260 Phil. 730 FIRST DIVISION

[ G.R. No. 85934, January 30, 1990 ]SSK PARTS CORPORATION, PETITIONER, VS. TEODORICO CAMAS AND SECRETARY OF LABOR &

EMPLOYMENT, RESPONDENTS.

[G.R. NO. 85935. JANUARY 30, 1990]

SSK PARTS CORPORATION, PETITIONER, VS. SSK-OLALIA AND/OR RIC DURAN AND SECRETARY OF LABOR & EMPLOYMENT, RESPONDENTS.

[G.R. NO. 85936. JANUARY 30, 1990]

IN RE: ROUTINE INSPECTION AT SSK PARTS CORP., BGY. PULO, CABUYAO, LAGUNA.

D E C I S I O NGRIÑO-AQUINO, J.:This is a petition for review on certiorari of the decision dated November 16, 1988 of the Department of Labor and Employment, affirming the Order of the Regional Director dated January 11, 1988 in three consolidated cases filed against the petitioner: (1) by Teodorico Camas for illegal deductions; (2) for underpayment of wages, non-payment of legal holiday pay and service incentive leave filed by the union in behalf of its members; and (3) for non-payment of employees’ service incentive leave, underpayment of allowance, overtime pay, premium pay, and non-payment of two (2) regular holidays in December which were discovered upon routine inspection conducted by the labor regulation officers.After the parties had submitted their position papers and evidence, the Regional Director issued an order on January 11, 1988, the dispositive portion of which reads thus: "WHEREFORE, premises considered, an Order is hereby entered: "a) Ordering respondent [herein petitioner] to refund to complainant Teodorico Camas the amount of Seven Hundred and Seventy Five Pesos (P775.00) having been illegally deducted from his salaries; and "b) Ordering respondent to pay individual claimants in the second case their unpaid overtime pay, legal holiday pay, living allowance and service incentive leave within ten (10) days from receipt hereof, otherwise a writ of execution shall be issued for the enforcement of this Order." (p. 92, Rollo.)Petitioner's appeal to the Secretary of Labor was dismissed by the latter. Hence, this petition for certiorari in which the petitioner alleges: 1. that the Regional Director has no jurisdiction over its employees' claims; and 2. that it (petitioner) was denied due process.The petition is devoid of merit. The jurisdiction of the Regional Director over claims for violation of labor standards is conferred by Article 128-B of the Labor Code, as amended by Executive Order No. 111 of March 26, 1987 which provides that: "(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists, the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor legislation  based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspections." (Underscoring supplied.)The jurisdiction of the Regional Director over employees' claims for wages and other monetary benefits not exceeding P5,000 has been affirmed by Republic Act No. 6715, amending Article 129 of the Labor Code as follows: "Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, that such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same."Being a curative statute, Republic Act No. 6715 may be given retroactive effect if, as in this case, no vested rights would be impaired (DBP vs. Court of Appeals, 96 SCRA 342; Santos vs. Duata, 14 SCRA 1041; Briad-Agro Dev. Corp. vs. De la Serna, et al., G.R. No. 82805, Nov. 9, 1989).Under the exception clause in Article 128(b) of the Labor Code, the Regional Director may not be divested of his jurisdiction over these claims, unless three (3) elements concur, namely: (a) that the petitioner (employer) contests the findings of the labor regulation 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.In this case, although the petitioner contested the Regional Director's finding of violations of labor standards committed by the petitioner, that issue was resolved by an examination of evidentiary matters which were verifiable in the ordinary course of inspection. Hence, there was no need to indorse the case to

the appropriate arbitration branch of the National Labor Relations Commission (NLRC) for adjudication (Sec. 2, Rules Implementing Executive Order 111).The petitioner's allegation that it was denied due process is not well taken. The petitioner actively participated in the proceedings a quo by filing its answer to the complaint, presenting a position paper to the Regional Director, submitting evidence in support of its claim, and appealing the decision of the Regional Director to the Secretary of Labor. Each of those steps was a part and parcel of its right to due process. As the petitioner had all those opportunities to be heard, it may not complain that it was denied due process (People vs. Retamia,  95 SCRA 201; Divine Word High School vs. NLRC, 143 SCRA 346; Municipality of Daet vs. Hidalgo Enterprises, Inc., 138 SCRA 265).WHEREFORE, the petition for certiorari is dismissed for lack of merit.SO ORDERED.Narvasa, (Chairman), Cruz, Gancayco, and Medialdea, JJ., concur.

G.R. No. 82607 SECOND DIVISION

[ G.R. No. 82607, July 12, 1990 ]STAR SECURITY AND DETECTIVE INVESTIGATION AGENCY, PETITIONER, VS. THE SECRETARY OF

LABOR, UNDERSECRETARY OF LABOR, REGIONAL DIRECTOR DAVID KONG, JR. AND THELMA CUERDA, RESPONDENTS. 

D E C I S I O NPARAS, J.:

On March 5, 1986, a complaint[1] was filed by private respondent Thelma L. Cuerda before the then Ministry of Labor and Employment, Regional Office No. 9 in ZamboangaCity against the petitioner Star Security and Detective Investigation Agency for underpayment of minimum wage, emergency cost of living allowance, non-payment of 13th month pay, regular holiday pay, rest day pay and service incentive leave pay.

On April 21, 1986, an inspection was conducted by the Regional Office a quo on the premises of the petitioner but the necessary documents (payrolls) as requested by the inspecting officer were not made available.  Petitioner promised, however, that said documents would be made available the following week.  On May 26, 1986, petitioner submitted the requested documents (payrolls), but only for the year 1985.  Petitioner stated that such documents may also be made as the basis for the year 1982 up to year 1985 salary.

Based on the submitted documents and the respective affidavits of the petitioner and the private respondent, the Regional Director promulgated on June 5, 1986 an order giving due course to the aforementioned complaint and awarding to the private respondent the sum of Fourteen Thousand Two Hundred and Eighty Pesos (P14,280.00) representing underpayment of wages, emergency cost of living allowance, 13th month pay, rest day pay and service incentive leave pay.

On June 26, 1986, petitioner filed a motion for reconsideration assailing the above mentioned Order on the grounds that the Regional Director has no jurisdiction over the case and that the award made in favor of the private respondent has no basis in law and in fact.  On July 24, 1986, the Regional Director issued another Order modifying his Order dated June 5, 1986 and ordering the petitioner to pay complainant the sum of Eighteen Thousand Three Hundred and Ninety Four Pesos and Ninety Six Centavos (P18,394.96).

On appeal to the Secretary of Labor, the decision of the Regional Director was upheld in an order[2] dated August 5, 1987.  The motion for reconsideration filed by the petitioner was denied in an order dated February 17, 1988.  Hence, this petition for certiorari.

The petition was given due course in this Court's resolution dated November 23, 1988 and required the parties to submit their respective memoranda.

The pivotal issue in the case at bar is whether or not the Regional Director of the Department of Labor acted within the bounds of his jurisdiction in taking cognizance of the complaint by private respondent below.

This Court had enumerated in the case of Brokenshire Memorial Hospital, Inc. vs. Hon. Minister of Labor, et al., G.R. No. 74621, February 7, 1990, applying Republic Act No. 6715, the requisites before the Regional Director and other hearing officers of the Department of Labor (aside from the Labor Arbiter) could have jurisdiction over money claims, to wit:1)  The claim is presented by an employee or person employed in domestic or household service, or househelper under the code;2)  The claimant, no longer being employed, does not seek reinstatement; and3)  The aggregate money claim of the employee or househelper does not exceed five thousand pesos (P5,000.00).The aforecited case likewise adopted the Separate Opinion of Mr. Justice Andres Narvasa in the case of Briad Agro Development Corporation, as reconsidered, G.R. No. 82805, November 9, 1989 which states:"In the resolution, therefore, of any question of jurisdiction over a money claim arising from employer-employee relations, the first inquiry should be into whether the employment relation does indeed still exist between the claimant and the respondent."If the relation no longer exists, and the claimant does not seek reinstatement, the case is cognizable by the Labor Arbiter, not by the Regional Director.  On the other hand, if the employment relation still exists, or reinstatement is sought, the next inquiry should be into the amount involved."If the amount involved does not exceed P5,000.00, the Regional Director undeniably has jurisdiction.  But even if the amount of the claim exceeds P5,000.00, the claim is not on that account necessarily removed from the Regional Director's competence.  In respect thereof, he may still exercise thevisitorial and enforcement powers vested in him by Article 128 of the Labor Code, as amended, supra; that is to say, he may still direct his labor regulations officers or industrial safety engineers to inspect the employer's premises and examine his records; and if the officers should find that there have been violations of labor standards provisions, the Regional Director may, after due notice and hearing, order compliance by the employer therewith and issue a writ of execution to the appropriate authority for the enforcement thereof.  However, this power may not, to repeat, be exercised by him where the employer contests the labor regulation officers’ findings and raises issues which cannot be resolved without considering evidentiary matters not verifiable in the normal course of inspection.  In such an event, the case will have to be referred to the corresponding Labor Arbiter for adjudication, since it falls within the latter's exclusive original jurisdiction."

The petition is impressed with merit.We find that the Regional Director had no jurisdiction over the case at bar.It can be gleaned from the complaint filed by private respondent Cuerda that she was relieved of her employment

due to her expired license and as found by public respondent Secretary of Labor, Cuerda did not seek reinstatement but just wanted to press her claim for the benefits and separation pay.  Also, the amount involved in this case is more than five thousand pesos (P5,000). All these factors taken into consideration, We find that the claims should have been filed with the labor arbiter.  Restating the aforementioned Brokenshire and Briad cases (supra), "(I)f the relation (employer-employee) no longer exists, and the claimant does not seek reinstatement, the case is cognizable by the Labor Arbiter, not by the Regional Director."

PREMISES CONSIDERED, the assailed orders are REVERSED and SET ASIDE.  The case is REFERRED, if the private respondent is so minded, to the Labor Arbiter for proper proceeding.

SO ORDERED.Sarmiento and Regalado, JJ., concur.Melencio-Herrera (Chairman), J., Concurring also with the separate opinion of J. Padilla.Padilla, J., See Separate Concurring Opinion.

[1] Annex A, p. 12, Rollo[2] Annex G, p. 27, Rollo

SEPARATE CONCURRING OPINIONPADILLA, J.:

I concur in the result.  The claim in this case falls within the jurisdiction of the Labor Arbiter, not of the Regional Director of the Department of Labor and Employment.

The applicable law is now Rep. Act 6715, a curative legislation.  Sec. 2 thereof amending Art. 129 of the Labor Code, as amended, provides:"Art. 129.  Recovery of wages, simple money claims and other benefits.  - Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations:  Provided, That such complaint does not include a claim for reinstatement:     Provided,     further, That the aggregate money claims of each     employee or   househelper   do not exceed Five     thousand pesos (P5,000.00).  x x x." (emphasis supplied)

Sec. 9 of RA 6715 amending Art. 217 of the Labor Code, as amended, provides:"Art. 217.  Jurisdiction of Labor Arbiters and the Commission.  - (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:x x x                             x x x                             x x x(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding Five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.x x x                             x x x                             x x x'"

As a consequence of the above-quoted provisions of Rep. Act 6715, the power of the Regional Directors to hear and decide claims for recovery of wages and other money claims is subject to the concurrence of the following requisites:  (1) the claim must arise from employer-employee relationship; (2) the claimant does not seek reinstatement; and (3) the aggregate money claim of each employee does not exceed P5,000.00.

It may be emphasized then that before the Regional Director can validly assume jurisdiction over money claims, all the aforementioned requisites must concur.  The absence of any of said requisites is enough to bring the case outside the jurisdiction of the Regional Director.

There is no dispute here that the amount of the claim involved is more than P5,000.00.  It thus exceeds the jurisdictional amount provided in RA 6715 under which the Regional Director can adjudicate money claims.  This fact alone is a sufficient ground why it is the Labor Arbiter, not the Regional Director, who has jurisdiction over this claim.

263 Phil. 613 SECOND DIVISION

[ G.R. No. 85840, April 26, 1990 ]SERVANDO'S INCORPORATED, PETITIONER, VS. THE SECRETARY OF LABOR AND EMPLOYMENT

AND THE REGIONAL DIRECTOR, REGION VI, DEPARTMENT OF LABOR AND EMPLOYMENT, RESPONDENTS. 

D E C I S I O NPADILLA, J.:This is a petition for certiorari to set aside the 23 August 1988 order of the Secretary of Labor,[1] sustaining the Director of the Department of Labor and Employment, Region VI, in holding herein petitioner company liable to fifty four (54) of its employees in the aggregate amount of P964,952.50, representing their alleged wage differentials.  The antecedent facts of the case are as follows:On 28 April 1987, the Labor Standards and Welfare Office conducted a routine inspection of petitioner's establishment.  On that same date, petitioner was furnished copy of a Notice of Inspection Result and apprised of its violations of the labor standards/occupational health and safety measures, that were discovered in the course of the inspection, namely:"LABOR STANDARDS LAWS:1.    Some of the employees are underpaid under Wage Order No. 4, covering the period from May 1, 1984 to June 15, 1984 averaging from P6.00 below for salary and P9.00 below for living allowance.2.    Some of the employees are underpaid under Wage Order No. 5, covering the period from June 16, 1984 to October 31, 1984 averaging from P7.00 below for salary and P3.00 for living allowance.3.    Some of the employees are underpaid under Wage Order No. 6 covering the period from November 1, 1984 to present averaging from P12.00 below for salary and P11.00 below for living allowance.OCCUPATIONAL HEALTH AND SAFETY:1.    There were some obstacles in the passageway of the bodega as the waste materials are being scattered in the aisle.2.    The fire extinguisher is not being displayed inside the bodega."[2]

On 22 May 1987, the Regional Office issued a subpoena duces tecum requiring petitioner to submit its payrolls and daily time records, with a warning that failure to comply with the same will be deemed a waiver of its right to present evidence.  Petitioner ignored said warning.On 17 June 1987, the Labor Standards and Welfare Officer submitted his report to the Regional Director, recommending the issuance of an order to require petitioner to pay fifty four (54) of its employees the amount of P964,952.50, based on the computation made by the Labor Standards and Welfare Office, representing the deficiencies in wages and allowances of said employees.[3]

Adopting the recommendation made by the Labor Standards and Welfare Office, the Regional Director issued the 2 July 1987 Order,[4] requiring petitioner to pay its employees the total amount of P964,952.50 as differentials, summarized as follows:

