G.R. No. L-76710, December 21, 1987
ANTONIO ONG, SR., petitioner, vs. HENRY M. PAREL, in his capacity as Regional Director of the Ministry of Labor and Employment, et al., respondents.

FACTS

Petitioner Antonio Ong, Sr., owner of Mansion House Restaurant, sought to annul the Final Order for Compliance issued by Regional Director Henry M. Parel, which directed him to pay P254,841.26 representing the money claims of thirteen employees for alleged violations of labor standards. The order stemmed from an inspection conducted by the Regional Office following a request from the employees’ union president. During inspections, petitioner failed to present his employment records despite being given opportunities and a subpoena duces tecum, leading the Regional Director to compute the claims based on employee affidavits.
Petitioner filed a motion for reconsideration, arguing that the Regional Director lacked jurisdiction over money claims, which he contended fell under the exclusive jurisdiction of the Labor Arbiter, and that he was denied due process as he was not furnished copies of the affidavits and inspection report. The Regional Director denied the motion, asserting jurisdiction under his visitorial and enforcement powers and finding no denial of due process given petitioner’s failure to comply with the subpoena.

ISSUE

Whether the Regional Director had jurisdiction to adjudicate the employees’ money claims arising from alleged violations of labor standards.

RULING

The Supreme Court ruled that the Regional Director acted without jurisdiction. The legal logic is anchored on the distinction between enforcement and adjudicatory powers under the Labor Code. While Article 128(b) granted the Regional Director visitorial and enforcement powers to conduct inspections and order compliance with labor standards, it did not confer jurisdiction to adjudicate and award money claims. The power to hear and decide money claims, especially those involving contested computations and factual disputes, was vested exclusively in the Labor Arbiters under Article 217.
The Court clarified that the Regional Director’s authority was limited to issuing compliance orders based on uncontested findings during inspections. Here, the claims were disputed, and the order to pay a specific sum constituted an exercise of adjudicative power beyond his statutory mandate. Consequently, the assailed orders were null and void. The Court remanded the money claims to the appropriate Labor Arbiter for proper proceedings. On the due process issue, while the Court noted petitioner was given opportunities to present his records, the jurisdictional defect rendered a full discussion on this point unnecessary.