JOSE COROMINAS, JR., AND COROMINAS & CO. INC., PETITIONERS, VS. LABOR STANDARD COMMISSION, ET AL., RESPONDENTS.

Corominas versus Labor Standards Commission

The Case

This is a consolidated set of four cases testing the validity of Reorganization Plan No. 20-A, dated December 10, 1956, and in particular the power it gave to the regional offices of the Department of Labor to hear and decide money claims of laborers. Private employers and a hotel operator, on one side, and labor claimants and hearing officers, on the other, dispute whether an executive reorganization plan could take from the courts of justice their jurisdiction over claims for overtime pay, separation pay, underpayment, and unpaid wages, and vest that jurisdiction exclusively in administrative regional offices. The case matters because it fixes the constitutional boundary of executive reorganization: an executive body may regroup and consolidate offices, but it may not create courts or strip the courts of jurisdiction, for judicial power belongs only to the courts that the law establishes.

Procedural History

The four cases travelled different roads but converged in the Supreme Court. In the first, a hearing officer of Regional Office No. 3 ruled for the labor claimant; on appeal the Labor Standards Commission reduced the award, denied a motion to quash, and ordered execution; the employers then filed a petition for certiorari with prohibition in the Supreme Court. In the second, the employer moved to dismiss the regional office complaint, was refused, and brought a petition in the Court of First Instance of Manila, which declared the Reorganization Plan null and void and enjoined enforcement of the regional office decision; the claimants and hearing officers appealed to the Supreme Court. In the third, the employer sued in the Court of First Instance of Manila to annul the regional office award; that court held the Plan invalid but dismissed the complaint on the ground that the question of validity had not been raised before the Labor Standards Commission; the employer appealed. In the fourth, the employer sought certiorari and injunction in the Court of First Instance of Manila, which ruled for the employer and held the Plan null and void; the claimants appealed. All four reached the Supreme Court, which resolved them in one decision.

Facts

Arturo Delaniel claimed that he had served as a driver for Jose Corominas, Junior, and Corominas and Company from January 1955 to August 1956 without receiving overtime and separation pay. He filed his claim with Regional Office No. 3 of the Department of Labor, and the hearing officer ruled in his favor. On appeal, the Labor Standards Commission reduced the judgment to 1,184.28 pesos, with legal interest and attorney's fees, denied the employers' motion to quash, and ordered execution.

Jose Calupitan filed a claim for underpayment and separation pay against the Manila Central University Hospital, again with Regional Office No. 3. The Hospital's motion to dismiss was denied and the regional office proceeded to hear evidence, prompting the Hospital to seek relief in the Court of First Instance of Manila. Meanwhile, Wong Chun sought to annul a regional office decision awarding Diego Carlim, a roomboy at the Plaza Hotel, separation and overtime pay with attorney's fees, on the ground that the regional office had arrogated judicial powers to itself.

Fabian Cañete, for his part, claimed unpaid wages, underpayment of wages, and overtime pay for Sundays and legal holidays against Balrodgan Company, Limited, and Mauro Ganzon. His case was first referred to the Labor Operations Section of the Department of Labor and later formally filed with Regional Office No. 3, whose hearing officer ruled for him and whose administrator approved and ordered execution of the award. The employers then went to the Court of First Instance of Manila to stop the levy and execution.

Issues

• Whether or not Reorganization Plan No. 20-A, in granting regional offices original and exclusive jurisdiction over money claims of laborers, was validly promulgated under Republic Act No. 997.
• Whether or not the Government Survey and Reorganization Commission could transfer to regional offices the jurisdiction over money claims that the law had vested in the courts of justice.
• Whether or not the validity of the regional office proceedings could still be attacked in court when the question of jurisdiction had not been raised before the Labor Standards Commission.

Applicable Provisions

Section 25 of Reorganization Plan No. 20-A, the provision struck down, provides:

25. Each Regional Office shall have original and exclusive jurisdiction over all cases affecting all money claims arising from violations of labor standards on working conditions, including but not restrictive to: unpaid wages, underpayment, overtime, separation pay, and maternity leave of employees/laborers; and unpaid wages, overtime, separation pay, vacation pay, and payment for medical services of domestic help.

This is the grant of jurisdiction that the Court found to exceed the authority conferred by the reorganizing statute.

Section 16 of the Minimum Wage Law, Republic Act No. 602, provides:

SEC. 16. Jurisdiction of the Courts.—(a) The Court of First Instance shall have jurisdiction to restrain violations of this Act; action by the Secretary or by the employees affected to recover underpayment may be brought in any competent Court, which shall render its decision on such cases within fifteen days from the time the case has been submitted for decision; in appropriate instances, appeal from the decisions of courts on any action, under this Act shall be in accordance with applicable law.

