Labor Law: Title II Wages; Chapter VI Administration and Enforcement; Arts. 120 - 127

 Title II

WAGES

Chapter V

Administration and Enforcement

Arts. 128 - 129


Q: If I have a money claim against my employer, where do I go for assistance?

Q: Does the DOLE Regional Director have the power to order the closure of an establishment?


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.
 
(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).

An order issued by the duly authorized representative of the Secretary of Labor and Employment under this Article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. (As amended by Republic Act No. 7730, June 2, 1994)

(c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.

(d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of Labor and Employment or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.

(e) Any government employee found guilty of violation of, or abuse of authority, under this Article shall, after appropriate administrative investigation, be subject to summary dismissal from the service.

(f) The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code.

Own Notes:
  1. Access and Investigation: 
    • The Secretary of Labor and Employment and authorized representatives can access employer records and premises anytime during work hours, questioning employees and investigating any violation or non-compliance with labor laws.
  2. Compliance Orders, Writ of Execution and Appeals:
    • They can issue compliance orders based on findings from inspections. Writs of execution enforce these orders unless contested by the employer with substantial documentary proof not considered during inspection.
    • Employers can appeal orders to the Secretary. For orders involving monetary awards, appeals require a cash or surety bond equivalent to the award.
  3. Stoppage of Work or Suspension of Operations:
    • The Secretary can order the stoppage of work or suspension of operations if non-compliance poses grave and imminent danger to health and safety of workers. A hearing within 24 hours determines the continuance of the order. If employer fault caused the violation, affected employees must be compensated.
  4. Prohibition of Obstruction: 
    • Obstructing Secretary's orders is unlawful. No inferior court or entity can issue injunctions or restraining order involving the enforcement orders.
  5. Government Employee Accountability: 
    • Government employees violating or abusing this article's authority face summary dismissal after administrative investigation, ensuring accountability within the public sector.
  6. Record Keeping: 
    • The Secretary can mandate employers to maintain necessary employment records, aiding in the exercise of visitorial and enforcement powers under this Code.

Notes:

