G.R. No. 100222 -23 September 14, 1993
RAJAH HUMABON HOTEL, INC., RAJAH SOLIMAN, INC. and/or PETER PO, petitioners, vs. HON. CRESENCIANO B. TRAJANO, as Undersecretary of Department of Labor and Employment, WENCESLAO PEDROSA, VICTOR BUAL, ROBERTO ESPINA, PROSPERO MANIS, PEDRO ABASOLO, WILLY ESPINA, MILA ALQUINO, NOMER HIPULAN, JOSIE LAXAMANA, SENEN POSTRERO, ANTONIO PAQUERA, CELIA TAN, ROLLY TOLIDANO, JULIO TALLE, CARLITO BULALOAN, BONIFACIO BUSTAMANTE, JAIME CHOY, SININIO DAYOHOY, FIDELA GUELEN, CLEMENTA INTOC, ELIEZER LADUCE, ALBERTO ORCULLO, JESUS PANAL, GAVINO PATAN-OG and IRENEO RESMA, JR., respondents.

FACTS

Private respondents, employees, filed a complaint on March 14, 1989, with Regional Office No. 7 of the Department of Labor and Employment (DOLE) in Cebu City, for underpaid wages and non-payment of benefits. An inspection of employment records was scheduled but initially prevented by a picket. Upon a rescheduled examination on April 16, 1989, petitioners, instead of presenting the required payrolls and daily time records, submitted a motion to dismiss. They argued that the regional director lacked jurisdiction because the employer-employee relationship had ceased due to the closure of their business, and because each employee’s claim exceeded the jurisdictional limit of P5,000.00 set by Republic Act No. 6715 . The regional director denied the motion to dismiss on September 25, 1989, finding violations of labor standards (underpayment of minimum wage and non-payment of service incentive leave) and ordering petitioners to pay an aggregate amount of P290,982.55. This order was affirmed by the DOLE on appeal. Petitioners filed a subsequent motion for re-evaluation, which was denied, leading to the instant petition.

ISSUE

Whether the Regional Director of the Department of Labor and Employment had jurisdiction over the money claims of private respondents, considering that the employer-employee relationship had been severed and the individual claims exceeded P5,000.00.

RULING

The Regional Director did not have jurisdiction. The Supreme Court granted the petition and set aside the challenged orders of the DOLE. The Court directed that the workers’ money claims be referred to the appropriate Labor Arbiter for proper disposition. The Court held that for a Regional Director to assume jurisdiction over a money claim, the following requisites must concur: (1) The claim is presented by an employee or person employed in domestic or household service, or househelper; (2) The claimant, no longer being employed, does not seek reinstatement; and (3) The aggregate money claim of the employee or househelper does not exceed five thousand pesos (P5,000.00). In this case, while the claimants were no longer employed and did not seek reinstatement, their individual claims substantially exceeded the P5,000.00 limit. Therefore, jurisdiction properly pertained to the Labor Arbiter pursuant to Article 217 of the Labor Code. The termination of the employer-employee relationship after the filing of the complaint did not divest the Labor Arbiter of jurisdiction over the money claims.