Labor Case

260 Phil.
730
FIRST DIVISION
[ G.R. No. 85934, January 30, 1990 ]
SSK PARTS CORPORATION, PETITIONER, VS. TEODORICO CAMAS AND SECRETARY OF LABOR &
EMPLOYMENT, RESPONDENTS.
[G.R. NO. 85935. JANUARY 30, 1990]
SSK PARTS CORPORATION, PETITIONER, VS. SSK-OLALIA AND/OR RIC DURAN AND
SECRETARY OF LABOR & EMPLOYMENT, RESPONDENTS.
[G.R. NO. 85936. JANUARY 30, 1990]
IN RE: ROUTINE INSPECTION AT SSK PARTS CORP., BGY. PULO, CABUYAO, LAGUNA.
DECISION
GRIO-AQUINO, J.:
This is a petition for review on certiorari of the decision dated November 16, 1988 of the Department of
Labor and Employment, affirming the Order of the Regional Director dated January 11, 1988 in three
consolidated cases filed against the petitioner: (1) by Teodorico Camas for illegal deductions; (2) for
underpayment of wages, non-payment of legal holiday pay and service incentive leave filed by the union
in behalf of its members; and (3) for non-payment of employees service incentive leave, underpayment of
allowance, overtime pay, premium pay, and non-payment of two (2) regular holidays in December which
were discovered upon routine inspection conducted by the labor regulation officers.
After the parties had submitted their position papers and evidence, the Regional Director issued an order
on January 11, 1988, the dispositive portion of which reads thus:
"WHEREFORE, premises considered, an Order is hereby entered:
"a) Ordering respondent [herein petitioner] to refund to complainant Teodorico Camas the amount of
Seven Hundred and Seventy Five Pesos (P775.00) having been illegally deducted from his salaries; and
"b) Ordering respondent to pay individual claimants in the second case their unpaid overtime pay, legal
holiday pay, living allowance and service incentive leave within ten (10) days from receipt hereof,
otherwise a writ of execution shall be issued for the enforcement of this Order." (p. 92, Rollo.)
Petitioner's appeal to the Secretary of Labor was dismissed by the latter. Hence, this petition
for certiorari in which the petitioner alleges:
1. that the Regional Director has no jurisdiction over its employees' claims; and
2. that it (petitioner) was denied due process.
The petition is devoid of merit. The jurisdiction of the Regional Director over claims for violation of labor
standards is conferred by Article 128-B of the Labor Code, as amended by Executive Order No. 111 of
March 26, 1987 which provides that:
"(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
inspections." (Underscoring supplied.)
The jurisdiction of the Regional Director over employees' claims for wages and other monetary benefits not
exceeding P5,000 has been affirmed by Republic Act No. 6715, amending Article 129 of the Labor Code as
follows:
"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). The Regional Director or
hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the
filing of the same."
Being a curative statute, Republic Act No. 6715 may be given retroactive effect if, as in this case, no
vested rights would be impaired (DBP vs. Court of Appeals, 96 SCRA 342; Santos vs. Duata, 14 SCRA
1041; Briad-Agro Dev. Corp. vs. De la Serna, et al., G.R. No. 82805, Nov. 9, 1989).
Under the exception clause in Article 128(b) of the Labor Code, the Regional Director may not be divested
of his jurisdiction over these claims, unless three (3) elements concur, namely: (a) that the petitioner
(employer) contests the findings of the labor regulation officer and raises issues thereon; (b) that in order
to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not
verifiable in the normal course of inspection.
In this case, although the petitioner contested the Regional Director's finding of violations of labor
standards committed by the petitioner, that issue was resolved by an examination of evidentiary matters
which were verifiable in the ordinary course of inspection. Hence, there was no need to indorse the case to
the appropriate arbitration branch of the National Labor Relations Commission (NLRC) for adjudication
(Sec. 2, Rules Implementing Executive Order 111).
The petitioner's allegation that it was denied due process is not well taken. The petitioner actively
participated in the proceedings a quo by filing its answer to the complaint, presenting a position paper to
the Regional Director, submitting evidence in support of its claim, and appealing the decision of the
Regional Director to the Secretary of Labor. Each of those steps was a part and parcel of its right to due
process. As the petitioner had all those opportunities to be heard, it may not complain that it was denied
due process (People vs. Retamia, 95 SCRA 201; Divine Word High School vs. NLRC, 143 SCRA
346; Municipality of Daet vs. Hidalgo Enterprises, Inc., 138 SCRA 265).
WHEREFORE, the petition for certiorari is dismissed for lack of merit.
SO ORDERED.
Narvasa, (Chairman), Cruz, Gancayco, and Medialdea, JJ., concur.
G.R. No. 82607
SECOND DIVISION
[ G.R. No. 82607, July 12, 1990 ]
STAR SECURITY AND DETECTIVE INVESTIGATION AGENCY, PETITIONER, VS. THE SECRETARY
OF LABOR, UNDERSECRETARY OF LABOR, REGIONAL DIRECTOR DAVID KONG, JR. AND THELMA
CUERDA, RESPONDENTS.
DECISION
PARAS, J.:
On March 5, 1986, a complaint [1] was filed by private respondent Thelma L. Cuerda before the then Ministry of Labor
and Employment, Regional Office No. 9 in ZamboangaCity against the petitioner Star Security and Detective Investigation
Agency for underpayment of minimum wage, emergency cost of living allowance, non-payment of 13th month pay, regular
holiday pay, rest day pay and service incentive leave pay.
On April 21, 1986, an inspection was conducted by the Regional Office a quo on the premises of the petitioner but
the necessary documents (payrolls) as requested by the inspecting officer were not made available. Petitioner promised,
however, that said documents would be made available the following week. On May 26, 1986, petitioner submitted the
requested documents (payrolls), but only for the year 1985. Petitioner stated that such documents may also be made as
the basis for the year 1982 up to year 1985 salary.
Based on the submitted documents and the respective affidavits of the petitioner and the private respondent, the
Regional Director promulgated on June 5, 1986 an order giving due course to the aforementioned complaint and awarding
to the private respondent the sum of Fourteen Thousand Two Hundred and Eighty Pesos (P14,280.00) representing
underpayment of wages, emergency cost of living allowance, 13th month pay, rest day pay and service
incentive leave pay.
On June 26, 1986, petitioner filed a motion for reconsideration assailing the above mentioned Order on the grounds
that the Regional Director has no jurisdiction over the case and that the award made in favor of the private respondent
has no basis in law and in fact. On July 24, 1986, the Regional Director issued another Order modifying his Order
dated June 5, 1986 and ordering the petitioner to pay complainant the sum of Eighteen Thousand Three Hundred and
Ninety Four Pesos and Ninety Six Centavos (P18,394.96).
On appeal to the Secretary of Labor, the decision of the Regional Director was upheld in an order [2] dated August 5,
1987. The motion for reconsideration filed by the petitioner was denied in an order dated February 17, 1988. Hence, this
petition for certiorari.
The petition was given due course in this Court's resolution dated November 23, 1988 and required the parties to
submit their respective memoranda.
The pivotal issue in the case at bar is whether or not the Regional Director of the Department of Labor acted within
the bounds of his jurisdiction in taking cognizance of the complaint by private respondent below.
This Court had enumerated in the case of Brokenshire Memorial Hospital, Inc. vs. Hon. Minister of Labor, et al.,
G.R. No. 74621, February 7, 1990, applying Republic Act No. 6715, the requisites before the Regional Director and other
hearing officers of the Department of Labor (aside from the Labor Arbiter) could have jurisdiction over money claims, to
wit:
1) The claim is presented by an employee or person employed in domestic or household service,
or househelper under the code;
2) The claimant, no longer being employed, does not seek reinstatement; and
3) The aggregate money claim of the employee or househelper does not exceed five thousand
pesos (P5,000.00).
The aforecited case likewise adopted the Separate Opinion of Mr. Justice Andres Narvasa in the case of Briad Agro
Development Corporation, as reconsidered, G.R. No. 82805, November 9, 1989 which states:
"In the resolution, therefore, of any question of jurisdiction over a money claim arising from employeremployee relations, the first inquiry should be into whether the employment relation does indeed still exist
between the claimant and the respondent.
"If the relation no longer exists, and the claimant does not seek reinstatement, the case is cognizable by
the Labor Arbiter, not by the Regional Director. On the other hand, if the employment relation still exists,
or reinstatement is sought, the next inquiry should be into the amount involved.
"If the amount involved does not exceed P5,000.00, the Regional Director undeniably has jurisdiction. But
even if the amount of the claim exceeds P5,000.00, the claim is not on that account necessarily removed
from the Regional Director's competence. In respect thereof, he may still exercise thevisitorial and
enforcement powers vested in him by Article 128 of the Labor Code, as amended, supra; that is to say, he
may still direct his labor regulations officers or industrial safety engineers to inspect the
employer's premises and examine his records; and if the officers should find that there have been
violations of labor standards provisions, the Regional Director may, after due notice and hearing, order
compliance by the employer therewith and issue a writ of execution to the appropriate authority for the
enforcement thereof. However, this power may not, to repeat, be exercised by him where the employer
contests the labor regulation officers findings and raises issues which cannot be resolved without
considering evidentiary matters not verifiable in the normal course of inspection. In such an event, the
case will have to be referred to the corresponding Labor Arbiter for adjudication, since it falls within the
latter's exclusive original jurisdiction."
The petition is impressed with merit.
We find that the Regional Director had no jurisdiction over the case at bar.
It can be gleaned from the complaint filed by private respondent Cuerda that she was relieved of her employment
due to her expired license and as found by public respondent Secretary of Labor, Cuerda did not seek reinstatement but
just wanted to press her claim for the benefits and separation pay. Also, the amount involved in this case is more than five
thousand pesos (P5,000). All these factors taken into consideration, We find that the claims should have been filed with
the labor arbiter. Restating the aforementioned Brokenshire and Briad cases (supra), "(I)f the relation (employer-
employee) no longer exists, and the claimant does not seek reinstatement, the case is cognizable by the Labor Arbiter, not
by the Regional Director."
PREMISES CONSIDERED, the assailed orders are REVERSED and SET ASIDE. The case is REFERRED, if the
private respondent is so minded, to the Labor Arbiter for proper proceeding.
SO ORDERED.
Sarmiento and Regalado, JJ., concur.
Melencio-Herrera (Chairman), J., Concurring also with the separate opinion of J. Padilla.
Padilla, J., See Separate Concurring Opinion.
[1]
[2]
Annex A, p. 12, Rollo

