HALILI INN, INCORPORATED, PETITIONER, VS. CRESENCIANO B. TRAJANO, IN HIS CAPACITY AS UNDER­SECRETARY OF LABOR; RAFAEL MARCELLANA, DIOSDADO QUINQUITO, NILO LOBRIDO, SONITA MORIN …

The present petition for certiorari involves cases filed
simultaneously with the Bureau of Labor Relations and the Labor Arbiter,
wherein the petitioner questions whether the Regional Director has jurisdiction
over money claims of workers concurrent with the Labor Arbiter.

Private respondents, Rafael Marcellana, Diosdado Quinquito, Nilo
Lobrido, Sonita Morin and Nena Panganiban were roomboys and laundry women,
respectively, of petitioner Halili Inn, Inc.

Pursuant to Inspection Authority No. BDO-89-062, the Labor
Standard Enforcement Division of the Department of Labor conducted a routine
inspection of petitioner’s
establishment on August 9, 1989. As a
result of the inspection, it was discovered that petitioner committed the
following violations:

“A. LABOR STANDARDS:

1.    Under payment of daily pay of all workers;

2.    Under payment of 13th month pay;

3.    Non-payment of overtime pay;

4.    Non-payment of rest day, premium pay; and

5.    Some workers are not included in the payroll.

“B. OCCUPATIONAL
SAFETY AND HEALTH STANDARDS:

1. Failure to register establishment with this Department”^[1]

While the examination of
the record was in progress, private respondents filed a complaint
against petitioner, with the Regional Arbitration Branch No. IV, National Labor
Relations Commission (NLRC) docketed as RAB Case No. 06-09-10369-89, dated
September 15, 1989, for unfair labor practice, overtime pay, holiday pay/rest
day, violation of the 13th month pay, violation of wage law, service incentive
pay, leave pay, separation pay and for illegal dismissal.

Thereafter, petitioner likewise filed a complaint dated September
21, 1989 against private respondents for abandonment before the same Regional
Arbitration Branch docketed as RAB Case No. 06-09-10378-89. This case was, subsequently consolidated
with RAB Case No. 06-09-10369-89, before Labor Arbiter Ricardo Jureta, pursuant
to Rule V, Section 4 of the Revised NLRC Rules.

In the course of the conferences held before the Labor Arbiter it was established that
the private respondents had an outstanding loan obligation with the Social
Security System, Bacolod City, as follows:

Finally, on December 6, 1989, the
parties, “engendered by the spirit of Christmas,” agreed on an
amicable settlement. Petitioner agreed
to pay private respondents the following amounts:^[2]

In addition thereto, petitioner agreed to
assume the loan obligations of private respondents with the Social Security
System^[3]
and likewise paid the attorney’s fees of private respondents’ counsel, Atty.
Abenir Chavez, in the amount of P2,000.00.

Notwithstanding the amicable settlement between the parties,
Regional Director Carlos L. Boteros issued an Order dated February 20, 1990^[4]
in the Routine Inspection case (Inspection Authority No. BDO-89-062), ordering
petitioner to pay respondents FIFTY THREE THOUSAND NINE HUNDRED NINETY EIGHT
PESOS AND 36/100(P53,998.36), broken down as follows:

On March 27, 1990, private respondents filed a Motion for a Writ
of Execution of the above Order with the Regional Director of Regional Office No. VI, Iloilo
City, which motion was granted and the writ issued on April 3, 1990.^[5]
In the Sheriff’s Return of Service, it was found that the parties had amicably
settled their cases resulting in the dismissal of RAB Case No. 06-09­-10378-89
and RAB Case No. 06-09-10369-89, which involved identical claims and the same
parties as in the routine inspection case. He thereby recommends that the routine inspection case be considered
closed and terminated.^[6]

Hence, in an order dated April 24, 1990, the Regional Director,
relying on the Sheriff’s Return that the Writ was satisfied issued the following
Order, to wit:

“On 20 February 1990, an Order was issued by this Office in
favor of the five (5) workers of subject-establishment operating under the name
or style Halili Inn Hotel by virtue of a routine inspection conducted therein
on 9 August 1989.

