Title
Tiger Construction and Development Corporation vs. Abay
Case
G.R. No. 164141
Decision Date
Feb 26, 2010
DOLE found TCDC violated labor standards; regional director's order became final after TCDC's belated appeal failed, affirming jurisdiction under Labor Code.
labor standards violation case
jurisdiction
dismissal

Case Summary (G.R. No. 164141)

Factual Background

Respondents Reynaldo Abay and fifty-nine others filed a complaint with the Regional Office of the DOLE. DOLE officials conducted an inspection at petitioner’s premises and found multiple labor standards violations, including deficiencies in record keeping, non-compliance with various wage orders, non-payment of holiday pay, and underpayment of the thirteenth month pay. A summary hearing was initially set, but before it could proceed, Director Ma. Glenda A. Manalo (Director Manalo) issued an Order dated July 25, 2002 directing that the case be referred back to an NLRC Sub-Arbitration Branch because, according to the Order, the aggregate money claim of each worker exceeded the jurisdictional threshold of the DOLE regional office.

Before the NLRC could act, DOLE Secretary Patricia A. Sto. Tomas (Secretary Sto. Tomas) issued another inspection authority on August 2, 2002, in apparent reversal of the earlier endorsement. Pursuant thereto, DOLE officials conducted another investigation, discovered the same violations, issued a Notice of Inspection Results requiring correction within five days, and, upon petitioner’s failure to comply, scheduled the matter for summary hearing on August 19, 2002. Petitioner allegedly questioned the inspector’s findings and argued that the July 25, 2002 endorsement to the NLRC had already rendered the DOLE regional office proceedings moot. Petitioner maintained that the July 25, 2002 Order was tantamount to a dismissal for lack of jurisdiction, which purportedly became final, so that subsequent actions were allegedly void.

On September 30, 2002, Director Manalo issued an Order directing petitioner to pay P2,123,235.90 to the employees for underpayment of salaries, thirteenth month pay, underpayment of service incentive leave pay, and underpayment of regular holiday pay. Petitioner moved for reconsideration on October 17, 2002, and later filed a Supplemental Pleading on November 21, 2002, reiterating the argument that Director Manalo had lost jurisdiction. Director Manalo, apparently persuaded, again endorsed the case to the NLRC Regional Arbitration Branch V (Legaspi City). The NLRC returned the records to Director Manalo on January 27, 2003, explaining that it had no jurisdiction over the complaint. Thereafter, Director Manalo issued an Order dated January 29, 2003 denying petitioner’s motion for reconsideration for lack of merit. Petitioner did not file an appeal within the prescribed period, and Director Manalo issued a Writ of Execution on February 12, 2003.

While enforcement was underway by the sheriff and more than three months after the denial of the motion for reconsideration, petitioner filed an admittedly belated appeal with the DOLE Secretary on May 14, 2003, again asserting that post–July 25, 2002 acts were void for lack of jurisdiction. Secretary Sto. Tomas issued an Order dated January 19, 2004 dismissing the appeal for lack of merit. The Secretary held that jurisdiction properly belonged with the regional director and that Director Manalo’s initial endorsement to the NLRC was a clear error. The Secretary further reasoned that mistakes of agents cannot bind the State and that Director Manalo was not prevented from continuing to exercise jurisdiction over the case.

Petitioner then filed a petition for certiorari before the Court of Appeals, but that petition was dismissed for failure to certify against forum-shopping. Petitioner sought reconsideration, but the Court of Appeals denied it because the submitted board resolution was deemed a mere afterthought. Petitioner later filed the present petition for review on certiorari before the Supreme Court after its initial denial on September 15, 2004, and after the Court reinstated the petition upon a reconsideration resolution due to respondents’ failure to comment.

The Parties’ Contentions

Petitioner anchored its challenge on the asserted absence of jurisdiction, arguing that the January 29, 2003 Order of Director Manalo could still be assailed at any time because it allegedly issued without jurisdiction. Petitioner also criticized the Court of Appeals’ dismissal on technical grounds relating to the certification against non-forum shopping, contending that strict adherence would result in a patent denial of substantial justice.

Respondents, in turn, defended the finality of the January 29, 2003 Order and the validity of the execution proceedings that followed. They maintained, in effect, that petitioner could not belatedly invoke supposed jurisdictional defects to defeat an order that had already become final and executory and was already being enforced.

Issue

The principal issue was whether petitioner could still assail the January 29, 2003 Order of Director Manalo on the ground of lack of jurisdiction after that order had attained finality and the case was already in the execution stage.

Legal Basis and Reasoning

The Court held that petitioner failed to overcome the combined barriers of jurisdictional authority and procedural finality. The Court noted petitioner’s admissions that it did not appeal the January 29, 2003 Order within the period prescribed by law and that it resorted to a belated appeal only after execution had already commenced. Petitioner sought to escape the effects of finality by characterizing Director Manalo’s action as void for want of jurisdiction.

The Court rejected that approach. It applied Article 128(b) of the Labor Code, as amended by RA No. 7730, which grants the DOLE Secretary and duly authorized representatives—including regional directors—jurisdiction over labor standards violations based on findings made during inspection of an employer’s premises. The Court emphasized that the jurisdiction conferred by Article 128(b) was not affected by the amount of the claim because RA 7730 removed the jurisdictional limitations in the older provisions insofar as inspection cases were concerned, consistent with the DOLE Secretary’s visitorial and enforcement powers.

The Court recognized that Article 128(b) contains an exception expressed in its last sentence. However, it held that the exception was neither at issue nor applicable on the facts described in the decision. The initial endorsement by Director Manalo to the NLRC—based on the mistaken belief that the claim fell within the NLRC’s jurisdiction—did not oust or deprive the regional director of jurisdiction. The Court invoked the principle that jurisdiction is conferred by law, not by the parties or even by one of them, and that the authority placed by statute must be exercised by the person or body designated by law.

The Court also dismissed petitioner’s theory that the endorsement to the NLRC operated as a dismissal that barred Director Manalo from later exercising jurisdiction. The Court treated the endorsement as a referral to another agency on a mistaken understanding of jurisdiction. When the records were returned to Director Manalo, the Court held that she could properly decide the case after the mistake was corrected and the matter returned to her office. In labor cases, the Court further observed that procedural lapses may be disregarded in the interest of substantial justice, and that procedural due process in administrative proceedings follows a more flexible standard so long as proceedings are undertaken in an atmosphere of fairness and justice.

In addition, the Court found no prejudice to petitioner from the mistaken endorsement because petitioner had been properly investigated, received a Notice of Inspection Results, participated in summary hearings, filed a Motion for Reconsideration, and even submitted a Supplemental Pleading. The Court expressed reason to doubt petitioner’s good faith in raising jurisdiction as a belated defense. It noted that if petitioner truly believed Director Manalo had acted without jurisdiction, it could have filed a petition for certiorari under Rule 65 within the proper period, measured from notice of the order (stated in the decision as sixty days). Petitioner did not do so, and the Court treated the failure as inconsistent with an honest and earnest belief in lack of jurisdiction.

The Court concluded that petitioner’s invocation of alleged lack of jurisdiction operated, in substance, as an attempt to reverse or modify an order already rendered final and executory. It relied on the well-settled rule that perfection of an appeal within the reglementary period is mandatory and jurisdictional; once the period lapses, the decision becomes final and executory by operation of law. A final and executory decision can no longer be altered, modified, or reversed by a t

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