Annex G, p. 27, Rollo
SEPARATE CONCURRING OPINION

PADILLA, J.:
I concur in the result. The claim in this case falls within the jurisdiction of the Labor Arbiter, not of the Regional
Director of the Department of Labor and Employment.
The applicable law is now Rep. Act 6715, a curative legislation. Sec. 2 thereof amending Art. 129 of the Labor
Code, as amended, provides:
"Art. 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any
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). x x x." (emphasis supplied)
Sec. 9 of RA 6715 amending Art. 217 of the Labor Code, as amended, provides:
"Art. 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 nonagricultural:
xxx
xxx
xxx
(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.
xxx
xxx
x x x'"
As a consequence of the above-quoted provisions of Rep. Act 6715, the power of the Regional Directors to hear and
decide claims for recovery of wages and other money claims is subject to the concurrence of the following requisites: (1)
the claim must arise from employer-employee relationship; (2) the claimant does not seek reinstatement; and (3) the
aggregate money claim of each employee does not exceed P5,000.00.
It may be emphasized then that before the Regional Director can validly assume jurisdiction over money
claims, all the aforementioned requisites must concur. The absence of any of said requisites is enough to bring the case
outside the jurisdiction of the Regional Director.
There is no dispute here that the amount of the claim involved is more than P5,000.00. It thus exceeds the
jurisdictional amount provided in RA 6715 under which the Regional Director can adjudicate money claims. This fact
alone is a sufficient ground why it is the Labor Arbiter, not the Regional Director, who has jurisdiction over this claim.
263 Phil. 613
SECOND DIVISION
[ G.R. No. 85840, April 26, 1990 ]
SERVANDO'S INCORPORATED, PETITIONER, VS. THE SECRETARY OF LABOR AND EMPLOYMENT
AND THE REGIONAL DIRECTOR, REGION VI, DEPARTMENT OF LABOR AND EMPLOYMENT,
RESPONDENTS.
DECISION
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:
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:
"LABOR STANDARDS LAWS:
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:
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.
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:
1. NoelCadiao
P 36,208.49
2.TranquilinoVillaruel
18,132.64
3. EdwinCabaluna
27,269.99
4. HerdiolynGarcia
27,572.99
5. EuniceDela Torre
22,041.67
6. AlfredoCanabe
22,041.67
7. Julie SalonCabaluna
22,041.67
8. AsuncionZamora
31,966.54
9. MarilouLoceno
31,814.99
10. SandraCadiao
31,814.99
11. MenchieYgonia
31,814.99
12. ImeldaPerlin
31,814.99
13. JulianitaSalucio
10,491.37
14. ReneZarcino
10,491.37
15.Gertrudes V.Besana
13,218.36
16. GildaPahilanga
10,491.37
17. DeniaPacheco
10,491.37
18. SusanGonzaga
10,491.37
19. FlorGardo
10,491.37
20. EmmaTortusa
13,218.36
21. SalvadorMoleta, Jr.
10,491.37
22. Ditto Fernandez
10,491.37
23. Ma. FeTermil
13,218.36
24. Ma. Helen P. Yap
13,218.36
25. TitoDalaorao
16,248.36
26. LorendaDima-ala
10,480.75
27. NenaMakilan
10,491.37
28. NenitaSumagaysay
10,491.37
29.FelecidadBaticados
10,491.37
30. JulieBaylon
10,491.37
31. DorinaLeonidas
22,199.00
32. Marlene Espinosa
22,199.00
33. DaisyAnoche
19,221.55
34. Bernadette Chavez
19,221.55
35. MonicaTejedo
19,221.55
36. MelanieGuancia
19,221.55
37. MerlindaPoblete
19,221.55
38. Edna Delas Marias
19,221.55
39. Angelica Salon
10,491.37
40. TeresaNarvas
10,491.37
41. RogeliaGuinabo
10,491.37
42. ElizabethCuadra
10,491.37
43. LizaEncabo
19,221.55
44. JovitaMilleno
16,248.36
45. OscarGonzaga
10,642.87
46. DorisTabaculde
22,062.17
47. Johnny Delgado
13,521.37
48. Lolita Noble
18,483.00
49. TarcilaDimamay
20,604.00
50. AnitaGravino
24,391.53
51. ElyBlancia
18,483.00
52. EstelaCerna
6,703.87
53. LailaYee
19,506.12
54. EulalioAgnes
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.
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 bySecs. 2 and 9, respectively, of RA 6715, which
provide that:
"Sec. 2. Article 129 of the Labor Code of the Philippines, as amended, is hereby further amended to read
as follows:
Art. 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any
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). x x x."(emphasis supplied)
"Sec. 9. Article 217 of the same Code, as amended, is hereby further amended to read as follows:
Article 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under
xxx
xxx
xxx
(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
xxx
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 concurrentjurisdiction 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 tothe 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 househelperdoes 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 execlusive jurisdiction over
employees' claims where the aggregate amount of the claim for each employee exceeds P5,000.00.
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, (Chairman), Paras, Sarmiento, and Regalado, JJ., concur.
263 Phil. 487
SECOND DIVISION
[ G.R. NO. 88538, April 25, 1990 ]
ABOITIZ SHIPPING CORPORATION, PETITIONER, VS. HON. DIONISIO C. DELA SERNA, IN HIS
CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT; HON. LUNA C. PIEZAS, IN HIS
CAPACITY AS DIRECTOR, NATIONAL CAPITAL REGION, DEPARTMENT OF LABOR AND
EMPLOYMENT; AND, ABOITIZ SHIPPING EMPLOYEES ASSOCIATION, RESPONDENTS.
DECISION
PADILLA, J.:
The principal issue in this special civil action for certiorari is whether the respondent Regional Director,
National Capital Region, Department of Labor and Employment (Regional Director, for short) correctly
assumed jurisdiction over the money claims filed with him by the complainants (members of herein private
respondent).
Assailed specifically in this petition is the Order dated 9 February 1989 of the respondent Undersecretary
of Labor and Employment affirming the Order dated 13 October 1988 of the Regional Director, ordering
petitioner company to pay the seven hundred seventeen (717) complainants a total amount of
P1,350,828.00, orP1,884.00 each, representing underpayment of an allowance of P2.00 per day, reckoned
from 16 February 1982 to 15 February 1985.
The facts of the case, as found by respondent Undersecretary, are as follows:
''x x x a complaint was filed by the Aboitiz Shipping Employees Association against Aboitiz Shipping
Corporation for non-compliance of the mandated minimum wage rates and allowances pursuant to P.D.
Nos. 1713, 1751, Wage Order Nos. 1, 2, 3, 4, 5 and 6. Accordingly, the Labor Regulation Officers of the
Regional Office a quo inspected the respondent's employment records.
On the other hand, the respondent filed a Motion to Dismiss contending that the complainant-union has no
legal capacity to sue because a representation issue is still pending with Med-Arbiter Edgardo Cruz in LRD
CASE NO. M?001-85.
Series of hearings were conducted whereby the Office a quo repeatedly directed the respondent to present
and submit all its pertinent papers/employment records covered by the investigation. However, on several
occasions, the respondent failed to appear. Likewise, despite repeated notices, the respondent failed to
present any of the documents due for inspection evidencing correct payments of salaries and allowances.
On December 28, 1987, the hearing officer submitted his report and recommended for the payment to the
union's members amounting to an aggregate sum of P16,200,877.47.
On January 20, 1988, the Office a quo formally issued subpoena duces tecum, requiring the presentation
by the respondent of its employees' payrolls and vouchers covering the period from February 16, 1982 to
December 31, 1985. This, the respondent ignored. In lieu thereof, it filed a second Motion to Dismiss
alleging that on July 24, 1986, the parties entered into a compromise agreement whereby they agreed
that all cases filed against and by respondent would be dropped and/or dismissed, including the above
entitled case; that pursuant to and by virtue of the compromise agreement, cases filed against the Aboitiz
Shipping Corporation and its officers were dropped and/or withdrawn and/or dismissed; and that similarly,
cases filed by Aboitiz Shipping Corporation and its officers against the union and its officers were dropped,
withdrawn and/or dismissed.
In the subsequent hearing of February 16, 1988 however, the parties agreed that on March 4, 1988, the
respondent shall submit to the Office a quo the required payrolls/vouchers for wages and salaries covering
the period from February 16, 1982 to December 31, 1985. On that date, the respondent again failed to
make good its commitment. Nevertheless, it agreed to submit the payrolls of its Manila-based employees
for the period from January 1982 to December 1982. Together with the submission of the photocopies of
the payrolls of the Manila-based employees, the respondent also filed a Manifestation of Compliance
stating that the following should be taken into consideration:
Annex 1. Which is a BWF/ISM Form No. 5 an advance notice dated October 1987 issued by the DOLE
Regional Office No. 7 notifying respondent of their intent to check payrolls etc. xxx
Annex 2. Which is the notice of inspection results no. 05598 dated October 23, 1987 stating that the
respondent (companywide payrolls, etc.) has no violation insofar as wages, salaries, etc. are concerned as
well as the benefits indicated in the CBA. xxx
Annex 3. Which is the certification of the ASEA Union President based in Cebu City and the Union Vice
President that company records inspected covering the period 1984-1987 were true correct and in order,
and in compliance with the Labor and Standard Laws;
Annex 4. Which is the existing CBA between the respondent and complainant ASEA employees Union;
Annex 5. Which is the letter of Bureau of Working Conditions dated July 17, 1987 signed by Director
Augusto Sanchez sustaining and validating respondent's use of 314 as divisor in the computation of wages
and COLA for land based employees of respondent.
Again, on July 5, 1988, the respondent filed a supplemental Motion to Dismiss, questioning this time the
jurisdiction of the Office a quo. The motion alleged that x x x considering the complaint involves money
claims, the original and exclusive jurisdiction rests not before the Honorable Director but before the Labor
Arbiter x x x'.
xxx
xxx
xxx
Another hearing was conducted on August 17, 1988, whereby the respondent was required to submit its
payrolls for the year 1984. The respondent manifested however, that its Motion to Dismiss be resolved
first by the Office a quo. Further, the respondent averred that the payroll for 1984 need not be submitted,
and thus moved for the resolution of this case based on the available records and motions submitted." [1]
Subsequently, respondent Regional Director issued the now assailed Order dated 13 October 1988, the
dispositive portion of which reads:
"WHEREFORE, premises considered, the Aboitiz Shipping Corporation is hereby Ordered to pay the herein
listed complainants the total amount of ONE MILLION THREE HUNDRED FIFTY THOUSAND EIGHT
HUNDRED TWENTY EIGHT and 00/100 PESOS (P1,350,828.00) representing underpayment of daily
allowance of TWO (P2.00) PESOS per day reckoned from 16 February 1982 to 15 February 1985.
FURTHER, the Aboitiz Shipping Corporation is hereby Ordered to pay each and every one of its employees
the deficiency in allowance of two (P2.00) PESOS per day from 16 February 1985 on ward until this Order
is fully complied with."[2]
On appeal to the Office of the Secretary of Labor and Employment, in which petitioner questioned, among
others, the jurisdiction of respondent Regional Director over the instant claims, respondent Undersecretary
issued the Order dated 9 February 1989 dismissing petitioner's appeal and affirming the Order dated 13
October 1988 of the respondent Director. The motion for reconsideration of the order dated 9 February
1989 having been denied by respondent Undersecretary in the Order dated 2 June 1989, petitioner
interposed this present petition.
Petitioner contends that it is the Labor Arbiter, not the Regional Director who has jurisdiction over money
claims, citing Article 217 of the Labor Code, and invoking this Court's ruling in Zambales Base Metals, Inc.
vs. Minister of Labor.[3]
We rule against petitioner's contention.
Pertinent to the issue at bar are Articles 129 and 217 of the Labor Code, as amended by Sections 2 and 9
of Republic Act 6715 approved on 2 March 1989 which read as follows:
"Article 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any
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). The Regional Director
or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of
the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this
Article shall be held in a special deposit account, and shall be paid, on order of the Secretary of Labor and
Employment or the Regional Director directly to the employee or househelper concerned. Any such sum
not paid to the employee or house-helper, because he cannot be located after diligent and reasonable
effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of
Labor and Employment to be used exclusively for the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall
resolve the appeal within ten (10) calendar days from the submission of the last pleading required or
allowed under its rules.
The Secretary of Labor and Employment or his duly authorized representative may supervise the payment
of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any
employee or househelper under this Code."
xxx
xxx
xxx
"Art. 217. Jurisdiction of Labor Arbiters and the Commission. -- (a) Except as otherwise provided under
(1)
Unfair labor practice cases;
(b)
(2)
Termination disputes;
'(3)
If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay hours of work and other terms and conditions of employment;
(4)
Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
(5)
Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and
(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
accompanies with a claim for reinstatement.
The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c)
Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be disposed of by
the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements."
It should be pointed out that, following the ruling in Briad Agro vs. Dela Cerna, and L.M. Camus
Engineering vs. Secretary of Labor,[4] the above-cited amendments, being curative in nature, have
retroactive effect and, thus, find application in the instant case.
Under the foregoing provisions of Articles 129 and 217 of the Labor Code, as amended, the Regional
Director is empowered, through summary proceeding and after due notice, to hear and decide cases
involving recovery of wages and other monetary claims and benefits, including legal interest, provided the
following requisites are present,[5] 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 (Art. 129,
Labor Code, as amended by R.A. 6715).
In the absence of any of the requisites above-enumerated, it is the Labor Arbiter who shall have exclusive
original jurisdiction over claims arising from employer-employee relations, except claims for employees
compensation, social security, medicare and maternity benefits, all these pursuant to Article 217 of the
Labor Code, particularly paragraph six (6) thereof.
This power of the Regional Directors qualified under R.A. 6715 is recognized in the modificatory resolution
dated 9 November 1989 in said Briad Agro vs. Dela Cerna which modified the earlier decision therein
dated 29 June 1989.[6]
In view of the enactment of R.A. 6715, and the modificatory resolution in the Briad Agro case, the ruling
in Zambales Base Metals, Inc. vs. Minister of Labor, supra, is no longer applicable.
In the case at bar, it is noted that in the Order dated 13 October 1988 of the Regional Director, the latter
found each of the seven hundred seventeen (717) complainants entitled to a uniform amount of
P1,884.00. (Rollo, pp. 117-131). All the other requisites for the exercise of the power of the Regional
Director under Article 129 of the Labor Code, as amended by R.A. 6715, are present. It follows that the
respondent Regional Director properly took cognizance of the claims, subject of this petition.
To the petitioner's contention that it was denied due process of law as it was not afforded time and
opportunity to present its evidence, the records show that on several occasions, despite due notice,
petitioner failed to either appear at the scheduled hearings, or to present its employees payrolls and
vouchers for wages and salaries, particularly, those covering the period from 16 February 1982 to 31
December 1985. Therefore, petitioner was not denied due process of law.
We also do not agree with the petitioner's allegation that it was improper for the respondent Regional
Director to order, in the questioned Order dated 13 October 1988, compliance with P.D. 1678[7] as the
issue on the said decree was never raised by private respondent in its complaint filed before the Regional
Director. While it may be true that P.D. 1678 is not one of the laws where non-compliance therewith was
complained of, still, the Regional Director correctly acted in ordering petitioner to comply therewith, as he
(Regional Director) has such power under his visitorial and enforcement authority provided under Article
128(a) of the Labor Code, which provides:
"Art. 128. Visitorial and enforcement power. - (a) The Secretary of Labor or his duly authorized
representatives, including labor regulation officers, shall have access to employers records and premises
at any time of the day or night whenever work is being undertaken therein, and the right to copy
therefrom, to question any employee and investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the enforcement of this Code and of any labor law,
wage order or rules and regulations issued pursuant thereto."
Petitioner also claims that the complaint filed against it should have been dismissed outright, considering
the compromise agreement dated 24 July 1986, which purportedly contains the agreement of the parties
therein to dismiss the cases filed by one against the other.[8]
We find no merit in said contention, in the light of the Regional Director's finding that the said agreement
can not bind the complainant-union vis-a-vis the instant claims, for the reason that it was entered into by
one Mr. Elizardo Manuel[9] in his personal capacity, one Luis M. Moro, Jr. representing Aboitiz Shipping
Corporation, and Atty. Luis D. Flores in his capacity as legal counsel of ASEA-CLO,[10] which finding is
supported by the records of the case before us. Such records show that the compromise agreement
primarily binds only the said Mr. Manuel, and that, therefore, it has nothing to do with the rest of the other
complainant-union members. The said agreement[11] reads:
"COMPROMISE AGREEMENT
This Agreement, entered into by and among Mr. ELIZARDO MANUEL in his personal capacity, LUIS M.
MORO, JR. representing Aboitiz Shipping Corporation and Atty. LUIS D. FLORES in his capacity as Legal
Counsel of ASEA-CLO.
Based on a compromise agreement Mr. Elizardo Manuel is requesting Aboitiz Shipping Corporation for
payment of P70,000.00 in full settlement of all monetary claims for back wages and benefits he has,
including the settlement decided by the NLRC which presently is under appeal.
For and in consideration of the above stated amount Mr. Elizardo Manuel and Aboitiz Shipping Corporation
mutually agree that:
Mr. Elizardo Manuel is deemed resigned from Aboitiz Shipping Corporation upon payment of the
above stated amount; xxx
-
Aboitiz Shipping Corporation will furnish Mr. E. Manuel a certificate of good moral character;
All pending cases as attested by our Legal Counsel that are related or filed by Mr. E. Manuel against
the Officers of Aboitiz Shipping Corporation and Aboitiz Shipping Corporation itself will be
immediately dropped;
Aboitiz Shipping Corporation also agrees to drop all pending cases related to and filed against Mr. E.
Manuel and Officers of the Union.
Done this 24th day of July, 1986 in Metro Manila, Philippines.

(SGD)
(SGD)
_________________
________________
ELIZARDO MANUEL
LUIS M. MORO, JR.
(SGD)
________________
ATTY. LUIS D. FLORES"
Considering the terms of the said compromise agreement, we rule that said Mr. Manuel shall be excluded
from the list of complainants who shall receive money awards from the petitioner.
Finally, petitioner avers: that the award of P1,350,828 is without factual and legal basis; that petitioner
did not commit any labor standards violation pursuant to the DOLE inspection results and the union
certification to that effect; and that 291 of the 717 complainants are non-employees of petitioner, and that
the other 136 of the said 717 commenced employment only after February 1982, hence, not entitled to
receive money awards. The foregoing contentions being evidentiary in nature, we have to respect the
factual findings of public respondents regarding the above-cited petitioner's averments, the long-settled
rule being that factual findings of labor officials are, generally, conclusive and binding on this Court when
supported by substantial evidence.[12]
WHEREFORE, the assailed Order dated 9 February 1989 of the respondent Undersecretary of Labor and
Employment affirming the Order dated 13 October 1988 of the Regional Director is hereby AFFIRMED, with
the modification that Mr. Elizardo Manuel shall be excluded from the list of complainants at bar who are
entitled to money awards of P1,884.00 each. Petition is DISMISSED.

