LABOR LAW I – CASES for FINALS Art. 87 – Overtime Work Computation of Overtime Work Premium Pay v. Overtime Pay Stipulation on overtime rate Built-in Overtime Pay
Engineering Equipment, Inc. v. Minister of Labor, G.R. No. L-64967, September 23, 1985 PA L E mployee mployeess S avings and Loan Loan As s ociation ociation v. NLR C, A ugus t 22, 22, 1996 1996 B is ig Mangg Mangg agawa agawa s a Tryco v. NLR C, October October 15, 2008 2008
Overtime Work of Seamen Marine Services v. NLR C, 1996 S tolt – Nielsen Marine
Waiver of Overtime Pay
PC L S hipping, Inc. v. NL R C, G .R. No. 15303 153031, 1, Decembe Decemberr 14, 2006 2006 Mercader v. Manila Polo Club, Inc ., G .R . No. L-8373, S eptember eptember 28, 1956 PA L E mployee mployeess S avings and Loan Loan As s ociation ociation v. NLR C, A ugus t 22, 22, 1996 1996 Damas Damas co v. NLR C, G .R . No. 115755, 115755, December December 4, 2000
Compressed Workweek (CWW) Dole Advisory No. 02-04 Undertime Not Offset by Overtime Rationale
NWS A v. NWSA Cons olidat olidated ed Unions, 11 S CR A 766
Emergency Overtime Work Computation of Additional Compensation III. Rest Periods (Arts. 91 – 93) IV. Holidays, Service Incentive Leaves and Service Charges Right to Holiday Pay (Holiday Pay of Certain Employees) Workers paid by Results
Tan v. Lagrama, Lagrama, G .R . No. 151228, 151228, Aug us t 15, 15, 2002 2002
Seasonal Employees
Manila Hotel Company v. C IR , G.R G .R . No. L-188373, S eptember eptember 30, 1963
Service Incentive Leave Commutable Nature of Benefit
Autobus A utobus Transpor Tr anspor t Sy s tem, Inc. v. B autis ta, G .R . No. 156367, May May 16, 2005 Duterte v. Kingswood Trading, Co., Inc. G.R. No. 160325, October 4, 2007 Labor Labor C ongres s of the Philippines Philippines v. NLR C, G .R . No. 123938 123938,, May May 21, 1998 1998 Fernandez v. NLR C, G .R . No. 105892, 105892, J anuary anuary 28, 1998 R icardo G. P aloma aloma v. PA L, G .R . No. 148415, 148415, July 14, 2008 2008 Texon Manufacturing Manufacturing and Betty Chua v. Millena, Millena, G.R . No. 141380, 141380, A pril 14, 2004
V. Wages Preliminary Matters Concept of Facilities and Supplements
Article 106 – 110 Contractor or Subcontractor (DO 18-A, Series of 2011) Requirements
Philippine Airlines v. Lig an, an, 547 S CR A 181 (2008) (2008)
Labor Only Contracting
Proof of Employer
Joint and Solidary Liability
Mandaue G alleon alleon v. An dales dales , 548 SC R A 17 Oregas Oregas v. NLR C, 559 SCR A 153 153 (2008 (2008)) Meralco v. NLR C , 548 SC R A 315 J aguar agu ar Sec uri ty and Inves Inv estig tig ation v. S ales ales , 552 SC R A 295
Articles 106, 107 and 109
Mabeza v. NL R C , 271 SR C A 670 Millares v. N LR C , 305 SC R A 670
Meralco v. NLR C , 548 SC R A 315 (2008)
Prohibition Regarding Wages Wage deductions
Principle of Non – Diminution of Benefits (Art. 100)
S pecial Steel Produ cts v. Vi llaruel, llaruel, G .R . No. 143304 Ag A g abon v. NLR C , November 17, 2004 Davao Integr ated ated Ports S tevedoring tevedoring S ervices v. Abarquez, March March 19, 1993 S evilla Trading Tr ading C o v. Semana, G.R . No. 152456, Apr il 28, 2004 G lobe Mack Mack ay Cable Cable v. NLR C, G .R . No. 74156, 74156, Jun e 29, 29, 1988 1988 Acr A cro o Metal Metal Pr oducts et. al. v. S amahan amahan ng mg a Mangagawa Mang agawa s a A cro cr o Metal, Metal, G .R . No. 170734, May 14, 2008 Ins ular ular H otel otel E mployees mployees Union v. Waterfront Waterfront I ns ular ular H otel otel Davao, Davao, S eptembe eptemberr 22, 2010 Pr otacio otacio v. Laya Mananghaya Mananghaya and and C o., G .R . No. 168654, March March 25, 2009 Producers B ank ank of the Philippines Philippines v. N LR C, G .R . No. 100701 100701,, March March 28, 2001 2001 Manila B anki ng Corpor Co rporation ation v. NLR C , G .R . No. 107487, S eptember eptember 29, 1997
Article 127 RA 6677: Section 3
Attorney’s Fees
