G.R. No. 217575, June 15, 2016
SOUTH COTABATO COMMUNICATIONS CORPORATION AND GAUVAIN J. BENZONAN, Petitioners, v. HON. PATRICIA STO. TOMAS, SECRETARY OF LABOR AND EMPLOYMENT, ROLANDO FABRIGAR, MERLYN VELARDE, VINCE LAMBOC, FELIPE GALINDO, LEONARDO MIGUEL, JULIUS RUBIN, EDEL RODEROS, MERLYN COLIAO, AND EDGAR JOPSON, Respondents.
D E C I S I O N
VELASCO JR., J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside the Decision1 dated November 28, 2014 and Resolution dated March 5, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 00179-MIN, affirming the Orders dated November 8, 2004 and February 24, 2005 issued by the Secretary of Labor and Employment.
Consequently, the DOLE issued a Notice of Inspection Result directing petitioner corporation and/or its president, petitioner Gauvain J. Benzonan (Benzonan), to effect restitution and/or correction of the alleged violations within five (5) days from notice. Due to petitioners' failure to comply with its directive, the DOLE scheduled on March 3, 2004 a Summary Investigation at its Regional Office No. XII, Provincial Extension Office, in General Santos City. However, petitioners failed to appear despite due notice. Another hearing was scheduled on April 1, 2004 wherein petitioners' counsel, Atty. Thomas Jacobo (Atty. Jacobo), failed to attend due to an alleged conflict in schedule. Instead, his secretary, Nona Gido, appeared on his behalf to request a resetting, which the DOLE Hearing Officer denied.4 Thus, in an Order dated May 20, 2004, the DOLE Region-XII OIC Regional Director (DOLE Regional Director) directed petitioners to pay private respondents the total amount of P759,752, representing private respondents' claim for wage differentials, 13th month pay differentials, service incentive leave pay, holiday premium pay, and rest day premium Pay-Therefrom, petitioners appealed to the Secretary of Labor, raising two grounds: (1) denial of due process; and (2) lack of factual and legal basis of the assailed Order.
- Underpayment of Wages
- Underpayment of 13th Month Pay
- Non-payment of the five (5) days Service Incentive Leave Pay
- Non-payment of Rest Day Premium Pay
- Non-payment of the Holiday Premium Pay
- Non-remittance of SSS Contributions
- Some employees are paid on commission basis aside from their allowance[s]3
WHEREFORE, presmises considered, the appeal by DXCP Radio Station and Engr. Gauvain Benzonan is hereby DISMISSED for lack of merit. The Order dated May , 2004 of the Regional Director, directing appellants to pay the nine (9) appellees the aggregate amount of Seven Hundred Fifty Nine Thousand Seven Hundred Fifty Two Pesos (Php759,752.00), representing their claims for wage differentials, 13th month pay differentials, service incentive leave pay, holiday pay premium and rest day premium, is AFFIRMED.Petitioners moved for, but was denied, reconsideration of the Secretary of Labor's Order.
In the matter of denial of due process, petitioners maintain that they were prevented from presenting evidence to prove that private respondents are not their employees when the Regional Director submitted the case for resolution without affording them an opportunity to ventilate their case or rebut the findings of the inspection. In addition, petitioners assail the Order of the Regional Director for want of factual and legal basis, particularly the lack of categorical finding on the existence of an employer-employee relationship between the parties—an element which petitioners insist is a prerequisite for the exercise of the DOLE'S jurisdiction,12 following People's Broadcasting (Bombo Radyo, Phils., Inc.) v. The Secretary of Labor and Employment, et al.13 Petitioners likewise note that the November 8, 2004 Order of the DOLE Secretary denying petitioner's appeal, as well as the Decision of the CA, is silent on the employer-employee relationship issue, which further suggests that no real and proper determination of the existence of such relationship was ever made by these tribunals.
- The [CA] did not completely and properly dispose of the case pending before it as it never resolved all justiciable issues raised x x x, particularly, that the determination of presence or absence of employer-employee relationship is indispensable in the resolution of this case as jurisdiction is dependent upon it.
