People's Broadcasting Service v. Secretary of the Department of Labor and Employment

EN BANC

[G.R. No. 179652. March 6, 2012.]

PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), petitioner, vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, respondents.

RESOLUTION

VELASCO, JR., J p:

In a Petition for Certiorari under Rule 65, petitioner People's Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.) questioned the Decision and Resolution of the Court of Appeals (CA) dated October 26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP No. 00855. cSaCDT

Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and PhilHealth. 1 After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled to his money claims. 2 Petitioner sought reconsideration of the Director's Order, but failed. The Acting DOLE Secretary dismissed petitioner's appeal on the ground that petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond. When the matter was brought before the CA, where petitioner claimed that it had been denied due process, it was held that petitioner was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128 (b) of the Code had been repealed by Republic Act No. (RA) 7730. 3

In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed. The dispositive portion of the Decision reads as follows:

WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE. The Order of the then Acting Secretary of the Department of Labor and Employment dated 27 January 2005 denying petitioner's appeal, and the Orders of the Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27 February 2004, respectively, are ANNULLED. The complaint against petitioner is DISMISSED. 4

The Court found that there was no employer-employee relationship between petitioner and private respondent. It was held that while the DOLE may make a determination of the existence of an employer-employee relationship, this function could not be co-extensive with the visitorial and enforcement power provided in Art. 128 (b) of the Labor Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee relationship. This was the interpretation of the Court of the clause "in cases where the relationship of employer-employee still exists" in Art. 128 (b). 5

From this Decision, the Public Attorney's Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employer-employee relationship. 6 In its Comment, 7 the DOLE sought clarification as well, as to the extent of its visitorial and enforcement power under the Labor Code, as amended. SIDTCa

The Court treated the Motion for Clarification as a second motion for reconsideration, granting said motion and reinstating the petition. 8 It is apparent that there is a need to delineate the jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC.

Under Art. 129 of the Labor Code,the power of the DOLE and its duly authorized hearing officers to hear and decide any matter involving the recovery of wages and other monetary claims and benefits was qualified by the proviso that the complaint not include a claim for reinstatement, or that the aggregate money claims not exceed PhP5,000. RA 7730, or an Act Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the PhP5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP5,000. The only qualification to this expanded power of the DOLE was only that there still be an existing employer-employee relationship.

It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the start, the DOLE has no jurisdiction. Under Art. 128 (b) of the Labor Code, as amended by RA 7730, the first sentence reads, "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." It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE. The question now arises, may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to what extent?

The first portion of the question must be answered in the affirmative.

The prior decision of this Court in the present case accepts such answer, but places a limitation upon the power of the DOLE, that is, the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE. But even in conceding the power of the DOLE to determine the existence of an employer-employee relationship, the Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC, that any finding by the DOLE is merely preliminary.

This conclusion must be revisited.

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. aCASEH

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. 9 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.

The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship.

If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first place.

The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of competing conclusions between the DOLE and the NLRC. The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent course of action to take.

This is not to say that the determination by the DOLE is beyond question or review. Suffice it to say, there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the findings of the DOLE.

It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding. The DOLE may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction over the case. It must not be precluded from being able to reach its own conclusions, not by the parties, and certainly not by this Court.

Under Art. 128 (b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC.

There is a view that despite Art. 128 (b) of the Labor Code, as amended by RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are involved, i.e., that if it is for PhP5,000 and below, the jurisdiction is with the regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP5,000, the jurisdiction is with the labor arbiter, under Art. 217. The view states that despite the wording of Art. 128 (b), this would only apply in the course of regular inspections undertaken by the DOLE, as differentiated from cases under Arts. 129 and 217, which originate from complaints. There are several cases, however, where the Court has ruled that Art. 128 (b) has been amended to expand the powers of the DOLE Secretary and his duly authorized representatives by RA 7730. In these cases, the Court resolved that the DOLE had the jurisdiction, despite the amount of the money claims involved. Furthermore, in these cases, the inspection held by the DOLE regional director was prompted specifically by a complaint. Therefore, the initiation of a case through a complaint does not divest the DOLE Secretary or his duly authorized representative of jurisdiction under Art. 128 (b). CAcEaS

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217 (3) of the Labor Code,which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.