Labor Administration
  • This article is the nucleus of administrative enforcement of Philippine labor laws. 
  • The job is lodged with the:
    1. Secretary of Labor and Employment,
    2. regional directors, and 
    3. other duly authorized representatives.
  • The enforcement function is broad. 
    • It covers "any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement" of the Labor Code or any labor law, wage order or regulations. 
  • Law enforcement includes inspection of establishments, but every inspection should be supported by an authorization duly issued.
    • Where violations are found, appropriate report will be submitted. 
    • Subsequently, the regional director may issue a "compliance order," which is a command to the employer to rectify the violation and found and proven.
Three Kinds of Power. 
  • Article 128 of the Labor Code, as amended, grants three kinds of power which the DOLE Secretary and/or the Regional Directors, may exercise in the administration and enforcement of labor standards, provisions of the Labor Code and of any labor law. 
    1. Visitorial power,
    2. Enforcement power, and 
    3. Appellate power or power of review. 
  • The appellate power may only be exercised by the DOLE Secretary in respect to any decision, order or are worried issued by the DOLE Regional Directors. 
  • The visitorial and enforcement power granted to the DOLE Secretary and the DOLE Regional Directors are quasi-judicial in nature. 
Extraordinary Powers
  • This Article, in paragraph (c) grants an extraordinary power.
  • In the exercise of his power under this Article, the Secretary of Labor and Employment may order the stoppage of work or suspension of operations over the inspector establishments or parts of it if the workers health and safety are in imminent danger. 
    • The employer, if at fault, may be ordered to pay the employees wages during the work stoppage or suspension of operations. Due process of law must be observed. 
  • Another extraordinary power is granted under Article 292 (b). It may be called the "power to defer dismissal" or the "dismissal deferment power."
    • It states the Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. 
Visitorial and Related Powers
  • The DOLE Regional Directors have original and exclusive jurisdiction over the following cases:
    1. Visitorial (inspection) cases under Article 37 of the Labor Code referring to the inspection of the premises and books of accounts and records of any person or entity covered by the Title One (Recruitment and Placement of Workers), Book I, Labor Code;
    2. Visitorial (inspection) and enforcement of cases under Article 128, either routine or initiated through complaint;
    3. Visitorial cases under Article 289 (274), involving examination of books of accounts of independent unions, local chapters/chartered locals and workers' associations;
    4. Occupational Safety and Health violations; 
    5. Small money claims arising from labor standards violations in an amount not exceeding ₱5000 and not accompanied with a claim for reinstatement under Article129;
    6. Cases related to private recruitment and placement agencies, (PRPAs) for local employment, such as:
      1. Application for license or denial thereof;
      2. Complaints for suspension or cancellation of license by reason of administrative offenses; 
      3. Complaints for illegal recruitment; and
      4. Petition for closure of agency.
    7. Cases submitted for voluntary arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007;
    8. Union registration-related cases, such as:
      1. Applications for union registration of independent unions, local chapters and workers' associations;
      2. Petitions for denial of application for registrations of said unions;
      3. Petitions for revocation or cancellation of registration of said unions; 
    9. Notice of merger, consolidation, affiliation and change of name of said unions and or petition for denial thereof. 
    10. CBA-related cases, such as: 
      1. Application for registration of single-enterprise CBAs or petition for deregistration thereof;
      2. Petition for denial of registration of single-enterprise CBAs or denial of petition for deregistration thereof; and 
    11. Request for SEBA certification when made in an unorganized establishment with only one (1) legitimate union.
Enforcement Power 
  • The enforcement power is exercised pursuant to the original jurisdiction of the DOLE Regional Directors. This involves the power: 
    1. To issue compliance orders to give effect to the labor standards provisions of the Labor Code and other labor legislations; 
    2. To issue writs of execution to the appropriate authority for the enforcement of their orders, except in contested cases;
    3. To order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules poses grave and imminent danger to the health and safety of workers in the workplace;
    4. To require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under the Labor Code.
  • Labor Standards
    • The minimum requirements prescribed by existing laws, rules and regulations and other issuances related to wages, hours of work, cost of living allowances and other monetary and welfare benefits, including those set by occupational safety and health standards.
  • The issuance of a Compliance Order must observe the "cardinal primary requirements" of due process in administrative proceedings. The requirements are:
    1. The alleged violator (employer or anyone else) must be first heard and given adequate opportunity to present evidence on his behalf;
    2. The evidence presented must be duly considered before any decision is reached;
    3. The decision should be based on substantial evidence which means evidence adequate for a reasonable mind to support a conclusion;
    4. The decision is based on evidence presented in hearing, or at least contained in the record and disclosed to the parties;
    5. The decision is that of the decision-making authority and not mere views of subordinates; and
    6. The decision should explain the issues involved and the reasons for the decision rendered.
  • To enforce a "compliance order," a writ of execution may be issued, except if the employer, armed with documentary evidence, questions the findings. In that situation, the case will have to be forwarded to a labor arbiter at the NLRC.
  • A regional director of DOLE has the power to order rectification of a labor standards violation even if such vioation is not mentioned in the employee's complaint. (See Aboitiz Shipping, April 25, 1990)
  • The authority under Article 128 may be exercised regardless of monetary value involved, unlike in Article 129 where the authority is only for claims not exceeding ₱5,000 per claimant.
    • R.A. No. 7730 (June 2, 1994) changed Article 128 (b) to its present wording so as to free it from the jurisdictional limitations found in Articles 129 and 217 (now 224).
  • Aboitiz Shipping Employees Association filed a complaint against the Aboitiz Shipping Corporation for non-compliance with mandated minimum wage rates and allowances. The company contested the complaint, arguing that the union had no legal capacity to sue due to a pending representation issue.
  • The Regional Director conducted hearings and repeatedly directed the company to present relevant employment records. Despite notices, the company failed to comply fully. 
  • Regional Director: Directed the company to pay the complainants a total amount of ₱1,350,828.00, representing underpayment of a daily allowance of ₱2.00 per day from February 16, 1982, to February 15, 1985.
  • Secretary of Labor and Employment: Dismissed the appeal.
  • Contention: The Labor Arbiter, not the Regional Director, had jurisdiction over money claims
WoN the respondent Regional Director, correctly assumed jurisdiction over the money claims filed with him by the complainants. YES