SO ORDERED.
Melencio-Herrera, (Chairman), Paras, Sarmiento, and Regalado, JJ., concur.
334 Phil. 97
SECOND DIVISION
[ G.R. No. 89894, January 03, 1997 ]
M. RAMIREZ INDUSTRIES AND/OR MANNY RAMIREZ, PETITIONER, VS. THE HONORABLE
SECRETARY OF LABOR AND EMPLOYMENT AND CAROLYN ALFONSO, WILLIAM DE LA TORRE,
RODULFO CANDIA, CLARISSA HERMOSA, GINA CABIGAS, ELIZABETH ENDRINA, ORLANDO
SEGUERRA, RODEO SEGUERRA, JOSELITO DE LA TORRE, MA. THERESA DE LA RIARTE, LUISA DE
LA RIARTE, MARIO MANCAO, REX DEIPARINE, PAULINO VILLAVER, ROGELIO PARAN, LUCILA
CAEZARES, ROBERTA DELA TORRE, JUANITA DELA TORRE, SUSAN VILLAVER, EDWIN BACUS,
DIORES LABAJO, ROLANDO REMULINO, ELVIS MAHIPOS, RAULITO PATATAG, OFELIA
VILLAVER, EMELIA MANCAO, EDDIE ROMARES, FLORIAN DE OCAMPO, LEONARDO VILLARTA,
GUADALUPE BELLEZA, MA. THERESA PACAA, TOMASA MANCIA, IRENE MANCIA, JOSE TOROY,
JR., MARIBEL BULABUS, CABRIEL REPUNO, RODRIGO SEGUERRA, ALEX HERUELA, EMIE
BARCOMA, FRANCISCO NEBRIA, JR., ANICITA DELIMA, CATHERINE DE LA VICTORIA, RIZALINA
CABALAN, TERESITO BONTILAO, ALLAN ABELLA, FLORIANA ROSKA, JUSTINO MANACIO,
RIZALINO LABAJO, DENNI LABAJO, ARTURO FERNANDEZ, ROGELIA BELLEZA, DOMINGA
CANONO, JANETH FAJARDO, RAQUELIZA BACUS, FELIPE BERENGUEL, JOELITO REPUNO,
RAYMUNDO CAPALA, RONIE ZAFRA, ROD DELIMA, BERNA OBEJERO, LUDY RAVANEZ, MELIT
LEE, LEONORA RICO, PERIGRINA TIROL, J. GONDABAN, FRANCISCO LARIOSA, EMILITO
SENSONTIC, NAPOLEON DABLO, JR., TERESITA PALANGCO, HANORIA ABALLERO, LEOPOLDO
LEBRADILLA, ROMEO GENGUYON, MELVIN JERALI, ERNING ZAFRA, EDNA ABAD, MIRALUNA
TECSON, LORNA DEL ROSARIO, WILFREDO RIVERAL, LYDIA FILOMENO, SUSANA MEREDORAS,
NEMESIA CAMPO, JUDITHA BELLANA, MARVIN TOGONON, CONSTANTINO CAON, BEATRIZ
YLANAN, SANTIAGO DEIPARINE, TERESITA VERNAIZ, REBECCA MERCADO, ELIZABETH DELOS
REYES, AILEEN LOPEZ, MANUELA BUCAO, WENCESLAO DELA TORRE, RAMIL BACALSO, EDGAR
ESPINA, RENATO BACALSO, FRANCISCO CEREO, CARMELITO PAQUET, RICARDO SABELLANO,
ENRIQUE GONZALES, JR., TEODULO TARDIN, WILFREDO CANONO, EDWARD ABELLANA,
SISMAR UFIL, TALANDRON CORDING, PEPE CEREO, DARIO ZAFRA, FELICISIMA SEQUISNAR,
JOVENCIO BASALO, SULPICIO MALERONG, MERCEDITA RAVANES, MAXIMO ZAFRA, ELIZABETH
CABILES, NARCISO SADAYA, LEONILA ALFANTE, CARINA POLINGA, EDWIN ABISO, DIOMEDES
BARICUATRO, JUDITHO DEGUMA, FELIXBERTO BASALO, NELSON BACALSO, CRISCENCIO
ECHAVEZ, ACHILLES TELERON, JAIME JAVA, EDDIE MURALEM, ROLANDO MEOZA, JORGE
ABISO, MARISSA SELLOTE, MYRNA UBAS, MATIAS ALFEREZ, ARLENE SELLORIA, CELESTINO
ABELLAR, EDURIGES ABELLAR, TEODORA VILLAMEA, ELENA VILLAMEA, NICOLAS ALIVO,
HENRY DIOSMANO, MARITES SABELLON, ROMEO NACARIO, CRESCENSIO ALFANTE, DIONISIO
SEGUE, FELIPA ALFERES, JUDY HERMIDA, MARCIAL VILARMEA, ALEJANDRO PANCHO, JOSELITO
MEOZA, OSWARD HILWANO, RANDY SELLORIA, HERACLEO RAVANES, NELSON ORALDE,
TEODORO ALFORQUE, BERNARDINO CARIZ, ZOSIMO SAZ, LUIS OBATOG, SAMUEL CANIA, JOEL
ABALO, ANDRES QUITARA, CRISPIN SABELLANO, BEN ABARQUEZ, ROBERTO CANONEO,
FEDILITO PARDILLO, MODESTO PAQUIT, RAMON NATAD, JR., THOMAS ENGHOG, FELOMINA
BACARRO, CHRISTINA MAACAP, PAZ ALGOSO, LEO FERNANDEZ, LUISA CAVALIDA, ADELINA
TUMULAC, ELESITO ABISO, HELDITHA BARICUATRO, JULIE BARICUATRO, MA. SOCORRO
CALLEDO, JUDITA BASALO, ROGER BORJA, ELIZABETH PASIBUG, LIMBERTO ALLER, HIPOLITA
BACARRO, JOVITA ALLER, ADOLFO SAYSON, BRENDA BORJA, THELMA ALFORQUE, JUVY
REPOLLO, DARIO ALFORQUE, GINA ALICABO, WENONA REPOLLO, CHONA ALFEREZ, VIRGINIA
LABANG, FORTUNATA CRUDA, CRESCENCIA TAGALOG, FRANCISCA BORJA, NESTOR BASALANG,
DOMINADOR BASALAN, DANILO JUCOY, ALEJANDRO HERMDA, CARMELITO TAPANGAN,
ERLANDO SAGISMAR, RUFINO RAGA, ELESIO MALARONG, SABINO BASALAN, CIRILO LAPUT,
JOSE CABUSAS, BOYETTE VILLAVER, CARFIL HAMILA, TEODOLO CAADA, PHILIP BONJOC,
FLORDELINA VILLAMOR, ELIZABETH SALOMON, MANUEL FERNANDEZ, ROY ABREA, FERNANDO
MUNALEM, NILA CAAS, ALFONSO CAROLINE, JANET SOLLANO, IREN RIVERA, MUNDA
BARICUATRO, VIVIAN REPUNTE, LORINDA OBINA, MARINO FRANZKIE, NARCISA BADAYA,
MERLINDA CAPIONESE, CENON CABAA, MIRAFLOR PAPARON, JORIE DEL CARMEN, JERRY
MOLBOG, CECENIA TAPANGAN, ARSENIA CASCUA, JOSEFINA BASALAN, ELIZABETH SAYSON,
DOROTEA PANILAG, ESTELITA PASAYLOON, CLAUDETH REPOLLO, PACITA ALFECHE, MARIA
ALFECHE, ELIZABETH UBAS, LEONIDA DELA CERNA, MARINA ADLAWAN, MARIAFLOR ABAD,
MARLYN SASAN, JUN PACAA, NOEL GULFIANO, RUBEN BACALSO, ROMEO DEL CARMEN,
MALOU ALCANTARA, RICARDO JAYRO, CAMILO LABURA, JAIME TIBIMINA, JERRY ABALAYAN,
ARNIE SANGGOTAN, CONCHITA GINODIALA, JOSE BONGHANOY, LEONARDO SAZ, AVELINO
RAGANS, ARLENE SEBIAL, MARIO FRANGES, FRANCISCO BONGHANOY, MARIVIC NAVALES,
NORMA LAPOA, INDOLENCIA NUEZ, CARMELITA CABAERO, LENITA UBAS, NOEL CAINTIC,
RESPONDENTS.
DECISION
MENDOZA, J.:
This is a petition for certiorari to set aside the orders of the Secretary of Labor and Employment, dated
May 12, 1989 and August 22, 1989, affirming the order of the Director of the Regional Office No. VII of
the Department of Labor in Cebu City, granting the claims for salary differentials and emergency cost of
living allowances (ECOLAs) of private respondents in the total amount of P430,901.75.

The facts are as follows:
Petitioner M. Ramirez Industries is a single proprietorship in Tungkop, Minglanilla, Cebu. It is engaged in
the manufacture of handmade rattan baskets for export abroad, principally to Japan, and has in its employ
from 400 to 500 employees.[1]
On April 1, 1986, Carolyn Alfonso and 260 other employees filed a complaint with the Regional Office No.
VII of the Department of Labor in Cebu City, alleging non-payment of minimum wage, living allowances
and non-compliance with other labor standard laws against M. Ramirez Industries and/or Manny Ramirez,
its proprietor.[2]
Accordingly, an inspection was conducted in the company premises on the same day by Labor Standard
Officer Juanito Yallosa.[3] After verifying the allegations of the complaint, the case was docketed as LSED
Case No. 028-86. Meantime it appears that private respondents stopped working on April 8, 1986.[4]
On April 11, 1986, petitioner filed an ex parte motion to dismiss the case alleging voluntary desistance by
private respondents. Attached to the motion was a letter, signed by 215 employees, affirming their
decision to desist from proceeding with their claim against petitioner.[5]
The motion was set for conference on May 7, 1986. Both petitioner and private respondents were notified,
[6]
but only private respondents appeared. Private respondents opposed the motion on the ground that
they were not signatories to the letter of affirmation supporting the motion to dismiss.[7]
The Regional Director denied petitioners motion in an order dated May 22, 1986, after finding that 90 per
cent of the signatures in the letter were not those of the complainants,[8] while complainants, whose
signatures appeared in the letters, had been deceived into signing the letters.
On June 11, 1986, petitioner filed a motion to remand the case to the National Labor Relations
Commission, contending that the matter was outside the jurisdiction of the Regional Director.[9] Without
acting on the motion, the Regional Director on July 18, 1986 ordered petitioner to pay private respondents
the total amount of P430,901.75. The dispositive portion of the order reads:
WHEREFORE, premises considered, respondent M. RAMIREZ INDUSTRIES AND/OR MR. MANNY (MANUEL)
RAMIREZ is hereby ordered to pay the complainants claim in the aggregate amount of FOUR HUNDRED
THIRTY THOUSAND NINE HUNDRED ONE AND 75/100 (P430,901.75), PHILIPPINE CURRENCY, within ten
(10) days from the receipt hereof, and distributed as follows: Names of complainants who worked from
January to April 8, 1986 with their corresponding differentials:
1.William Dela Torre
P1,748.00
2. Rodulfo Candia
P1,702.00
3. Clarissa Hermosa
P1,633.00
4. Gina Cabigas
P1,702.00
5. Elizabeth Endrina
P1,702.00
6. Orlando Seguerra
P1,748.00
7. Rodeo Seguerra
P1,672.00
8. Joselito de la Torre
P1,540.00
9. Ma. Theresa de la Riarte
P1,610.00
10. Luisa de la Riarte
P1,628.00
11. Mario Mancao
P1,540.00
12. Rex Deiparine
P1,540.00
13. Paulino Villaver
P1,540.00
14. Rogelio Paran
P1,540.00
15. Lucila Caezares
P1,633.00
16. Roberta dela Torre
P1,633.00
17. Juanita dela Torre
P1,633.00
18. Susan Villaver
P1,628.00
19. Edwin Bacus
P1,544.00
20. Diores Labajo
P1,518.00
21. Rolando Remulino
P1,738.00
22. Elvis Mahipos
P1,738.00
23. Raulito Patatag
P1,738.00
24. Ofelia Villaver
P1,628.00
25. Emelia Mancao
P1,628.00
26. Eddie Romares
P1,518.00
27. Florian de Ocampo
P1,518.00
28. Leonardo Villarta
P1,496.00
29. Guadalupe Belleza
P1,496.00
30. Ma. Theresa Pacaa
P1,496.00
31. Tomasa Mancia

32. Irene Mancia
33. Jose Toroy, Jr.
34. Maribel Bulabus
35. Cabriel Repuno
36. Rodrigo Seguerra
37. Alex Heruela
38. Emie Barcoma
39. Francisco Nebria, Jr.
40. Anicita Delima
41. Catherine de la Victoria
42. Rizalina Cabalan
43. Teresito Bontilao
44. Alln Abella
45. Floriana Roska
46. Justino Manacio
47. Rizalino Labajo
48. Denni Labajo
49. Arturo Fernandez
50. Rogelia Belleza
51. Dominga Canono
52. Janeth Fajardo
53. Raqueliza Bacus
54. Felipe Berenguel
55. Joelito Repuno
56. Raymundo Capala
57. Ronie Zafra
58. Rod Delima
59. Berna Obejero
60. Ludy Ravanez
61. Melit Lee
62. Leonora Rico
63. Perigrina Tirol
64. J. Gondaban
65. Francisco Lariosa
66. Emilito Sensontic
67. Napoleon Dablo, Jr.
68. Teresita Palangco
69. Hanoria Caballero
70. Leopoldo Lebradilla
71. Romeo Genguyon
72. Melvin Jerali
73. Erning Zafra
74. Edna Abad
75. Miraluna Tecson
76. Lorna del Rosario
77. Wilfredo Riveral
78. Lydia Filomeno
79. Susana Meredoras
80. Nemesia Campo
81. Juditha Abellana
82. Marvin Togonon
83. Constantino Caon
84. Beatriz Ylanan
85. Santiago Deiparine
86. Teresita Vernaiz
87. Rebecca Mercado
88. Elizabeth delos Reyes
89. Aileen Lopez
90. Manuela Bucao
91. Wenceslao dela Torre
92. Ramil Bacalso
93. Edgar Espina
94. Renato Bacalso
95. Francisco Cereo
P1,738.00
P1,738.00
P1,496.00
P1,738.00
P1,564.00
P1,518.00
P1,288.00
P1,232.00
P1,771.00
P1,702.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,472.00
P1,472.00
P1,679.00
P1,288.00
P1,587.00
P1,587.00
P1,628.00
P1,472.00
P1,650.00
P1,050.00
P1,311.00
P1,403.00
P1,610.00
P1,403.00
P1,403.00
P1,403.00
P1,541.00
P1,495.00
P1,587.00
P1,541.00
P1,564.00
P1,564.00
P1,656.00
P1,748.00
P1,748.00
P1,748.00
P1,748.00
P1,748.00
P1,748.00
P1,748.00
P1,748.00
P1,541.00
P1,679.00
P1,541.00
P1,541.00
P1,541.00
P1,541.00
P1,541.00
P1,541.00
P1,541.00
P1,426.00
P1,426.00
P1,380.00
P1,472.00
P1,426.00
P1,403.00
P1,403.00
P2,433.75
P2,433.75
P2,433.75
P2,433.75
96. Carmelito Paquet

97. Ricardo Sabellano
98. Enrique Gonzales, Jr.
99. Teodulo Tardin
100. Wilfredo Canono
101. Edward Abellana
102. Sismar Ufil
103. Talandron Cording
104. Pepe Cereo
105. Dario Zafra
106. Felicisima Sequisnar
107. Jovencio Basalo
108. Sulpicio Malerong
109. Mercedita Ravanes
110. Maximo Zafra
111. Elizabeth Cabiles
112. Narciso Sadaya
113. Leonila Alfante
114. Carina Polinga
115. Edwin Abiso
116. Diomedes Baricuatro
117. Juditho Deguma
118. Felixberto Basalo
119. Nelson Bacalso
120. Criscencio Echavez
121. Achilles Teleron
122. Jaime Java
123. Eddie Muralem
124. Rolando Meoza
125. Jorge Abiso
126. Marissa Sellote
127. Myrna Ubas
128. Matias Alferez
129. Arlene Selloria
130. Celestino Abellar
131. Eduriges Abellar
132. Teodora Villamea
133. Elena Villamea
134. Nicolas Alivo
135. Henry Diosmano
136. Marites Sabellon
137. Romeo Nacario
138. Crescensio Alfante
139. Dionisio Segue
140. Felipa Alferes
141. Judy Hermida
142. Marcial Vilarmea
143. Alejandro Pancho
144. Joselito Meoza
145. Osward Hilwano
146. Randy Selloria
147. Heracleo Ravanes
148. Nelson Oralde
149. Teodoro Alforque
150. Bernardino Cariz
151. Zosimo Saz
152. Luis Obatog
153. Samuel Cania
154. Joel Abalo
155. Andres Quitara
156. Crispin Sabellano
157. Ben Abarquez
158. Roberto Canoneo
159. Fedilito Pardillo
160. Modesto Paquit
P2,433.75
P2,433.75
P2,433.75
P2,433.75
P2,433.75
P2,433.75
P2,433.75
P2,433.75
P2,433.75
P1,564.00
P1,518.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,472.00
P1,633.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,127.00
P1,518.00
P1,633.00
P1,518.00
P1,656.00
P1,656.00
P1,656.00
P1,521.00
P1,656.00
P1,656.00
P1,679.00
P1,656.00
P1,633.00
P1,408.00
P1,679.00
P1,679.00
P1,679.00
P1,606.00
P1,679.00
P1,679.00
P1,679.00
P1,679.00
P1,320.00
P1,320.00
P1,540.00
P1,320.00
P1,470.00
P1,320.00
P1,518.00
P1,518.00
P1,320.00
P1,320.00
P1,617.00
P1,837.50
P1,606.00
161. Ramon Natad, Jr.

