SEVERINO PONCE, PETITIONER, VS. CO KING LIAN, RESPONDENT.

On April 16, 1956, Severino Ponce (appellee herein) filed a claim
with the Wage Administration Service, Manila, for the recovery from Co
King Lian (herein appellant) unpaid wages, overtime pay, and separation
pay, (Case No. C—6074). After hearing before investigator Felipe N.
Aurea, wherein both parties were present, said investigator, on June
25, 1956, rendered his “Findings and Recommendations”, the last
paragraph of which reads:

“WHEREFORE, the respondent is requested to deposit
the aforequoted amount of P19,366.38 with this Office within five days
from receipt hereof, which in turn will be given to the complainant.”

As no deposit was made by Co King Lian in accordance with the above
request, the officer-in-charge of the prosecution section, of
Department of Labor Regional Office No. 1 sent him a letter giving him
five days within which to make the necessary deposit or said office
would take the necessary steps to enforce the judgment in the case.
Still no deposit was made by Co King Lian; whereupon, claimant Ponce,
on November 12, 1956, filed a petition with the Court of First Instance
of Rizal, alleging that the decision of the Wage Administration Service
in his favor in its Case No. C-6074 against Co King Lian had become res judicata,
and asking that the court render judgment in accordance therewith. Co
King Lian moved to dismiss the petition on the ground that it did not
state any cause of action. On March 16, 1957, the court denied the
motion to dismiss, and on the 21st of the same month, without waiting
for Co King Lian’s answer and without any hearing, issued an order
stating, after a narration of the facts that took place in the Wage
Administration Service, that the decision of that office in Case No.
C-6074 “has already become final and executory”, and ordering the
issuance of the corresponding writ of execution for the satisfaction of
said decision. From this order, Co King Lian appealed to the Court of
Appeals, which certified the case to us because it raises purely
questions of law.

The main question raised by the appeal is whether or not the lower
court may order the execution of the findings and recommendation of the
investigator of the Wage Administration Service in C-6074 without any
hearing and trial.

This question has already been settled by this Court in a number of decisions of recent date.

The first of these decisions is Winch vs. P. J. Kiener Co.,
Ltd., 104 Phil., 735; 55 Off. Gaz. (35) 7337, wherein we pointed out
the three steps or ways by which a claimant for uncollected pay or
wages may enforce his claim; namely, mediation, arbitration, and court
action. Describing each of these remedies, we said:

“The Minimum Wage Law does not specify in precise
terms the duties and functions of the Wage Administration Service ….
but because of the vagueness of the law in this regard, it deemed
proper to confer on said Secretary broad powers to make and issue such
rules and regulations as may be necessary to carry out the provisions
of the Act (Section 11). This was done when the Secretary of Labor
approved a Code of Rules and Regulations’ wherein he outlined the
steps, procedure and manner in which the claim of an employee against
an employer may be filed and enforced. Thus, in Chapter III, Article 7
of said Code, we find provisions relative to how a claim should be
filed and the different methods an employee may pursue to enforce the
same. They postulate that, once a claim is filed, the same shall be
assigned to an investigator whose function shall be to mediate and
endeavor to induce the parties to settle the claim by amicable
agreement.’ This function is called mediation. If an agreement is
arrived at then the same becomes binding and must be complied with.

Another
method refers to arbitration. This is resorted to if no amicable
agreement is arrived at between the parties, The investigator shall ask
the parties whether they are willing to submit the case to arbitration
and if they do then they should subscribe to an agreement in writing
which shall be signed by them before the investigator. If they do agree
to arbitration as stated, the decision of the arbitrator, shall be
binding, final and conclusive between them. But the rule requires that
the agreement shall be made in writing and signed by both parties
before an investigator could arbitrate, otherwise no arbitration can
take place.

Finally, the rule provides that in the event
mediation fails and the parties are not willing to arbitrate, then the
claim shall be assigned to a Claims Attorney who, if he finds the claim
meritorious and the employee is indigent, shall prepare the
corresponding complaint to be submitted to a competent court within one
week after receiving the case.