Under the foregoing provisions of Articles 129 and 217 of the Labor Code, as amended, the Regional Director is empowered, through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including legal interest, provided the following requisites are present,  to wit:
  1. the claim is presented by an employee or person employed in domestic or household service, or househelper;
  2. the claim arises from employer-employee relations;
  3. the claimant does not seek reinstatement; and
  4. the aggregate money claim of each employee or househelper does not exceed P5,000.00 (Art. 129, Labor Code, as amended by R.A. 6715).
In the case at bar, it is noted that in the Order dated 13 October 1988 of the Regional Director, the latter found each of the seven hundred seventeen (717) complainants entitled to a uniform amount of P1,884.00. (Rollo, pp. 11 7-131,). All the other requisites for the exercise of the power of the Regional Director under Article 129 of the Labor Code, as amended by R.A. 6715, are present. It follows that the respondent Regional Director properly took cognizance of the claims, subject of this petition.

WoN it was improper for the Regional Director to order compliance with P.D. 1678 as the issue on the said decree was never raised by private respondent in its complaint filed before the Regional Director. NO

We also do not agree with the petitioner's allegation that it was improper for the respondent Regional Director to order in the questioned Order dated 13 October 1988, compliance with P.D. 1678 as the issue on the said decree was never raised by private respondent in its complaint filed before the Regional Director. While it may be true that P.D. 1678 is not one of the laws where non-compliance therewith was complained of, still, the Regional Director correctly acted in ordering petitioner to comply therewith, as he (Regional Director) has such power under his visitorial and enforcement authority provided under Article 128(a) of the Labor Code.



Subject of the Visitorial and Enforcement Powers 
  • The subject of the visitorial and enforcement powers granted to the DOLE Secretary or his duly authorized representatives under Article 128 is the establishment which is under inspection and not the employees thereof.
  • According to Maternity Children's Hospital v. Secretary of Labor, any awards granted are not confined to employees who signed the complaint inspection but are equally applicable to all those who were employed by the establishment concerned at the time the complaint was filed, even if they were not signatories thereto.
    • The reason is that the visitorial and enforcement powers are relevant to, and may be exercised over establishments, not over individual employees thereof, to determine compliance by such establishments with labor standards laws.
    • Necessarily, in case of award from such violation by the establishment, all its existing employees should be benefited thereby.
    • It must be stressed, however, that such award shouId not apply to those who resigned, retired or ceased to be employees at the time the complaint was filed.
  • 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.
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 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. 

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. 

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.

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.


Jurisdictional Requisites
For the valid exercise of the visitorial and enforcement powers provided under Article 128, the following requisites shall concur:
  1. The employer-employee relationship still exists at the time of the initiation of the action;
  2. The findings in question were made in course of inspection, regardless of whether it was initiated by complaint or routine inspection; and
  3. The employees have not yet initiated any claim or complaint with the DOLE Regional Director under Article 129 (small money claims not exceeding P5,000.00) or the Labor Arbiter, under Article 224 [217] (money claims exceeding P5,000.00).
  • If at the time of the initiation of the action, the employer-employee reIationship had already ceased, it is not the DOLE Regional Director but the Labor Arbiter who has jurisdiction over the same.

