EN BANC

[G.R. No. 78909. June 30, 1989.]

MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA

L. DORADO, President, petitioner, vs. THE HONORABLE
SECRETARY OF LABOR AND THE REGIONAL DIRECTOR OF
LABOR, REGION X, respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT;

LABOR STANDARDS, CONSTRUED. — Labor standards refer to the minimum
requirements 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).
2. ID.; ID.; ID.; LABOR DISPUTES; POWER OF THE REGIONAL
DIRECTOR TO ADJUDICATE MONEY CLAIMS; CONDITIONS. — 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. (Art. 128-b of the Labor Code, as amended by E.O. No. 111)
3. ID.; ID.; MORE POLICY INSTRUCTIONS NOS. 6 AND 37;
ADJUDICATORY POWERS OF THE REGIONAL DIRECTOR REQUIRES THE
EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP. — The provisions of
MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor
Cases) and 37 (Assignment of Cases to Labor Arbiters) gave the Regional
Directors adjudicatory powers over uncontested money claims discovered in
the course of normal inspection, provided an employer-employee
relationship still exists.
4. ID.; ID.; ID.; ID.; CONFIRMED BY E.O. NO. 111. — E.O. 111
authorizes a Regional Director to order compliance by an employer with
labor standards provisions of the Labor Code and other legislation. It is Our
considered opinion however, that the inclusion of the phrase, "The provisions
of Article 217 of this Code to the contrary notwithstanding and in cases
where the relationship of employer-employee still exists" . . . in Article
128(b), as amended, above-cited, merely confirms/reiterates the
enforcement adjudication authority of the Regional Director over
uncontested money claims in cases where an employer-employee
relationship still exists.
5. ID.; ID.; ID.; ID.; ID.; INTENTION OF POLICY INSTRUCTIONS NOS. 6
AND 37, GIVEN WEIGHT AND ENTITLED TO GREAT RESPECT. — The
amendment of the visitorial and enforcement powers of the Regional
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 Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in
Policy Instructions Nos. 6 and 37 to empower the Regional Directors to
resolve uncontested money claims in cases where an employer-employee
relationship still exists. This intention must be given weight and entitled to
great respect.
6. ID.; LABOR LAWS; EXECUTIVE ORDER NO. 111, A CURATIVE
STATUTE WITH RETROSPECTIVE APPLICATION. — The proceedings before the
Regional Director must, perforce, be upheld on the basis of Article 128(b) as
amended by E.O. No. 111, dated December 24, 1986, this executive order
"to be considered in the nature of a curative statute with retrospective
application." (Progressive Workers' Union, et al. vs. Hon. F.P. Aguas, et al.
(Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L-47629, May 28,
1979, 90 SCRA 331).
7. ID.; LABOR CODE; ENFORCEMENT POWER OF THE REGIONAL
DIRECTOR CANNOT BE UPHELD IN CASES OF SEPARATED EMPLOYEES. —
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, having resigned therefrom in 1984. The enforcement power of the
Regional Director cannot legally be upheld in cases of separated employees.
Article 129 of the Labor Code, cited by petitioner is not applicable as said
article is in aid of the enforcement power of the Regional Director; hence, not
applicable where the employee seeking to be paid underpayment of wages
is already separated from the service. His claim is purely a money claim that
has to be the subject of arbitration proceedings and therefore within the
original and exclusive jurisdiction of the Labor Arbiter.

DECISION

MEDIALDEA, J : p

This is a petition for certiorari seeking the annulment of the Decision of

the respondent Secretary of Labor dated September 24, 1986, affirming with
modification the Order of respondent Regional Director of Labor, Region X,
dated August 4, 1986, awarding salary differentials and emergency cost of
living allowances (ECOLAs) to employees of petitioner, and the Order
denying petitioner's motion for reconsideration dated May 13, 1987, on the
ground of grave abuse of discretion.
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 hold-over 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. prcd