TS PIC Corporation v. TS PIC E mployees Union, G.R . No. 163419, February 13, 2008 Americ an Wi re and Cable Union v. Ameri can Wire and Cable Co., A pril 29, 2005 NPC Drivers and Mechanics As s ociation v. NPC , G .R. No. 156208, September 17, 2008
Wage Distortion (Art. 124) Elements
P.I. Manufacturing Inc. v. P.I. Manufacturing Supervisors, G.R. No. 167217, February 4, 2008
FACTS: Petitioner P.I. a domestic corporation Manufacturing, Incorporated is engaged in the manufacture and sale of household appliances. On the other hand, respondent P.I. Manufacturing Supervisors and Foremen Association (PIMASUFA) is an organization of petitioners supervisors and foremen, joined in this case by its federation, the National Labor Union (NLU). On December 10, 1987, the President signed into law Republic Act (R.A.) No. 6640[2] providing, among others, an increase in the statutory minimum wage and salary rates of employees and workers in the private sector. S ection 2 provides: SEC. 2. The statutory minimum wage rates of workers and employees in the private sector, whether agricultural or non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural workers and employees outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per day: Provided , That those already receiving above the minimum wage up to one hundred pesos (P100.00) shall receive an increase of ten pesos (P10.00) per day. Excepted from the provisions of this Act are domestic helpers and persons employed in the personal service of another. Thereafter, on December 18, 1987, petitioner and respondent PIMASUFA entered into a new Collective Bargaining Agreement (1987 CBA) whereby the supervisors were granted an increase of P625.00 per month and the foremen, P475.00 per month. The increases were made retroactive to May 12, 1987, or prior to the passage of R.A. No. 6640, and every year thereafter until July 26, 1989. On January 26, 1989, respondents PIMASUFA and NLU filed a complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC), docketed as NLRC-NCR Case No. 00-01-00584, charging petitioner with violation of R.A. No. 6640 .[3] Respondents attached to their complaint a numerical illustration of wage distortion resulting from the implementation of R.A. No. 6640. On March 19, 1990, the Labor Arbiter rendered his Decision in favor of respondents. Petitioner was ordered to give the members of respondent PIMASUFA wage increases equivalent to 13.5% of their basic pay they were receiving prior to December 14, 1987. On appeal by petitioner, the NLRC, in its Resolution dated January 8, 1991, affirmed the Labor Arbiters judgment. On July 21, 2004, the appellate court rendered its Decision affirming the Decision of the NLRC with modification by raising the 13.5% wage increase to 18.5%. We quote the pertinent portions of the Court of Appeals Decision, thus: Anent the fourth issue, petitioner asseverates that the wage distortion issue is already barred by Sec. 2 Article IV of the Contract denominated as The Company and Supervisors and Foremen Contract dated December 18, 1987 declaring that it absolves, quit claims and releases the COMPANY for any monetary claim they have, if any there might be or there might have been previous to the signing of this agreement. Petitioner interprets this as absolving it from any wage distortion brought about by the implementation of the new minimum wage law. Since the contract was signed on December 17, 1987, or after the effectivity of Republic Act No. 6640, petitioner claims that private respondent is deemed to have waived any benefit it may have under the new law. -
Petitioner filed a motion for reconsideration but it was denied by the appellate court in its Resolution dated February 18, 2005. In a Minute Resolution dated April 18, 2005, we denied the petition for petitioners failure to show that the Court of Appeals committed a reversible error. Hence, this motion for reconsideration. We grant the motion.