DOLE Regional Director Empowered to Determine Employer-Employee Relationship
  • In a 2009 decision, the Supreme Court ruled that the labor arbiters, not the DOLE regional directors were the proper authority to determine whether employer-employee relationship exists. But this ruling was reconsidered in 2012. The Court now recognizes that as the regional directors exercise quasi-judicial power, they are empowered to determine the existence of employment relationship. Moreover, their determination is subject to judicial review, not review by the NLRC. (People's Broadcasting Service, March 6, 2012)
  • The existence of employer-employee relationship between the parries is a prerequisite for the director's exercise of the visitorial and enforcement power. The finding that employer-employee relationship exists must be:
    1. based on facts gathered from documents and interviews and
    2. categorically expressed in the regional director's order. 
  • Without this finding of employment relationship which should be stated distinctly in the order, the powers under Article 128 cannot be exercised, hence alleged violations of labor standards cannot be determined.
  • Nevertheless, it is incumbent upon the claimants to prove that they were employees of the respondent and that the latter violated their labor rights. A person who alleges a fact has the onus (or the burden) of proving it, and the proof should be clear, positive and convincing. (South Cotabato Communications Corp., June 15, 2016)
  • Private respondent Jandeleon Juezan filed a complaint against petitioner People's Broadcasting Service (Bombo Radyo) with 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, illegal diminution of benefits, delayed payment of wages, and noncoverage of SSS, PAG-IBIG, and Philhealth.
  • DOLE Regional Director: Found Juezan to be an employee of the petitioner and was entitled to money claims.
  • Acting DOLE Secretary: Dismissed the appeal.
  • CA: Reversed the DOLE decision.
    • The DOLE Secretary's jurisdiction under Art. 128(b) of the Labor Code does not include determining the existence of an employer-employee relationship.
    • The NLRC was held to be the primary agency in determining the existence of an employer-employee relationship.
WoN the DOLE can make a determination of whether or not an employer-employee relationship exists. YES

Held:
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 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.

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.

If a complaint is filed with DOLE, and an employer-employee relationship is found, DOLE has exclusive jurisdiction, excluding NLRC. If DOLE finds no employer-employee relationship, NLRC has jurisdiction.  In this case, the court ruled there was no employer-employee relationship based on evidence presented, leading to DOLE's lack of jurisdiction and dismissal of the complaint.

South Cotabato Communications Corp. v. Hon. P. Sto. Tomas et al., G.R. No. 217575, June 15, 2016

  • The Department of Labor and Employment (DOLE) conducted an inspection at DXCP Radio Station, owned by South Cotabato Communications Corporation, and found violations of labor standards provisions, including underpayment of wages and non-remittance of SSS contributions.
  • The DOLE issued a Notice of Inspection Result, directing the corporation to correct the violations but petitioners failed to comply. A Summary Investigation was scheduled, but petitioners did not appear. Another hearing was set, but their counsel's secretary requested a reset, which was denied.
  • The DOLE Regional Director ordered petitioners to pay the total amount of P759,752 to the affected employees.
  • Petitioners appealed to the Secretary of Labor, claiming denial of due process and lack of evidence of an employer-employee relationship.
  • Secretary of Labor: Affirmed the DOLE Regional Director's findings and dismissed the appeal.
  • CA: Upheld the Secretary of Labor's decision, stating that petitioners' failure to present evidence was due to negligence.

WoN the CA erred in affirming the Secretary of Labor's decision despite the absence of evidence proving the employer-employee relationship. YES

The Regional Director merely noted the discovery of violations of labor standards provisions in the course of inspection of the DXCP premises. No such categorical determination was made on the existence of an employer-employee relationship utilizing any of the guidelines set forth. In a word, the Regional Director had presumed, not demonstrated, the existence of the relationship. Of particular note is the DOLE'S failure to show that petitioners, thus, exercised control over private respondents' conduct in the workplace. 

The existence of employer-employee relationship must be proved by adequate evidence and determined through examination of facts. The relationship must be demonstrated, not presumed, and its existence should be declared categorically before the powers under Article 128 may be exercised.

After a careful review of this case, the Court finds that the DOLE failed to establish its jurisdiction over the case. 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 NLRC, 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.