Petitioner has forty-one (41) employees. Aside from salary and living
allowances, the employees are given food, but the amount spent therefor is
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 deducted from their respective salaries (pp. 77-78, Rollo).
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 (p. 98, Rollo). Payrolls
covering the periods of May, 1974, January, 1985, November, 1985 and May,
1986, were duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted
their report confirming that there was underpayment of wages and ECOLAs
of all the employees by the petitioner, the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING, deficiency on wage and ecola as
verified and confirmed per review of the respondent payrolls and
interviews with the complainant workers and all other information
gathered by the team, it is respectfully recommended to the Honorable
Regional Director, this office, that Antera Dorado, President be
ORDERED to pay the amount of SIX HUNDRED FIFTY FOUR THOUSAND
SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01), representing
underpayment of wages and ecola to the THIRTY SIX (36) employees of
the said hospital as appearing in the attached Annex "F" worksheets
and/or whatever action equitable under the premises." (p. 99, Rollo )

Based on this 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, the dispositive portion of which reads:
"WHEREFORE, premises considered, respondent Maternity and
Children Hospital is hereby ordered to pay the above-listed
complainants the total amount indicated opposite each name, thru this
Office within ten (10) days from receipt thereof. Thenceforth, the
respondent hospital is also ordered to pay its employees/workers the
prevailing statutory minimum wage and allowance.
SO ORDERED." (p. 34, Rollo )

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, the
dispositive portion of which reads: cdphil

"WHEREFORE, the August 29, 1986 order is hereby MODIFIED in

that the deficiency wages and ECOLAs should only be computed from
May 23, 1983 to May 23, 1986. The case is remanded to the Regional
Director, Region X, for recomputation specifying the amounts due each
the complainants under each of the applicable Presidential Decrees."
(p. 40, Rollo )

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 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 (p. 43 Rollo).
The instant petition questions the all-embracing applicability of the
award involving salary differentials and ECOLAs, in that it covers not only the
hospital employees who signed the complaints, but also those (a) who are
not signatories to the complaint, and (b) those who were no longer in the
service of the hospital at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional
Director of Labor, as affirmed with modifications by respondent Secretary of
Labor, does not clearly and distinctly state the facts and the law on which
the award was based. In its "Rejoinder to Comment", petitioner further
questions the authority of the Regional Director to award salary differentials
and ECOLAs to private respondents, (relying on the case of Encarnacion vs.
Baltazar, G.R. No. L-16883, March 27, 1961, 1 SCRA 860, as authority for
raising the additional issue of lack of jurisdiction at any stage of the
proceedings, p. 52, Rollo), alleging that the original and exclusive jurisdiction
over money claims is properly lodged in the Labor Arbiter, based on Article
217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had
jurisdiction over the case and if so, the extent of coverage of any award that
should be forthcoming, arising from his visitorial and enforcement powers
under Article 128 of the Labor Code. The matter of whether or not the
decision states clearly and distinctly statement of facts as well as the law
upon which it is based, becomes relevant after the issue on jurisdiction has
been resolved.
This is a labor standards case, and is governed by Art. 128-b of the
Labor Code, as amended by E.O. No. 111. Labor standards refer to the
minimum requirements 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). 1 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.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the
Regional Director's authority over money claims was unclear. The complaint
in the present case was filed on May 23, 1986 when E.O. No. 111 was not yet
in effect, and the prevailing view was that stated in the case of Antonio Ong,
Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987,
thus:
". . . the Regional Director, in the exercise of his visitorial and
enforcement powers under Article 128 of the Labor Code, has no
authority to award money claims, properly falling within the jurisdiction
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 of the labor arbiter . . .
". . . If the inspection results in a finding that the employer has
violated certain labor standard laws, then the regional director must
order the necessary rectifications. However, this does not include
adjudication of money claims, clearly within the ambit of the labor
arbiter's authority under Article 217 of the Code."

