Cirineo Bowling Plaza, Inc. vs. Sensing

The visitorial and enforcement powers of the Secretary of Labor and Employment or duly authorized representatives under Article 128 of the Labor Code, as amended by R.A. No. 7730, extend to the issuance of compliance orders regardless of the amount of individual employee claims, and the failure to state the material date of receipt of the assailed resolution in a petition for certiorari is a sufficient ground for dismissal.

Cirineo Bowling Plaza, Inc. is a business establishment in Dagupan City employing workers whose labor standards compliance was subject to inspection by the Department of Labor and Employment (DOLE). Within petitioner's premises operated Esperanza Seafoods Kitchenette, a separate business owned by Fe Esperanza C. Octaviano, whose employees petitioner later claimed were erroneously included among the thirteen awardees in the DOLE compliance order. The visitorial and enforcement powers of the Secretary of Labor and Employment, exercisable through duly authorized representatives such as the DOLE Regional Director, are governed by Article 128 of the Labor Code, as amended by R.A. No. 7730, which removed the prior ₱5,000.00 jurisdictional limitation on compliance orders issued under that article.

On November 27, 1995, Eligio Paolo, Jr., an employee of Cirineo Bowling Plaza, Inc., filed a letter complaint with the DOLE Dagupan District Office requesting inspection and investigation of petitioner for various labor law violations, including underpayment of wages, 13th month pay, non-payment of rest day pay, overtime pay, holiday pay, and service incentive leave pay. Pursuant to the visitorial and enforcement powers of the Secretary of Labor and Employment under Article 128 of the Labor Code, Labor and Employment Officer III Crisanto Rey Dingle conducted an inspection of petitioner's establishment the following day. The inspection report found that petitioner had thirteen employees and had committed violations consisting of underpayment of minimum wage, 13th month pay, holiday premiums, overtime premiums, and non-payment of rest day. The findings were explained to petitioner's officer-in-charge, Ma. Fe Boquiren, who signed the inspection report.

The first hearing was scheduled for December 27, 1995, but petitioner failed to appear, and the hearing was reset to January 10, 1996. On that date, Boquiren appeared and informed the DOLE that petitioner's President/General Manager Luisito Cirineo was hospitalized. At the January 19, 1996 hearing, Cirineo appeared and requested time to settle with his employees. The case was reset to January 26, 1996, but Cirineo failed to appear. On April 22, 1996, the DOLE Regional Office issued an Order directing petitioner to pay the thirteen affected employees a total of ₱377,500.58 representing unpaid/underpaid wages, 13th month pay, holiday premiums, rest day pay, and overtime premiums, and to adjust employee salaries to applicable minimum wages. Petitioner's counsel received a copy of the Order on May 17, 1996, but no motion for reconsideration or appeal memorandum was filed.

On May 27, 1996, petitioner's representative Carmen Zapata submitted quitclaims, waivers, and releases from seven of the thirteen employee-awardees. Four of those employees—Benitez, Tandoc, Quinto, and Dizon—subsequently wrote to DOLE denying having received any amount from petitioner. DOLE inspector Dingle visited petitioner's establishment to verify the quitclaims; the employees concerned stated they signed the documents without knowing their contents but were willing to settle if given the amounts computed by DOLE. On June 19, 1996, Luisito Cirineo and Fe Cirineo Octaviano, owner of Esperanza Seafoods Kitchenette stationed within petitioner's establishment, wrote to DOLE requesting that the case be endorsed to the NLRC, arguing that resolution required evidentiary matters not disclosed during inspection. They submitted documents purporting to show that petitioner and Esperanza Seafoods Kitchenette were separate and distinct business entities and that some of the employee-awardees were actually employees of the latter.

