G.R. No. 85278 and G.R. No. 85918 , August 29, 1989
RTG CONSTRUCTION, INC., petitioner, vs. BARTOLOME C. AMOGUIS, et al., and THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.

FACTS

The petitioner, RTG Construction, Inc., is a corporation engaged in construction. In 1984, it employed Romeo Tarroza as a watchman. On December 15, 1986, Tarroza and 33 co-employees filed a complaint (LSED ROXI Case No. 83-86) with the Department of Labor and Employment (DOLE) for alleged violations of labor standards, including non-payment of salary differentials, holiday pay, and 13th month pay. Tarroza’s co-complainants later withdrew, leaving him to pursue the case. The Regional Director, after inspection and investigation, found Tarroza entitled to monetary claims totaling P21,753.50. RTG Construction appealed to the DOLE Undersecretary, arguing for a set-off against Tarroza’s alleged liability for lost company tools, but the appeal was dismissed.
Subsequently, during the pendency of the labor standards case, RTG Construction ordered Tarroza’s transfer to another shop. Upon his refusal, he was dismissed in May 1987. Tarroza then filed a separate complaint for illegal dismissal (RAB-11-09-00435-87) before the Labor Arbiter of the National Labor Relations Commission (NLRC). The Labor Arbiter ruled the dismissal illegal, ordering reinstatement with backwages. The NLRC dismissed RTG’s appeal for being filed out of time. RTG Construction filed two consolidated petitions for certiorari before the Supreme Court, assailing the DOLE’s jurisdiction over the money claims and the NLRC’s order for reinstatement.

ISSUE

The primary issues are: (1) whether the Regional Director of DOLE had jurisdiction to adjudicate Tarroza’s money claims for labor standards violations, and (2) whether the NLRC committed grave abuse of discretion in affirming the Labor Arbiter’s decision ordering Tarroza’s reinstatement with backwages for illegal dismissal.

RULING

The Supreme Court dismissed both petitions. On the jurisdictional issue, the Court held that the Regional Director properly exercised jurisdiction over Tarroza’s money claims under the labor standards laws. Citing Executive Order No. 111, which amended the Labor Code, the Court clarified that Regional Directors possess not only visitorial but also enforcement powers to order compliance with labor standards based on inspection findings, provided the employer does not contest the findings with issues requiring evidentiary matters not verifiable in a normal inspection. Since RTG Construction failed to substantively contest the inspection findings with necessary evidence like payrolls, the Regional Director’s jurisdiction was proper. The Court noted the burden of proof in such cases rests on the employer to show compliance, which RTG failed to discharge.
Regarding the illegal dismissal case, the Court found no grave abuse of discretion by the NLRC. The claim for reinstatement and backwages, arising from the severance of the employer-employee relationship, falls under the original and exclusive jurisdiction of the Labor Arbiter under Article 217 of the Labor Code. There was no overlapping jurisdiction, as the labor standards case covered claims up to Tarroza’s dismissal, while the illegal dismissal case covered claims from dismissal onwards. The Court affirmed the reinstatement order but modified the backwages to not exceed three years, consistent with prevailing jurisprudence. The petitions were dismissed for lack of merit.