The Ong case relied on the ruling laid down in Zambales Base Metals
Inc. vs. The Minister of Labor, et al., (G.R. Nos. 73184-88, November 26,
1986, 146 SCRA 50) that the "Regional Director was not empowered to share
in the original and exclusive jurisdiction conferred on Labor Arbiters by
Article 217."
We believe, however, that 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.
To clarify matters, it is necessary to enumerate a series of rules and
provisions of law on the disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an
exclusive function of labor arbiters, under Article 216 of the then Labor Code
(PD No. 442, as amended by PD 570-a), which read in part:
"Art 216. Jurisdiction of the Commission. — The Commission
shall have exclusive appellate jurisdiction over all cases decided by the
Labor Arbiters and compulsory arbitrators.
"The Labor Arbiters shall have exclusive jurisdiction to hear and
decide the following cases involving all workers whether agricultural or
non-agricultural.

xxx xxx xxx

"(c) All money claims of workers, involving non-payment or
underpayment of wages, overtime compensation, separation pay,
maternity leave and other money claims arising from employee-
employer relations, except claims for workmen's compensation, social
security and medicare benefits;
"(d) Violations of labor standard laws;

"xxx xxx xxx" (Emphasis supplied)

The Regional Director exercised visitorial rights only under then Article
127 of the Code as follows:
"ART. 127. Visitorial Powers. — The Secretary of Labor or his
duly authorized representatives, including, but not restricted, to the
labor inspectorate, 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
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 necessary to determine violations or in aid in the enforcement of this
Title and of any Wage Order or regulation issued pursuant to this
Code."

With the promulgation of PD 850, Regional Directors were given

enforcement powers, in addition to visitorial powers. Article 127, as
amended, provided in part:
"SEC. 10. Article 127 of the Code is hereby amended to read
as follows:
'Art. 127. Visitorial and enforcement powers. —
'xxx xxx xxx;
'(b) The Secretary of Labor 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 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 order.'
"xxx xxx xxx"

Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases.
Article 216, as then amended by PD 850, provided in part: Cdpr

"SEC. 22. Article 216 of the Code is hereby amended to read

as follows:
'Art. 216. Jurisdiction of Labor Arbiters and the
Commission . — (a) The Labor Arbiters shall have exclusive
jurisdiction to hear and decide the following cases involving all
workers, whether agricultural or non-agricultural:

'xxx xxx xxx;

'(3) All money claims of workers involving non-payment
or underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relations, except
claims for employee's compensation, social security and
medicare benefits and as otherwise provided in Article 127 of this
Code.'
"xxx xxx xxx" (Emphasis ours)

Under the then Labor Code therefore (PD 442 as amended by PD 570-
a, as further amended by PD 850), there were three adjudicatory units: The
Regional Director, the Bureau of Labor Relations and the Labor Arbiter. It
became necessary to clarify and consolidate all governing provisions on
jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions
No. 6 was issued, and provides in part (on labor standards cases) as follows:
"POLICY INSTRUCTIONS NO. 6
TO: All Concerned
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 SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES.

"xxx xxx xxx

"1. The following cases are under the exclusive original
jurisdiction of the Regional Director .
a) Labor standards cases arising from violations of
labor standard laws discovered in the course of inspection or
complaints where employer-employee relations still exist;
xxx xxx xxx

"2. The following cases are under the exclusive original

jurisdiction of the Conciliation Section of the Regional Office:
a) Labor standards cases where employer-employee
relations no longer exist;
xxx xxx xxx

"6. The following cases are certifiable to the Labor Arbiters:

a) Cases not settled by the Conciliation Section of the Regional
Office, namely:
1) labor standard cases where employer-employee relations no
longer exist;
xxx xxx xxx" (Emphasis ours)

MOLE Policy Instructions No. 7 (undated) was likewise subsequently

issued, enunciating the rationale for, and the scope of, the enforcement
power of the Regional Director, the first and second paragraphs of which
provide as follows:
"POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from the
arbitration system and placed under the enforcement system, except
where a) questions of law are involved as determined by the Regional
Director, b) the amount involved exceeds P100,000.00 or over 40% of
the equity of the employer, whichever is lower, c) the case requires
evidentiary matters not disclosed or verified in the normal course of
inspection, or d) there is no more employer-employee relationship.

