LABOR REVIEW NOTES
He
Professor: LA Abdulazis U. Metmug
1. Article 232. BLR (p.96-117, Poquiz)
The BLR and the Labor Relations Divisions in
the regional offices of the DOL shall have original and
exclusive authority to act, at their own initiative or
upon request of either or both parties, on all inter-
union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting labor-
management relations in all workplaces whether
agricultural or nonagricultural, except those arising
from the implementation or interpretation of collective
bargaining agreements which shall be the subject of
grievance procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) working
days to act on labor cases before it, subject to
extension by agreement of the parties.
CASE DIGEST
ATTY. ALLAN S. MONTAÑO vs. ATTY. ERNESTO
C. VERCELES
G.R. No. 168583
July 26, 2010
FACTS:
Atty. Montaño worked as legal assistant of FFW Legal
Center. Subsequently, he joined the union of rank-
and-file employees, the FFW Staff Association, and
eventually became the employees’ union president. In
November 1998, he was likewise designated officer-
in-charge of FFW Legal Center.
During the 21st National Convention and Election of
National Officers of FFW, Atty. Montaño was
nominated for the position of National Vice-
President. In a letter dated May 25, 2001,7 however,
the Commission on Election (FFW COMELEC),
informed him that he is not qualified for the
position as his candidacy violates the 1998 FFW
Constitution and By-Laws, particularly Section 76 of
Article XIX and Section 25 (a) of Article VIII, both in
Chapter II thereof. Atty. Montaño thus filed an Urgent
Motion for Reconsideration praying that his name
be included in the official list of candidates.
Election ensued on May 26-27, 2001 in the National
Convention held at Subic International Hotel,
Olongapo City. Despite the pending motion for
reconsideration with the FFW COMELEC, and strong
opposition and protest of respondent Atty.
Ernesto C. Verceles (Atty. Verceles), a delegate to
the convention and president of University of the East
Employees’ Association (UEEA-FFW) which is an
affiliate union of FFW, the convention delegates
allowed Atty. Montaño’s candidacy. He emerged
victorious and was proclaimed as the National
Vice-President.
On May 28, 2001, through a letter to the Chairman of
FFW COMELEC, Atty. Verceles reiterated his protest
over Atty. Montaño’s candidacy which he manifested
during the plenary session before the holding of the
election in the Convention. On June 18, 2001, Atty.
Verceles sent a follow-up letter to the President of
FFW requesting for immediate action on his protest.
Atty. Verceles, as President of UEEA-FFW and officer
of the Governing Board of FFW, filed before the BLR
a petition for the nullification of the election of
Atty. Montaño as FFW National Vice-President.
alleged that, as already ruled by the FFW COMELEC,
Atty. Montaño is not qualified to run for the position
because Section 76 of Article XIX of the FFW
Constitution and By-Laws prohibits federation
employees from sitting in its Governing Board.
Claiming that Atty. Montaño’s premature assumption
of duties and formal induction as vice-president will
cause serious damage, Atty. Verceles likewise prayed
for injunctive relief.
Atty. Montaño filed his Comment with Motion to
Dismiss on the grounds that the Regional Director
of the Department of Labor and Employment
(DOLE) and not the BLR has jurisdiction over the
case; that the filing of the petition was premature
due to the pending and unresolved protest before the
FFW COMELEC; and that, Atty. Verceles has no
legal standing to initiate the petition not being the
real party in interest.
FFW COMELEC intimated its firm stand that Atty.
Montaño’s candidacy contravenes the FFW’s
Constitution.
***The BLR rendered a Decision dismissing the
petition (Verceles’ petition) for lack of merit. While it
upheld its jurisdiction over the intra-union dispute
case and affirmed, as well, Atty. Verceles’ legal
personality to institute the action as president of an
affiliate union of FFW, the BLR ruled that there were
no grounds to hold Atty. Montaño unqualified to
run for National Vice-President of FFW. It held that
the applicable provision in the FFW Constitution and
By-Laws to determine whether one is qualified to run
for office is not Section 76 of Article XIX but Section
26 of Article VIII thereof. The BLR opined that there
was sufficient compliance with the requirements laid
down by this applicable provision and, besides, the
convention delegates unanimously decided that Atty.
