UBAY ARRASTRE AND STEVEDORING SERVICES, INC., JESS ALIGADO AND ALEXANDER GAVIOLA, PETITIONERS, VS. HON. CRESCENCIANO B. TRAJANO, UNDERSECRETARY OF LABOR AND EMPLOYMENT; HON. BAR…

The question raised in this
petition is whether Republic
Act No. 6715, which took effect on 21 March
1989, applies to cases for illegal dismissal
and money claims which were brought before the Office of the Regional Director of the then Ministry of Labor and Employment in 1980.

The answer must be in the
affirmative in the light of the settled jurisprudence on the
matter. In our Resolution of 9 November
1989, in
Briad Agro Development Corp. vs. De la Cerna,^[1] setting aside our prior Decision of 29 June 1989,^[2] we upheld
the retroactive application of R.A.
No. 6715, it being a curative statute.^[3] Briad involved an order of a
Regional Director of the Department of Labor and Employment
(DOLE) in a complaint for unpaid wages and wage supplements filed on
21 February 1987. This ruling was reiterated in SSK Parts Corp. vs. Camas,^[4] Brokenshire
Memorial Hospital, Inc. vs.
Minister of Labor and Employment,^[5]
Aboitiz Shipping Corp. vs. De la Serna,^[6] Servando’s Inc. vs. Secretary of Labor and Employment,^[7] and
Star Security and Detective
Investigation Agency vs. Secretary
of Labor,^[8] which involved orders of
Regional
Directors
of the Ministry or Department of Labor
and Employment dated 11 January 1988, 12 April 1985, 13 October 1988, 2
July 1987, and 5 June 1986, respectively. This Court reiterated, with further amplifications, the ruling in Servando’s in its Resolution of 5 June
1991^[9] and applied it in, inter alia, Red V Coconut Products, Ltd. vs. Leogardo,^[10] Midland Insurance Corp. vs.
Secretary of Labor and
Employment,^[11] and Fermin vs. Secretary of Labor and Employment,^[12] which
involved orders of Regional Directors of the Ministry or Department of Labor and Employment dated 4 June 1984, 25 September 1989, and 2 March and 7
August 1987, respectively.

R.A. No. 6715 amended, inter alia, Articles 129 and 217
of the Labor Code (P.D. No. 442). As thus amended, they
read as follows:

“ART. 129. Recovery of wages, simple money claims and other benefits. —
Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic
or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does
not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not
exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any
employee or househelper pursuant to
this Article shall be held in a special deposit
account, and shall be paid, on order of the
Secretary of Labor and Employment or the
Regional Director directly to the employee
or househelper concerned. Any such sum not paid to the employee
or househelper,
because he cannot be located after diligent
and reasonable effort to locate him within a
period of three (3) years, shall be held as a special fund of the Department of Labor and
Employment to be used exclusively for the
amelioration and benefit of workers.

x x x

ART. 217. Jurisdiction
of Labor Arbiters and the Commission. — (a) Except
as otherwise provided under this
Code, the Labor Arbiters shall
have original and exclusive jurisdiction
to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision
without extension, even in the
absence of stenographic notes, the following
cases involving all workers, whether
agricultural or non­-agricultural:

(1)    Unfair
labor practice cases;

(2)    Termination disputes;

(3)    If
accompanied with a claim for reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work and
other terms and conditions of employment;

(4)    Claims for actual, moral, exemplary and other
forms of damages arising from employer-employee relations;

(5)    Cases arising from any violation of Article
264 of this Code, including questions involving the legality of strikes and
lockouts; x x x”

x x x

In the Resolution of
5 June 1991 in Servando’s, we explained further the effects of R. A. No. 6715
on the jurisdictions of the Labor Arbiters
and the Regional Directors of the DOLE and harmonized Articles 128(b), 129, and 217(a)(6) of the Labor
Code. We said:

“A careful consideration of the above-quoted three (3) provisions of the
Labor Code leads
the Court to reiterate its ruling that the exclusive jurisdiction to hear and
decide employees’
claims arising from
employer-employee relations,
exceeding the aggregate amount of P5,000.00
for each employee, is vested in the Labor Arbiter
(Article 217(a)(6). This exclusive jurisdiction of the Labor Arbiter is confirmed by the provisions of Article 129 which excludes from the jurisdiction of
the Regional Director or any hearing officer
of the Department of Labor the power to
hear and decide claims of employees arising from employer-employee relations exceeding the amount of
P5,000.00 for each employee.