- There is [no] single basis, either factual or legal, for the issuance of the May 20, 2004 Order of the Regional Director x x x against the petitioners as it was issued relying merely on pure allegations and without any substantial proof on the part of the claimants, contrary to law and jurisprudence.
- The [CA] gravely erred in ruling that the Secretary of Labor x x x did not act in a whimsical and capricious manner or with grave abuse of discretion tantamount to lack or excess of jurisdiction in affirming the Order of the [Regional Director] despite the glaring fact that no evidence were submitted by private respondents as to the basis of [their] claim and nature of their employment.
- The [CA] erred in ruling that the Secretary of Labor x x x did not deny [petitioners their] right to due process in affirming the x x x Order of [the] Regional Director x x x notwithstanding [the evidence] submitted before her [that there] exist no employer- employee relation [ship] among the parties and that the [DOLE] has no jurisdiction over the case.11
ART. 128. Visitorial and enforcement power. - (a) The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers, shall have access to employer's records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto.Under the aforequoted provision, the Secretary of Labor, or any of his or her authorized representatives, is 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. Indispensable to the DOLE'S exercise of such power is the existence of an actual employer-employee relationship between the parties.
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. (As amended by Republic Act No. 7730, June 2, 1994). x x xcralawred
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 DOLE'S 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).The foregoing ruling was further reiterated and clarified in the resolution of the reconsideration of the same case, wherein the jurisdiction of the DOLE was delineated vis-a-vis the NLRC where the employer-employee relationship between the parties is at issue:chanRoblesvirtualLawlibrary
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 impose. The rationale underlying this limitation is to eliminate the prospect of competing conclusions of the Secretary of Labor and the NLR.C, 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. (emphasis ours)cralawred
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.Like the NLRC, the DOLE has the authority to rule on the existence of an employer-employee relationship between the parties, considering that the existence of an employer-employee relationship is a condition sine qua non for the exercise of its visitorial power. Nevertheless, it must be emphasized that without an employer-employee relationship, or if one has already been terminated, the Secretary of Labor is without jurisdiction to determine if violations of labor standards provision had in fact been committed,24 and to direct employers to comply with their alleged violations of labor standards.
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. (emphasis ours)cralawred
In determining the existence of an employer-employee relationship, Bombo Radyo specifies the guidelines or indicators used by courts, i.e. (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee's conduct. 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.26ChanRoblesVirtualawlibrary
This refers to the Complaint Inspection conducted at DXCP Radio Station and/or Engr. Gauvain Benzonan, President, located at NH Lagao Road, General Santos City on January 19, 2004 pursuant to Inspection Authority No. R1201-0401-CI-052 which resulted to the discovery of the Labor Standards violations, namely:chanRoblesvirtualLawlibrary1. Underpayment of WagesProceeding from the conduct of such inspection was the issuance of the Notice of Inspection Result requiring the respondent DXCP Radio Station and/or Engr. Gauvain Benzonan, President, to effect restitution and/or correction of the noted violations at the plant/company level within five (5) calendar days from notice thereof. But, Engr. Gauvain Benzonan failed to do so.
2. Underpayment of 13th Month Pay
3. Non-payment of the five (5) days Service Incentive Leave Pay
4. Non-payment of Rest Day Premium Pay
5. Non-payment of the Holiday Premium Pay
6. Non-remittance of SSS Contributions
7. Some employees are paid on commission basis aside from their allowance[s]cralawred
On March 3, 2004, a summary investigation was conducted at the [DOLE], Regional Office No. XII, Provincial Extension Office, General Santos City. In that scheduled Summary Investigation, only complainants appeared, assisted by Mr. Fred Huervana, National President of the Philippine Organization of Labor Unions, x x x while respondent failed to appear despite due notice.
