Aboitiz Shipping Corporation vs. Dela Serna

The Regional Director of the Department of Labor and Employment has jurisdiction over money claims arising from employer-employee relations where the aggregate claim of each employee does not exceed ₱5,000, provided the claim does not seek reinstatement and all requisites under Article 129 of the Labor Code, as amended by R.A. 6715, are present. In the absence of any such requisite, exclusive original jurisdiction lies with the Labor Arbiter under Article 217.

Aboitiz Shipping Corporation is an employer whose employees are represented by the Aboitiz Shipping Employees Association (ASEA). The union filed a complaint before the Regional Director, National Capital Region, Department of Labor and Employment, alleging non-compliance with mandated minimum wage rates and allowances under several presidential decrees and wage orders. The jurisdictional framework governing such claims was substantially altered by Republic Act No. 6715, approved on March 2, 1989, which amended Articles 129 and 217 of the Labor Code and introduced a ₱5,000 threshold dividing jurisdiction between Regional Directors and Labor Arbiters over money claims.

The Aboitiz Shipping Employees Association (ASEA) filed a complaint before the Regional Director, National Capital Region, Department of Labor and Employment, against Aboitiz Shipping Corporation for non-compliance with mandated minimum wage rates and allowances pursuant to P.D. Nos. 1713, 1751, and Wage Order Nos. 1 through 6. Labor Regulation Officers of the Regional Office thereupon inspected the company's employment records. Petitioner filed a motion to dismiss contending that the complainant-union had no legal capacity to sue because a representation issue was still pending before Med-Arbiter Edgardo Cruz in LRD Case No. M-001-85.

Series of hearings were conducted in which the Office a quo repeatedly directed petitioner to present its pertinent employment records for inspection. On several occasions, petitioner failed to appear, and despite repeated notices, it failed to present any documents evidencing correct payments of salaries and allowances. On December 28, 1987, the hearing officer submitted a report recommending payment to the union's members amounting to an aggregate sum of ₱16,200,877.47. On January 20, 1988, the Office a quo formally issued a subpoena duces tecum requiring petitioner to present its employees' payrolls and vouchers covering the period from February 16, 1982 to December 31, 1985. Petitioner ignored this subpoena and instead filed a second motion to dismiss, alleging that on July 24, 1986, the parties had entered into a compromise agreement whereby all cases filed by one against the other would be dropped and dismissed.

At a subsequent hearing on February 16, 1988, the parties agreed that petitioner would submit the required payrolls on March 4, 1988. On that date, petitioner again failed to comply, though it agreed to submit photocopies of the payrolls of its Manila-based employees for January to December 1982. Together with that submission, petitioner filed a Manifestation of Compliance attaching several documents: a DOLE Regional Office No. 7 advance notice of inspection, a notice of inspection results stating no wage violations company-wide, a certification by the ASEA Union President and Vice President that company records for 1984–1987 were in order, the existing collective bargaining agreement, and a letter from the Bureau of Working Conditions sustaining petitioner's use of 314 as divisor in computing wages and COLA for land-based employees. On July 5, 1988, petitioner filed a supplemental motion to dismiss questioning the jurisdiction of the Office a quo, arguing that since the complaint involved money claims, original and exclusive jurisdiction rested with the Labor Arbiter. At a hearing on August 17, 1988, petitioner was required to submit its 1984 payrolls but manifested that its motion to dismiss be resolved first, averring that the 1984 payroll need not be submitted and moving for resolution based on available records.

The Regional Director issued the assailed Order dated October 13, 1988, ordering petitioner to pay the 717 complainants a total of ₱1,350,828.00, or ₱1,884.00 each, representing underpayment of a daily allowance of ₱2.00 per day reckoned from February 16, 1982 to February 15, 1985, and further ordering petitioner to pay each employee the deficiency in allowance of ₱2.00 per day from February 16, 1985 onward until full compliance. On appeal to the Office of the Secretary of Labor and Employment, the Undersecretary issued the Order dated February 9, 1989, dismissing petitioner's appeal and affirming the Regional Director's Order. The motion for reconsideration having been denied by the Order dated June 2, 1989, petitioner interposed the present petition for certiorari.

• Jurisdiction over Money Claims: Petitioner contended that the Labor Arbiter, not the Regional Director, has jurisdiction over money claims, citing Article 217 of the Labor Code and invoking the ruling in Zambales Base Metals, Inc. vs. Minister of Labor.
• Due Process: Petitioner alleged that it was denied due process of law because it was not afforded the time and opportunity to present its evidence.
• Improper Application of P.D. 1678: Petitioner claimed it was improper for the Regional Director to order compliance with P.D. 1678, as the issue on that decree was never raised by private respondent in its complaint.
• Compromise Agreement: Petitioner argued that the complaint should have been dismissed outright in view of the compromise agreement dated July 24, 1986, which purportedly contained the parties' agreement to dismiss all cases filed by one against the other.
• Factual and Legal Basis of Award: Petitioner averred that the award of ₱1,350,828.00 was without factual and legal basis; that it committed no labor standards violation pursuant to DOLE inspection results and union certification; that 291 of the 717 complainants were non-employees; and that 136 of the 717 commenced employment only after February 1982, hence not entitled to receive money awards.

