DEPARTMENT OF LABOR AND EMPLOYMENT

COMPLIANCE ORDER

13 August 2016 1
JOINT ASSESSMENT OR
COMPLIANCE VISIT

NOTICE OF RESULTS

MANDATORY CONFERENCE

COMPLIANCE ORDER
COMPLIANCE ORDER

CAPTION
a. name of the office
b. the title of the case
c. the docket number

BODY
a. statement of the case
b. statement of the facts
c. the issues
d. the ruling including the
computation/regularization

DISPOSITIVE PORTION
Compliance Order shall be written in
clear and concise language, stating
therein the following:

1. Facts;
2. Issue/s;
3. Applicable laws;
4. Computation of the unpaid
wages and other benefits;
5. Double Indemnity;
6. Accessory penalty;
7. Directive to submit
compliance
8. Unlawful act, if any and
appropriate recommendation
ISSUE

Factual Issue
Legal Issue
FACTUAL ISSUE
EVIDENCE

Real - those addressed to the senses.

Documentary – those consist of writing or
any material containing letters, words,
numbers, figures, symbols or other modes of
written expression offered as proof of
their contents.

Testimonial – those testified to by a witness.
LEGAL ISSUE
AUTHORITY

Primary – constitution, laws, rules and
jurisprudence

Secondary – articles, treatises, or legal
encyclopedia

Mandatory or Persuasive
WHAT ISSUE?

WHETHER OR NOT A HAS RENDERED WORK
IN EXCESS OF EIGHT HOURS

WHETHER OR NOT A IS ENTITLED TO OVERTIME PAY

HOW MANY HOURS OF WORK HAS A RENDERED
IN EXCESS OF EIGHT HOURS?

IS A A RANK-AND-FILE EMPLOYEE?
SUBSTANTIAL EVIDENCE

Substantial evidence is defined
as that amount of relevant
evidence which a reasonable
mind might accept as adequate
to justify a conclusion.
LEGAL ISSUE

DOES THE LLCO HAVE THE
AUTHORITY TO VISIT AND ASSESS
THE COMPLIANCE OF
ESTABLISHMENT?
LEGAL ISSUE

DOES THE REGIONAL DIRECTOR
HAVE JURISDICTION OVER
LABOR STANDARDS CASES?
LEGAL ISSUE

IS THERE A JURISDICTIONAL
THRESHOLD AS TO THE AMOUNT
INVOLVED IN THE EXERCISE OF
ENFORCEMENT POWER?
LEGAL ISSUE

DOES THE REGIONAL DIRECTOR
HAVE THE AUTHORITY TO ISSUE
COMPLIANCE ORDER?
LEGAL ISSUE

MAY THE REGIONAL DIRECTOR
BE DIVESTED FROM EXERCISING
HIS OR HER POWER OR
JURISDICTION UNDER ARTICLE
128?
LEGAL ISSUE

DOES THE REGIONAL DIRECTOR
HAVE THE AUTHORITY TO
DETERMINE EMPLOYER-
EMPLOYEE RELATIONSHIP?
LEGAL ISSUE

DOES THE REGIONAL DIRECTOR
HAVE THE AUTHORITY TO
DECLARE LABOR-ONLY
CONTRACTING?
LEGAL ISSUE

WHO HAS THE BURDEN OF
PROOF TO ESTABLISH
LEGITIMATE CONTRACTING OR
SUBCONTRACTING?
LEGAL ISSUE

DOES THE REGIONAL DIRECTOR
HAVE THE AUTHORITY TO
REGULARIZE EMPLOYEES?
Labor Code of the Philippines

Art. 128. Visitorial and enforcement power. 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.
Labor Code of the Philippines

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.
Labor Code of the Philippines

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.
Labor Code of the Philippines

The Secretary of Labor and Employment may likewise
order stoppage of work or suspension of operations of any
unit or department of an establishment when non-
compliance with the law or implementing rules and
regulations poses grave and imminent danger to the
health and safety of workers in the workplace. Within
twenty-four hours, a hearing shall be conducted to
determine whether an order for the stoppage of work or
suspension of operations shall be lifted or not. In case the
violation is attributable to the fault of the employer, he
shall pay the employees concerned their salaries or wages
during the period of such stoppage of work or suspension
of operation.
Labor Code of the Philippines

It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders
of the Secretary of Labor and Employment or his duly
authorized representatives issued pursuant to the
authority granted under this Article, and no inferior court
or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over
any case involving the enforcement orders issued in
accordance with this Article.
Labor Code of the Philippines

Under Article 217 of the Labor Code, Labor Arbiters have
jurisdiction over the following cases:

1. Unfair labor practice (ULP) cases;
2. Termination disputes (or illegal dismissal cases);
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms
of damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of the
Labor Code, including questions involving the legality of
strikes and lockouts;
Labor Code of the Philippines

6. Except claims for employees compensation not
included in the next succeeding paragraph, social
security, medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding Five Thousand
Pesos (P5,000.00), whether or not accompanied with a
claim for reinstatement;
7. Wage distortion disputes in unorganized
establishments not voluntarily settled by the parties
pursuant to Republic Act No. 6627;
8. Enforcement of compromise agreements when there
is non-compliance by any of the parties pursuant to
Article 227 of the Labor Code, as amended;
Labor Code of the Philippines