ISSUE: Whether the implementation of R.A. No. 6640 resulted in a wage distortion and whether such distortion was cured or remedied by the 1987 CBA. RULING: R.A. No. 6727, otherwise known as the Wage Rationalization Act , explicitly defines wage distortion as: x x x a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. -
Otherwise stated, wage distortion means the disappearance or virtual di s appearance of pay differentials between lower and higher positions in an enterprise because of compliance with a wage order .[6]
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In this case, the Court of Appeals correctly ruled that a wage distortion occurred due to the implementation of R.A. No. 6640.
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However, while we find the presence of wage distortions, we are convinced that the same were cured or remedied when respondent PIMASUFA entered into the 1987 CBA with petitioner after the effectivity of R.A. No. 6640. The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and the foremen, by P475.00, effective May 12, 1987. These increases re-established and broadened the gap, not only between the supervisors and the foremen, but also between them and the rank-and-file employees.
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Significantly, the 1987 CBA wage increases almost doubled that of the P10.00 increase under R.A. No. 6640. The P625.00/month means P24.03 increase per day for the supervisors, while the P475.00/month means P18.26 increase per day for the foremen. These increases were to be observed every year, starting May 12, 1987 until July 26, 1989. Clearly, the g ap between the wag e rates of the s upervi s ors and thos e of the foremen was i nevitably re-es tablis hed. It continued to broaden through the years.
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Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with R.A. No. 6640.
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As the numerical illustration shows, almost all of the members of respondent PIMASUFA have been receiving wage rates above P100.00 and, therefore, not entitled to the P10.00 increase. Only three (3) of them are receiving wage rates below P100.00, thus, entitled to such increase. Now, to direct petitioner to grant an across-the-board increase to all of them, regardless of the amount of wages they are already receiving, would be harsh and unfair to the former.
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WHEREFORE, we GRANT petitioners motion for reconsideration and REINSTATE the petition likewise GRANT. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 54379 is REVERSED.
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A wage distortion happens when a wage order increasing the rates of wages removes or significantly reduces the pay advantage of one position of employees over another. This change has to be corrected. The fo llowing are the essential elements of a wage distortion: 1. 2. 3. 4.
The company has a hierarchy of positions with corresponding salary rates. A wage order significantly changes or increases the salaries of the employees in the lower level but doesn't have a corresponding increase for the salaries of the employees in the higher level. The distinction between the positions/groups of employees is eliminated. The distortion exists in the same region of the country.
Corrections of Wage Distortion
National Federation of Labor v. NLR C , 234 S CR A 311
In National Federation of Labor v. NL R C ,[8] we held: We believe and so hold that the re-establishment of a significant gap or differential between regular employees and casual employees by operation of the CBA was more than substantial compliance with the requirements of the several Wage Orders (and of Article 124 of the Labor Code). That this reestablishment of a significant differential was the result of collective bargaining negotiations, rather than of a special grievance procedure, is not a legal basis for ignoring it . The NLRC En Banc was in serious error when it disregarded the differential of P3.60 which had been restored by 1 July 1985 upon the ground that such differential represent[ed] negotiated wage increase[s] which should not be considered covered and in compliance with the Wage Orders. x x x
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Between 1 November 1983 and 1 November 1984, Wage Orders Nos. 3, 4, 5 and 6 were promulgated by the then President Ferdinand E. Marcos. All these Wage Orders increased the statutory minimum wages of workers with differing increases being specified for agricultural plantation and non-agricultural workers.
