Maternity Children’s Hospital vs. Secretary of Labor

G.R. No. 78909. June 30, 1989


Maternity Children  is a semi-government hospital. mIn May 23, 1986 when E.O. No. 111 was not yet in effect, 10 of its employees filed with DOLE complaint for underpayment of their salaries and ECOLAs with the Office of the Regional Director of Labor and Employment.

The Regional Director directed two of his Labor Standard and Welfare Officers to ascertain the truth of the allegations. The Officers confirmed that there was underpayment of wages and ECOLAs of all the employees by the petitioner. The Regional Director issued an Order directing the payment of underpayment of wages and ECOLAs to all the petitioner’s.

The Minister of Labor and Employment modified the order that the deficiency wages and ECOLAs should only be computed from May 23, 1983 to May 23, 1986. The petitioner filed a motion for reconsideration which was denied by the Secretary of Labor.

The Petitioner questioned the authority of Regional Director with the award, holding that in few cases decided that the Regional Director has no authority to award money claims, properly falling within the jurisdiction of the labor arbiter,


(1) WON 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, and (b) those who were no longer in the service of the hospital at the time the complaints were filed.


YES. 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. 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,

The award to all the employees is correct since visitorial and enforcement powers by 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. Any violation of labor legislation by such establishment, the entire members/employees should benefit therefrom.

(2) WON the Regional Director has authority of to award salary differentials and ECOLAs to private respondents

HELD: YES.  In this case, define Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). (WHCO)

Even in the absence of E.O. No. 111, Regional Directors already had enforcement powers over money claims, effective under P.D. No. 850 (1975) which transferred labor standards cases from the arbitration system to the enforcement system.

Under the MOLE Policy Instructions No 6 provided the following.  Under the foregoing, a complaining employee who was denied his rights and benefits due him under labor standards law need not litigate. The Regional Director, by virtue of his enforcement power, assured “expeditious delivery to him of his rights and benefits free of charge,” provided of course, he was still in the employ of the firm.

Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. Labor laws are meant to promote, not defeat, social justice.

The case enumerated series of rules and provisions of law on the disposition of labor standards cases:

1. Article 216 of the then Labor Code – The Regional Director exercised visitorial rights. Visitorial Powers – the Sec. of Labor shall have access to employers’ records and premises at any time of the day or night

2. PD 850, Regional Directors were given enforcement powers, in addition to visitorial powers. Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases.

Under the then Labor Code therefore there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations and the Labor Arbiter.

The Ong and Zambales cases involved workers who were still connected with the company. In the Ong case, the employer disputed the adequacy of the evidentiary foundation (employees’ affidavits) of the findings of the labor standards inspectors while in the Zambales case, the money claims which arose from alleged violations of labor standards provisions were not discovered in the course of normal inspection. Thus, the provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over uncontested money claims discovered in the course of normal inspection, provided an employer-employee relationship still exists, are inapplicable.

Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention of our labor authorities to provide our workers immediate access (when still feasible, as where an employer-employee relationship still exists) to their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve-wracking, but financially burdensome in the long run.

Under the present rules – EO No 11, a Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned

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.

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