RED V COCONUT PRODUCTS, LTD., PETITIONER, VS. HON. VICENTE LEOGARDO, JR., IN HIS CAPACITY AS DEPUTY MINISTER OF LABOR, AND FREE WORKERS OF THE COCONUT INDUSTRY – UNITED LUMBER A…

Petitioner is a private corporation duly organized and existing
under Philippine laws.  It is engaged in
coconut processing.  On the other hand,
private respondent Free Workers of the Coconut Industry – United Lumber and
General Workers of the Philippines
(FWCI-ULGWP) is a labor organization recognized by petitioner as the sole
bargaining representative of its rank and file employees at its plant at Talairon, Oroquieta
City.

From April 1, 1980
up to October 1, 1983, the
rank and file employees of petitioner received wages and living allowances in
the following amounts:

DETAIL OF WAGE
RATES AND

  LIVING ALLOWANCES

(p. 88, Record; p. 86, Rollo)

On October 18, 1983, private respondent labor union, through its
president, filed a letter-complaint with the Regional Office No. 10 of the
Ministry of Labor & Employment (MOLE) at Cagayan
de Oro City, alleging that petitioner company had not
been complying with Wage Order No. 2 which provided for wage increases
effective on July 6, 1983 and October 1, 1983 and had failed to provide health
and safety devices in its premises as well as to its workers (pp. 4-5, Record).

Upon order of the Regional Director, the Labor Standards and
Welfare Officers conducted an on-the-spot inspection both of the payrolls and
the premises of petitioner company.  Subsequently,
said officers submitted their report dated January 5, 1984, (p. 6, Record) the
pertinent portion of which reads:

“On the inspection of the workplace, the following safety
equipments were found wanting, to wit:

I.   
Hauler Department:                    V.   Electric Grinder:

a) Safety shoes                                 a) Goggles-permanent

b) Gloves

II. 
Sheller Department:                     VI.  Paring Dryer Department:

a) Goggles                                         a) Blowers

b) Safety shoes

III.  Parer Department:                        VII. Packing Department:

a) Rubber Boots                               a) Additional Blowers

IV.  Nut Checkers:                            VIII. Engineering Department:

a)
Gloves                                         
    a)
Safety Shoes

b) Gloves

c) Goggles

“On the examination of the payrolls, it appears that there was
non-compliance of Wage Order No. 2 which took effect on July 6, 1983, partially or totally.  As computed from July 6, 1983 to October 19,
1983 =

As to Wage/

Salary    ……………………. .    P 
54,591.85

As
to ECOLA  ……………………. .         51,436,02

TOTAL    …………………… .    P106,027.87

“The management contended that they are not liable to the
increase provided under Wage Order No. 2 because they have been paying their
workers the Minimum Wage of P18.02 prior to the issuance of Wage Order No.
2.  As examined, the worker’s wage ranges
from P18.02 and up from July 6, 1983 up to date.

“IN VIEW OF THE FOREGOING, it is
respectfully forwarded to the Honorable Regional Director with the
recommendation that an ORDER be issued directing RED V Coconut Products to pay
their workers the total sum of ONE HUNDRED SIX THOUSAND TWENTY SEVEN and 87/100
(P106,027.87) representing Wages/Salaries and Emergency Cost of Living
Allowances as reflected in the payrolls of from July 6, 1983 to October 19,
1983, inclusive.  And/or whatever action
he may deem legal under the premises.”

(pp. 87-88, Rollo)

Thereafter, meetings were called by the Labor Conciliators for
possible conciliation but the parties failed to arrive at a compromise
agreement.