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Before the effectivity of Wage Order No. 3, the wage rates of regular employees and of casual (or non-regular) employees of private respondent Franklin Baker Company of the Philippines (Davao Plant) ("Company") were such that there was a positive differential between the two (2) in the amount of P4.56. Upon the effectivity of Wage Order No. 5, grievance meetings were held by petitioner National Federation of Labor ("NFL") and private respondent Company sometime in June 1984, addressing the impact which implementation of the various Wage Orders had on the wage structure of the Company. On 1 July 1984, the effectivity date of the 1984 Collective Bargaining Agreement between NFL and the Company, all regular employees of the Company received an increase of P1.84 in their daily wage; the regular daily wage of the regular employees thus became P35.84 as against P34.00 per day for non-regular employees. As a result of the implementation of Wage Order No. 6, casual employees received an increase of their daily wage from P34.00 to P36.00. At the same time, the Company unilaterally granted an across-the-board increase of P2.00 in the daily rate of all regular employees, thus increasing their daily wage from P35.84 to P37.84. Further, on 1 July 1985, the anniversary date of the increases under the CBA, all regular employees who were members of the collective bargaining unit got a raise of P1.76 i n their basic daily wage, which pushed that daily wage from P37.84 to P39.60, as against the non-regular's basic wage of P36.00 per day. Finally, by November 1987, the lowest paid regular employee had a basic daily rate of P64.64, or P10.64 more than the statutory minimum wage paid to a nonregular employee. Meantime, while the above wage developments were unfolding, the Company experienced a work output slow down. The Company directed some 205 workers to explain the reduction in their work output. The workers failed to comply and they were accordingly issued notices of dismissal by the Company. As a response to its decreasing productivity levels, the Company suspended operations on 16 August 1984. Operations were resumed on 14 September 1984; the Company, however, refused to take back the 205 dismissed employees. Petitioner Union then went on strike alleging a lock-out on the part of the Company and demanding rectification of the wage distortion. On 11 November 1987, the NLRC En Banc rendered a decision which in effect found the existence of wage distortion and required the Company to pay a P1.00 wage increase effective 1 May 1984: On motion for partial reconsideration filed by the Company, the above quoted portion of the NLRC En Banc 's decision was reconsidered and set aside by the NLRC Fifth Division. 3 The Fifth Division of the NLRC in effect found that while a wage distortion did exist commencing 16 June 1984, the distortion persisted only for a total of fifteen (15) days and accordingly required private respondent company to pay "a wage increase of P2.00 per day to all regular workers effective June 16, 1984 up to June 30, 1984 or a total of fifteen (15) days." 4
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We note that neither the Wage Orders noted above, nor the Implementing Rules promulgated by the Department of Labor and Employment, set forth a clear and specific notion of "wage distortion." What the Wage Orders and the Implementing Rules did was simply to recognize that implementation of the Wage Orders could result in a "distortion of the wage structure" of an employer, and to direct the employer and the union to negotiate with each other to correct the distortion. A statutory definition of "wage distortion" is now found in Article 124 of the Labor Code as amended by Republic Act. No. 6727 (dated 9 June 1989) which reads as follows: Article 124. Standards/Criteria for Minimum Wage Fixing — . . . xxx xxx xxx As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. 9 (Emphasis supplied)
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From the above quoted material, it will be seen that the concept of wage distortion assumes an existing g rouping or classification of employees which establishes distinctions among such employees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the existing classes of employees. The wage distortion anticipated in Wage Orders Nos. 3, 4, 5 and 6 was a "distortion" (or "compression") which ensued from the impact of those Wage Orders upon the different wage rates of the several classes of employees. Thus distortion ensued where the result of implementation of one or another of the several Wage Orders was the total elimination or the severe reduction of the differential or gap existing between the wage rates of the differing classes of employees. 10 It is important to note that the remedy contemplated in the Wage Orders, and now in Article 124 of the Labor Code, for a wage distortion consisted of negotiations between employer and employees for the rectification of the distortion by re-adjusting the wage rates of the differing classes of employees. As a practical matter, this ordinarily meant a wage increase for one or more of the affected classes of employees so that some gap or differential would be re-established . There was no legal requirement that the historical gap which existed before the implementation of the Wage Orders be restored in precisely the same form or amount. We believe and so hold that the re-establishment of a significant gap or differential between regular employees and casual employees by operation of the CBA was more than substantial compliance with the
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requirements of the several Wage Orders (and of Article 124 of the Labor Code). That this re-establishment of a significant differential was the result of collective bargaining negotiations, rather than of a special grievance procedure, is not a legal basis for ignoring it. The NLRC En Banc was in serious error when it disregarded the differential of P3.60 which had been restored by 1 July 1985 upon the ground that such differential "represent[ed] negotiated wage increase[s] which should not be considered covered and in compliance with the Wage Orders." 11 The Wage Orders referred to above had provided for the crediting of increases in wages or allowances granted or paid by employers within a specified time against the statutorily prescribed increases in minimum wages. 12 A similar provision recognizing crediting of increases in daily basic wage rates granted by employers pursuant to collective bargaining agreements, is set out in Section 4(d) of R.A. No. 6727, a statute which sought to "rationalize wage policy determination by establishing the mechanism and proper standards therefor —." We believe that the same public policy requires recognition and validation, as it were, of wage increases given by employers either unilaterally or as a result of collective bargaining negotiations, in the effort to correct wage distortions. WHEREFORE, the Petition for Certiorari is hereby DISMISSED for lack of merit. No pronouncement as to costs.
