of its right to present evidence. Petitioner ignored said warning.chanrobles virtual lawlibrary
On 17 June 1987, the Labor Standards and Welfare Officer submitted his report to the Regional Director, recommending the issuance of an order to require petitioner to pay fifty four (54) of its employees the amount of P964,952.50, based on the computation made by the Labor Standards and Welfare Office, representing the deficiencies in wages and allowances of said employees. 3
Adopting the recommendation made by the Labor Standards and Welfare Office, the Regional Director issued the 2 July 1987 Order, 4 requiring petitioner to pay its employees the total amount of P964.952.50 as differentials, summarized as follows:jgc:chanrobles.com.ph
"1. Noel Cadiao P 36,208.49
2. Tranquilino Villaruel 18,132.64
3. Edwin Cabaluna 27,269.99
4. Herdiolyn Garcia 27,572.99
5. Eunice Dela Torre 22,041.67
6. Alfredo Canabe 22,041.67
7. Julie Salon Cabaluna 22,041.67
8. Asuncion Zamora 31,966.54
9. Marilou Loceno 31,814.99
10. Sandra Cadiao 31,814.99
11. Menchie Ygonia 31,814.99
12. Imelda Perlin 31,814.99
13. Julianita Salucio 10,491.37
14. Rene Zarcino 10,491.37
15. Gertrudes V. Besana 13,218.36
16. Gilda Pahilanga 10,491.37
17. Denia Pacheco 10,491.37
18. Susan Gonzaga 10,491.37
19. Flor Gardo 10,491.37
20. Emma Tortusa 13,218.36
21. Salvador Moleta, Jr. 10,491.37
22. Ditto Fernandez 10,491.37
23. Ma. Fe Termil 13,218.36
24. Ma. Helen P. Yap 13,218.36
25. Tito Dalaorao 16,248.36
26. Lorenda Dima-ala 10,480.75
27. Nena Makilan 10,491.37
28. Nenita Sumagaysay 10,491.37
29. Felecidad Baticados 10,491.37
30. Julie Baylon 10,491.37
31. Dorina Leonidas 22,199.00
32. Marlene Espinosa 22,199.00
33. Daisy Anoche 19,221.55
34. Bernadette Chavez 9,221.55
35. Monica Tejedo 19,221.55
36. Melanie Guancia 19,221.55
37. Merlinda Poblete 19,221.55
38. Edna Delas Marias 19,221.55
39. Angelica Salon 10,491.37
40. Teresa Narvas 10,491.37
41. Rogelia Guinabo 10,491.37
42. Elizabeth Cuadra 10,491.37
43. Liza Encabo 19,221.55
44. Jovita Milleno 16,248.36
45. Oscar Gonzaga 10,642.87
46. Doris Tabaculde 22,062.17
47. Johnny Delgado 13,521.37
48. Lolita Noble 18,483.00
49. Tarcila Dimamay 20,604.00
50. Anita Gravino 24,391.53
51. Ely Blancia 18,483.00
52. Estela Cerna 6,703.87
53. Laila Yee 19,506.12
54. Eulalio Agnes 33,357.27
__________
GRAND TOTAL P964,952.50" 5
Petitioner was likewise ordered to clear the passageway of its warehouse of waste materials, and to put up fire extinguishers in their proper places pursuant to the occupational safety and health rules.
A motion for reconsideration of said order was filed by petitioner, but the same was denied. On appeal, the Secretary of Labor in his order of 23 August 1988 affirmed the orders of the Regional Director. 6 Hence this petition.chanrobles virtual lawlibrary
The sole issue raised in this case is whether or not the Regional Director has the jurisdiction to hear and decide cases involving recovery of wages and other monetary claims and benefits of workers and employees.
