PEOPLE’S BROADBASTING v.

SECRETARY
FACTS:
 A complaint filed by Jandeleon Juezan (respondent)
against People's Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.)
(petitioner) for illegal deduction, non-payment of service incentive leave, 13th
month pay, premium pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and
PhilHealth. 
 On the basis of the complaint, the DOLE conducted a plant level inspection.
The Inspection Report Form, the Labor Inspector wrote under the heading
"Findings/Recommendations" "non-diminution of benefits" and "Note:
Respondent deny employer-employee relationship with the complainant — see
Notice of Inspection results".
 In the Notice of Inspection Results, the Labor Inspector made the following
notations: Management representative informed that complainant is a drama
talent hired on a per drama "participation basis" hence no employer-employee
relationship existed between them. As proof of this, management presented
photocopies of cash vouchers, billing statement, employments of specific
undertaking (a contract between the talent director & the complainant), summary
of billing of drama production etc. They (mgt.) has [sic] not control of the talent if
he ventures into another contract w/ other broadcasting industries.
 Petitioner was required to rectify/restitute the violations within five (5) days from
receipt. No rectification was effected by petitioner; thus, summary investigations
were conducted, with the parties eventually ordered to submit their respective
position papers.
 DOLE Regional Director’s Ruling: respondent is an employee of petitioner, and
that the former is entitled to his money claims amounting to P203,726.30.
 DOLE Secretary’s Ruling: dismissed the appeal on the ground that petitioner
did not post a cash or surety bond and instead submitted a Deed of Assignment
of Bank Deposit. 
 CA’s Ruling: held that petitioner was not deprived of due process as the
essence thereof is only an opportunity to be heard, which petitioner had when it
filed a motion for reconsideration with the DOLE Secretary. It further ruled that
the latter had the power to order and enforce compliance with labor standard
laws irrespective of the amount of individual claims because the limitation
imposed by Article 29 of the Labor Code had been repealed by Republic Act No.
7730. 
 Before this Court, petitioner argues that the National Labor Relations
Commission (NLRC), and not the DOLE Secretary, has jurisdiction over
respondent's claim, in view of Articles 217 and 128 of the Labor Code. 

ISSUE: Whether the Secretary of Labor have the power to determine the existence of
an employer-employee relationship – YES.
RULING, MAY 8, 2009: (pwede magskip sa 2012 ruling, also may separate opinion si
J. Brion)
 To resolve this pivotal issue, one must look into the extent of the visitorial and
enforcement power of the DOLE found in Article 128 (b) of the Labor Code, as
amended by Republic Act 7730.
 The provision is quite explicit that the visitorial and enforcement power of the
DOLE comes into play only "in cases when the relationship of employer-
employee still exists". It also underscores the avowed objective underlying the
grant of power to the DOLE which is "to give effect to the labor standard
provision of this Code and other labor legislation". Of course, a person's
entitlement to labor standard benefits under the labor laws presupposes the
existence of employer-employee relationship in the first place.
 The clause "in cases where the relationship of employer-employee still exists"
signifies that the employer-employee relationship must have existed even
before the emergence of the controversy. Necessarily, the DOLE's power
does not apply in two instances, namely: (a) where the employer-
employee relationship has ceased; and (b) where no such relationship
has ever existed.
 The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on
the Disposition of Labor Standards Cases issued by the DOLE Secretary.
 In the recent case of Bay Haven, Inc. v. Abuan, this Court recognized the first
situation and accordingly ruled that a complainant's allegation of his illegal
dismissal had deprived the DOLE of jurisdiction as per Article 217 of the Labor
Code. 
 Clearly the law accords a prerogative to the NLRC over the claim when the
employer-employee relationship has terminated or such relationship has not
arisen at all. The reason is obvious. In the second situation especially, the
existence of an employer-employee relationship is a matter which is not easily
determinable from an ordinary inspection, necessarily so, because the
elements of such a relationship are not verifiable from a mere ocular
examination. The intricacies and implications of an employer-employee
relationship demand that the level of scrutiny should be far above the cursory
and the mechanical. While documents, particularly documents found in the
employer's office are the primary source materials, what may prove decisive
are factors related to the history of the employer's business operations, its
current state as well as accepted contemporary practices in the industry. More
often than not, the question of employer-employee relationship becomes a
battle of evidence, the determination of which should be comprehensive and
intensive and therefore best left to the specialized quasi-judicial body that is the
NLRC. 
