1

Maternity Childrens Hospital vs. Secretary of Labor

G.R. No. 78909, June 30, 1989
EN BANC: MEDIALDEA, J.

Facts:

Petitioner is a semi-government hospital, managed by the Board of Directors

of the Cagayan de Oro Women's Club and Puericulture Center, headed by
Mrs. Antera Dorado, as holdover President. The hospital derives its finances
from the club itself as well as from paying patients, averaging 130 per
month. It is also partly subsidized by the Philippine Charity Sweepstakes
Office and the Cagayan De Oro City government. Petitioner has forty-one
(41) employees. Aside from salary and living allowances, the employees are
given food, but the amount spent therefor is deducted from their respective
salaries. On May 23, 1986, ten (10) employees of the petitioner employed in
different capacities/positions filed a complaint with the Office of the Regional
Director of Labor and Employment, Region X, for underpayment of their
salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86.On
June 16, 1986, the Regional Director directed two of his Labor Standard and
Welfare Officers to inspect the records of the petitioner to ascertain the truth
of the allegations in the complaints. Based on their inspection report and
recommendation, the Regional Director issued an Order dated August 4,
1986, directing the payment of P723, 888.58, representing underpayment of
wages and ECOLAs to all the petitioner's employees. Petitioner appealed
from this Order to the Minister of Labor and Employment, Hon. Augusto S.
Sanchez, who rendered a Decision on September 24, 1986, modifying the
said Order in that deficiency wages and ECOLAs, should be computed only
from May 23, 1983 to May 23, 1986. On October 24, 1986, the petitioner
filed a motion for reconsideration which was denied by the Secretary of Labor
in his Order dated May 13, 1987, for lack of merit.

Issue:

1. Whether or not the Regional Director had jurisdiction over the case?

2. Whether or not the Regional Director erred in extending the award to all
hospital employees?

HELD:

1. The answer is in the affirmative the Regional Directors has a

jurisdiction in this labor standard case. This is Labor Standard case,
and is governed by Article 128 (b) of the Labor Code, as amended by
E.O. No. 111. Labor standards refer to the minimum requirements
 2

prescribed by existing laws, rules, and regulations relating to wages,

hours of work, cost of living allowance and other monetary and welfare
benefits, including occupational, safety, and health standards (Section
7, Rule I, Rules on the Disposition of Labor Standards Cases in the
Regional Office, dated September 16, 1987).

Under the present rules, a Regional Director exercises both

visitorial and enforcement power over labor standards cases, and is
therefore empowered to adjudicate money claims, provided there still
exists an employer-employee relationship, and the findings of the
regional office is not contested by the employer concerned. We
believedthat even in the absence of E. O. No. 111, Regional Directors
already had enforcement powers over money claims, effective under
P.D. No. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement
system.

2. The Regional Director correctly applied the award with respect to

those employees who signed the complaint, as well as those who did
not sign the complaint, but were still connected with the hospital at the
time the complaint was filed. The justification for the award to this
group of employees who were not signatories to the complaint is that
the visitorial and enforcement powers given to the Secretary of Labor
is relevant to, and exercisable over establishments, not over individual
members/employees, because what is sought to be achieved by its
exercise is the observance of, and/ or compliance by such
firm/establishment with the labor standards regulations. However,
there is no legal justification for the award in favor of those employees
who were no longer connected with the hospital at the time the
complaint was filed. Article 129 of the Labor Code in aid of the
enforcement power of the Regional Director is not applicable where the
employee seeking to be paid is separated from service. His claim is
purely money claim that has to be subject of arbitration proceedings
and therefore within the original and exclusive jurisdiction of the Labor
Arbiter.
 3

Peoples Broadcasting v. Sec. of DOLE

G.R. no. 179652. May 8, 2009

Facts:
Jandeleon Juezan (respondent) filed a complaint against Peoples
Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal
deduction, non-payment of service incentive leave, 13 th 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 before
the Department of Labor and Employment (DOLE) Regional Office No.
VII,Cebu City.