The jurisdiction of the Regional Director to adjudicate money claims of workers and employees is governed by Articles 129 and 217 of the Labor Code, as amended by Secs. 2 and 9, respectively, of RA 6715, which provide that:jgc:chanrobles.com.ph
"Sec. 2. Article 129 of the Labor Code of the Philippines, as amended, is hereby further amended to read as follows:chanrob1es virtual 1aw library
‘Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided, further; That the aggregate money claims of each employee or househelper do not exceed Five thousand pesos (P5,000.00) . . ." (Emphasis supplied)
"Sec. 9. Article 217 of the same Code, as amended, is hereby further amended to read as follows:chanrob1es virtual 1aw library
‘Article 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:chanrob1es virtual 1aw library
x x x
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding Five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.
x x x’"
In order to fully appreciate the previous rulings of the Court on the power of the Regional Directors to adjudicate money claims of workers and employees, there is a need to trace back the grant of said power by legislation. Prior to the enactment of RA 6715, Art. 217 of the Labor Code, as amended, conferred on the Labor Arbiters the original and exclusive jurisdiction to hear and decide all cases involving household services, and all money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees’ compensation, social security, medicare and maternity benefits. The Regional Director was not empowered to share in that original and exclusive jurisdiction conferred on Labor Arbiters by Art. 217. 7
Subsequently, Executive Order (EO) 111 was promulgated on 24 December 1986, Section 2 8 of which amended Article 128 par. (b) of the Labor Code, as amended, by granting the Minister of Labor or his duly authorized representative the power to order and administer compliance with standards and other labor legislations.
In the case of Briad Agro Development Corp. v. de la Cerna and Camus Engineering Corp. v. Sec. of Labor, 9 applying EO 111, the Court recognized the concurrent jurisdiction of the Secretary of Labor (or Regional Directors) and the Labor Arbiters to pass on employees’ money claims, including those cases over which the Labor Arbiters had previously exercised exclusive jurisdiction. However, in a subsequent modificatory resolution in the Briad Agro case, dated 9 November 1989, the Court modified its original decision in view of the enactment of RA 6715, and upheld the power of the Regional Directors to adjudicate employees’ money claims subject to the conditions set forth in Section 2 of said law (RA 6715).
The power then of the Regional Director (under the present state of the law) to adjudicate employees’ money claims is subject to the concurrence of all the requisites provided under Sec. 2 of RA 6715, to wit: (1) the claim is presented by an employee or person employed in domestic or household service, or househelper; (2) the claim arises from employer-employee relations; (3) the claimant does not seek reinstatement; and (4) the aggregate money claim of each employee or househelper does not exceed P5,000.00.
Going over the records of this case, we note that the aggregate claims of each of the fifty four (54) employees of herein petitioner are over and above the amount of P5,000.00. Under the circumstances, the power to adjudicate such claims belongs to the Labor Arbiter who has the exclusive jurisdiction over employees’ claims where the aggregate amount of the claim for each employee exceeds P5,000.00.chanroblesvirtualawlibrary
WHEREFORE, the petition is GRANTED. The order of respondent Secretary of Labor dated 23 August 1988 and the order of respondent Regional Director dated 2 July 1987 are SET ASIDE. The case is REFERRED to the appropriate Labor Arbiter for proper determination. No costs.
SO ORDERED.
Melencio-Herrera, Paras, Sarmiento and Regalado, JJ., concur.
Endnotes:
1. Rollo, pp. 22-27.
2. Rollo, pp. 22-23.
3. Rollo, p. 23.
4. Ibid., pp. 16-18.
5. Rollo, pp. 16-17.
6. Rollo, pp. 22-27.
7. Zambales Base Metals, Inc. v. The Minister of Labor, G.R. Nos. 73184-88, 26 November 1986, 146 SCRA 50.
8. Section 2. Article 128 (b) of the Labor Code of the Philippines is hereby further amended to read as follows:jgc:chanrobles.com.ph
"(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists, the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor legislation based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection." (Emphasis supplied)
9. G.R. Nos. 82805 and 83225, 29 June 1989.
