GR 74621; (February, 1990) (Digest)
G.R. No. 74621 February 7, 1990
BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner, vs. THE HONORABLE MINISTER OF LABOR & EMPLOYMENT AND BROKENSHIRE MEMORIAL HOSPITAL EMPLOYEES AND WORKER’S UNION-FFW, respondents.
FACTS
This case originated from a complaint filed by the Brokenshire Memorial Hospital Employees and Worker’s Union-FFW against Brokenshire Memorial Hospital, Inc. for non-compliance with Wage Order Nos. 5 and 6. After a prior case where the hospital paid a claim of P163,047.50 pursuant to a Regional Director’s order, the hospital ceased compliance, prompting a second complaint. The Regional Director ordered the hospital to pay P284,625.00 in living allowances. The hospital appealed, arguing the Regional Director lacked jurisdiction, that its counterclaim for alleged employee debts was ignored, and that the wage orders were unconstitutional.
The hospital contended that exclusive jurisdiction over such money claims resided with the Labor Arbiter, not the Regional Director. It also sought to offset its wage order obligations against alleged unpaid obligations of the employees totaling P507,237.57. The Minister of Labor affirmed the Regional Director’s order, leading to this petition for review.
ISSUE
The primary issue is whether the Regional Director had jurisdiction to adjudicate the employees’ money claims for non-compliance with wage orders, or if such jurisdiction belonged exclusively to the Labor Arbiter.
RULING
The Supreme Court set aside the Regional Director’s decision and referred the case to the Labor Arbiter. The Court clarified the jurisdictional landscape under Article 128 of the Labor Code, as amended. While Executive Order No. 111 had established concurrent jurisdiction between Regional Directors and Labor Arbiters over money claims, the subsequent enactment of Republic Act No. 6715 (the Herrera-Veloso Law) and the Court’s reconsideration of its ruling in Briad Agro Development Corp. v. de la Cerna were controlling.
The Court held that where the employer contests the labor regulation officer’s findings and raises substantive issues requiring evidentiary determination—such as the hospital’s claim for offsetting obligations—the case falls under the exclusive original jurisdiction of the Labor Arbiter. The power of the Regional Director to order compliance in a summary proceeding is not appropriate when the employer raises claims that cannot be resolved without a formal hearing to examine evidence. The aggregate amount of the claim, though exceeding P5,000.00, was not the decisive factor; rather, it was the nature of the contested issues. The constitutional challenge to the wage orders was dismissed, as the Court found them valid and for the benefit of labor. Thus, the proper forum for the ventilated issues, including the proposed offset, is the Labor Arbiter.