Montaño was qualified to run for the position of
National Vice-President.
***CA set aside the BLR’s Decision. The CA ruled
that Atty. Montaño did not possess the
qualification requirement under paragraph (d) of
Section 26 that candidates must be an officer or
member of a legitimate labor organization.
According to the CA, since Atty. Montaño, as legal
assistant employed by FFW, is considered as
confidential employee, consequently, he is
ineligible to join FFW Staff Association, the rank-
and-file union of FFW. The CA, thus, granted the
petition and nullified the election of Atty. Montaño as
FFW National Vice-President.
Atty. Montaño moved for reconsideration claiming
that the CA seriously erred in granting Atty. Verceles’
petition on the ground that FFW Staff Association, of
which he is an officer and member, is not a legitimate
labor organization. He asserted that the legitimacy of
the union was never raised as an issue. Besides,
the declaration of the CA that FFW Staff Association
is not a legitimate labor organization amounts to a
collateral attack upon its legal personality, which is
proscribed by law. Atty. Montaño also reiterated his
allegations of lack of jurisdiction and lack of cause
of action due to a pending protest. In addition, he
claimed violation of the mandatory requirement on
certification against forum shopping and mootness of
the case due to the appointment of Atty. Verceles as
Commissioner of the National Labor Relations
Commission (NLRC), thereby divesting himself of
interest in any matters relating to his affiliation with
FFW.
ISSUES:
1. WON BLR has jurisdiction.
2. WON the petition to annul Atty. Montaño’s election
as VP was prematurely filed.
3. WON Atty. Montaño is qualified to run as FFW
National Vice-President in view of the prohibition
established in Section 76, Article XIX of the 1998
FFW Constitution and By-Laws.
RULING:
1. YES. The BLR has jurisdiction over intra-union
disputes involving a federation.
Section 226 of the Labor Code clearly provides that
the BLR and the Regional Directors of DOLE have
concurrent jurisdiction over inter-union and intra-
union disputes. Such disputes include the conduct or
nullification of election of union and workers’
association officers. There is, thus, no doubt as to the
BLR’s jurisdiction over the instant dispute involving
member-unions of a federation arising from
disagreement over the provisions of the federation’s
constitution and by-laws.
Rule XVI lays down the decentralized intra-union
dispute settlement mechanism. Section 1 states that
any complaint in this regard ‘shall be filed in the
Regional Office where the union is domiciled.’
***The concept of domicile in labor relations
regulation is equivalent to the place where the union
seeks to operate or has established a geographical
presence for purposes of collective bargaining or for
dealing with employers concerning terms and
conditions of employment.
The matter of venue becomes problematic when the
intra-union dispute involves a federation, because
the geographical presence of a federation may
encompass more than one administrative region.
Pursuant to its authority under Article 226, this Bureau
exercises original jurisdiction over intra-union disputes
involving federations. It is well-settled that FFW,
having local unions all over the country, operates
in more than one administrative region. Therefore,
this Bureau maintains original and exclusive
jurisdiction over disputes arising from any violation of
or disagreement over any provision of its constitution
and by-laws.
2. NO. The petition to annul Atty. Montaño’s election
as VP was not prematurely filed.
It is true that under the Implementing Rules, redress
must first be sought within the organization itself
in accordance with its constitution and by-laws.
However, this requirement is not absolute but
yields to exception under varying circumstances.
In the case at bench, Atty. Verceles made his protest
over Atty. Montaño’s candidacy during the plenary
session before the holding of the election
proceedings. The FFW COMELEC, notwithstanding
its reservation and despite objections from certain
convention delegates, allowed Atty. Montaño’s
candidacy and proclaimed him winner for the position.
Under the rules, the committee on election shall
endeavor to settle or resolve all protests during or
immediately after the close of election proceedings
and any protest left unresolved shall be resolved by
the committee within five days after the close of the
election proceedings. A day or two after the election,
Atty. Verceles made his written/formal protest over
Atty. Montaño’s candidacy/proclamation with the FFW
COMELEC. He exhausted the remedies under the
constitution and by-laws to have his protest acted
upon by the proper forum and even asked for a formal
hearing on the matter. Still, the FFW COMELEC failed
to timely act thereon. Thus, Atty. Verceles had no
other recourse but to take the next available remedy
to protect the interest of the union he represents as
well as the whole federation, especially so that Atty.