162. Thomas Enghog
163. Felomina Bacarro
164. Christina Maacap
165. Paz Algoso
166. Leo Fernandez
167. Luisa Cavalida
168. Adelina Tumulac
169. Elesito Abiso
170. Helditha Baricuatro
171. Julie Baricuatro
172. Ma. Socorro Calledo
173. Judita Basalo
174. Roger Borja
175. Elizabeth Pasibug
176. Limberto Aller
177. Hipolita Bacarro
178. Jovita Aller
179. Adolfo Sayson
180. Brenda Borja
181. Thelma Alforque
182. Juvy Repollo
183. Dario Alforque
184. Gina Alicabo
185. Wenona Repollo
186. Chona Alferez
187. Virginia Labang
188. Fortunata Cruda
189. Crescencia Tagalog
190. Francisca Borja
191. Nestor Basalang
192. Dominadar Basalan
193. Danilo Jucoy
194. Alejandro Hermda
195. Carmelito Tapangan
196. Erlando Sagismar
197. Rufino Raga
198. Elesio Malarong
199. Sabino Basalan
200. Cirilo Laput
201. Jose Cabusas
202. Boyette Villaver
203. Carfil Hamila
204. Teodolo Caada
205. Philip Bonjoc
206. Flordelina Villamor
207. Elizabeth Salomon
208. Manuel Fernandez
209. Roy Abrea
210. Fernando Munalem
211. Nila Caas
212. Alfonso Caroline
213. Janet Sollano
214. Iren Rivera
215. Munda Baricuatro
216. Vivian Repunte
217. Lorinda Obina
218. Marino Franzkie
219. Narcisa Badaya
220. Merlinda Capionese
221. Cenon Cabaa
222. Miraflor Paparon
223. Jorie del Carmen
224. Jerry Molbog
225. Cecenia Tapangan
P1,637.50
P1,690.50
P1,837.50
P1,837.50
P1,666.00
P1,666.00
P1,666.00
P1,666.00
P1,837.50
P1,837.50
P1,837.50
P1,837.50
P1,837.50
P1,462.50
P1,690.50
P1,690.50
P1,837.50
P1,690.50
P1,690.50
P1,679.00
P1,788.50
P1,788.50
P1,788.50
P1,788.50
P1,788.50
P1,788.50
P1,679.00
P1,788.50
P1,679.00
P1,788.50
P1,788.50
P1,788.50
P1,788.50
P1,564.00
P1,564.00
P1,564.00
P1,564.00
P1,748.00
P1,633.00
P1,564.00
P1,035.00
P1,541.00
P1,541.00
P1,364.00
P1,541.00
P1,562.00
P1,633.00
P1,610.00
P1,610.00
P1,679.00
P1,679.00
P1,656.00
P1,679.00
P1,587.00
P1,587.00
P1,587.00
P1,656.00
P1,564.00
P1,656.00
P1,725.00
P1,702.00
P1,610.00
P1,650.00
P1,650.00
P1,650.00
226. Arsenia Cascua

P1,650.00
227. Josefina Basalan
P1,739.50
228. Elizabeth Sayson
P1,739.50
229. Dorotea Panilag
P1,739.50
230. Estelita Pasayloon
P1,739.50
231. Claudeth Repollo
P1,702.00
232. Pacita Alfeche
P1,813.00
233. Maria Alfeche
P1,813.00
234. Elizabeth Ubas
P1,739.50
235. Leonida dela Cerna
P1,666.00
236. Marina Adlawan
P1,702.00
237. Mariaflor Abad
P1,650.00
238. Marlyn Sasan
P1,715.00
239. Jun Pacaa
P1,837.50
240. Noel Gulfiano
P1,837.50
241. Ruben Bacalso
P1,837.50
242. Romeo del Carmen
P1,837.50
243. Malou Alcantara
P1,813.00
244. Ricardo Jayro
P1,837.50
245. Camilo Labura
P1,725.00
246. Jaime Tibimina
P1,837.50
247. Jerry Abalayan
P1,837.50
248. Arnie Sanggotan
P1,837.50
249. Conchita Ginodiala
P1,298.00
250. Jose Bonghanoy
P1,430.00
251. Leonardo Saz
P1,650.00
252. Avelino Ragans
P1,628.00
253. Arlene Sebial
P1,298.00
254. Mario Franges
P1,298.00
255. Francisco Bonghanoy
P1,739.50
256. Marivic Navales
P1,813.00
Names of Complainants who worked from February to April 8, 1986 w/ their corresponding differentials:
1. Norma Lapoa
P1,127.00
2. Indolencia Nuez
P1,127.00
3. Carmelita Cabaero
P1,127.00
4. Lenita Ubas
P1,452.00
Complainant who worked from March to April, 18, 1986 with his corresponding differential:
1. Noel Caintic
P136.00
SO ORDERED.[10]
Petitioner moved for a reconsideration of the Regional Directors order, which was treated as an appeal to
the Secretary of Labor and Employment. On May 12, 1989, the Secretary issued an order affirming that of
the Regional Director. Petitioner filed a motion for reconsideration, but its motion was denied on August
22, 1989. Hence this petition, assailing the foregoing orders of the Secretary of Labor and Employment on
the following grounds:
(1) The Regional Director has no jurisdiction to take cognizance of this case;
(2) Petitioner was denied due process; and
(3) The order of the Regional Director does not state clearly the facts and the law upon which it is based
and is not supported by substantial evidence.
With respect to the first ground, petitioner contends that the case falls within the original and exclusive
jurisdiction of the Labor Arbiter, citing in support of its contention Art. 217 of the Labor Code, which,
before its amendment by R.A. No. 6715 on March 21, 1989, provided:
Art. 217. Jurisdiction of Labor Arbiter and the Commission. (a) The Labor Arbiters shall have the original
and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case
by the parties for decision, the following cases involving all workers, whether agricultural or nonagricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of
employment;
3. 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;
4. Cases involving household services; and

5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of
strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
The contention has no merit. It is true that on April 1, 1986, when this case was filed in the Regional
Office, Labor Arbiters had original and exclusive jurisdiction over money claims of laborers pursuant to Art.
217(a)(3) of the Labor Code as quoted above. On March 3, 1987, however, President Corazon C. Aquino,
issued E.O. No. 111, conferring jurisdiction over money claims of laborers on Regional Directors,
concurrently with Labor Arbiters. In Briad Agro Dev. Corp. v. Dela Serna,[11] this Court, after declaring E.O.
No. 111 to be in the nature of a curative statute, gave it retroactive application with respect to claims filed
in 1982 and 1987. Then on March 21, 1989, R.A. No. 6715 was enacted, amending the Labor Code so
that, so far as pertinent, it now provides:
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
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 does not exceed five thousand pesos (P5,000.00). The regional director
or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of
the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this
Article shall be held in a special deposit account by, and shall be paid on order of, the Secretary of Labor
and Employment or the regional director directly to the employee or househelper concerned. . . .
Art. 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 nonagricultural.
....
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) regardless or whether
accompanied with a claim for reinstatement. . . . (Emphasis added)
Like E.O. No. 111, this amendatory statute was also retroactively applied to cases where the money claims
of laborers were filed in 1980,[12] 1986,[13] 1987[14] and 1989, [15] i.e., long before the enactment of
said statute on March 21, 1989. As we have construed the above provisions of the Labor Code, as thus
amended, the Regional Director has the power to decide the cases involving money claims of laborers
where the following requisites concur: (1) the claim must arise from employer-employee relationship; (2)
the claimant does not seek reinstatement; and (3) the aggregate money claim of each employee does not
exceed P5,000.00.[16] On the other hand, if the individual claims of employees exceed P5,000.00 and, even
if they do not, if they include claims for reinstatement, the matter falls within the original and exclusive
jurisdiction of the Labor Arbiter.
It is not disputed in this case that at the time of the filing of the complaint, private respondents were
employees of petitioner and that said relationship gave rise to private respondents claim for wage
differentials. Although no longer employees of petitioner, private respondents do not seek reinstatement
and the aggregate money claim of each of them does not exceed P5,000.00. As a matter of fact, the
Regional Directors order shows that the aggregate claim of each of the 261 employees involved does not
exceed P2,500.00.
Moreover, petitioner is estopped from questioning the jurisdiction of the Regional Director, having
previously invoked it by filing a motion to dismiss. As has been held:
[A] party can not invoke the jurisdiction of a court to secure affirmative relief against his opponent and,
after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction.
In the case just cited, by way of explaining the rule, it was further said that the question whether the
court had jurisdiction either of the subject-matter of the action or of the parties is barred from such
conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for
the reason that such a practice can not be tolerated obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse
decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. . . And
in Littleton vs. Burges, 16 Wyo, 58, the Court said that it is not right for a party who has affirmed and
invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny
that same jurisdiction to escape a penalty.[17]
The Regional Director may not be divested of jurisdiction over these claims, unless the following elements
are present:
(a) that the petitioner (employer) contests the findings of the labor regulation officer and raises issues
thereon;
(b) that in order to resolve such issues, there is need to examine evidentiary matters; and
(c) that such matters are not verifiable in the normal course of inspection. [18]
These conditions do not exist in this case and, therefore, there can be no question that the Regional
Director had jurisdiction to decide the claims of private respondents.
This brings us to the second ground for the present petition, namely, the alleged denial of due process to
petitioner. Petitioner claims that it was not able to contest the findings of the Labor Standard Officer
because it was not furnished a copy of the inspection report containing the findings and because instead of
denying its motion to dismiss for lack of jurisdiction and thereafter giving it a hearing, the Regional
Director simply issued his questioned order.
As already stated, after petitioner had filed a motion to dismiss the case based on the alleged desistance
of the complainants, the Regional Office called the parties to a conference, but only private respondents
came. Petitioner did not appear. After its motion was denied, the case was again set for conciliation
conference on June 18, 1989, but again petitioner did not come, insisting instead on the remand of the
case to the NLRC.
If petitioner attended the hearing on its motion to dismiss (based on alleged desistance of employees) it
would have known who the complainants were because it would have been furnished a copy of the
complaint.
Nor can petitioner pretend that it did not know what the nature of private respondents claims was
because petitioner in fact moved for the remand of the case to the NLRC on the ground that it involved a
claim within the original exclusive jurisdiction of the Labor Arbiter of said commission. Petitioner could
only have invoked the original and exclusive jurisdiction of Labor Arbiters precisely because it knew the
nature of the claims of private respondent.
As this Court has time and again stated:
The essence of due process is that a party be afforded reasonable opportunity to be heard and to submit
any evidence he may have in support of his defense. In administrative proceedings such as the one at
bench, due process simply means the opportunity to explain ones side or the opportunity to seek a
reconsideration of the action or ruling complained of.[19]
The Regional Director therefore rightly concluded in his order of July 29, 1986:
The records showed that the respondent [now petitioner] was afforded ample time to defend and present
evidences to refute the complainants allegations, but failed to avail of those opportunities.[20]
The fact is that, as the Secretary of Labor and Employment stated in his order of May 26, 1989:
In the course of inspection Mr. Manny Ramirez, owner of the Industry, revealed that he was not giving the
living allowances and other benefits for by doing so would mean business closure. He advised the labor
inspector to settle the case amicably with the complainants.[21]
What seems to have been overlooked by petitioner is that the proceedings in the Regional Office were a
summary one. Under Art. 128(a) of the Labor Code, the Secretary of Labor or his duly authorized
representatives, such as the Regional Directors, has visitorial powers which authorize him to inspect the
records and premises of an employer at any time of the day or night whenever work is being undertaken
therein, to question any employee and investigate any fact, condition or matter, and to determine
violations of labor laws, wage orders or rules and regulations. If the employer refuses to attend the
inspection or conference or to submit any record, such as payrolls and daily time records, he will be
deemed to have waived his right to present evidence.[22]
Indeed, Art. 129 of the Labor Code provides that proceedings before the Regional Director shall be
summary in nature and, hence, should be resolved expeditiously. Accordingly, the parties to such
proceedings must be vigilant and prompt in the assertion and protection of their rights.
Finally it is contended that the order of the Regional Director is defective because it does not contain a
clear and distinct statement of the facts and the law on which it is based. Petitioner claims that the
deficiency was supplied only in the order of the Secretary of Labor.
This contention has likewise no merit. The order in question reads:
This case is for non-payment of the minimum wage, living allowance and non-compliance with other labor
standard laws which was filed in this Office on April 1, 1986 by Carolyn Alfonso and 260 others against M.
Ramirez Industries and/or Manny Ramirez.