“1. NoelCadiao P 36,208.492.TranquilinoVillaruel 18,132.643. EdwinCabaluna 27,269.994. HerdiolynGarcia 27,572.995. EuniceDela Torre 22,041.676. AlfredoCanabe 22,041.677. Julie SalonCabaluna 22,041.678. AsuncionZamora 31,966.549. MarilouLoceno 31,814.9910. SandraCadiao 31,814.9911. MenchieYgonia 31,814.9912. ImeldaPerlin 31,814.9913. JulianitaSalucio 10,491.3714. ReneZarcino 10,491.3715.Gertrudes V.Besana 13,218.3616. GildaPahilanga 10,491.3717. DeniaPacheco 10,491.3718. SusanGonzaga 10,491.3719. FlorGardo 10,491.3720. EmmaTortusa 13,218.3621. SalvadorMoleta, Jr. 10,491.3722. Ditto Fernandez 10,491.3723. Ma. FeTermil 13,218.3624. Ma. Helen P. Yap 13,218.3625. TitoDalaorao 16,248.3626. LorendaDima-ala 10,480.7527. NenaMakilan 10,491.3728. NenitaSumagaysay 10,491.3729.FelecidadBaticados 10,491.3730. JulieBaylon 10,491.3731. DorinaLeonidas 22,199.0032. Marlene Espinosa 22,199.0033. DaisyAnoche 19,221.5534. Bernadette Chavez 19,221.5535. MonicaTejedo 19,221.5536. MelanieGuancia 19,221.55

37. MerlindaPoblete 19,221.5538. Edna Delas Marias 19,221.5539. Angelica Salon 10,491.3740. TeresaNarvas 10,491.3741. RogeliaGuinabo 10,491.3742. ElizabethCuadra 10,491.3743. LizaEncabo 19,221.5544. JovitaMilleno 16,248.3645. OscarGonzaga 10,642.8746. DorisTabaculde 22,062.1747. Johnny Delgado 13,521.3748. Lolita Noble 18,483.0049. TarcilaDimamay 20,604.0050. AnitaGravino 24,391.5351. ElyBlancia 18,483.0052. EstelaCerna 6,703.8753. LailaYee 19,506.1254. EulalioAgnes           33,357.27 GRAND TOTAL P964,952.50"[5]

Petitioner was likewise ordered to clear the passageway of its warehouse of waste materials, and to put up fire extinguishers in their proper places pursuant to the occupational safety and health rules.A motion for reconsideration of said order was filed by petitioner; but the same was denied.  On appeal, the Secretary of Labor in his order of 23 August 1988 affirmed the orders of the Regional Director.[6] Hence this petition.The sole issue raised in this case is whether or not the Regional Director has the jurisdiction to hear and decide cases involving recovery of wages and other monetary claims and benefits of workers and employees.The jurisdiction of the Regional Director to adjudicate money claims of workers and employees is governed by Articles 129 and 217 of the Labor Code, as amended bySecs. 2 and 9, respectively, of RA 6715, which provide that:"Sec. 2.  Article 129 of the Labor Code of the Philippines, as amended, is hereby further amended to read as follows:‘Art. 129.  Recovery of wages, simple money claims and other benefits.  - Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer?employee relations:  Provided, That such   complaint does not include a claim for reinstatement:     Provided, further, That the aggregate money claims of each employee or   househelper   do not exceed Five thousand pesos (P5,000.00) .  x x x."(emphasis supplied)"Sec. 9.  Article 217 of the same Code, as amended, is hereby further amended to read as follows:‘Article 217.  Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:x x x                   x x x                        x x x

(6)     Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding Five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.

'x x x                   x x x                      x x x'"In order to fully appreciate the previous rulings of the Court on the power of the Regional Directors to adjudicate money claims of workers and employees, there is a need to trace back the grant of said power by legislation.  Prior to the enactment of RA 6715, Art. 217 of the Labor Code, as amended, conferred on the Labor Arbiters the original and exclusive jurisdiction to hear and decide all cases involving household services, and all money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits.  The Regional Director was not empowered to share in that original and exclusive jurisdiction conferred on Labor Arbiters by Art. 217.[7]

Subsequently, Executive Order (EO) 111 was promulgated on 24 December 1986, Section 2[8] of which amended Article 128 par. (b) of the Labor Code, as amended, by granting the Minister of Labor or his duly authorized representative the power to order and administer compliance with standards and other labor legislations.In the case of Briad   Agro Development Corp. v. de la   Cerna   and   Camus   Engineering Corp. v. Sec. of Labor ,[9] applying EO 111, the Court recognized the concurrentjuris diction  of the Secretary of Labor (or Regional Directors) and the Labor Arbiters to pass on employees' money claims, including those cases over which the Labor Arbiters had previously exercised exclusive jurisdiction.  However, in a subsequent modificatory resolution in the Briad   Agro  case, dated 9 November 1989, the Court modified its original decision in view of the enactment of RA 6715, and upheld the power of the Regional Directors to adjudicate employees' money claims subject tothe conditions set forth in Section 2 of said law (RA 6715).

The power then of the Regional Director (under the present state of the law) to adjudicate employees' money claims is subject to the concurrence of all the requisites provided under Sec. 2 of RA 6715, to wit:  (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 househelperdoes not exceed P5,000.00.Going over the records of this case, we note that the aggregate claims of each of the fifty four (54) employees of herein petitioner are over and above the amount of P5,000.00.  Under the circumstances, the power to adjudicate such claims belongs to the Labor Arbiter who has the execlusive jurisdiction over employees' claims where the aggregate amount of the claim for each employee exceeds P5,000.00.WHEREFORE, the petition is GRANTED.  The order of respondent Secretary of Labor dated 23 August 1988 and the order of respondent Regional Director dated 2 July 1987 are SET ASIDE.  The case is REFERRED to the appropriate Labor Arbiter for proper determination.  No Costs.SO ORDERED.Melencio-Herrera, (Chairman), Paras, Sarmiento, and Regalado, JJ., concur.

263 Phil. 487 SECOND DIVISION

[ G.R. NO. 88538, April 25, 1990 ]ABOITIZ SHIPPING CORPORATION, PETITIONER, VS. HON. DIONISIO C. DELA SERNA, IN HIS

CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT; HON. LUNA C. PIEZAS, IN HIS CAPACITY AS DIRECTOR, NATIONAL CAPITAL REGION, DEPARTMENT OF LABOR AND EMPLOYMENT; AND, ABOITIZ SHIPPING EMPLOYEES ASSOCIATION, RESPONDENTS. 

D E C I S I O NPADILLA, J.:The principal issue in this special civil action for certiorari is whether the respondent Regional Director, National Capital Region, Department of Labor and Employment (Regional Director, for short) correctly assumed jurisdiction over the money claims filed with him by the complainants (members of herein private respondent).

Assailed specifically in this petition is the Order dated 9 February 1989 of the respondent Undersecretary of Labor and Employment affirming the Order dated 13 October 1988 of the Regional Director, ordering petitioner company to pay the seven hundred seventeen (717) complainants a total amount of P1,350,828.00, orP1,884.00 each, representing underpayment of an allowance of P2.00 per day, reckoned from 16 February 1982 to 15 February 1985.

The facts of the case, as found by respondent Undersecretary, are as follows:''x x x a complaint was filed by the Aboitiz Shipping Employees Association against Aboitiz Shipping Corporation for non-compliance of the mandated minimum wage rates and allowances pursuant to P.D. Nos. 1713, 1751, Wage Order Nos. 1, 2, 3, 4, 5 and 6.  Accordingly, the Labor Regulation Officers of the Regional Office a quo inspected the respondent's employment records.

On the other hand, the respondent filed a Motion to Dismiss contending that the complainant-union has no legal capacity to sue because a representation issue is still pending with Med-Arbiter Edgardo Cruz in LRD CASE NO. M?001-85.

Series of hearings were conducted whereby the Office a quo repeatedly directed the respondent to present and submit all its pertinent papers/employment records covered by the investigation.  However, on several occasions, the respondent failed to appear.  Likewise, despite repeated notices, the respondent failed to present any of the documents due for inspection evidencing correct payments of salaries and allowances.

On December 28, 1987, the hearing officer submitted his report and recommended for the payment to the union's members amounting to an aggregate sum of P16,200,877.47.

On January 20, 1988, the Office a quo formally issued subpoena duces tecum, requiring the presentation by the respondent of its employees' payrolls and vouchers covering the period from February 16, 1982 to December 31, 1985.  This, the respondent ignored.  In lieu thereof, it filed a second Motion to Dismiss alleging that on July 24, 1986, the parties entered into a compromise agreement whereby they agreed that all cases filed against and by respondent would be dropped and/or dismissed, including the above entitled case; that pursuant to and by virtue of the compromise agreement, cases filed against the Aboitiz Shipping Corporation and its officers were dropped and/or withdrawn and/or dismissed; and that similarly, cases filed by Aboitiz Shipping Corporation and its officers against the union and its officers were dropped, withdrawn and/or dismissed.

In the subsequent hearing of February 16, 1988 however, the parties agreed that on March 4, 1988, the respondent shall submit to the Office a quo the required payrolls/vouchers for wages and salaries covering the period from February 16, 1982 to December 31, 1985.  On that date, the respondent again failed to make good its commitment.  Nevertheless, it agreed to submit the payrolls of its Manila-based employees for the period from January 1982 to December 1982.  Together with the submission of the photocopies of the payrolls of the Manila-based employees, the respondent also filed a Manifestation of Compliance stating that the following should be taken into consideration:

‘Annex 1.  Which is a BWF/ISM Form No. 5 an advance notice dated October 1987 issued by the DOLE Regional Office No. 7 notifying respondent of their intent to check payrolls etc.  xxx

Annex 2.  Which is the notice of inspection results no. 05598 dated October 23, 1987 stating that the respondent (companywide payrolls, etc.) has no violation insofar as wages, salaries, etc. are concerned as well as the benefits indicated in the CBA.  xxx

Annex 3.  Which is the certification of the ASEA Union President based in Cebu City and the Union Vice President that company records inspected covering the period 1984-1987 were true correct and in order, and in compliance with the Labor and Standard Laws;

Annex 4.  Which is the existing CBA between the respondent and complainant ASEA employees Union;

Annex 5.  Which is the letter of Bureau of Working Conditions dated July 17, 1987 signed by Director Augusto Sanchez sustaining and validating respondent's use of 314 as divisor in the computation of wages and COLA for land based employees of respondent.’

Again, on July 5, 1988, the respondent filed a supplemental Motion to Dismiss, questioning this time the jurisdiction of the Office a quo.  The motion alleged that ‘x x x considering the complaint involves money claims, the original and exclusive jurisdiction rests not before the Honorable Director but before the Labor Arbiter x x x'.

xxx                      xxx                      xxx

Another hearing was conducted on August 17, 1988, whereby the respondent was required to submit its payrolls for the year 1984.  The respondent manifested however, that its Motion to Dismiss be resolved first by the Office a quo.  Further, the respondent averred that the payroll for 1984 need not be submitted, and thus moved for the resolution of this case based on the available records and motions submitted."[1]

Subsequently, respondent Regional Director issued the now assailed Order dated 13 October 1988, the dispositive portion of which reads:"WHEREFORE, premises considered, the Aboitiz Shipping Corporation is hereby Ordered to pay the herein listed complainants the total amount of ONE MILLION THREE HUNDRED FIFTY THOUSAND EIGHT HUNDRED TWENTY EIGHT and 00/100 PESOS (P1,350,828.00) representing underpayment of daily allowance of TWO (P2.00) PESOS per day reckoned from 16 February 1982 to 15 February 1985.

FURTHER, the Aboitiz Shipping Corporation is hereby Ordered to pay each and every one of its employees the deficiency in allowance of two (P2.00) PESOS per day from 16 February 1985 on ward until this Order is fully complied with."[2]

On appeal to the Office of the Secretary of Labor and Employment, in which petitioner questioned, among others, the jurisdiction of respondent Regional Director over the instant claims, respondent Undersecretary issued the Order dated 9 February 1989 dismissing petitioner's appeal and affirming the Order dated 13 October 1988 of the respondent Director.  The motion for reconsideration of the order dated 9 February 1989 having been denied by respondent Undersecretary in the Order dated 2 June 1989, petitioner interposed this present petition.

Petitioner contends that it is the Labor Arbiter, not the Regional Director who has jurisdiction over money claims, citing Article 217 of the Labor Code, and invoking this Court's ruling in Zambales Base Metals, Inc. vs. Minister of Labor.[3]

We rule against petitioner's contention.

Pertinent to the issue at bar are Articles 129 and 217 of the Labor Code, as amended by Sections 2 and 9 of Republic Act 6715 approved on 2 March 1989 which read as follows:"Article 129.  Recovery of wages, simple money claims and other benefits.  - Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations:  Provided, that such complaint does not include a claim for reinstatement:  Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000.00).  The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same.  Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned.  Any such sum not paid to the employee or house-helper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers.

Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules.

The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code."

xxx                            xxx                               xxx

"Art. 217.  Jurisdiction of Labor Arbiters and the Commission.  -- (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

‘(1) Unfair labor practice cases;‘(2) Termination disputes;'(3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages,

rates of pay hours of work and other terms and conditions of employment;

‘(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

‘(5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and

‘(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not accompanies with a claim for reinstatement.

(b)     The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

(c)     Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements."It should be pointed out that, following the ruling in Briad Agro vs. Dela Cerna, and L.M. Camus Engineering vs. Secretary of Labor,[4] the above-cited amendments, being curative in nature, have retroactive effect and, thus, find application in the instant case.

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,[5] to wit:

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 P5,000.00 (Art. 129, Labor Code, as amended by R.A. 6715).

In the absence of any of the requisites above-enumerated, it is the Labor Arbiter who shall have exclusive original jurisdiction over claims arising from employer-employee relations, except claims for employees’ compensation, social security, medicare and maternity benefits, all these pursuant to Article 217 of the Labor Code, particularly paragraph six (6) thereof.

This power of the Regional Directors qualified under R.A. 6715 is recognized in the modificatory resolution dated 9 November 1989 in said Briad Agro vs. Dela Cerna which modified the earlier decision therein dated 29 June 1989.[6]

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.

In the case at bar, it is noted that in the Order dated 13 October 1988 of the Regional Director, the latter found each of the seven hundred seventeen (717) complainants entitled to a uniform amount of P1,884.00.  (Rollo, pp. 117-131).  All the other requisites for the exercise of the power of the Regional Director under Article 129 of the Labor Code, as amended by R.A. 6715, are present.  It follows that the respondent Regional Director properly took cognizance of the claims, subject of this petition.

To the petitioner's contention that it was denied due process of law as it was not afforded time and opportunity to present its evidence, the records show that on several occasions, despite due notice, petitioner failed to either appear at the scheduled hearings, or to present its employees’ payrolls and vouchers for wages and salaries, particularly, those covering the period from 16 February 1982 to 31 December 1985.  Therefore, petitioner was not denied due process of law.