On the basis of the complaint, the DOLE conducted a plant level

inspection on 23 September 2003. In 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.
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.

In his Order dated 27 February 2004, DOLE Regional Director Atty.

Rodolfo M. Sabulao (Regional Director) ruled that respondent is an employee
of petitioner, and that the former is entitled to his money claims amounting
to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that
the Regional Director gave credence to the documents offered by respondent
without examining the originals, but at the same time he missed or failed to
consider petitioners evidence. Petitioners motion for reconsideration was
denied.[ On appeal to the DOLE Secretary, petitioner denied once more the
existence of employer-employee relationship. In its Order dated 27 January
2005, the Acting DOLE Secretary 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. Petitioner maintained that there is no
employer-employee relationship had ever existed between it and
respondent because it was the drama directors and producers who paid,
supervised and disciplined respondent. It also added that the case was
beyond the jurisdiction of the DOLE and should have been considered by the
labor arbiter because respondents claim exceeded P5,000.00.
 4

Issue:
Does the Secretary of Labor have the power to determine the
existence of an employer-employee relationship?

Held:
No.
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 em
ployers office are the primary source materials, what may prove decisive
are factors related to the history of the employers 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
DOLEs 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
 5

impose. The rationale underlying this limitation is to eliminate the prospect

of competing conclusions of the Secretary of Labor and the NLRC, on a
matter fraught with questions of fact and law, which is best resolved by
the quasi-judicial body, which is the NRLC, rather than an
administrative official of the executive branch of the government. If the
Secretary of Labor proceeds to exercise his visitorial and enforcement
powers absent the first requisite, as the dissent proposes, his office confers
jurisdiction on itself which it cannot otherwise acquire.

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.

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.

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 NLRCs jurisdiction and the DOLEs
prerogative but also the procedure when the case involves the
fundamental challenge on the DOLEs prerogative based on lack of
employer-employee relationship. As exhaustively discussed here,
the DOLEs 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 petitioners 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.
 6

WHEREFORE, the petition is GRANTED.

G.R. No. 142351 November 22, 2006

ST. MARTIN FUNERAL HOMES

vs.
NATIONAL LABOR RELATIONS COMMISSION , AND BIENVENIDO
ARICAYOS

The present petition for certiorari stemmed from a complaint for illegal
dismissal filed by herein private respondent before the NLRC, Regional
Arbitration Branch No. III, in San Fernando, Pampanga.

FACTS: Private respondent alleges that he started working as Operations

Manager of petitioner St. Martin Funeral Home on February 6, 1995.
However, there was no contract of employment executed between him and
petitioner nor was his name included in the semi-monthly payroll.

On January 22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by petitioner
of its VAT to the BIR.

On October 25, 1996, the Labor Arbiter rendered a Decision, in favor of

petitioner declaring that his office had no jurisdiction over the case.
 7

On June 13, 1997, the NLRC issued a Resolution annulling the Arbiters
Decision and remanded the case to him for appropriate proceedings.

When its motion for reconsideration was rejected by the NLRC, petitioner
filed a petition for certiorari under Rule 65 before the Supreme Court.

ISSUE: W/N all petitions for certiorari under Rule 65 assailing the decisions
of the NLRC should henceforth be filed with the Supreme Court.

RULING: The Court held for the first time that all petitions for certiorari
under Rule 65 assailing the decisions of the NLRC should henceforth be filed
with the CA.

Therefore, all references in the amended section 9 of B.P. No. 129 to

supposed appeals from the NLRC to the Supreme Court are interpreted and
refer to petitions for certiorari under Rule 65. Consequently, all such petitions
should henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the appropriate
forum for the relief desired.

Thus, the petition was remanded to the CA.