Non-compliance with Wage Order; Double Indemnity

  • Failure or refusal to pay mandatory wage increase is considered a criminal offense under R.A. No. 8188, approved June 11, 1996. 
    • The violator may be sentenced to imprisonment of not less than two nor more than four years. 
    • He may also be fined an amount from  ₱25,000 to  ₱100,000.
    • Moreover, he shall be ordered to pay an amount double the unpaid benefits owing to the employee.
  • The DOLE has issued D.O. No. 10 (May 4, 1998) to implement this "double indemnity" law.
  • Not only the DOLE Regional Directors but also the NLRC labor arbiters are authorized to impose such double indemnity. (Grand Asian, January 29, 2014)
  • Grand Asian Shipping Lines, Inc. (GASLI) is a domestic corporation engaged in transporting liquified petroleum gas (LPG).
  • An investigation revealed that fuel oil was misdeclared as consumed fuel in the Engineer's Voyage Reports and then sold to other vessels; proceeds were divided among the crew. A formal complaint for qualified theft was filed against the respondents.
  • GASLI terminated the respondents' employment after placing them under preventive suspension. Several other employees and crewmembers of GASLI's two other vessels were likewise suspended and terminated from employment.
  • Respondents filed complaints for illegal suspension and dismissal, non-payment of salaries, and other benefits.
  • Labor Arbiter: Found the dismissal of all 21 complainants illegal and ordered their reinstatement, backwages, money claims, damages, and attorney's fees.
  • NLRC: Struck down the monetary awards given by the Labor Arbiter, which, it ruled, were based merely on the computations unilaterally prepared by the complainants. It is the Secretary of Labor or the Regional Director who has jurisdiction to impose the penalty of double indemnity for violations of the Minimum Wage Laws and not the Labor Arbiter.
WoN the Labor Arbiter has authority to impose the penalty of double indemnity for violations of the Minimum Wage Law. YES

First, there is no provision in RA 6727 or RA 8188 which precludes the Labor Arbiter from imposing the penalty of double indemnity against employers. Second, Article 217 of the Labor Code gives the Labor Arbiter jurisdiction over cases of termination disputes and those cases accompanied with a claim for reinstatement. Thus, in Bay Haven, Inc. v. Abuan the Court held that an allegation of illegal dismissal deprives the Secretary of Labor of jurisdiction over claims to enforce compliance with labor standards law. This was also pronounced in People's Broadcasting Service (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor and Employment, wherein we stated that the Secretary of Labor has no jurisdiction in cases where employer-employee relationship has been terminated. We thus sustain the Labor Arbiter's award of double indemnity.



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 does not exceed Five thousand pesos (₱5,000.00). 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. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid on order of, the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers.

Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules.

The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. (As amended by Section 2, Republic Act No. 6715, March 21, 1989)

Own Notes:
  • Authorities:
    • The Regional Director of the Department of Labor and Employment and authorized hearing officers can handle complaints related to recovery of wages and monetary claims.
  • Applications:
    • Applies to employees, domestic workers, or househelpers under the Labor Code arising from employer-employee relationship.
  • Limitations:
    • Complaint does not include a claim for reinstatement.
    • Complaints must not exceed ₱5,000.00 in aggregate money claims per employee or househelper.
  • Resolution:
    • Through summary proceedings and after due notice, the Regional Director or hearing officer must resolve the complaint within thirty (30) calendar days from filing.
  • Recovery:
    • Amounts recovered are held in a special deposit account.
    • The Secretary of Labor and Employment or Regional Director can directly pay the recovered sums to the concerned employee or househelper.
    • If the employee cannot be located within three (3) years despite efforts, the unclaimed sum is used for workers' amelioration and benefits.
  • Appeals:
    • Decisions can be appealed within five (5) calendar days from receipt of the decision to the National Labor Relations Commission.
    • The Commission must resolve the appeal within ten (10) calendar days after the submission of the last pleading.
  • Supervision of Payments:
    • The Secretary of Labor and Employment or an authorized representative can supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, to employees and househelpers.