On April 1, 2004, another Summary Investigation was conducted x x x [There] complainants appeared, x x x while respondent was represented by Ms. Nona Gido, Secretary of Atty. Thomas Jacobo, counsel for the respondent. During the deliberation, Ms. Nona Gido manifested that her presence in that scheduled summary investigation was to request for the re-scheduling of such hearing, however, such request was denied. Mr. Fred Huervana declared that as he gleaned from the Notice of Inspection Result issued by the labor inspector, the Non-payment of the Provisional Emergency Relief Allowance (PERA) was not included from among the discovered violations, hence he requested that it should be included in the computation. Such request was denied x x x. Further, Mr. Fred Huervana, declared that this case be submitted for decision based on the merit of the case.
Failure of the parties to reach a final settlement prompted this Office to compute the entitlements of the seven (7) affected workers for their salary differential, underpayment of 13th month pay, non-payment of the five (5) days service incentive leave pay, non-payment of holiday premium pay and non-payment of rest day premium pay in the total amount of SEVEN HUNDRED FIFTY NINE THOUSAND SEVEN HUNDRED FIFTY TWO PESOS (P759,752.00) x x x.25cralawred
Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.As stressed by this Court in San Jose v. NLRC,34 faithful compliance by the courts and quasi-judicial bodies, such as the DOLE, with Art. VIII, Sec. 14 is a vital element of due process as it enables the parties to know how decisions are arrived at as well as the legal reasoning behind them. Thus:chanRoblesvirtualLawlibrary
No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefor.cralawred
This Court has previously held that judges and arbiters should draw up their decisions and resolutions with due care, and make certain that they truly and accurately reflect their conclusions and their final dispositions. A decision should faithfully comply with Section 14, Article VIII of the Constitution which provides that no decision shall be rendered by any court without expressing therein clearly and distinctly the facts of the case and the law on which it is based. If such decision had to be completely overturned or set aside, upon the modified decision, such resolution or decision should likewise state the factual and legal foundation relied upon. The reason for this is obvious: aside from being required by the Constitution, the court should be able to justify such a sudden change of course; it must be able to convincingly explain the taking back of its solemn conclusions and pronouncements in the earl indecision. The same thing goes for the findings of fact made by the NLRC, as it is a settled rule that such findings are entitled to great respect and even finality when supported by substantial evidence; otherwise, they shall be struck down for being whimsical and capricious and arrived at with grave abuse of discretion. It is a requirement of due process and fair play that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. x x xcralawredTo this end, University of the Philippines v. Hon. Dizon35 instructs that the Constitution and the Rules of Court require not only that a decision should state the ultimate facts but also that it should specify the supporting evidentiary facts, for they are what are called the findings of fact. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court (or quasi-judicial body) for review by a higher tribunal.36ChanRoblesVirtualawlibrary
In the present case, the NLRC was definitely wanting in the observance of the aforesaid constitutional requirement. Its assailed five-page Decision consisted of about three pages of quotation from the labor arbiter's decision, including the dispositive portion, and barely a page (two short paragraphs of two sentences each) of its own discussion of its reasons for reversing the arbiter's findings. It merely raised a doubt on the motive of the complaining employees and took "judicial notice that in one area of Mindanao, the mining industry suffered economic difficulties." In affirming peremptorily the validity of private respondents' retrenchment program, it surmised that "[i]f small mining cooperatives experienced the same fate, what more with those highly mechanized establishments."cralawredThe Court is not unmindful of the State's policy to zealously safeguard the rights of our workers, as no less than the Constitution itself mandates the State to afford full protection to labor. Nevertheless, it is equally true that the law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer.38 The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers.39 Certainly, an employer cannot be made to answer for claims that have neither been sufficiently proved nor substantiated.
1 Penned by Associate Justice Maria Filomena D. Singh and concurred in by Associate Justices Romulo V. Borja and Rafael Antonio M. Santos.
2 Pursuant to Inspection Authority No. R1201-0401-CI-052.
3Rollo, p. 89.