To construe the
visitorial power of the Secretary of Labor
to order and enforce compliance with
labor laws as including the power to
hear and decide cases involving employees’
claims for wages, arising from employer-employee relations, even if the amount of said claims exceed P5,000.00
for each employee, would, in our
considered opinion, emasculate and render meaningless, if not useless, the provisions of Article
217(a)(6) and Article 129 of the Labor Code which, as above-pointed out, confer
exclusive jurisdiction on
the Labor Arbiter to hear and decide
such employees’ claims (exceeding P5,000.00 for each employee). To sustain the respondents’ position would, in
effect, sanction a situation
where all employees’ claims, regardless of amount, can be
heard and determined
by the Secretary of Labor under his visitorial power. This
does not, however, appear to be the
legislative intent.

We further hold that
to harmonize the above-quoted three
(3) provisions of the Labor Code, the Secretary
of Labor should be held as possessed of
his plenary visitorial powers to order
the inspection of all establishments where labor is employed, to look
into all possible violations of
labor laws and regulations but
the power to hear and decide employees’
claims exceeding P5,000.00 for each employee should be left to the Labor Arbiter as the exclusive
repository of the power to hear
and decide such claims. In other
words, the inspection conducted
by the Secretary of Labor, through labor regulation officers or industrial safety engineers, may yield
findings of violations of labor standards under labor laws; the Secretary of
Labor may order compliance with said labor standards, if necessary, through
appropriate writs of execution but when
the findings disclose an
employee claim of over P5,000.00, the matter should be referred to the Labor Arbiter in recognition of his exclusive jurisdiction over such claims.”

Considering that, as hereafter shown, the individual claims of
the private respondents far exceed P5,000.00, we find no cogent reason why R.A.
No. 6715 should not apply to the complaints of the private respondents. We are not unaware of the exceptions to the
doctrine that curative statutes are to be given retroactive effect, viz.: the curative statutes must not
violate the
Constitution; nor must they impair vested rights or the obligations of
contracts.^[13]
Nevertheless, none of the exceptions has been
shown to apply in this case.

Let us now unfold the factual and procedural antecedents of this
case.

In separate complaints filed on 27 June 1980 and 12 October 1980
with the Bohol Provincial Labor Office in Tagbilaran City against the petitioners
Ubay Arrastre and Stevedoring Services, Inc. (UBASCOR), Jess Aligado, and Alexander Gaviola,^[14]
the complainants (private respondents) asked for reinstatement due to alleged
illegal dismissal and for payment of overtime pay, legal holiday pay, premium
pay for holiday and rest day, service incentive leave, living allowance, 13th
month pay, vacation and sick leave pay, and other monetary claims. The complaints were referred to the Office
of the Regional Director, Region VII (Cebu ????? of the then Ministry of Labor and
Employment and docketed therein as BO Cases Nos. 80-237 to 80-242 and BO Cases
Nos. 80-­243 to BO-251. The third set
involving ten complainants was not assigned a number. On 22 November 1982, the Regional Director issued an Order^[15] disposing
of the complaints as follows:

“WHEREFORE, IN VIEW OF ALL THE FOREGOING, order is hereby issued requiring
the respondents UBAY ARRASTRE AND STEVEDORING CORPORATION, JESS ALIGADO
AND ALEXANDER GAVIOLA to:

I. Pay, jointly and solidarily, the amount due each of the
following complainants within the period of ten (10) days from receipt of this
Order:

II. Reinstate the herein
complainants without loss of seniority rights effective on the first working
day of December, 1982; Provided, that should the respondents fail to do so on
such date, to further pay them backwages computed at the current daily rate of
pay until the time of their actual reinstatement; Provided further, that should
their reinstatement be impractical, to pay each of them their separation pay
equivalent to one-half month’s salary for every year of service.

Complainants’ claims for Premium Pay for Holiday and Rest Day,
Underpayment of Minimum Wages, Vacation Leave and Sick Leave are hereby denied
for lack of merit.”^[16]

The specific monetary awards
to the 25 complainants represent
emergency cost of living allowance, 13th month pay bonus, service incentive leave pay,
and legal holiday pay.