We also do not agree with the petitioner's allegation that it was improper for the respondent Regional Director to order, in the questioned Order dated 13 October 1988, compliance with P.D. 1678[7] as the issue on the said decree was never raised by private respondent in its complaint filed before the Regional Director.  While it may be true that P.D. 1678 is not one of the laws where non-compliance therewith was complained of, still, the Regional Director correctly acted in ordering petitioner to comply therewith, as he (Regional Director) has such power under his visitorial and enforcement authority provided under Article 128(a) of the Labor Code, which provides:"Art. 128.  Visitorial and enforcement power.  - (a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have access to employers’ records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto."Petitioner also claims that the complaint filed against it should have been dismissed outright, considering the compromise agreement dated 24 July 1986, which purportedly contains the agreement of the parties

therein to dismiss the cases filed by one against the other.[8]

We find no merit in said contention, in the light of the Regional Director's finding that the said agreement can not bind the complainant-union vis-a-vis the instant claims, for the reason that it was entered into by one Mr. Elizardo Manuel[9] in his personal capacity, one Luis M. Moro, Jr. representing Aboitiz Shipping Corporation, and Atty. Luis D. Flores in his capacity as legal counsel of ASEA-CLO,[10] which finding is supported by the records of the case before us.  Such records show that the compromise agreement primarily binds only the said Mr. Manuel, and that, therefore, it has nothing to do with the rest of the other complainant-union members.  The said agreement[11] reads:

"COMPROMISE AGREEMENTThis Agreement, entered into by and among Mr. ELIZARDO MANUEL in his personal capacity, LUIS M. MORO, JR. representing Aboitiz Shipping Corporation and Atty. LUIS D. FLORES in his capacity as Legal Counsel of ASEA-CLO.

Based on a compromise agreement Mr. Elizardo Manuel is requesting Aboitiz Shipping Corporation for payment of P70,000.00 in full settlement of all monetary claims for back wages and benefits he has, including the settlement decided by the NLRC which presently is under appeal.

For and in consideration of the above stated amount Mr. Elizardo Manuel and Aboitiz Shipping Corporation mutually agree that:

- Mr. Elizardo Manuel is deemed resigned from Aboitiz Shipping Corporation upon payment of the above stated amount; xxx

- Aboitiz Shipping Corporation will furnish Mr. E. Manuel a certificate of good moral character;- All pending cases as attested by our Legal Counsel that are related or filed by Mr. E. Manuel against

the Officers of Aboitiz Shipping Corporation and Aboitiz Shipping Corporation itself will be immediately dropped;

- Aboitiz Shipping Corporation also agrees to drop all pending cases related to and filed against Mr. E. Manuel and Officers of the Union.

Done this 24th day of July, 1986 in Metro Manila, Philippines.(SGD) (SGD)

_________________ ________________ELIZARDO MANUEL LUIS M. MORO, JR.

(SGD)________________

ATTY. LUIS D. FLORES"Considering the terms of the said compromise agreement, we rule that said Mr. Manuel shall be excluded from the list of complainants who shall receive money awards from the petitioner.

Finally, petitioner avers:  that the award of P1,350,828 is without factual and legal basis; that petitioner did not commit any labor standards violation pursuant to the DOLE inspection results and the union certification to that effect; and that 291 of the 717 complainants are non-employees of petitioner, and that the other 136 of the said 717 commenced employment only after February 1982, hence, not entitled to receive money awards.  The foregoing contentions being evidentiary in nature, we have to respect the factual findings of public respondents regarding the above-cited petitioner's averments, the long-settled rule being that factual findings of labor officials are, generally, conclusive and binding on this Court when supported by substantial evidence.[12]

WHEREFORE, the assailed Order dated 9 February 1989 of the respondent Undersecretary of Labor and Employment affirming the Order dated 13 October 1988 of the Regional Director is hereby AFFIRMED, with the modification that Mr. Elizardo Manuel shall be excluded from the list of complainants at bar who are entitled to money awards of P1,884.00 each.  Petition is DISMISSED.SO ORDERED.Melencio-Herrera, (Chairman), Paras, Sarmiento, and Regalado, JJ., concur.

334 Phil. 97 SECOND DIVISION

[ G.R. No. 89894, January 03, 1997 ]M. RAMIREZ INDUSTRIES AND/OR MANNY RAMIREZ, PETITIONER, VS. THE HONORABLE

SECRETARY OF LABOR AND EMPLOYMENT AND CAROLYN ALFONSO, WILLIAM DE LA TORRE, RODULFO CANDIA, CLARISSA HERMOSA, GINA CABIGAS, ELIZABETH ENDRINA, ORLANDO

SEGUERRA, RODEO SEGUERRA, JOSELITO DE LA TORRE, MA. THERESA DE LA RIARTE, LUISA DE LA RIARTE, MARIO MANCAO, REX DEIPARINE, PAULINO VILLAVER, ROGELIO PARAN, LUCILA

CAÑEZARES, ROBERTA DELA TORRE, JUANITA DELA TORRE, SUSAN VILLAVER, EDWIN BACUS, DIORES LABAJO, ROLANDO REMULINO, ELVIS MAHIPOS, RAULITO PATATAG, OFELIA VILLAVER, EMELIA MANCAO, EDDIE ROMARES, FLORIAN DE OCAMPO, LEONARDO VILLARTA, GUADALUPE BELLEZA, MA. THERESA PACAÑA, TOMASA MANCIA, IRENE MANCIA, JOSE TOROY, JR., MARIBEL

BULABUS, CABRIEL REPUNO, RODRIGO SEGUERRA, ALEX HERUELA, EMIE BARCOMA, FRANCISCO NEBRIA, JR., ANICITA DELIMA, CATHERINE DE LA VICTORIA, RIZALINA CABALAN, TERESITO

BONTILAO, ALLAN ABELLA, FLORIANA ROSKA, JUSTINO MANACIO, RIZALINO LABAJO, DENNI LABAJO, ARTURO FERNANDEZ, ROGELIA BELLEZA, DOMINGA CANONO, JANETH FAJARDO,

RAQUELIZA BACUS, FELIPE BERENGUEL, JOELITO REPUNO, RAYMUNDO CAPALA, RONIE ZAFRA, ROD DELIMA, BERNA OBEJERO, LUDY RAVANEZ, MELIT LEE, LEONORA RICO, PERIGRINA TIROL, J. GONDABAN, FRANCISCO LARIOSA, EMILITO SENSONTIC, NAPOLEON DABLO, JR., TERESITA

PALANGCO, HANORIA ABALLERO, LEOPOLDO LEBRADILLA, ROMEO GENGUYON, MELVIN JERALI, ERNING ZAFRA, EDNA ABAD, MIRALUNA TECSON, LORNA DEL ROSARIO, WILFREDO RIVERAL,

LYDIA FILOMENO, SUSANA MEREDORAS, NEMESIA CAMPO, JUDITHA BELLANA, MARVIN TOGONON, CONSTANTINO CAÑON, BEATRIZ YLANAN, SANTIAGO DEIPARINE, TERESITA

VERNAIZ, REBECCA MERCADO, ELIZABETH DELOS REYES, AILEEN LOPEZ, MANUELA BUCAO, WENCESLAO DELA TORRE, RAMIL BACALSO, EDGAR ESPINA, RENATO BACALSO, FRANCISCO

CERÑEO, CARMELITO PAQUET, RICARDO SABELLANO, ENRIQUE GONZALES, JR., TEODULO TARDIN, WILFREDO CANONO, EDWARD ABELLANA, SISMAR UFIL, TALANDRON CORDING, PEPE

CEREÑO, DARIO ZAFRA, FELICISIMA SEQUISNAR, JOVENCIO BASALO, SULPICIO MALERONG, MERCEDITA RAVANES, MAXIMO ZAFRA, ELIZABETH CABILES, NARCISO SADAYA, LEONILA ALFANTE, CARINA POLINGA, EDWIN ABISO, DIOMEDES BARICUATRO, JUDITHO DEGUMA,

FELIXBERTO BASALO, NELSON BACALSO, CRISCENCIO ECHAVEZ, ACHILLES TELERON, JAIME JAVA, EDDIE MURALEM, ROLANDO MEÑOZA, JORGE ABISO, MARISSA SELLOTE, MYRNA UBAS, MATIAS ALFEREZ, ARLENE SELLORIA, CELESTINO ABELLAR, EDURIGES ABELLAR, TEODORA

VILLAMEA, ELENA VILLAMEA, NICOLAS ALIVO, HENRY DIOSMANO, MARITES SABELLON, ROMEO NACARIO, CRESCENSIO ALFANTE, DIONISIO SEGUE, FELIPA ALFERES, JUDY HERMIDA, MARCIAL

VILARMEA, ALEJANDRO PANCHO, JOSELITO MEÑOZA, OSWARD HILWANO, RANDY SELLORIA, HERACLEO RAVANES, NELSON ORALDE, TEODORO ALFORQUE, BERNARDINO CARIZ, ZOSIMO

SAZ, LUIS OBATOG, SAMUEL CANIA, JOEL ABALO, ANDRES QUITARA, CRISPIN SABELLANO, BEN ABARQUEZ, ROBERTO CANONEO, FEDILITO PARDILLO, MODESTO PAQUIT, RAMON NATAD, JR.,

THOMAS ENGHOG, FELOMINA BACARRO, CHRISTINA MAÑACAP, PAZ ALGOSO, LEO FERNANDEZ, LUISA CAVALIDA, ADELINA TUMULAC, ELESITO ABISO, HELDITHA BARICUATRO, JULIE

BARICUATRO, MA. SOCORRO CALLEDO, JUDITA BASALO, ROGER BORJA, ELIZABETH PASIBUG, LIMBERTO ALLER, HIPOLITA BACARRO, JOVITA ALLER, ADOLFO SAYSON, BRENDA BORJA,

THELMA ALFORQUE, JUVY REPOLLO, DARIO ALFORQUE, GINA ALICABO, WENONA REPOLLO, CHONA ALFEREZ, VIRGINIA LABANG, FORTUNATA CRUDA, CRESCENCIA TAGALOG, FRANCISCA

BORJA, NESTOR BASALANG, DOMINADOR BASALAN, DANILO JUCOY, ALEJANDRO HERMDA, CARMELITO TAPANGAN, ERLANDO SAGISMAR, RUFINO RAGA, ELESIO MALARONG, SABINO BASALAN, CIRILO LAPUT, JOSE CABUSAS, BOYETTE VILLAVER, CARFIL HAMILA, TEODOLO

CAÑADA, PHILIP BONJOC, FLORDELINA VILLAMOR, ELIZABETH SALOMON, MANUEL FERNANDEZ, ROY ABREA, FERNANDO MUNALEM, NILA CAÑAS, ALFONSO CAROLINE, JANET SOLLANO, IREN

RIVERA, MUNDA BARICUATRO, VIVIAN REPUNTE, LORINDA OBINA, MARINO FRANZKIE, NARCISA BADAYA, MERLINDA CAPIONESE, CENON CABAÑA, MIRAFLOR PAPARON, JORIE DEL CARMEN, JERRY MOLBOG, CECENIA TAPANGAN, ARSENIA CASCUÑA, JOSEFINA BASALAN, ELIZABETH

SAYSON, DOROTEA PANILAG, ESTELITA PASAYLOON, CLAUDETH REPOLLO, PACITA ALFECHE, MARIA ALFECHE, ELIZABETH UBAS, LEONIDA DELA CERNA, MARINA ADLAWAN, MARIAFLOR

ABAD, MARLYN SASAN, JUN PACAÑA, NOEL GULFIANO, RUBEN BACALSO, ROMEO DEL CARMEN, MALOU ALCANTARA, RICARDO JAYRO, CAMILO LABURA, JAIME TIBIMINA, JERRY ABALAYAN, ARNIE SANGGOTAN, CONCHITA GINODIALA, JOSE BONGHANOY, LEONARDO SAZ, AVELINO RAGANS, ARLENE SEBIAL, MARIO FRANGES, FRANCISCO BONGHANOY, MARIVIC NAVALES,

NORMA LAPOÑA, INDOLENCIA NUÑEZ, CARMELITA CABAÑERO, LENITA UBAS, NOEL CAINTIC, RESPONDENTS. 

D E C I S I O NMENDOZA, J.:This is a petition for certiorari  to set aside the orders of the Secretary of Labor and Employment, dated May 12, 1989 and August 22, 1989, affirming the order of the Director of the Regional Office No. VII of the Department of Labor in Cebu City, granting the claims for salary differentials and emergency cost of living allowances (ECOLAs) of private respondents in the total amount of P430,901.75.

The facts are as follows:

Petitioner M. Ramirez Industries is a single proprietorship in Tungkop, Minglanilla, Cebu. It is engaged in the manufacture of handmade rattan baskets for export abroad, principally to Japan, and has in its employ from 400 to 500 employees.[1]

On April 1, 1986, Carolyn Alfonso and 260 other employees filed a complaint with the Regional Office No. VII of the Department of Labor in Cebu City, alleging non-payment of minimum wage, living allowances and non-compliance with other labor standard laws against M. Ramirez Industries and/or Manny Ramirez, its proprietor.[2]

Accordingly, an inspection was conducted in the company premises on the same day by Labor Standard Officer Juanito Yallosa.[3] After verifying the allegations of the complaint, the case was docketed as LSED Case No. 028-86. Meantime it appears that private respondents stopped working on April 8, 1986.[4]

On April 11, 1986, petitioner filed an ex parte motion to dismiss the case alleging voluntary desistance by private respondents. Attached to the motion was a letter, signed by 215 employees, affirming their decision to desist from proceeding with their claim against petitioner.[5]

The motion was set for conference on May 7, 1986. Both petitioner and private respondents were notified,[6] but only private respondents appeared. Private respondents opposed the motion on the ground that they were not signatories to the letter of affirmation supporting the motion to dismiss.[7]

The Regional Director denied petitioner’s motion in an order dated May 22, 1986, after finding that 90 per cent of the signatures in the letter were not those of the complainants,[8] while complainants, whose signatures appeared in the letters, had been deceived into signing the letters.