CIRINEO BOWLING PLAZA, INC., petitioner,

vs.
GERRY SENSING, BELEN FERNANDEZ, MIRASOL DIAZ, MARGARITA
ABRIL, DARIO BENITEZ, MANUEL BENITEZ, RONILLO TANDOC, EDGAR
DIZON, JOVELYN QUINTO, KAREN REMORAN, JENIFFER RINGOR,
DEPARTMENT OF LABOR AND EMPLOYMENT and COURT of
APPEALS, respondents.

NATURE OF THE CASE: Special Civil Action for Certiorari under Rule 65 of
Rules of Court

FACTS: On November 27, 1995, one of the employee of the petitioner filed
a letter complaint with the DOLE in Dagupan District, Dagupan City for
inspection and investigation of the petitioner for various labor law violations
such as underpayment of wages, 13th month pay, non-payment of rest day
pay, overtime pay, holiday pay and service incentive pay. Pursuant to the
visitorial and enforcement of the Secretary of Labor and Employment, his
duly authorized representative conducted an inspection/investigation and
validated such complaint. Petitioner was then called for a hearing for four(4)
times, however, failed to appear. DOLE then ordered the petitioner for lawful
 8

remuneration amounting to Php377,500.58 for the thirteen(13) affected

employees and also to submit proof of payments, and adjust the salaries of
the employees and to submit proof thereof within the same period.

The claims of two(2) of the thirteen(13) affected employees have been

settled and thereby dismissed. However the order for the remaining
eleven(11) employees still stands. On October 21, 1996, DOLE Director
Maximo B. Lim issued a writ of execution. Having such act, the petitioner
attacked the validity of such writ, averring that the DOLE Director do not
have the jurisdiction to decide on such case, thus, praying that it should be
dismissed.

ISSUE: WON the DOLE Director has a jurisdiction over the case.

HELD: YES. Pursuant to the provisions of Article 128 of the Labor Code, the
Secretary of Labor or his duly authorized representatives, including labor
regulation officers, shall have access to employers records and premises at
any time of the day or night whenever work is being undertaken, 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 regulartions issued pursuant thereto. Therefore, the instant petition
was dismissed.

BAY HAVEN, INC, JOHNNY T. CO AND VIVIAN TE-FERNANDEZ VS.

FLORENTINOABUAN ET. AL.G.R. No. 160859, July 30, 2008Ponente: J.
Austria-Martinez

FACTS:
Abuan and his co-respondents were employees of New Bay Haven, Inc. who
filed a complaint of underpayment of wages and holiday pays and non-
payment of night shift differential before the RegionalDirector of DOLE-NCR.
The Regional Director in the exercise of its visitorial, inspection
andenforcement powers issued an order corresponding to the claims of
underpayment. The Companyassailed the decision for lack of due process
 9

and lack jurisdiction of Regional Director over the disputedue to the amount
involved.
ISSUE:
Did Regional Director correctly assume jurisdiction over the case?
LAW:
Art, 128 of the Labor Code on Visitorial and Enforcement Powers
RULING:
Yes, the Regional Director correctly assumed jurisdiction over the case. The
Secretary of Labor and his authorized representatives have jurisdiction to
enforce compliance with labor standard laws under the broad visitorial and
enforcement powers conferred by Art. 128 of the Labor Code as amended by
RA7730.The visitorial and enforcement powers of the Secretary, exercised
through his representatives,encompass compliance with all labor standard
laws and other legislation, regardless of the amount of theclaims involved

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 87245 April 6, 1990

UNIVERSAL TEXTILE MILLS, INC. AND PATRICIO LIM, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, ASSOCIATED LABOR
UNIONS TUCP AND UNIVERSAL TEXTILE MILLS WORKERS UNION-
ALU, respondents.
 10

Jaime E. Ilagan & Associates for petitioners.

Vicente S. Veloso III & Leonard U. Sawal and Joji L. Barrios for private
respondent.