Montaño, immediately after being proclaimed, already
assumed and started to perform the duties of the
position. Consequently, Atty. Verceles properly
sought redress from the BLR so that the right to
due process will not be violated. To insist on the
contrary is to render the exhaustion of remedies within
the union as illusory and vain.
3. NO. Atty. Montaño is not qualified to run as FFW
National Vice-President in view of the prohibition
established in Section 76, Article XIX of the 1998
FFW Constitution and By-Laws.
Section 76, Article XIX of the FFW Constitution and
By-laws provides that no member of the Governing
Board shall at the same time be an employee in the
staff of the federation.
There is no dispute that Atty. Montaño, at the time of
his nomination and election for the position in the
Governing Board, is the head of FFW Legal Center
and the President of FFW Staff Association. Even
after he was elected, albeit challenged, he continued
to perform his functions as staff member of FFW
and no evidence was presented to show that he
tendered his resignation. On this basis, the FFW
COMELEC disqualified Atty. Montaño.
FFW COMELEC is vested with authority and power,
under the FFW Constitution and By-Laws, to screen
candidates and determine their qualifications and
eligibility to run in the election and to adopt and
promulgate rules concerning the conduct of elections.
Under the Rules Implementing the Labor Code, the
Committee shall have the power to prescribe rules
on the qualification and eligibility of candidates and
such other rules as may facilitate the orderly conduct
of elections. The Committee is also regarded as the
final arbiter of all election protests.
From the foregoing, FFW COMELEC, undeniably,
has sufficient authority to adopt its own
interpretation of the explicit provisions of the
federation’s constitution and by-laws and unless it
is shown to have committed grave abuse of
discretion, its decision and ruling will not be interfered
with. The FFW Constitution and By-laws are clear that
no member of the Governing Board shall at the
same time perform functions of the rank-and-file
staff. The BLR erred in disregarding this clear
provision. The FFW COMELEC’s ruling which
considered Atty. Montaño’s candidacy in violation of
the FFW Constitution is therefore correct.
***Section 26. A candidate for the position of National
President, National Vice-President, and National
Treasurer shall possess the following qualifications:
a. a candidate must be a bonafide member of the
Federation for at least two (2) consecutive years;
b. a candidate must be of good moral character and
has not been convicted by a final judgment of a crime
involving moral turpitude before a candidate’s election
to office or during a candidate’s incumbency;
c. except the Treasurer, a candidate must serve the
Federation full time for the period of his/her
incumbency;
d. a candidate for National President and National
Vice-President must be or must have been an
officer or member of a legitimate labor
organization in the FFW for at least three (3)
years. A legitimate labor organization shall mean a
duly registered labor union as defined by the Labor
Code as Amended.
2. Articles 273 – 277 (Grievance Machinery and
Voluntary Arbitration; p. 520-567, Azucena; p. 328-
359, Poquiz)
Article 273. GRIEVANCE MACHINERY AND
VOLUNTARY ARBITRATION
The parties to a Collective Bargaining
Agreement shall include therein provisions that will
ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from
the interpretation or implementation of their CBA and
those arising from the interpretation or enforcement of
company personnel policies.
All grievances submitted to the grievance
machinery which are not settled within seven (7)
calendar days from the date of its submission shall
automatically be referred to voluntary arbitration
prescribed in the CBA.
For this purpose, parties to a CBA shall name
and designate in advance a Voluntary Arbitrator or
panel of Voluntary Arbitrators, or include in the
agreement a procedure for the selection of such VA or
panel of VAs, preferably from the listing of qualified
Vas duly accredited by the Board. In case the parties
fail to select a VA or panel of Vas, as may be
necessary, pursuant to the selection procedure
agreed upon in CBA, which shall act with the same
force and effect as if the Arbitrator or panel of As has
been selected by the parties as described above.