The purpose is clear: to assure the worker the rights and benefits
due to him under labor standards laws without having to go through
arbitration. The worker need not litigate to get what legally belongs to
him. The whole enforcement machinery of the Department of Labor
exists to insure its expeditious delivery to him free of charge."
(Emphasis ours)

Under the foregoing, a complaining employee who was denied his

rights and benefits due him under labor standards law need not litigate. The
Regional Director, by virtue of his enforcement power, assured "expeditious
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 delivery to him of his rights and benefits free of charge", provided of course,
he was still in the employ of the firm.
After PD 850, Article 216 underwent a series of amendments (aside
from being re-numbered as Article 217) and with it a corresponding change
in the jurisdiction of, and supervision over, the Labor Arbiters:
1. PD 1367 (5-1-78) — gave Labor Arbiters exclusive
jurisdiction over unresolved issues in collective bargaining, etc., and
those cases arising from employer-employee relations duly indorsed by
the Regional Directors. (It also removed his jurisdiction over moral or
other damages) In other words, the Labor Arbiter entertained cases
certified to him. (Article 228, 1978 Labor Code.)
2. PD 1391 (5-29-78) — all regional units of the National
Labor Relations Commission (NLRC) were integrated into the Regional
Offices Proper of the Ministry of Labor; effectively transferring direct
administrative control and supervision over the Arbitration Branch to
the Director of the Regional Office of the Ministry of Labor. "Conciliable
cases" which were thus previously under the jurisdiction of the defunct
Conciliation Section of the Regional Office for purposes of conciliation
or amicable settlement, became immediately assignable to the
Arbitration Branch for joint conciliation and compulsory arbitration. In
addition, the Labor Arbiter had jurisdiction even over termination and
labor-standards cases that may be assigned to them for compulsory
arbitration by the Director of the Regional Office. PD 1391 merged
conciliation and compulsory arbitration functions in the person of the
Labor Arbiter. The procedure governing the disposition of cases at the
Arbitration Branch paralleled those in the Special Task Force and Field
Services Division, with one major exception: the Labor Arbiter
exercised full and untrammelled authority in the disposition of the
case, particularly in the substantive aspect, his decisions and orders
subject to review only on appeal to the NLRC. 3
3. MOLE Policy Instructions No. 37 — Because of the
seemingly overlapping functions as a result of PD 1391, MOLE Policy
Instructions No. 37 was issued on October 7, 1978, and provided in
part:
"POLICY INSTRUCTIONS NO. 37
TO : All Concerned
SUBJECT : ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391
and to insure speedy disposition of labor cases, the following
guidelines are hereby established for the information and
guidance of all concerned. LLpr

1. Conciliable Cases.

Cases which are conciliable per se i.e., (a) labor standards

cases where employer-employee relationship no longer exists;
(b) cases involving deadlock in collective bargaining, except
those falling under P.D. 823, as amended; (c) unfair labor
practice cases; and (d) overseas employment cases, except
those involving overseas seamen, shall be assigned by the
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 Regional Director to the Labor Arbiter for conciliation and
arbitration without coursing them through the conciliation section
of the Regional Office .
2. Labor Standards Cases.
Cases involving violation of labor standards laws where
employer-employee relationship still exists shall be assigned to
the Labor Arbiters where:
a) intricate questions of law are involved; or

b) evidentiary matters not disclosed or verified in the

normal course of inspection by labor regulations officers are
required for their proper disposition.
3. Disposition of Cases.

When a case is assigned to a Labor Arbiter, all issues raised

therein shall be resolved by him including those which are
originally cognizable by the Regional Director to avoid
multiplicity of proceedings. In other words, the whole case, and
not merely issues involved therein, shall be assigned to and
resolved by him.
xxx xxx xxx" (Emphasis ours)

4. PD 1691 (5-1-80) — original and exclusive

jurisdiction over unresolved issues in collective bargaining and
money claims, which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor
arbiters over money claims, however, the Regional Director
nonetheless retained his enforcement power, and remained
empowered to adjudicate uncontested money claims.

5. BP 130 (8-21-81) — strengthened voluntary

arbitration. The decree also returned the Labor Arbiters as part of
the NLRC, operating as Arbitration Branch thereof.
6. BP 227 (6-1-82) — original and exclusive jurisdiction
over questions involving legality of strikes and lock-outs.