 It can be assumed that the DOLE in the exercise of its visitorial and
enforcement power somehow has to make a determination of the
existence of an employer-employee relationship. Such prerogatival
determination, however, cannot be coextensive with the visitorial and
 enforcement power itself. Indeed, such determination is merely
preliminary, incidental and collateral to the DOLE's primary function of
enforcing labor standards provisions. The determination of the existence
of employer-employee relationship is still primarily lodged with the NLRC.
This is the meaning of the clause "in cases where the relationship of
employer-employee still exists" in Art. 128 (b).
 Thus, before the DOLE may exercise its powers under Article 128, two
important questions must be resolved:
1. Does the employer-employee relationship still exist, or alternatively, was
there ever an employer-employee relationship to speak of; and
2. Are there violations of the Labor Code or of any labor law?
 The existence of an employer-employee relationship is a statutory
prerequisite to and a limitation on the power of the Secretary of Labor,
one which the legislative branch is entitled to impose. 
 A reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or
his authorized representatives was granted visitorial and enforcement powers
for the purpose of determining violations of, and enforcing, the Labor Code and
any labor law, wage order, or rules and regulations issued pursuant thereto.
Necessarily, the actual existence of an employer-employee relationship affects
the complexion of the putative findings that the Secretary of Labor may
determine, since employees are entitled to a different set of rights under
the Labor Code from the employer as opposed to non-employees. Among
these differentiated rights are those accorded by the "labor standards"
provisions of the Labor Code, which the Secretary of Labor is mandated to
enforce. If there is no employer-employee relationship in the first place, the duty
of the employer to adhere to those labor standards with respect to the non-
employees is questionable. TDCAIS
 This decision should not be considered as placing an undue burden on
the Secretary of Labor in the exercise of visitorial and enforcement powers, nor
seen as an unprecedented diminution of the same, but rather a recognition of
the statutory limitations thereon.
 A mere assertion of absence of employer-employee relationship does not
deprive the DOLE of jurisdiction over the claim under Article 128 of the  Labor
Code. At least a prima facie showing of such absence of relationship, as in this
case, is needed to preclude the DOLE from the exercise of its power.
The Secretary of Labor would not have been precluded from exercising the
powers under Article 128 (b) over petitioner if another person with better-
grounded claim of employment than that which respondent had. Respondent,
especially if he were an employee, could have very well enjoined other
employees to complain with the DOLE, and, at the same time, petitioner could
ill-afford to disclaim an employment relationship with all of the people under its
aegis.
 Without a doubt, petitioner, since the inception of this case had been consistent
in maintaining that respondent is not its employee. Certainly, a preliminary
determination, based on the evidence offered, and noted by the Labor
Inspector during the inspection as well as submitted during the proceedings
 before the Regional Director puts in genuine doubt the existence of employer-
employee relationship. From that point on, the prudent recourse on the part of
the DOLE should have been to refer respondent to the NLRC for the proper
dispensation of his claims. Furthermore, as discussed earlier, even the
evidence relied on by the Regional Director in his order are mere self-serving
declarations of respondent, and hence cannot be relied upon as proof of
employer-employee relationship.
 It is not enough that the evidence be simply considered. The standard is
substantial evidence as in all other quasi-judicial agencies. The standard
employed in the last sentence of Article 128 (b) of the Labor Code that the
documentary proofs be "considered in the course of inspection" does not apply.
It applies only to issues other than the fundamental issue of existence of
employer-employee relationship. A contrary rule would lead to controversies on
the part of labor officials in resolving the issue of employer-employee
relationship. The onset of arbitrariness is the advent of denial of substantive
due process.
 Even the identification card purportedly issued by petitioner is not proof of
employer-employee relationship since it only identified respondent as an
"Authorized Representative of Bombo Radyo . . . ", and not as an employee.