3. Article 224. Labor Arbiter’s Jurisdiction (p. 35-
71, Azucena; p. 20-33, Poquiz)
4. Article 229. Appeal (p. 107-146, Azucena; p. 52-
85, Poquiz)
5. Articles 128. Visitorial and Enforcement Power.
(p. 380-390, Poquiz)
ART. 128. Visitorial and enforcement power. - (a)
The Secretary of Labor and Employment or his duly
authorized representatives, including labor regulation
officers, shall have access to employer's records and
premises at any time of 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) 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. (As
amended by Republic Act No. 7730, June 2, 1994).
Article 129. Recovery of Wages, Simple Money
Claims and Other Benefits (p. 390-393, Poquiz)
CASE DIGESTS
PEOPLE'S BROADCASTING SERVICE (BOMBO
RADYO PHILS., INC.)
vs.
THE SECRETARY OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT, THE REGIONAL
DIRECTOR, DOLE REGION VII, and JANDELEON
JUEZAN
G.R. No. 179652
March 6, 2012
FACTS:
Private respondent Jandeleon Juezan filed a
complaint against petitioner with the Department of
Labor and Employment (DOLE) Regional Office No.
VII, Cebu City, for illegal deduction, nonpayment of
service incentive leave, 13th month pay, premium
pay for holiday and rest day and illegal diminution
of benefits, delayed payment of wages and
noncoverage of SSS, PAG-IBIG and Philhealth.
After the conduct of summary investigations, and after
the parties submitted their position papers, the DOLE
Regional Director found that private respondent was
an employee of petitioner, and was entitled to his
money claims. Petitioner sought reconsideration of
the Director’s Order, but failed. The Acting DOLE
Secretary dismissed petitioner’s appeal on the ground
that petitioner submitted a Deed of Assignment of
Bank Deposit instead of posting a cash or surety
bond. When the matter was brought before the CA,
where petitioner claimed that it had been denied due
process, it was held that petitioner was accorded due
process as it had been given the opportunity to be
heard, and that the DOLE Secretary had jurisdiction
over the matter, as the jurisdictional limitation
imposed by Article 129 of the Labor Code on the
power of the DOLE Secretary under Art. 128(b) of the
Code had been repealed by Republic Act No. (RA)
7730.
The Court found that there was no employer-
employee relationship between petitioner and
private respondent. It was held that while the DOLE
may make a determination of the existence of an
employer-employee relationship, this function could
not be co-extensive with the visitorial and
enforcement power provided in Art. 128(b) of the
Labor Code, as amended by RA 7730. The National
Labor Relations Commission (NLRC) was held to
be the primary agency in determining the
existence of an employer-employee relationship.
This was the interpretation of the Court of the clause
"in cases where the relationship of employer-
employee still exists" in Art. 128(b).
***Under Art. 129 of the Labor Code, the power of
the DOLE and its duly authorized hearing officers to
hear and decide any matter involving the recovery
of wages and other monetary claims and benefits
was qualified by the proviso that the complaint not
include a claim for reinstatement, or that the
aggregate money claims not exceed PhP 5,000.
RA 7730, or an Act Further Strengthening the
Visitorial and Enforcement Powers of the Secretary of
Labor, did away with the PhP 5,000 limitation,
allowing the DOLE Secretary to exercise its
visitorial and enforcement power for claims
beyond PhP 5,000. The only qualification to this
expanded power of the DOLE was only that there still
be an existing employer-employee relationship.
***It is conceded that if there is no employer-
employee relationship, whether it has been
terminated or it has not existed from the start, the
DOLE has no jurisdiction.
It is clear and beyond debate that an employer-
employee relationship must exist for the exercise of
the visitorial and enforcement power of the DOLE.
ISSUE:
1. WON DOLE may make a determination of the
existence of employer-employee relationship (and to
what extent)
RULING:
1. YES. 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.
***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.
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 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 PhP 5,000 and below, the
jurisdiction is with the regional director of the
DOLE, under Art. 129, and if the amount involved
exceeds PhP 5,000, the jurisdiction is with the labor
arbiter, under Art. 217.
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.

SOUTH COTABATO COMMUNICATIONS
CORPORATION AND GAUVAIN J. BENZONAN
v.