Administration and Enforcement DOLE Regional Directors Jurisdiction People’s Broadcasting Service (Bombo Radyo) v. Secretary of Labor, G.R. No. 179652,
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Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.[1] The DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled to his money claims.[2] When the matter was brought before the CA, where petitioner claimed that it had been denied due p rocess, it was held that petitioner was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730.[3] In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed. The Court found that there was no employer-employee relationship between petitioner and private respondent. It was held that while the DOLE may make a determination of the existence of an employeremployee relationship, this function could not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employeremployee relationship. This was the interpretation of the Court of the clause in cases where the relationship of employer-employee still exists in Art. 128(b).[5] It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the start, the DOLE has no jurisdiction. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence reads, Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee s till exis ts , the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE. The question now arises, may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to what extent?
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The first portion of the question must be answered in the affirmative. The prior decision of this Court in the present case accepts such answer, but places a limitation upon the power of the DOLE, that is, the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE. But even in conceding the power of the DOLE to determine the existence of an employer-employee relationship, the Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC, that any finding by the DOLE is merely preliminary. This conclusion must be revisited.
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No limitation in the law was placed upon the power of the DOLE to determine the existence of an employeremployee relationship. No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC. The law did not say that the DOLE would first seek the NLRCs determination of the existence of an employer-employee relationship, or that should the existence of the employer-employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to
determine whether or not an employer-employee relationship exists, and from there to decide whether or not to is s ue compliance orders i n accordance with A rt. 128(b) of the Labor Code, as amended by R A 7730. -
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The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship. If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The DOL E would have no juri s diction only if the employer-employee
relationship has already been terminated, or it appears, upon review, that no employer-employee relations hip exis ted in the firs t place. -
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The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of competing conclusions between the DOLE and the NLRC. The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent course of action to take. It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding. The DOLE may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction over the case. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC. There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with the labor arbiter, under Art. 217. To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) o f the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court. In the present case, The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present.
Visitorial and Enforcement Power
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Meteoro v. Cr eative Creatures , G .R . No. 171275, J uly 13, 2009
Respondent is a domestic corporation engaged in the business of producing, providing, or procuring the production of set designs and set construction services for television exhibitions, concerts, theatrical performances, motion pictures and the like. It primarily caters to the production design requirements of ABS-CBN Broadcasting Corporation in Metro Manila and nationwide.[3] On the other hand, petitioners were hired by respondent on various dates as artists, carpenters and welders. They were tasked to design, create, assemble, set-up and dismantle props, and provide sound effects to respondents various TV programs and movies.[4] Sometime in February and March 1999, petitioners filed their respective complaints for non -payment of night shift differential pay, overtime pay, holiday pay, 13 th month pay, premium pay for Sundays and/or rest days, service incentive leave pay, paternity leave pay, educational assistance, rice benefits, and illegal and/or unauthorized deductions from salaries against respondent, before the Department of Labor and Employment (DOLE), National Capital Region (NCR). In its position paper, respondent argued that the DOLE-NCR had no jurisdiction over the complaint of the petitioners because of the absence of an employer-employee relationship. It added that petitioners were free-
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lance individuals, performing special services with skills and expertise inherently exclusive to them like actors, actresses, directors, producers, and script writers, such that they were treated as special types of workers . [7] Petitioners, on the other hand, averred that they were employees of respondent, as the elements of an employeremployee relationship existed. On October 11, 1999, DOLE Regional Director Maximo Baguyot Lim issued an Order [9] directing respondent to pay petitioners the total amount of P2,694,709.00. The Regional Director sustained petitioners claim on the existence of an employer-employee relationship xxx. Lastly, he upheld the DOLE-NCRs jurisdiction to hear and determine cases in violation of labor standards law.[11] On appeal, then DOLE Secretary Patricia A. Sto. Tomas affirmed the findings of the DOLE Regional Director .[12] In upholding the jurisdiction of the DOLE-NCR, she explained that the Secretary of Labor or his duly authorized representative is allowed to use his visitorial and enforcement powers to give effect to labor legislation, regardless of the amount involved, pursuant to Article 128 of the Labor Code, as amended by Republic Act (R.A.) No. 7730.