The phrase gains significance when compared vis a vis the following notation in
the sample identification cards presented by petitioner in its motion for
reconsideration:
 In the instant case, save for respondent's self-serving allegations and self-
defeating evidence, there is no substantial basis to warrant the Regional
Director's finding that respondent is an employee of petitioner.
Interestingly, the Order of the Secretary of Labor denying petitioner's appeal
dated 27 January 2005, as well as the decision of the Court of Appeals
dismissing the petition for certiorari, are silent on the issue of the existence of
an employer-employee relationship, which further suggests that no real and
proper determination the existence of such relationship was ever made by
these tribunals. Even the dissent skirted away from the issue of the existence of
employer-employee relationship and conveniently ignored the dearth of
evidence presented by respondent.
 The most important consideration for the allowance of the instant petition
is the opportunity for the Court not only to set the demarcation between
the NLRC's jurisdiction and the DOLE's prerogative but also the
procedure when the case involves the fundamental challenge on the
DOLE's prerogative based on lack of employer-employee relationship. As
exhaustively discussed here, the DOLE's prerogative hinges on the
existence of employer-employee relationship, the issue is which is at the
very heart of this case. And the evidence clearly indicates private
respondent has never been petitioner's employee. But the DOLE did not
address, while the Court of Appeals glossed over, the issue. The
peremptory dismissal of the instant petition on a technicality would
deprive the Court of the opportunity to resolve the novel controversy.
RULING, MARCH 6, 2012: (this time, unanimous na decision ng court and wala nang
dissenting opinion si J. Brion)
 This conclusion must be revisited.
 No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down
where the DOLE would only make a preliminary finding, that the power was
primarily held by the NLRC. The law did not say that the DOLE would first seek
the NLRC's determination of the existence of an employer-employee relationship,
or that should the existence of the employer-employee relationship be disputed,
the DOLE would refer the matter to the NLRC. The DOLE must have the power
to determine whether or not an employer-employee relationship exists, and from
there to decide whether or not to issue compliance orders in accordance with Art.
128 (b) of the Labor Code, as amended by RA 7730. 
 The DOLE, in determining the existence of an employer-employee relationship,
has a ready set of guidelines to follow, the same guide the courts themselves
use. The elements to determine the existence of an employment relationship are:
(1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; (4) the employer's power to control the employee's
conduct. The use of this test is not solely limited to the NLRC. The
DOLE Secretary, or his or her representatives, can utilize the same test, even in
the course of inspection, making use of the same evidence that would have been
presented before the NLRC.
 The determination of the existence of an employer-employee relationship by the
DOLE must be respected. The expanded visitorial and enforcement power of the
DOLE granted by RA 7730 would be rendered nugatory if the alleged employer
could, by the simple expedient of disputing the employer-employee relationship,
force the referral of the matter to the NLRC. The Court issued the declaration that
at least a prima facie showing of the absence of an employer-employee
relationship be made to oust the DOLE of jurisdiction. But it is precisely the
DOLE that will be faced with that evidence, and it is the DOLE that will weigh it,
to see if the same does successfully refute the existence of an employer-
employee relationship.
 If the DOLE makes a finding that there is an existing employer-employee
relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The
DOLE would have no jurisdiction only if the employer-employee relationship has
already been terminated, or it appears, upon review, that no employer-employee
relationship existed in the first place.
 The Court, in limiting the power of the DOLE, gave the rationale that such
limitation would eliminate the prospect of competing conclusions between the
DOLE and the NLRC. The prospect of competing conclusions could just as well
have been eliminated by according respect to the DOLE findings, to the
exclusion of the NLRC, and this We believe is the more prudent course of action
to take.
 This is not to say that the determination by the DOLE is beyond question or
review. Suffice it to say, there are judicial remedies such as a petition
 for certiorari under Rule 65 that may be availed of, should a party wish to dispute
the findings of the DOLE.
 It must also be remembered that the power of the DOLE to determine the
existence of an employer-employee relationship need not necessarily result in an
affirmative finding. The DOLE may well make the determination that no
employer-employee relationship exists, thus divesting itself of jurisdiction over
the case. It must not be precluded from being able to reach its own conclusions,
not by the parties, and certainly not by this Court.