Notes:
  • Article 129 is more limited in scope than Article 128:
  1. Empowerment 
    • Article 129 empowers only the regional director or authorized hearing officers
    • Article 128 empowers the Secretary of Labor or any "duly authorized representative"
  2. Coverage
    • Article 129 refers only to money claims and benefits
    • Article 128 covers all matters affected by the Labor Code or any labor law
  3. Appeal
    • A decision rendered under Article 129 being adjudicatory in nature is appealable to the NLRC.
    • A decision under Article 128 is administrative and therefore available to the Secretary of Labor who is the administrative superior of all regional directors in the department.
  • The regional director's authority under Article 129 is subject to four requisites: 
  1. The claim is presented by an employee or a person employed in domestic or household service or a house helper;
  2. The claim arises from the employer-employee relations;
  3. The claimant does not seek reinstatement;
  4. The aggregate money claim of each employee does not exceed ₱5,000. 
  • If there is a demand for or question of reinstatement or if the claimant's demand exceeds ₱5,000, the labor arbiter of the NLRC, not the regional director, has jurisdiction over the case pursuant to Article 224.
  • Even as regards labor arbiter, however, employer-employee relation is a prerequisite as the basis of the claim.
  • The proceedings under these Article should follow due process of law, as explained in the preceding Article.
From DOLE Secretary to CA
  • Following the rationale of the ruling in the St. Martin case, decisions of the Secretary of Labor may be elevated initially to the Court of Appeals through certiorari. 
  • These include the DOLE Secretary's decisions about:
    • Compliance order as an exercise of the visitorial power (Art. 128)
    • Cancellation of union registration (Art. 247)
    • Certification election order (Art. 272) 
    • Assumption of jurisdiction (Art. 278) (National Federation of Labor, March 10, 1999) 
  • The Articles 128 and 129 apply only in the context of employment relationship.
  • A regular court, not DOLE or NLRC, has jurisdiction over the claim of an independent contractor (who is not an employee) to adjust the contractor's fee (Urbanes, February 19, 2003)
  • Bienvenido Aricayos filed a complaint for illegal dismissal against St. Martin Funeral Home before NLRC-Pampanga.
  • Private respondent was the Operations Manager of St. Martin Funeral Home but was dismissed due to alleged misappropriation of funds intended for payment of taxes. He claimed no employment contract existed, and he was not listed in the payroll.
  • St. Martin Funeral Home, argued that the private respondent was not an employee but only the uncle of the owner who merely volunteered to help out in the business as a gesture of gratitude.
  • LA: Ruled in favor of the petitioner, stating there was no employer-employee relationship between the parties.
  • NLRC: Set aside the labor arbiter's decision and remanded the case for further proceedings.
WoN the filing of an appeal for certiorari on cases decided by the NLRC to the Supreme Court proper. NO

The Court is of the considered opinion that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC.

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should hence forth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired.


National Federation of Labor (NFL) v. Hon. Laguesma, G.R. No. 123426, March 10, 1999
  • Alliance of Nationalist and Genuine Labor Organization-Kilusang Mayo Uno (ANGLO-KMU) filed a petition for certification election among Cebu Shipyard and Engineering Work, Inc.'s rank and file employees.
  • Nagkahiusang Mamumuo sa Baradero — National Federation of Labor is the incumbent bargaining agent of the rank and file employees.
  • Med-Arbiter ordered ANGLO-KMU to submit documents proving its local's creation and legitimacy within five days.
  • Forced-intervenor NFL moved for dismissal, claiming ANGLO-KMU lacked legal personality, failed 25% consent requirement, and submitted requirements after the freedom period.
  • ANGLO-KMU submitted documents and argued that even if the 25% requirement was not met, Med-Arbiter could order a certification election.
  • Med-Arbiter: Dismissed the petition due to late submission of required documents..
  • Undersecretary Bienvenido E. Laguesma: Set aside Med-Arbiter's decision, stating ANGLO-KMU complied with registration requirements during the petition filing.
Issue: 
WoN the filing of an appeal for certiorari on cases decided by the NLRC to the Supreme Court proper. NO

Considering the above dictum and as affirmed by decisions of this Court, St. Martin Funeral Homes v. NLRC succinctly pointed out, the remedy of an aggrieved party is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and then seasonably file a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.

Proceeding therefrom and particularly considering that the special civil action of certiorari under Rule 65 is within the concurrent original jurisdiction of the Supreme Court and the Court of Appeals, St. Martin Funeral Homes v. NLRC concluded and directed that all such petitions should be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts.

REFERRED to the Court of Appeals for disposition.