On June 11, 1986, petitioner filed a motion to remand the case to the National Labor Relations Commission, contending that the matter was outside the jurisdiction of the Regional Director.[9] Without acting on the motion, the Regional Director on July 18, 1986 ordered petitioner to pay private respondents the total amount of P430,901.75. The dispositive portion of the order reads:WHEREFORE, premises considered, respondent M. RAMIREZ INDUSTRIES AND/OR MR. MANNY (MANUEL) RAMIREZ is hereby ordered to pay the complainants claim in the aggregate amount of FOUR HUNDRED THIRTY THOUSAND NINE HUNDRED ONE AND 75/100 (P430,901.75), PHILIPPINE CURRENCY, within ten (10) days from the receipt hereof, and distributed as follows: Names of complainants who worked from January to April 8, 1986 with their corresponding differentials:1.William Dela Torre P1,748.002. Rodulfo Candia P1,702.003. Clarissa Hermosa P1,633.004. Gina Cabigas P1,702.005. Elizabeth Endrina P1,702.006. Orlando Seguerra P1,748.007. Rodeo Seguerra P1,672.008. Joselito de la Torre P1,540.009. Ma. Theresa de la Riarte P1,610.0010. Luisa de la Riarte P1,628.0011. Mario Mancao P1,540.0012. Rex Deiparine P1,540.0013. Paulino Villaver P1,540.0014. Rogelio Paran P1,540.0015. Lucila Cañezares P1,633.0016. Roberta dela Torre P1,633.0017. Juanita dela Torre P1,633.0018. Susan Villaver P1,628.0019. Edwin Bacus P1,544.0020. Diores Labajo P1,518.0021. Rolando Remulino P1,738.0022. Elvis Mahipos P1,738.0023. Raulito Patatag P1,738.0024. Ofelia Villaver P1,628.0025. Emelia Mancao P1,628.0026. Eddie Romares P1,518.0027. Florian de Ocampo P1,518.0028. Leonardo Villarta P1,496.0029. Guadalupe Belleza P1,496.0030. Ma. Theresa Pacaña P1,496.0031. Tomasa Mancia P1,738.0032. Irene Mancia P1,738.0033. Jose Toroy, Jr. P1,496.0034. Maribel Bulabus P1,738.0035. Cabriel Repuno P1,564.00

36. Rodrigo Seguerra P1,518.0037. Alex Heruela P1,288.0038. Emie Barcoma P1,232.0039. Francisco Nebria, Jr. P1,771.0040. Anicita Delima P1,702.0041. Catherine de la Victoria P1,679.0042. Rizalina Cabalan P1,679.0043. Teresito Bontilao P1,679.0044. Alln Abella P1,679.0045. Floriana Roska P1,472.0046. Justino Manacio P1,472.0047. Rizalino Labajo P1,679.0048. Denni Labajo P1,288.0049. Arturo Fernandez P1,587.0050. Rogelia Belleza P1,587.0051. Dominga Canono P1,628.0052. Janeth Fajardo P1,472.0053. Raqueliza Bacus P1,650.0054. Felipe Berenguel P1,050.0055. Joelito Repuno P1,311.0056. Raymundo Capala P1,403.00

57. Ronie Zafra P1,610.00

58. Rod Delima P1,403.0059. Berna Obejero P1,403.0060. Ludy Ravanez P1,403.0061. Melit Lee P1,541.0062. Leonora Rico P1,495.0063. Perigrina Tirol P1,587.0064. J. Gondaban P1,541.0065. Francisco Lariosa P1,564.0066. Emilito Sensontic P1,564.0067. Napoleon Dablo, Jr. P1,656.0068. Teresita Palangco P1,748.0069. Hanoria Caballero P1,748.0070. Leopoldo Lebradilla P1,748.0071. Romeo Genguyon P1,748.0072. Melvin Jerali P1,748.0073. Erning Zafra P1,748.0074. Edna Abad P1,748.0075. Miraluna Tecson P1,748.0076. Lorna del Rosario P1,541.0077. Wilfredo Riveral P1,679.0078. Lydia Filomeno P1,541.0079. Susana Meredoras P1,541.0080. Nemesia Campo P1,541.0081. Juditha Abellana P1,541.0082. Marvin Togonon P1,541.0083. Constantino Cañon P1,541.0084. Beatriz Ylanan P1,541.0085. Santiago Deiparine P1,426.0086. Teresita Vernaiz P1,426.0087. Rebecca Mercado P1,380.0088. Elizabeth delos Reyes P1,472.00

89. Aileen Lopez P1,426.00

90. Manuela Bucao P1,403.0091. Wenceslao dela Torre P1,403.0092. Ramil Bacalso P2,433.7593. Edgar Espina P2,433.7594. Renato Bacalso P2,433.7595. Francisco Cerñeo P2,433.7596. Carmelito Paquet P2,433.7597. Ricardo Sabellano P2,433.7598. Enrique Gonzales, Jr. P2,433.7599. Teodulo Tardin P2,433.75100. Wilfredo Canono P2,433.75

101. Edward Abellana P2,433.75102. Sismar Ufil P2,433.75103. Talandron Cording P2,433.75104. Pepe Cereño P2,433.75105. Dario Zafra P1,564.00106. Felicisima Sequisnar P1,518.00107. Jovencio Basalo P1,679.00108. Sulpicio Malerong P1,679.00109. Mercedita Ravanes P1,679.00110. Maximo Zafra P1,679.00111. Elizabeth Cabiles P1,472.00112. Narciso Sadaya P1,633.00113. Leonila Alfante P1,679.00114. Carina Polinga P1,679.00115. Edwin Abiso P1,679.00116. Diomedes Baricuatro P1,679.00117. Juditho Deguma P1,679.00118. Felixberto Basalo P1,679.00119. Nelson Bacalso P1,679.00120. Criscencio Echavez P1,679.00121. Achilles Teleron P1,679.00122. Jaime Java P1,679.00123. Eddie Muralem P1,679.00124. Rolando Meñoza P1,679.00125. Jorge Abiso P1,679.00126. Marissa Sellote P1,127.00127. Myrna Ubas P1,518.00128. Matias Alferez P1,633.00129. Arlene Selloria P1,518.00130. Celestino Abellar P1,656.00131. Eduriges Abellar P1,656.00132. Teodora Villamea P1,656.00133. Elena Villamea P1,521.00134. Nicolas Alivo P1,656.00135. Henry Diosmano P1,656.00136. Marites Sabellon P1,679.00

137. Romeo Nacario P1,656.00

138. Crescensio Alfante P1,633.00139. Dionisio Segue P1,408.00140. Felipa Alferes P1,679.00141. Judy Hermida P1,679.00142. Marcial Vilarmea P1,679.00143. Alejandro Pancho P1,606.00144. Joselito Meñoza P1,679.00145. Osward Hilwano P1,679.00146. Randy Selloria P1,679.00147. Heracleo Ravanes P1,679.00148. Nelson Oralde P1,320.00149. Teodoro Alforque P1,320.00150. Bernardino Cariz P1,540.00151. Zosimo Saz P1,320.00152. Luis Obatog P1,470.00153. Samuel Cania P1,320.00154. Joel Abalo P1,518.00155. Andres Quitara P1,518.00156. Crispin Sabellano P1,320.00157. Ben Abarquez P1,320.00158. Roberto Canoneo P1,617.00159. Fedilito Pardillo P1,837.50160. Modesto Paquit P1,606.00161. Ramon Natad, Jr. P1,637.50162. Thomas Enghog P1,690.50163. Felomina Bacarro P1,837.50164. Christina Mañacap P1,837.50165. Paz Algoso P1,666.00

166. Leo Fernandez P1,666.00167. Luisa Cavalida P1,666.00168. Adelina Tumulac P1,666.00169. Elesito Abiso P1,837.50170. Helditha Baricuatro P1,837.50171. Julie Baricuatro P1,837.50172. Ma. Socorro Calledo P1,837.50173. Judita Basalo P1,837.50174. Roger Borja P1,462.50175. Elizabeth Pasibug P1,690.50176. Limberto Aller P1,690.50177. Hipolita Bacarro P1,837.50178. Jovita Aller P1,690.50179. Adolfo Sayson P1,690.50180. Brenda Borja P1,679.00181. Thelma Alforque P1,788.50182. Juvy Repollo P1,788.50183. Dario Alforque P1,788.50184. Gina Alicabo P1,788.50185. Wenona Repollo P1,788.50186. Chona Alferez P1,788.50187. Virginia Labang P1,679.00188. Fortunata Cruda P1,788.50189. Crescencia Tagalog P1,679.00190. Francisca Borja P1,788.50191. Nestor Basalang P1,788.50192. Dominadar Basalan P1,788.50193. Danilo Jucoy P1,788.50194. Alejandro Hermda P1,564.00195. Carmelito Tapangan P1,564.00196. Erlando Sagismar P1,564.00197. Rufino Raga P1,564.00198. Elesio Malarong P1,748.00199. Sabino Basalan P1,633.00200. Cirilo Laput P1,564.00201. Jose Cabusas P1,035.00202. Boyette Villaver P1,541.00203. Carfil Hamila P1,541.00204. Teodolo Cañada P1,364.00205. Philip Bonjoc P1,541.00206. Flordelina Villamor P1,562.00207. Elizabeth Salomon P1,633.00208. Manuel Fernandez P1,610.00209. Roy Abrea P1,610.00210. Fernando Munalem P1,679.00211. Nila Cañas P1,679.00212. Alfonso Caroline P1,656.00

213. Janet Sollano P1,679.00

214. Iren Rivera P1,587.00215. Munda Baricuatro P1,587.00216. Vivian Repunte P1,587.00217. Lorinda Obina P1,656.00218. Marino Franzkie P1,564.00219. Narcisa Badaya P1,656.00220. Merlinda Capionese P1,725.00221. Cenon Cabaña P1,702.00222. Miraflor Paparon P1,610.00223. Jorie del Carmen P1,650.00224. Jerry Molbog P1,650.00225. Cecenia Tapangan P1,650.00226. Arsenia Cascuña P1,650.00227. Josefina Basalan P1,739.50228. Elizabeth Sayson P1,739.50229. Dorotea Panilag P1,739.50230. Estelita Pasayloon P1,739.50

231. Claudeth Repollo P1,702.00232. Pacita Alfeche P1,813.00233. Maria Alfeche P1,813.00234. Elizabeth Ubas P1,739.50235. Leonida dela Cerna P1,666.00236. Marina Adlawan P1,702.00237. Mariaflor Abad P1,650.00238. Marlyn Sasan P1,715.00239. Jun Pacaña P1,837.50240. Noel Gulfiano P1,837.50241. Ruben Bacalso P1,837.50242. Romeo del Carmen P1,837.50243. Malou Alcantara P1,813.00244. Ricardo Jayro P1,837.50245. Camilo Labura P1,725.00246. Jaime Tibimina P1,837.50247. Jerry Abalayan P1,837.50248. Arnie Sanggotan P1,837.50249. Conchita Ginodiala P1,298.00250. Jose Bonghanoy P1,430.00251. Leonardo Saz P1,650.00252. Avelino Ragans P1,628.00253. Arlene Sebial P1,298.00254. Mario Franges P1,298.00255. Francisco Bonghanoy P1,739.50256. Marivic Navales P1,813.00Names of Complainants who worked from February to April 8, 1986 w/ their corresponding differentials:1. Norma Lapoña P1,127.002. Indolencia Nuñez P1,127.003. Carmelita Cabañero P1,127.004. Lenita Ubas P1,452.00

Complainant who worked from March to April, 18, 1986 with his corresponding differential:1. Noel Caintic P136.00SO ORDERED.[10]

Petitioner moved for a reconsideration of the Regional Director’s order, which was treated as an appeal to the Secretary of Labor and Employment. On May 12, 1989, the Secretary issued an order affirming that of the Regional Director. Petitioner filed a motion for reconsideration, but its motion was denied on August 22, 1989. Hence this petition, assailing the foregoing orders of the Secretary of Labor and Employment on the following grounds:(1) The Regional Director has no jurisdiction to take cognizance of this case; 

(2) Petitioner was denied due process; and 

(3) The order of the Regional Director does not state clearly the facts and the law upon which it is based and is not supported by substantial evidence.With respect to the first ground, petitioner contends that the case falls within the original and exclusive jurisdiction of the Labor Arbiter, citing in support of its contention Art. 217 of the Labor Code, which, before its amendment by R.A. No. 6715 on March 21, 1989, provided:Art. 217. Jurisdiction of Labor Arbiter and the Commission. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Those that workers may file involving wages, hours of work and other terms and conditions of employment;

3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees’ compensation, social security, medicare and maternity benefits;

4. Cases involving household services; and

5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of strikes and lockouts.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

The contention has no merit. It is true that on April 1, 1986, when this case was filed in the Regional Office, Labor Arbiters had original and exclusive jurisdiction over money claims of laborers pursuant to Art. 217(a)(3) of the Labor Code as quoted above. On March 3, 1987, however, President Corazon C. Aquino, issued E.O. No. 111, conferring jurisdiction over money claims of laborers on Regional Directors, concurrently with Labor Arbiters. In Briad Agro Dev. Corp. v. Dela Serna,[11] this Court, after declaring E.O. No. 111 to be in the nature of a curative statute, gave it retroactive application with respect to claims filed in 1982 and 1987. Then on March 21, 1989, R.A. No. 6715 was enacted, amending the Labor Code so that, so far as pertinent, it now provides:

Art. 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any interested party, the regional director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department  is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided further, that the aggregate money claims of each employee or househelper does not exceed five thousand pesos (P5,000.00). The regional director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid on order of, the Secretary of Labor and Employment or the regional director directly to the employee or househelper concerned. . . .

Art. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural.

. . . .

6.       Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations,including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless or whether accompanied with a claim for reinstatement. . . . (Emphasis added)

Like E.O. No. 111, this amendatory statute was also retroactively applied to cases where the money claims of laborers were filed in 1980,[12] 1986,[13] 1987[14] and 1989,[15] i.e., long before the enactment of said statute on March 21, 1989. As we have construed the above provisions of the Labor Code, as thus amended, the Regional Director has the power to decide the cases involving money claims of laborers where the following requisites concur: (1) the claim must arise from employer-employee relationship; (2) the claimant does not seek reinstatement; and (3) the aggregate money claim of each employee does not exceed P5,000.00.[16] On the other hand, if the individual claims of employees exceed P5,000.00 and, even if they do not, if they include claims for reinstatement, the matter falls within the original and exclusive jurisdiction of the Labor Arbiter.

It is not disputed in this case that at the time of the filing of the complaint, private respondents were employees of petitioner and that said relationship gave rise to private respondents’ claim for wage differentials. Although no longer employees of petitioner, private respondents do not seek reinstatement and the aggregate money claim of each of them does not exceed P5,000.00. As a matter of fact, the Regional Director’s order shows that the aggregate claim of each of the 261 employees involved does not exceed P2,500.00.

Moreover, petitioner is estopped from questioning the jurisdiction of the Regional Director, having previously invoked it by filing a motion to dismiss. As has been held:[A] party can not invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction.

In the case just cited, by way of explaining the rule, it was further said that the question whether the court had jurisdiction either of the subject-matter of the action or of the parties is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice can not be tolerated ¾ obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. . . And in Littleton vs. Burges, 16 Wyo, 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.[17]

The Regional Director may not be divested of jurisdiction over these claims, unless the following elements are present:(a) that the petitioner (employer) contests the findings of the labor regulation officer and raises issues thereon;

(b) that in order to resolve such issues, there is need to examine evidentiary matters; and(c) that such matters are not verifiable in the normal course of inspection.[18]

These conditions do not exist in this case and, therefore, there can be no question that the Regional Director had jurisdiction to decide the claims of private respondents.

This brings us to the second ground for the present petition, namely, the alleged denial of due process to petitioner. Petitioner claims that it was not able to contest the findings of the Labor Standard Officer because it was not furnished a copy of the inspection report containing the findings and because instead of denying its motion to dismiss for lack of jurisdiction and thereafter giving it a hearing, the Regional Director simply issued his questioned order.