 Under Art. 128 (b) of the Labor Code, as amended by RA 7730, the DOLE is
fully empowered to make a determination as to the existence of an
employer-employee relationship in the exercise of its visitorial and
enforcement power, subject to judicial review, not review by the NLRC.
 There is a view that despite Art. 128 (b) of the Labor Code, as amended by RA
7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor
Code when money claims are involved, i.e., that if it is for PhP5,000 and below,
the jurisdiction is with the regional director of the DOLE, under Art. 129, and if the
amount involved exceeds PhP5,000, the jurisdiction is with the labor arbiter,
under Art. 217. The view states that despite the wording of Art. 128 (b), this
would only apply in the course of regular inspections undertaken by the DOLE,
as differentiated from cases under Arts. 129 and 217, which originate from
complaints. There are several cases, however, where the Court has ruled that
Art. 128 (b) has been amended to expand the powers of the DOLE Secretary and
his duly authorized representatives by RA 7730. In these cases, the Court
resolved that the DOLE had the jurisdiction, despite the amount of the money
claims involved. Furthermore, in these cases, the inspection held by the DOLE
regional director was prompted specifically by a complaint. Therefore, the
initiation of a case through a complaint does not divest the DOLE Secretary or
his duly authorized representative of jurisdiction under Art. 128 (b).
 To recapitulate, if a complaint is brought before the DOLE to give effect to the
labor standards provisions of the Labor Code or other labor legislation, and there
is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the
DOLE finds that there is no employer-employee relationship, the jurisdiction is
properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the
Labor Arbiter, under Art. 217 (3) of the Labor Code,which provides that the Labor
Arbiter has original and exclusive jurisdiction over those cases involving wages,
rates of pay, hours of work, and other terms and conditions of employment, if
accompanied by a claim for reinstatement. If a complaint is filed with the NLRC,
and there is still an existing employer-employee relationship, the jurisdiction is
properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.
 In the present case, the finding of the DOLE Regional Director that there was an
employer-employee relationship has been subjected to review by this Court, with
the finding being that there was no employer-employee relationship between
petitioner and private respondent, based on the evidence presented. Private
respondent presented self-serving allegations as well as self-defeating
evidence. The findings of the Regional Director were not based on substantial
evidence, and private respondent failed to prove the existence of an employer-
employee relationship. The DOLE had no jurisdiction over the case, as there was
no employer-employee relationship present. Thus, the dismissal of the complaint
against petitioner is proper.
 Separate Opinions (MAY 8, 2009) – in case tanungin

CARPIO MORALES, J., dissenting: agreed with Justice Brion’s dissenting opinion.

BRION, J., dissenting: (mahaba pero di ko binawasan yung discussion niya about

secretary’s visitorial power)

GROUNDS FOR DISSENT:

1. The petitioner chose the wrong recourse in seeking the review by this
Court of the CA's decision on the petitioner's Rule 65 petition for certiorari; the
petitioner came to us via another petition for certiorari under Rule 65 when the
appropriate mode is a petition for review on certiorari under Rule
45. The ponencia bends over backwards to accommodate Bombo
Radyo's legally erroneous petition to open the way for its review of the
administrative (DOLE) decisions and the support the CA gave these decisions.
2. The Director originally ordered the payment of the respondent's monetary
claim in his Order of February 27, 2004.
a. The petitioner was given all the opportunity to present evidence to
oppose the Labor Inspector's findings; hence, it cannot plead lack
of due process for lack of opportunity to be heard.
b. The Director duly considered the evidence on the issue of employer-
employee relationship in both his initial decision 2 and in his
resolution of May 24, 2004. 3 The ponencia, nitpicking the
Director's decision for not stating how each piece of
evidence was ruled upon, charges that the decision
disregarded the petitioner's evidence. This stance ignores
the legal reality that the Constitution only requires the factual
and legal bases for the decision to be stated, 4 and that the
decision maker is not under any obligation to state in its
decision every fact and bit of evidence the parties
submitted. 5
c. The nature of the proceedings, level of evidence required, and level of
expertise between Labor Arbiters and the Regional Director are
not different and one tribunal holds no primacy over the other in
the determination of the employment relationship issue. The
terms and structure of Article 128(b), as amended by R.A.