• Jurisdiction over Money Claims: Whether the Regional Director correctly assumed jurisdiction over the money claims filed by the complainants.
• Due Process: Whether petitioner was denied due process of law.
• Authority to Order Compliance with P.D. 1678: Whether the Regional Director properly ordered compliance with P.D. 1678 despite it not being among the laws cited in the complaint.
• Compromise Agreement: Whether the compromise agreement dated July 24, 1986 bars the instant claims.
• Factual Basis of Award: Whether the award of ₱1,350,828.00 is supported by factual and legal basis.

• Jurisdiction over Money Claims: Yes. The Regional Director properly assumed jurisdiction, the aggregate claim of each of the 717 complainants being ₱1,884.00 — well within the ₱5,000 threshold — and all requisites under Article 129 of the Labor Code, as amended by R.A. 6715, being present.
• Due Process: No. Petitioner was not denied due process, having failed on several occasions despite due notice to appear at scheduled hearings or to present required payrolls and vouchers.
• Authority to Order Compliance with P.D. 1678: Yes. The Regional Director acted correctly under his visitorial and enforcement power under Article 128(a) of the Labor Code, which authorizes investigation of any fact necessary to determine violations of labor laws.
• Compromise Agreement: No, the agreement does not bar the claims. It was entered into by Elizardo Manuel in his personal capacity and binds only him, not the rest of the complainant-union members.
• Factual Basis of Award: The factual findings of labor officials are conclusive and binding on the Court when supported by substantial evidence; petitioner's contentions being evidentiary in nature, the Court deferred to those findings.

• Jurisdiction over Money Claims: Articles 129 and 217 of the Labor Code, as amended by Sections 2 and 9 of R.A. 6715, empower the Regional Director, through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims, provided four requisites are present: (1) the claim is presented by an employee or person employed in domestic or household service; (2) the claim arises from employer-employee relations; (3) the claimant does not seek reinstatement; and (4) the aggregate money claim of each employee does not exceed ₱5,000. In the absence of any requisite, the Labor Arbiter has exclusive original jurisdiction under Article 217, particularly paragraph (6) thereof. Following Briad Agro vs. Dela Cerna and L.M. Camus Engineering vs. Secretary of Labor, the amendments are curative in nature and have retroactive effect, thus applying to the instant case. In this case, each of the 717 complainants was found entitled to a uniform amount of ₱1,884.00, and all other requisites were present. The ruling in Zambales Base Metals, Inc. vs. Minister of Labor — which held that only the Labor Arbiter could decide money claims — was rendered no longer applicable by the enactment of R.A. 6715 and the modificatory resolution dated November 9, 1989 in the Briad Agro case.

• Due Process: The records show that on several occasions, despite due notice, petitioner failed to either appear at scheduled hearings or to present its employees' payrolls and vouchers for wages and salaries, particularly those covering the period from February 16, 1982 to December 31, 1985. The opportunity to be heard was afforded but not availed of; accordingly, petitioner was not denied due process of law.

• Authority to Order Compliance with P.D. 1678: While P.D. 1678 was not among the laws cited in the complaint for non-compliance, the Regional Director correctly acted in ordering compliance therewith. Article 128(a) of the Labor Code grants the Secretary of Labor or duly authorized representatives, including labor regulation officers, access to employers' records and premises and the right to investigate any fact, condition, or matter necessary to determine violations of the Labor Code and any labor law, wage order, or rules and regulations issued pursuant thereto. This visitorial and enforcement authority sustains the Regional Director's order even as to a decree not specifically invoked in the complaint.

• Compromise Agreement: The Regional Director found, and the records support, that the compromise agreement dated July 24, 1986 was entered into by Elizardo Manuel in his personal capacity, Luis M. Moro, Jr. representing Aboitiz Shipping Corporation, and Atty. Luis D. Flores as legal counsel of ASEA-CLO. The agreement primarily concerned Manuel's request for ₱70,000 in full settlement of all his personal monetary claims for back wages and benefits, including a settlement under appeal before the NLRC. Its terms — including the dropping of all pending cases — were mutual obligations between Manuel and the corporation. The agreement therefore binds only Manuel and has nothing to do with the rest of the complainant-union members. Manuel was accordingly excluded from the list of complainants entitled to the money award.

• Factual Basis of Award: Petitioner's contentions that 291 of the 717 complainants were non-employees, that 136 commenced employment only after February 1982, and that no labor standards violation was committed are evidentiary in nature. The long-settled rule is that factual findings of labor officials are generally conclusive and binding on the Court when supported by substantial evidence, and the Court found no reason to depart from that rule here.

• Jurisdiction of Regional Directors over Money Claims — Under Article 129 of the Labor Code, as amended by R.A. 6715, the Regional Director is empowered, through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims, provided four requisites concur: (1) the claim is presented by an employee or person employed in domestic or household service, or househelper; (2) the claim arises from employer-employee relations; (3) the claimant does not seek reinstatement; and (4) the aggregate money claim of each employee or househelper does not exceed ₱5,000. In the absence of any of these requisites, exclusive original jurisdiction lies with the Labor Arbiter under Article 217, paragraph (6). The Court applied this framework by finding that each complainant's claim of ₱1,884.00 fell within the threshold and all other requisites were satisfied.