The petitioners herein appealed
the order to the Minister of Labor and
Employment. However, the records
of the cases were lost during the
pendency of the appeal and it was
only on 14 January 1986 that
then Deputy Minister of Labor and Employment Vicente Leogardo, Jr. issued an order^[17]
disclosing the fact of the loss of the records of the cases,
stating the need to reconstruct them,
and requiring the parties to submit copies in their personal files of the complaint, answer, position paper, orders, resolution, appeal, and other
papers or documents pertinent to the
case for the reconstitution of the records. Several hearings were
called for the purpose but only the private respondents attended the hearings and submitted “a reconstituted complaint as well as relevant papers
supporting their claims.”^[18]

On 18 May 1990,
then DOLE Undersecretary Dionisio C. de la Serna, by authority of the Secretary, handed down an order^[19]
affirming the 22 November 1982
Order of the Regional Director and
dismissing the appeal. As reason
therefor, Undersecretary de la Serna
stated:

“The
deliberate failure of the respondents to attend the scheduled hearings
is nothing but an expression of waiving their right to adduce pertinent documents in their favor and an utter lack of
interest to pursue their appeal. Considering too that the records of this
case clearly indicate respondents’ liability, we find no basis to modify, much less, set aside the Order of the Regional Director dated November 22, 1982.”

On 15 February 1991, the petitioners filed a motion for reconsideration^[20] based on questions of law, alleged
errors in the findings of fact, and lack of jurisdiction on the part of the
Regional Director over the claims.

Anent the claimed lack of jurisdiction, which is the only issue relevant in the instant
petition, the petitioners rely, among others, on the resolution of this Court
of 29 June 1989 in Briad Agro Development Corp. vs. Hon.
Dionisio de la Serna.^[21]

In his Order of 7 February 1992,^[22]
public respondent Crescenciano B. Trajano, Undersecretary of the DOLE, denied
the aforesaid motion for reconsideration for lack of merit and affirmed “the
Regional Director’s Order dated November 22, 1986,^[23]
as well as [the] Order dated May 15,^[24]
1990.” As to the issue of
jurisdiction raised by the petitioners, he ruled as follows:

“As regards the issue of jurisdiction, particularly with respect to
the P5,000.00 jurisdictional amount limit provided by Articles 129 and 217 of
the Labor Code, we wish to state that these provisions find no application to
the case at bar. The Regional Office
had already acquired jurisdiction over the case as far back as October 10,1980,
long before the enactment of Republic Act No. 6715.”

Petitioners’ motion for reconsideration of the above order and
supplemental motion for reconsideration were denied by Undersecretary Trajano
in the Orders of 19 June 1992 and 18 August 1992, respectively.^[25]
The latter order was made final.

A writ of execution was issued on 2 September 1992.^[26]
Some properties of the petitioners were attached and a notice of sale and
public auction, scheduled on 15 October 1992, was issued on 17 September 1992.^[27]

Hence, the instant petition, with a prayer for a temporary
restraining order, which was filed on 11 September 1992. On 22 September 1992, we issued a temporary
restraining order enjoining the respondents and/or their agents and
representatives from enforcing or carrying out the questioned orders.^[28]

In their petition, the petitioners
insist that the Labor Arbiters have exclusive jurisdiction over the claims of
the private respondents since their individual claims exceed P5,000.00 and
while it may be true that when the complaints were filed in 1980 the Regional
Director still had jurisdiction to resolve such claims, nevertheless, at the time
they were finally decided on 2 September 1992 by the Undersecretary of Labor,
the Regional Director was already divested of such jurisdiction by R. A. No.
6715. Being a curative statute, the Act
should be given retroactive effect, pursuant to the doctrine laid down in the cases of Briad Agro Development Corp. vs. De la Serna^[29] and Servando’s Inc. vs. Secretary of Labor and Employment.^[30]

In their Comment, the private respondents allege that when the complaints were filed in 1980, R.A. No. 6715 was not in force yet and the
Regional Director still had jurisdiction
over the complaints. Having
acquired jurisdiction over their claims
at the inception, such jurisdiction continues until the entire controversy is finally decided.^[31]
While they concede that R.A. No. 6715 can be considered a
curative statute, it cannot be given retroactive
effect in the instant case for there is
nothing irregular or erroneous in the assumption by the Regional Director of jurisdiction over
these cases. Furthermore, at the time R.A. No. 6715 was enacted,
the complaints were no longer pending
with the Office of the Regional Director but were pending appeal before the Office of
the Secretary of the DOLE.

