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VICTOR METEORO v. CREATIVE CREATURES

FACTS:

The case involves a dispute between respondent Creative Creatures, Inc., and petitioners who were hired artists, carpenters, and welders. Petitioners filed complaints against respondent for non-payment of benefits and illegal deductions from their salaries before the DOLE-NCR. Respondent claimed that petitioners were contractual employees or independent talent workers, while petitioners argued that they were employees of respondent. Additionally, petitioners filed a complaint for illegal dismissal before the NLRC. The DOLE Regional Director issued an order directing respondent to pay petitioners a total of P2,694,709.00, affirming the existence of an employer-employee relationship and DOLE-NCR's jurisdiction over labor standard violations. However, the Court of Appeals nullified the Secretary's orders and held that the NLRC had jurisdiction over the money claims. Petitioners appealed to the Supreme Court, arguing the issue of jurisdiction between the DOLE Secretary or his authorized representative and the NLRC. The Supreme Court upheld the appellate court's ruling, affirming that the NLRC held exclusive jurisdiction over the case.

ISSUES:

  1. Whether the DOLE-NCR Regional Director has jurisdiction to enforce compliance with labor standards laws under the visitorial and enforcement powers conferred by Article 128 of the Labor Code.

  2. Whether the "exception clause" in Article 128 (b) divests the Regional Director of jurisdiction over a labor standards case.

  3. Whether or not the petitioners are independent contractors or employees of the respondent.

  4. Whether or not the Regional Director and the Secretary of Labor have jurisdiction to decide the case.

RULING:

  1. Yes, the DOLE-NCR Regional Director has jurisdiction to enforce compliance with labor standards laws under the visitorial and enforcement powers conferred by Article 128 of the Labor Code. It has been consistently held that the visitorial and enforcement powers of the Secretary of Labor, exercised through his representatives, encompass compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed by workers.

  2. The "exception clause" in Article 128 (b) divests the Regional Director of jurisdiction over a labor standards case if the employer contests the findings of the labor regulations officer and raises issues that need to be examined evidentiary matters that are not verifiable in the normal course of inspection.

  3. The Court held that the determination of whether petitioners are independent contractors or employees is a question of fact that requires the examination of evidentiary matters not verifiable in the normal course of inspection. Therefore, the Regional Director and the Secretary of Labor are divested of jurisdiction to decide the case.

  4. The key requirement for the Regional Director and the Secretary of Labor to be divested of jurisdiction is that the evidentiary matters be not verifiable in the course of inspection. In this case, the evidence presented by the respondent was verifiable in the normal course of inspection. Therefore, the Regional Director and the Secretary of Labor still have jurisdiction to examine such evidence. However, since an illegal dismissal case had already been filed by the petitioners, the endorsement of the case to the appropriate Arbitration Branch of the NLRC is no longer necessary.

PRINCIPLES:

  • The visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives encompass compliance with all labor standards laws and other labor legislation.

  • The jurisdiction of the Regional Director to hear and decide the monetary claims of employees is not absolute, as it may be divested under the "exception clause" of Article 128 (b).

  • The "exception clause" has three elements that must concur: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection.

  • The determination of an employer-employee relationship requires examination of the following elements: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee's conduct.

  • The existence of an employer-employee relationship is determined by the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee's conduct.

  • The most important index of an employer-employee relationship is the "control test," which determines whether the employer controls or has reserved the right to control the employee, not only as to the result of the work, but also as to the means and methods by which the work is accomplished.

  • Identification cards, cash vouchers, social security registration, appointment letters, employment contracts, payrolls, organization charts, and personnel lists serve as evidence of employee status.

  • The Regional Director and the Secretary of Labor are divested of jurisdiction to decide a case if the evidentiary matters necessary are not verifiable in the normal course of inspection.

  • Raising lack of jurisdiction alone is not considered a contest that divests the Regional Director and the Secretary of Labor of jurisdiction. It is necessary for the employer to contest the findings of the labor regulations officer during the hearing or after receiving the notice of inspection results.