4 Id. at 62-63.
5 Id. at 89-92.
6 Id. at 91.
7 Id. at 262-264.
8 Id. at 301-340, Petition for Review on Certiorari dated July 17, 2006.
9 Decision dated December 15, 2010 in G.R. No. 173326, penned by Associate Justice Teresita J. Leonardo-De Castro and concurred in by Chief Justice Renato C. Corona and Associate Justices Presbitero J. Velasco, Jr., Mariano C. Del Castillo, and Jose Portugal Perez.
10 Id. at 647-651.
11 Id. at 37-38.
12Rollo, pp. 41-42.
13 G.R. No. 179652, May 8, 2009, 587 SCRA 724.
14 DOLE Comment, p. 6.
15Sarapat v. Salanga, G.R. No. 154110, November 23, 2007, 538 SCRA 324; citing Westmont Pharmaceuticals, Inc. v. Samaniego, G.R. Nos. 146653-54 & 147407-408, February 20, 2006, 482 SCRA 611, 619.
16Montemayor v. Bundalian, et. al., G.R. No. 140335, July 1, 2003, 405 SCRA 264.
17Rollo, p. 32.
18Magsaysay Maritime Services and Princess Cruise Lines, Ltd. v. Laurel, G.R. No. 195518, March 20, 2013, 694 SCRA 225.
19Tenaza, et. al. v. R. Villegas Taxi Transport, G.R. No. 192998, April 2, 2014.
20Legend Hotel (Manila) v. Realuyo, G.R. No. 153511, July 18, 2012, July 18, 2012, 677 SCRA 10, 19; citing Opulencia Ice Plant and Storage v. NLRC, G.R. No. 98368, December 15, 1993, 228 SCRA 473.
21Legend Hotel (Manila) v. Realuyo, G.R. No. 153511, July 18, 2012, 677 SCRA 10.
22People's Broadcasting (Bornbo Radyo, Phils., Inc.) v. The Secretary of Labor and Employment, et. al., supra note 13.
24People's Broadcasting (Bombo Radyo, Phils., Inc.) v. The Secretary of Labor and Employment, et. al., G.R. No. 179652, March 6, 2012, 667 SCRA 538.chanrobleslaw
25Rollo, pp. 62-63.
26People's Broadcasting (Bombo Radyo, Phils.. Inc.) v. The Secretary of Labor and Employment, et. al., supra note 24.
27Coca Cola Bottlers Phils., Inc. v. NLRC, G.R. No. 120466, May 17, 1999, 307 SCRA 131, 139.
28Rollo, p. 91; Order dated November 8, 2004.
29Centro Project Manpower Services Corporation v. Naluis, G.R. No. 160123, June 17, 2015.
30Javier v. Fly Ace Corporation, G.R. No. 192558, February 15, 2012; citing Cootauco v. MMS Phil. Maritime Services, Inc., G.R. No. 184722, March 15, 2010, 615 SCRA 529.
31Loon, et. al. v. Power Master, Inc., G.R. No. 189404, December 11, 2013; citing Lagatic v. NLRC, 349 Phil. 172, 185-186 (1998).
32Basay v. Hacienda Consolacion, G.R. No. 175532, April 19, 2010, 618 SCRA 422; citing Leopard Integrated Services, Inc. v. Macalinao, G.R. No. 159808, September 30, 2008, 567 SCRA 192, 200.
33] People's Broadcasting (Bombo Radyo, Phils., Inc.) v. The Secretary of Labor and Employment, et. al., supra note 24.
34 G.R. No. 121227, August 17, 1998, 294 SCRA 336; citing Juan Saballa, et. al. v. NLRC, G.R. Nos. 102472-84, August 22, 1996, 260 SCRA 697.
35 G.R. No. 171182, August 23, 2012.
36Anino, et. al. v. Hinatuan Mining Corporation, et. al., G.R. No. 123226, May 21, 1998; citing Saballa v. NLRC, August 22, 1996, 260 SCRA 697.
38Serrano v. NLRC, 380 Phil. 416 (2000).
39Agabon v. NLRC, G.R. No. 158693, November 17, 2004.