As already stated, after petitioner had filed a motion to dismiss the case based on the alleged desistance of the complainants, the Regional Office called the parties to a conference, but only private respondents came. Petitioner did not appear. After its motion was denied, the case was again set for conciliation conference on June 18, 1989, but again petitioner did not come, insisting instead on the remand of the case to the NLRC.

If petitioner attended the hearing on its motion to dismiss (based on alleged desistance of employees) it would have known who the complainants were because it would have been furnished a copy of the complaint.

Nor can petitioner pretend that it did not know what the nature of private respondents’ claims was because petitioner in fact moved for the remand of the case to the NLRC on the ground that it involved a claim “within the original exclusive jurisdiction of the Labor Arbiter of said commission.” Petitioner could only have invoked the original and exclusive jurisdiction of Labor Arbiters precisely because it knew the nature of the claims of private respondent.

As this Court has time and again stated:The essence of due process is that a party be afforded reasonable opportunity to be heard and to submit any evidence he may have in support of his defense. In administrative proceedings such as the one at bench, due process simply means the opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complained of.[19]

The Regional Director therefore rightly concluded in his order of July 29, 1986:The records showed that the respondent [now petitioner] was afforded ample time to defend and present evidences to refute the complainants allegations, but failed to avail of those opportunities.[20]

The fact is that, as the Secretary of Labor and Employment stated in his order of May 26, 1989:In the course of inspection Mr. Manny Ramirez, owner of the Industry, revealed that he was not giving the living allowances and other benefits for by doing so would mean business closure. He advised the labor inspector to settle the case amicably with the complainants.[21]

What seems to have been overlooked by petitioner is that the proceedings in the Regional Office were a summary one. Under Art. 128(a) of the Labor Code, the Secretary of Labor or his duly authorized representatives, such as the Regional Directors, has visitorial powers which authorize him to inspect the records and premises of an employer at any time of the day or night whenever work is being undertaken therein, to question any employee and investigate any fact, condition or matter, and to determine violations of labor laws, wage orders or rules and regulations. If the employer refuses to attend the inspection or conference or to submit any record, such as payrolls and daily time records, he will be deemed to have waived his right to present evidence.[22]

Indeed, Art. 129 of the Labor Code provides that proceedings before the Regional Director shall be summary in nature and, hence, should be resolved expeditiously. Accordingly, the parties to such proceedings must be vigilant and prompt in the assertion and protection of their rights.

Finally it is contended that the order of the Regional Director is defective because it does not contain a clear and distinct statement of the facts and the law on which it is based. Petitioner claims that the deficiency was supplied only in the order of the Secretary of Labor.

This contention has likewise no merit. The order in question reads:This case is for non-payment of the minimum wage, living allowance and non-compliance with other labor standard laws which was filed in this Office on April 1, 1986 by Carolyn Alfonso and 260 others against M. Ramirez Industries and/or Manny Ramirez.

The complainants were not given the minimum wage and emergency cost of living allowance as mandated by labor laws since the period of their employment in January 1986, when the respondent opened for business, up to the time it stop business operations last April 8, 1986.

The records showed that the respondent was afforded ample time to defend and present evidences to refute the complainants allegations, but failed to avail of those opportunities.

The complainants, therefore, are entitled to the difference of what has been provided by law less the amount actually received by them.

Contrary to the claim of petitioner, the order of the Regional Director states the ultimate facts, to wit: that private respondents were employed by petitioner in 1986; that on April 1, 1986 private respondents, led by Carolyn Alfonso, filed the case complaining of nonpayment of the minimum wage, living allowance and noncompliance with labor standards laws; that petitioner stopped business operations on April 8, 1986; that private respondents were entitled to wage differentials; and that petitioner failed to refute the private respondents’ allegations despite opportunity given to petitioner.

These are the facts on which the order was based. The order of the Secretary of Labor and Employment, which petitioner seems to consider as adequate contains no more recital of the facts than the order of the Regional Director in question. The only difference between the two is that the Secretary’s order, aside from stating the facts, also states the proceedings in the case. Thus, the Secretary’s order reads:

The factual background are as follows:This case is for non-payment of minimum wage, living allowance and non-compliance with other labor standard laws which was filed on April 1, 1986 by Carolyn Alfonso and 260 others against respondent herein.

On the strength of Office Order No. 23 dated April 1, 1986, Labor Standard and Welfare Officer, Mr. Juanito Yallosa, conducted a complaint inspection at the respondent’s premises. Consequently, several conciliation hearings were held until it was reset to April 18, 1986.

However, on April 14, 1986, respondent filed an Ex-Parte Motion to Dismiss the case on the ground of complainants’ voluntary desistance from pursuing their case and attaching therein their letter of affirmation to said desistance.

On May 7, 1986, both parties again were called for a conference. Complainants appeared while respondent did not. In said hearing complainants vehemently objected to respondent’s motion on the ground that the signatories appearing thereon are not the complainants.

On May 22, 1986, the Regional Director promulgated an Order dismissing respondent Ex-Parte Motion To Dismiss.

On June 11, 1986, respondent filed another Motion praying that the case be remanded to the National Labor Relations Commission alleging among others, that the case is within the original and exclusive jurisdiction of the NLRC.

On June 18, 1986 an Order was promulgated ordering respondent to pay the claims of the complainants.

Hence, respondent appealed.A decision must state the grounds for it so that any party who wishes to appeal therefrom can make a proper assignment of error against the decision. In the language of Ang Tibay v. CIR:[23](7) The [administrative agency] should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.If the test of sufficiency of a decision or order is that the party adversely affected by it can, if he wishes to, assign errors against it, then the order of Regional Director in question is sufficient. Thus, in its motion for reconsideration dated July 29, 1986, petitioner took issue with the findings contained in the order of the Regional Director. Petitioner said:The awards are inequitable, unjust and oppressive. Contrary to what was recited in the questioned order that the respondent stopped business operations on April 8, 1986, respondent opened for business his new but still-not-finished factory buildings on July 2, 1986. During the alleged period of employment of the complainants, respondent was, and even presently is, undertaking construction in progress of his factory buildings and compound. Anticipating that respondent will need workers when the factory will open for business, many presented themselves to learn the trade of weaving baskets which will be the crafts to be produced in respondent’s factory. Sacrificing valuable materials, respondent allowed those who are interested to learn the trade. Naturally, many of the baskets weaved are of inferior and unsalable quality, but respondent was not counting the costs, expecting that when the time comes to open the factory for business, there would be already available workers skilled in the art of weaving baskets. Besides, there were some who possess the aptitude and had weaved baskets of fair quality, so, they were correspondingly paid of their labor on a piece rate basis. Unfortunately, however, even as construction of respondent’s factory was not yet completed, his business was not spared of agitation initiated by elements of a radical labor union. Hence, this case. And, now, to compel respondent to pay as commanded in the questioned order, despite much sacrifice to waste valuable materials so prospective workers will learn to weave is, verily, inequitable, unjust and oppressive. (Emphasis added)Petitioner would not have been able to say “contrary to what was recited in the questioned order...” if the basis of the Regional Director’s order was not stated. In effect petitioner admitted that he had not paid the respondents some of their claims, such as those for living allowance, albeit it defended itself by claiming that private respondents were not regular workers but only learners, who were allowed to work so that they would learn the craft, pending their employment. However that may be, the fact is that petitioner admitted not having paid private respondents regular wages. That private respondents were regular workers is a finding that the Regional Director made, based on the report of the Labor Standard Officer. The failure of petitioner to dispute this factual finding gives it the stamp of finality. It is now settled that factual findings of administrative agencies are to be accorded not only respect but even finality when they

are supported by substantial evidence.[24]

WHEREFORE, the petition for certiorari is DISMISSED for lack of merit.SO ORDERED.

Regalado (Chairman), Romero, Puno, and Torres, Jr ., JJ., concur.

261 Phil. 1049 THIRD DIVISION

[ G.R. No. 82488, February 28, 1990 ]VICENTE ATILANO/ROSE SHIPPING LINES, PETITIONER, VS. HON. DIONISIO C. DE LA SERNA, UNDERSECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, HON. ADRIAN LOMUNTAD, REGIONAL DIRECTOR, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7,

MAMINTAS O. SANDALAN, CESAR PETALCORIN, JONATHAN SARADOR, BONIFACIO LASOLA, NILO CLAROS, GODOFREDO GRANADA, CRISTITUTO DAQUEL, LEONARDO LARGO, TOMAS OTADOY,

LUIS GONZALES, PAULINO SIDO, GILBERT OSABEL, WILLIAM RONDOVIO, RUEL ORGE, NOLASCO P. AUSTERO, WILFREDO FLORES AND BERNARDITO P. MANALO, RESPONDENTS. 

D E C I S I O NFELICIANO, J.:This Petition for Certiorari is directed against the order of respondent Undersecretary of Labor and Employment dated 3 March 1988 which sustained the decision of respondent Regional Director in LSED Case No. 055-85. That decision awarded salary differentials, allowances, 13th month pay and overtime pay to the seventeen (17) private respondent employees of petitioner Vicente Atilano who is doing business under the rubric Rose Shipping Lines.On 20 May 1985, private respondents filed a letter-complaint in the Regional Office of the then Ministry of Labor and Employment, Cebu City, against petitioner Rose Shipping Lines and its Proprietor/Manager Vicente Atilano docketed as LSED Case No. 055-85. The letter-complaint alleged violations by petitioner of labor standard laws on minimum wages, allowances, 13th month pay and overtime pay.Acting on the letter-complaint, the Office of the Regional Director ordered a Labor Standards and Welfare Officer (LSW officer, hereinafter) to conduct a complaint inspection on 22 July 1985 at the establishment of petitioner in Cebu City. However, no actual inspection was effected because the owner, petitioner Mr. Vicente Atilano, was allegedly on a business trip to Manila, and his employees declined to allow the inspection in his absence.Respondent Regional Director subsequently summoned the parties to conciliation conferences the first of which was held on 5 August 1985 where only the complainants (private respondents herein) appeared. The conference was then rescheduled to 16 August 1985 and on that meeting both the parties were represented. Another hearing was held on 21 August 1985 and there the private respondents submitted their position paper elaborating and documenting their claims. Petitioner did not file any position paper.On 16 August 1985, while the above case was in progress, private respondents filed another complaint against petitioner for unpaid wages covering the month of July 1985 which case was docketed as LSED Case No. 061-85. On 26 August 1985, the parties were called to a conference regarding this second complaint during which petitioner Vicente Atilano appeared and promised to pay private respondents their unpaid salaries for the month of July not later than 30 August 1985, and their salaries for the month of August 1985 not later than 2 September 1985. Petitioner, however, failed to comply with this promise. On 6 September 1985, the Regional Director issued a Compliance Order requiring petitioner to pay private respondents the aggregate amount of Thirty Seven Thousand Sixty Five Pesos and Sixty Centavos (P37,065.60) representing the unpaid wages being claimed under the second complaint (LSED Case No. 061-85).Petitioner filed a motion for reconsideration of the Compliance Order, which was denied for lack of merit in a Resolution dated 11 October 1985. Counsel for private respondents immediately moved for the issuance of a writ of execution. The case was later appealed by petitioner to the then Minister of Labor and Employment which appeal was, however, dismissed on the ground that it was filed out of time. Petitioner then filed a motion to quash the writ of execution which motion was also denied. But in an order dated 26 January 1986. LSED Case No. 061-85 was dismissed on the ground that the claims of all the complainants had been fully settled by the petitioner.Meanwhile, on 16 January 1986, the Regional Director issued an order in LSED Case No. 055-85 (the earlier case) the dispositive portion of which provided as follows: "WHEREFORE, premises considered, respondent ROSE SHIPPING LINES and the Manager/Proprietor is (sic) hereby ordered to pay the claims of the complainants in the aggregate sum of SIX HUNDRED SIXTY THOUSAND FIVE HUNDRED NINETY FOUR PESOS AND 46/1000 (P660,594.46), Philippine currency, within 15 days from the receipt thereof, x x x."Petitioner did not file a motion for reconsideration of the above order but instead filed an ex-parte motion to dismiss dated 24 January 1986 alleging that the case (No. 055-85) had been rendered moot and academic by the quitclaims and release papers dated 4 January 1986 signed by complainants in favor of respondents.Private respondents filed an opposition to the ex-parte  motion to dismiss, contending that the quitclaims and release papers referred to by petitioner (which quitclaims and papers had been prepared by petitioner) were intended to support the dismissal of LSED Case No. 061-85 (the later case) only.In his comment on private respondents' opposition to the ex-parte motion to dismiss, petitioner contended that the two (2) cases involved identical claims and concerned the same parties, and that the dismissal of LSED Case No. 061-85 was res judicata in respect of LSED Case No. 055-85. Petitioner added that the dispositive portion of the order dismissing LSED Case No. 061-85 refers not only to the claims of private respondents in the said case but to all claims of private respondents against petitioner including those which are the subject of LSED Case No. 055-85.Several conciliation conferences on the motion to dismiss were subsequently held and both parties agreed that they would submit their respective position papers after which petitioner's motion to dismiss would be deemed submitted for resolution.On 24 April 1986, public respondent Regional Director denied petitioner's motion to dismiss for lack of merit. A motion for reconsideration or appeal was filed with the Secretary of the Department of Labor and

Employment on 19 May 1986. Petitioner more than a year later filed a Manifestation and Motion with the Secretary dated 23 July 1987, enclosing therein a different set of quitclaims and releases also prepared by petitioner but allegedly signed by private respondents dated 9 July 1986 (i.e., different from those earlier referred to by petitioner in his ex-parte  motion to dismiss filed with the Regional Director). On 3 March 1988, public respondent Undersecretary of Labor rendered the questioned order dismissing petitioner's motion for reconsideration or appeal for lack of merit.In the instant Petition for Certiorari, petitioner makes the following arguments:

1. Public respondents acted without jurisdiction over the nature and subject matter of private respondents' purported money claims.  

2. Public respondents acted in excess of jurisdiction in not endorsing the matter to the National Labor Relations Commission for adjudication.  

3. Public respondents acted with grave abuse of discretion in not conducting an actual inspection on the purported charges of labor standards violations.  

4. Public respondents acted with grave abuse of discretion amounting to lack of jurisdiction in summarily granting private respondents' claims.

