Tiger Construction and Development Corporation vs. Abay

A DOLE Regional Director's erroneous endorsement of a labor standards case to the NLRC does not divest her of jurisdiction conferred by Article 128(b) of the Labor Code, as amended by RA 7730, and an employer who fails to appeal the resulting compliance order within the reglementary period may no longer assail it on the ground of lack of jurisdiction, especially where such challenge is raised only at the execution stage and in evident bad faith.

Petitioner Tiger Construction and Development Corporation (TCDC) is an employer against whom sixty employees, led by Reynaldo Abay, filed a complaint before the Department of Labor and Employment (DOLE) Regional Office No. V for various labor standard violations. The DOLE Secretary and her duly authorized representatives, the regional directors, exercise visitorial and enforcement powers under Article 128(b) of the Labor Code, as amended by Republic Act No. 7730, which removed the jurisdictional amount limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases are concerned. The interplay between these provisions and the jurisdiction of the NLRC forms the statutory backdrop against which the procedural confusion in this case arose.

On the basis of a complaint filed by respondents Reynaldo Abay and fifty-nine others before the DOLE Regional Office No. V, DOLE officials conducted an inspection of petitioner TCDC's premises and noted several labor standard violations, including deficiencies in record keeping, non-compliance with various wage orders, non-payment of holiday pay, and underpayment of 13th month pay. The case was then set for summary hearing.

Before the hearing could take place, Director Ma. Glenda A. Manalo issued an Order on July 25, 2002 endorsing the case to the NLRC Sub-Arbitration Branch V in Naga City, on the ground that the aggregate money claim of each worker exceeded the jurisdictional amount of ₱5,000.00. Before the NLRC could act, however, DOLE Secretary Patricia A. Sto. Tomas issued another inspection authority on August 2, 2002 in the same case, in an apparent reversal of Director Manalo's endorsement. Pursuant to that authority, DOLE officials conducted another investigation and discovered the same violations. A Notice of Inspection Results was issued directing TCDC to rectify the violations within five days. For failure to comply, the case was set for summary hearing on August 19, 2002, where petitioner questioned the inspector's findings and argued that the proceedings had been rendered moot by the July 25, 2002 Order, which it characterized as a dismissal on the ground of lack of jurisdiction that had attained finality.

On September 30, 2002, Director Manalo issued an Order directing TCDC to pay ₱2,123,235.90 to its employees, representing underpayment of salaries, 13th month pay, service incentive leave pay, and regular holiday pay. TCDC filed a Motion for Reconsideration on October 17, 2002 and a Supplemental Pleading on November 21, 2002, reiterating the argument that Director Manalo had lost jurisdiction. Apparently convinced, Director Manalo again endorsed the case to the NLRC Regional Arbitration Branch V in Legaspi City. On January 27, 2003, the NLRC returned the entire records to Director Manalo on the ground that it did not have jurisdiction over the complaint. Director Manalo then issued an Order dated January 29, 2003 denying TCDC's motion for reconsideration for lack of merit.

TCDC did not appeal within the prescribed period. Director Manalo issued a Writ of Execution on February 12, 2003. On May 14, 2003, while the sheriff was enforcing the writ and more than three months after the denial of its motion for reconsideration, TCDC filed a belated appeal with the DOLE Secretary, reiterating its argument that all of Director Manalo's actions after July 25, 2002 were null and void for lack of jurisdiction. Secretary Sto. Tomas dismissed the appeal on January 19, 2004, citing Guico vs. Quisumbing and holding that jurisdiction properly belonged with the regional director and that mistakes of the State's agents cannot bind the State. TCDC's subsequent petition for certiorari before the Court of Appeals was dismissed for failure to comply with the certification against forum-shopping requirement, and its motion for reconsideration was denied because the board resolution authorizing the corporate signatory was executed four days after the petition was filed.

• Lack of Jurisdiction: Petitioner argued that Director Manalo's July 25, 2002 Order endorsing the case to the NLRC was tantamount to a dismissal on the ground of lack of jurisdiction, which had attained finality; hence, all subsequent proceedings before the DOLE regional office were null and void for want of jurisdiction.
• Nullity Assailable at Any Time: Petitioner maintained that because the January 29, 2003 Order was allegedly issued without jurisdiction, it was a total nullity that could be assailed at any time, even after it had become final and executory.
• Strict Application of Technical Rules: Petitioner argued that the CA erred in dismissing its petition for certiorari on the ground of defective certification against forum-shopping, insisting that strict application of the rule would result in a patent denial of substantial justice.

