G.R. No. 233781 - Department of Labor and Employment vs. Kentex Manufacturing Corp.

On May 13, 2015, a fire erupted at Kentex Manufacturing Corporation's factory in Valenzuela City, resulting in 72 deaths and multiple injuries.
The Department of Labor and Employment (DOLE) Caloocan, Malabon, Navotas and Valenzuela (CAMANAVA) Field Office conducted an initial inspection, noting the factory's layout, evidence of burnt material, and destroyed administrative offices.
Concurrently, the DOLE-National Capital Region (DOLE-NCR) assessed Kentex’s compliance with occupational health and safety standards (NCR00-TSSD-1505-OSHI-001).

It was found that Kentex contracted CJC Manpower Services (CJC) to deploy workers at its factory. DOLE-NCR scheduled mandatory conferences on May 18 and 20, 2015, requiring attendance from Kentex, CJC, and corporate officers including Ong King Guan.
The DOLE Regional Office No. III (DOLE-RO III) conducted a joint assessment of CJC on May 15, 2015, which revealed:

CJC was an unregistered private recruitment and placement agency.
CJC exhibited non-compliance with occupational health and safety standards and labor standards, including underpayment of wages and nonpayment of statutory benefits.

Consequently, DOLE-RO III issued a Compliance Order on June 8, 2015, declaring CJC a labor-only contractor and Kentex as its principal employer, ordering both to pay monetary obligations to affected workers.

No formal service contract existed between CJC and Kentex.
CJC deployed 99 workers to Kentex on the day of the fire without written employment contracts.
Kentex paid CJC Php230.00 daily for each worker, from which CJC deducted administrative fees; workers received Php202.50 per day.

Kentex and its corporate officers, including Ong King Guan, denied these claims, arguing:

Workers were originally hired by Panday Management before absorption by CJC.
Wages ranged between Php250.00 to Php350.00 daily, allegedly complying with labor and safety standards.
They cited a Certificate of Compliance (COC) signed by the DOLE-NCR Regional Director as proof of compliance.

The DOLE-NCR rejected these arguments in its June 26, 2015 Order, stating the COC only reflected compliance at the inspection time and does not exempt Kentex from ongoing obligations. It re-affirmed CJC’s status as a labor-only contractor.

The DOLE-NCR calculated monetary claims for underpayment of wages, premiums, 13th month pay, unauthorized deductions, and other labor infringements totaling Php1,440,641.39.
Kentex, Ong, and others were ordered to pay this amount jointly and severally within ten days, with penalties for failure to comply.
Ong alone filed a motion for reconsideration on July 3, 2015, which DOLE-NCR Regional Director Alex Avila declared procedurally improper, advising appeal to the DOLE Secretary instead. Ong missed the 10-day appeal period.
Kentex and Ong filed a Rule 43 petition before the Court of Appeals (CA) assailing the June 8 and June 26 DOLE orders as well as DOLE-NCR’s letter rejecting Ong’s motion. They also challenged Ong’s personal liability.

The CA ruled that the parties availed of the wrong remedy and an appeal to the DOLE Secretary was the proper course, but nevertheless upheld the DOLE orders and their finality due to no timely appeal.
Importantly, the CA held Ong personally not liable for the debts of Kentex absent proof of bad faith or wrongdoing on his part, modifying the DOLE-NCR order accordingly.
Petitioner DOLE filed a motion for partial reconsideration to reinstate Ong’s liability, which the CA denied.

Whether Ong King Guan, as a corporate officer, can be held personally and solidarily liable with Kentex for the monetary awards due the workers under the DOLE-NCR’s June 26, 2015 Order.
Whether the Court of Appeals erred in modifying the final and executory DOLE-NCR Order by discharging Ong from liability despite lack of an appeal to the DOLE Secretary.
Whether respondents Kentex and Ong were deprived of due process in the administrative proceedings conducted by the DOLE-NCR.
Whether the failure to appeal to the DOLE Secretary divested the DOLE-NCR Order of finality and executory effect.