The main issue to be resolved herein is whether or not the public respondents, Regional Director and Undersecretary of Labor, have jurisdiction over the subject matter of the case. Petitioner contends that the power to adjudicate the money claims here involved is vested solely in the Labor Arbiter.1. LSED Case No. 055-85 was commenced on 20 May 1985: the order of the Regional Director in said case, which is here sought to be set aside, was issued on 16 January 1986, while the order of the same official denying petitioner's motion to dismiss for lack of merit was rendered on 24 April 1986. The order of the Undersecretary of Labor here assailed was, as already noted, issued on 3 March 1988. At all material times — i.e., from 20 May 1985 through to 3 March 1988, the legal provisions governing the exercise of the visitorial and enforcement powers of the Regional Directors of Labor were embodied in P.D. No. 850 (promulgated on 16 December 1975) and Executive Order No. 111 (promulgated on 24 December 1986), amending Article 128 (b) of the Labor Code which, as amended, provided as follows: "ART. 128. Visitorial and enforcement power. — x x x.(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exist, the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor legislation based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.

xxx xxx xxx"In Maternity and Children's Hospital v. the Honorable Secretary of Labor,[1] the Court made clear that under Article 128 of the Labor Code, as amended, the Regional Director of Labor possessed "enforcement/adjudication authority" over uncontested money claims where the employer-employee relationship remained. The Court, through Mr. Justice Medialdea, said: "As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an employer with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion however, that the inclusion of the phrase, 'The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists x x x' in Article 128 (b), as amended, above-cited, merely confirms/reiterates the enforcement/adjudication authority of the Regional Director over uncontested money claims in cases where an employer-employee relationship still exists. Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention of our labor authorities to provide our workers immediate access (when still feasible, as where an employer-employee relationship still exists) to their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve?wracking, but financially burdensome in the long run. Note further the second paragraph of Policy instructions No. 7 indicating that the transfer of labor standards cases from the arbitration system to the enforcement system is'x x to assure the workers the rights and benefits due to him under labor standard laws, without having to go through arbitration. x x'so that'x x the workers would not litigate to get what legally belongs to him. x x ensuring delivery x x free of charge.'Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. Labor laws are meant to promote, not defeat, social justice.

xxx xxx xxx The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 128 (b) as amended by E.O. No. 111, dated December 24, 1986, this executive order ‘to be considered in the nature of a curative statute with retrospective application.’ (Progressive Workers' Union, et al. v. Hon. F.P. Aguas, et al. [supra]; M. Garcia vs. Judge A. Martinez, et al., G.R. No. L-47629, May 28, 1979, 90 SCRA 331)." (Citations omitted; italics)

2. Applying the Maternity and Children's Hospital case to the case at bar, we consider that petitioner did not effectively controvert the money claims of private respondents against him, which claims originated from labor standards violations asserted to have been committed by petitioner.The records of the present case show that petitioner, for reasons satisfactory to himself, did not contest the claims of private respondents despite the multiple opportunities therefor afforded to him. Petitioner did not file any answer to the letter-complaint submitted by private respondents to the Office of the Regional Director; neither did he file a position paper before that Office to controvert private respondents' claims. It was only  after the Regional Director had already rendered his ruling of 16 January 1986 in LSED Case No. 055-85 that petitioner tried to controvert the said claims by arguing that private respondents had subsequently executed quitclaims and releases in his favor. We note that petitioner did not question the correctness of the computations of the amounts due to each of the private respondents nor that said claims had not theretofore been paid by petitioner. After rendition of the Regional Director's decision, petitioner attempted to set up a defense of subsequent  compromise of and payment to or waiver by private respondents of their claims and presented what he contends were quitclaims, releases and waivers signed by private respondents. On the basis of the submission of such papers, petitioner now pretends that he had controverted the claims of private respondents and that he had raised issues which could not be resolved without considering evidentiary matters not verifiable in the normal course of inspection, and that therefore the present case should go to the Labor Arbiter.We do not find petitioner's argument persuasive. We believe that the question of the authenticity or genuineness of the quitclaims, releases and waivers supposedly signed by private respondents, but vehemently denied by the latter, could be verified by the Regional Director in the course of, and in connection with, examination of the petitioner's books and records of which such supposed quitclaims, etc. (if at all genuine) must have formed part. We note also that after petitioner on 19 May 1986 filed a motion for reconsideration or appeal from the Regional Director's order of 16 January 1986, with the Secretary of Labor, the Secretary of Labor requested the Regional Director to conduct conferences or hearings for the purpose of verifying the genuineness and authenticity of private respondents’ signatures on the quitclaim papers submitted by petitioner. A report by an LSW officer of the Regional Director's office showed that:(a) eight (8) of the private respondents denied the genuineness of their purported signatures appearing on the quitclaim and

release papers shown to them for identification and examination;(b) the same private respondents executed affidavits stating that they had not executed any document in favor of petitioner;

that the quitclaims, etc. submitted by petitioner were simulated and forged; and that private respondents had not tried to settle the case (LSED Case No. 055-85).[2]

On the basis of the foregoing report, the Undersecretary of Labor stated in his 3 March 1988 order that:"In the face of the foregoing circumstances, we have no alternative but to deny respondents' motion. Let it be noted that a careful examination of the signatures appearing in the quitclaims and releases will readily show quite apparent variance vis-a-vis the signatures affixed in the complaint. This aroused our suspicion on their due execution and genuineness and prompted us to cause the calling of concerned parties for verification. Said doubts and suspicion were confirmed and further strengthened by the outright denial made by the complainants during the conferences called as well as in the sworn statements they subsequently submitted. We wish to state at this juncture that while it is our policy to encourage voluntary settlement of disputes, this Office can not approve a compromise agreement or settlement which is being questioned and in fact being denied by one of the parties. While it is true that respondents submitted quitclaims and releases and other documents purportedly executed by complainants to show that they have no more claims against respondents,said documents could not be given any weight after the complainants personally appeared during the hearing and declared that their signatures appearing thereon were simulated and forged and at the same time denied that any settlement was arrived at. Besides, the fact that those documents were supposed to be executed as early as July 9, 1986 but were submitted to this Office after more than a year has lapsed puts serious doubts on their authenticity. For if indeed there was an amicable settlement reached that early, why did it take respondent that long to notify us of the same and move for the dismissal of this case. More importantly, would it not be appropriate and logical for the parties, assisted by their respective counsels to file a joint motion to dismiss, if really they have come to terms.[3]

The quitclaim papers which petitioner alleges embodied a compromise or settlement agreement were in any case not duly executed, that is, they were not signed in the presence of the Regional Director or his duly authorized representative, in disregard of the requirements of Section 8, Rule II of the Rules on the Disposition of Labor Standards Cases in the Regional Offices, which provide that: "Section 8. Compromise Agreement. — Should the party arrive at an agreement as to the whole or part of the dispute, said agreement shall be reduced [to] writing and signed by the parties in the presence of the regional director or his duly authorized representative." (Italics supplied)Thus, the issue of the authenticity and genuineness of the two (2) sets of supposed quitclaims had been squarely raised before and passed upon and resolved by the Regional Director and the Undersecretary of Labor. We note that petitioner did not submit any rebuttal evidence before the Regional Director or his representatives. We note also that the set of supposed quitclaims purportedly signed as early as 9 July 1986, were first presented by petitioner in his Manifestation and Motion filed with the Undersecretary of Labor dated 23 July 1987, that is, more than a year after execution; and that, upon the other hand, the joint affidavits supposedly signed by private respondents attesting to the genuineness of the purported quitclaims are dated only as of 14 September 1987, or more than a year after the supposed quitclaims were signed.The record thus strongly suggests that the issue of the genuineness or authenticity of the purported quitclaim documents was an issue belatedly manufactured by petitioner in the effort to evade the jurisdiction of the Regional Director and delay payment of the amounts awarded by the Regional Director.

3. On 2 March 1989, Republic Act. No. 6715 amending certain provisions of the Labor Code was enacted. In his concurring opinion in the Resolution of the Motion for Reconsideration in Briad Agro Development Corporation v. de la Cerna, et al.,[5] Mr. Justice Narvasa underscored that Republic Act No. 6715 had left Article 128 (b) of the Labor Code intact, in the sense that the Regional Director retains his visitorial and enforcement powers thereunder and could exercise such powers even though the amount involved was in excess of P5,000.00 provided that the employer had not contested the findings of the LSW officers by raising issues which can not be resolved without considering evidentiary matters not verifiable in the course of normal inspection: "In the resolution, therefore, of any question of jurisdiction over a money claim arising from employer-employee relations, the first inquiry should be into whether the employment relation does indeed still exist between the claimant and the respondent.If the relation no longer exists, and the claimant does not seek reinstatement, the case is cognizable by the Labor Arbiter, not by the Regional Director. On the other hand, it the employment relation still exists, or reinstatement is sought, the next inquiry should be into the amount involved. If the amount involved does not exceed P5,000.00, the Regional Director undeniably has jurisdiction. But even if the amount of the claim exceeds P5,000.00, the claim is not on that account necessarily removed from the Regional Director's competence. In respect thereof, he may still exercise the visitorial and enforcement powers vested in him by Article 128 of the Labor Code, as amended, supra; that is to say, he may still direct his labor regulations officers or industrial safety engineers to inspect the employer's premises and examine his records; and if the officers should find that there have been violations of labor standards provisions, the Regional Director may, after due notice and hearing, order compliance by the employer therewith and issue a writ of execution to the appropriate authority for the enforcement thereof. However, this power may not, to repeat, be exercised by him where the employer contests the labor regulation officers' findings and raises issues which cannot be resolved without considering evidentiary matters not verifiable in the normal course of inspection. In such an event, the case will have to be referred to the corresponding Labor Arbiter for adjudication, since it falls within the latter's exclusive original jurisdiction." (Italics supplied)As already pointed out above, petitioner here did not controvert the findings of the LSW officers and the decision of the Regional Director, and that the issue hesubsequently raised could, in any event, have been resolved, as it was in fact verified and resolved, in the normal course of inspection and conferences among petitioner and private respondents.4. Should it be assumed for purposes of argument merely, that under Article 217 (6) of the Labor Code as last amended by Republic Act No. 6715, jurisdiction over wage claims like those involved in LSED Case No. 055-85 was transferred to the Labor Arbiter, it must still be pointed out that the amendments introduced by Republic Act No. 6715 cannot be applied retroactively so as to set aside and nullify earlier, completed exercises of jurisdiction which had resulted in a decision which had become final and executory long before the enactment of Republic Act No. 6715. As noted earlier, at the time LSED Case No. 055-85 was commenced and at the time decision thereon was rendered by the Regional Director and affirmed by the Undersecretary of Labor, both officials undeniably had jurisdiction over the subject matter of LSED Case No. 055-85. That jurisdiction was not wiped out by the coming into effect of Republic Act No. 6715.[5]

5. Finally, petitioner points to the failure of public respondent Regional Director to conduct an actual inspection of the establishment owned by petitioner, contending that the absence of such an inspection nullified the decision rendered by the Regional Director. This argument fails to take into account two (2) things: firstly, that the inability of the LSW officers of the Regional Director conduct an actual inspection was due to refusal of petitioner's own employees to permit inspection in the alleged absence of petitioner; secondly, Section 7, Rule II of the Rules on the Disposition of Labor Standards Cases provides that: "Sec. 2. Complaint inspection. — All such complaints shall immediately be forwarded to the Regional Director who shall refer the case to the appropriate unit in the Regional Office for assignment to a Labor Standards and Welfare Officer (LSWO) for field inspection. When the field inspection does not produce the desired results, the Regional Director shall summon the parties for summary investigation to expedite the disposition of the case. x x x." (Italics supplied)Thus, the lack of inspection was cured when the Regional Director called the parties to several conferences, at which conferences, petitioner could have presented whatever he had in his books and records to refute the claims of private respondents; petitioner did not do so and his failure must be deemed a waiver of his right to contest the conclusions of the Regional Director on the basis of the evidence and records actually made available to him.WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner.SO ORDERED.  Fernan, C.J., (Chairman), Gutierrez, Jr., Bidin,  and Cortes, JJ., concur. 

278 Phil. 747 SECOND DIVISION

[ G.R. No. 96169, September 24, 1991 ]EMPLOYERS CONFEDERATION OF THE PHILIPPINES, PETITIONER VS. NATIONAL WAGES AND

PRODUCTIVITY COMMISSION AND REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD-NCR, TRADE UNION CONGRESS OF THE PHILIPPINES, RESPONDENTS.

D E C I S I O NSARMIENTO, J.:The petition is given due course and the various pleadings submitted being sufficient to aid the Court in the proper resolution of the basic issues raised in this case, we decide it without further ado.

The Employers Confederation of the Philippines (ECOP) is questioning the validity of Wage Order No. NCR-0-A dated October 23, 1990 of the Regional Tripartite Wages and Productivity Board, National Capital Region, promulgated pursuant to the authority of Republic Act. No. 6727, "AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY ESTABLISHING THE MECHANISM AND PROPER STANDARDS THEREFOR.  AMENDING FOR THE PURPOSE ARTICLE 99 OF AND INCORPORATING ARTICLES 120, 121, 122, 123, 124, 126, AND 127 INTO PRESIDENTIAL DECREE NO. 442 AS AMENDED.  OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, FIXING NEW WAGE RATES PROVIDING WAGE INCENTIVES FOR INDUSTRIAL DISPERSAL TO THE COUNTRYSIDE, AND FOR OTHER PURPOSES," was approved by the President on June 9, 1989.  Aside from providing new wage rates,[1] the "Wage Rationalization Act" also provides, among other things, for various Regional Tripartite Wages and Productivity Boards in charge of prescribing minimum wage rates for all workers in the various regions[2] and for a National Wages and Productivity Commission to review among other functions, wage levels determined by the boards.[3]

On October 15, 1990, the Regional Board of the National Capital Region issued Wage Order No. NCR-01, increasing the minimum wage by P17.00 daily in the National Capital Region.[4] The Trade Union Congress of the Philippines (TUCP) moved for reconsideration; so did the Personnel Management Association of the Philippines (PMAP).[5] ECOP opposed.

On October 23, 1990, the Board issued Wage Order No. NCR-01-A, amending Wage Order No. NCR-01, as follows:

Section 1.  Upon the effectivity of this Wage Order, all workers and employees in the private sector in the National Capital Region already receiving wages above the statutory minimum wage rates up to one hundred and twenty-five pesos (P125.00) per day shall also receive an increase of seventeen pesos (P17.00) per day.

ECOP appealed to the National Wages and Productivity Commission.  On November 6, 1990, the Commission promulgated an Order, dismissing the appeal for lack of merit.  On November 14, 1990, the Commission denied reconsideration.

The Orders of the Commission (as well as Wage Order No. NCR-01-A) are the subject of this petition, in which ECOP assails the board's grant of an "across-the-board" wage increase to workers already being paid more than existing minimum wage rates (up to P125.00 a day) as an alleged excess of authority, and alleges that under the Republic Act No. 6727, the boards may only prescribe "minimum wages," not determine "salary ceilings." ECOP likewise claims that Republic Act No. 6727 is meant to promote collective bargaining as the primary mode of settling wages, and in its opinion, the boards can not preempt collective bargaining agreements by establishing ceilings.  ECOP prays for the nullification of Wage Order No. NCR-01-A and for the "reinstatement" of Wage Order No. NCR-01.

The Court directed the Solicitor General to comment on behalf of the Government, and in the Solicitor General's opinion, the Board, in prescribing an across-the-board hike did not, in reality, "grant additional or other benefits to workers and employees, such as the extension of wage increases to employees and workers already receiving more than minimum wages. . ."[6] but rather, fixed minimum wages according to the "salary-ceiling method."