No appeal having been perfected within the reglementary period, a
Writ of Execution was issued upon motion of complainants, thru counsel. In the course of the service of said Writ,
the assigned Sheriff was informed that the case had been settled amicably
before the NLRC where other cases between the same parties and same causes of
action were filed, and docketed as RAB Cases Nos. 06-09-10369-89 and
06-09-10378-89. Consequent thereto, the
NLRC, Bacolod City, dismissed the said cases in its Order dated 28 December
1989.

Pertinent portion of the said amicable settlement showed:

‘RECEIVED from Ramon Halili of Halili Inn, Bacolod City, the
corresponding amount opposite their names, to wit:

as full payment of all benefits claimed by
us as specifically stated in our complaint entitled ‘Rafael Marcellana et al.
vs. Halili Inn/Ramon Halili’ and docketed as RAB VI Case No. 06-09-10369-89
relative to our employment with Halili Inn under Ramon Halili.

Done this 6th day of December 1989, Bacolod City.’

In view of all the foregoing, the assigned Sheriff returned the
Writ ‘Satisfied.’

WHEREFORE, premises considered, let this case be as it is hereby, ordered closed and
terminated from the calendar of cases of this Office.

SO ORDERED.”^[7]

Private respondents moved for a reconsideration of the
aforementioned Order, which was treated in the nature of an appeal and indorsed
to the Office of the Secretary of Labor.^[8]

Finding merit in the motion, the Order of April 24, 1990 was set
aside in the Order of October 16, 1990 by Undersecretary Cresenciano B.
Trajano, the dispositive portion of which We quote:

“WHEREFORE, the Order dated April 24, 1990, is hereby SET
ASIDE and the Order dated February 20, 1990 is hereby REINSTATED with the
modification that the Three Thousand Pesos (P3,000.00) received each by the
complainants in the National Labor Relations Commission be deducted from their
respective individual monetary award.” (Rollo, p. 31)

The Order of October 16, 1990, however, was subsequently modified
the Order of April 1, 1991 upon petitioner’s motion for reconsideration in that
the amount assumed by petitioner for the calamity loans of respondents were
deducted from their individual awards.^[9]

Petitioner claims that it was its understanding that the amicable
settlement forged between Halili Inn, Inc. and private respondents included the
Routine Inspection Authority No. BDO-89-062 and for that reason it did not
bother to question the Order dated February 20, 1990 of the Regional
Director. Petitioner in taking
exception to its failure to institute an appeal despite ample opportunities
afforded to it, explains:

“We take note further, of the Comment of the Honorable
Solicitor General that petitioner did not question the report and
recommendation of the Labor Officer of the Regional Director’s Office. We beg to disagree, the truth being that on
August 15, 1989, petitioner with respondent and
counsels were present when petitioner questions (sic) the finding and contest
the Routine Inspection, however, we were persuaded to defer the said action,
considering that petitioner was likewise negotiating for the amicable
settlement of the same.

“It is obvious that petitioner could have availed of the
opportunity to appeal the findings of the Regional Director’s decision before
the Secretary of Labor were it not for the gentlemen’s agreement of the parties
and counsels that they are not interested in pursuing the case, since
negotiations before the National Labor Relations Commission are going on and
conclusion of an amicable settlement is only a matter of time. Unfortunately, after the amicable settlement,
petitioner’s counsel taking his word for it,
did not bother to file pleadings before the Regional Director.^[10]

The issue then in the present case is whether the Orders dated
October 16, 1990 and April 1, 1991 of Undersecretary Trajano, reinstating and
modifying the order of February 20, 1990 of the Regional Director are valid,
considering that they awarded amounts in excess of P5,000.00 for each
employee. There are three (3) pertinent
provisions of the Labor Code
which address this issue, to wit: Article 128 on the visitorial and
enforcement power of the Secretary of Labor; Article 129 on Recovery of wages,
simple money claims and other benefits; and Article 217 on the Jurisdiction of
the Labor Arbiters, and the Commission.^[11]

The leading case on the question of the extent of the
jurisdiction of the Regional Director of the Department of Labor and the Labor
Arbiter in connection with the money claims of employee, is the case of Servando’s, Inc. v. Secretary of Labor and
Employment,^[12] wherein We discussed the interplay of
the foregoing provisions. We said:

“A careful consideration of the above-quoted 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.”