On September 12, 1996, DOLE issued an Order denying the request for indorsement to the NLRC, noting that petitioner had appeared during the summary investigation and had been bent on settling the claims of all thirteen employees, thereby acknowledging being their employer, without ever raising the issue of separate juridical personalities. The Order dismissed the claims of two employees whose claims had been settled and affirmed the order for payment of the remaining eleven employees. A writ of execution was issued on October 21, 1996. Petitioner filed a motion to quash the writ on November 13, 1996, alleging that the writ sought to satisfy awards to employees not employed by petitioner, that some awardees were employees of Esperanza Seafoods Kitchenette whose owner was not impleaded, that establishments employing fewer than ten employees were exempt from certain labor standards, and that the awards exceeded the jurisdictional amount allowed by law. DOLE Regional Director Lim denied the motion to quash on February 7, 1997. Petitioner's memorandum of appeal to the Secretary of Labor was initially dismissed as filed out of time but, on reconsideration, was given due course. DOLE Undersecretary José Español dismissed the appeal on March 30, 1999, affirming the Regional Director's order and ruling that the Regional Director had jurisdiction under Article 128 as amended by R.A. No. 7730. Petitioner's motion for reconsideration was denied on April 18, 2000.

Petitioner filed a petition for certiorari with the Court of Appeals, which dismissed it on August 31, 2000, for failure to attach certain documents and to state the material date when the assailed orders and resolutions were received. Petitioner's motion for reconsideration, while attaching the required documents, still did not state the material date of receipt of the DOLE Resolution dated April 18, 2000, and was denied on November 10, 2000.

• Grave Abuse of Discretion: Petitioner contended that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction when it dismissed the petition and the motion for reconsideration due to mere technicalities.
• Jurisdictional Amount: Petitioner argued that the DOLE Regional Director lacked jurisdiction because the individual monetary claims exceeded ₱5,000.00, placing the case within the exclusive jurisdiction of the Labor Arbiter under Articles 129 and 217 of the Labor Code.
• Separate Juridical Personalities: Petitioner maintained that some of the employee-awardees were actually employees of Esperanza Seafoods Kitchenette, a separate and distinct business entity, and that the owner of that entity was not impleaded.
• Exemption for Small Establishments: Petitioner asserted that establishments employing fewer than ten employees are exempt from compliance with minimum wage rates under R.A. No. 6727 and its Implementing Rules, and from holiday pay and holiday premium pay under Article 94 of the Labor Code.
• Lack of Proof of Overtime and Rest Day Work: Petitioner argued there was no proof that the employees rendered overtime or rest day work, and therefore they were not entitled to the corresponding pay.

• Procedural Compliance: Whether the Court of Appeals committed grave abuse of discretion in dismissing the petition for certiorari for failure to state the material date of receipt of the assailed resolution.
• Jurisdiction of the DOLE Regional Director: Whether the DOLE Regional Director had jurisdiction over the labor standards case notwithstanding that the individual employee claims exceeded ₱5,000.00.
• Timeliness and Merits of Petitioner's Defenses: Whether petitioner's defenses regarding separate juridical personalities, exemption for small establishments, and lack of proof of overtime work were properly raised and meritorious.

• Procedural Compliance: No. The CA did not commit grave abuse of discretion; the failure to state the material date of receipt of the DOLE resolution denying reconsideration is a sufficient ground for dismissal under Section 3, Rule 46 of the 1997 Rules of Civil Procedure, as the CA could not determine whether the petition was filed within the reglementary period.
• Jurisdiction of the DOLE Regional Director: Yes. The DOLE Regional Director had jurisdiction over the case pursuant to Article 128 of the Labor Code as amended by R.A. No. 7730, which removed the ₱5,000.00 jurisdictional limitation previously imposed by Articles 129 and 217.
• Timeliness and Merits of Petitioner's Defenses: No. Petitioner never refuted the labor inspector's findings as to the identity of the thirteen employees nor raised the issue of separate juridical personalities during the summary investigation, and the defenses were raised only after the compliance order was issued.

• Procedural Compliance: The CA correctly dismissed the petition because petitioner failed to state the material date when it received the DOLE Resolution dated April 18, 2000 denying its motion for reconsideration. Without that date, the CA could not determine whether the petition was filed within the sixty-day reglementary period under Rule 65. Section 3, Rule 46 of the 1997 Rules of Civil Procedure, as amended by SC Circular No. 39-98, expressly requires that petitions for certiorari indicate the material dates showing when the notice of the judgment or final order was received, when a motion for new trial or reconsideration was filed, and when notice of the denial thereof was received, and provides that failure to comply is sufficient ground for dismissal. The timely perfection of an appeal is a mandatory requirement that cannot be trifled with as a "mere technicality." Petitioner's new counsel failed to state the material date twice—first in the petition and again in the motion for reconsideration. Petitioner's explanation that its president only learned of the denial upon returning from Europe and that efforts to contact former counsel were futile was unsatisfactory, since the material dates could easily be verified from DOLE's files.