In their position papers, respondent labor union claimed that
petitioner company had not complied with Wage Order No. 2, and prayed that
petitioner company be ordered to pay the employees the amount of P106,027.87
representing deficiencies in their wages and ECOLA covering the period from
July 6, 1983 to October 19, 1983 as found by the Labor Standard Inspectors and
to comply with the Labor Inspector’s Report dated January 5, 1984 regarding
Health and Safety provisions for the company premises and its workers.  (Position Paper of respondent Labor Union,
pp. 76-80, Record).  On the other hand,
petitioner company alleged that the Regional Director had no jurisdiction over
the claims for unpaid wages and allowances: 
that it was not liable to pay, on across-the-board basis, the P1.00 per
day increase in the statutory minimum wage granted under Wage Order No. 2; that
it had already complied with the P1.00 (as of July 6, 1983) and P1.50 (as of
October 1, 1983) increase in the living allowances mandated by the same wage;
and that it was not required by the Occupational Safety and Health Standard to
provide its workers and premises with the safety equipments mentioned in the
report of the Labor Standard Inspectors (Position Paper of petitioner, pp.
89-96, Record).

On June 4, 1984, Assistant Regional Director Jude T. Bontol, issued an order directing petitioner company as
follows:

“PREMISES CONSIDERED, Red V Coconut Products, Ltd. is hereby
ordered to provide/pay the following:

‘a)   to provide the workers and the work place
with the safety equipment above-enumerated;

‘b)  to pay the workers/complainants the total sum
of FIFTY FOUR THOUSAND FIVE  HUNDRED
NINETY ONE PESOS AND 85/100 (P54,591.85), representing the  efficiency in wages; and

‘c)  to pay the workers the total sum of FIFTY ONE
THOUSAND FOUR HUNDRED  THIRTY-SIX PESOS
AND 02/100 (P51,436.02) representing deficiency in  allowances, thru this office within ten (10)
days from receipt of this order.

“SO ORDERED.” (pp. 89-90, Rollo)

The said order was affirmed on appeal by public respondent Deputy
Minister of the MOLE, in his Order dated April 18, 1985.  The pertinent portion of the said order
reads:

“After a careful review of the entire record of the case,
taking into consideration the points raised by respondent; we find no
compelling reason to warrant a modification or reversal of the disputed Order,
it appearing that the same had been amply passed upon in the said Order.

“WHEREFORE, the Order dated June 4, 1984 should be, as it is
hereby, affirmed and the subject appeal is dismissed for lack of merit.

“SO ORDERED.” (p. 90, Rollo)

Petitioner’s motion for reconsideration was denied, hence, the
instant petition with a prayer for the issuance of a writ of preliminary
injunction and/or restraining order. 
Petitioner contends that:

I

The public respondent acted without
jurisdiction in passing upon the money claims raised in the instant case, the
same being within the original and exclusive jurisdiction of the National Labor
Relations Commission.

II

The public respondent grossly
misinterpreted Wage Order No. 2.  While
admitting that petitioner was already paying wages beyond the minimum level set
by the order, he nonetheless found its payment of the additional P1.00/day
provided therein to be mandatory.  Corrollarily, while admitting that the P1.50 and P1.00
additional daily allowances set by the Order were paid to petitioner’s
employees, he nonetheless directed the payment of an additional P0.60 daily
allegedly pursuant to the Order when the same nowhere provides therefor.

III

The public respondent
committed grave abuse of discretion in arbitrarily mandating the installation
of various equipment and paraphernalia by petitioner without giving factual nor
legal basis therefor, thereby denying petitioner’s
constitutional right to due process and the equal protection of the laws.

(pp. 10-11, Rollo)

The Court’s recent resolution in the case of Servando’s
Incorporated vs. the Secretary of Labor and Employment, (G.R. No. 85840, June
5, 1991, 198 SCRA 156) reiterated in Aboitiz Shipping
Corporation vs. de la Serna, (G.R. No. 88538, July 25, 1991, 199 SCRA 568) is
controlling in the present case, particularly on the issue of jurisdictions of
Labor Arbiters and Regional Directors over money claims of employees against
employers.  In these said cases, the Court
ruled that the original and exclusive jurisdiction to hear and decide
employee’s money claims arising from employer-employee relations exceeding the
aggregate amount of P5,000 for each employee is vested in the Labor
Arbiter (Art. 217 (a), (b), Labor Code as amended) and this is confirmed by the
provisions of Art. 129 of the same Code, which excludes from the jurisdiction
of the Regional Director or any hearing officer of the Department of Labor and
Employment (DOLE) the power to hear and decide claims of employees arising from
employer-employee relations exceeding the amount of P5,000.00 for each
employee.