The complainants were not given the minimum wage and emergency cost of living allowance as mandated
by labor laws since the period of their employment in January 1986, when the respondent opened for
business, up to the time it stop business operations last April 8, 1986.
The records showed that the respondent was afforded ample time to defend and present evidences to
refute the complainants allegations, but failed to avail of those opportunities.
The complainants, therefore, are entitled to the difference of what has been provided by law less the
amount actually received by them.
Contrary to the claim of petitioner, the order of the Regional Director states the ultimate facts, to wit: that
private respondents were employed by petitioner in 1986; that on April 1, 1986 private respondents, led
by Carolyn Alfonso, filed the case complaining of nonpayment of the minimum wage, living allowance and
noncompliance with labor standards laws; that petitioner stopped business operations on April 8, 1986;
that private respondents were entitled to wage differentials; and that petitioner failed to refute the private
respondents allegations despite opportunity given to petitioner.
These are the facts on which the order was based. The order of the Secretary of Labor and Employment,
which petitioner seems to consider as adequate contains no more recital of the facts than the order of the
Regional Director in question. The only difference between the two is that the Secretarys order, aside from
stating the facts, also states the proceedings in the case. Thus, the Secretarys order reads:
The factual background are as follows:
This case is for non-payment of minimum wage, living allowance and non-compliance with other labor
standard laws which was filed on April 1, 1986 by Carolyn Alfonso and 260 others against respondent
herein.
On the strength of Office Order No. 23 dated April 1, 1986, Labor Standard and Welfare Officer, Mr. Juanito
Yallosa, conducted a complaint inspection at the respondents premises. Consequently, several conciliation
hearings were held until it was reset to April 18, 1986.
However, on April 14, 1986, respondent filed an Ex-Parte Motion to Dismiss the case on the ground of
complainants voluntary desistance from pursuing their case and attaching therein their letter of
affirmation to said desistance.
On May 7, 1986, both parties again were called for a conference. Complainants appeared while respondent
did not. In said hearing complainants vehemently objected to respondents motion on the ground that the
signatories appearing thereon are not the complainants.
On May 22, 1986, the Regional Director promulgated an Order dismissing respondent Ex-Parte Motion To
Dismiss.
On June 11, 1986, respondent filed another Motion praying that the case be remanded to the National
Labor Relations Commission alleging among others, that the case is within the original and exclusive
jurisdiction of the NLRC.
On June 18, 1986 an Order was promulgated ordering respondent to pay the claims of the complainants.
Hence, respondent appealed.
A decision must state the grounds for it so that any party who wishes to appeal therefrom can make a
proper assignment of error against the decision. In the language of Ang Tibay v. CIR:[23]
(7) The [administrative agency] should, in all controversial questions, render its decision in such a manner
that the parties to the proceeding can know the various issues involved, and the reasons for the decisions
rendered. The performance of this duty is inseparable from the authority conferred upon it.
If the test of sufficiency of a decision or order is that the party adversely affected by it can, if he wishes
to, assign errors against it, then the order of Regional Director in question is sufficient. Thus, in its motion
for reconsideration dated July 29, 1986, petitioner took issue with the findings contained in the order of
the Regional Director. Petitioner said:
The awards are inequitable, unjust and oppressive. Contrary to what was recited in the questioned
order that the respondent stopped business operations on April 8, 1986, respondent opened for business
his new but still-not-finished factory buildings on July 2, 1986. During the alleged period of employment of
the complainants, respondent was, and even presently is, undertaking construction in progress of his
factory buildings and compound. Anticipating that respondent will need workers when the factory will open
for business, many presented themselves to learn the trade of weaving baskets which will be the crafts to
be produced in respondents factory. Sacrificing valuable materials, respondent allowed those who are
interested to learn the trade. Naturally, many of the baskets weaved are of inferior and unsalable quality,
but respondent was not counting the costs, expecting that when the time comes to open the factory for
business, there would be already available workers skilled in the art of weaving baskets. Besides, there
were some who possess the aptitude and had weaved baskets of fair quality, so, they were
correspondingly paid of their labor on a piece rate basis. Unfortunately, however, even as construction of
respondents factory was not yet completed, his business was not spared of agitation initiated by elements
of a radical labor union. Hence, this case. And, now, to compel respondent to pay as commanded in the
questioned order, despite much sacrifice to waste valuable materials so prospective workers will learn to
weave is, verily, inequitable, unjust and oppressive. (Emphasis added)
Petitioner would not have been able to say contrary to what was recited in the questioned order... if the
basis of the Regional Directors order was not stated. In effect petitioner admitted that he had not paid the
respondents some of their claims, such as those for living allowance, albeit it defended itself by claiming
that private respondents were not regular workers but only learners, who were allowed to work so that
they would learn the craft, pending their employment. However that may be, the fact is that petitioner
admitted not having paid private respondents regular wages. That private respondents were regular
workers is a finding that the Regional Director made, based on the report of the Labor Standard Officer.
The failure of petitioner to dispute this factual finding gives it the stamp of finality. It is now settled that
factual findings of administrative agencies are to be accorded not only respect but even finality when they
are supported by substantial evidence.[24]
WHEREFORE, the petition for certiorari is DISMISSED for lack of merit.
SO ORDERED.
Regalado (Chairman), Romero, Puno, and Torres, Jr ., JJ., concur.
261 Phil. 1049

THIRD DIVISION
[ G.R. No. 82488, February 28, 1990 ]
VICENTE ATILANO/ROSE SHIPPING LINES, PETITIONER, VS. HON. DIONISIO C. DE LA SERNA,
UNDERSECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, HON. ADRIAN LOMUNTAD, REGIONAL
DIRECTOR, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7, MAMINTAS O.
SANDALAN, CESAR PETALCORIN, JONATHAN SARADOR, BONIFACIO LASOLA, NILO CLAROS, GODOFREDO
GRANADA, CRISTITUTO DAQUEL, LEONARDO LARGO, TOMAS OTADOY, LUIS GONZALES, PAULINO SIDO,
GILBERT OSABEL, WILLIAM RONDOVIO, RUEL ORGE, NOLASCO P. AUSTERO, WILFREDO FLORES AND
BERNARDITO P. MANALO, RESPONDENTS.
DECISION
FELICIANO, J.:
This Petition for Certiorari is directed against the order of respondent Undersecretary of Labor and
Employment dated 3 March 1988 which sustained the decision of respondent Regional Director in LSED
Case No. 055-85. That decision awarded salary differentials, allowances, 13th month pay and overtime
pay to the seventeen (17) private respondent employees of petitioner Vicente Atilano who is doing
business under the rubric Rose Shipping Lines.
On 20 May 1985, private respondents filed a letter-complaint in the Regional Office of the then Ministry of
Labor and Employment, Cebu City, against petitioner Rose Shipping Lines and its Proprietor/Manager
Vicente Atilano docketed as LSED Case No. 055-85. The letter-complaint alleged violations by petitioner of
labor standard laws on minimum wages, allowances, 13th month pay and overtime pay.
Acting on the letter-complaint, the Office of the Regional Director ordered a Labor Standards and Welfare
Officer (LSW officer, hereinafter) to conduct a complaint inspection on 22 July 1985 at the establishment
of petitioner in Cebu City. However, no actual inspection was effected because the owner, petitioner Mr.
Vicente Atilano, was allegedly on a business trip to Manila, and his employees declined to allow the
inspection in his absence.
Respondent Regional Director subsequently summoned the parties to conciliation conferences the first of
which was held on 5 August 1985 where only the complainants (private respondents herein) appeared.
The conference was then rescheduled to 16 August 1985 and on that meeting both the parties were
represented. Another hearing was held on 21 August 1985 and there the private respondents submitted
their position paper elaborating and documenting their claims. Petitioner did not file any position paper.
On 16 August 1985, while the above case was in progress, private respondents filed another complaint
against petitioner for unpaid wages covering the month of July 1985 which case was docketed as LSED
Case No. 061-85. On 26 August 1985, the parties were called to a conference regarding this second
complaint during which petitioner Vicente Atilano appeared and promised to pay private respondents their
unpaid salaries for the month of July not later than 30 August 1985, and their salaries for the month of
August 1985 not later than 2 September 1985. Petitioner, however, failed to comply with this promise. On
6 September 1985, the Regional Director issued a Compliance Order requiring petitioner to pay private
respondents the aggregate amount of Thirty Seven Thousand Sixty Five Pesos and Sixty Centavos
(P37,065.60) representing the unpaid wages being claimed under the second complaint (LSED Case No.
061-85).
Petitioner filed a motion for reconsideration of the Compliance Order, which was denied for lack of merit in
a Resolution dated 11 October 1985. Counsel for private respondents immediately moved for the issuance
of a writ of execution. The case was later appealed by petitioner to the then Minister of Labor and
Employment which appeal was, however, dismissed on the ground that it was filed out of time. Petitioner
then filed a motion to quash the writ of execution which motion was also denied. But in an order dated 26
January 1986. LSED Case No. 061-85 was dismissed on the ground that the claims of all the complainants
had been fully settled by the petitioner.
Meanwhile, on 16 January 1986, the Regional Director issued an order in LSED Case No. 055-85 (the
earlier case) the dispositive portion of which provided as follows:
"WHEREFORE, premises considered, respondent ROSE SHIPPING LINES and the Manager/Proprietor is
(sic) hereby ordered to pay the claims of the complainants in the aggregate sum of SIX HUNDRED SIXTY
THOUSAND FIVE HUNDRED NINETY FOUR PESOS AND 46/1000 (P660,594.46), Philippine currency, within
15 days from the receipt thereof, x x x."
Petitioner did not file a motion for reconsideration of the above order but instead filed an ex-parte motion
to dismiss dated 24 January 1986 alleging that the case (No. 055-85) had been rendered moot and
academic by the quitclaims and release papers dated 4 January 1986 signed by complainants in favor of
respondents.
Private respondents filed an opposition to the ex-parte motion to dismiss, contending that the quitclaims
and release papers referred to by petitioner (which quitclaims and papers had been prepared by
petitioner) were intended to support the dismissal of LSED Case No. 061-85 (the later case) only.
In his comment on private respondents' opposition to the ex-parte motion to dismiss, petitioner contended
that the two (2) cases involved identical claims and concerned the same parties, and that the dismissal of
LSED Case No. 061-85 was res judicata in respect of LSED Case No. 055-85. Petitioner added that the
dispositive portion of the order dismissing LSED Case No. 061-85 refers not only to the claims of private
respondents in the said case but to all claims of private respondents against petitioner including those
which are the subject of LSED Case No. 055-85.
Several conciliation conferences on the motion to dismiss were subsequently held and both parties agreed
that they would submit their respective position papers after which petitioner's motion to dismiss would be
deemed submitted for resolution.
On 24 April 1986, public respondent Regional Director denied petitioner's motion to dismiss for lack of
merit. A motion for reconsideration or appeal was filed with the Secretary of the Department of Labor and
Employment on 19 May 1986. Petitioner more than a year later filed a Manifestation and Motion with the
Secretary dated 23 July 1987, enclosing therein a different set of quitclaims and releases also prepared by
petitioner but allegedly signed by private respondents dated 9 July 1986 (i.e., different from those earlier
referred to by petitioner in his ex-parte motion to dismiss filed with the Regional Director). On 3 March
1988, public respondent Undersecretary of Labor rendered the questioned order dismissing petitioner's
motion for reconsideration or appeal for lack of merit.
In the instant Petition for Certiorari, petitioner makes the following arguments:
1. Public respondents acted without jurisdiction over the nature and subject matter of private
respondents' purported money claims.
2. Public respondents acted in excess of jurisdiction in not endorsing the matter to the National Labor
Relations Commission for adjudication.
3. Public respondents acted with grave abuse of discretion in not conducting an actual inspection on
the purported charges of labor standards violations.
4. Public respondents acted with grave abuse of discretion amounting to lack of jurisdiction in
summarily granting private respondents' claims.
The main issue to be resolved herein is whether or not the public respondents, Regional Director and
Undersecretary of Labor, have jurisdiction over the subject matter of the case. Petitioner contends that the
power to adjudicate the money claims here involved is vested solely in the Labor Arbiter.
1. LSED Case No. 055-85 was commenced on 20 May 1985: the order of the Regional Director in said
case, which is here sought to be set aside, was issued on 16 January 1986, while the order of the same
official denying petitioner's motion to dismiss for lack of merit was rendered on 24 April 1986. The order of
the Undersecretary of Labor here assailed was, as already noted, issued on 3 March 1988. At all material
times i.e., from 20 May 1985 through to 3 March 1988, the legal provisions governing the exercise of
the visitorial and enforcement powers of the Regional Directors of Labor were embodied in P.D. No. 850
(promulgated on 16 December 1975) and Executive Order No. 111 (promulgated on 24 December 1986),
amending Article 128 (b) of the Labor Code which, as amended, provided as follows:
"ART. 128. Visitorial and enforcement power. x x x.
(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the
relationship of employer-employee still exist, 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.
xxx xxx xxx"
In Maternity and Children's Hospital v. the Honorable Secretary of Labor,[1] the Court made clear that
under Article 128 of the Labor Code, as amended, the Regional Director of Labor possessed
"enforcement/adjudication authority" over uncontested money claims where the employer-employee
relationship remained. The Court, through Mr. Justice Medialdea, said:
"As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an employer
with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion
however, that the inclusion of the phrase, 'The provisions of Article 217 of this Code to the contrary
notwithstanding and in cases where the relationship of employer-employee still exists x x x' in Article 128
(b), as amended, above-cited, merely confirms/reiterates the enforcement/adjudication authority of the
Regional Director over uncontested money claims in cases where an employer-employee relationship still
exists.
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it is
clear that it has always been the intention of our labor authorities to provide our workers immediate
access (when still feasible, as where an employer-employee relationship still exists) to their rights and
benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve?
wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy instructions No. 7 indicating that the transfer of labor
standards cases from the arbitration system to the enforcement system is
'x x to assure the workers the rights and benefits due to him under labor standard laws, without having to
go through arbitration. x x'
so that
'x x the workers would not litigate to get what legally belongs to him. x x ensuring delivery x x free of
charge.'
Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in
its application by long-winded arbitration and litigation. Rights must be asserted and benefits received
with the least inconvenience. Labor laws are meant to promote, not defeat, social justice.
xxx xxx xxx
The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 128 (b) as
amended by E.O. No. 111, dated December 24, 1986, this executive order to be considered in the nature
of a curative statute with retrospective application. (Progressive Workers' Union, et al. v. Hon. F.P. Aguas,
et al. [supra]; M. Garcia vs. Judge A. Martinez, et al., G.R. No. L-47629, May 28, 1979, 90 SCRA 331)."
(Citations omitted; italics)
2. Applying the Maternity and Children's Hospital case to the case at bar, we consider that petitioner did
not effectively controvert the money claims of private respondents against him, which claims originated
from labor standards violations asserted to have been committed by petitioner.
The records of the present case show that petitioner, for reasons satisfactory to himself, did not contest
the claims of private respondents despite the multiple opportunities therefor afforded to him. Petitioner did
not file any answer to the letter-complaint submitted by private respondents to the Office of the Regional
Director; neither did he file a position paper before that Office to controvert private respondents' claims. It
was only after the Regional Director had already rendered his ruling of 16 January 1986 in LSED Case No.
055-85 that petitioner tried to controvert the said claims by arguing that private respondents had
subsequently executed quitclaims and releases in his favor. We note that petitioner did not question the
correctness of the computations of the amounts due to each of the private respondents nor that said
claims had not theretofore been paid by petitioner. After rendition of the Regional Director's decision,
petitioner attempted to set up a defense of subsequent compromise of and payment to or waiver by
private respondents of their claims and presented what he contends were quitclaims, releases and waivers
signed by private respondents. On the basis of the submission of such papers, petitioner now pretends
that he had controverted the claims of private respondents and that he had raised issues which could not
be resolved without considering evidentiary matters not verifiable in the normal course of inspection, and
that therefore the present case should go to the Labor Arbiter.
We do not find petitioner's argument persuasive. We believe that the question of the authenticity or
genuineness of the quitclaims, releases and waivers supposedly signed by private respondents, but
vehemently denied by the latter, could be verified by the Regional Director in the course of, and in
connection with, examination of the petitioner's books and records of which such supposed
quitclaims, etc. (if at all genuine) must have formed part. We note also that after petitioner on 19 May
1986 filed a motion for reconsideration or appeal from the Regional Director's order of 16 January 1986,
with the Secretary of Labor, the Secretary of Labor requested the Regional Director to conduct conferences
or hearings for the purpose of verifying the genuineness and authenticity of private respondents
signatures on the quitclaim papers submitted by petitioner. A report by an LSW officer of the Regional
Director's office showed that:
(a)
eight (8) of the private respondents denied the genuineness of their purported signatures appearing
on the quitclaim and release papers shown to them for identification and examination;
(b)
the same private respondents executed affidavits stating that they had not executed any document
in favor of petitioner; that the quitclaims, etc. submitted by petitioner were simulated and forged;
and that private respondents had not tried to settle the case (LSED Case No. 055-85). [2]
On the basis of the foregoing report, the Undersecretary of Labor stated in his 3 March 1988 order that:
"In the face of the foregoing circumstances, we have no alternative but to deny respondents' motion. Let
it be noted that a careful examination of the signatures appearing in the quitclaims and releases will
readily show quite apparent variance vis-a-vis the signatures affixed in the complaint. This aroused our
suspicion on their due execution and genuineness and prompted us to cause the calling of concerned
parties for verification. Said doubts and suspicion were confirmed and further strengthened by the outright
denial made by the complainants during the conferences called as well as in the sworn statements they
subsequently submitted. We wish to state at this juncture that while it is our policy to encourage
voluntary settlement of disputes, this Office can not approve a compromise agreement or settlement
which is being questioned and in fact being denied by one of the parties. While it is true that respondents
submitted quitclaims and releases and other documents purportedly executed by complainants to show
that they have no more claims against respondents,said documents could not be given any weight after
the complainants personally appeared during the hearing and declared that their signatures appearing
thereon were simulated and forged and at the same time denied that any settlement was arrived
at. Besides, the fact that those documents were supposed to be executed as early as July 9, 1986 but
were submitted to this Office after more than a year has lapsed puts serious doubts on their
authenticity. For if indeed there was an amicable settlement reached that early, why did it take
respondent that long to notify us of the same and move for the dismissal of this case. More importantly,
would it not be appropriate and logical for the parties, assisted by their respective counsels to file a joint
motion to dismiss, if really they have come to terms.[3]
The quitclaim papers which petitioner alleges embodied a compromise or settlement agreement were in
any case not duly executed, that is, they were not signed in the presence of the Regional Director or his
duly authorized representative, in disregard of the requirements of Section 8, Rule II of the Rules on the
Disposition of Labor Standards Cases in the Regional Offices, which provide that:
"Section 8. Compromise Agreement. Should the party arrive at an agreement as to the whole or part of
the dispute, said agreement shall be reduced [to] writing and signed by the parties in the presence of the
regional director or his duly authorized representative." (Italics supplied)
Thus, the issue of the authenticity and genuineness of the two (2) sets of supposed quitclaims had been
squarely raised before and passed upon and resolved by the Regional Director and the Undersecretary of
Labor. We note that petitioner did not submit any rebuttal evidence before the Regional Director or his
representatives. We note also that the set of supposed quitclaims purportedly signed as early as 9 July
1986, were first presented by petitioner in his Manifestation and Motion filed with the Undersecretary of
Labor dated 23 July 1987, that is, more than a year after execution; and that, upon the other hand, the
joint affidavits supposedly signed by private respondents attesting to the genuineness of the purported
quitclaims are dated only as of 14 September 1987, or more than a year after the supposed quitclaims
were signed.
The record thus strongly suggests that the issue of the genuineness or authenticity of the purported
quitclaim documents was an issue belatedly manufactured by petitioner in the effort to evade the
jurisdiction of the Regional Director and delay payment of the amounts awarded by the Regional Director.
3. On 2 March 1989, Republic Act. No. 6715 amending certain provisions of the Labor Code was enacted.
In his concurring opinion in the Resolution of the Motion for Reconsideration in Briad Agro Development
Corporation v. de la Cerna, et al.,[5] Mr. Justice Narvasa underscored that Republic Act No. 6715 had left
Article 128 (b) of the Labor Code intact, in the sense that the Regional Director retains his visitorial and
enforcement powers thereunder and could exercise such powers even though the amount involved was in
excess of P5,000.00 provided that the employer had not contested the findings of the LSW officers by
raising issues which can not be resolved without considering evidentiary matters not verifiable in the
course of normal inspection:
"In the resolution, therefore, of any question of jurisdiction over a money claim arising from employeremployee relations, the first inquiry should be into whether the employment relation does indeed still exist
between the claimant and the respondent.
If the relation no longer exists, and the claimant does not seek reinstatement, the case is cognizable by
the Labor Arbiter, not by the Regional Director. On the other hand, it the employment relation still exists,
or reinstatement is sought, the next inquiry should be into the amount involved.
If the amount involved does not exceed P5,000.00, the Regional Director undeniably has jurisdiction.
But even if the amount of the claim exceeds P5,000.00, the claim is not on that account necessarily
removed from the Regional Director's competence. In respect thereof, he may still exercise the visitorial
and enforcement powers vested in him by Article 128 of the Labor Code, as amended, supra; that is to
say, he may still direct his labor regulations officers or industrial safety engineers to inspect the employer's
premises and examine his records; and if the officers should find that there have been violations of labor
standards provisions, the Regional Director may, after due notice and hearing, order compliance by the
employer therewith and issue a writ of execution to the appropriate authority for the enforcement
thereof. However, this power may not, to repeat, be exercised by him where the employer contests the
labor regulation officers' findings and raises issues which cannot be resolved without considering
evidentiary matters not verifiable in the normal course of inspection. In such an event, the case will have
to be referred to the corresponding Labor Arbiter for adjudication, since it falls within the latter's exclusive
original jurisdiction." (Italics supplied)
As already pointed out above, petitioner here did not controvert the findings of the LSW officers and the
decision of the Regional Director, and that the issue hesubsequently raised could, in any event, have been
resolved, as it was in fact verified and resolved, in the normal course of inspection and conferences among
petitioner and private respondents.
4. Should it be assumed for purposes of argument merely, that under Article 217 (6) of the Labor Code as
last amended by Republic Act No. 6715, jurisdiction over wage claims like those involved in LSED Case No.
055-85 was transferred to the Labor Arbiter, it must still be pointed out that the amendments introduced
by Republic Act No. 6715 cannot be applied retroactively so as to set aside and nullify earlier,
completed exercises of jurisdiction which had resulted in a decision which had become final and executory
long before the enactment of Republic Act No. 6715. As noted earlier, at the time LSED Case No. 055-85
was commenced and at the time decision thereon was rendered by the Regional Director and affirmed by
the Undersecretary of Labor, both officials undeniably had jurisdiction over the subject matter of LSED
Case No. 055-85. That jurisdiction was not wiped out by the coming into effect of Republic Act No. 6715. [5]
5. Finally, petitioner points to the failure of public respondent Regional Director to conduct an actual
inspection of the establishment owned by petitioner, contending that the absence of such an inspection
nullified the decision rendered by the Regional Director. This argument fails to take into account two (2)
things: firstly, that the inability of the LSW officers of the Regional Director conduct an actual inspection
was due to refusal of petitioner's own employees to permit inspection in the alleged absence of petitioner;
secondly, Section 7, Rule II of the Rules on the Disposition of Labor Standards Cases provides that:
"Sec. 2. Complaint inspection. All such complaints shall immediately be forwarded to the Regional
Director who shall refer the case to the appropriate unit in the Regional Office for assignment to a Labor
Standards and Welfare Officer (LSWO) for field inspection. When the field inspection does not produce the
desired results, the Regional Director shall summon the parties for summary investigation to expedite the
disposition of the case. x x x." (Italics supplied)
Thus, the lack of inspection was cured when the Regional Director called the parties to several
conferences, at which conferences, petitioner could have presented whatever he had in his books and
records to refute the claims of private respondents; petitioner did not do so and his failure must be
deemed a waiver of his right to contest the conclusions of the Regional Director on the basis of the
evidence and records actually made available to him.
WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner.
SO ORDERED.
Fernan, C.J., (Chairman), Gutierrez, Jr., Bidin, and Cortes, JJ., concur.
278 Phil. 747

