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, et al., respondents.

FACTS

Private respondents, employees of petitioner Vicente Atilano (doing business as Rose Shipping Lines), filed a letter-complaint (LSED Case No. 055-85) on 20 May 1985 with the Regional Office of the then Ministry of Labor and Employment in Cebu, alleging violations of labor standards on minimum wages, allowances, 13th month pay, and overtime pay. A Labor Standards and Welfare Officer attempted a complaint inspection on 22 July 1985 but was prevented as petitioner’s employees, in his alleged absence, declined to allow it. The Regional Director then summoned the parties to conciliation conferences. Private respondents submitted a detailed position paper, while petitioner failed to file any. Meanwhile, on 16 August 1985, private respondents filed a separate complaint (LSED Case No. 061-85) for unpaid wages for July 1985. Petitioner promised payment during a conference but reneged, leading to a Compliance Order against him. This second case was later dismissed on 26 January 1986 on the ground of full settlement.
On 16 January 1986, the Regional Director issued an order in the main case (LSED Case No. 055-85) directing petitioner to pay the aggregate claims of P660,594.46. Petitioner did not move for reconsideration but instead filed an ex-parte motion to dismiss, alleging the case was rendered moot by quitclaims signed by complainants. Private respondents opposed, contending these quitclaims pertained only to the second case (LSED Case No. 061-85). The Regional Director denied the motion to dismiss. Petitioner’s subsequent motion for reconsideration or appeal to the Secretary of Labor was dismissed by respondent Undersecretary de la Serna in an order dated 3 March 1988.

ISSUE

The primary issue is whether public respondents (the Regional Director and the Undersecretary of Labor) acted without or in excess of jurisdiction in adjudicating the money claims in LSED Case No. 055-85.

RULING

The Supreme Court dismissed the petition, upholding the jurisdiction of the Regional Director and the validity of the proceedings. Petitioner argued that under Article 217(6) of the Labor Code, as amended by Republic Act No. 6715 , jurisdiction over such wage claims rests with the Labor Arbiter, not the Regional Director. The Court clarified that at the time the complaint was filed (May 1985) and when the Regional Director rendered his decision (January 1986), the governing law was Presidential Decree No. 850. Under PD 850 and the implementing rules, Regional Directors had original and exclusive authority to enforce labor standards through summary proceedings, which included the power to adjudicate money claims arising from violations. The amendments introduced by RA 6715, which reallocated jurisdiction to Labor Arbiters, could not be applied retroactively to nullify a completed exercise of jurisdiction that had resulted in a final and executory decision prior to the new law’s effectivity.
The Court also rejected petitioner’s ancillary claim that the lack of an actual physical inspection nullified the proceedings. The failure to inspect was attributable to the refusal of petitioner’s own employees. Moreover, the applicable rules provided that when a field inspection does not yield results, the Regional Director shall summon the parties for a summary investigation. This was duly complied with through several conciliation conferences. Petitioner’s failure to submit a position paper or present contrary evidence during these conferences constituted a waiver of his right to contest the claims. The quitclaims presented pertained to a different case and did