Maternity Children’s Hospital v.

SOLE​, June 30, 1989 

 
FACTS:  
MCH is a semi-govt hospital managed by the BoD of the Cagayan de Oro Women’s Club and 
Puericulture center. It earns from the club, paying patients, and is partly subsidized by the PCSO 
and CDO govt. It has 41 employees who are given salary and living allowances (they are given food 
but the amount is deducted from their salary)  
 
10 employees filed a complaint with the office of the RD of Labor and Employment for 
underpayment of salaries and ECOLAS ​(emergency cost of living allowances).  
 
The Labor Standard and Welfare Officers submitted a report confirming underpayment of wages 
and ECOLAS. It recommended payment by MCH Pres (Dorado) of P654,756 to the 36 employees.  
 
The RD directed payment of P723,888 to the complainants. It also directed payment of statutory 
minimum wage and allowance.  
 
MCH appealed. 
 
The Minister of L&E affirmed w modification (the modification was that the deficiency should be 
computed only from May 23, 1983 to 1986). MCH’s MR was denied for lack of merit.  
 
Hence, this petition.  
 
ISSUE​: W/n the RD has jurisdiction over the case  
Other issue: Whether or not the award covers only the complainants (not including other employees 
and those no longer in the service of the hospital when the complaints were filed) 
 
HELD​: YES 
 
This is a labor standards case, governed by Art. 128-b of the LC as amended by EO 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.  
 
The RD exercises BOTH visitorial and enforcement power over labor standards cases, so he is 
empowered to adjudicate money claims, provided 
1. there still exists an employer-employee relationship, and  
2. the findings of the regional office is not contested by the employer concerned. 
 
In this case, the complaint was filed before EO 111 was in effect. [MCH argues, citing Ong v Parel 
and Zamblaes Metals v Minister of Labor that the RD cannot adjudicate money claims because this 
is the exclusive function of the LA]  
 
However, even without EO 111 the RDs already had enforcement powers over money claims due to 
PD 850 which transferred labor standards cases to the enforcement system (from the arbitration 
system).  
 
Background: 
Prior to PD 850: Labor standards were an exclusive function of labor arbiters. Art. 216 of 
the old labor code: LAs shall have exclusive jurisdiction to hear and decide the ff cases 
involving all workers: (d) Violations of labor standard laws.  
 
The RD exercised only visitorial rights under Art. 127 of the old code. He has the 
right to access employers’ records and premises, to copy therefrom, to question 
employees, and to investigate.  
 
PD 850: RDs were given enforcement powers ​in addition​ to visitorial powers. LAs lost 
jurisdiction over labor standards cases.  
 
So under the old code, there were 3 adjudicatory units: 
1. RD -- exclusive original jurisdiction over labor standards cases arising from 
violations of labor standard laws discovered in the course of inspection or 
complaints where employer-employee relations still exist 
2. Bureau of Labor Relations (Conciliation Section of the Regional Office) -- eoj over 
labor standards where employer-employee relations no longer exist 
3. LAs -- the ff cases are ​certifiable​ to the LAs: cases not settled by the conciliation 
section (see #2): labor standard cases where employer-employee relations no longer 
exist 
 
The purpose of giving enforcement power to the RD is 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.  
 
Subsequent change in jurisdiction of the LA: 
1. PD 1367 -- the LA entertained cases ​certified ​to him (unresolved issues in collective 
bargaining, and cases arising from e-e relations duly indorsed by RDs) 
2. PD 1391 -- all regional units of the NLRC were integrated into the Regional Offices 
Proper of the Ministry of Labor; it merged conciliation and compulsory arbitration 
functions in the person of the LA. The LA had full authority in the disposition of 
cases, and his decisions and orders are subject to review only on appeal to the NLRC 
3. MOLE Policy Instructions No. 37 -- LA cases: 
a. Conciliable cases including labor standards cases where e-e rel no longer 
exists -- assigned by the RD to the LA for conciliation and arbitration 
without coursing them through the conciliation section of the Regional 
Office 
b. Labor standards cases, where e-e rel still exists -- assigned to LAs where 
i. Intricate questions of law are involved; or 
ii. Evidentiary matters not disclosed or verified in the normal course of 
 inspection by labor regulations officers are required for proper 
disposition 
c. When a case is assigned to the LA, the whole case is assigned to and resolved 
by him.  
4. PD 1691 -- LA oej over ​unresolved​ issues in collective bargaining and money claims 
(but the RD still retained enforcement power, and remained empowered to 
adjudicate ​uncontested​ money claims) 
5. BP 130 -- LAs were part of the NLRC operating as the arbitration branch 
6. BP 227 -- LA oej over questions involving legality of strikes and lockouts  
 
Here, when the RD issued its order, Art. 128 provided that the Minister of Labor or his 
representative shall have the power to order and administer compliance with labor standards, ​except 
in cases where the employer ​contests​ the findings of the labor regulations officer.   
 
The Ong and Zambales cases involved workers who were still connected with the company.  
However, the employer in Ong disputed the adequacy of the evidentiary foundation of the 
findings of the labor standards inspectors. In Zambales, the money claims which arose from 
alleged violations of labor standards were not discovered in the course of normal inspection.  
In this case, MCH admitted the charge of underpayment of wages to workers still employed. Hence, 
there was ​no contest​ against the findings of labor inspectors.  
 
EO 111 confirmed the enforcement adjudication authority of the RD over ​uncontested​ money 
claims in cases where e-e relationship ​still exists​.  
 
EO 111 was issued 3 months after the promulgation of the decision.  
 
The proceedings before the RD must be upheld on the basis of Art. 128b as amended by EO 
111 because the EO is considered in the nature of a curative statute with retrospective 
application.  
 
Anyway, the RD correctly applied the award to: 
1. The complainants and 
2. Employees who did not sign the complaint but were still connected w the hospital at the 
time the complaint was filed.  
 
This is bc the the visitorial and enforcement powers of the Sec of Labor is exercisable over 
establishments, not individual members or employees. So in case of an award resulting from a 
violation of labor legislation, the entire employees should benefit.  
 
But here is no legal justification for the award in favor of the employees no longer connected with 
the hospital at the time the complaint was filed. The claim is a purely money claim that has to 
subject of arbitration proceedings and therefore within the oej of the LA.  
 
DISPOSITIVE: dismissed as regards all persons still employed at the time of filing of the complaint, 
but granted as regards those employees no longer employed at the time