• Jurisdiction of the DOLE Regional Director: The visitorial and enforcement powers of the Secretary of Labor and Employment, exercisable through duly authorized representatives such as the DOLE Regional Director, are defined in Article 128 of the Labor Code as amended by R.A. No. 7730. The amendatory law expressly provides that the Secretary or 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," "notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary." This phrase eliminates the prior ₱5,000.00 jurisdictional limitation, overturning the restrictive rulings in the Aboitiz and Servandos cases. The Supreme Court had already so ruled in Nazareno Furniture vs. Hon. Secretary of Labor and Employment and Tomas Mendoza and Allied Investigation Bureau, Inc. vs. Secretary of Labor and Employment. The compliance order in this case was issued based on findings made during a lawful inspection, which petitioner did not contest with documentary proof, and therefore fell squarely within the coverage of Article 128 as amended.

• Timeliness and Merits of Petitioner's Defenses: Records show that during the summary investigation and the hearings conducted, petitioner never refuted the labor inspector's findings regarding the identity of the thirteen employees, nor raised the issue of separate juridical personalities of petitioner and Esperanza Seafoods Kitchenette. Petitioner had consistently been bent on settling the claims of all thirteen employees, thereby acknowledging being their employer. The documents submitted to show separate juridical personalities were submitted only after the compliance order was issued and were characterized by the DOLE as a "desperate attempt to mislead this Office and to evade liability." The defenses regarding exemption for small establishments and lack of proof of overtime work were likewise unavailing, as they were raised only at the execution stage and not during the investigation when petitioner had the opportunity to present payrolls, daily time records, and similar documents.

• Visitorial and Enforcement Powers under Article 128 of the Labor Code (as amended by R.A. No. 7730) — The Secretary of Labor and Employment or duly authorized representatives have the power to issue compliance orders to give effect to labor standards provisions based on findings of labor enforcement officers made in the course of inspection, without any restriction as to the jurisdictional amount of ₱5,000.00 previously provided under Articles 129 and 217 of the Labor Code. The phrase "notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary" in R.A. No. 7730 expressly excludes those articles from the coverage of Article 128, thereby retaining and strengthening the Secretary's visitorial and enforcement powers. The Court applied this doctrine to uphold the DOLE Regional Director's jurisdiction over the compliance order, notwithstanding that individual employee claims exceeded ₱5,000.00.

• Mandatory Nature of Procedural Rules on Perfection of Appeals — The timely perfection of an appeal is a mandatory requirement which cannot be trifled with as a "mere technicality." The rules on periods for filing appeals must be observed religiously, and parties who seek to avail themselves of the privilege must comply with the rules. Failure to perfect an appeal renders the judgment final and executory. While exceptional cases may warrant setting aside procedural defects to correct a patent injustice, the party invoking liberality must at least explain its failure to comply with the rules. The Court applied this doctrine to sustain the CA's dismissal of the petition for failure to state the material date of receipt of the assailed resolution.

• Contesting Findings of Labor Inspectors — Under Article 128(b) of the Labor Code, the Secretary or duly authorized representatives may issue compliance orders based on inspection findings "except in cases where the employer contests the finding of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection." The Court found that petitioner did not contest the labor inspector's findings with documentary proof during the investigation, and thus the exception did not apply.

• "The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition." — This passage quotes Section 3, Rule 46 of the 1997 Rules of Civil Procedure as amended by SC Circular No. 39-98, establishing the mandatory character of the material-date requirement in petitions for certiorari and forming the procedural basis for the CA's dismissal.