• Jurisdiction of the DOLE Regional Director: Whether the DOLE Regional Director lost jurisdiction over the labor standards case after issuing the July 25, 2002 Order endorsing the case to the NLRC.
• Finality of the January 29, 2003 Order: Whether petitioner can still assail the January 29, 2003 Order of Director Manalo on the ground of lack of jurisdiction after said Order has attained finality and is already in the execution stage.

• Jurisdiction of the DOLE Regional Director: No. Director Manalo acted within her jurisdiction under Article 128(b) of the Labor Code, as amended by RA 7730, which removed the jurisdictional amount limitation in visitorial and enforcement cases. Her mistaken endorsement to the NLRC did not oust her of jurisdiction, as jurisdiction is conferred by law and not by the parties or their errors.

• Finality of the January 29, 2003 Order: No. The January 29, 2003 Order had attained finality and was already in the execution stage. Petitioner's failure to appeal within the reglementary period, without any explanation for the delay, belied its good faith and revealed a belated attempt to reverse a final and executory order.

• Jurisdiction of the DOLE Regional Director: Under Article 128(b) of the Labor Code, as amended by RA 7730, the DOLE Secretary and her duly authorized representatives, the regional directors, have jurisdiction over labor standards violations based on findings made in the course of inspection of an employer's premises. RA 7730 effectively removed the jurisdictional amount limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases under the visitorial and enforcement powers of the DOLE Secretary are concerned. Director Manalo's initial endorsement of the case to the NLRC, based on the mistaken opinion that the claim was within the latter's jurisdiction, did not oust or deprive her of jurisdiction. Jurisdiction is conferred by law and not by the interested parties, much less by one of them, and should be exercised by the person or body in whom the law has placed it. The endorsement was not a final disposition but a mere referral to another agency on a mistaken belief; it could not preclude the regional director from subsequently deciding the case after the error was rectified and the NLRC returned the records. No right of the parties was prejudiced, as petitioner was properly investigated, received a Notice of Inspection Results, participated fully in the summary hearings, and filed pleadings.

• Finality of the January 29, 2003 Order: While orders issued without jurisdiction are generally considered null and void and may be assailed at any time, that principle does not apply here because Director Manalo acted within her jurisdiction. Petitioner admitted it failed to appeal the January 29, 2003 Order within the prescribed period and that the case was already in execution when it resorted to a belated appeal. If petitioner genuinely believed the Director lacked jurisdiction, it could have filed a petition for certiorari under Rule 65 within 60 days from notice of the order. Its failure to do so, without any explanation, belied its good faith and revealed that the jurisdictional objection was merely a tactic to thwart execution of a final award. Perfection of an appeal within the reglementary period is mandatory and jurisdictional; once a decision becomes final and executory, it can no longer be altered, modified, or reversed. The Court found no need to address petitioner's arguments on erroneous computation and inclusion of non-employees, nor the CA's dismissal on the ground of defective certification against forum-shopping, given that the January 29, 2003 Order was rendered with jurisdiction and had become final and executory.

• Jurisdiction Conferred by Law, Not by Parties — Jurisdiction or authority to try a certain case is conferred by law and not by the interested parties, much less by one of them, and should be exercised precisely by the person in authority or body in whose hands it has been placed by law. Applied here to hold that Director Manalo's mistaken endorsement to the NLRC did not divest her of jurisdiction, as jurisdiction is determined by the statute conferring it and cannot be lost through a procedural error of the official who holds it.

• Finality of Judgments — Perfection of an appeal in the manner and within the reglementary period allowed by law is both mandatory and jurisdictional. If no appeal is perfected on time, the decision becomes final and executory by operation of law and can no longer be altered, modified, or reversed by the trial or appellate court. The prevailing party is entitled as a matter of right to a writ of execution, the issuance of which is a ministerial duty compelled by mandamus. Applied here to bar petitioner's belated challenge to the January 29, 2003 Order.

• Good Faith Requirement in Raising Lack of Jurisdiction — While a decision rendered without jurisdiction is a total nullity and may be struck down at any time, the party that asserts it must be in good faith and not evidently availing thereof simply to thwart the execution of an award that has long become final and executory. Applied here where petitioner failed to file a timely petition for certiorari under Rule 65 and raised the jurisdictional objection only during the execution stage, without any explanation for the delay.

