MILAN V. NLRC
Petition: Petition for Review of CA Decision
Ponente: LEONEN
FACTS:
1. Milan et.al are Solid Mills, Inc.’s (Solid Mills) employees. They are
represented by the National Federation of Labor Unions (NAFLU), their
collective bargaining agent.
2. As Solid Mills’ employees, Milan et.al. and their families were allowed
to occupy SMI Village, a property owned by Solid Mills. According to
Solid Mills, this was “[o]ut of liberality and for the convenience of its
employees . . . [and] on the condition that the employees would vacate
the premises anytime the Company deems fit.”
3. In September 2003, Milan et.al were informed that effective October 10,
2003, Solid Mills would cease its operations due to serious business
losses. NAFLU recognized Solid Mills’ closure due to serious business
losses in the memorandum of agreement dated September 1, 2003.
The memorandum of agreement provided for Solid Mills’ grant of
separation pay less accountabilities, accrued sick leave benefits,
vacation leave benefits, and 13th month pay to the employees. The
agreement was entered into with full knowledge by the parties of their
rights under the law and they bound themselves not to conduct any
concerted action of whatsoever kind, otherwise the grant of financial
assistance as discussed above will be withheld.
4. Solid Mills filed its Department of Labor and Employment termination
report on September 2, 2003.
5. Later, Solid Mills, through Alfredo Jingco, sent to Milan et.al individual
notices to vacate SMI Village.
6. Milan et.al. were no longer allowed to report for work by October 10,
2003. They were required to sign a memorandum of agreement with
release and quitclaim before their vacation and sick leave benefits, 13th
month pay, and separation pay would be released. Employees who
signed the memorandum of agreement were considered to have agreed
to vacate SMI Village, and to the demolition of the constructed houses
inside as condition for the release of their termination benefits and
separation pay. Milan et.al. refused to sign the documents and
demanded to be paid their benefits and separation pay.
7. Hence, they filed complaints before the Labor Arbiter for alleged non-
payment of separation pay, accrued sick and vacation leaves, and 13th
month pay. They argued that their accrued benefits and separation pay
should not be withheld because their payment is based on company
policy and practice. Moreover, the 13th month pay is based on law,
specifically, Presidential Decree No. 851. Their possession of Solid
Mills property is not an accountability that is subject to clearance
procedures. They had already turned over to Solid Mills their uniforms
and equipment when Solid Mills ceased operations.
8. On the other hand, Solid Mills argued that Milan et.al.’s complaint was
premature because they had not vacated its property.
9. The Labor Arbiter ruled in favor of Milan et.al. According to the Labor
Arbiter, Solid Mills illegally withheld petitioners’ benefits and separation
pay. The memorandum of agreement dated September 1, 2003 stated
no condition to the effect that petitioners must vacate Solid Mills’
property before their benefits could be given to them. Milan et.al.’s
possession should not be construed as their“accountabilities” that must
be cleared first before the release of benefits. er.
10. Silodd Mills appealed to the National Labor Relations Commission. The
National Labor Relations Commission affirmed part of the decision but
reversed and set aside another part and decided that Milan et.al.’s
monetary claims in the form of separation pay, accrued 13th month pay
for 2003, accrued vacation and sick leave pays are held in abeyance
pending compliance of their accountabilities to respondent company by
turning over the subject lots they respectively occupy at SMI Village
Sucat Muntinlupa City, Metro Manila to Solid Mills. Linga and four other
were already paid their respective separation pays and benefits.
Meanwhile, Teodora Mahilom already retired long before Solid Mills’
closure. She was already given her retirement benefits.
11. The National Labor Relations Commission ruled that because of
petitioners’ failure to vacate Solid Mills’ property, Solid Mills was justified
in withholding their benefits and separation pay.35 Solid Mills granted
the petitioners the privilege to occupy its property on account of
petitioners’ employment.36 It had the prerogative to terminate such
privilege.37 The termination of Solid Mills and petitioners’ employer-
employee relationship made it incumbent upon petitioners to turn over
the property to Solid Mills.
12. The Court of Appeals ruled that Solid Mills’ act of allowing its
employees to make temporary dwellings in its property was a liberality
on its part. It may be revoked any time at its discretion.
ISSUE: Whether or not an employer is allowed to withhold terminal pay and
benefits pending the employee’s return of its properties
RULING/RATIO: Yes.
The fact that majority of NAFLU’s members were not occupants of
respondent Solid Mills’ property is evidence that possession of the property
was not contemplated in the agreement. “Accountabilities” should be
interpreted to refer only to accountabilities that were incurred by petitioners
while they were performing their duties as employees at the worksite.
Moreover, applicable laws, company practice, or policies do not provide that
13th month pay, and sick and vacation leave pay benefits, may be withheld
pending satisfaction of liabilities by the employee.
Requiring clearance before the release of last payments to the employee is
a standard procedure among employers, whether public or
private. Clearance procedures are instituted to ensure that the properties,
real or personal, belonging to the employer but are in the possession of the
separated employee, are returned to the employer before the employee’s
departure.
As a general rule, employers are prohibited from withholding wages from