SECOND DIVISION
[ G.R. No. 96169, September 24, 1991 ]
EMPLOYERS CONFEDERATION OF THE PHILIPPINES, PETITIONER VS. NATIONAL WAGES AND
PRODUCTIVITY COMMISSION AND REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD-NCR,
TRADE UNION CONGRESS OF THE PHILIPPINES, RESPONDENTS.
DECISION
SARMIENTO, J.:
The petition is given due course and the various pleadings submitted being sufficient to aid the Court in
the proper resolution of the basic issues raised in this case, we decide it without further ado.
The Employers Confederation of the Philippines (ECOP) is questioning the validity of Wage Order No. NCR0-A dated October 23, 1990 of the Regional Tripartite Wages and Productivity Board, National Capital
Region, promulgated pursuant to the authority of Republic Act. No. 6727, "AN ACT TO RATIONALIZE WAGE
POLICY DETERMINATION BY ESTABLISHING THE MECHANISM AND PROPER STANDARDS THEREFOR.
AMENDING FOR THE PURPOSE ARTICLE 99 OF AND INCORPORATING ARTICLES 120, 121, 122, 123, 124,
126, AND 127 INTO PRESIDENTIAL DECREE NO. 442 AS AMENDED. OTHERWISE KNOWN AS THE LABOR
CODE OF THE PHILIPPINES, FIXING NEW WAGE RATES PROVIDING WAGE INCENTIVES FOR INDUSTRIAL
DISPERSAL TO THE COUNTRYSIDE, AND FOR OTHER PURPOSES," was approved by the President on June
9, 1989. Aside from providing new wage rates,[1] the "Wage Rationalization Act" also provides, among
other things, for various Regional Tripartite Wages and Productivity Boards in charge of prescribing
minimum wage rates for all workers in the various regions[2] and for a National Wages and Productivity
Commission to review among other functions, wage levels determined by the boards.[3]
On October 15, 1990, the Regional Board of the National Capital Region issued Wage Order No. NCR-01,
increasing the minimum wage by P17.00 daily in the National Capital Region.[4] The Trade Union Congress
of the Philippines (TUCP) moved for reconsideration; so did the Personnel Management Association of the
Philippines (PMAP).[5] ECOP opposed.
On October 23, 1990, the Board issued Wage Order No. NCR-01-A, amending Wage Order No. NCR-01, as
follows:
Section 1. Upon the effectivity of this Wage Order, all workers and employees in the private sector in the
National Capital Region already receiving wages above the statutory minimum wage rates up to one
hundred and twenty-five pesos (P125.00) per day shall also receive an increase of seventeen pesos
(P17.00) per day.
ECOP appealed to the National Wages and Productivity Commission. On November 6, 1990, the
Commission promulgated an Order, dismissing the appeal for lack of merit. On November 14, 1990, the
Commission denied reconsideration.
The Orders of the Commission (as well as Wage Order No. NCR-01-A) are the subject of this petition, in
which ECOP assails the board's grant of an "across-the-board" wage increase to workers already being
paid more than existing minimum wage rates (up to P125.00 a day) as an alleged excess of authority, and
alleges that under the Republic Act No. 6727, the boards may only prescribe "minimum wages," not
determine "salary ceilings." ECOP likewise claims that Republic Act No. 6727 is meant to promote
collective bargaining as the primary mode of settling wages, and in its opinion, the boards can not
preempt collective bargaining agreements by establishing ceilings. ECOP prays for the nullification of
Wage Order No. NCR-01-A and for the "reinstatement" of Wage Order No. NCR-01.
The Court directed the Solicitor General to comment on behalf of the Government, and in the Solicitor
General's opinion, the Board, in prescribing an across-the-board hike did not, in reality, "grant additional
or other benefits to workers and employees, such as the extension of wage increases to employees and
workers already receiving more than minimum wages. . ."[6] but rather, fixed minimum wages according to
the "salary-ceiling method."
ECOP insists, in its reply, that wage-fixing is a legislative function and Republic Act No. 6727 delegated to
the Regional boards no more "than the power to grant minimum wage adjustments" [7] and in the absence
of clear statutory authority,"[8] the boards may no more than adjust "floor wages.[9]
The Solicitor General, in his rejoinder, argues that Republic Act No. 6727 is intended to correct "wage
distortions" and the salary-ceiling method (of determining wages) is meant, precisely, to rectify wage
distortions.[10]
The Court is inclined to agree with the Government. In the National Wages and Productivity Commission's
Order of November 6, 1990 the Commission noted that the determination of wages has generally involved
two methods, the floor-wage" method and the "salary-ceiling" method. We quote:
Historically, legislation involving the adjustment of the minimum wage made use of two methods. The
first method involves the fixing of determinate amount that would be added to the prevailing statutory
minimum wage. The other involves "the salary-ceiling method" whereby the wage adjustment is applied
to employees receiving a certain, denominated salary ceiling. The first method was adopted in the earlier
wage orders, while the latter method was used in R.A. Nos. 6640 and 6727. Prior to this, the salaryceiling method was also used in no less than eleven issuances mandating the grant of cost-of-living
allowances (P.D. Nos. 525, 1123. 1614. 1634, 1678. 1713 and Wage Order Nos. 1, 2, 3, 5 and 6). The
shift from the first method to the second method was brought about by labor disputes arising from wage
distortions, a consequence of the implementation of the said wage orders. Apparently, the wage order
provisions that wage distortions shall be resolved through the grievance procedure was perceived by
legislators as ineffective in checking industrial unrest resulting from wage order implementations. With
the establishment of the second method as a practice in minimum wage fixing, wage distortion disputes
were minimized.[11]
As the Commission noted, the increasing trend is toward the second mode, the salary-cap method, which
has reduced disputes arising from wage distortions (brought about, apparently, by the floor-wage
method). Of course, disputes are appropriate subjects of collective bargaining and grievance procedures,
but as the Commission observed and as we are ourselves agreed, bargaining has helped very little in
correcting wage distortions. Precisely, Republic Act No. 6727 was intended to rationalize wages, first, by
providing for full-time boards to police wages round-the-clock, and second, by giving the boards enough
powers to achieve this objective. The Court is of the opinion that Congress meant the boards to be
creative in resolving the annual question of wages without labor and management knocking on the
legislature's door at every turn. The Court's opinion is that if Republic No. 6727 intended the boards alone
to set floor wages, the Act would have no need for a board but an Accountant to keep track of the latest
consumer price index or better, would have Congress done it as the need arises as the legislature, prior to
the Act, has done so for years. The fact of the matter is that the Act sought a "thinking" group of men
and women bound by statutory standards. We quote:
ART. 124. Standards/Criteria for Minimum Wage Fixing.The regional minimum wages to be established
by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum
standards of living necessary for the health, efficiency and general well-being of the employees within the
framework of the national economic and social development program. In the determination of such
regional minimum wages, the Regional Board shall, among other relevant factors, consider the following:
"(a) The demand for living wages;
"(b). Wage adjustment vis-a-vis the consumer price index;
"(c) The cost of living and changes or increases therein;
"(d) The needs of workers and their families;
"(e) The need to induce industries to invest in the countryside;
"(f.) Improvements in standards of living;
"(g) The prevailing wage levels;
"(h) Fair return of the capital invested and capacity to pay of employers;
"(i) Effects of employment generation and family income; and
"(j) The equitable distribution of income and wealth along the imperatives of economic and social
development.[12]
The Court is not convinced that the Regional Board of the National Capital Region, in decreeing an acrossthe-board hike, performed an unlawful act of legislation. It is true that wage-fixing, like rate-fixing,
constitutes an act Congress;[13] it is also true, however, that Congress may delegate the power to fix
rates[14] provided that, as in all delegations cases. Congress leaves sufficient standard. As this Court has
indicated, it is impressed that the above-quoted standards are sufficient, and in the light of the floor-wage
method's failure, the Court believes that the Commission correctly upheld the Regional Board of the
National Capital Region.
Apparently, ECOP is of the mistaken impression that Republic Act No. 6727 is .meant to "get the
Government out of the industry" and leave labor and management alone in deciding wages. The Court
does not think that the law intended to deregulate the relation between labor and capital for several
reasons: (1) The Constitution calls upon the State to protect the rights of workers and promote their
welfare;[15] (2) the Constitution also makes it a duty of the State "to intervene when the common goal so
demands" in regulating property and property relations;[16] (3) the Charter urges Congress to give priority
to the enactment of measures, among other things, to diffuse the wealth of the nation and to regulate the
use of property;[17] (4) the Charter recognizes the just share of labor in the fruits of production; [18]" (5)
under the Labor Code, the State shall regulate the relations between labor and management; [19] (6) under
Republic Act No. 6727 itself the State is interested in seeing that workers receive fair and equitable
wages;[20] and (7) the Constitution is primarily a document of social justice, and although it has recognized
the importance of the private sector,[21] it has not embraced fully the concept of laissez faire[22] or
otherwise, relied on pure market forces to govern economy. We can not give to the Act a meaning or
intent that will conflict with these basic principles.
It is the Court's thinking, reached after the Court's own study of the Act, that the Act is meant to
rationalize wages, that is, by having permanent boards to decide wages rather than leaving wage
determination to Congress year after year and law after law. The Court is not of course saying that the
Act is an effort of Congress to pass the buck, or worse, to abdicate its duty, but simply, to leave the
question of wages to the expertise of experts. As Justice Cruz observed, "[w]ith the proliferation or
specialized activities and their attendant peculiar problems, the national legislature has found it more
necessary to entrust to administrative agencies the power of subordinate legislation as it is called." [23]
The Labor Code defines "wage" as follows:
"Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for services rendered or to be
rendered and includes the fair and reasonable value, as determined by the Secretary of Labor of board,
lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable
value" shall not include any profit to the employer or to any person affiliated with the employer.[24]
The concept of "minimum wage" is however, a different thing, and certainly, it means more than setting a
floor wage to upgrade existing wages, as ECOP takes it to mean. "Minimum wages" underlies the effort of
the State, as Republic Act No. 6727 expresses it, "to promote productivity-improvement and gain-sharing
measures to ensure a decent standard of living for the workers and their families; to guarantee the rights
of labor to its just share in the fruits of production; to enhance employment generation in the countryside
through industry dispersal; and to allow business and industry reasonable returns on investment,
expansion and growth,"[25] and as the Constitution expresses it, to affirm "labor as a primary social
economic force.[26] As the Court indicated, the statute would have no need for a board if the question
were simply "how much". The State is concerned, in addition, that wages are not distributed unevenly,
and more important that social justice is subserved.
It is another question, to be sure, had Congress created "roving" boards, and were that the case, a
problem of undue delegation would have ensued; but as we said, we do not see a Board (National Capital
Region) "running riot" here, and Wage Order No. NCR-01-A as an excess of authority.
It is also another question whether the salary-cap method utilized by the Board may serve the purposes of
Republic Act No. 6727 in future cases and whether that method is after all, a lasting policy of the Board;
however, it is a question on which we may only speculate at the moment. At the moment, we find it to be
reasonable policy (apparently, it has since been Government policy); and if in the future it would be
perceptibly unfair to management, we will take it up then.
WHEREFORE, premises considered, the petition is DENIED. No pronouncement as to cost.
IT IS SO ORDERED.
Melencio-Herrera, (Chairman), Padilla and Regalado, JJ., concur.
Paras, J., no part.
339 Phil. 40
SECOND DIVISION
[ G.R. No. 111722, May 27, 1997 ]
ALPHA INVESTIGATION AND SECURITY AGENCY, INC. (AISA), PETITIONER, VS. NATIONAL LABOR
RELATIONS COMMISSION, THIRD DIVISION, AND WILLIAM GALIMBA, NESTOR LOLOQUISEN, NESTOR
IBUYAT, CARLITO CASTRO, JOSE PERDIDO, FELIPE TOLENTINO, LEONARDO IBUYAT, FELINO CULANNAY,
RONIE NINO, ROMAN NALUNDASAN, JAIME FONTANILLA, WILFRED BUTAY, JOSE ACIO, EDISON VALDEZ,
CRESENCIO AGRES, RODRIGO LUIS, MARIO SUGUI, BENEDICTO SUGUI, ROGER RAMBAUD,
RESPONDENTS.
DECISION
ROMERO, J.:
May the principal of a security service agreement be held jointly and severally liable with the contractor for
non-payment of the minimum wage?
The facts are undisputed.
Petitioner Alpha Investigation and Agency, Inc. (AISA) is a private corporation engaged in the business of
providing security services to its clients, one of whom is the Don Mariano Marcos State University
(DMMSU).
Private respondents were hired as security guards by AISA on February 16, 1990. Five months later, 43
security guards filed before the Regional Office of the Department of Labor and Employment (DOLE) a
complaint against AISA for non-compliance with the current minimum wage order. After 24 of the original
complainants filed a motion for exclusion from the case, the remaining 19 security guards filed their
individual amended complaints impleading DMMSU as party-respondent.
Private respondents have been receiving a monthly salary of P900.00 although the security service
agreement between AISA and DMMSU[1] provided a monthly pay of P1,200.00 for each security guard.
AISA made representations with DMMSU for an increase in the contract rates of the security guards to
enable them to pay the mandated minimum wage rates without compromising its administrative and
operational expenses. DMMSU, however, replied that, being a government corporation, it cannot grant said
request due to budgetary constraints.
On August 17, 1992, Labor Arbiter Emiliano T. de Asis rendered a decision, the dispositive portion of which
reads as follows:
"RESPONSIVE TO THE FOREGOING, judgment is hereby rendered:
a)
Ordering the respondent Alpha Investigation and Security Agency and Mariano Marcos State
University to pay each complainant the amount of FORTY ONE THOUSAND FOUR HUNDRED FIFTY NINE
PESOS AND FIFTY ONE CENTAVOS (P41,459.51) representing salary differential for the period from
February 16, 1990 to September 30, 1991, or the total amount of P787,730.69 as follows:
1.
Nestor Loloquisen P41,459.51
2.
Nestor Ibuyat 41,459.51
3.
Jose Acio 41,459.51
4.
Cresencio Agres 41,459.51
5.
Wilfred Butay 41,459.51
6.
Carlito Castro 41,459.51
7.
Federico Calunnay 41,459.51
8.
Jaime Fontanilla 41,459.51
9.
William Galimba 41,459.51
10.
Leonardo Ibuyat 41,459.51
11.
Rodrigo Luis 41,459.51
12.
Roman Nalundasan 41,459.51
13.
Ronnie Nino 41,459.51
14.
Jose Perdido 41,459.51
15.
Roger Rambaud 41,459.51
16.
Benedicto Sugui 41,459.51
17.
Mario Sugui 41,459.51
18.
Felipe Tolentino 41,459.51
19.
Edison Valdez 41,459.51
P787,730.69
b)
Dismissing the claims for 13th month pay for failure to substantiate the same.
c)
Claims of complainants who filed their motion for reconsideration are hereby dismissed.
SO ORDERED."[2]
AISA and DMMSU interposed separate appeals. The NLRC, on May 7, 1993, rendered a decision affirming
the solidary liability of AISA and DMMSU and remanding the records of the case to the arbitration branch
of origin for computation of the salary differential awarded by the Labor Arbiter.
Only AISA filed a motion for reconsideration, which was denied by the NLRC on July 1, 1993, for lack of
merit.
The judgment against DMMSU, finding it jointly and severally liable with AISA for the payment of increase
in wages, became final and executory after it failed to file a petition for certiorari with this Court within a
reasonable time. "Although Rule 65 does not specify any period for the filing of a petition for certiorari and
mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the definitive rule
now is that such reasonable time is within three months from the commission of the complained act." [3]
In this petition, AISA alleges that payment of the wage increases under the current minimum wage order
should be borne exclusively by DMMSU, pursuant to Section 6 of Republic Act 6727 (RA 6727) [4] which
reads as follows:
"Sec. 6.
In the case of contracts for construction projects and for security, janitorial and similar
services, the prescribed increases in the wage rates of the workers shall be borne by the principals or
clients of the construction/service contractors and the contract shall be deemed amended accordingly. In
the event, however, that the principal or client fails to pay the prescribed wage rates, the
construction/service contractor shall be jointly and severally liable with his principal or client."
It further contends that Articles 106, 107 and 109 of the Labor Code generally refer to the failure of the
contractor or sub-contractor to pay wages in accordance with the Labor Code with a mandate that failure
to pay such wages would make the employer and contractor jointly and severally liable for such payment.
AISA insists that the matter involved in the case at bar hinges on wage differentials or wages increases, as
prescribed in the aforequoted Section 6 of RA 6727, and not wages in general, as provided by the Labor
Code.
This interpretation is not acceptable. It is a cardinal rule in statutory construction that in interpreting the
meaning and scope of a term used in the law, a careful review of the whole law involved, as well as the
intendment of the law, must be made.[5] In fact, legislative intent must be ascertained from a
consideration of the statute as a whole, and not of an isolated part or a particular provision alone.[6]
AISA's solidary liability for the amounts due the security guards finds support in Articles 106, 107 and 109
of the Labor Code, to wit:
"ART. 106.
Contractor or Sub-Contractor. Whenever an employer enters into a contract with another
person for the performance of the former's work, the employees of the contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this code.
In the event that the contractor or sub-contractor fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with his contractor or sub-contractor to
such employees to the extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him. xxx
ART. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to
any person, partnership association or corporation which, nor being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.
ART. 109.
Solidary Liability. The provisions of existing laws to the contrary notwithstanding, every
employer or indirect employer shall be held responsible with his contractor or sub-contractor for any
violation of any provision of this Code. For purposes of determining the extent of their civil liability under
the Chapter, they shall be considered as direct employers."
The joint and several liability of the contractor and the principal is mandated by the Labor Code to ensure
compliance with its provisions, including the statutory minimum wage.[7] The contractor is made liable by
virtue of his status as direct employer, while the principal becomes the indirect employer of the former's
employees for the purpose of paying their wages in the event of failure of the contractor to pay them. This
gives the workers ample protection consonant with the labor and social justice provisions of the 1987
Constitution.[8]
In the case at bar, it is not disputed that private respondents are the employees of AISA. Neither is there
any question that they were assigned to guard the premises of DMMSU pursuant to the latter's security
service agreement with AISA and that these two entities paid their wage increases.
It is to be borne in mind that wages orders, being statutory and mandatory, cannot be waived. AISA
cannot escape liability since the law provides for the joint and solidary liability of the principal and the
contractor to protect the laborers.[9] Thus, the Court held in the Eagle Security v. NLRC:[10]
"The solidary liability of PTSI and EAGLE, however, does not preclude the right of reimbursement from his
co-debtor by the one who paid (See Article 1217, Civil Code). It is with respect to this right of
reimbursement that petitioners can find support in the aforecited contractual stipulation and Wage Order
provision.
The Wage Orders are explicit that payment of the increases are 'to be borne' by the principal or client. 'To
be borne', however, does not mean that the principal, PTSI in this case, would directly pay the security
guards the wage and allowance increases because there is no privity of contract between them. The
security guards' contractual relationship is with their immediate employer, EAGLE. As an employer, EAGLE
is tasked, among others, with the payment of their wages. (See Article VII Sec. 3 of the Contract for
Security Services, supra and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 556).
Premises considered, the security guards' immediate recourse for the payment of the increases is with
their direct employer, EAGLE. However, in order for the security agency to comply with the new wage and
allowance rates it has to pay the security guards, the Wage Order made specific provision to amend
existing contracts for security services by allowing the adjustments of the consideration paid by the
principal to the security agency concerned. What the Wage Orders require, therefore, is the amendment of
the contract as to the consideration to cover the service contractor's payment of the increases
mandated. In the end, therefore, ultimate liability for the payment of the increases rests with the
principal." (Underscoring supplied)
Section 6 of RA 6727 merely provides that in case of wage increases resulting in a salary differential, the
liability of the principal and the contractor shall be joint and several. The same liability attaches under
Articles 106, 107 and 109 of the Labor Code, which refer to the prevailing standard minimum wage.
The Court finds that the NLRC acted correctly in holding petitioner jointly and severally liable with DMMSU
for the payment of the wage increases to private respondents. Accordingly, no grave abuse of discretion
may be attributed to the NLRC in arriving at the impugned decision.
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit and the assailed
resolution is AFFIRMED. Costs against petitioner.
SO ORDERED.
Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.
255 Phil. 459