FELICIANO, J.:

In this Petition for Certiorari, petitioners Universal Textile Mills, Inc. ("Utex")
and Patricio Lim seek to annul and set aside the decision of the National
Labor Relations Commission ("NLRC") in NLRC-NCR Case No. 7-2038-85 dated
25 January 1988 which reversed a decision of Labor Arbiter Ceferina J.
Diosana and directed petitioners to pay Utex's workers an additional basic
wage increase of P1.50 starting from 13 March 1982 and continuing
indefinitely.

The record shows that on 24 March 1983, petitioner Utex and private
respondents Associated Labor Unions TUCP and Universal Textile Mills
Workers Union ("ALU") entered into a Collective Bargaining Agreement
("CBA") which was to be in effect for a period of three (3) years from the said
date. The CBA included the following provisions:

Article V
Wage Increase

Section 1. The company hereby grants the following wage increases

to all covered employees:

(a) wage increase of P1.50 per day from March 13, 1982 to March 12,
1983 to those with at least one (1) year of service as of March 13,
1982. Any backwages shall be computed exclusively on days actually
worked not including overtime, rest day premium, holiday premium,
night differential pay, vacation and sick leave; provided, however, that
only those still in the payroll as of the date of the signing this
Agreement shall be entitled to any such backwages;

(b) an increase of P1.50 per day effective March 13, 1983 to

employees with at least two (2) years of service on such date;

(c) on the second and third years, if conditions so warrant, the Union
may seek negotiation for wage adjustments

xxx xxx xxx

(Emphasis supplied)
 11

Two years later, between the months of February and July 1985, respondent
unions filed several complaints against petitioner Utex, namely:

1. NLRC Case No. 2-480-85 filed on 11 February 1985 for unfair labor
practice by reason of the management's alleged refusal to negotiate
concerning wage adjustments for the second and third years of the life
of the CBA;

2. NLRC Case No. 7-2038-85 filed on 2 July 1985 for the petitioner's
alleged failure and refusal to implement the wage increases provided
in Sections 1 (a) and (b) Article V of the CBA;

3. NLRC Case No. 7-2339-85 filed on 25 July 1985 for alleged "deadlock
in wage reopening negotiation", due to management's alleged refusal
to reopen negotiations for wage adjustments for the second and third
years of the CBA.

All the aforementioned cases were subsequently consolidated in the salary of

Labor Arbiter Diosana. On 10 July 1986, the parties executed a Memorandum
Agreement in which they agreed to dismiss with prejudice all the cases
pending before Labor Arbiter Diosana, except NLRC Case No. 7-2038-85.

In due time, in a decision dated 3 November 1986, the Labor Arbiter

dismissed NLRC Case No. 7-2038-85 for lack of merit. The Labor Arbiter held
that respondent unions had failed to prove their charges against petitioners
and that the latter had complied with management's obligations under the
CBA.

On appeal by private respondent unions, the NLRC set aside the decision of
the Labor Arbiter and directed petitioners to pay the workers a basic wage
increase of P1.50 per day which, the NLRC held, was provided under Section
1, paragraph (a), Article V of the CBA, starting from 13 March 1983 and
continuing indefinitely. The NLRC held that the P1.50 increase per day from
13 March 1982 to 12 March 1983 embodied in Section I (a), Article V of the
CBA was a wage increase and not backwages, since said Article V itself refers
to "Wage Increase." The NLRC also stated that Section 2 of the same article
which provides that "(All) the foregoing increases shall be deemed in
compliance with Presidential Decrees/Letters of Instructions and/or Wage
Orders promulgated as of the date of signing of this Agreement," would be
bereft of meaning if the increase granted under Section 1, paragraph (a)
were to be considered as mere backwages. On 16 February 1989, the NLRC
denied petitioners' Motion for Reconsideration.

Petitioners are now before us assailing the above ruling of the NLRC and
submitting that the NLRC cannot order petitioners to continue to pay the
covered employees the P1.50/day provided in Section 1 (a) of Article V of the
 12

CBA beyond 12 March 1983 since the said amount was granted for a definite
period only, i.e. from 13 March 1982 to 12 March 1983; that the same was
not a wage increase but some sort of a "backwage."