HON. PATRICIA STO. TOMAS, SECRETARY OF
LABOR AND EMPLOYMENT, ROLANDO
FABRIGAR, MERLYN VELARDE, VINCE LAMBOC,
FELIPE GALINDO, LEONARDO MIGUEL, JULIUS
RUBIN, EDEL RODEROS, MERLYN COLIAO, AND
EDGAR JOPSON
G.R. No. 217575
June 15, 2016
FACTS:
Department of Labor and Employment Region-XII
(DOLE) conducted a Complaint Inspection2 at the
premises of DXCP Radio Station, which is owned by
petitioner South Cotabato Communications
Corporation. The inspection yielded a finding of
violation of labor standards provisions of the Labor
Code involving the nine (9) private respondents, such
as:
Underpayment of Wages
Underpayment of 13th Month Pay
Non-payment of the five (5) days Service Incentive
Leave Pay
Non-payment of Rest Day Premium Pay
Non-payment of the Holiday Premium Pay
Non-remittance of SSS Contributions
Some employees are paid on commission basis aside
from their allowance[s]
DOLE issued a Notice of Inspection Result directing
petitioner corporation and/or its president, petitioner
Gauvain J. Benzonan (Benzonan), to effect
restitution and/or correction of the alleged
violations within five (5) days from notice. However,
petitioners failed to comply.
DOLE Region-XII OIC Regional Director (DOLE
Regional Director) directed petitioners to pay private
respondents the total amount of P759,752,
representing private respondents' claim for wage
differentials, 13th month pay differentials, service
incentive leave pay, holiday premium pay, and
rest day premium Pay. Therefrom, petitioners
appealed to the Secretary of Labor, raising two
grounds: (1) denial of due process; and (2) lack of
factual and legal basis of the assailed Order.
The denial of due process was predicated on the
refusal of the Hearing Officer to reset the hearing
set on April 1, 2004, which thus allegedly deprived
petitioners the opportunity to present their evidence.
Likewise, petitioners asserted that the Order of the
Regional Director does not state that an employer-
employee relationship exists between petitioners
and private respondents, which is necessary to confer
jurisdiction to the DOLE over the alleged violations.
Secretary of Labor affirmed the findings of the
DOLE Regional Director.
Petitioners moved for, but was denied,
reconsideration of the Secretary of Labor's Order.
Petitioners elevated the case to the Court of Appeals
(CA) via a Petition for Certiorari under Rule 65 of the
Rules of Court. The CA dismissed the petition.
CA upheld the Secretary of Labor, holding that
petitioners cannot claim denial of due process,
their failure to present evidence being attributed to
their negligence.
ISSUE:
1. WON petitioners were denied of due process.
2. WON there was factual and legal basis of the Order
of the DOLE and WON there is employer-employee
relationship between the petitioner and respondents.
RULING:
1. NO. Petitioner was not denied of due process.
Petitioners were given ample opportunity to present
their evidence before the Regional Director is
indisputable. They were notified of the summary
investigations conducted on March 3, 2004 and April
1, 2004, both of which they failed to attend. To
justify their non-appearance, petitioners claim they
requested a resetting of the April 1, 2004 hearing due
to the unavailability of their counsel. However, no
such explanation was proffered as to why they
failed to attend the first hearing. At any rate, it
behooved the petitioners to ensure that they, as well
as their counsel, would be available on the dates set
for the summary investigation as this would enable
them to prove their claim of non-existence of an
employer-employee relationship. Clearly, their own
negligence did them in. Their lament that they have
been deprived of due process is specious.
3. NO. There was no factual and legal basis of the
Order of the DOLE and employer-employee
relationship between petitioner and respondents were
not properly established.
The Orders of the Regional Director and the Secretary
of Labor do not contain clear and distinct factual basis
necessary to establish the jurisdiction of the DOLE
and to justify the monetary awards to private
respondents.
The Regional Director merely noted the discovery
of violations of labor standards provisions in the
course of inspection of the DXCP premises. No such
categorical determination was made on the
existence of an employer-employee relationship
utilizing any of the guidelines set forth. In a word, the
Regional Director had presumed, not demonstrated,
the existence of the relationship. Of particular note is
the DOLE'S failure to show that petitioners, thus,
exercised control over private respondents' conduct in
the workplace. The power of the employee to control
the work of the employee, or the control test, is
considered the most significant determinant of the
existence of an employer-employee relationship.