• "The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code by the phrase '(N)otwithstanding the provisions of Articles 129 and 217 of this Code to the contrary . . .' thereby retaining and further strengthening the power of the Secretary of Labor or his duly authorized representative to issue compliance orders to give effect to the labor standards provisions of said Code and other legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection." — This passage, drawn from Allied Investigation Bureau, Inc. vs. Secretary of Labor and Employment, articulates the doctrinal interpretation of R.A. No. 7730's amendment to Article 128, confirming that the visitorial and enforcement powers operate free of the jurisdictional amount limitations in Articles 129 and 217.

• "It bears stressing that the timely perfection of an appeal is a mandatory requirement, which cannot be trifled with as a 'mere technicality' to suit the interest of a party." — This statement encapsulates the Court's stance on the mandatory nature of procedural rules governing appeals, reinforcing that compliance with reglementary periods and procedural requirements is not a dispensable formality.

• Nazareno Furniture vs. Hon. Secretary of Labor and Employment and Tomas Mendoza, G.R. No. 128546, April 30, 1997 — Cited as controlling authority for the proposition that R.A. No. 7730 amended Article 128 of the Labor Code notwithstanding the jurisdictional provisions of Articles 129 and 217, thereby removing the ₱5,000.00 limitation on the Secretary's visitorial and enforcement powers. Followed.

• Allied Investigation Bureau, Inc. vs. Secretary of Labor and Employment, 319 SCRA 77 — Cited and extensively quoted for its elucidation that the visitorial and enforcement powers under Article 128 are distinct from the adjudicatory jurisdiction of Labor Arbiters under Articles 129 and 217, and that the former are not subject to the ₱5,000.00 jurisdictional limitation. Followed.

• Guico vs. Quisumbing, 298 SCRA 667 — Cited for the proposition that the visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standards laws can be exercised even where the individual claim exceeds ₱5,000.00. Followed.

• Cuevas vs. Bais Steel Corporation, 391 SCRA 192 — Cited in support of the rule that the rules on periods for filing appeals must be observed religiously. Followed.

• Mabuhay vs. NLRC, 288 SCRA 1 — Cited for the proposition that failure to perfect an appeal renders the judgment final and executory. Followed.

• Lapid vs. Laurea, 391 SCRA 277 — Cited for the principle that while exceptional cases may warrant setting aside procedural defects to correct a patent injustice, the party invoking liberality must at least explain its failure to comply with the rules. Followed.

• Cagampanan vs. NLRC, 195 SCRA 533 — Cited by petitioner for the proposition that without proof of overtime or rest day work, employees are not entitled to the corresponding pay. The Court did not directly address this citation, having found petitioner's defenses procedurally barred.

• Article 128, Labor Code (as amended by R.A. No. 7730) — Defines the visitorial and enforcement powers of the Secretary of Labor and Employment or duly authorized representatives, including the power to issue compliance orders based on inspection findings. The amendatory phrase "notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary" was held to remove the ₱5,000.00 jurisdictional limitation, thereby conferring jurisdiction on the DOLE Regional Director over the compliance order in this case regardless of the amount of individual claims.

• Articles 129 and 217, Labor Code — Confer jurisdiction on Labor Arbiters over employees' money claims exceeding ₱5,000.00. The Court held that these provisions do not restrict the visitorial and enforcement powers under Article 128, as R.A. No. 7730 expressly made Article 128 applicable notwithstanding Articles 129 and 217.

• Section 3, Rule 46, 1997 Rules of Civil Procedure (as amended by SC Circular No. 39-98) — Requires that petitions for certiorari filed with the CA indicate the material dates showing when the notice of the judgment or final order was received, when a motion for new trial or reconsideration was filed, and when notice of the denial thereof was received. The Court upheld the CA's dismissal of the petition for failure to state the material date of receipt of the DOLE resolution denying reconsideration.

• Article 94, Labor Code — Governs holiday pay; petitioner invoked it to argue that employees of establishments employing fewer than ten employees are not entitled to holiday pay. The defense was rejected as untimely raised.

• R.A. No. 6727 and its Implementing Rules, Chapter 1, Section 1 — Petitioner invoked this provision to argue that establishments employing fewer than ten employees are exempt from compliance with minimum wage rates. The defense was rejected as untimely raised.

Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concurred.