1. The task before us is to ascertain and give effect to the intent

projected by the parties to the CBA when they agreed upon Section 1
(a) of Article V thereof. That intent is, of course, to be determined in
the first instance by examining the words used by the parties in setting
forth their agreement. 1 Those words are simply that a "wage increase
of P1.50 per day" was being granted by Utex "from March 13, 1982 to
March 12, 1983" to employees "with at least one (1) year of service as
of March 13, 1982." Giving these quite ordinary words used by the
parties their ordinary signification, the parties may be seen to have
intended to make that wage increase of P1.50 per day to be effective
for a defined and limited duration only, that is, from March 13, 1982 to
March 12, 1983. In marked contrast, Section 1 (b) of Article V of the
CBA provided for an increase of P1.50 per day effective March 13,
1983," without setting a terminal date for the effectivity of that
increase and hence, by clear implication, stipulated for the continued
effectivity of that increase for the indefinite future. Reading, as we
must, Sections 1 (a) and 1 (b) of Article V together, it will be seen that
the parties agreed upon a wage increase of P1.50 per day starting from
March 13, 1982 to March 12, 1983, and from March 13, 1983
indefinitely into the future.

2. The NLRC misread Sections 1 (a) and 1 (b) of Article V of the CBA.
The NLRC construed Article V as providing for two (2) cumulative wage
increases: a) the first increase, of P1.50 per day, under Section 1 (a),
starting March 13, 1982 and continuing indefinitely; b) the second
increase, also of P1.50 per day, under Section 1 (b) starting March 13,
1983 and also continuing indefinitely. Thus, under the NLRC's reading,
starting March 13, 1983, a total wage increase of P3.00 per day was
provided for. The principal difficulty with the NLRC's reading is that it
disregards the ordinary meaning of the words used by the parties in
Section 1 (a) of Article V. In effect, the NLRC read Section 1 (a) ("wage
increase of P1.50 per day from March 13, 1982 to March 12, 1983 to
those with at least one [1] year of service as of March 13, 1982") as if
provided for a "wage increase of P1.50 per day from March 13,
1982 . . . to those with at least one (1) year of service as of March 13,
1982." The NLRC, however, cannot remake a contract by eviscerating
it, by deleting from it words placed there by the parties. No court, no
interpreter and applier of a contract, has such a prerogative.

3. The NLRC sought to justify its surgical interpretation by pointing to

the words "wage increase" used in Section 1 (a) of Article V, as if a
wage increase per se were to continue indefinitely into the future,
 13

without regard to the actual words used by the parties. Such a view is
simply without basis in law or common practice. In this instance, words
limiting the effectivity of that wage increase to an identified and
limited period of time were used; "from March 13, 1982 to March 12,
1983," and those words must be given effect. Actually, the parties used
in Section 1 (a) not only the phrase "wage increase" but also the terms
"backwages." "Backwages" may seem a somewhat clumsy term but
the interpreter of this CBA must bear in mind that the CBA took effect
as of March 13, 1983 (the commencement date of the P1.50 per day
increase stipulated in Section 1 [b] of Article V) and that, consequently,
the net effect of Sections 1 (a) and 1 (b) was to provide for a P1.50 per
day increase retroactively starting one (1) year before the effective
date of the CBA. In this light, Section 1 (a) had indeed provided for
"backwages"; added remuneration for work done in the preceding year.

It seems useful to note that Section 1 (a) of Article V of the 1983 CBA
was designed to bridge the one-year gap which existed between the
expiration date of the 1979 CBA and effectivity date of the 1983 CBA.
The 1983 CBA was naturally prospective in operation; thus the wage
increase stipulated in Section 1 (b) of Article V was effective from
March 13, 1983 and onwards. Upon the other hand, Section 1 (a) of
Article V in effect made Section 1 (b) retroactive to March 13, 1982, to
cover the period during which the parties were negotiating what was to
become the 1983 CBA.

