Sphinx Security and Foreign Boat Watchman Agency v. Secretary of Labor
REITERATIONFacts
The Antecedents: Thirteen security guards filed a complaint against Sphinx Security and Foreign Boat Watchman Agency (SSFBWA), their employer, and Washington Equipment and Supply Company (WESCO), who hired the guards from SSFBWA. The complaint alleged non-compliance with Republic Act No. 6640, which provided for an increase in statutory minimum wage and salary rates. The complaint was endorsed to the Secretary of Labor and then to the Regional Director of Region XII. Procedural History: An inspection by Labor Employment and Development Officers of Region XII revealed violations of labor standards, including underpayment of wages, non-integration of ECOLA, and underpayment of 13th-month pay and service incentive leave pay. A summary investigation was conducted, during which SSFBWA challenged the DOLE's jurisdiction and argued that WESCO should settle the deficiencies. WESCO also objected, stating it was not a party to the complaint. A hearing was held, and both parties submitted position papers arguing against the DOLE's jurisdiction and the findings. On September 12, 1989, the Regional Director issued a Compliance Order ordering SSFBWA and WESCO to jointly and severally pay the thirteen complainants an aggregate amount of P369,087.45. A Motion for Reconsideration was denied. The Petition: Petitioners SSFBWA and WESCO filed a petition for certiorari, questioning the Compliance Order and seeking its annulment, arguing that the Secretary of Labor committed grave abuse of discretion in assuming jurisdiction over the complaint.
Issue(s)
Whether the Secretary of Labor committed grave abuse of discretion in assuming jurisdiction over the complaint for deficiency in wages filed against SSFBWA, considering the jurisdictional limits defined in the Labor Code. Whether the Regional Director has the authority to hear and decide claims exceeding P5,000.00 per employee, and the implications for the jurisdiction of the Labor Arbiter.
Ruling
The petition is granted. The Compliance Order dated September 12, 1989, issued by the Regional Director of Region XII, is NULLIFIED and SET ASIDE. The parties are given fifteen (15) days from receipt of the promulgated copies of this Resolution to submit their respective pleadings before the Labor Arbiter.
Ratio Decidendi
On the issue of the Secretary of Labor's grave abuse of discretion: The Court reiterated the principle that the visitorial power of the Secretary of Labor to order and enforce compliance with labor laws does not include the power to hear and decide cases involving employees' claims for wages that exceed P5,000.00 per employee, as this would emasculate the provisions granting exclusive jurisdiction to the Labor Arbiter. Therefore, if the Secretary of Labor acted through the Regional Director in assuming jurisdiction over claims exceeding this amount, it constitutes grave abuse of discretion. On the issue of the Regional Director's authority and the Labor Arbiter's jurisdiction: Under Article 217(a)(6) of the Labor Code, Labor Arbiters have original and exclusive jurisdiction over all claims arising from employer-employee relations, including those involving money claims exceeding Five Thousand Pesos (P5,000.00), unless such claims are for employees' compensation, social security, medicare, and maternity benefits. This exclusive jurisdiction is further confirmed by Article 129 of the Labor Code, which empowers the Regional Director or any duly authorized hearing officer to hear and decide money claims and other benefits arising from employer-employee relations only if the aggregate money claims of each employee do not exceed Five Thousand Pesos (P5,000.00) and there is no claim for reinstatement. In the present case, the aggregate amount awarded to each of the thirteen complainants significantly exceeded P5,000.00, thus placing the claims squarely within the exclusive jurisdiction of the Labor Arbiter, not the Regional Director. The Regional Director gravely abused his discretion in assuming jurisdiction over the case.
Main Doctrine
The Regional Director, or any duly authorized hearing officer of the Department of Labor and Employment (DOLE), has the power to hear and decide claims arising from employer-employee relations only if the aggregate money claims of each employee do not exceed Five Thousand Pesos (P5,000.00) and there is no claim for reinstatement. Claims exceeding this amount, or involving reinstatement, fall under the original and exclusive jurisdiction of the Labor Arbiters.