THIRD DIVISION
[ G.R. No. 81314, May 18, 1989 ]
EAGLE SECURITY AGENCY, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, LABOR
ARBITER EDUARDO G. MAGNO, RODOLFO DEQUINA, AVELINO M. NARVAEZ, JACULO J. JEROME,
ROLANDO N. VALENCIA, CLODUALDO N. ANGRA, JOSE SAMONTE, RUEL A. LAGASTOS, PRISCILO MALDO,
JR., R. C. DELA CRUZ, JOSE AJEDA, JOSE ANASTACIO, LAURO ROBERTO, ISMAEL SALACATA, ULDARICO
CAMU, JESUS CARILLO, AND DIORITO BRAGA, RESPONDENTS.
[G.R. NO. 81447. MAY 18, 1989]
PHILIPPINE TUBERCULOSIS SOCIETY, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION,
EAGLE SECURITY AGENCY, INC., RODOLFO V. DEQUINA, AVELINO M. NARVAEZ, JACULO J. JEROME,
ROLANDO N. VALENCIA, CLODUALDO M. ANGRA, JOSE SAMONTE, RUEL A. LAGASTOS, PRISCILO MALDO,
JR., R. C. DELA CRUZ, JOSE AJEDA, HILARIO V. LLANES, NAPOLEON SAPOLE, WILLIAM ESTOSANE, AND
AMANTE SOBRETODO, RESPONDENTS.
DECISION
CORTES, J.:
The core issue in these two consolidated cases is the liability of the principal and the contractor for the
payment of the minimum wage and cost of living allowance increases to security guards under Wage Order
Nos. 2, 3, 5 and 6.
The antecedent facts are undisputed.
In 1980, petitioners Philippine Tuberculosis Society, Inc., (hereinafter referred to as PTSI) and Eagle
Security Agency, Inc. (hereinafter referred to as EAGLE) entered into a "Contract for Security Services"
wherein the latter agreed to provide security services in the former's premises. The contract covered the
period from November 2, 1979 to July 31, 1985. Pursuant to this agreement, private respondents were
assigned by EAGLE to PTSI as security guards.
Subsequently, on November 5, 1985, a complaint was filed by private respondents
Rodolfo Dequina, Avelino Narvaez, Jaculo Jerome, Rolando Valencia, ClodualdoAngra, Jose Samonte,
Raul Lagastos, Priscilo Maldo, Jr., R. C. dela Cruz, Jose Ajeda, and others against PTSI and EAGLE for
unpaid wage and allowance increases under Wage Order Nos. 2, 3, 5 and 6* with interest plus damages
and attorney's fees.
On September 30, 1986, while the case was still pending, ten (10) additional complainants,
namely: Jose Anastacio, Lauro Roberto, Ismael Salacata, Uldarico Camu, Jesus
Carrillo, Diorito Braga, Hilario Llanes, Napoleon Sepole, William Estosane and Amante Sobretodo, joined in
the suit. However, the labor arbiter dropped the names of Hilario Llanes, Napoleon Sapole,
William Estosane and Amante Sobretodo as complainants, on the ground that only those who signed the
verified complaint and reply should be recognized [Labor Arbiter's Decision, p. 1; G.R. No. 81447, Rollo, p.
74.]
On April 6, 1987, the labor arbiter rendered a decision, the dispositive portion of which reads as follows:
IN VIEW OF THE FOREGOING, respondent Eagle Security Agency, Inc. and Philippine Tuberculosis Society,
Inc. are hereby ordered to pay jointly and severally the sixteen (16) complainants of (sic) their unpaid
wages and allowances under Wage Order Nos. 2, 3, 5 and 6. The office of the Socio-Economic Analyst is
hereby ordered to examine the records and payrolls of the two (2) respondents to determine their
liabilities.
The claim for damages and attorney's fees are hereby DISMISSED for lack of merit.
SO ORDERED. [Labor Arbiter's Decision, pp. 6-7; G.R. No. 81447, Rollo, pp. 79-80.]
PTSI, EAGLE and the four (4) security guards whose names were dropped from the complaint filed their
appeals to the National Labor Relations Commission (hereinafter referred to as NLRC).
The NLRC, on November 27, 1987, rendered its decision granting the appeal as to the four (4) security
guards whose names were dropped and denying PTSI and EAGLE'S appeals. The dispositive portion of its
decision reads as follows:
WHEREFORE, premises considered, let the appealed decision be, as it is hereby, Modified in
that respondent Eagle Security Agency, Inc. and the Philippine Tuberculosis Society, Inc. are hereby
ordered to pay jointly and severally the twenty (20) complainants of (sic) their unpaid wages and
allowances under Wage Order Nos. 2, 3, 5 and 6. In all other respects, the decision is Affirmed.
SO ORDERED. [NLRC Decision, p. 8; G.R. No. 81447, Rollo, p. 27.]
Both PTSI and EAGLE filed their motions for reconsideration. In a resolution dated December 29, 1987,
the NLRC denied these motions for lack of merit.
PTSI and EAGLE filed separate petitions for certiorari with this Court. PTSI's petition was docketed as
G.R. No. 81447 while that of EAGLE, G.R. No. 81314.
On motion of PTSI, the Court, on April 6, 1988, resolved to consolidate the two (2) petitions. Thereafter,
on May 25, 1988, the Court gave due course to both petitions and required the parties to submit their
respective memoranda. On June 20, 1988, the Court, also upon motion of PTSI, resolved to issue a
temporary restraining order enjoining the NLRC from enforcing and/or carrying out its
decision dated November 27, 1987 and resolution of December 29, 1987.
1. Petitioners PTSI and EAGLE, in this special civil action of certiorari, impugn the decision of the
NLRC as having been issued with grave abuse of discretion amounting to lack or excess of
jurisdiction. Petitioners assail the decision of the NLRC finding them jointly and severally liable to the
security guards for payment of the minimum wage and cost of living allowance increases under the wage
orders. Both PTSI and EAGLE point to the other as the one who should be solely liable for paying the
increases.
Petitioner PTSI alleges that payment of the wage and allowance increases under Wage Order Nos. 2, 3, 5
and 6 should be borne exclusively by EAGLE, pursuant to the following provision in the "Contract for
Security Services":
3. AGENCY hereby binds itself to pay its employees in accordance with the provisions of the New Labor Co
de, as amended, Eight-Hour Labor Law, theMinimum Wage Law, and other laws, and/or decrees governing
security agency. AGENCY shall be solely responsible for the payment of all indemnities to its
employees which may arise under PD No. 442, as amended, and shall comply with the provisions of all
other Philippine laws relative to its employees . . . [Article VII sec. 3 of the Contract for Security Services;
G. R. No. 81447, Rollo, p. 34; Underscoring supplied.]
Petitioner EAGLE, on the other hand, invokes the following provision common to Wage Order Nos. 3, 5 and
6 to support its theory that it is PTSI that should be held liable for the increases:
In case of contracts for construction projects and for security, janitorial and similar services, the increase
in the minimum wage and allowance rates of the workers shall be borne by the principal or client of the
construction/service contractor and the contract shall be deemed amended accordingly . . . **
The Court finds that the NLRC acted correctly in ordering the two petitioners to jointly and severally pay
the wage and allowance increases to the security guards.
Petitioners' solidary liability for the amounts due the security guards finds support in Articles 106, 107 and
109 of the Labor Code which state that:
ART. 106. Contractor or subcontractor. - Whenever an employer enters into a contract with another
person for the performance of the former's work, the employees of the contractor and of the latter's
subcontractor, if any, shall be paid in accordance with the provisions of this Code.
In the event that the contractor or suncontracator fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to
such employees to the extent that he is liable to employees directly employed by him.
*
*
*
ART. 107. Indirect employer. - The provisions of the immediately preceding Article shall likewise apply
to any person, partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.
*
*
*
ART. 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding, every
employer or indirect employer shall be held responsible with his contractor or subcontractor for any
violation of this Code. For purposes of determining the extent of the civil liability under this Chapter, they
shall be considered as direct employers.
This joint and several liability of the contractor and the principal is mandated by the Labor Code to assure
compliance of the provisions therein including the statutory minimum wage [Article 99, Labor Code]. The
contractor is made liable by virtue of his status as direct employer. The principal, on the other hand, is
made the indirect employer of the contractor's employees for purposes of paying the employees their
wages should the contractor be unable to pay them. This joint and several liability facilitates, if not
guarantees, payment of the workers' performance of any work, task, job or project, thus giving the
workers ample protection as mandated by the 1987 Constitution [See Article II Sec. 18 and Article XIII
Sec. 3.]
In the case at bar, it is beyond dispute that the security guards are the employees of EAGLE [See Article
VII Sec. 2 of the Contract for Security Services; G.R. No. 81447, Rollo, p. 34.] That they were assigned to
guard the premises of PTSI pursuant to the latter's contract with EAGLE and that neither of these two
entities paid their wage and allowance increases under the subject wage orders are also
admitted [See Labor Arbiter's Decision, p. 2; G.R. No. 81447, Rollo, p. 75.] Thus, the application of
the aforecited provisions of the Labor Code on joint and several liability of the principal and contractor is
appropriate [See Del Rosario & Sons Logging Enterprises, Inc. v. NLRC, G.R. No. 64204, May 31, 1985,
136 SCRA 669.]
The solidary liability of PTSI and EAGLE, however, does not preclude the right of reimbursement from his
co-debtor by the one who paid [See Article 1217, Civil Code.] It is with respect to this right of
reimbursement that petitioners can find support in the aforecited contractual stipulation and Wage Order
provision.
The Wage Orders are explicit that payment of the increases are "to be borne" by the principal or
client. "To be borne", however, does not mean that the principal, PTSI in this case, would directly pay the
security guards the wage and allowance increases because there is no privity of contract between
them. The security guards contractual relationship is with their immediate employer, EAGLE. As an
employer, EAGLE is tasked, among others, with the payment of their wages [See Article, VII Sec. 3 of the
Contract for Security Services, supra and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA
665.]
On the other hand, there existed a contractual agreement between PTSI and EAGLE wherein the former
availed of the security services provided by the latter. In return, the security agency collects from its
client payment for its security services. This payment covers the wages for the security guards and also
expenses for their supervision and training, the guards' bonds, firearms with ammunitions, uniforms and
other equipments, accessories, tools, materials and supplies necessary for the maintenance of a security
force.
Premises considered, the security guards immediate recourse for the payment of the increases is with
their direct employer, EAGLE. However, in order for the security agency to comply with the new wage and
allowance rates it has to pay the security guards, the Wage Orders made specific provision to amend
existing contracts for security services by allowing the adjustment of the consideration paid by the
principal to the security agency concerned. What the Wage Orders require, therefore, is the amendment
of the contract as to the consideration to cover the service contractor's payment of the increases
mandated. In the end, therefore, ultimate liability for the payment of the increases rests with the
principal.
In view of the foregoing, the security guards should claim the amount of the increases from
EAGLE. Under the Labor Code, in case the agency fails to pay them the amounts claimed. PTSI should be
held solidarily liable with EAGLE [Articles 106, 107 and 109.] Should EAGLE pay, it can claim an
adjustment from PTSI for an increase in consideration to cover the increases payable to the security
guards.
However, in the instant case, the contract for security services had already expired without being amended
consonant with the Wage Orders. It is also apparent froma reading of the record that EAGLE does not
now demand from PTSI any adjustment in the contract price and its main concern is freeing itself from
liability. Given these peculiar circumstances, if PTSI pays the security guards, it cannot claim
reimbursement from EAGLE. But in case it is EAGLE that pays them, the latter can claim reimbursement
from PTSI in lieu of an adjustment, considering that the contract had expired and had not been renewed.
2. PTSI also alleges that it is exempt from payment under the subject Wage Orders because it is a public
sector employer while the Wage Orders cover only employers and employees in the private sector [G.R.
No. 81447, Petition, p. 9; Rollo, p. 10.] This is unmeritorious. The definition of a public sector
employer*** relied upon by PTSI is relevant only for purposes of coverage under the Employees'
Compensation. Moreover, the Labor Code provides that as used in Book Three, Title II on Wages,the term
"employer" includes "the Government and all its branches, subdivisions and instrumentalities, all
government-owned or controlled corporations and institutions . . ." [Article 97 (b), Labor Code.]
3. It is further contended by PTSI that to uphold the ruling of the NLRC would be violative of the
Constitutional prohibition against impairment of the obligation of contracts [Article III sec. 10 of the 1987
Constitution.] Time and again, this Court has rejected this line of reasoning in sustaining the validity and
constitutionality of labor and social legislations like the Blue Sunday Law [Asia Bed Factory v. National Bed
and Kapok Industries Workers Union, et al., 100 Phil. 837 (1957)], compulsory coverage of private sector
employees in the Social Security System [Phil. Blooming Mills Co., Inc. v. Social Security System, G.R.
No. L-21223, August 31, 1966, 17 SCRA 1077], and the abolition of share tenancy [Vda. de Genuino v.
Court of Agrarian Relations, G.R. No. L-25035, February 26, 1968, 22 SCRA 792] enacted pursuant to the
police power of the State.
The Wage Orders are no different from the aforecited laws. They are labor standard legislations enacted
to alleviate the plight of the workers whose wages barely meet the spiralling costs of their basic
needs. The increase in the minimum wage and the cost of living allowance was ordered precisely to
ensure the workers health,efficiency and well-being towards achieving the country's goal of ensuring
increased productivity and viability of business and industry [See Whereas Clause of the Wage Orders.]
4. Petitioner EAGLE would moreover ascribe grave abuse of discretion to both the Labor Arbiter and the
NLRC for the inclusion of certain security guards in the complaint.
Firstly, EAGLE contends that the names of Rodolfo Dequina and R.C. dela Cruz should have been dropped
from the complaint as they had already resigned from its employ and signed a quitclaim in favor of the
security agency [G.R. No. 81314, Petition, p. 6; Rollo, p. 7.]
However, no grave abuse of discretion can be ascribed to the labor arbiter for not dropping their names
from the complaint it appearing that the alleged resignation letters are not of record [Labor Arbiter's
Decision, p. 6; G. R. No. 81314, Rollo, p. 18.]
Secondly, EAGLE assails the NLRC's inclusion of the four (4) security guards whose names were dropped
by the labor arbiter in the complaint. However, these four (4) security guards are part of the ten (10)
additional complainants denominated as "and others" in the complaint and who were identified in their
Manifestation datedSeptember 30, 1986. Further, they submitted individual computations in their "Reply
to Separate Position Papers Filed by Respondents". Accordingly, the Court finds no grave abuse of
discretion committed by the NLRC in granting their appeal.
WHEREFORE, in view of the foregoing, the petitions in G.R. No. 81314 and G.R. No. 81447 are hereby
DISMISSED and the decision and resolution of the NLRC in NLRC-NCR-11-3652-85 dated November 27,
1987 and December 29, 1987, respectively, are AFFIRMED. The temporary restraining order issued by the
Court on June 20, 1988 is hereby LIFTED and SET ASIDE.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Feliciano, and Bidin, JJ., concur.