• Curative Amendments and Retroactive Application — Amendments to the Labor Code that are curative in nature have retroactive effect and apply to cases pending at the time of enactment. The Court relied on this principle to apply R.A. 6715's amendments to Articles 129 and 217 to the instant case, notwithstanding that the complaint was filed before the law's approval on March 2, 1989.

• Visitorial and Enforcement Power of the Secretary of Labor — Under Article 128(a) of the Labor Code, the Secretary of Labor or duly authorized representatives, including labor regulation officers, have access to employers' records and premises at any time work is being undertaken, and the right to copy therefrom, question employees, and investigate any fact necessary to determine violations of the Labor Code and any labor law, wage order, or rules and regulations. This authority sustains orders of compliance even as to laws not specifically invoked in the complaint.

• Conclusiveness of Factual Findings of Labor Officials — Factual findings of labor officials are generally conclusive and binding on the Supreme Court when supported by substantial evidence. The Court applied this doctrine to defer to the labor officials' findings on the number of complainants, their employment status, and the existence of labor standards violations.

• "Under the foregoing provisions of Articles 129 and 217 of the Labor Code, as amended, the Regional Director is empowered, through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including legal interest, provided the following requisites are present" — This passage introduces the four-requisite test for the Regional Director's jurisdiction over money claims, constituting the ratio decidendi of the decision.

• "the above-cited amendments, being curative in nature, have retroactive effect and, thus, find application in the instant case." — This establishes the retroactive application of R.A. 6715's amendments to pending cases, a principle critical to the Court's conclusion that the Regional Director's jurisdiction was properly invoked.

• "In view of the enactment of R.A. 6715, and the modificatory resolution in the Briad Agro case, the ruling in Zambales Base Metals, Inc. vs. Minister of Labor, supra, is no longer applicable." — This passage signals the abandonment of prior jurisprudence that had confined money claims jurisdiction exclusively to Labor Arbiters, marking a shift in the jurisdictional landscape.

• Zambales Base Metals, Inc. vs. Minister of Labor, G.R. Nos. L-73184-88, November 26, 1986, 146 SCRA 50 — Previously held that only the Labor Arbiter could decide money claims and that the Regional Director's authority under Article 128 was limited to visitorial powers. Overruled as no longer applicable in light of R.A. 6715 and the modificatory resolution in Briad Agro.

• Briad Agro vs. Dela Cerna, G.R. No. 82805, November 9, 1989 — Recognized the jurisdiction of Regional Directors over money claims under the Labor Code amendments. A modificatory resolution dated November 9, 1989 qualified this power under R.A. 6715, establishing the ₱5,000 threshold framework. Followed.

• L.M. Camus Engineering vs. Secretary of Labor, G.R. No. 83225, November 9, 1989 — Cited alongside Briad Agro for the proposition that the R.A. 6715 amendments are curative and retroactive. Followed.

• South Motorists vs. Tosoc, G.R. No. 87445, January 23, 1990 — Cited as authority for the four requisites of the Regional Director's jurisdiction under Article 129. Followed.

• Edi-Staff Builder International, Inc. vs. Leogardo, Jr., G.R. No. 71907, July 30, 1987, 152 SCRA 453 — Cited for the rule that factual findings of labor officials are conclusive and binding on the Court when supported by substantial evidence. Followed.

• Article 129, Labor Code, as amended by R.A. 6715 — Empowers the Regional Director or duly authorized hearing officers to hear and decide, through summary proceedings, recovery of wages and other monetary claims arising from employer-employee relations, provided the aggregate claim per employee does not exceed ₱5,000 and no reinstatement is sought. Applied to sustain the Regional Director's jurisdiction over the 717 complainants' claims of ₱1,884.00 each.

• Article 217, Labor Code, as amended by R.A. 6715 — Grants Labor Arbiters original and exclusive jurisdiction over claims arising from employer-employee relations exceeding ₱5,000, and over cases involving reinstatement, unfair labor practice, termination disputes, and damages. Applied as the counterpart provision defining the boundary between Regional Director and Labor Arbiter jurisdiction.

• Article 128(a), Labor Code — Grants the Secretary of Labor and duly authorized representatives visitorial and enforcement powers, including access to employers' records and premises and the right to investigate violations of labor laws. Applied to sustain the Regional Director's order of compliance with P.D. 1678 despite its not being cited in the complaint.

• P.D. 1678 — Provides for a provisional mandatory emergency living allowance of ₱2.00 per day for non-agricultural workers and ₱1.50 per day for agricultural workers. Applied by the Regional Director under his visitorial authority.

• P.D. Nos. 1713 and 1751; Wage Order Nos. 1–6 — Laws cited in the complaint for non-compliance with mandated minimum wage rates and allowances. Formed the basis of the inspection and subsequent money claims.

Melencio-Herrera, Paras, Sarmiento, and Regalado, JJ., concurred.