It also seems useful to note further that both 1) the preceding CBA
between the parties, i.e., the CBA which took effect on 31 January
1979, and 2) the succeeding CBA between the same parties, i.e., the
CBA effective 25 June 1987, have provisions quite parallel to Sections 1
(a) and 1 (b) of Article V of the (1983) CBA here before us. Section 1 (a)
of Article V of the 1979 CBA provided as follows:

Section 1. The COMPANY shall grant the following wage increases:

(a) Seven (7%) percent wage increase but not less than P1.00 on
November 9, 1977 to January 31, 1979 rounded to nearest P0.05 to
those with at least one (1) year of service on November 9,1977. Any
backwages shall be computed exclusively on days actually worked, not
including overtime, rest day premium, holiday premium, night
differential pay, vacation and sick leave. In addition, said workers shall
receive the amount of eighty (P80.00) pesos each; only those still in
the payroll on date of signing are entitled to backwages and eighty
(P80.00) pesos.
 14

(b) Effective February 1, 1979, an amount equivalent to 10% of their

respective daily wages, rounded to the nearest P0.05, to employees
with at least two (2) years of service on such date.

(c) Effective February 1, 1980, an amount equivalent to 5% of their

respective daily wages, rounded to the nearest P0.05 to employees
with at least three (3) years of service on such date.

(d) Effective February 1, 1981, an amount equivalent to 5% of their

respective daily wages rounded to the nearest P0.05, to employees
with four (4) years of service or more, on such date.2 (Emphasis
supplied.)

Section 1 of Article V of the 1987 CBA reads thus

Section 1. The COMPANY hereby grants the following wage increases to all
covered employees:

(a) A backpay of P3.00 per day from June 11, 1986 to June 25, 1987 to
those with at least one (1) year of service of June 25, 1987. Any
backpay shall be computed exclusive on days actually worked, not
including overtime, rest day premium, holiday premium, night
differential pay, vacation and sick leave; PROVIDED, however, that only
those still in the payroll as of the date of the signing of this Agreement
shall be entitled to any such backpay.

(b) An increase of P3.00 per day effective June 25, 1987 to those
workers with at least one (1) year of service on such date, including
those who will complete one (1) year of service after said date.

(c) An increase of P4.00 per day effective June 25, 1988 to those
workers with at least two (2) years of service on that date, including
those who will complete two (2) years of service after said date.

(d) An increase of P5.00 per day effective June 25, 1989 to those
workers with at least three (3) years on that date, including those who
will complete three (3) years of service after such date. PROVIDED,
that those will complete one (1) year, two years and three years of
service as mentioned in par. b, c and d respectively, must have been
completed in the duration of the CBA and/or up to June 25, 1990. 3

The Court notes that Section 1 (a) of Article V of all three (3) CBAs (1979,
1983 and 1987) provide for a wage increase expressed to be retroactively
effective for a particular and limited period of time immediately preceding
the effective date of each CBA, while Section 1 (b) et seq. of Article V
established wage increases effective prospectively. The relevant points are
 15

that respondent unions had never (before the case at bar) suggested that
the retroactive increases or backpay provided for in Section 1 (a) were to be
continued forward prospectively in addition to or on top of the wage
increases stipulated in Section 1 (b) et seq. and that Utex certainly had not
so treated such "backpay" as continuing prospectively and cumulatively with
the wage increases agreed upon in Section 1 (b) et seq. in each CBA. It is
well settled that the contemporaneous and subsequent conduct of the
parties may be taken into account by a court which must interpret and apply
a contract entered into by them. 4

4. We must also take note of Section 1 of Article XIV of the CBA before us, in
obedience to the rule that a stipulations of a contract must be read together
with its other provisions and not in isolation from each other:5

Section 1. Except the wage increases herein set forth in Article V (a)
[should be V (1) (a)], this agreement and the provisions thereof shall
be effective from the date of signing hereof, and shall remain in full
force and effect, without change, for a period of three years, and shall
inure to the benefit of, and bind each, and every worker, including the
present or future officers and/or directors of the UNION, or may
hereafter be in the employ of the Company for the duration of the
Agreement. (Emphasis supplied)

Thus Section 1 of Article XIV comports precisely with our reading of Section 1
(a) of Article V as effective only in respect of a specific, limited period in the
past, and without application to the unfolding future.