employees (Art. 116, Labor Code). The Labor Code also prohibits the
elimination or diminution of benefits (Art. 100, Labor Code).
However, our law supports the employers’ institution of clearance procedures
before the release of wages. As an exception to the general rule that wages
may not be withheld and benefits may not be diminished, the Labor Code
provides: Art. 113. Wage deduction. No employer, in his own behalf or in
behalf of any person, shall make any deduction from the wages of his
employees, except:
1. In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for the
amount paid by him as premium on the insurance;
2. For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in
writing by the individual worker concerned; and
3. In cases where the employer is authorized by law or regulations
issued by the Secretary of Labor and Employment.
The Civil Code provides that the employer is authorized to withhold wages
for debts due: Article 1706. Withholding of the wages, except for a debt due,
shall not be made by the employer. “Debt” in this case refers to any obligation
due from the employee to the employer. It includes any accountability that
the employee may have to the employer. There is no reason to limit its scope
to uniforms and equipment, as petitioners would argue.
More importantly, respondent Solid Mills and NAFLU, the union representing
petitioners, agreed that the release of petitioners’ benefits shall be “less
accountabilities.” Accountabilities of employees are personal. They need not
be uniform among all employees in order to be included in accountabilities
incurred by virtue of an employer-employee relationship. Milan et.al. do not
categorically deny Solid Mills’ ownership of the property, and they do not
claim superior right to it. What can be gathered from the findings of the Labor
Arbiter, National Labor Relations Commission, and the Court of Appeals is
that Solid Mills allowed the use of its property for the benefit of Milan et.al. as
its employees. Milan et.al were merely allowed to possess and use it out of
Solid Mills’ liberality. The employer may, therefore, demand the property at
will.
DISPOSITIVE: Solid Mills won.
DOCTRINE: An employer is allowed to withhold terminal pay and benefits
pending the employee’s return of its properties. As a general rule, No
employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees. The following cases are
considered exceptions:
1. In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for
the amount paid by him as premium on the insurance;
2. For union dues, in cases where the right of the worker or his union
to check-off has been recognized by the employer or authorized
in writing by the individual worker concerned; and
3. In cases where the employer is authorized by law or regulations
issued by the Secretary of Labor and Employment.
Special Steel Products, Inc. v. Villareal can withhold his 13th month pay and other benefits. In the
GR No. 143304, 8 July 2004 present case, set-off or legal compensation cannot take place
between petitioner and respondent So because they are not
FACTS: mutually creditor and debtor of each other.
o A careful reading of the Memorandum reveals that the “lump
o Petitioner Special Steels Products, Inc. is a domestic sum compensation of not less than US $6,000.00 will have to
corporation engaged in the business of importation, sale and be refunded” by each trainee to BOHLER, not to petitioner.
marketing of BOHLER steel products. Respondent Villareal
and So, worked for petitioner as assistant sales manager and o In fine, we rule that petitioner has no legal right to withhold
salesman, respectively. respondents’ 13th month pay and other benefits to
o Sometime in May 1993, respondent Villareal obtained a car recompense for whatever amount it paid as security for
loan from Bank of Commerce, with petitioner as surety, as respondent Villareal’s car loan; and for the expenses incurred
shown by a continuing suretyship agreement and promissory by respondent So in his training abroad.
note. In 1997, respondent Villareal resigned and thereafter
joined another company.
o Sometime in August 1994, petitioner “sponsored” respondent
So to attend a training course in Austria conducted by
BOHLER. This training was reward for respondent So’s
outstanding sales performances. When respondent returned
9 months thereafter, petitioner directed him to sign a
memorandum providing that BOHLER requires trainees from
Austria to continue working with petitioner for a period of 3
years after the training. Otherwise, each training shall refund
to BOHLER the training expenses by way of set-off or
compensation. After 2 years and 4 months, respondent So
resigned from petitioner.
o Immediately, petitioner order respondents to render an
accounting of its various Christmas giveaways they received.
These were intended for distribution to petitioner’s customer.
o In protest, respondents demanded from petitioner payment of
their separation benefits, commissions, vacation and sick
leave benefits, and proportionate 13th month. But petitioner
refused, and instead, withheld the 13th month pay and other
benefits.
o Respondents filed a complaint with the LA for payment of their
monetary benefits.
o LA ruled in favor of respondents, ordering petitioner-company
and its president jointly and severally liable to pay the
monetary benefits of Villareal and So
o On appeal, NLRC affirmed the LA decision, but exempted the
petitioner’s president from any liability, which was affirmed by
the CA. Hence, this petition.
o Petitioner contends that as a guarantor, it could legally
withhold respondent Villareal’s monetary benefits as a
preliminary remedy pursuant to Art. 2071 of the Civil Code. As
to respondent So, petitioner citing Article 113 of the Labor
Code, in relation to Art. 1706 of the Civil Code, maintains that
it could withhold his monetary benefits being authorized by the
memorandum he signed.