The Court went further to say that such construction is
reasonable because:

x          x          x

“2. Article 129 of the Labor Code expressly provides that ‘upon complaint of
any interested party,’ the Regional Director (and, consequently, the Secretary
of Labor to whom appeals from the Regional Director are taken) is empowered to
hear and decide simple money claims, i.e. those that do not exceed P5,000.00
for each employee, employing for this purpose a summary procedure. If Article 128(b) of the Labor Code were to
be construed as empowering the Secretary of Labor, under his visitorial power,
to hear and decide all types or employee’s claims, including those exceeding
P5,000.00 for each employee, employing for this purpose a summary procedure,
then, Article 129 (limiting the Regional Director’s jurisdiction to a claim not
exceeding P5,000.00) becomes a useless surplusage in the Labor code.”^[13]

The above doctrine has been reiterated in several other cases^[14]
and is still the governing case law on the matter. As We said in the case of Red v. Coconut
Products, Ltd. v. Leogardo,
Jr.^[15]:

“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
jurisdiction 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.^[16]

We do not find any reason to deviate from these well settled
doctrines, particularly so because in this case, the Regional Director awarded
sums exceeding P5,000.00 to each of the private respondents. The Order of April 24, 1990 issued by the
Regional Director, setting aside his earlier Order dated February 20, 1990 was
properly issued and should not have been disturbed. Neither can there be execution of said Order (February 20, 1990),
it being beyond the competence of the Regional Director to award employees’
claims exceeding P5,000.00.

WHEREFORE, the Orders of the Undersecretary of Labor
Cresenciano B. Trajano, dated October 16, 1990 and April 1, 1991 are SET ASIDE,
and the Order of April 24, 1990 of the Regional Director is hereby REINSTATED.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Regalado, JJ., concur.

^[1]
Annex “A” of the Petition; Rollo, p. 19.

^[2]
Original Records, p. 48.

^[3]
Original Records, p. 37.

^[4]
Rollo, p. 19.

^[5]
Original Records, p. 53.

^[6]
Original Records, p. 55.

^[7]
Annex “F” of the Petition; Rollo, p. 27.

^[8]
Original Records, p. 74.

^[9]
Original Records, p. 137.

^[10]
Petitioner’s Reply, p. 6.

^[11]
“ART. 128. Visitorial and
enforcement power -­- (a) The Secretary of Labor or his duly authorized
representatives, including labor regulation officers, shall have access to
employers records and premises at any time or the day or night whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee and investigate any fact,
condition or matter which may be necessary to determine violations or which may
aid in the enforcement of this Code and of any labor law, wage order or rules
and regulations issued pursuant thereto.

(b) The
provisions of Article 217 of this Code to the contrary notwithstanding and in
cases where the relationship of employer-employee still exists, the Minister of
Labor and Employment or his duly authorized representatives shall have the
power to order and administer, after due notice and hearing, compliance with
the labor standards provisions of this Code and other labor legislation based
on the findings of labor regulation officers or industrial safety engineers
made in the course of inspection, and to 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 regulation officer and raises
issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection.

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 does not exceed five thousand pesos (P5,000.00). 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 . . . the following
cases involving all workers, whether agricultural or non-agricultural:

x x   x

6. Except
claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations including
those of persons, in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.

^[12]
G.R. No. 85840, 198 SCRA 156 (1991).

^[13]
Id., at pp. 161-162.

^[14]
Bulldog Security Agency v. Undersecretary of Labor, G.R. No. 93794, July
17, 1991, (Minute Resolution); Heva v. de la Serna, G.R. No. 90741,
September 11, 1991, (Minute Resolution); 5 D’s Liner v. DOLE, G.R. No.
96705, Oct. 2, 1991, (Minute Resolution); Baritua v. Secretary of the
Department of Labor and Employment, 204 SCRA 332; Midland Insurance Corporation
v. Hon. Secretary of Labor and Employment, G.R. No. 95492, 15 Oct. 92.

^[15]
G.R. No. 72247, 208 SCRA 25 (1992).

^[16]
208 SCRA, at 31.