7730, are clear and need not give rise to the ponencia's fear
of confusion in determining the employment relationship
issue.
3. The Secretary has expanded visitorial and enforcement powers under
Article 128 of the Labor Code, as amended by R.A. 7730; he or his representative
has full authority under the amended Article 128 to determine whether employer-
employee relationship exists.
4. Article 128 of the Labor Code clearly provides that an appeal is
perfected "only" by the posting of cash or surety bond; the Deed of Assignment the
petitioner submitted to the DOLE is neither a cash nor a surety bond, and
the Secretary correctly dismissed the petitioner's appeal because it was not duly
perfected. The ponencia bends over beyond the law's breaking point to admit
the petitioner's appeal despite its infirmity under the clear terms and intent of
the law.
a. The Secretary fully explained the reasons for the non-perfection of
appeal in an original Order dated January 29, 2005 and in her
subsequent Order dated May 23, 2005 on the petitioner's motion
for reconsideration. The ponencia sees not only legal error but
grave abuse of discretion although the Secretary followed
the letter and intent of the law, as plainly stated in the law
itself and as interpreted by this Court in its rulings.
b. Petitioners have only themselves to blame for their lost appeal to the
Labor Secretary for their failure to post the required bond for the
perfection of their appeal.
c. The Director's Order lapsed to finality when the petitioner failed to
perfect its appeal to the DOLE Secretary. The ponencia digs
deep into this Court's review power, effectively bending
established rules and jurisprudence, to reach and nullify the
effects of this first level decision.
5. The Court of Appeals correctly dismissed the petitioner's petition
for certiorari for lack of merit. aEHIDT
a. The CA cannot be wrong when it refused to recognize that no grave
abuse of discretion attended the Secretary's dismissal of an
appeal that was never perfected based on the letter and intent of
the law;
b. The CA cannot be wrong in its conclusion that no violation of due
process attended the Director's ruling, as stated above;
c. The CA could not have ruled on other issues after it recognized that
no appeal was perfected and no abuse of discretion attended the
assailed decisions; likewise, it could not have recognized any
legal error on the part of the Secretary for not discussing other
issues after recognizing that the petitioner did not perfect its
appeal.
6. The petitioner's evidence, at the most, established a doubt on the
employer-employee relationship issue, which doubt should be resolved in favor of
the respondent-worker. 7
THE SECRETARY'S VISITORIAL POWERS
A major issue for the ponencia is the Director's determination that employer-
employee relationship existed between the petitioner and the respondent at the time
of the inspection. Citing mainly Section 3, Rule 11 of the Rules on the Disposition of
Labor Standards Cases, the ponencia rationalizes: 
The clause "in cases where the relationship of employer-
employee still exists" signifies that the employer-employee relationship
must have existed even before the emergence of the
controversy. Necessarily, the DOLE's power does not apply in two
instances, namely: (a) where the employer-employee relationship
has ceased; and (b) where no such relationship has ever existed.
The first situation is categorically covered by Sec. 3, Rule 11 of
the Rules on the Disposition of Labor Standards Cases issued by the
DOLE Secretary. It reads:
Sec. 3. Complaints where no employer-employee
relationship actually exists. Where employer-employee
relationship no longer exists by reason of the fact that it has
already been severed, claims for payment of monetary benefits
fall within the exclusive and original jurisdiction of the labor
arbiters. Accordingly, if on the face of the complaint, it can be
ascertained that employer-employee relationship no longer exists,
the case, whether accompanied by an allegation of illegal
dismissal, shall immediately be endorsed by the Regional Director
to the appropriate branch of the National Labor Relations
Commission (NLRC).
xxx xxx xxx
In the first situation, the claim has to be referred to the NLRC
because it is the NLRC which has jurisdiction in view of the termination
of the employer-employee relationship. The same procedure has to be
followed in the second situation since it is the NLRC that has jurisdiction
in view of the absence of employer-employee relationship between the
evidentiary parties from the start.