ISSUE: Whether the petitioner has legal authority to withhold

respondent’s monetary benefits

HELD: NO

RATIO:

o What an employee has worked for, his employer must pay.

Thus, an employer cannot simply refuse to pay the wages or
benefits of its employee because he has either defaulted in
paying a loan guaranteed by his employer; or violated their
memorandum of agreement; or failed to render an accounting
of his employer’s property.

o There is no guaranty involved herein, and therefore Art. 2071

does not apply. The contract executed by petitioner and
respondent Villareal (in favor of the Bank of Commerce) is a
contract of surety. In fact, it is denominated as a “continuing
suretyship agreement.” Hence, petitioner could not just
unilaterally withhold respondent’s wages or benefits as a
preliminary remedy under Article 2071. It must file an action
against respondent Villareal. Thus, the Appellate Court aptly
ruled that petitioner „may only protect its right as surety by
instituting an “action to demand a security.”

o As to respondent So, petitioner maintains that there can be a

set-off or legal compensation between them. Consequently, it
NIÑ A JEWELRY MANUFACTURING OF METAL ARTS, INC. vs. Article 114 states that generally, deposits for loss or damages are not
MONTECILLO allowed except in cases where the employer is engaged in such trades,
occupations or business where the practice of making deposits is a
recognized one, or is necessary or desirable as determined by the
G.R. No. 188169. November 28, 2011.
Secretary of Labor in appropriate rules or regulations.

FACTS:
While the petitioners are not absolutely precluded from
imposing the new policy, they can only do so upon compliance with the
Madeline Montecillo and Liza Trinidad were first employed as requirements of the law. In other words, the petitioners should first
goldsmiths by the petitioner Nina ̃ Jewelry Manufacturing of Metal Arts, establish that the making of deductions from the salaries is authorized
Inc. in 1996 and 1994, respectively. Madeline's weekly rate was by law, or regulations issued by the Secretary of Labor. Further, the
P1,500.00 while Liza's was P2,500.00. Taking into consideration the posting of cash bonds should be proven as a recognized practice in the
incidents of theft involving goldsmiths in Nina ̃ Jewelry's employ, it jewelry manufacturing business, or alternatively, the petitioners should
imposed a policy for goldsmiths requiring them to post cash bonds or seek for the determination by the Secretary of Labor through the
deposits in varying amounts but in no case exceeding 15% of the latter's issuance of appropriate rules and regulations that the policy the former
salaries per week. The deposits were intended to answer for any loss or seeks to implement is necessary or desirable in the conduct of business.
damage which Nina ̃ Jewelry may sustain by reason of the goldsmiths' The petitioners failed in this respect. It bears stressing that without
fault or negligence in handling the gold entrusted to them. Niña Jewelry proofs that requiring deposits and effecting deductions are recognized
alleged that the goldsmiths were given the option not to post deposits, practices, or without securing the Secretary of Labor's determination of
but to sign authorizations allowing the former to deduct from the latter's the necessity or desirability of the same, the imposition of new policies
salaries amounts not exceeding 15% of their take home pay should it be relative to deductions and deposits can be made subject to abuse by the
found that they lost the gold entrusted to them. The respondents claimed employers. This is not what the law intends.
otherwise insisting that Ninã Jewelry left the goldsmiths with no option
but to post the deposits. The respondents alleged that they were
constructively dismissed by Niña Jewelry as their continued
employments were made dependent on their readiness to post the
required deposits. Nina ̃ Jewelry averred that on August 14, 2004, the
respondents no longer reported for work and signified their defiance
against the new policy which at that point had not even been
implemented yet.The respondents filed against Nina ̃ Jewelry complaints
for illegal dismissal seeking reinstatement and payment of backwages,
attorney's fees and 13th month pay.