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Whether or not the Court of Appeals committed an error when it ruled that the instant case falls within the exception clause of Article 128 (b) of the Labor Code, as amended, and in annulling and setting aside the Orders of the Secretary of Labor which affirmed the Order of the Regional Director of DOLE-NCR awarding the claims of the petitioners for benefits under the Labor Standards laws, namely, 13 th month benefit, overtime pay, night shift differentials, premium on rest days, vacation and sick leave and other benefits accorded to employees of the responden[t] in the exercise of its visitorial powers pursuant to Article 128 (b) of the Labor Code as amended. [14] determine which body/tribunal has jurisdiction over petitioners money claims --- the DOLE Secretary or his duly authorized representative, or the NLRC.
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We sustain the appellate courts conclusion that the instant case falls within the exclusive jurisdiction of the NLRC. The DOLE Secretary and her authorized representatives, such as the DOLE-NCR Regional Director, have jurisdiction to enforce compliance with labor standards laws under the broad visitorial and enforcement powers conferred by A rtic le 128 of the Labor C ode, and expanded by R epublic A ct (R.A .) No. 7730 , [15] As it is now worded, and as consistently held in a number of cases,[17] the visitorial and enforcement powers of the Secretary, exercised through his representatives, encompass compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed by workers. This notwithstanding, the power of the Regional Director to hear and decide the monetary claims of employees is not absolute. The last sentence of Article 128 (b) of the Labor Code, otherwise known as the exception clause, provides an instance when the Regional Director or his representatives may be divested of jurisdiction over a labor standards case. Under prevailing jurisprudence, the so-called exception clause has the following elements, all of which must concur: (a) that the employer contests the findings of the labor regulations 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.[24] In sum, respondent contested the findings of the labor inspector during and after the inspection and raised issues the resolution of which necessitated the examination of evidentiary matters not verifiable in the normal course of inspection. Hence, the Regional Director was divested of jurisdiction and should have endorsed the case to the appropriate Arbitration Branch of the NLRC.[33] Considering, however, that an illegal dismissal case had been filed by petitioners wherein the existence or absence of an employer-employee relationship was also raised, the CA correctly ruled that such endorsement was no longer necessary. WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Decision dated May 31, 2005 and its Resolution dated January 27, 2006 in CA-G.R. SP No. 76942, are AFFIRMED.
B ay Haven, Inc. v. Abuan, G .R . No. 160589, July 30, 2008
VI. 13th Month Pay
S an Miguel v. Inci ong , 103 SC R A 139 (1981) Honda Philippines v. S amahan Ng Malalayang Mang g agawa s a Honda, G .R . No. 145561, J une 15, 2005
Philippine Airline Incorporated v. PALEA, G.R. No. 142399, March 12, 2008 R & E Transports v. Latag, G .R . No. 155214, February 13, 2004 Petroleum Shipping Limited v. NLR C, G .R. No. 148130, J une 16, 2006
VII. Working Conditions for Special Group of Employees Women Workers
Del Monte Philippines , Inc. v. V elasco, G .R . No. 153477, March 6, 2007 PT & T v. NLRC , 272 SCR A 596 Lakpue Drug, Inc. v. Belga, G.R. No. 166379, October 20, 2005’
S tar Paper Cor p. v. Simbol, Ap ril 12, 2006, G. R . No. 164774 s upra. Duncan As s ociation v. Glaxo Welcome Philippines , G .R . No. 162994, September 17, 2004 s upra. Domingo v. R ayala, 546 SCR A 90 B acsi n v. Wahiman, Apri l 30, 2008, G.R . No. 146053
BOOK FOUR Health, Safety and Social Welfare I. Medical and Dental Services
E sc asinas, et. al. v. Shangri - la’s Mactan Island Resort
