RIZAL SECURITY & PROTECTIVE SERVICES INC., and/or RUFINO S. ANTONIO, JR., Petitioners, vs. HON. DIRECTOR ALEX E. MARAAN, Regional Sheriff of DOLE, Cordillera Administrative Regi…

Rizal Security and Protective Services versus Maraan

The Case

This is a special civil action for certiorari under Rule 65, brought by Rizal Security and Protective Services, Incorporated and its president, Rufino Antonio, Junior, against the Director of the Department of Labor and Employment for the Cordillera Administrative Region, Alex Maraan, and the Regional Sheriff. The petitioners ask the Supreme Court to annul a compliance order directing them to pay labor standard deficiencies to eight security guards, and to quash the writ of execution that followed it. The case matters for two reasons: it fixes the rule that the visitorial and enforcement jurisdiction of the Labor Secretary or his authorized representative is determined by the state of the employer-employee relationship at the moment the complaint is filed, and it insists that even in summary labor proceedings, an order that was never validly served cannot become final and cannot be executed.

Procedural History

The case began as a complaint filed with the Department of Labor and Employment Regional Office for the Cordillera Administrative Region, docketed as a labor standards case. A labor inspector conducted an inspection and reported violations. The Regional Director issued an order denying the petitioners' motion assailing jurisdiction and ordering payment of the computed deficiencies. A writ of execution was later issued. The petitioners went directly to the Supreme Court by petition for certiorari and prohibition with a prayer for a temporary restraining order. The Supreme Court initially dismissed the petition for failure to attach a certified true copy of the questioned writ of execution, but upon motion for reconsideration and compliance, the Court reinstated the petition and decided it on the merits.

Facts

On 19 May 1995, Rico Gomez and Edwin Tupas, then still employed as security guards of Rizal Security and detailed at Rainbow End Village in Baguio City, filed a complaint with the regional office seeking assistance over alleged violations of labor standards, including illegal deduction of wages, underpayment of night shift differential, underpayment of minimum wage, nonpayment of overtime pay and legal holiday pay, and nonpayment of thirteenth month pay. Acting under his visitorial and enforcement powers, the Regional Director had the establishment inspected on 1 June 1995. The inspection yielded findings of underpayment of wages, underpayment of cost of living allowance, nonpayment of overtime pay, nonpayment of service incentive leave, underpayment of night shift differential, irregular frequency of payment, nonpayment of thirteenth month pay, and absence of emergency medicines.

Hearings were scheduled. In the meantime, two events took place. On 10 July 1995, the private respondents signed a resignation letter effective 1 September 1995. On 25 July 1995, Rainbow End Village notified the petitioner company that its security services would be terminated, also effective 1 September 1995. At a hearing on 23 October 1995, the petitioners moved to dismiss on the ground that the regional office had lost jurisdiction, since no employer-employee relationship remained as of 1 September 1995.

On 24 January 1996, Director Maraan issued the assailed order denying the motion and ordering payment of deficiencies totaling 560,989 pesos and 70 centavos to eight guards, and holding the resident manager of Rainbow End Village jointly and severally liable. The petitioners say their counsel never officially received a copy and secured one from the regional office only on 18 June 1996. On 8 May 1996, counsel received a copy of the writ of execution dated 12 March 1996, which recited that the order had been received on 1 February 1996 and had become final. The records showed that the notice and copy of the order were mailed to counsel on 29 January 1996 but were returned by the post office with the notation that there was no such number on the street, although earlier notices to the same address had always been received. An internal labor office communication admitted that the respondents did not receive a copy of the order because it was returned to sender.

Issues

• Whether or not the Regional Director acted without or in excess of jurisdiction in issuing the order of 24 January 1996 after the employer-employee relationship had been severed during the proceedings.
• Whether or not the writ of execution dated 12 March 1996 was prematurely and illegally issued.
• Whether or not petitioner Rufino Antonio, Junior may be held solidarily liable for the monetary claims of the private respondents.

Applicable Provisions

Article 128, paragraph b, of the Labor Code, as amended, provides:

Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.

This is the source of the enforcement power upheld by the Court, conditioned on the existence of the employer-employee relationship.

Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides:

Where employer-employee relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. Accordingly, if on the face of the complaint, it can be ascertained that employer-employee relationship no longer exists, the case, whether or not accompanied by an allegation of illegal dismissal, shall immediately be endorsed by the Regional Director to the appropriate Branch of the National Labor Relations Commission.

The petitioners invoke this rule, but the Court holds it applies only where the severance appears on the face of the complaint at filing.

Rule III, Section 17 of the same Rules provides:

An aggrieved party may file a motion for reconsideration of the Order of the Regional Office within seven calendar days from receipt by him of a copy of said Order.

Because the petitioners never received the order, this period never began to run, and the order never became final.

Ruling

On the first issue, the Court sustained the jurisdiction of the Regional Director. Jurisdiction over the subject matter is determined by the allegations of the complaint at the time of filing, and once vested it is retained to the end of litigation and is not ousted by subsequent events. The complaint was filed on 19 May 1995, when the employer-employee relationship still existed; the petitioners themselves admitted the relationship ended only on 1 September 1995. The case involved violations of labor standards, so the Director properly retained jurisdiction under Article 128, paragraph b.

On the second issue, the Court ruled for the petitioners. Notice to counsel is notice to the party, but here the notice was returned undelivered through no fault of the petitioners, a fact admitted by the public respondent. The inspection report is a distinct document and is not the notice the law contemplates. Without receipt of the notice and copy of the order, the order never became final and executory, and the writ of execution issued on 12 March 1996 was premature and without legal basis, rendering it null.

On the third issue, the Court declined to rule, because the order had not attained finality and resolving the question of solidary liability would pre-empt whatever action the Regional Director might still take, consistent with the principle of exhaustion of administrative remedies.

Doctrine

First, the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the nature and subject matter of a complaint is determined by the material allegations therein, the character of the relief prayed for, and the law existing at the time of filing. Once jurisdiction is vested, it is retained to the end of litigation and cannot be ousted by subsequent events. Second, the visitorial and enforcement power under Article 128, paragraph b, of the Labor Code depends on the existence of the employer-employee relationship, tested at the time the complaint is filed, not at the time of the order. Third, in summary labor proceedings, due process still requires that the party be given notice and a copy of the order; absent valid service, the reglementary period to seek reconsideration never begins, the order does not become final, and any writ of execution issued upon it is premature and void.

Disposition

The petition was partially granted: a writ of certiorari was issued quashing the writ of execution dated 12 March 1996 for being premature, and the Department of Labor and Employment for the Cordillera Administrative Region was directed to proceed with the labor standards case with dispatch.

Remember This

Memorize this line: jurisdiction is fixed by the allegations of the complaint at the time of filing and is not ousted by the later severance of the employment relationship. Examiners use this case to test the scope of the Regional Director's visitorial and enforcement power under Article 128 and the due process requirement of valid service before an order can become final and executory.