Clearly the law accords a prerogative to the NLRC over the claim
when the employer-employee relationship has terminated or such
relationship has not arisen at all. The reason is obvious. In the second
situation especially, the existence of an employer-employee relationship
is a matter which is not easily determinable from an ordinary inspection,
necessarily so, because the elements of such a relationship are not
verifiable from a mere ocular examination. The intricacies and
implications of an employer-employee relationship demand that the level
of scrutiny should be far above the cursory and the mechanical. While
 documents, particularly documents found in the employer's office are the
primary source materials, what may prove decisive are factors related to
the history of the employer's business operations, its current state as
well as accepted contemporary practices in the industry. More often than
not, the question of employer-employee relationship becomes a battle of
evidence, the determination of which should be comprehensive and
intensive and therefore best left to the specialized quasi-judicial body
that is the NLRC.
It can be assumed that the DOLE in the exercise of its
visitorial and enforcement power somehow has to make a
determination of the existence of an employer-employee
relationship. Such prerogatival determination, however, cannot be
coextensive with the visitorial and enforcement power itself.
Indeed, such determination of the existence of employer-employee
relationship is still primarily lodged with the NLRC. This is the
meaning of the clause "in cases where the relationship of
employer-employee still exists" in Art. 128 (b).
This approach is a legally incorrect due mainly to the ponencia's lack of
appreciation of the extent of the DOLE Secretary's visitorial and enforcement powers
under the Labor Code, as amended, and a mis-reading of the current law and the
applicable implementing rules. The present law gives the Secretary or his
representative the authority to fully determine whether employer-employee
relationship exists; only upon a showing that it does not, is the DOLE divested of
jurisdiction over the case.
In the first place, the ponencia is fixated on the application of the Rules on
the Disposition of Labor Standards Cases in the Regional Offices which cannot now
be cited and used in their totality in light of the amendment of the Article 128 (b)
by Republic Act No. 7730. Prior to the amendment, Section 128 (b) stated that —
Art. 128(b). The provisions of Article 217 of this Code to the
contrary notwithstanding and in cases where the relationship of
employer-employee still exist, 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 relation 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.
As amended, Section 128 (b) now states:
Art. 128. Visitorial and Enforcement Power. —
 (b) Notwithstanding the provisions of Articles 129 and 217 of this
Code to the contrary, and in cases where the relationship of employer-
employee still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue compliance
orders to give effect to the labor standards provisions of this Code and
other labor legislation based on the findings of labor employment and
enforcement officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives shall
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 employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the
course of inspection.
An order issued by the duly authorized representative of
the Secretary of Labor and Employment under this article may be
appealed to the latter. In case said order involves a monetary award, an
appeal by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly
accredited by the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed from.
This amendment is critical in viewing the Secretary's visitorial and enforcement
powers as they introduced new features that expanded these powers, thereby
affecting the cited Rules as well as the process of referring an inspection case to the
NLRC.
A first distinction between the original and the amended Article 128 (b) is the
reference to Article 217 of the Labor Code in the "notwithstanding" clause. As
amended, Article 129 is also referred to. Read in relation with Article 217, the effect
is the removal of the P5,000.00 ceiling in the Secretary's visitorial powers — a
conclusion that the ponencia fully supports.
Another distinction relates to the present clause "except in cases where the
employer contests the findings of the labor employment and enforcement officer and
raises issues supported by documentary proofs which were not considered in the
course of inspection" (the "excepting clause"). In the original version of Article
128(b), this clause states — "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". Thus, previously, the law referred to matters that the labor regulation
officer could not have ruled upon because they are not verifiable in the normal
course of inspection. Under the present formulation, reference is only to
"documentary proofs which were not considered in the course of inspection" used in
a different context explained below. Textually, the present formulation refers only to
documentary evidence that might or might not have been available during inspection
but were not considered. CASaEc
 The difference can be explained by the new and unique formulation of the
whole Article 128 (b). In the original provision, the visitorial and enforcement power
of the Minister of Labor and Employment generally prevailed over the jurisdiction
over arbitration cases granted to Labor Arbiters and the Commission under Article
217. Excepted from this rule is what the original and unamended excepting clause,
quoted above, provides — i.e., when inspection would not suffice because of
evidentiary matters that have to be threshed out at an arbitration hearing.
