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RAJAH HUMABON HOTEL v. CRESENCIANO B. TRAJANO

FACTS:

The case involves a dispute regarding underpaid wages and non-payment of benefits filed by the respondents-employees with the regional director of the Department of Labor and Employment. The employers argue that the jurisdiction should be with the labor arbiter. The initial inspection of the employment records was prevented due to a picket staged by other workers. The petitioners submitted a motion to dismiss, claiming lack of jurisdiction and exceeding the monetary limit. The regional director denied the motion to dismiss and found the petitioners in violation of labor standards laws. The regional director ordered the petitioners to pay the respondents the corresponding amount. The findings and awards of the regional director were affirmed on appeal. The complainants were former employees of the respondents, who closed down their business. Both parties agreed that the employer-employee relationship still existed when the complaints were filed. The regional director acquired jurisdiction over the case. The Supreme Court adopted the view that the regional director may still exercise the powers granted by Article 128. The respondents were given ample opportunity to defend themselves. A temporary restraining order was issued to enjoin the respondents. The petitioners argued that the claims of the private respondents became simple money demands. The petitioners invoked Articles 129 and 217 of the Labor Code.

ISSUES:

  1. Whether the regional director or the labor arbiter has jurisdiction over the complaint of private respondents.

  2. Whether Executive Order No. 111 or Republic Act No. 6715 is the applicable law to the complaint.

  3. Whether the jurisdiction of the labor arbiter was retroactively applied through the amendatory decree.

  4. Whether the regional directors have jurisdiction over money claims under Republic Act No. 6715.

  5. Whether the regional director's jurisdiction includes claims exceeding P5,000.

  6. Whether the labor arbiter's exclusive jurisdiction under Article 217(6) operates to oust the regional director's jurisdiction over labor standard infractions exceeding P5,000.

  7. Whether or not the Secretary of Labor has the power to hear and decide cases involving employees' claims for wages that exceed P5,000.00 for each employee, under his visitorial power.

  8. Whether or not the exclusive jurisdiction to hear and decide such claims lies with the Labor Arbiter.

RULING:

  1. The labor arbiter has jurisdiction over the complaint of private respondents. The authority of the regional director is limited to cases where the claim is prosecuted by an employee or househelper, the claimant does not seek reinstatement, and the aggregate money claim does not exceed P5,000. In this case, private respondents are not seeking reinstatement and their claims are all in excess of P5,000.

  2. Republic Act No. 6715 is the applicable law to the complaint. Executive Order No. 111, which amended Article 128(b) of the Labor Code, and Republic Act No. 6715 both give concurrent jurisdiction to the regional director and the labor arbiter over money claims. However, with the enactment of Republic Act No. 6715, the regional directors were divested of the power to hear money claims, and this divestment affected pending litigations.

  3. The lack of jurisdiction of the lower court at the time the case was filed was cured by the amendatory decree, which had retrospective application to pending proceedings.

  4. Regional directors under Republic Act No. 6715 can only try money claims if the claim is presented by an employee or person employed in domestic or household service, the claimant is no longer employed and does not seek reinstatement, and the aggregate money claim does not exceed P5,000.

  5. Regional directors do not have jurisdiction over money claims that exceed P5,000.

  6. The exclusive jurisdiction of the labor arbiter under Article 217(6) of the Labor Code does not operate to oust the regional director's jurisdiction over labor standard infractions exceeding P5,000.

  7. The Supreme Court held that the Secretary of Labor does not have the power to hear and decide cases involving employees' claims for wages that exceed P5,000.00 for each employee under his visitorial power. The exclusive jurisdiction to hear and decide such claims lies with the Labor Arbiter. The court further emphasized that to construe the visitorial power of the Secretary of Labor as including the power to hear and decide such claims would render the provisions of the Labor Code, specifically Article 217(a)(6) and Article 129, meaningless. The court also stated that the summary procedure employed by the Secretary of Labor under his visitorial power is not appropriate for claims that exceed P5,000.00.

PRINCIPLES:

  • The authority of the regional director is limited to cases where the claim is prosecuted by an employee or househelper, the claimant does not seek reinstatement, and the aggregate money claim does not exceed P5,000.

  • Executive Order No. 111 and Republic Act No. 6715 give concurrent jurisdiction to the regional director and the labor arbiter over money claims.

  • Republic Act No. 6715 has retroactive application and affects pending litigations.

  • Amendments relative to the jurisdiction of labor arbiters partake of the nature of curative statutes with retrospective application to pending proceedings.

  • The jurisdiction of regional directors under Republic Act No. 6715 is limited to money claims presented by employees or persons employed in domestic or household service, who are no longer employed and do not seek reinstatement, and where the aggregate money claim does not exceed P5,000.

  • The labor arbiter's exclusive jurisdiction under Article 217(6) of the Labor Code does not affect the regional director's jurisdiction over labor standard infractions exceeding P5,000.

  • The Labor Arbiter has exclusive jurisdiction to hear and decide employees' claims for wages that exceed P5,000.00 for each employee.

  • The Secretary of Labor has the plenary visitorial power to order the inspection of establishments and enforce compliance with labor laws but does not have the power to hear and decide claims that exceed P5,000.00.

  • The summary procedure employed by the Secretary of Labor under his visitorial power is not appropriate for claims that exceed P5,000.00.