Labor Arbiter Jose Gutierrez (LA Gutierrez) dismissed the

respondents' complaints for lack of merit but ordered Niña Jewelry to
pay Madeline the sum of P3,750.00, and Liza, P6,250.00, representing
their proportionate entitlements to 13th month pay for the year 2004. The
respondents filed an appeal before the NLRC which affirmed LA
Gutierrez's dismissal of the amended complaints but deleted the award
of 13th month pay based on findings that the former had contracted
unpaid individual loans from Niña Jewelry. The respondents then filed a
Petition for Certiorari before the CA where the appellate court reversed
the findings of the LA and the NLRC.

ISSUE:

Whether or not the petitioner’s policy of requiring its employee-

goldsmiths to post cash bonds or deposits is valid.

SC RULING:

The petition is partly meritorious.

In view of the foregoing, we hold that no dismissal,

constructive or otherwise, occurred. The findings of the NLRC and the
LA that it was the respondents who stopped reporting for work are
supported by substantial evidence. Hence, the CA erred when it re-
evaluated the parties' respective evidence and granted the petition filed
before it. However, we agree with the CA that it is baseless for Niña
Jewelry to impose its new policy upon the goldsmiths under its employ
without first complying with the strict requirements of the law.

It was the respondents who merely stopped reporting for work.

While it is conceded that the new policy will impose an additional burden
on the part of the respondents, it was not intended to result in their
demotion.

On the other hand, it is important to note that Article 113 of

the Labor Code is clear that there are only three exceptions to the
general rule that no deductions from the employees' salaries can be
made. The exception which finds application in the instant petition is in
cases where the employer is authorized by law or regulations issued by
the Secretary of Labor to effect the deductions. On the other hand,
C. Planas Commercial vs. NLRC establishment is regularly employing not more than ten (10) workers and
had applied for exemptions with and as determined by the appropriate
Regional Board in accordance with the applicable rules and regulations
G.R. No. 144619; November 11, 2005
issued by the Commission.

FACTS:

In September 1993, Morente, Allauigan and Ofialda and

others filed a complaint for underpayment of wages, non-payment of
overtime pay, holiday pay, service incentive leave pay, and premium pay
for rest day and holiday and night shift differential against petitioners in
the Arbitration Branch of NLRC. It alleged that Cohu is engaged in the
business of wholesale of plastic products and fruits of different kinds with
more than 24 employees. Respondents were hired on January 1990,
May 1990 and July 19991 as laborers and were paid below the minimum
wage for the past 3 years. They were required to work for more than 8
hours a day and never enjoyed the minimum benefits. Petitioners filed
their comment stating that the respondents were their helpers.

The Labor Arbiter rendered a decision dismissing the money

claims. Respondents filed an appeal with the NLRC where it granted the
money claims of Ofialda, Morente and Allaguian. Petitioners appealed
with the CA but it was denied. It said that the company having claimed
of exemption of the coverage of the minimum wage shall have the
burden of proof to the claim.

In the present petition, the Petitioners insist that C. Planas

Commercial is a retail establishment principally engaged in the sale of
plastic products and fruits to the customers for personal use, thus
exempted from the application of the minimum wage law; that it merely
leases and occupies a stall in the Divisoria Market and the level of its
business activity requires and sustains only less than ten employees at
a time. Petitioners contend that private respondents were paid over and
above the minimum wage required for a retail establishment, thus the
Labor Arbiter is correct in ruling that private respondents’ claim for
underpayment has no factual and legal basis. Petitioners claim that
since private respondents alleged that petitioners employed 24 workers,
it was incumbent upon them to prove such allegation which private
respondents failed to do.

ISSUE:

Whether or not petitioner is exempted from the application of minimum

wage law.

RULING:

The contention of the petitioners that they are exempted by

the law must be proven. The petitioners have not successfully shown
that they had applied for the exemption.

