G.R. No. L-12299. May 29, 1959.
FRANCISCO M. ORTEGA, complainant-appellee, vs. SAULOG TRANSIT, INC., respondent-appellant.

FACTS

Complainant Francisco M. Ortega was employed by Saulog Transit, Inc., first as a conductor (from September 1948 to July 8, 1951) and later as an inspector (from July 10, 1951 to August 12, 1954). As a conductor, he worked long hours (e.g., from 4:00 a.m. to 11:00 p.m. three times a week, and from 5:00 a.m. to 10:00 p.m. four times a week) and received a daily salary that increased over time. As an inspector, he rendered at least twelve hours daily without a fixed schedule. In April 1953, Ortega filed a claim for overtime pay with the Wage Administration Service (WAS), Regional Office No. 1, Department of Labor. After hearings, where the respondent failed to appear on the final date (July 16, 1955), WAS Investigator Felipe N. Aurea rendered a decision on August 18, 1955, holding the respondent liable for overtime pay. The respondent received a copy but did not appeal. Ortega then filed a petition with the Court of First Instance of Rizal to execute the WAS decision. The respondent opposed, arguing the WAS decision was without legal authority. The lower court granted the execution, prompting this appeal.

ISSUE

Whether the decision of the Wage Administration Service (WAS) is legally enforceable through court execution, given the procedural requirements under the Code of Rules implementing Republic Act No. 602 (Minimum Wage Law).

RULING

The Supreme Court declared the lower court’s order for execution null and void. The WAS decision was not legally enforceable because it did not comply with the mandatory procedure outlined in the Code of Rules and Regulations to Implement the Minimum Wage Law. Under the Code, the claims investigator must first attempt mediation or arbitration between the parties. If mediation fails and the parties are unwilling to arbitrate, the claims attorney should determine if the claim is meritorious and, if so, file a court action for recovery. In this case, the respondent did not appear at the hearing, so no mediation or arbitration could occur. Despite this, the WAS investigator proceeded to hear evidence and render a decision, which was irregular. The Court analogized to Potente vs. Saulog Transit, Inc., where it held that the Workmen’s Compensation Commission lacked authority to render an enforceable decision unless an arbitration agreement or compromise was reached. Similarly, the WAS has no power to issue a decision enforceable by courts without such an agreement. Thus, the WAS should have brought an action in court instead. The writ of execution was set aside.