In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by this Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence presented. Private respondent presented self-serving allegations as well as self-defeating evidence. 10 The findings of the Regional Director were not based on substantial evidence, and private respondent failed to prove the existence of an employer-employee relationship. The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper.

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATION that in the exercise of the DOLE's visitorial and enforcement power, the Labor Secretary or the latter's authorized representative shall have the power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC.

SO ORDERED.

Corona, C.J., Carpio, Leonardo-de Castro, Peralta, Bersamin, Abad, Villarama, Jr., Perez, Mendoza, Sereno, Reyes and Perlas-Bernabe, JJ., concur.

Brion, J., see Concurring Opinion (In the Result).

Del Castillo, J., is on official leave.

Separate Opinions

BRION, J., concurring:

I concur in the result in affirming with modification the Court's Decision of May 8, 2009. This Decision originally dismissed respondent Jandeleon Juezan's money claims against the petitioner People's Broadcasting Service (Bombo Radyo Phils., Inc.). The present Resolution still affirms the ruling in favor of the petitioner, but more importantly to me, it recognizes the validity of the Department of Labor and Employment's (DOLE's) plenary power under Article 128 (b) of the Labor Code, as amended by Republic Act No. 7730, including its power to determine the existence of employer-employee relationship in the exercise of its Article 128 (b) powers. ACDIcS

Background

The case arose when the DOLE Regional Office No. VII conducted an inspection of Bombo Radyo's premises in response to Juezan's money claims against the broadcasting company, resulting in an order for Bombo Radyo to rectify/restitute the labor standards violations discovered during the inspection. Bombo Radyo failed to make any rectification or restitution, prompting the DOLE to conduct a summary investigation. Bombo Radyo reiterated its position, made during the inspection, that Juezan was not its employee. Both parties submitted evidence to support their respective positions.

DOLE Director Rodolfo M. Sabulao found Juezan to be an employee of Bombo Radyo. Consequently, Director Sabulao ordered Bombo Radyo to pay Juezan P203,726.30 representing his demanded money claims. Bombo Radyo moved for reconsideration and submitted additional evidence, but Director Sabulao denied the motion. Bombo Radyo then appealed to the DOLE Secretary, insisting that Juezan was not its employee as he was a drama talent hired on a per drama basis. The Acting DOLE Secretary dismissed the appeal for non-perfection due to Bombo Radyo's failure to put a cash or surety bond, as required by Article 128 (b) of the Labor Code.

Bombo Radyo went to the Court of Appeals (CA) through a petition for certiorari under Rule 65 of the Rules of Court. The CA dismissed the petition for lack of merit. Bombo Radyo then sought relief from this Court, likewise through a Rule 65 petition, contending that the CA committed grave abuse of discretion in dismissing the petition. It justified its recourse to a petition for certiorari instead of a Rule 45 appeal by claiming that there was no appeal or any plain and adequate remedy available to it in the ordinary course of law.

On May 8, 2009, the Court's Second Division rendered a Decision reversing the CA rulings and dismissing Juezan's complaint. It reviewed the evidence and found that there was no employer-employee relationship between Juezan and Bombo Radyo. The Court overruled the CA's recognition of the DOLE's power to determine the existence of employer-employee relationship in a labor standards case under Article 128 (b) of the Labor Code. It stressed that the power to determine the existence of employer-employee relationship is primarily lodged with the National Labor Relations Commission (NLRC) based on the clause "in cases where the relationship of employer-employee still exists" in Article 128 (b). cSCADE

The Dissent

The May 8, 2009 Court Decision was not unanimous. I wrote a Dissent and was joined by Justice Conchita Carpio Morales. I took strong exception to the Court's Decision for:

1. taking cognizance of Bombo Radyo's Rule 65 petition for certiorari despite the fact that a Rule 45 appeal (petition for review on certiorari) was available to the company and would have been the proper recourse since errors of law against the CA were raised;

2. allowing a Deed of Assignment of Bank Deposits as a substitute for a cash or surety bond in perfecting an appeal to the Labor Secretary, in violation of Article 128 (b) of the Labor Code which requires only a cash or surety bond;

3. re-examining the evidence and finding that there was no employer-employee relationship between Juezan and Bombo Radyo, thereby reversing the DOLE Regional Director's findings which had already lapsed into finality in view of the non-perfection of the appeal;

4. holding that while the Regional Director and the DOLE Secretary may preliminarily determine the existence of an employer-employee relationship in a labor standards case, they can be divested of jurisdiction over the issue by a mere prima facie showing of an absence of an employer-employee relationship.