R.A. No. 6727 known as the Wage Rationalization Act

provides for the statutory minimum wage rate of all workers and
employees in the private sector. Section 4 of the Act provides for
exemption from the coverage, thus: Sec. 4. (c) Exempted from the
provisions of this Act are household or domestic helpers and persons
employed in the personal service of another, including family drivers.
Also, retail/service establishments regularly employing not more than
ten (10) workers may be exempted from the applicability of this Act upon
application with and as determined by the appropriate Regional Board
in accordance with the applicable rules and regulations issued by the
Commission. Whenever an application for exemption has been duly filed
with the appropriate Regional Board, action on any complaint for alleged
non-compliance with this Act shall be deferred pending resolution of the
application for exemption by the appropriate Regional Board.

In the event that applications for exemptions are not granted,

employees shall receive the appropriate compensation due them as
provided for by this Act plus interest of one percent (1%) per month
retroactive to the effectivity of this Act.

Clearly, for a retail/service establishment to be exempted from

the coverage of the minimum wage law, it must be shown that the
Bankard Employees Union vs. NLRC Put differently, the entry of new employees to the company
ipso facto places them under any of the levels mentioned in the new
salary scale which private respondent adopted retroactive to April 1,
G.R. No. 140689; February 17, 2004
1993. While seniority may be a factor in determining the wages of
employees, it cannot be made the sole basis in cases where the nature
FACTS: of their work differs.

Bankard, Inc. classifies its employees by levels: Level I, Level Moreover, for purposes of determining the existence of wage
II, Level III, Level IV, and Level V. On May 1993, its Board of Directors distortion, employees cannot create their own independent classification
approved a New Salary Scale, made retroactive to April 1, 1993, for the and use it as a basis to demand an across- the-board increase in salary.
purpose of making its hiring rate competitive in the industry’s labor
market. The New Salary Scale increased the hiring rates of new
The wordings of Article 124 are clear. If it was the intention of
employees, to wit: Levels I and V by one thousand pesos (P1,000.00),
the legislators to cover all kinds of wage adjustments, then the language
and Levels II, III and IV by nine hundred pesos (P900.00). Accordingly,
of the law should have been broad, not restrictive as it is currently
the salaries of employees who fell below the new minimum rates were
phrased:
also adjusted to reach such rates under their levels.

Article 124. Standards/Criteria for Minimum Wage Fixing.

This made Bankard Employees Union-WATU (petitioner), the
duly certified exclusive bargaining agent of the regular rank and file
employees of Bankard, to request for the increase in the salary of its old,
regular employees. Bankard insisted that there was no obligation on the
part of the management to grant to all its employees the same increase
in an across-the-board manner.
Petitioner filed a notice of strike. The strike was averted when
the dispute was certified by the Secretary of Labor and Employment for
compulsory arbitration. NLRC finding no wage distortion dismissed the
case for lack of merit. Petitioner’s motion for reconsideration of the
dismissal of the case was denied.
ISSUE:
Whether the unilateral adoption by an employer of an
upgraded salary scale that increased the hiring rates of new employees
without increasing the salary rates of old employees resulted in wage
distortion within the contemplation of Article 124 of the Labor Code.
RULING:
The Court will not interfere in the management prerogative of
the petitioner. The employees are not precluded to negotiate through the
provisions of the CBA.
Upon the enactment of R.A. No. 6727 (WAGE
RATIONALIZATION ACT, amending, among others, Article 124 of the
Labor Code), the term "wage distortion" was explicitly defined as... a
situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences
in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in
such wage structure based on skills, length of service, or other logical
bases of differentiation.
Where the application of any prescribed wage increase by virtue of a law
or Wage Order issued by any Regional Board results in distortions of the
wage structure within an establishment, the employer and the union
shall negotiate to correct the distortions. Any dispute arising from the
wage distortions shall be resolved through the grievance procedure
under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration.
Article 124 is entitled "Standards/Criteria for Minimum Wage
Fixing." It is found in CHAPTER V on "WAGE STUDIES, WAGE
AGREEMENTS AND WAGE DETERMINATION" which principally deals
with the fixing of minimum wage. Article 124 should thus be construed
and correlated in relation to minimum wage fixing, the intention of the
law being that in the event of an increase in minimum wage, the
distinctions embodied in the wage structure based on skills, length of
service, or other logical bases of differentiation will be preserved.
If the compulsory mandate under Article 124 to correct "wage distortion"
is applied to voluntary and unilateral increases by the employer in fixing
hiring rates which is inherently a business judgment prerogative, then
the hands of the employer would be completely tied even in cases where
an increase in wages of a particular group is justified due to a re-
evaluation of the high productivity of a particular group, or as in the
present case, the need to increase the competitiveness of Bankard’s
hiring rate. An employer would be discouraged from adjusting the salary
rates of a particular group of employees for fear that it would result to a
demand by all employees for a similar increase, especially if the financial
conditions of the business cannot address an across-the-board
increase.
Wage distortion is a factual and economic condition that may be brought
about by different causes. The mere factual existence of wage distortion
does not, however, ipso facto result to an obligation to rectify it, absent
a law or other source of obligation which requires its rectification.