There are therefore three
steps that a claimant may pursue in the enforcement of his claim;
mediation arbitration, and court action. As may be noted, the first
step is purely administrative in character, the second is a
quasi-judicial function, while the third is an auxiliary remedy
extended to an employee who may not be financially able to get legal
assistance in court.”

We held in Potente vs. Saulog Transit, Inc., 105 Phil.,
525, that only through these modes—mediation, arbitration, or court
action—may the Wage Administration Service cause the employer to
satisfy the employee’s claim for unpaid wages, and that the Wage
Administration Service “has no authority to render a decision’—in the
sense this term is used in legal parlance—on the claim for wages,
except insofar as it has to determine whether, in its opinion, the
claim is meritorious, as a condition precedent to the institution,
before ‘any competent court’, of an ordinary ‘action’ for the recovery
of the sum of money it considers due to the claimant. But, then, no
writ of execution shall issue, except when the judgment rendered said court—after
due notice and hearing, as demanded by the tenets of due process and
provided in the Rules of Court—shall have become final and executory.”
And still later, in Ortega vs. Saulog Transit, Inc., 105
Phil., 907; 57 Off. Gaz. (46) 8299, we ruled that “it is only when an
arbitration agreement or compromise is entered into between the parties
that a judgment can be rendered by the Wage Administration Service and
enforced by the courts”., Finally, following the above rulings, we held
in Garcia vs. Garcia, 106 Phil., 413; 57 Off. Gaz. [3] 460,
that where the parties did not enter into a written agreement to submit
their dispute to the Wage Administration Service for arbitration,
“whatever ‘decision’ or ‘judgment’ the Wage Administration Service may
have rendered in the case is not binding upon the parties, and a writ
of execution issued by the Court of First Instance to enforce it is
unauthorized and illegal.”

In the instant case, although the claim of appellee against
appellant was heard in the presence of both parties and decided by an
investigator of the Wage Administration Service, it does not appear
that the parties had submitted the case to arbitration in an agreement
in writing signed before the investigator. Consequently, the findings
and recommendations of the investigator in the case in favor of the
claim are not binding and conclusive on appellant, and cannot be
executed by mere petition for execution presented by appellee in the
court below without trial and decision on the merits.

Appellee relies upon our decision in the case of Brillantes vs.
Castro, 99 Phil., 497; 56 Off. Gaz. (29) 4621, to the effect that a
ruling of the Wage Administration Service not appealed from becomes
final, conclusive, and executory. But there was in that case an express
arbitration agreement signed by the parties submitting their cases to
the investigation and decision of the Wage Administration Service. As
we later ruled in Winch vs. P. J. Kiener Co., supra; Santos vs. Perez Vda. de Caparas, 105 Phil., 992; and Figueroa vs. Eliseo Saulog, 105 Phil., 1012; 57 Off. Gaz., (8) 1395, the holding in the Brillantes vs.
Castro case cannot be invoked where the parties did not submit to an
arbitration agreement in the Wage Administration Service, as in this
case.

The appellee also invokes the provisions of Section 20 of
Reorganization Plan 20-A. We need not delve into these provisions,
because the award in the case at bar was made long before the
Reorganization Plan went into effect in January of 1957.

Consequently, the order of the court below sustaining the petition
for a writ of execution to enforce the findings of the Wage
Administration Service in C-6074, without giving the appellant the
benefit of an answer and a hearing, finds no support in law. And with
this conclusion, it is needless to inquire further into appellant’s
second claim that the findings and recommendations of a mere
investigator of the Wage Administration Service do not amount to a
“decision” or “order”‘ of that office in legal contemplation.

The order appealed from is set aside, and the petition dismissed,
without prejudice to appellee’s filing an appropriate action against
appellant to enforce his claim. Costs against appellee Severino Ponce.

Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia, Barrera, and Gutierrez David, JJ., concur.