The new and amended Article 128 (b) did not retain the formulation of the
original as it broke up the original version into two sentences. In the first
sentence, it recognized the primacy of the visitorial and enforcement powers of
the Secretary of Labor over the terms of Articles 129 and 217. In other words,
the Secretary or his delegate can inspect without being fettered by the limitations
under these provisions. The second sentence is devoted wholly to the issuance of
writs of execution to enforce the issued orders. It exists as an independent
statement from what the first sentence states and is limited only by the exception —
when the employer cites a documentary proof that was not considered during the
inspection.
Thus, under the amended Article 128 (b), as written, the power of
the Secretary of Labor or his representative to enforce the labor standards
provisions of the Labor Code and other labor legislations has been vastly expanded,
being unlimited by Articles 129 and 217 of the Labor Code, provided only that
employer-employee relationship still exists. The existence of the relationship,
however, is still a matter for the Secretary or the appropriate regional office to
determine, unfettered by Articles 129 and 217 of the Labor Code. The mere
allegation — whether prima facie or not — that employer-employee relationship
exists, does not, by itself, divests the Regional Director of jurisdiction to rule on the
case; 16 the Director can at least fully determine whether or not employer-employee
relationship exists.
The present "excepting clause" (which refers only to the issuance of a writ
of execution) suggests that after the labor employment officer has issued its
inspection ruling, the Secretary may issue a writ to execute the ruling, unless the
employer "contests the findings of the labor employment officer and raises issues
supported by documentary evidence which were not considered in the course of
inspection." Stated otherwise, there is now a window in the law for immediate
execution pending appeal when the employer's objection does not relate to
documentary evidence that has not been raised in the course of inspection.
What happens to the inspection ruling itself is governed by the next
paragraph of Article 128 (b) which expressly provides for an appeal to
the Secretary of Labor, with the requirement for the filing of a cash or surety bond to
perfect the appeal. This requirement, stated without distinctions or qualifications,
should apply to all issues, whether on the employer-employee issue or on the
inspection findings.
A necessary question that arises is the status of the current rule implementing
Article 128 (b) as amended, which is an exact copy of the law except for the addition
of a new sentence — ". . . In such cases the Regional Director shall endorse the
dispute to the appropriate regional branch of the National Labor Relations
Commission for proper action." This rule antedates the R.A. 7730 amendment but is
not necessarily negated by the Secretary's expanded powers because of the
limitation that the Secretary or his representation has jurisdiction only where an
employment relationship exists. Properly understood, it should now be read as a
confirmation of the Secretary's expanded power that includes the full authority to
rule on whether employer-employee relationship exists. It is only upon a ruling that
no such relationship exists that the Secretary and the Director are divested of
jurisdiction to rule on the monetary claim. The Secretary or the Director must then
endorse the monetary claim to the NLRC instead of dismissing it for lack of
jurisdiction. However, whatever action the Director takes is a matter that can be
appealed to the Secretary of Labor pursuant to the second paragraph of Article 128
(b). In the present case, the petitioner did appeal as allowed by Article 128 (b), but
unfortunately blew its chance to secure a review on appeal before the Secretary of
Labor as it failed to post the cash or surety bond that the present law expressly
requires.
This reading of the law totally invalidates the ponencia's position in the
present case that the Regional Director and the Secretary of Labor have no
jurisdiction to issue an enforcement order and the case should have been turned
over to the NLRC for compulsory arbitration after the petitioner claimed or has
shown prima facie that no employer-employee relationship existed.
The ponencia makes a final desperate effort to circumvent the plain import of
Section 128 (b) and its history by appealing to and urging the use of the common
law in reading the DOLE Secretary's visitorial and enforcement powers under
the cited Section. The ponencia suggests a "functional or pragmatic analysis" to
ascertain the jurisdictional boundaries of administrative agencies. Why the common
law approach is to be used in the Philippines' statutory regime is puzzling. Why there
is a need for such an analysis to understand the terms of Section 128 (b) and
the Labor Code, is more so. The suggested common law approach is simply
irrelevant and deserves no further discussion.