9. Money claims arising out of employer-employee
relationship or by virtue of any law or contract, involving
Filipino workers for overseas employment, including
claims for actual, moral, exemplary and other forms of
damages as provided by Section 10 of R.A. No. 8042, as
amended by R.A. No. 10022;
10.Contested cases under the exception clause of Article
128(b) of the Labor Code, as amended by R.A. 7730; and
11.Other cases as may be provided by law.
EXCEPTION CLAUSE

However, if the labor standards case is covered by the
exception clause in Article 128(b) of the Labor Code, then
the Regional Director will have to endorse the case to the
appropriate Arbitration Branch of the NLRC. In order to
divest the Regional Director or his representatives of
jurisdiction, the following elements must be present: (a)
that the employer contests the findings of the labor
regulations officer and raises issues thereon; (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. The rules
also provide that the employer shall raise such objections
during the hearing of the case or at any time after receipt
of the notice of inspection results. Esvai Case, November
20, 2007.
BURDEN OF PROOF

A contractor is presumed to be a labor-only
contractor, unless it proves that it has the
substantial capital, investment, tools and
the like. However, where the principal is
the one claiming that the contractor is a
legitimate contractor, the burden of proving
the supposed status of the contractor rests
on the principal. Alilin Case, June 9, 2014.
DETERMINATION OF EMPLOYMENT
RELATIONSHIP

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. Bombo Radyo Case,
March 6, 2012.
DETERMINATION OF EMPLOYMENT
RELATIONSHIP

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. Bombo
Radyo Case, March 6, 2012.
DOLE VS. NLRC

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. Bombo Radyo Case, March 6, 2012.
DECLARATION OF LABOR-ONLY
CONTRACTING

The basis of their claims against petitioner rests on the
argument that CAMPCO was a labor-only contractor and,
thus, merely an agent or intermediary of petitioner, who
should be considered as respondents’ real employer. The
matter of whether CAMPCO was a labor-only contractor
was already settled and determined in the DOLE
proceedings, which should be conclusive and binding upon
the NLRC. What were left for the determination of the
NLRC were the issues on whether there was illegal
dismissal and whether respondents should be regularized.
DOLE Philippines Case, November 30, 2006.
DECLARATION OF LABOR-ONLY
CONTRACTING

It is obvious that the visitorial and enforcement power
granted to the DOLE Secretary is in the nature of a quasi-
judicial power.

The DOLE Secretary, under Article 106 of the Labor Code,
as amended, exercise quasi-judicial power, at least, to the
extent necessary to determine violations of labor
standards provisions of the Code and other labor
legislation. He can issue compliance orders and writs of
execution for the enforcement of his orders. As evidence
of the importance and binding effect of the compliance
orders of the DOLE Secretary, Article 128 of the Labor
Code, as amended. DOLE Philippines Case, November 30,
2006.
DECLARATION OF LABOR-ONLY
CONTRACTING

Applying the doctrine of res judicata, all matters that
have been fully resolved with finality by this Court’s
dismissal of the appeal that stemmed from Regional
Director Balanag’s Order dated August 22, 2000 in LSED
Case No. RO700-9906-CI-CS-168 are already conclusive
between the parties. Res judicata is defined as a matter
adjudged; a thing judicially acted upon or decided; a thing
or matter settled by judgment. Under this doctrine, an
existing final judgment or decree rendered on the merits,
and without fraud or collusion, by a court of competent
jurisdiction, upon any matter within its jurisdiction, is
conclusive of the rights of the parties or their privies, in
all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and
matters in issue in the first suit. Norkis Trading Case,
DECLARATION OF LABOR-ONLY
CONTRACTING

Such utter disregard by the NLRC of the findings of the
Regional Director and DOLE Secretary amounts to grave
abuse of discretion amounting to lack or excess of
jurisdiction. Norkis Trading Case, October 10, 2012.
EXPRESS CLEARLY
AND DISTINCTLY
THE FACTS AND
THE LAW
Determine employment relationship

Four-fold test
Determine labor-only contracting

Determine regular employment

Identify names of employees
DISPOSITIVE PORTION (Trilateral)

“Name of LOC is declared labor-only
contractor.”

“The employees placed by Name of LOC in
list A shall be considered regular employees
of the Name of Principal.

“ Name of Principal is directed to submit
within ten (10) day proof of absorption or
regularization of the employees in list A.”
DISPOSITIVE PORTION (Bilateral)

“The employees in list A shall be considered
regular employees of the Name of
Establishment.”

“Name of Establishment is directed to
submit within ten (10) day proof of
absorption or regularization of the
employees in list A.”
INDICATORS OF GOOD DECISION
WRITING

1. Precise
2. Concise
3. Clear
4. Forceful
COMPLIANCE ORDER

CAPTION
a. name of the office
b. the title of the case
c. the docket number

BODY
a. statement of the case
b. statement of the facts
c. the issues
d. the ruling including the
computation/regularization

DISPOSITIVE PORTION
THANK YOU

DEPARTMENT OF LABOR AND EMPLOYMENT