G.R. No. 78909 . June 30, 1989.
MATERNITY CHILDREN’S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs. THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DIRECTOR OF LABOR, REGION X, respondents.

FACTS

Petitioner Maternity Children’s Hospital, a semi-government entity, was the subject of a complaint filed by ten of its employees on May 23, 1986, for underpayment of statutory wages and Emergency Cost of Living Allowances (ECOLAs). The Regional Director of Labor, Region X, acting on the complaint, directed a labor inspection. The inspection report confirmed underpayments to the hospital’s employees. Consequently, the Regional Director issued an Order on August 4, 1986, directing the hospital to pay deficiency wages and ECOLAs not only to the complainants but to all its employees, amounting to P723,888.58. The Secretary of Labor affirmed this order on appeal but modified the computation period to cover only three years prior to the complaint’s filing.
Petitioner challenged the orders via certiorari, raising several grounds. It argued that the award erroneously covered non-complainant employees and former employees. It also contended that the decision lacked a clear statement of facts and law. Crucially, in its rejoinder, petitioner raised the jurisdictional issue, asserting that the Regional Director lacked authority to adjudicate money claims, which under Article 217 of the Labor Code was the exclusive original jurisdiction of the Labor Arbiter.

ISSUE

The primary issue is whether the Regional Director had jurisdiction to adjudicate the money claims for wage differentials and ECOLAs at the time the complaint was filed on May 23, 1986.

RULING

The Supreme Court ruled that the Regional Director had no jurisdiction. The petition was granted, and the assailed orders were annulled and set aside. The Court held that at the time the complaint was filed in May 1986, the law governing the Regional Director’s authority was Article 128 of the Labor Code, prior to its amendment by Executive Order No. 111. Under the old Article 128, the Regional Director’s power was purely visitorial and enforcement-oriented, limited to issuing compliance orders. The power to adjudicate and award money claims in uncontested cases was not conferred until E.O. No. 111 took effect on March 3, 1987. Since the complaint preceded this amendment, the Regional Director acted without jurisdiction.
The Court clarified that the exclusive original jurisdiction over money claims, such as wage differentials, was vested in the Labor Arbiters under Article 217(a)(6) of the Labor Code. The inspection and report by the labor officers did not constitute adjudication; it was merely a fact-finding exercise in aid of the visitorial power. The expansive award covering all employees, based on a single complaint, further underscored the adjudicatory nature of the order, which was beyond the Regional Director’s powers at that time. The case was remanded to the Regional Director solely for the purpose of filing the appropriate action with the Labor Arbiter.