In the case of Prubankers Association v. Prudential Bank and

Trust Company, it laid down the four elements of wage distortion, to wit:
(1.) An existing hierarchy of positions with corresponding salary rates;
(2) A significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of a higher one; (3) The
elimination of the distinction between the two levels; and (4) The
existence of the distortion in the same region of the country.

Normally, a company has a wage structure or method of

determining the wages of its employees. In a problem dealing with "wage
distortion," the basic assumption is that there exists a grouping or
classification of employees that establishes distinctions among them on
some relevant or legitimate bases. Involved in the classification of
employees are various factors such as the degrees of responsibility, the
skills and knowledge required, the complexity of the job, or other logical
basis of differentiation. The differing wage rate for each of the existing
classes of employees reflects this classification.
Tiger Construction and Development Corp. vs. Abay standards violations based on findings made in the course of inspection
of an employer’s premises. The said jurisdiction is not affected by the
amount of claim involved, as RA 7730 had effectively removed the
GR NO. 164141 February 26, 2010
jurisdictional limitations found in Articles 129 and 217 of the Labor Code
insofar as inspection cases, pursuant to the visitorial and enforcement
FACTS: powers of the DOLE Secretary, are concerned. 16 The last sentence of
Article 128(b) of the Labor Code recognizes an exception17 to the
On the basis of a complaint filed by respondents Reynaldo jurisdiction of the DOLE Secretary and her representatives, but such
Abay and fifty-nine (59) others before the Regional Office of the exception is neither an issue nor applicable here.
Department of Labor and Employment (DOLE), an inspection was
conducted by DOLE officials at the premises of petitioner TCDC. Several
labor standard violations were noted, such as deficiencies in record
keeping, non-compliance with various wage orders, non-payment of
holiday pay, and underpayment of 13th month pay. The case was then
set for summary hearing.

However, before the hearing could take place, the Director of

Regional Office No. V, Ma. Glenda A. Manalo (Director Manalo), issued
an Order on July 25, 2002, which reads:

XXX in view of the foregoing, this case falls under the original and
exclusive jurisdiction of the National Labor Relations Commission as
provided under Article 217 of the Labor Code of the Philippines. 5

On September 30, 2002, Director Manalo issued an Order

directing TCDC to pay P2,123,235.90 to its employees representing
underpayment of salaries, 13th month pay, and underpayment of service
incentive leave pay and regular holiday pay. TCDC filed a Motion for
Reconsideration on October 17, 2002 and a Supplemental Pleading to
the Motion for

Reconsideration on November 21, 2002, reiterating the

argument that Director Manalo had lost jurisdiction over the matter.

Apparently convinced by petitioner’s arguments, Director

Manalo again endorsed the case to the NLRC Regional Arbitration
Branch V (Legaspi City). On January 27, 2003, the NLRC returned the
entire records of the case to Director Manalo on the ground that the
NLRC does not have jurisdiction over the complaint.

Having the case in her office once more, Director Manalo

finally issued an Order dated January 29, 2003 denying petitioner’s
motion for reconsideration for lack of merit. Since TCDC did not
interpose an appeal within the prescribed period, Director Manalo issued
forthwith a Writ of Execution on February 12, 2003.

ISSUE:

The issue in the case is whether petitioner can still assail the
January 29, 2003 Order of Director Manalo allegedly on the ground of
lack of jurisdiction, after said Order has attained finality and is already in
the execution stage.

RULING:

The petition lacks merit.

Petitioner admits that it failed to appeal the January 29, 2003

Order within the period prescribed by law. It likewise admits that the case
was already in the execution process when it resorted to a belated
appeal to the DOLE Secretary. Petitioner, however, excuses itself from
the effects of the finality of the Order by arguing that it was allegedly
issued without jurisdiction and may be assailed at any time.

While it is true that orders issued without jurisdiction are

considered null and void and, as a general rule, may be assailed at any
time, the fact of the matter is that in this case, Director Manalo acted
within her jurisdiction. Under Article 128 (b) of the Labor Code, 14 as
amended by Republic Act (RA) No. 7730,15 the DOLE Secretary and
her representatives, the regional directors, have jurisdiction over labor