The present petition questions the authority of the Regional Director to issue
the Order, dated August 4, 1986, on the basis of his visitorial and
enforcement powers under Article 128 (formerly Article 127) of the present
Labor Code. It is contended that based on the rulings in the Ong vs. Parel
(supra) and the Zambales Base Metals, Inc. vs. The Minister of Labor (supra)
cases, a Regional Director is precluded from adjudicating money claims on
the ground that this is an exclusive function of the Labor Arbiter under
Article 217 of the present Code.
On August 4, 1986, when the order was issued, Article 128(b) 4 read as
follows:
"(b) The Minister of Labor or his duly authorized
representatives shall have the power to order and administer, after due
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 notice and hearing, compliance with the labor standards provisions of
this Code 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
order, except in cases where the employer contests the findings of the
labor regulations officer and raises issues which cannot be resolved
without considering evidentiary matters that are not verifiable in the
normal course of inspection." (Emphasis ours)

On the other hand, Article 217 of the Labor Code as amended by P.D.
1691, effective May 1,1980; Batas Pambansa Blg. 130, effective August 21,
1981; and Batas Pambansa Blg. 227, effective June 1, 1982, inter alia,
provides:
"ART. 217. Jurisdiction of Labor Arbiters and the Commission.
— (a) The Labor Arbiters shall have the original and exclusive
jurisdiction to hear and decide within thirty (30) working days after
submission of the case by the parties for decision, the following cases
involving all workers, whether agricultural or non-agricultural:
"1. Unfair labor practice cases;
"2. Those that workers may file involving wages, hours of
work and other terms and conditions of employment;
"3. All money claims of workers, including those based on
non-payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social
security, medicare and maternity benefits;
"4. Cases involving household services; and
"5. Cases arising from any violation of Article 265 of this
Code, including questions involving the legality of strikes and
lockouts." (Emphasis ours)

The Ong and Zambales cases involved workers who were still
connected with the company. However, in the Ong case, the employer
disputed the adequacy of the evidentiary foundation (employees' affidavits)
of the findings of the labor standards inspectors while in the Zambales case,
the money claims which arose from alleged violations of labor standards
provisions were not discovered in the course of normal inspection. Thus, the
provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction
Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters) giving
Regional Directors adjudicatory powers over uncontested money claims
discovered in the course of normal inspection, provided an employer-
employee relationship still exists, are inapplicable.
In the present case, petitioner admitted the charge of underpayment of
wages to workers still in its employ; in fact, it pleaded for time to raise funds
to satisfy its obligation. There was thus no contest against the findings of the
labor inspectors.
Barely less than a month after the promulgation on November 26,
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 1986 of the Zambales Base Metals case, Executive Order No. 111 was issued
on December 24, 1986, 5 amending Article 128(b) of the Labor Code, to read
as follows:
"(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE
CONTRARY NOTWITHSTANDING AND IN CASES WHERE THE
RELATIONSHIP OF EMPLOYER-EMPLOYEE STILL EXISTS, 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)

As seen from the foregoing, EO 111 authorizes a Regional Director to

order compliance by an employer with labor standards provisions of the
Labor Code and other legislation. It is Our considered opinion however, that
the inclusion of the phrase, "The provisions of Article 217 of this Code to the
contrary notwithstanding and in cases where the relationship of employer-
employee still exists" . . . in Article 128(b), as amended, above-cited, merely
confirms/reiterates the enforcement adjudication authority of the Regional
Director over uncontested money claims in cases where an employer-
employee relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy
Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention
of our labor authorities to provide our workers immediate access (when still
feasible, as where an employer-employee relationship still exists) to their
rights and benefits, without being inconvenienced by arbitration/litigation
processes that prove to be not only nerve-wracking, but financially
burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7
indicating that the transfer of labor standards cases from the arbitration
system to the enforcement system is.
". . . to assure the workers the rights and benefits due to him
under labor standard laws, without having to go through
arbitration . . ."
so that
". . . the workers would not litigate to get what legally belongs to
him . . . ensuring delivery . . . free of charge."
Social justice legislation, to be truly meaningful and rewarding to our
workers, must not be hampered in its application by long-winded arbitration
and litigation. Rights must be asserted and benefits received with the least
inconvenience. Labor laws are meant to promote, not defeat, social justice.