Confusion between the DOLE and the NLRC in resolving employment

relationship issues.
As last point that is hard to leave alone is the ponencia's interpretation that
the standard laid down in the last sentence of Article 128 (b) of the  Labor Code that
the documentary proofs be "considered in the course of inspection" applies only to
issues other than the fundamental issue of the existence of employer-employee
relationship. A contrary rule according to the ponencia would lead to controversies
on the part of labor officials in resolving the issue of employer-employee relationship.
What the ponencia apparently refers to is that portion of Article 128 (b) that
was amended by R.A. 7730, heretofore discussed. To reiterate what has been
stated above, the "documentary proofs which were not considered in the course of
inspection" refers to the objection that a party may raise in relation with the issuance
of a writ of execution, and does not relate to the extent of the visitorial and
enforcement power of the Secretary defined in the first sentence of the Article. Thus,
no writ may immediately issue if such objection exists. Rather, a full hearing shall
ensue as in this case where the Director allowed the petitioner to submit evidence as
late as the motion for reconsideration stage. After the Director shall have ruled on all
the submitted issues, then a writ of execution shall issue if no appeal is taken;
otherwise, an appeal may be taken to the Secretary. Under the Rules, the perfection
of an appeal holds in abeyance the issuance of a writ of execution or suspends one
already issued. R.A. 7730 effectively changes this rule by giving the authority to
issue a writ of execution unless the "excepting clause" mentioned above applies.
That the employment relationship issue is for the Secretary or his
representative to rule upon is clear from the wording of the 1st paragraph of Article
128 (b) when it defines the extent of the Secretary's power. In this definition of
authority, the issue cannot be anywhere else but with the Secretary who has been
granted visitorial and enforcement power when an employment relationship exists.
This grant must be read with the 2nd paragraph of the same Article that identifies an
appeal as the remedy to take from an inspection decision made under the 1st
paragraph.
For the ponencia to imply that the NLRC is more fitted to rule on the
employment relationship issue misunderstands the power that Article 128 grants
the Secretary. It is a full fact-finding power that includes whatever is necessary for
the enforcement of the grant, including the authority to determine when the limits of
the power apply and to call the parties and hear and decide their submissions. For
this reason, Sections 5 (a) and 6 of Department Order No. 7-A, Series of 1995
states:
Sec 5. Field investigation and hearing. — (a) In case of complaint
inspection where no proof of compliance is submitted by the employer
after seven (7) calendar days from receipt of the inspection results, the
Regional Director shall summon the employer and the
employees/complainants to a summary hearing at the regional office.
xxx xxx xxx
Sec. 6. Nature of Proceedings. The proceedings shall be
summary and non-litigious in character. Subject to the requirements of
due process, the technicalities of law and procedure and the rules
governing admissibility and sufficiency of evidence obtaining in the
courts of law shall not strictly apply. The regional director or his
designated representative may, however, avail of all reasonable means
to ascertain the facts of the controversy speedily and objectively,
including the conduct of ocular inspection and examination of well-
informed persons. Substantial evidence shall be sufficient to support a
decision.
Significantly, the nature of the proceedings before the Regional Director is not
different from the proceedings before the Labor Arbiter. Section 2, Rule V of the
Revised Rules of Procedure of the National Labor Relations Commission (2005)
provides that: 
Section 2. Nature of Proceedings. The proceedings before the
Labor Arbiter shall be non-litigious in nature. Subject to the requirements
of due process, the technicalities of law and procedure and the rules
obtaining in courts of law shall not strictly apply thereto. The Labor
Arbiter may avail himself of all reasonable means to ascertain the facts
of the controversy speedily, including the ocular inspection and
examination of well-informed persons.
Thus, the view that one tribunal has primacy over another because of the
nature of their proceedings, the quantum of evidence required, or their level of
expertise, is misplaced. Properly understood, the structure that Article 128 (b)
provides in relation with monetary claims within and employment relationship, as
well as the delineation of powers between the Secretary of Labor and Employment
and the NLRC are not at all complicated nor confusing, and need not lead to
controversies on the part of labor officials in resolving the issue of employer-
employee relationship, as the ponencia fears.