• Visitorial and Enforcement Powers Under Article 128(b) — The DOLE Secretary and her duly authorized representatives, the regional directors, have jurisdiction over labor standards violations based on findings made in the course of inspection, and such jurisdiction is not affected by the amount of claim involved, as RA 7730 removed the jurisdictional limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases are concerned. An exception exists where the employer contests the findings and raises issues requiring examination of evidentiary matters not verifiable in the normal course of inspection, in which case the regional director must endorse the case to the NLRC — but this exception was neither raised nor applicable here.

• "While the general rule is that any decision rendered without jurisdiction is a total nullity and may be struck down at any time, the party that asserts it must be in good faith and not evidently availing thereof simply to thwart the execution of an award that has long become final and executory." — This is the opening sentence of the decision and articulates the governing principle that tempers the general rule on nullity of judgments rendered without jurisdiction with a good-faith requirement.

• "Jurisdiction or authority to try a certain case is conferred by law and not by the interested parties, much less by one of them, and should be exercised precisely by the person in authority or body in whose hands it has been placed by the law." — This quotation, adopted from Tolentino vs. Quirino, states the rationale for why Director Manalo's mistaken endorsement to the NLRC did not divest her of jurisdiction.

• "Well-settled is the rule that perfection of an appeal in the manner and within the reglementary period allowed by law is not only mandatory but also jurisdictional. Thus, if no appeal is perfected on time, the decision becomes final and executory by operation of law after the lapse of the reglementary period of appeal." — This passage, quoted from Estoesta, Sr. vs. Court of Appeals, sets forth the doctrine on finality of judgments that bars petitioner's belated challenge.

• Guico vs. Quisumbing, 359 Phil. 197 (1998) — Cited by the DOLE Secretary and relied upon by the Court for the proposition that jurisdiction over labor standards inspection cases properly belongs with the regional director, and that the State is not bound by the mistakes of its agents.

• Ex-Bataan Veterans Security Agency, Inc. vs. Laguesma, G.R. No. 152396, November 20, 2007, 537 SCRA 651 — Followed for the rule that RA 7730 removed the jurisdictional amount limitations in Articles 129 and 217 of the Labor Code insofar as inspection cases are concerned, and for the explanation of the exception clause in Article 128(b).

• Estoesta, Sr. vs. Court of Appeals, G.R. No. 74817, November 8, 1989, 179 SCRA 203 — Cited by petitioner but applied by the Court in context to hold that once a decision becomes final and executory, it can no longer be altered, modified, or reversed, and the prevailing party is entitled to a writ of execution as a matter of right.

• Tolentino vs. Quirino, 64 Phil. 873 (1937) — Followed for the principle that jurisdiction is conferred by law and not by the interested parties, and should be exercised by the person or body in whom the law has placed it.

• T.H. Valderrama and Sons, Inc. vs. Drilon, G.R. No. 78212, January 22, 1990, 181 SCRA 308 — Cited for the principle that procedural due process in administrative proceedings follows a more flexible standard as long as the proceedings were undertaken in an atmosphere of fairness and justice.

• Article 128(b), Labor Code of the Philippines (P.D. 442), as amended by Republic Act No. 7730 — Confers upon the DOLE Secretary and her duly authorized representatives (the regional directors) the power to issue compliance orders to give effect to labor standards provisions based on findings made in the course of inspection. The provision removes the jurisdictional amount limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases are concerned. Applied to uphold Director Manalo's jurisdiction over the case notwithstanding the amount of the claims.

• Articles 129 and 217, Labor Code of the Philippines — These provisions respectively govern the jurisdiction of the DOLE regional directors and the NLRC over money claims. The Court held that RA 7730 effectively removed the jurisdictional amount limitations in these articles insofar as inspection cases under the visitorial and enforcement powers of the DOLE Secretary are concerned.

• Rule 65, Rules of Court — Governs petitions for certiorari. The Court noted that if petitioner genuinely believed Director Manalo lacked jurisdiction, it should have filed a petition for certiorari under Rule 65 within 60 days from notice of the assailed order, rather than raising the jurisdictional objection belatedly during the execution stage.

Justice Antonio T. Carpio (Chairperson), Justice Arturo D. Brion, Justice Roberto A. Abad, and Justice Jose P. Perez concurred in the decision. No separate concurring opinions were written.