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 This view is in consonance with the present "Rules on the Disposition of
Labor Standard Cases in the Regional Offices" 7 issued by the Secretary of
Labor, Franklin M. Drilon on September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from
Complaint Routine Inspection", provide as follows: LLjur

"Section 2. Complaint inspection. — All such complaints shall

immediately be forwarded to the Regional Director who shall refer the
case to the appropriate unit in the Regional Office for assignment to a
Labor Standards and Welfare Officer (LSWO) for field inspection. When
the field inspection does not produce the desired results, the Regional
Director shall summon the parties for summary investigation to
expedite the disposition of the case . . .
"Section 3. Complaints where no employer-employee
relationship actually exists. — Where employer-employee relationship
no longer exists by reason of the fact that it has already been severed,
claims for payment of monetary benefits fall within the exclusive and
original jurisdiction of the labor arbiters . . ." (Emphasis ours)
Likewise, it is also clear that the limitation embodied in MOLE Policy
Instructions No. 7 to amounts not exceeding P100,000.00 has been
dispensed with, in view of the following provisions of pars. (b) and (c),
Section 7 on "Restitution", the same Rules, thus:
"xxx xxx xxx
"(b) Plant-level restitutions may be effected for money claims
not exceeding Fifty Thousand (P50,000.00) . . .

"(c) Restitutions in excess of the aforementioned amount

shall be effected at the Regional Office or at the worksite subject to the
prior approval of the Regional Director."

which indicate the intention to empower the Regional Director to award

money claims in excess of P100,000.00; provided of course the employer
does not contest the findings made, based on the provisions of Section 8
thereof:
"Section 8. Compromise agreement. — Should the parties
arrive at an agreement as to the whole or part of the dispute, said
agreement shall be reduced in writing and signed by the parties in the
presence of the Regional Director or his duly authorized
representative."

E.O. No. 111 was issued on December 24, 1986 or three (3) months
after the promulgation of the Secretary of Labor's decision upholding private
respondents' salary differentials and ECOLAs on September 24, 1986. The
amendment of the visitorial and enforcement powers of the Regional
Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in
Policy Instructions Nos. 6 and 37 to empower the Regional Directors to
resolve uncontested money claims in cases where an employer-employee
relationship still exists. This intention must be given weight and entitled to
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 great respect. As held in Progressive Workers' Union, et. al. vs. F.P. Aguas,
et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429:
". . . The interpretation by officers of laws which are entrusted to
their administration is entitled to great respect. We see no reason to
detract from this rudimentary rule in administrative law, particularly
when later events have proved said interpretation to be in accord with
the legislative intent . . ."

The proceedings before the Regional Director must, perforce, be

upheld on the basis of Article 128(b) as amended by E.O. No. 111, dated
December 24, 1986, this executive order "to be considered in the nature of a
curative statute with retrospective application." (Progressive Workers' Union,
et al. vs. Hon. F.P. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et
al., G.R. No. L-47629, May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director
erred in extending the award to all hospital employees. We answer in the
affirmative.
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. (See Order, p. 33 dated August 4, 1986 of the Regional
Director, Pedrito de Susi, p. 33, Rollo).
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 the 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.
Necessarily, in case of an award resulting from a violation of labor legislation
by such establishment, the entire members/employees should benefit
therefrom. As aptly stated by then Minister of Labor Augusto S. Sanchez: LLjur

". . . It would be highly derogatory to the rights of the workers, if

after categorically finding the respondent hospital guilty of
underpayment of wages and ECOLAs, we limit the award to only those
who signed the complaint to the exclusion of the majority of the
workers who are similarly situated. Indeed, this would be not only
render the enforcement power of the Minister of Labor and
Employment nugatory, but would be the pinnacle of injustice
considering that it would not only discriminate but also deprive them of
legislated benefits.