  • Placido O. Urbanes, Jr., operating as Catalina Security Agency, had a contract with the Social Security System (SSS) to provide security services.
  • Petitioner requested an adjustment of the contract rate from SSS due to Wage Order No. NCR-03 issued by the Regional Tripartite Wages and Productivity Board-NCR.
  • SSS did not respond to the request, leading to petitioner filing a complaint with the Department of Labor and Employment-National Capital Region (DOLE-NCR) seeking implementation of Wage Order No. NCR-03.
  • SSS argued that petitioner was not the real party in interest and had no legal capacity to file the complaint. SSS also contended that any obligation was to the security guards.
  • Regional Director of DOLE-NCR: Ruled in favor of petitioner, ordering SSS to pay wage differentials to the security guards.
  • Secretary of Labor: Set aside the Regional Director's order, remanding the case for recomputation of wage differentials using a different basis and holding petitioner's agency jointly and severally liable for wage differentials, to be paid directly to the security guards.
WoN the Secretary of Labor does not have jurisdiction to review appeals from decisions of the Regional Directors in complaints filed under Article 129 of the Labor Code.  NO

The RTC has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner’s alleged breach of its obligation under their contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists.

The ultimate liability for payment rests with the principal (client), not the security agency.The security guards should claim payment from their direct employer (security agency), and if the agency fails to pay, the principal should be held solidarily liable. The principal's liability arises only when the contractor (security agency) pays the mandated increases. In the case at hand, the petitioner had not paid the mandated increases to the security guards.



SEnA (Single Entry Approach)
  • Grassroot labor procedures begin administratively with Articles 128-129 which strengthen and simplify the regional director's inspection and enforcement authority.
  • To expedite further the DOLE mechanism, the DOLE issued D.O. No. 107-10 in October 2010 to establish SEnA or Single Entry Approach.
  • It creates a Single Entry Approach Desk (SEAD) in DOLE offices, including its attached agency, to accept (at least initially) almost any kind of disputes arising from the workplace. 
    • The SEAD officer provides counseling meditation services within 30 days to settle the dispute amicably, if possible, before the formal filing of any labor dispute or complaint. 
    • If counseling mediation fails, he refers unsolved issues to the appropriate DOLE office or agency that has jurisdiction over the dispute.
    • The SEAD officer may entertain almost all kinds of disputes, except notices of strike or disputes that should be brought to the in-house grievance machinery.
  • The SEnA approach has been adopted into law by R.A. No. 10396 passed on January 29, 2013. (Article 234)
SEnA Suspends the Prescription Period
  • SEnA is an administrative approach requiring conciliation-mediation efforts between the parties so as to prevent full-blown disputes.
  • Request for assistance submitted under SEnA procedure has the effect of suspending the running of a prescription to investigate.
  • Thus the three-year period within which to file a disability benefit, in effect, is stopped by SEnA action. (Zonio v. 88 Aces Maritime Services, G.R. No. 239052, October 16, 2019) 

  • Apolinario Z. Zonio, Jr. worked as an "ordinary seaman" for 88 Aces Maritime Services, Inc. on MV Algosaibi 42.
  • After his initial contract, he signed a new one with Khalifa Algosaibi, lasting until April 2012.
  • In 2015, Apolinario filed a complaint for disability benefits, citing diabetes from work-related stress.
  • LA: Ruled in his favor, stating his claim was within the time limit.
  • NLRC: Disagreed, citing late medical certificates and lack of proof for work-related illness.
  • CA: Upheld NLRC, noting Apolinario's absence of complaints after leaving the vessel and failure to undergo necessary medical exams.
WoN the cause of action had not prescribed yet as he instituted his action against the respondents within the three-year reglementary period. YES

As Apolinario's disembarkation from Algosaibi 42 was on April 11, 2012, he had three years from the date, or until April 11, 2015, to make a claim for disability benefits. Records show that Apolinario had requested for a SENA before the NLRC as early as March 25, 2015. To elucidate, SENA is an administrative approach to provide an accessible, speedy, and inexpensive settlement of complaints arising from employer-employee relationship to prevent cases from ripening into full blown disputes. All labor and employment disputes undergo this 30-day mandatory conciliation-mediation process.

Apolinario filed his Complaint before the Labor Arbiter only on May 8, 2015 is of no moment. SENA being a pre-requisite to the filing of a Complaint before the Labor Arbiter, the date when Apolinario should be deemed to have instituted his claim was when he instituted his Request for SENA on March 25, 2015. Considering that the expiration of Apolinario's cause of action was on April 11, 2015, his claim was filed well within the 3-year prescriptive period.


