Facts:

The case, Albay I Electric Cooperative, Inc. (ALECO I) v. Ricardo S. Martinez, Sr., Arnold B. Bonagua, and Conrado S. Buban, revolves around a legal dispute that arose from the issue of appointment validity and subsequent salary entitlements of certain employees. On August 15, 1988, respondents Conrado Buban and Arnold Bonagua were designated by Israel Garcia, the petitioner’s Acting General Manager, as an acting manager in the Commercial Services Department and a supervisor in the Service Center, respectively. Garcia’s appointment had been previously revoked by the National Electrification Administration (NEA) on August 10, 1988. The Board of Directors of ALECO I subsequently deemed these appointments null and void on August 27, 1988. On June 7, 1989, NEA’s Chief of the Legal Service Office raised concerns regarding the legitimacy of Buban and Bonagua's appointments.

On August 15, 1989, the two private respondents filed a complaint with the Office of the Regional Director f

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Facts:

Appointments and Initial Acts

• On August 15, 1988, pursuant to the actions of Israel Garcia, ALECO I’s Acting General Manager, private respondents Conrado Buban and Arnold Bonagua were designated, respectively, as acting manager (Commercial Services Department) and supervisor (Service Center) of Albay I Electric Cooperative, Inc.
• The appointments were made after Garcia’s own appointment had been recalled by the National Electrification Administration (NEA) by virtue of Office Order No. 454 issued on August 10, 1988, effective immediately.

Board of Directors’ Opposition and NEA Legal Opinion

• On August 27, 1988, the Board of Directors of ALECO I considered the midnight appointments of Buban and Bonagua as null and void.
• A Memorandum dated June 7, 1989, prepared by Romulo Maristaza, Chief of the Legal Service Office of the NEA, found serious doubts regarding the validity of the appointments, terming them defective.

Filing of Complaint and Subsequent Orders

• On August 15, 1989, the private respondents filed a complaint with the Office of the Regional Director for the recovery of salary differentials corresponding to their new positions. They further claimed that since they had served in their positions for more than one year, their status should be considered permanent, thereby entitling them to the corresponding salaries.
• Despite the petitioner's motion to dismiss the complaint for lack of jurisdiction, on September 11, 1989, respondent Regional Director Ricardo Martinez, Sr. issued an Order directing ALECO I to pay Bonagua P11,962.31 and Buban P12,593.36 for the underpayment of wages.

Appeal Process and Denial

• Petitioner filed a notice of appeal and a Memorandum of Appeal on September 19, 1989 in reaction to the Order.
• Instead of giving due course to the appeal, the Med-Arbiter denied it and ordered the parties to present evidence.

Subsequent Order and Execution

• On September 3, 1990, the Regional Director issued a second Order requiring ALECO I to pay respondent Bonagua P9,259.72 and respondent Buban P38,243.21 corresponding to their salary differentials and 13th month pay.
• Following this, a writ of execution was issued on September 26, 1990.

Contentious Jurisdictional Issue

• Petitioner argued that because each money claim by the private respondents exceeded the P5,000.00 threshold, the complaint fell outside the jurisdiction of the Regional Director and should be heard exclusively by the Labor Arbiter.
• Public respondent maintained that under his visitorial power—and citing precedents such as Brokenshire Memorial Hospital Inc. vs. Minister of Labor and Employment—the P5,000.00 limit did not restrict his authority to adjudicate the complaint.

Arguments of the Parties and Relevant Statutory Provisions

• Petitioner asserted that the unlawfully rendered orders were based on an improper exercise of jurisdiction, contending that the money claims being in excess of P5,000.00 rendered the Regional Director’s actions outside his statutory competence.
• Public respondent countered that, even if the monetary claim exceeded P5,000.00, his visitorial powers under Article 128 of the Labor Code allowed him to inspect, verify, and enforce labor standards.
• Both parties debated the appropriate interpretation of Article 129 and Article 217 of the Labor Code, with the former limiting the Regional Director’s jurisdiction to claims not exceeding P5,000.00 and the latter vesting exclusive original jurisdiction over claims exceeding this amount in the Labor Arbiter.

Supporting Jurisprudence and Legislative Intent

• The Solicitor General, in his Manifestation in Lieu of Comment, highlighted that the claims for unpaid wages should be heard by the Labor Arbiter, emphasizing the statutory silence on a minimum claim for relief under Article 128 versus the explicit limit provided in Article 129.
• Citing cases such as Brokenshire Memorial Hospital Inc. and Servando’s Inc. vs. Secretary of Labor and Employment, the jurisprudence underscored that the Regional Director’s visitorial power does not extend to the adjudication of wage claims exceeding the P5,000.00 limit.

Resultant Legal Position

• The Court was confronted with the need to determine whether the Regional Director’s actions in issuing orders for wage payment and subsequent execution were within his jurisdiction, or whether they were ultra vires.
• The consideration centered on whether the proper forum for deciding substantively large wage claims was the Labor Arbiter rather than the Regional Director.

Issue:

• Whether the Regional Director, in issuing orders for the payment of salary differentials and 13th month pay, acted within his jurisdiction when the aggregate money claims of the private respondents exceeded P5,000.00.
• Whether the Regional Director's use of his visitorial power under Article 128 of the Labor Code can supersede the jurisdictional limit imposed by Article 129 regarding claims exceeding P5,000.00.
• Whether the denial of the petitioner's notice of appeal and its subsequent handling by the Med-Arbiter amounts to an improper exercise of administrative authority.
• Whether the permanent employment claims asserted by the private respondents, based on their continued service for more than one year, affect the jurisdictional question regarding the proper forum for adjudicating their claims.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)