Neither did the Orders of the Regional Director and
Secretary of Labor state nor make reference to any
concrete evidence to support a finding of an
employer-employee relationship and justify the
monetary awards to private respondents. Substantial
evidence, such as proofs of employment, clear
exercise of control, and the power to dismiss that
prove such relationship and that petitioners committed
the labor laws violations they were adjudged to have
committed, are grossly absent in this case.
Furthermore, the Orders dated May 20, 2004 and
November 8, 2004 do not even allude to the
substance of the interviews during the inspection that
became the basis of the finding of an employer-
employee relationship.
In a similar vein, the use of the straight computation
method in awarding the sum of P759,752 to private
respondents, without reference to any other
evidence other than the interviews conducted during
the inspection, is highly telling that the DOLE failed to
consider evidence in arriving at its award and leads
this Court to conclude that such amount was arrived
at arbitrarily.
Evidence pointing not only to the existence of an
employer-employee relationship between the
petitioners and private respondents but also to the
latter's entitlement to the benefits are miserably
lacking.
It cannot be stressed enough that the existence of an
employer-employee relationship between the parties
is essential to confer jurisdiction of the case to the
DOLE. Without such express finding, the DOLE
cannot assume to have jurisdiction to resolve the
complaints of private respondents as jurisdiction in
that instance lies with the NLRC.
*** The Orders of the Regional Director and Secretary
of Labor do not comply with Article VIII, Section 16 of
the Constitution
As a necessary corollary to the foregoing
considerations, another well-grounded reason exists
to set aside the May 20, 2004 Order of the Regional
Director and November 8, 2004 Order of the
Secretary of Labor. The said Orders contravene
Article VIII, Section 14 of the Constitution, which
requires courts to express clearly and distinctly the
facts and law on which decisions are based, to
Section 14. No decision shall be rendered by any
court without expressing therein clearly and
distinctly the facts and the law on which it is
based.
No petition for review or motion for reconsideration of
a decision of the court shall be refused due course or
denied without stating the legal basis therefor.
VICTOR METEORO, et.al.
vs.
CREATIVE CREATURES, INC.
G.R. No. 171275
July 13, 2009
FACTS:
Respondent is a domestic corporation engaged in the
business of producing, providing, or procuring the
production of set designs and set construction
services for television exhibitions, concerts, theatrical
performances, motion pictures and the like. It primarily
caters to the production design requirements of ABS-
CBN Broadcasting Corporation in Metro Manila and
nationwide. On the other hand, petitioners were hired
by respondent on various dates as artists, carpenters
and welders. They were tasked to design, create,
assemble, set-up and dismantle props, and provide
sound effects to respondent’s various TV programs
and movies.
Petitioners filed their respective complaints for non-
payment of night shift differential pay, overtime
pay, holiday pay, 13th month pay, premium pay
for Sundays and/or rest days, service incentive
leave pay, paternity leave pay, educational
assistance, rice benefits, and illegal and/or
unauthorized deductions from salaries against
respondent, before the Department of Labor and
Employment (DOLE), National Capital Region (NCR).
After the inspection conducted at respondent’s
premises, the labor inspector noted that "the records
were not made available at the time of the inspection;"
that respondent claimed that petitioners were
contractual employees and/or independent talent
workers; and that petitioners were required to punch
their cards.
Respondent argued that the DOLE-NCR had no
jurisdiction over the complaint of the petitioners
because of the absence of an employer-employee
relationship. It added that petitioners were free-lance
individuals, performing special services with skills
and expertise inherently exclusive to them like actors,
actresses, directors, producers, and script writers,
such that they were treated as special types of
workers.
Petitioners, on the other hand, averred that they were
employees of respondent, as the elements of an
employer-employee relationship existed.
Meanwhile, petitioners filed a complaint for illegal
dismissal against petitioner, with prayer for payment
of overtime pay, premium pay for holiday and rest
day, holiday pay, service incentive leave pay, 13th
month pay and attorney’s fees before the National
Labor Relations Commission (NLRC).