The palpable error committed by the NLRC in this case amounts to the
imposition upon one of the parties to a contract of an obligation which it had
never assumed. In doing so, the NLRC acted without or in excess of its
jurisdiction. 6

WHEREFORE, the Court Resolved to GRANT the Petition for Certiorari. The
Decision of the NLRC in NLRC-NCR Case No. 7-2038-85 dated 25 January
1988 is hereby SET ASIDE and NULLIFIED. The Decision of the Labor Arbiter 3
November 1986 is hereby REINSTATED. No pronouncement as to costs.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Bidin and Cortes JJ., concur.

 16

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 88538 July 25, 1991

ABOITIZ SHIPPING CORPORATION, petitioner,

vs.
HON. DIONISIO C. DELA SERNA, in his capacity as Undersecretary of
Labor and Employment; HON. LUNA C. PIEZAS, in his capacity as
Director, National Capital Region, Department of Labor and
Employment; and ABOITIZ SHIPPING EMPLOYEES ASSOCIATION,
respondents.

Alejandro B. Cinco for petitioner.

Rogelio B. De Guzman for private respondent.

RESOLUTION

PADILLA, J.:p

Before the Court is petitioner's motion for reconsideration of the decision

rendered in the present case, dated 25 April 1990, dispositive portion of
which reads:

WHEREFORE, the assailed Order dated 9 February 1989 of the

respondent Undersecretary of Labor and Employment affirming
the Order dated 13 October 1988 of the Regional Director is
hereby AFFIRMED, with the modification that Mr. Elizardo Manuel
shall be excluded from the list of complainants at bar who are
entitled to money awards of P1,884.00 each. Petition is
DISMISSED.

In this motion for reconsideration, the principal contention of petitioner is

that inasmuch as the aggregate amount of the claims involved in the case is
P1,350,828.00, which exceeds the P5,000.00 limit set by the law for the
 17

exercise by the Regional Director of his jurisdiction over employees' money

claims against employers,. arising from employer-employee relations, the
case should be referred to the Labor Arbiter, not the Regional Director, for
adjudication.

The Court's recent resolution in the case of Servando's Incorporated vs. the
Secretary of Labor and Employment (G.R. No. 85840) is controlling in the
present case, particularly on the issue of the jurisdictions of Labor Arbiters
and Regional Directors over money claims of employees against employers.
In fact, the resolution of the present motion was deferred until after the Court
En Banc had resolved the issues in Servando's. On 5 June 1991, the Court En
Banc promulgated its resolution in Servando's, which ruled that the original
and exclusive jurisdiction to hear and decide employee's money claims
arising from employer-employee relations exceeding the aggregate amount
of P5,000.00 for each employee, is vested in the Labor Arbiter (Article 217[a]
[6], Labor Code, as amended), 1 and that this is confirmed by the provisions
of Article 129, Labor Code, as amended, 2 which excludes from the
jurisdiction of the Regional Director or any hearing officer of the Department
of Labor and Employment (DOLE) the power to hear and decide claims of
employees arising from employer-employee relations exceeding the amount
of P5,000.00 for each employee. 3

Petitioner further contends that, even if the employees' claims do not exceed
the aggregate amount of P5,000.00 for each employee, the respondent
Regional Director can not exercise his visitorial and enforcement power
granted under Article 128 4 of the Labor Code, inasmuch as the present case
falls under the "exception clause" provided in paragraph (b) thereof, which
reads:

xxx xxx xxx

(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 regulation officers or
industrial safety engineers made in the course of inspection, and
to issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer
contests the findings of the labor regulation officer and raises
issues which cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection.
(Emphasis supplied)
 18

xxx xxx xxx

While it is true that Article 128(b) of the Labor Code provides for the
exception under which the Regional Director may be divested of his
jurisdiction over claims not exceeding P5,000.00 for each employee, the
following three (3) elements must concur to justify such exception:

(a) the petitioner (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. 5

We do not find justification for applying said "exception clause" in the case at
bar. As held in SSK Parts Corporation vs. Camas, supra, "although the
petitioner contested the Regional Director's finding of violations of labor
standards committed by the petitioner, that issue was resolved by an
examination of evidentiary matters which were verifiable in the ordinary
course of inspection. Hence, there was no need to indorse the case to the
appropriate arbitration branch of the National Labor Relations Commission
(NLRC) for adjudication (Sec. 2, Rules Implementing Executive Order 111)."

Petitioner reiterates its contention that the findings of fact of the respondent
public officials were not based on substantial evidence and that there was
misapprehension of facts. We do not agree with this submission. We find the
questioned orders of the respondent public officials to be supported by
substantial evidence. As ruled in the questioned decision, factual findings of
labor officials are, generally, conclusive and binding on this Court when
supported by substantial evidence.

On the other hand, private respondent moves for a clarification of this

Court's decision dated 25 April 1990, on whether the second paragraph of
the Order of respondent Regional Director, dated 13 October 1988 is also
affirmed in the decision of this Court . 6

The dispositive portion of the above cited Regional Director's Order reads:

WHEREFORE, premises considered, the Aboitiz Shipping

Corporation is hereby Ordered to pay the herein listed
complainants the total amount of ONE MILLION THREE HUNDRED
FIFTY THOUSAND EIGHT HUNDRED TWENTY EIGHT and 00/100
PESOS (P1,350,828.00) representing underpayment of daily
 19

allowance of TWO (P2.00) PESOS per day reckoned from 16

February 1982 to 15 February 1985.

FURTHER, the Aboitiz Shipping Corporation is hereby Ordered to

pay each and every one of its employees the deficiency in
allowance of two (P2.00) PESOS per day from 16 February 1985
on ward until this Order is fully complied with.

The dispositive part of this Court's decision dated 25 April 1990, as quoted in
the first paragraph of this resolution, is quite clear; hence, no clarification
thereof is needed. ACCORDINGLY, petitioner's motion for reconsideration and
private respondent's motion for clarification of the decision dated 25 April
1990 are DENIED. This denial is final.

SO ORDERED.

Footnotes

1 Article 217 (a) which provides:

"Art. 217. Jurisdiction of Labor Arbiters and the Commission.

(a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving
all workers, whether agricultural or non-agricultural:

xxx xxx xxx

(6) Except claims for employees compensation, social security,

medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
Five thousand pesos (P5,000.00), whether or not accompanied
with a claim for reinstatement.

. . . (emphasis supplied)

2 Article 129 which provides:

"Art. 129. Recovery of wages, simple money claims and other

benefits. Upon complaint of any interested party, the Regional
Director of the Department of Labor and Employment or any of
 20

the duly authorized hearing officers of the Department is

empowered, through summary proceeding and after due notice,
to hear and decide any matter involving the recovery of wages
and other monetary claims and benefits, including legal interest,
owing to an employee or person employed in domestic or
household service or househelper under this Code, arising from
employer-employee relations: Provided, That such complaint
does not include a claim for reinstatement: Provided, further
That the aggregate money claims of each employee or house
helper do not exceed Five thousand pesos (P5,000.00). . . ."
(emphasis supplied)

3 Note that in the present case, the Regional Director, in his

Order dated 13 October 1988, found that each of the seven
hundred seventeen (717) complainants was entitled to a uniform
amount of P1,884.00.

4 Article 128. Visitorial and enforcement power. (a) The

Secretary of Labor or his duly authorized representatives,
including labor regulation officers, shall have access to
employers records and premises at any time 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.