ECOP insists, in its reply, that wage-fixing is a legislative function and Republic Act No. 6727 delegated to the Regional boards no more "than the power to grant minimum wage adjustments"[7] and in the absence of clear statutory authority,"[8] the boards may no more than adjust "floor wages.”[9]

The Solicitor General, in his rejoinder, argues that Republic Act No. 6727 is intended to correct "wage distortions" and the salary-ceiling method (of determining wages) is meant, precisely, to rectify wage distortions.[10]

The Court is inclined to agree with the Government.  In the National Wages and Productivity Commission's Order of November 6, 1990 the Commission noted that the determination of wages has generally involved two methods, the “floor-wage" method and the "salary-ceiling" method.  We quote:Historically, legislation involving the adjustment of the minimum wage made use of two methods.  The first method involves the fixing of determinate amount that would be added to the prevailing statutory minimum wage.  The other involves "the salary-ceiling method" whereby the wage adjustment is applied to employees receiving a certain, denominated salary ceiling.  The first method was adopted in the earlier wage orders, while the latter method was used in R.A. Nos. 6640 and 6727.  Prior to this, the salary-ceiling

method was also used in no less than eleven issuances mandating the grant of cost-of-living allowances (P.D. Nos. 525, 1123. 1614. 1634, 1678. 1713 and Wage Order Nos. 1, 2, 3, 5 and 6).  The shift from the first method to the second method was brought about by labor disputes arising from wage distortions, a consequence of the implementation of the said wage orders.  Apparently, the wage order provisions that wage distortions shall be resolved through the grievance procedure was perceived by legislators as ineffective in checking industrial unrest resulting from wage order implementations.  With the establishment of the second method as a practice in minimum wage fixing, wage distortion disputes were minimized.[11]

As the Commission noted, the increasing trend is toward the second mode, the salary-cap method, which has reduced disputes arising from wage distortions (brought about, apparently, by the floor-wage method).  Of course, disputes are appropriate subjects of collective bargaining and grievance procedures, but as the Commission observed and as we are ourselves agreed, bargaining has helped very little in correcting wage distortions.  Precisely, Republic Act No. 6727 was intended to rationalize wages, first, by providing for full-time boards to police wages round-the-clock, and second, by giving the boards enough powers to achieve this objective.  The Court is of the opinion that Congress meant the boards to be creative in resolving the annual question of wages without labor and management knocking on the legislature's door at every turn.  The Court's opinion is that if Republic No. 6727 intended the boards alone to set floor wages, the Act would have no need for a board but an Accountant to keep track of the latest consumer price index or better, would have Congress done it as the need arises as the legislature, prior to the Act, has done so for years.  The fact of the matter is that the Act sought a "thinking" group of men and women bound by statutory standards.  We quote:ART. 124. Standards/Criteria for Minimum Wage Fixing.—The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program.  In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors, consider the following:

"(a) The demand for living wages;"(b). Wage adjustment vis-a-vis the consumer price index;"(c) The cost of living and changes or increases therein;"(d) The needs of workers and their families;"(e) The need to induce industries to invest in the countryside;"(f.) Improvements in standards of living;"(g) The prevailing wage levels;"(h) Fair return of the capital invested and capacity to pay of employers;"(i) Effects of employment generation and family income; and"(j) The equitable distribution of income and wealth along the imperatives of economic and social development.”[12]

The Court is not convinced that the Regional Board of the National Capital Region, in decreeing an across-the-board hike, performed an unlawful act of legislation.  It is true that wage-fixing, like rate-fixing, constitutes an act Congress;[13] it is also true, however, that Congress may delegate the power to fix rates[14] provided that, as in all delegations cases.  Congress leaves sufficient standard.  As this Court has indicated, it is impressed that the above-quoted standards are sufficient, and in the light of the floor-wage method's failure, the Court believes that the Commission correctly upheld the Regional Board of the National Capital Region.

Apparently, ECOP is of the mistaken impression that Republic Act No. 6727 is .meant to "get the Government out of the industry" and leave labor and management alone in deciding wages.  The Court does not think that the law intended to deregulate the relation between labor and capital for several reasons:  (1) The Constitution calls upon the State to protect the rights of workers and promote their welfare;[15] (2) the Constitution also makes it a duty of the State "to intervene when the common goal so demands" in regulating property and property relations;[16] (3) the Charter urges Congress to give priority to the enactment of measures, among other things, to diffuse the wealth of the nation and to regulate the use of property;[17] (4) the Charter recognizes the just share of labor in the fruits of production;[18]" (5) under the Labor Code, the State shall regulate the relations between labor and management;[19] (6) under Republic Act No. 6727 itself the State is interested in seeing that workers receive fair and equitable wages;[20] and (7) the Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector,[21] it has not embraced fully the concept of laissez faire[22] or otherwise, relied on pure market forces to govern economy.  We can not give to the Act a meaning or intent that will conflict with these basic principles.

It is the Court's thinking, reached after the Court's own study of the Act, that the Act is meant to rationalize wages, that is, by having permanent boards to decide wages rather than leaving wage determination to Congress year after year and law after law.  The Court is not of course saying that the Act is an effort of Congress to pass the buck, or worse, to abdicate its duty, but simply, to leave the question of wages to the expertise of experts.  As Justice Cruz observed, "[w]ith the proliferation or specialized activities and their attendant peculiar problems, the national legislature has found it more necessary to entrust to administrative agencies the power of subordinate legislation as it is called."[23]

The Labor Code defines "wage" as follows:"Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a

written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor of board, lodging, or other facilities customarily furnished by the employer to the employee.  "Fair and reasonable value" shall not include any profit to the employer or to any person affiliated with the employer.[24]

The concept of "minimum wage" is however, a different thing, and certainly, it means more than setting a floor wage to upgrade existing wages, as ECOP takes it to mean. "Minimum wages" underlies the effort of the State, as Republic Act No. 6727 expresses it, "to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on investment, expansion and growth,"[25] and as the Constitution expresses it, to affirm "labor as a primary social economic force.”[26] As the Court indicated, the statute would have no need for a board if the question were simply "how much".  The State is concerned, in addition, that wages are not distributed unevenly, and more important that social justice is subserved.

It is another question, to be sure, had Congress created "roving" boards, and were that the case, a problem of undue delegation would have ensued; but as we said, we do not see a Board (National Capital Region) "running riot" here, and Wage Order No. NCR-01-A as an excess of authority.

It is also another question whether the salary-cap method utilized by the Board may serve the purposes of Republic Act No. 6727 in future cases and whether that method is after all, a lasting policy of the Board; however, it is a question on which we may only speculate at the moment.  At the moment, we find it to be reasonable policy (apparently, it has since been Government policy); and if in the future it would be perceptibly unfair to management, we will take it up then.

WHEREFORE, premises considered, the petition is DENIED.  No pronouncement as to cost.

IT IS SO ORDERED.

Melencio-Herrera, (Chairman), Padilla and Regalado, JJ., concur.Paras, J., no part.

339 Phil. 40 SECOND DIVISION

[ G.R. No. 111722, May 27, 1997 ]ALPHA INVESTIGATION AND SECURITY AGENCY, INC. (AISA), PETITIONER, VS. NATIONAL LABOR

RELATIONS COMMISSION, THIRD DIVISION, AND WILLIAM GALIMBA, NESTOR LOLOQUISEN, NESTOR IBUYAT, CARLITO CASTRO, JOSE PERDIDO, FELIPE TOLENTINO, LEONARDO IBUYAT,

FELINO CULANNAY, RONIE NINO, ROMAN NALUNDASAN, JAIME FONTANILLA, WILFRED BUTAY, JOSE ACIO, EDISON VALDEZ, CRESENCIO AGRES, RODRIGO LUIS, MARIO SUGUI, BENEDICTO

SUGUI, ROGER RAMBAUD, RESPONDENTS. 

D E C I S I O NROMERO, J.:May the principal of a security service agreement be held jointly and severally liable with the contractor for non-payment of the minimum wage?

The facts are undisputed.

Petitioner Alpha Investigation and Agency, Inc. (AISA) is a private corporation engaged in the business of providing security services to its clients, one of whom is the Don Mariano Marcos State University (DMMSU).

Private respondents were hired as security guards by AISA on February 16, 1990. Five months later, 43 security guards filed before the Regional Office of the Department of Labor and Employment (DOLE) a complaint against AISA for non-compliance with the current minimum wage order. After 24 of the original complainants filed a motion for exclusion from the case, the remaining 19 security guards filed their individual amended complaints impleading DMMSU as party-respondent.

Private respondents have been receiving a monthly salary of P900.00 although the security service agreement between AISA and DMMSU[1] provided a monthly pay of P1,200.00 for each security guard. AISA made representations with DMMSU for an increase in the contract rates of the security guards to enable them to pay the mandated minimum wage rates without compromising its administrative and operational expenses. DMMSU, however, replied that, being a government corporation, it cannot grant said request due to budgetary constraints.

On August 17, 1992, Labor Arbiter Emiliano T. de Asis rendered a decision, the dispositive portion of which reads as follows:

"RESPONSIVE TO THE FOREGOING, judgment is hereby rendered:

a)       Ordering the respondent Alpha Investigation and Security Agency and Mariano Marcos State University to pay each complainant the amount of FORTY ONE THOUSAND FOUR HUNDRED FIFTY NINE PESOS AND FIFTY ONE CENTAVOS (P41,459.51) representing salary differential for the period from February 16, 1990 to September 30, 1991, or the total amount of P787,730.69 as follows:

1.             Nestor Loloquisen P41,459.51

2.             Nestor Ibuyat 41,459.51

3.             Jose Acio 41,459.51

4.             Cresencio Agres 41,459.51

5.             Wilfred Butay 41,459.51

6.             Carlito Castro 41,459.51

7.             Federico Calunnay 41,459.51

8.             Jaime Fontanilla 41,459.51

9.             William Galimba 41,459.51

10.           Leonardo Ibuyat 41,459.51

11.           Rodrigo Luis 41,459.51

12.           Roman Nalundasan 41,459.51

13.           Ronnie Nino 41,459.51

14.           Jose Perdido 41,459.51

15.           Roger Rambaud 41,459.51

16.           Benedicto Sugui 41,459.51

17.           Mario Sugui 41,459.51

18.           Felipe Tolentino 41,459.51

19.           Edison Valdez 41,459.51

—————

P787,730.69

b)       Dismissing the claims for 13th month pay for failure to substantiate the same.

c)       Claims of complainants who filed their motion for reconsideration are hereby dismissed.

SO ORDERED."[2]

AISA and DMMSU interposed separate appeals. The NLRC, on May 7, 1993, rendered a decision affirming the solidary liability of AISA and DMMSU and remanding the records of the case to the arbitration branch of origin for computation of the salary differential awarded by the Labor Arbiter.

Only AISA filed a motion for reconsideration, which was denied by the NLRC on July 1, 1993, for lack of merit.

The judgment against DMMSU, finding it jointly and severally liable with AISA for the payment of increase in wages, became final and executory after it failed to file a petition for certiorari with this Court within a reasonable time. "Although Rule 65 does not specify any period for the filing of a petition for certiorari and mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the definitive rule now is that such reasonable time is within three months from the commission of the complained act."[3]

In this petition, AISA alleges that payment of the wage increases under the current minimum wage order should be borne exclusively by DMMSU, pursuant to Section 6 of Republic Act 6727 (RA 6727)[4] which reads as follows:"Sec. 6.          In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed increases in the wage rates of the workers shall be borne by the principals or clients of the construction/service contractors and the contract shall be deemed amended accordingly. In the event, however, that the principal or client fails to pay the prescribed wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client."It further contends that Articles 106, 107 and 109 of the Labor Code generally refer to the failure of the contractor or sub-contractor to pay wages in accordance with the Labor Code with a mandate that failure to pay such wages would make the employer and contractor jointly and severally liable for such payment. AISA insists that the matter involved in the case at bar hinges on wage differentials or wages increases, as prescribed in the aforequoted Section 6 of RA 6727, and not wages in general, as provided by the Labor Code.

This interpretation is not acceptable. It is a cardinal rule in statutory construction that in interpreting the meaning and scope of a term used in the law, a careful review of the whole law involved, as well as the intendment of the law, must be made.[5] In fact, legislative intent must be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular provision alone.[6]

AISA's solidary liability for the amounts due the security guards finds support in Articles 106, 107 and 109 of the Labor Code, to wit:"ART. 106.     Contractor or Sub-Contractor. — Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of the contractor and of the latter's sub-contractor, if any, shall be paid in accordance with the provisions of this code.

In the event that the contractor or sub-contractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or sub-contractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. xxx

ART. 107. Indirect employer. — The provisions of the immediately preceding Article shall likewise apply to any person, partnership association or corporation which, nor being an employer, contracts with an independent contractor for the performance of any work, task, job or project.

ART. 109.     Solidary Liability. — The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or sub-contractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under the Chapter, they shall be considered as direct employers."The joint and several liability of the contractor and the principal is mandated by the Labor Code to ensure compliance with its provisions, including the statutory minimum wage.[7] The contractor is made liable by

virtue of his status as direct employer, while the principal becomes the indirect employer of the former's employees for the purpose of paying their wages in the event of failure of the contractor to pay them. This gives the workers ample protection consonant with the labor and social justice provisions of the 1987 Constitution.[8]

In the case at bar, it is not disputed that private respondents are the employees of AISA. Neither is there any question that they were assigned to guard the premises of DMMSU pursuant to the latter's security service agreement with AISA and that these two entities paid their wage increases.

It is to be borne in mind that wages orders, being statutory and mandatory, cannot be waived. AISA cannot escape liability since the law provides for the joint and solidary liability of the principal and the contractor to protect the laborers.[9] Thus, the Court held in the Eagle Security v. NLRC:[10]

"The solidary liability of PTSI and EAGLE, however, does not preclude the right of reimbursement from his co-debtor by the one who paid (See Article 1217, Civil Code). It is with respect to this right of reimbursement that petitioners can find support in the aforecited contractual stipulation and Wage Order provision.

The Wage Orders are explicit that payment of the increases are 'to be borne' by the principal or client. 'To be borne', however, does not mean that the principal, PTSI in this case, would directly pay the security guards the wage and allowance increases because there is no privity of contract between them. The security guards' contractual relationship is with their immediate employer, EAGLE. As an employer, EAGLE is tasked, among others, with the payment of their wages. (See Article VII Sec. 3 of the Contract for Security Services, supra and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 556).

Premises considered, the security guards' immediate recourse for the payment of the increases is with their direct employer, EAGLE. However, in order for the security agency to comply with the new wage and allowance rates it has to pay the security guards, the Wage Order made specific provision to amend existing contracts for security services by allowing the adjustments of the consideration paid by the principal to the security agency concerned.  What the Wage Orders require, therefore, is the amendment of the contract as to the consideration to cover the service contractor's payment of the increases mandated. In the end, therefore, ultimate liability for the payment of the increases rests with the principal." (Underscoring supplied)Section 6 of RA 6727 merely provides that in case of wage increases resulting in a salary differential, the liability of the principal and the contractor shall be joint and several. The same liability attaches under Articles 106, 107 and 109 of the Labor Code, which refer to the prevailing standard minimum wage.

