G.R. No. 88538; April 25, 1990
Aboitiz Shipping Corporation, petitioner, vs. Hon. Dionisio C. Dela Serna, in his capacity as Undersecretary of Labor and Employment; Hon. Luna C. Piezas in his capacity as Director, National Capital Region, Department of Labor and Employment; and, Aboitiz Shipping Employees Association, respondents.

FACTS

The Aboitiz Shipping Employees Association filed a complaint with the Department of Labor and Employment (DOLE) Regional Office against Aboitiz Shipping Corporation for alleged non-compliance with mandated wage rates and allowances under various wage orders. The Regional Director directed the company to submit employment records and payrolls for inspection. The company filed multiple motions to dismiss, arguing the union lacked legal capacity due to a pending representation issue and that a prior compromise agreement had settled all cases. The company also later challenged the Regional Director’s jurisdiction, asserting that money claims fall under the exclusive original jurisdiction of the Labor Arbiter under Article 217 of the Labor Code. Despite repeated directives and a subpoena duces tecum, the company largely failed to produce the required payrolls, submitting only limited records for Manila-based employees for 1982 along with certain certifications.
The Regional Director issued an Order dated October 13, 1988, directing the company to pay 717 complainants a total of P1,350,828.00, representing underpayment of a daily P2.00 allowance from February 16, 1982, to February 15, 1985. The company appealed to the Secretary of Labor, reiterating the jurisdictional challenge. The Undersecretary affirmed the Regional Director’s Order in a ruling dated February 9, 1989. The company elevated the case to the Supreme Court via certiorari, primarily contesting the Regional Director’s jurisdiction over the money claims.

ISSUE

Whether the Regional Director of the DOLE had jurisdiction to hear and decide the money claims for underpayment of allowances filed by the employees’ association.

RULING

Yes, the Regional Director correctly assumed jurisdiction. The Supreme Court affirmed the Orders of the public respondents. The legal logic hinges on the amendment introduced by Executive Order No. 111, which took effect on March 3, 1987. This EO amended Article 128(b) of the Labor Code, expanding the enforcement authority of the Secretary of Labor and his duly authorized representatives, such as Regional Directors. Prior jurisprudence, notably Servando’s Inc. vs. Secretary of Labor, held that Regional Directors, exercising visitorial powers, could not adjudicate money claims, which were under the exclusive jurisdiction of Labor Arbiters. However, EO No. 111 explicitly empowered these officials to order compliance with labor standards laws, including the payment of prescribed wages and other benefits, and to issue writs of execution for the enforcement of such orders. This created a system of concurrent jurisdiction between Regional Directors and Labor Arbiters over money claims arising from labor standards violations.
The Court ruled that since the complaint was filed and actively pursued after the effectivity of EO No. 111, the Regional Director properly exercised jurisdiction. The company’s failure to substantively comply with the production orders for payrolls, despite opportunities, justified the inference and finding of underpayment based on the available evidence. The Court declined to re-evaluate the factual findings, which were supported by substantial evidence. The petition was dismissed, with a minor modification excluding one individual from the list of awardees.