NESTOR J. BALLADARES, ET. AL. VS.

PEAK VENTURES CORPORATION AND YANGCO MARKET OWNERS

ASSOCIATION
FACTS:
Balladares and co-petitioners were hired as security guards by Peak Ventures and were assigned at the premises of Yangco
Market. They filed a complaint for underpayment of wages against Peak Ventureswith the DOLE. The Regional Director of
DOLE rendered judgment in favor of petitioners and ruled that Peak Ventures and Yangco Market are solidarily liable to
petitioners, said decision was upheld by Secretary of Labor. On certiorari, the CA ruled that Regional Director has no
jurisdiction over the case because the claims of each petitioners exceeded PHP5,000, therefore power to adjudicate such
claims belong to the LA.
ISSUE: Did the Regional Director correctly assume jurisdiction over the case?
LAW: Art. 128 of the Labor Code on Visitorial and Enforcement Powers
RULING:
Yes, the Regional Director correctly assumed jurisdiction over the case. The complaint involved underpayment of wages. In
order to verify the allegations in the complaint, DOLE conducted an inspection which yielded proof of violations of labor
standards. By nature of the complaint and from the result of the inspection the authority of the DOLE under Art. 128 of Labor
Code came into play regardless of monetary value of claims involved.The Secretary of Labor or his duly authorized
representatives is now empowered to hear and decide in summary proceeding, any matter involving the recovery of amount
of wages and other monetary claims arising out of employer-employee relationship at the time of inspections, even if the
amount of money claims exceed PHP5000.
OPINION:
The Regional Director correctly assumed jurisdiction over the money claims of petitioners even if the claims exceeded
PHP5,000. Said jurisdiction was in accordance with Art. 128(b) of the Labor Code and the case does not fall under the
exception clause. We must take note that the doctrine in the Servando case is no longer controlling upon the amendment of
Art. 128 by RA 7730, Secretary of Labor or his duly authorized representative is now empowered to hear and decide money
claims arising out of employer-employee relationship at the time of inspection.In this case, Peak Ventures did not contest the
findings of Regional Director, it even admitted before the CA that petitioners were not paid correct wages and as a defense
tried to pass the buck to Yangco Market, therefore the case does not fall under the exceptions provided in Art. 128 (b) which
would have divested Regional Director of jurisdiction over the case
Meteoro v. Creative Creatures
FACTS: Creative Creatures hired Victor Meteoro and the rest of the petitioners on various dates as artists, carpenters, and
welders, tasked to design, create, assemble, set-up, and dismantle props, and provide soundeffects to Creatives various TV
programs and movies.In 1999, Meteoro and the others filed a complaint against Creative for non-payment of labor standards
incentives with the DOLE-NCR. An inspection was conducted. Creative claimed that the petitioners were only contractual
workers, and as such, no employer-employee relationship existed. Thus, the DOLE could not have exercised jurisdiction
over the case, for it had none. It added that the petitioners were freelance individuals, performing special services with skills
and expertise inherently exclusive to them like actors, actresses, directors, producers, and scriptwriters, such that they were
treated as special types of workers. Petitioners, on the other hand, aver that they were employees because the elements of
an employer-employee relationship existed. Subsequently, petitioners filed a complaint for illegal dismissal against Creative,
with prayer for payment of overtime pay, premium pay for holiday and rest day, holiday pay, service incentive leave pay,
13th month pay, and attorneys fees before the NLRC. A few months after, DOLE Regional Director Maximo Baluyot Lim
issued an order directing Creative to pay petitioners. On appeal, DOLE Secretary Patricia Sto. Tomas upheld the DOLE
Regional Directors findings. She stated that the Secretary of Labor or his duly authorized representative is allowed to use
his visitorial and enforcement powers to give effect to labor legislation, regardless of the amount involved. On appeal, CA
dismissed the case against Creative for lack of jurisdiction. Petition for review on certiorari.
ISSUE: W/N the DOLE-NCR properly exercised its jurisdiction over the case. NO.
The DOLE Secretary and her authorized representatives, such as the DOLE-NCR Director, have jurisdiction to enforce
compliance with labor standards laws under the broad visitorial and enforcement powers conferred by Article 128 of the
Labor Code, and expanded by RA No. 7730. But this notwithstanding,the power of the Regional Director to hear and decide
money claims is not absolute. The last sentence of Article 128 (b) of the Labor Code, otherwise known as the exception
clause, provides an instance when the Regional Director or his representatives may be divested of jurisdiction over a labor
standards case. Under prevailing jurisprudence, the so-called exception clause has the following elements, all of which
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;
(c) That such matters are not verifiable in the normal course of inspection.
In the instant case, Creative registered its objection to the findings of the labor inspector at the earliest opportunity. It is
clear that Creative contested and continues to contest the findings and conclusions of the labor inspector. Also, the question