For their part, the public respondents allege in their Comment that although R.A.
No. 6715 can be given retroactive effect
because it is a curative statute, the principle cannot apply when vested rights would be impaired.^[32]
They contend that the 18 May
1990 Order of the
Undersecretary had become final and executory because of the failure
of the petitioners to file a timely motion for
reconsideration; however, they make no reference
to any date when the said order had supposedly become final. They
further allege that the complaints were filed in 1980 and decided in 1982 when the
Regional Director still had jurisdiction over the cases, which decision was
affirmed by authority of the Secretary only after eight years, or on 18 May
1990, for reasons not attributable to the complainants.

In their Reply to the Comment^[33]
which they filed after obtaining leave of the Court, the petitioners contend
for the first time that the Regional Director had no jurisdiction over the
complaints filed in 1980 because as of that date the Labor Code did not
expressly confer upon the Regional Director jurisdiction over monetary claims
of employees, especially those involving amounts in excess of P5,000.00; hence,
the Order of 22 November 1982 was null and void and could not ripen into a
vested right. The orders subsequently
issued by the DOLE were thus likewise
void.

On 3 February 1993, we gave due course to the petition and
required the parties to submit their respective memoranda.

The merit of this petition is evident in the light of our earlier
disquisitions that R.A. No. 6715 should retroactively apply to the claims of
the private respondents. Moreover, at
the time the private respondents filed their complaints, the Regional Director
of Region VII of the then Ministry of Labor and Employment had no jurisdiction
over the subject matter thereof. The
applicable law then was Article 217 of the Labor Code (P.D. No. 442), as amended by P.D. No. 1691,^[34]
which provided as follows:

“ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall
have the original and exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or
non-agricultural:

1. Unfair labor practice cases;

2. Unresolved issues
in collective bargaining, including those that involve wages, hours of work and
other terms and conditions of employment;

3. All money claims
of workers, including those based on non-payment
or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement,
except claims for employee’s compensation, social security, medicare
and maternity benefits;

4. Cases involving household services; and

5. All other claims arising from employer-employee relations,
unless expressly excluded by this Code.

(b) The Commission shall
have exclusive appellate jurisdiction over all cases decided by Labor Arbiters, compulsory arbitrators,
and voluntary arbitrators in appropriate cases provided in article 263 of this
Code.”

Thus, in the 26
November 1986 Decision in Zambales Base Metals, Inc. vs.
Minister of Labor,^[35] this Court, speaking through Mr. Justice Isagani A. Cruz, held that:

“This article [referring to Article 217] does not even need
construction. It is obvious therefrom that only the labor
arbiter could decide the cases
filed by the employees as they involved ‘money claims’ falling under No. 3 of the
enumeration. As for the regional
director, the authority he invokes under Article 128 of the Labor Code confers
upon him only visitorial powers over the employer’s premises and records,
including the right to require compliance with the labor standards provisions
of the Code, such as those
relating to industrial safety. Nowhere
in the said article is the regional director empowered to share the ‘original
and exclusive jurisdiction’ conferred on the labor arbiters by Article 217.”

It was only upon the
effectivity of Executive Order No. 111 on 3
March 1987 that the Regional Director shared jurisdiction with Labor
Arbiters over money claims. So, in our
29 June 1989 Decision in Briad Agro
Development Corp. vs. Hon.
Dionisio de la Serna,^[36] we gave
retroactive effect to this executive order, it being a curative statute and ruled
that Zambales Base Metals “is no longer good law.” Thus:

“The Court rules
that, in view of the promulgation of
Executive Order No. 111, Zambales
Base Metals v. Minister of Labor is no longer good law. Executive Order No. 111 is in the character
of a curative law, that is to say, it was intended to remedy a defect that, in
the opinion of the legislative (the incumbent Chief Executive in this case, in
the exercise of her lawmaking powers under the Freedom Constitution) had
attached to the provision subject of the amendment. This is clear from the proviso: ‘The provisions of
Article 217 of this Code to the contrary notwithstanding … Plainly, the amendment was meant to make
both the Secretary of Labor (or the various Regional Directors) and the Labor
Arbiters share jurisdiction.”