"xxx xxx xxx" (pp. 38-39, Rollo )

This view is further bolstered by the provisions of Sec. 6, Rule II of the

"Rules on the Disposition of Labor Standards cases in the Regional Offices"
(supra) presently enforced, viz:
"SECTION 6. Coverage of complaint inspection. — A complaint
inspection shall not be limited to the specific allegations or violations
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 raised by the complainants/workers but shall be a thorough inquiry into
and verification of the compliance by employer with existing labor
standards and shall cover all workers similarly situated." (Emphasis
ours)

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, having resigned therefrom in 1984, viz:
1. Jean (Joan) Venzon (See Order, p. 33, Rollo )
2. Rosario Paclijan

3. Adela Peralta
4. Mauricio Nagales

5. Consega Bautista

6. Teresita Agcopra
7. Felix Monleon

8. Teresita Salvador
9. Edgar Cataluna; and

10. Raymond Manija (p. 7, Rollo ).

The enforcement power of the Regional Director cannot legally be upheld in

cases of separated employees. Article 129 of the Labor Code, cited by
petitioner (p. 54, Rollo) is not applicable as said article is in aid of the
enforcement power of the Regional Director; hence, not applicable where
the employee seeking to be paid underpayment of wages is already
separated from the service. His claim is purely a money claim that has to be
the subject of arbitration proceedings and therefore within the original and
exclusive jurisdiction of the Labor Arbiter.
Petitioner has likewise questioned the order dated August 4, 1986 of
the Regional Director in that it does not clearly and distinctly state the facts
and the law on which the award is based.
We invite attention to the Minister of Labor's ruling thereon, as follows:
"Finally, the respondent hospital assails the order under appeal
as null and void because it does not clearly and distinctly state the
facts and the law on which the awards were based. Contrary to the
pretensions of the respondent hospital, we have carefully reviewed the
order on appeal and we found that the same contains a brief statement
of the (a) facts of the case; (b) issues involved; (c) applicable laws; (d)
conclusions and the reasons therefor; (e) specific remedy granted
(amount awarded)." (p. 40, Rollo )

ACCORDINGLY, this petition should be dismissed, as it is hereby

DISMISSED, as regards all persons still employed in the Hospital at the time
of the filing of the complaint, but GRANTED as regards those employees no
longer employed at that time.
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 SO ORDERED.
Fernan (C.J.), Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Cortes, Griño-Aquino and Regalado, JJ., concur.
Sarmiento, J., Subject to my opinion in G.R. Nos. 82805 and 83205.

Separate Opinions
MELENCIO-HERRERA, J., concurring:

I concur, with the observation that even as reconciled, it would seem

inevitable to state that the conclusion in the Zambales and Ong cases that,
prior to Executive Order No. 111, Regional Directors were not empowered to
share the original and exclusive jurisdiction conferred on Labor Arbiters over
money claims, is now deemed modified, if not superseded.
It may not be amiss to state either that under Section 2, Republic Act
No. 6715, which amends further the Labor Code of the Philippines (PD No.
442), Regional Directors have also been granted adjudicative powers, albeit
limited, over monetary claims and benefits of workers, thereby settling any
ambiguity on the matter. Thus: prLL

"SEC. 2. Article 129 of the Labor Code of the Philippines, as

amended, is hereby further amended to read as follows:

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 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 househelper do not
exceed five thousand pesos (P5,000.00). The Regional
Director or hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from the date
of the filing of the same . . ."

Footnotes

1. Cited in J. Nolledo, Labor Code of the Philippines, Ann., 1988 Rev. Ed. p. 217.
2. (See Critical Areas in the Administration of Labor Justice) (Proceedings of the
16th Annual Institute on Labor Relations Law — 1979, U.P. Law Center, p. 5).

3. Ibid.
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 4. as amended by Section 2, PD 1691.
5. EO 111 expressly declared that its provisions would become effective fifteen
(15) days after publication in the Official Gazette. The executive order was
published on February 16, 1987 (83 O.G. No. 7, p. 5770) and therefore
became effective on March 3, 1987.

6. A present exception may be found in Section 2 of RA 6715, effective March

20, 1989 which gives Regional Director, "through summary proceeding, to
hear and decide any matter involving the recovery of wages and other
monetary claims and benefits, . . . to an employee or person employed in
domestic or household service or househelper . . . arising from employee-
employer relations. Provided, That such complaint does not include a claim
for reinstatement: Provided, further, That the aggregate money claims of
each employee or househelper do not exceed five thousand pesos
(P5,000.00) . . .
7. Cited in J. Nolledo, Labor Code of the Philippines, Ann., 1988 Rev. Ed., p. 216.

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