The Court finds that the NLRC acted correctly in holding petitioner jointly and severally liable with DMMSU for the payment of the wage increases to private respondents. Accordingly, no grave abuse of discretion may be attributed to the NLRC in arriving at the impugned decision.

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit and the assailed resolution is AFFIRMED. Costs against petitioner.SO ORDERED.

Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.

255 Phil. 459 THIRD DIVISION

[ G.R. No. 81314, May 18, 1989 ]EAGLE SECURITY AGENCY, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EDUARDO G. MAGNO, RODOLFO DEQUINA, AVELINO M. NARVAEZ, JACULO J.

JEROME, ROLANDO N. VALENCIA, CLODUALDO N. ANGRA, JOSE SAMONTE, RUEL A. LAGASTOS, PRISCILO MALDO, JR., R. C. DELA CRUZ, JOSE AJEDA, JOSE ANASTACIO, LAURO ROBERTO,

ISMAEL SALACATA, ULDARICO CAMU, JESUS CARILLO, AND DIORITO BRAGA, RESPONDENTS. 

[G.R. NO. 81447.  MAY 18, 1989]

PHILIPPINE TUBERCULOSIS SOCIETY, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, EAGLE SECURITY AGENCY, INC., RODOLFO V. DEQUINA, AVELINO M. NARVAEZ, JACULO J. JEROME, ROLANDO N. VALENCIA, CLODUALDO M. ANGRA, JOSE SAMONTE, RUEL A.

LAGASTOS, PRISCILO MALDO, JR., R. C. DELA CRUZ, JOSE AJEDA, HILARIO V. LLANES, NAPOLEON SAPOLE, WILLIAM ESTOSANE, AND AMANTE SOBRETODO, RESPONDENTS. 

D E C I S I O NCORTES, J.:The core issue in these two consolidated cases is the liability of the principal and the contractor for the payment of the minimum wage and cost of living allowance increases to security guards under Wage Order Nos. 2, 3, 5 and 6.The antecedent facts are undisputed.In 1980, petitioners Philippine Tuberculosis Society, Inc., (hereinafter referred to as PTSI) and Eagle Security Agency, Inc. (hereinafter referred to as EAGLE) entered into a "Contract for Security Services" wherein the latter agreed to provide security services in the former's premises.  The contract covered the period from November 2, 1979 to July 31, 1985.  Pursuant to this agreement, private respondents were assigned by EAGLE to PTSI as security guards.Subsequently, on November 5, 1985, a complaint was filed by private respondents Rodolfo Dequina, Avelino Narvaez, Jaculo Jerome, Rolando Valencia, ClodualdoAngra, Jose Samonte, Raul Lagastos, Priscilo Maldo, Jr., R. C. dela Cruz, Jose Ajeda, and others against PTSI and EAGLE for unpaid wage and allowance increases under Wage Order Nos. 2, 3, 5 and 6* with interest plus damages and attorney's fees.On September 30, 1986, while the case was still pending, ten (10) additional complainants, namely:  Jose Anastacio, Lauro Roberto, Ismael Salacata, Uldarico Camu, Jesus Carrillo, Diorito Braga, Hilario Llanes, Napoleon Sepole, William Estosane and Amante Sobretodo, joined in the suit.  However, the labor arbiter dropped the names of Hilario Llanes, Napoleon Sapole, William Estosane and Amante Sobretodo as complainants, on the ground that only those who signed the verified complaint and reply should be recognized [Labor Arbiter's Decision, p. 1; G.R. No. 81447, Rollo, p. 74.]On April 6, 1987, the labor arbiter rendered a decision, the dispositive portion of which reads as follows:IN VIEW OF THE FOREGOING, respondent Eagle Security Agency, Inc. and Philippine Tuberculosis Society, Inc. are hereby ordered to pay jointly and severally the sixteen (16) complainants of (sic) their unpaid wages and allowances under Wage Order Nos. 2, 3, 5 and 6.  The office of the Socio-Economic Analyst is hereby ordered to examine the records and payrolls of the two (2) respondents to determine their liabilities.The claim for damages and attorney's fees are hereby DISMISSED for lack of merit.SO ORDERED.  [Labor Arbiter's Decision, pp. 6-7; G.R. No. 81447, Rollo, pp. 79-80.]PTSI, EAGLE and the four (4) security guards whose names were dropped from the complaint filed their appeals to the National Labor Relations Commission (hereinafter referred to as NLRC).The NLRC, on November 27, 1987, rendered its decision granting the appeal as to the four (4) security guards whose names were dropped and denying PTSI and EAGLE'S appeals.  The dispositive portion of its decision reads as follows:WHEREFORE, premises considered, let the appealed decision be, as it is hereby, Modified in that respondent Eagle Security Agency, Inc. and the Philippine Tuberculosis Society, Inc. are hereby ordered to pay jointly and severally the twenty (20) complainants of (sic) their unpaid wages and allowances under Wage Order Nos. 2, 3, 5 and 6.  In all other respects, the decision is Affirmed.SO ORDERED.  [NLRC Decision, p. 8; G.R. No. 81447, Rollo, p. 27.]Both PTSI and EAGLE filed their motions for reconsideration.  In a resolution dated December 29, 1987, the NLRC denied these motions for lack of merit.PTSI and EAGLE filed separate petitions for certiorari with this Court.  PTSI's petition was docketed as G.R. No. 81447 while that of EAGLE, G.R. No. 81314.On motion of PTSI, the Court, on April 6, 1988, resolved to consolidate the two (2) petitions.  Thereafter, on May 25, 1988, the Court gave due course to both petitions and required the parties to submit their respective memoranda.  On June 20, 1988, the Court, also upon motion of PTSI, resolved to issue a temporary restraining order enjoining the NLRC from enforcing and/or carrying out its decision dated November 27, 1987 and resolution of December 29, 1987.1.  Petitioners PTSI and EAGLE, in this special civil action of certiorari, impugn the decision of the NLRC as having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.  Petitioners assail the decision of the NLRC finding them jointly and severally liable to the security guards for payment of the minimum wage and cost of living allowance increases under the wage orders.  Both PTSI and EAGLE point to the other as the one who should be solely liable for paying the increases.

Petitioner PTSI alleges that payment of the wage and allowance increases under Wage Order Nos. 2, 3, 5 and 6 should be borne exclusively by EAGLE, pursuant to the following provision in the "Contract for Security Services":3.  AGENCY hereby binds itself to pay its employees in accordance with the provisions of the New Labor Code, as amended, Eight-Hour Labor Law, theMinimum Wage Law, and other laws, and/or decrees governing security agency.  AGENCY shall be solely responsible for the payment of all indemnities to its employees which may arise under PD No. 442, as amended, and shall comply with the provisions of all other Philippine laws relative to its employees  . . . [Article VII sec. 3 of the Contract for Security Services; G. R. No. 81447, Rollo, p. 34; Underscoring supplied.]Petitioner EAGLE, on the other hand, invokes the following provision common to Wage Order Nos. 3, 5 and 6 to support its theory that it is PTSI that should be held liable for the increases:In case of contracts for construction projects and for security, janitorial and similar services, the increase in the minimum wage and allowance rates of the workers shall be borne by the principal or client of the construction/service contractor and the contract shall be deemed amended accordingly . . . **The Court finds that the NLRC acted correctly in ordering the two petitioners to jointly and severally pay the wage and allowance increases to the security guards.Petitioners' solidary liability for the amounts due the security guards finds support in Articles 106, 107 and 109 of the Labor Code which state that:ART. 106.  Contractor or subcontractor.  - Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of the contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this Code.In the event that the contractor or suncontracator fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent that he is liable to employees directly employed by him.*        *          *ART. 107.  Indirect employer.  - The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.*        *          *ART. 109.  Solidary liability.  - The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of this Code.  For purposes of determining the extent of the civil liability under this Chapter, they shall be considered as direct employers.This joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance of the provisions therein including the statutory minimum wage [Article 99, Labor Code].  The contractor is made liable by virtue of his status as direct employer.  The principal, on the other hand, is made the indirect employer of the contractor's employees for purposes of paying the employees their wages should the contractor be unable to pay them.  This joint and several liability facilitates, if not guarantees, payment of the workers' performance of any work, task, job or project, thus giving the workers ample protection as mandated by the 1987 Constitution [See Article II Sec. 18 and Article XIII Sec. 3.]In the case at bar, it is beyond dispute that the security guards are the employees of EAGLE [See Article VII Sec. 2 of the Contract for Security Services; G.R. No. 81447, Rollo, p. 34.] That they were assigned to guard the premises of PTSI pursuant to the latter's contract with EAGLE and that neither of these two entities paid their wage and allowance increases under the subject wage orders are also admitted [See Labor Arbiter's Decision, p. 2; G.R. No. 81447, Rollo, p. 75.] Thus, the application of the aforecited provisions of the Labor Code on joint and several liability of the principal and contractor is appropriate [See Del Rosario & Sons Logging Enterprises, Inc. v. NLRC, G.R. No. 64204, May 31, 1985, 136 SCRA 669.]The solidary liability of PTSI and EAGLE, however, does not preclude the right of reimbursement from his co-debtor by the one who paid [See Article 1217, Civil Code.] It is with respect to this right of reimbursement that petitioners can find support in the aforecited contractual stipulation and Wage Order provision.The Wage Orders are explicit that payment of the increases are "to be borne" by the principal or client.  "To be borne", however, does not mean that the principal, PTSI in this case, would directly pay the security guards the wage and allowance increases because there is no privity of contract between them.  The security guards’ contractual relationship is with their immediate employer, EAGLE.  As an employer, EAGLE is tasked, among others, with the payment of their wages [See Article, VII Sec. 3 of the Contract for Security Services, supra and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 665.]On the other hand, there existed a contractual agreement between PTSI and EAGLE wherein the former availed of the security services provided by the latter.  In return, the security agency collects from its client payment for its security services.  This payment covers the wages for the security guards and also expenses for their supervision and training, the guards' bonds, firearms with ammunitions, uniforms and other equipments, accessories, tools, materials and supplies necessary for the maintenance of a security force.Premises considered, the security guards’ immediate recourse for the payment of the increases is with their direct employer, EAGLE.  However, in order for the security agency to comply with the new wage and allowance rates it has to pay the security guards, the Wage Orders made specific provision to amend existing contracts for security services by allowing the adjustment of the consideration paid by the principal to the security agency concerned.  What the Wage Orders require, therefore, is the amendment of the contract as to the consideration to cover the service contractor's payment of the increases mandated.  In the end, therefore, ultimate liability for the payment of the increases rests with the principal.

In view of the foregoing, the security guards should claim the amount of the increases from EAGLE.  Under the Labor Code, in case the agency fails to pay them the amounts claimed.  PTSI should be held solidarily liable with EAGLE [Articles 106, 107 and 109.] Should EAGLE pay, it can claim an adjustment from PTSI for an increase in consideration to cover the increases payable to the security guards.However, in the instant case, the contract for security services had already expired without being amended consonant with the Wage Orders.  It is also apparent froma reading of the record that EAGLE does not now demand from PTSI any adjustment in the contract price and its main concern is freeing itself from liability.  Given these peculiar circumstances, if PTSI pays the security guards, it cannot claim reimbursement from EAGLE.  But in case it is EAGLE that pays them, the latter can claim reimbursement from PTSI in lieu of an adjustment, considering that the contract had expired and had not been renewed.2.  PTSI also alleges that it is exempt from payment under the subject Wage Orders because it is a public sector employer while the Wage Orders cover only employers and employees in the private sector [G.R. No. 81447, Petition, p. 9; Rollo, p. 10.] This is unmeritorious.  The definition of a public sector employer*** relied upon by PTSI is relevant only for purposes of coverage under the Employees' Compensation.  Moreover, the Labor Code provides that as used in Book Three, Title II on Wages,the term "employer" includes "the Government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions  . . ." [Article 97 (b), Labor Code.]3.  It is further contended by PTSI that to uphold the ruling of the NLRC would be violative of the Constitutional prohibition against impairment of the obligation of contracts [Article III sec. 10 of the 1987 Constitution.] Time and again, this Court has rejected this line of reasoning in sustaining the validity and constitutionality of labor and social legislations like the Blue Sunday Law [Asia Bed Factory v. National Bed and Kapok Industries Workers’ Union, et al., 100 Phil. 837 (1957)], compulsory coverage of private sector employees in the Social Security System [Phil. Blooming Mills Co., Inc. v. Social Security System, G.R. No. L-21223, August 31, 1966, 17 SCRA 1077], and the abolition of share tenancy [Vda. de Genuino v. Court of Agrarian Relations, G.R. No. L-25035, February 26, 1968, 22 SCRA 792] enacted pursuant to the police power of the State.The Wage Orders are no different from the aforecited laws.  They are labor standard legislations enacted to alleviate the plight of the workers whose wages barely meet the spiralling costs of their basic needs.  The increase in the minimum wage and the cost of living allowance was ordered precisely to ensure the workers’ health,efficiency and well-being towards achieving the country's goal of ensuring increased productivity and viability of business and industry [See Whereas Clause of the Wage Orders.]4.  Petitioner EAGLE would moreover ascribe grave abuse of discretion to both the Labor Arbiter and the NLRC for the inclusion of certain security guards in the complaint.Firstly, EAGLE contends that the names of Rodolfo Dequina and R.C. dela Cruz should have been dropped from the complaint as they had already resigned from its employ and signed a quitclaim in favor of the security agency [G.R. No. 81314, Petition, p. 6; Rollo, p. 7.]However, no grave abuse of discretion can be ascribed to the labor arbiter for not dropping their names from the complaint it appearing that the alleged resignation letters are not of record [Labor Arbiter's Decision, p. 6; G. R. No. 81314, Rollo, p. 18.]Secondly, EAGLE assails the NLRC's inclusion of the four (4) security guards whose names were dropped by the labor arbiter in the complaint.  However, these four (4) security guards are part of the ten (10) additional complainants denominated as "and others" in the complaint and who were identified in their Manifestation datedSeptember 30, 1986.  Further, they submitted individual computations in their "Reply to Separate Position Papers Filed by Respondents".  Accordingly, the Court finds no grave abuse of discretion committed by the NLRC in granting their appeal.WHEREFORE, in view of the foregoing, the petitions in G.R. No. 81314 and G.R. No. 81447 are hereby DISMISSED and the decision and resolution of the NLRC in NLRC-NCR-11-3652-85 dated November 27, 1987 and December 29, 1987, respectively, are AFFIRMED.  The temporary restraining order issued by the Court on June 20, 1988 is hereby LIFTED and SET ASIDE.SO ORDERED.Fernan, C.J., Gutierrez, Jr., Feliciano, and Bidin, JJ., concur.