G.R. No. L-48848 May 11, 1988
FEDERATION OF FREE WORKERS and ALLIED SUGAR CENTRALS EMPLOYEES & WORKERS UNION-FFW, petitioners, vs. HON. AMADO G. INCIONG, in his capacity as Acting Secretary of Labor, HON. RACHEL FIDELINO, in her capacity as Chairman of the Wage Commission and ALLIED SUGAR CENTRALS COMPANY, respondents.

FACTS

Petitioner Federation of Free Workers is the certified collective bargaining agent for the employees of private respondent Allied Sugar Centrals Company. Presidential Decree No. 1123, effective May 1, 1977, mandated a P60.00 across-the-board increase in the emergency living allowance for private sector employees. The Decree authorized the Secretary of Labor to issue implementing rules, including procedures for financially distressed employers to apply for exemption. The implementing rules, issued on May 1, 1977, required applications for exemption to be filed within thirty days from the rules’ effectivity.
Private respondent initially prepared to pay the increase but aborted the plan. On September 27, 1977, over 100 days after the rules took effect, it filed an application for exemption with the Wage Commission, supported by financial statements showing operational losses. The Wage Commission Chairman recommended approval, and Acting Secretary of Labor Amado Inciong granted the exemption for one year effective May 1, 1977, stating the approval was “final and unappealable.” A subsequent application for exemption for 1978 was also approved. Petitioners filed a motion for reconsideration, arguing the exemption was discriminatory and the company was not financially distressed, but it was overruled.

ISSUE

Whether the public respondents, the Acting Secretary of Labor and the Wage Commission Chairman, committed grave abuse of discretion in granting the private respondent’s applications for exemption from the mandated wage increase.

RULING

The Supreme Court dismissed the petition, finding no grave abuse of discretion. The legal logic centers on the scope of the Secretary of Labor’s discretionary power under P.D. 1123 and the procedural posture of the case. The Court clarified that the grant or denial of an exemption application is an executive function vested in the Secretary of Labor by the decree. The Court’s review in a certiorari proceeding is limited to determining whether the exercise of such discretion was done capriciously, whimsically, or arbitrarily. The financial documents submitted by the private respondent, indicating losses, provided a factual basis for the Secretary’s finding of a distressed condition. The Court found no evidence that this determination was arrived at without basis or in bad faith, which is necessary to constitute grave abuse of discretion.
On procedural matters, the Court rejected the argument that petitioners failed to exhaust administrative remedies. It noted that the Secretary’s order explicitly stated it was “final and unappealable.” Furthermore, applying the doctrine of qualified political agency, the acts of the Department Secretary, unless reprobated by the President, are presumptively the acts of the Chief Executive. The Court also addressed and dismissed the petitioners’ ancillary argument regarding the private respondent’s legal personality, noting it was a registered partnership, not a corporation, making the doctrine of piercing the corporate veil inapplicable. Consequently, with no showing of grave abuse, the writ of certiorari could not be issued.