G.R. No. L-17783; June 30, 1962
VALDERRAMA LUMBER MANUFACTURERS COMPANY, INC., petitioner-appellant, vs. THE ADMINISTRATOR, and THE HEARING OFFICER, Regional Office No. V, Department of Labor, Iloilo City, respondents-appellees.

FACTS

Former employees of Valderrama Lumber Manufacturers Co., Inc. filed money claims for overtime pay, salary differential, and separation pay with Regional Office No. V of the Department of Labor. After a hearing, the petitioner company filed an action for prohibition with the Court of First Instance of Negros Occidental, seeking to restrain the Labor Regional Office from further proceeding. The company argued that jurisdiction over such money claims belonged exclusively to the regular courts.
The respondents, the Administrator and Hearing Officer of the Regional Office, defended their jurisdiction by citing Reorganization Plan No. 20-A, implemented by Executive Order No. 218, which vested regional offices with original and exclusive jurisdiction over money claims arising from labor standards laws. The trial court dismissed the prohibition case, upholding the jurisdiction of the Regional Office based on the congressional approval of the Reorganization Plan.

ISSUE

The primary issue is whether Reorganization Plan No. 20-A, which conferred judicial power upon regional offices of the Department of Labor to adjudicate money claims, is constitutionally valid.

RULING

The Supreme Court reversed the trial court’s decision, ruling that Reorganization Plan No. 20-A is unconstitutional and void. The legal logic proceeds on two grounds. First, the procedure for the Plan’s enactment under Section 6(a) of Republic Act No. 997 violated the constitutional process for lawmaking. The Act provided that the Plan would become effective unless Congress disapproved it by concurrent resolution. This mechanism of legislative approval through inaction or silence contravened the explicit constitutional requirements for a bill’s passage, which mandate affirmative votes recorded in the Journals of each separate House and presentation to the President for approval or veto. The Court held that such a procedure was a reversal of democratic processes and could not be countenanced.
Second, and more fundamentally, the conferment of judicial power to the regional offices was an invalid encroachment on the judiciary. The Reorganization Act authorized the reorganization of the Executive Branch only, which plainly excludes the creation of courts or the grant of judicial functions to administrative bodies. Judicial power, under the Constitution, is vested exclusively in the Supreme Court and such inferior courts as may be established by law. Adjudicating money claims involving the application of law to specific controversies is an exercise of judicial power. Therefore, vesting this power in an executive regional office constituted an unconstitutional delegation of judicial authority to the executive branch. Consequently, the Regional Office had no jurisdiction over the claims, and the writ of prohibition was made permanent.