Regional Director's Jurisdiction Over Small Money Claims
  • The DOLE Regional Director has original jurisdiction over small money claims cases arising from labor standards violations in the amount not exceeding ₱5,000 and not accompanied the claim for reinstatement under Article 129 of the Labor Code.
  • Article 129 contemplates the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee arising from employer-employee relations provided the claim does not exceed ₱5,000.
Requisites
  • The following requisites for the valid exercise of jurisdiction over small money claims must all concur:
  1. The claim is presented by an employee; 
  2. The claimant, no longer being employed, does not seek reinstatement; and
  3. The aggregate money claim of the employee does not exceed ₱5,000.00.
Labor Arbiters Jurisdiction
  • In the absence of any of the aforesaid prerequisites, the labor arbiters have original and exclusive jurisdiction over all claims arising from employer-employee relations other than claims for employees' compensation, social security, PhilHealth and maternity benefits. 
  • Employment relationship should no longer exist at the time of the initiation of the complaint for monetary claim under Article 129. 
    • Article 128: If the employment relationship still exists at the time of the filing of the complaint, the case necessarily falls under the coverage of Article 128 where it is a prerequisite that such relationships would still exist at the time of the initiation of the complaint.
    • Article 129: If the employment no longer exist, the complaint falls under Article 129 for as long as a terminated employee does not raise the issue of legality of his dismissal or assert any claim for reinstatement and merely confines his complaint to his monetary claims, which should not exceed ₱5,000.
  • Once the employer-employee relationship has already ceased, and the legality of the dismissal is raised and the reinstatement is sought, jurisdiction necessarily falls under the Labor Arbiter by virtue of Article 224 (217) of the Labor Code. 
    • Such jurisdiction covers the recovery of any and all monetary and other benefits consequences of such dismissal.
  • When the total monetary claims exceed ₱5,000, jurisdiction is lodged with the Labor Arbiter. 
    • This is regardless of whether the money claim is accompanied with a claim for reinstatement.
    • The monetary claims may include unpaid wages, salary differentials, 13th month pay and other benefits.
  • When the claim does not exceed ₱5,000,  but employee prays for reinstatement, the case falls within the original and exclusive jurisdiction of the Labor Arbiter.
    • An action which carries with it a claim for reinstatement is principally an illegal dismissal case and not one for monetary claims. 
    • Consequently, since it is an illegal dismissal case, the amount of money accompanying monetary claims is inconsequential. 
Claims of Kasambahay
  • Article 129 no longer applies to claims of domestic workers or kasambahay.
  • However, applies to all "employees" as maybe clearly deduced from the phrase "owing to an employee xxx arising from employer-employee relations xxx."
  • DOLE Regional Director has exclusive there is jurisdiction over all money claims of the kasambahay regardless of amount.
  • R.A. No. 10361 The Kasambahay Law provides:
    • SEC. 37. Mechanism for Settlement of Disputes. – All labor-related disputes shall be elevated to the DOLE Regional Office having jurisdiction over the workplace without prejudice to the filing of a civil or criminal action in appropriate cases. The DOLE Regional Office shall exhaust all conciliation and mediation efforts before a decision shall be rendered.
  • The jurisdiction over all labor-related disputes involving a Kasambahay, including illegal dismissal, money claims (regardless of amount) and other labor issues, is now lodged solely with the DOLE Regional Director.
  • Obviously, the least expensive and simplest way should be accessible.   
  • The procedure prescribes that all labor-related disputes shall be filed before the DOLE Field/Provincial/Regional Office having jurisdiction over the workplace and shall go through the 30-day mandatory conciliation under the DOLE Single Entry Approach (SEnA) program to exhaust all efforts for the settlement of the dispute in case the parties failed to reach a settlement.
    • A mandatory conference not exceeding 30 days shall be conducted by the DOLE Field/Provincial/Regional Office from referral of the unsettled dispute.
  • The DOLE Regional Director shall issue a compliance order within 10 days from the submission of the case for resolution.
    •  Any aggrieved party may file a motion for reconsideration from the compliance order within 10 days from receipt thereof.



















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