The Public Attorney's Office (PAO) moved, with leave of court, to clarify the Decision on the question of when the visitorial and enforcement power of the DOLE can be considered co-extensive or not co-extensive with the power to determine the existence of an employer-employee relationship. The DOLE, in its Comment, also sought to clarify the extent of its visitorial and enforcement power under the Labor Code.

The Court, treating the Motion for Clarification as a Second Motion for Reconsideration, granted the motion and reinstated the petition. 1

The Court's Ruling

In a reversal of position, the present Resolution now recognizes that the determination of the existence of an employer-employee relationship by the DOLE, in the exercise of its visitorial and enforcement power under Article 128 (b) of the Labor Code,is entitled to full respect and must be fully supported. It categorically states: ICDSca

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. 2

The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship. 3

This is not to say that the determination by the DOLE is beyond question or review. Suffice it to say, there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the findings of the DOLE. 4 (underscoring ours)

In short, the Court now recognizes that the DOLE has the full power to determine the existence of an employer-employee relationship in cases brought to it under Article 128 (b) of the Labor Code.This power is parallel and not subordinate to that of the NLRC.

Our present ruling on the authority of the DOLE with respect to Article 128 (b) of the Labor Code is, to my mind, a very positive development that cannot but benefit our working masses, the vast majority of whom "are not organized and, therefore, outside the protective mantle of collective bargaining." 5

It should be welcome to the DOLE, too, as it will greatly boost its visitorial and enforcement power, and serve as an invaluable tool in its quest to ensure that workers enjoy minimum terms and conditions of employment. The DOLE's labor inspection program can now proceed without being sidetracked by unscrupulous employers who could, as the Resolution acknowledges, render nugatory the "expanded visitorial and enforcement power of the DOLE granted by RA 7730 . . . by the simple expedient of disputing the employer-employee relationship [and] force the referral of the matter to the NLRC." 6

But our Resolution does not fully go the DOLE's way. The Court, at the same time, confirms its previous finding that no employer-employee relationship exists between Juezan and Bombo Radyo based on the evidence presented, 7 and that a Deed of Assignment of Bank Deposits can be a substitute for a cash or surety bond in perfecting an appeal to the Labor Secretary.

I continue to entertain strong reservations against the validity of these rulings, particularly the ruling on the Court's acceptance of a Deed of Assignment of Bank Deposits to perfect an appeal to the Labor Secretary; this mode directly contravenes the express terms of Article 128 (b) of the Labor Code which requires only a cash or surety bond. I do hope that the Court will consider this ruling an isolated one applicable only to the strict facts obtaining in the present case as this is a step backward in the DOLE's bid for an orderly and efficient delivery of labor justice. cHCaIE

In light of these reservations, I cannot fully concur with the present Resolution and must only "concur in the result."

 

Footnotes

1.People's Broadcasting (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor and Employment, G.R. No. 179652, May 8, 2009, 587 SCRA 724, 738.

2.Id. at 739.

3.Id. at 740.

4.Id. at 763.

5.Id. at 744-745.

6.Rollo, p. 329.

7.Id. at 335.

8.Resolution, People's Broadcasting (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor and Employment, G.R. No. 179652, January 24, 2011.

9.CRC Agricultural Trading v. National Labor Relations Commission, G.R. No. 177664, December 23, 2009, 609 SCRA 138, 146.

10.People's Broadcasting (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor and Employment,supra note 1, at 761.

BRION, J., concurring:

1.Resolution dated January 24, 2011.

2.Draft Resolution, p. 4.

3.Id. at 5.

4.Id. at 6.

5.Reply to the Comment on the Dissent.

6.Supra note 4.

7.Id. at 7.