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260 Phil.

G.R. No. 82607

Annex A, p. 12, Rollo

SEPARATE CONCURRING OPINION

263 Phil. 613

the Labor Arbiters had previously exercised exclusive jurisdiction. However, in a

263 Phil. 487

the claim arises from employer-employee relations;

the claimant does not seek reinstatement; and

Done this 24th day of July, 1986 in Metro Manila, Philippines.

entitled to money awards of P1,884.00 each. Petition is DISMISSED.

living allowances (ECOLAs) of private respondents in the total amount of P430,901.75.

31. Tomasa Mancia

96. Carmelito Paquet

161. Ramon Natad, Jr.

226. Arsenia Cascua

4. Cases involving household services; and

Ramirez Industries and/or Manny Ramirez.

261 Phil. 1049

278 Phil. 747

Nestor Loloquisen P41,459.51

Nestor Ibuyat 41,459.51

Jose Acio 41,459.51

Cresencio Agres 41,459.51

Wilfred Butay 41,459.51

Carlito Castro 41,459.51

Federico Calunnay 41,459.51

Jaime Fontanilla 41,459.51

William Galimba 41,459.51

Leonardo Ibuyat 41,459.51

Rodrigo Luis 41,459.51

Roman Nalundasan 41,459.51

Ronnie Nino 41,459.51

Jose Perdido 41,459.51

Roger Rambaud 41,459.51

Benedicto Sugui 41,459.51

Mario Sugui 41,459.51

Felipe Tolentino 41,459.51

Edison Valdez 41,459.51

255 Phil. 459

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