Case Summary (G.R. No. 208908)
Regional Order and Secretary’s Modification
The Regional Director’s August 4 Order required petitioner to pay P723,888.58 in salary differentials and ECOLAs to all employees and comply with prevailing wage laws. Petitioner appealed; Secretary of Labor’s September 24 Decision limited computations to the three-year period before the complaint and remanded for recomputation under applicable Presidential Decrees.
Petition for Certiorari and Grounds
Petitioner sought annulment of both the Regional Director’s Order and Secretary’s Decision via certiorari, alleging:
- Regional Director lacked jurisdiction to decide money claims (exclusive to Labor Arbiters).
- Award extended improperly to non-signatory employees and those already separated.
- Orders failed to state clearly facts and law constituting grounds.
Jurisdictional Framework Under the Labor Code
Prior to E.O. 111, Article 127 (later renumbered 128) granted visitorial powers; PD 850 (1975) amended it to include enforcement power over labor standards violations and writs of execution. Article 216 (now 217) vested exclusive original jurisdiction over money claims and labor standards violations in Labor Arbiters, except for issues “as otherwise provided in Article 127.”
MOLE Policy Instructions Clarifying Jurisdiction
• Instruction No. 6: Regional Directors have original jurisdiction over labor standards cases when employer-employee relations still exist; Labor Arbiters handle cases where relations ceased.
• Instruction No. 7: Enforcement system intended to deliver workers’ rights expeditiously without arbitration for uncontested money claims ≤ P100,000.
• Instruction No. 37: Labor Arbiters to handle cases with complex legal or evidentiary issues; Regional Directors to resolve uncontested violations discovered upon inspection.
Effect of Executive Order No. 111
Executive Order No. 111 (effective Mar. 3, 1987) amended Article 128(b) to state that, notwithstanding Article 217, Regional Directors may order compliance with labor standards provisions and adjudicate money claims where an employer-employee relationship persists and no contest exists on inspector findings. This confirmed the Regional Director’s authority to resolve uncontested money claims discovered during inspection.
Scope of the Award to Employees
The Court upheld the Regional Director’s power under amended Article 128(b) and MOLE instructions to award salary differentials and ECOLAs to:
• Employees who signed the complaint.
• Non-signatory employees still employed at the time of inspection—visitorial and enforcement powers operate at the establishment level, so all similarly situated workers benefit.
Policy rules require holistic inquiry covering all employees in establishments found in violation.
Relief for Separated Employees
The Court ruled that employees who had left the hospital before May 23, 1986 were not entitled to Regional Director’s enforcement relief, as their claims are pure money claims subject to Labor Arbiter juris
...continue readingCase Syllabus (G.R. No. 208908)
Facts of the Case
- Petitioner is a semi-government hospital managed by the Cagayan de Oro Women’s Club and Puericulture Center, headed by Mrs. Antera L. Dorado as holdover President.
- The hospital operates with revenues from club funds, paying patients (average 130/month) and subsidies from the Philippine Charity Sweepstakes Office and Cagayan de Oro City government.
- It employs forty-one (41) workers who receive salaries, living allowances, and food (cost deducted from salary).
- On May 23, 1986, ten employees filed Complaint ROX-CW-71-86 before the Regional Director, alleging underpayment of wages and emergency cost-of-living allowances (ECOLAs).
- June 16, 1986: Two Labor Standards and Welfare Officers (LSWOs) were directed to inspect payroll records covering May 1974, January 1985, November 1985, and May 1986.
- July 17, 1986: LSWOs’ report confirmed underpayments affecting thirty-six (36) employees; recommended payment of ₱654,756.01.
Regional Director’s Order (August 4, 1986)
- Directed the hospital to pay ₱723,888.58 representing underpayment of wages and ECOLAs to all employees within ten days.
- Ordered compliance with prevailing statutory minimum wages and allowances thereafter.
Secretary of Labor’s Decision (September 24, 1986)
- Petitioner appealed to Hon. Augusto S. Sanchez, Secretary of Labor.
- Modified the Regional Director’s order: deficiency wages and ECOLAs to be computed from May 23, 1983 to May 23, 1986.
- Remanded to Regional Director for recomputation specifying amounts due under applicable Presidential Decrees.
- October 24, 1986: Petitioner’s motion for reconsideration filed; denied on May 13, 1987 for lack of merit.
Petition for Certiorari to the Supreme Court
- Sought annulment of Secretary’s Decision and Regional Director’s order on ground of grave abuse of discretion.
- Contended:
• Award improperly covers non-signatory employees and those separated before complaint.
• Orders lack clear and distinct statement of facts and law.
• Regional Director lacked jurisdiction under Article 128(b) of the Labor Code, claiming exclusivity of Labor Arbiter’s ju