G.R. No. L-14442; June 30, 1961
Equitable Banking Corporation and Go Kim Pah, petitioners-appellees, vs. Regional Office 3 of the Department of Labor and Alejo Garcia, respondents-appellants.

FACTS

On July 15, 1957, respondent Alejo Garcia filed a complaint with Regional Office No. 3 of the Department of Labor against the Equitable Banking Corporation and Go Kim Pah. Garcia sought to collect the sum of P2,000, representing alleged unpaid overtime pay, vacation pay, and separation pay earned during his employment as a janitor-messenger from August 1951 to June 1957. The petitioners moved to dismiss the complaint, challenging the jurisdiction of the Regional Office. They argued that the grant of adjudicatory power to regional offices under Reorganization Plan No. 20-A was an unconstitutional delegation of legislative power and an invalid transfer of judicial authority.
The Regional Office denied the motion to dismiss. Consequently, the petitioners filed a petition for prohibition with the Court of First Instance of Manila, seeking to enjoin the labor office from proceeding with the case. The lower court issued a preliminary injunction and, after hearing, rendered judgment in favor of the bank and Go Kim Pah. It declared that Regional Office No. 3 lacked jurisdiction over Garcia’s money claim, holding that Section 25 of Reorganization Plan No. 20-A unconstitutionally divested courts of their jurisdiction over such claims and vested it in an executive office. The Regional Office and Garcia appealed this decision to the Supreme Court.

ISSUE

The core issue is whether Regional Office No. 3 of the Department of Labor validly possesses original and exclusive jurisdiction over employee money claims, such as for overtime and separation pay, under Reorganization Plan No. 20-A.

RULING

The Supreme Court affirmed the lower court’s decision, ruling that the Regional Office had no jurisdiction over the money claim. The legal logic rests on the interpretation of the enabling statute, Republic Act No. 997, which created the Reorganization Commission. The Court held that Congress, through RA 997, did not authorize the Commission to transfer judicial functions from the judiciary to executive agencies. The grant of original and exclusive jurisdiction to regional offices over money claims effectively deprived the regular courts of their jurisdiction, constituting a reorganization not of the executive branch but an encroachment into the judicial branch.
This ruling was consolidated with several other cases decided on the same date (e.g., Carominas, Jr. v. Labor Standards Commission), where the Court uniformly declared that the legislature’s intent in RA 997 was limited to reorganizing the administrative structure of the executive department. It did not intend to permit the delegation of judicial power or the stripping of courts’ jurisdiction over monetary disputes. Therefore, Section 25 of Reorganization Plan No. 20-A, to the extent it conferred such jurisdiction on regional offices, was invalid. Consequently, the Regional Office was correctly prohibited from trying Garcia’s claim for overtime, vacation, and separation pay.