Case Digest: Maternity Children's Hospital v. Secretary of Labor, G.R. No. 78909 June 30, 1989

Labor Law | Art. 128

Facts:

  • Maternity Children's Hospital is a semi-government hospital managed by the Board of Directors of the Cagayan de Oro Women's Club and Puericulture Center. It is partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City government, and its finances come from the club, paying patients, and subsidies.
  • It has forty-one (41) employees.
  • Ten employees of the petitioner filed a complaint for underpayment of salaries and ECOLAs. The complaint led to an inspection of petitioner's records.
  • Labor Standard and Welfare Officers confirmed underpayment of wages and ECOLAs for all employees based on their review of payrolls and interviews with complainants. A recommendation was made to the Regional Director to order the petitioner to pay employees.
  • Regional Director: Issued an order directing the payment to all employees.
  • Minister of Labor and Employment: Modified the period of computation for the deficiency wages and ECOLAs.
  • Secretary of Labor: Denied the motion for reconsideration.
Issue:
WoN the applicability of the award involving salary differentials and ECOLAS, covers not only the hospital employees who signed the complaints, but also those:
(a) who are not signatories to the complaint (YES)
(b) who were no longer in the service of the hospital at the time the complaints were filed (NO)

Held:

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.

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:

. . 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.

. . . (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 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 supplied)

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.

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.

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.

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