of whether or not petitioners were independent contractors/project employees/free-lance workers is a question of fact that
necessitates the examination of evidentiary matters not verifiable in the course of inspection. Verily, the Regional Director
and the Secretary of Labor are divested of jurisdiction to decide the case, and the NLRC is the agency clothed with authority
to do so.Petition denied for lack of merit. CA decision affirmed.
To contest means to raise questions as to the amounts complained of or the absence of violation of labor standards laws; or,
issues as to the complainants right to labor standards benefits. Raising lack of jurisdiction alone is not the contest
contemplated by the exception clause. It is necessary that the employer contest the findings of the labor regulations officer
during the hearing or after receipt of the notice of inspection results. More importantly, the key requirement for the Regional
Director andthe DOLE Secretary to be divested of jurisdiction is that the evidentiary matters be not verifiable in the course of
inspection. Where the evidence presented was verifiable in the normal course of inspection, even if presented belatedly by
the employer, the Regional Director, and later the DOLE Secretary, may still examine it; and these officers are not divested
of jurisdiction to decide the case.
REPUBLIC V PERALTA
FACTS:
RP seeks the review on certiorari of the Order of the Manila CFI in its Civil Case No. 108395 entitled "In the Matter of
Voluntary Insolvency of Quality Tobacco Corporation, Quality Tobacco. In its questioned Order, the trial court held that the
above enumerated claims of USTC and FOITAF (hereafter collectively referred to as the "Unions") for separation pay of their
respective members embodied in final awards of the NLRC were to be preferred over the claims of the Bureau of Customs
and the BIR. The trial court, in so ruling, relied primarily upon LC Art 110. The SolGen, in seeking the reversal of the
questioned Orders, argues that Art 110 is not applicable as it speaks of "wages," a term which he asserts does not include
the separation pay claimed by the Unions. "Separation pay," the SolGen contends: is given to a laborer for a separation from
employment computed on the basis of the number of years the laborer was employed by the employer; it is a form of penalty
or damage against theemployer in favor of the employee for the latter's dismissal or separation from service
ISSUE: WON separation pay of their respective members embodied in final awards of the NLRC were to be preferred over
the claims of the Bureau of Customs and the BIR (WON separation pay is included in the term wages)
HELD: YES; For the specific purposes of Art 110 and in the context of insolvency, termination or separation pay is
reasonably regarded as forming part of the remuneration or other money benefits accruing to employees or workers by
reason of their having previously rendered services to their employer; as such, they fall within the scope of "remuneration or
earningsfor services rendered or to be rendered ." Liability for separation pay might indeed have the effect of a penalty,
so far as the employer is concerned. So far as concerns the employees, however, separation pay is additional remuneration
to which they become entitled because, having previously rendered services, they are separated from the employer's
service.
Reasoning: We note, in this connection, that in Philippine Commercial and Industrial Bank (PCIB) us. National Mines and
Allied Workers Union, the SolGen took a different view and there urged that the term "wages" under Art110 may be regarded
as embracing within its scope severance pay or termination or separation pay. In PCIB, this Court agreed with the position
advanced by the SolGen. We see no reason for overturning this particular position. The resolution of the issue of priority
among the several claims filed in the insolvency proceedings instituted by the insolvent cannot, however, rest on a reading
of Art 110 alone. Art 110, in determining the reach of its terms cannot be viewed in isolation. Article 110 must be read in
relation to the provisions of the Civil Code concerning the classification, concurrence and preference of credits. which
provisions find particular application in insolvency proceedings where the claims of all creditors, preferred or non-preferred, may
be adjudicated in a binding manner