This shows that the law had lodged money claims in competent courts, which the Plan sought to displace.

Section 3 of Republic Act No. 997 provides:

SEC. 3. To carry out the purposes of this Act, there is hereby created the Government Survey and Reorganization Commission, hereinafter known as the 'Commission', which shall conduct a study and investigation of the present organization and methods of operation of all departments, offices, bureaus, agencies, and instrumentalities of the Executive Branch of the Government, and determine what change or changes are necessary to accomplish the objectives set forth in subsection (a) section two of this Act.

This confines the Commission's work to the executive branch and supplies no power to create courts or shift judicial jurisdiction.

Section 4 of Republic Act No. 997 provides:

SEC. 4. To accomplish the objectives set forth in subsection (a), section two of this Act, the Commission is authorized: (1) to group, coordinate or consolidate departments, bureaus, offices, agencies, instrumentalities and functions of government; (2) to abolish departments, offices, agencies or functions which may not be necessary for the efficient of the government service, activities and functions; (3) to eliminate overlapping and duplications of services, activities and functions of the government; (4) to transfer functions, appropriations, equipment, property, records, and personnel, from one department, bureau, office, agency, or instrumentality to another; (5) to create, classify, combine, split or abolish positions; (6) to standardized salaries, materials and equipment; and (7) to do whatever is necessary and desirable to effect economy and promote efficiency in the government; Provided, however, That in the reorganization to be effected by this Act, no office or agency or function of the government shall be made to continue beyond the period authorized by law or beyond the time when it would have terminated if the reorganization had not been made.

These enumerated powers permit regrouping and consolidation but nowhere authorize the conferral of new jurisdiction on offices to be created.

Ruling

On the first issue, the Court held that Reorganization Plan No. 20-A is invalid insofar as Section 25 grants regional offices original and exclusive jurisdiction over money claims. Comparing the Plan with the Minimum Wage Law, the Court observed that under the statute money claims were brought before a competent court, while under the Plan they would go to regional offices whatever the amount demanded. The Court stressed the most striking feature of Section 25, its grant of exclusive and original jurisdiction, which, together with the Plan's repealing clause, would remove from courts of justice a power vested in them by law.

On the second issue, the Court held that Republic Act No. 997 gave the Commission no authority to grant powers and duties to offices it created which were not already granted to offices or officials of the Department of Labor. Section 3 limits reorganization to the executive branch, and Section 4 authorizes only consolidation and elimination of overlapping functions. The Court declared that Congress could not have intended to authorize the transfer of judicial jurisdiction to an executive body, since judicial powers are vested only in the Supreme Court and in such courts as the law may establish, and the Legislature may not delegate its power to create courts of justice. The Court concluded that in vesting regional offices with original and exclusive jurisdiction over money claims, the Commission overstepped the limits of its powers.

On the third issue, the Court rejected the ruling that the question of validity was waived because it had not been raised before the Labor Standards Commission. The Court held that the judgment of any court or body having no jurisdiction can be attacked at any time and in any court, and that objection to validity is not waived by failure to raise it in the body which had no jurisdiction.

Doctrine

An executive reorganization commission may regroup, consolidate, and abolish offices and functions within the executive branch, but it may not create courts of justice, take away the jurisdiction of courts, or transfer that jurisdiction to administrative offices it creates. Judicial power is vested only in the Supreme Court and in such courts as the law may establish, and the Legislature cannot delegate to an executive body its power to legislate or to create courts. A grant of original and exclusive jurisdiction over money claims to regional offices of the Department of Labor, made by a reorganization plan without statutory authority, is null and void. Finally, a judgment rendered by a body without jurisdiction may be attacked at any time and in any court, and the objection is not waived by failure to raise it before that body.

Disposition

The employers prevailed: the Court granted the petition in the Corominas case, declared the Labor Standards Commission decision null and void and enjoined its enforcement, affirmed the decisions of the Court of First Instance of Manila in the Calupitan and Cañete cases, and in the Wong Chun case set aside the regional office decision and the order dismissing the action to annul it.

Remember This

Memorize the line that an executive reorganization plan cannot create courts or transfer judicial jurisdiction, for judicial power belongs only to the Supreme Court and to such courts as the law may establish. Examiners use this case on the limits of delegated reorganization power, the separation of judicial from executive authority, and the rule that lack of jurisdiction may be raised at any time.