We reiterate then that no cogent reason exists why R.A. No. 6715
and the cases of Briad and Servando’s should
not apply to the instant petition. Petitioners cannot be said to have been estopped to question the
jurisdiction of the Regional Director. They did not seek affirmative relief before the Regional Director or submit their evidence before him. They also raised the issue of jurisdiction
before the DOLE in their motion to reconsider the 18 May 1990 Order.

WHEREFORE, being impressed with sufficient merit, the
instant petition is hereby GRANTED and the challenged Orders of (1) 22 November
1982 of the Regional Director, Region VII, Cebu City, of the Department of
Labor and Employment in BO Cases Nos. 80-237 to 80-242, BO 80-243 to 80-251,
and an unnumbered case; (2) 18 May 1990 of Undersecretary Dionisio C. de la
Serna; and (3) 7 February 1992,
19 June 1992, and 18 August 1992 of Undersecretary Crescenciano B. Trajano in
the said cases, are REVERSED and SET ASIDE. The said cases are REFERRED to the appropriate Labor Arbiter for proper
disposition. The pendency of these
cases with the Office of the Regional Director (Region VII) and with the Office
of the Secretary, both of the Department of Labor and Employment, and with this
Court shall be deemed to have tolled the running of the prescriptive period.

The temporary restraining order issued on 21 September 1992 is
hereby made permanent.

SO ORDERED.

Cruz, (Chairman), Bellosillo,
and Quiason, JJ., concur.

* Aside from Roberto A. Palermo,
there are 24 other complainants before the Office of the Regional Director,
Region VII, DOLE, who are enumerated in the latter’s Order of 22 November 1982
but are not specifically mentioned in the
caption of the Petition in this case.

^[1]
179 SCRA 269 [1989].

^[2]
174 SCRA 524 [1989].

^[3]
Citing Garcia vs. Martinez,
90 SCRA 331 [1979]; Calderon vs. Court of Appeals, 100 SCRA 459 [1980]; Pepsi Cole Bottling Co. vs. Martinez, 112 SCRA 578 [1982]; Ebon vs. de
Guzman, 113 SCRA 52 [1982]; Agusan del Norte Electric Coop., Inc. vs. Suarez, 125 SCRA 436 [1983].

^[4]
181 SCRA 675 [30 January 1990].

^[5]
182 SCRA 5 [7 February 1990].

^[6]
184 SCRA 551 [25 April 1990] and 199 SCRA 568 [25 July 1991] re
denial of motion for reconsideration.

^[7]
184 SCRA 664 [26 April 1990].

^[8]
187 SCRA 358 [12 July 1990].

^[9]
198 SCRA 156 [1991].

^[10]
208 SCRA 25 [10 April 1992].

^[11]
214 SCRA 578 [15 October 1992].

^[12]
215
SCRA 10 [21 October 1992].

^[13]
Briad Agro Development Corp. vs. De la Cerna, 174 SCRA 524, 532 [1989].

^[14]
They were the Manager and President, respectively, of UBASCOR.

^[15]
Annex “E” of Petition; Rollo, 48-54.

^[16]
Rollo, 53-54.

^[17]
Rollo, 165.

^[18]
Order of 18 May 1990 of DOLE Undersecretary de la Serna, 3; Id., 21.

^[19]
Annex “A” of Petition; Id., 18-21.

^[20]
Annex “A-1” of Petition; Rollo, 22-36.

^[21]
174 SCRA 524 [1989].

^[22]
Annex “B” of Petition; Rollo,
37-44.

^[23]
Should be 1982.

^[24]
Should be 18.

^[25]
Annexes “C” and “D” of Petition; Rollo, 46-47.

^[26]
Annex “G” of Petition; Id., 58-59.

^[27]
Id., 309.

^[28]
Id., 62-63.

^[29]
Supra., and the amendatory
resolution issued in the same case on 9 November 1989, 179 SCRA 269 [1989].

^[30]
Supra.

^[31]
Odin Security Agency vs. De la Serna, 182 SCRA 472 [1990].

^[32]
SSK Parts Corp. vs. Camas, supra., citing Development Bank of the Philippines vs. Court of Appeals, 96 SCRA 342 [1980]; Santos vs. Duata, 14 SCRA 1041 [1965]; and Briad Agro
Development Corp. vs. De la Serna, 174 SCRA 524 [1989].

^[33]
Rollo, 134-150.

^[34]
Promulgated on 1 May 1980.

^[35]
146 SCRA 50 [1986].

^[36]
174 SCRA 524 [1989].