DOLE Regional Director Maximo Baguyot Lim issued
an Order directing respondent to pay petitioners the
total amount of ₱2,694,709.00.
The Regional Director sustained petitioners’ claim
on the existence of an employer-employee
relationship using the determinants set forth by the
Labor Code, specifically, the elements of control and
supervision, power of dismissal, payment of wages,
and the selection and engagement of employees. He
added that since the petitioners had worked for
more than one year doing the same routine work,
they were regular employees with respect to the
activity in which they were employed. Lastly, he
upheld the DOLE-NCR’s jurisdiction to hear and
determine cases in violation of labor standards law.
On appeal, then DOLE Secretary Patricia A. Sto.
Tomas affirmed the findings of the DOLE Regional
Director. In upholding the jurisdiction of the DOLE-
NCR, she explained that the Secretary of Labor or his
duly authorized representative is allowed to use his
visitorial and enforcement powers to give effect to
labor legislation, regardless of the amount involved,
pursuant to Article 128 of the Labor Code, as
amended by Republic Act (R.A.) No. 7730.
However, CA annulled and set aside the Orders of the
Regional Director and SOLE.
ISSUE:
WON DOLE has jurisdiction over the case at bar.
RULING:
NO. The instant case falls within the exclusive
jurisdiction of the NLRC.
The power of the Regional Director to hear and
decide the monetary claims of employees is not
absolute. The last sentence of Article 128 (b) of the
Labor Code, otherwise known as the "exception
clause," provides an instance when the Regional
Director or his representatives may be divested of
jurisdiction over a labor standards case.
issues the resolution of which necessitated the
examination of evidentiary matters not verifiable in the
normal course of inspection. Hence, the Regional
Director was divested of jurisdiction and should
have endorsed the case to the appropriate
Arbitration Branch of the NLRC. Considering,
however, that an illegal dismissal case had been filed
by petitioners wherein the existence or absence of an
employer-employee relationship was also raised, the
CA correctly ruled that such endorsement was no
longer necessary.
Recruitment and Placement
RA 8042 as amended by RA 100022

Under prevailing jurisprudence, the so-called CASE DIGESTS

"exception clause" has the following elements, all of
which must concur: PEOPLE v. SADIOSA
GR No. 107084
(a) that the employer contests the findings of the labor
regulations officer and raises issues thereon;
FACTS:
(b) that in order to resolve such issues, there is a
need to examine evidentiary matters; and

(c) that such matters are not verifiable in the normal

course of inspection.

In the present case, the CA aptly applied the

"exception clause." At the earliest opportunity,
respondent registered its objection to the findings of
the labor inspector. The labor inspector, in fact,
noted in its report that "respondent alleged that
petitioners were contractual workers and/or
independent and talent workers without control or
supervision and also supplied with tools and
apparatus pertaining to their job." In its position paper,
respondent again insisted that petitioners were not its
employees. It then questioned the Regional Director’s
jurisdiction to entertain the matter before it, primarily
because of the absence of an employer-employee
relationship. Finally, it raised the same arguments
before the Secretary of Labor and the appellate court.
It is, therefore, clear that respondent contested and
continues to contest the findings and conclusions
of the labor inspector.

In the case at bar, whether or not petitioners were

independent contractors/project employees/free lance
workers is a question of fact that necessitates the
examination of evidentiary matters not verifiable in the
normal course of inspection. Indeed, the contracts of
independent services, as well as the check vouchers,
were kept and maintained in or about the premises of
the workplace and were, therefore, verifiable in the
course of inspection. However, respondent likewise
claimed that petitioners were not precluded from
working outside the service contracts they had
entered into with it (respondent); and that there were
instances when petitioners abandoned their service
contracts with the respondent, because they had to
work on another project with a different company.
Undoubtedly, the resolution of these issues requires
the examination of evidentiary matters not
verifiable in the normal course of inspection.
Verily, the Regional Director and the Secretary of
Labor are divested of jurisdiction to decide the
case.

In sum, respondent contested the findings of the labor

inspector during and after the inspection and raised