In the case at bar, the aggregate claim
of the workers is P106,027.87, but the claim of each of the more than thirty
(30) workers does not exceed P5,000.00. 
This being the case, the jurisdiction to decide the claim properly
belongs to the Regional Director.  The
only instance when the Regional Director may be divested of such jurisdiction
is when under Art. 128 (b) of the Labor Code, the following three (3)
circumstances concur, to wit:

(a)  the petitioner
(employer) contests the findings of the labor regulations officer and raises
issues thereon;

(b)  that in order to resolve
such issue, there is a need to examine evidentiary matters; and

(c)  that such matters are not verifiable in the
normal course of inspection.  (SSK Parts
Corp. v. Camas, G.R. No. 85934, Jan. 30, 1990, 181 SCRA 675)

The Regional Director required the payment of petitioner of a one
peso (P1.00) across-the-board increase to its employees.  Petitioner contended that in so doing, the
Regional Director misinterpreted and misapplied Wage Order No. 2 because even
before the passage of the said order, the minimum wage obtaining in
petitioner’s company was already more than the minimum wage level set by Wage
Order No. 2.

On the matter of living allowances, it is admitted that the
petitioner did actually give the required P1.50 and P1.00 cost of living
allowance provided for by Wage Order No. 2. 
What the Regional Director maintains, however, is that since the total
amount of allowances is less by P0.60 if we compare the same with the aggregate
sum of allowance provided for by the various Presidential issuances, the proper
implementation of Wage Order No. 2 must require petitioner to grant the
difference.  For its part, petitioner
argues that what the Wage Order mandates is the grant of an additional P1.50
and P1.00 daily in living allowances effective July 6, 1983 and October 1,
1983, respectively, and nothing more.

In his Comment to the Petition, the Solicitor General opined that
the Regional Director and public respondent have no jurisdiction over the
subject money claims since petitioner contests the findings of the Labor
Standard Inspectors and presents intricate questions of law (p. 12, Comment; p.
95, Rollo).

We agree with the Solicitor General.  The case before Us clearly falls within the
exception.  (Article 128 (b) of the Labor
Code).  The issue presented by petitioner
– how Wage Order No. 2 should be interpreted and applied, will necessitate the
examination of evidentiary matters not verifiable in the normal course of
inspection.

We, however, sustain the action of the Regional Director and the
public respondent in ordering petitioner to provide the safety equipment and
paraphernalia mentioned in the report of the labor inspectors.

The contention of petitioner that there was no finding by the
labor inspectors or the Assistant Regional Director as to the hazardous nature
of its business is untenable.

The labor inspectors conducted an on-the-spot inspection of the
premises of petitioner and actually discovered that various safety equipment as
enumerated in their report are wanting. 
This implies that the workers are exposed to hazards necessitating the
installation of those equipment and paraphernalia.  This is within the scope of the visitorial and enforcement power of the MOLE under Sec. 1,
Rule X, Book III of the Rules and Regulations Implementing the Labor Code as
well as Policy Instruction No. 6.

WHEREFORE, the assailed Order is SET ASIDE in so far as it
makes an award for alleged deficiency in wages and allowances, the Regional
Director not having jurisdiction to make the same, but AFFIRMED insofar as it
requires installation or provision of health and safety devices in petitioner’s
premises.  The claim for deficiency in
wages and allowances is REFERRED to the Labor Arbiter for proper proceedings.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera,
Gutierrez, Jr., Cruz, Padilla, Bidin, Grino-Aquino, Medialdea, Regalado, Davide, Jr., Romero and Nocon, JJ., concur.

Feliciano and Bellosillo, JJ., on leave.