Paulino Ungos III

Lawyer | Law Professor | Author

Tag: labor arbiter

  • Jurisdiction of the Labor Arbiter and the POEA

    Mike and Ryan alleged that on May 11, 2011, they were hired by The W Construction through its agent, U R Employed International Corporation, as construction workers in Malaysia. They entered into a two-year employment contract with a monthly salary of 800 Malaysian Ringgit.

    Mike and Ryan narrated that upon their arrival in Malaysia, the broker who fetched them from the airport took their passports. They were made to live in a place with unsafe living conditions. Also, they worked beyond regular hours without pay. Later, they discovered that they only had tourist visas, and that the employer was hiding them from the authorities because they did not have work permits.

    Mike and Ryan claimed that they reported their living and working conditions to their broker, but their grievances were unheeded.

    Mike and Ryan stated that they were left without any other recourse, which was why on August 14, 2011, Ryan sent an e-mail to the editorial of a Philippine newspaper company, narrating their experience and seeking assistance.

    Mike and Ryan continued that in the last week of August 2011, the employer’s human relations officer questioned them about the e-mail sent to the Philippine newspaper company. On September 13, 2011, a supervisor informed them about the termination of their employment. The employer told them that they were processed for repatriation and would be sent home on September 15, 2011. However, they were only repatriated sometime in November 2011. In the meantime, the employer cut off their food supply.

    On December 5, 2011, Mike and Ryan filed a complaint for illegal dismissal and money claims against their employer.

    Initially, the complaint was dismissed without prejudice because both parties failed to submit their respective position papers. On March 26, 2012, the complaint was reinstated upon a Motion to Revive filed by Mike and Ryan.

    The employer denied the allegations of Mike and Ryan. The employer countered that Mike voluntarily resigned from his job, while Ryan was dismissed from employment on the ground of grave misconduct when he sent a derogatory email to a Philippine newspaper company. The employer further submitted a summary of pay slips to prove that Mike and Ryan were properly paid their salary and benefits.

    The Office of the Labor Arbiter found that Mike and Ryan were constructively dismissed due to the unbearable and unfavorable working conditions set by the employer. They were awarded reimbursement of placement fees, backwages until the end of their employment contracts, damages, and attorney’s fees. Ryan’s claims for overtime pay and illegal deductions were denied for being unsubstantiated. Mike’s claim of illegal deduction was given credence by the Office of the Labor Arbiter.

    The National Labor Relations Commission denied the employer’s appeal and affirmed the ruling of the Office of the Labor Arbiter.

    The employer sought recourse before the Court of Appeals, ascribing grave abuse of discretion on the part of the National Labor Relations Commission.

    Record revealed that before Mike and Ryan filed their complaint with the Office of the Labor Arbiter, they also filed a complaint with the Philippine Overseas Employment Administration against the employer and its agent for violation of the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. The complaint alleged the same set of facts in the complaint before the Office of the Labor Arbiter and were supported by the same affidavits. The complaint filed before the Philippine Overseas Employment Administration was dismissed for failure of Mike and Ryan to substantiate their allegations and attend the scheduled hearings. Mike and Ryan appealed the dismissal to the Department of Labor and Employment, which issued an order dismissing their appeal.

    Regarding the petition assailing the ruling of the National Labor Relations Commission, the Court of Appeals dismissed the same since it found substantial evidence to prove that respondents were illegally dismissed.

    The employer then elevated its case to the Supreme Court. It pointed out that the other complaint filed by Mike and Ryan before the Philippine Overseas Employment Administration had been dismissed. The employer thus posited that it was erroneous for the Court of Appeals to not consider the orders issued by the Philippine Overseas Employment Administration and the Department of Labor and Employment, when Mike and Ryan alleged the same facts in their complaint filed before the Office of the Labor Arbiter.

    Was the Court of Appeals correct in dismissing the employer’s petition?

    The Supreme Court ruled in the affirmative because no basis supported the argument that the Office of the Labor Arbiter should have considered the orders issued by the Philippine Overseas Employment Administration and the Department of Labor and Employment in the adjudication of the complaint filed by Mike and Ryan before the Office of the Labor Arbiter.

    The first reason discussed by the Supreme Court was that the Philippine Overseas Employment Administration could not have prevented the Office of the Labor Arbiter from ruling on the complaint of Mike and Ryan. Stated otherwise, the Doctrine of Primary Jurisdiction did not apply.

    The Supreme Court discussed that the Doctrine of Primary Jurisdiction, also known as the Doctrine of Prior Resort, is the power and authority vested by the Constitution or by statute upon an administrative body to act upon a matter by virtue of its specific competence. The Doctrine of Primary Jurisdiction prevents the court from arrogating unto itself the authority to resolve a controversy which falls under the jurisdiction of a tribunal possessed with special competence.

    The Supreme Court further discussed that Primary Jurisdiction does not necessarily denote Exclusive Jurisdiction. Primary Jurisdiction applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of the issues to the administrative body for its review.

    In the present case, the Supreme Court found that while Mike and Ryan alleged the same set of facts and submitted the same affidavits before the Office of the Labor Arbiter and the Philippine Overseas Employment Administration, the complaints raised different causes of action. Specifically, the complaint filed before the Office of the Labor Arbiter involved the issue of illegal dismissal and various money claims, while the Philippine Overseas Employment Administration complaint involved administrative disciplinary liability for violation of the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. For the Supreme Court, the Doctrine of Primary Jurisdiction could not have applied.

    The second reason discussed by the Supreme Court was that in some instances, an administrative body is granted primary jurisdiction, concurrent with another government agency or the regular court.

    However, the Supreme Court found that a review of the respective jurisdictions of the Philippine Overseas Employment Administration and the Office of the Labor Arbiter reveals that these administrative bodies do not have concurrent jurisdiction.

    The Supreme Court mentioned that Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022, provides that the Office of the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary, and other forms of damage. On the other hand, Section 6, Part A, Rule X of the Implementing Rules and Regulations of Republic Act No. 10022 provides that the Philippine Overseas Employment Administration exercises administrative jurisdiction arising out of violations of rules and regulations and administrative disciplinary jurisdiction over employers, principals, contracting partners, and overseas Filipino workers.

    For the Supreme Court, the jurisdiction of these administrative bodies does not in any way intersect as to warrant the application of the doctrine of primary jurisdiction. Accordingly, said the Supreme Court, the appreciation by the Philippine Overseas Employment Administration and Office of the Labor Arbiter of the complaints should be limited to matters falling within their respective jurisdictions, and only insofar as relevant to the resolution of the controversies presented before them.

    The third reason discussed by the Supreme Court was that the finality of the Order issued by the Department of Labor and Employment had no effect on the resolution of the present petition. For the Supreme Court, the Doctrine of Immutability of Judgments does not apply to this case.

    Under the Doctrine of Immutability of Judgments, all the issues between the parties are deemed resolved and laid to rest once a judgment becomes final. No other action can be taken on the decision except to order its execution. The decision becomes immutable and unalterable and may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it will be made by the court that rendered it or by the highest court of the land.

    In the present case, the Supreme Court found that the Order of the Department of Labor and Employment, which had become final, settled the issue of whether the employer and its agent violated the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. It did not involve the issue of the illegal dismissal and money claims lodged by Mike and Ryan with the Office of the Labor Arbiter. To reiterate, the Supreme Court found that the finality of the Order issued by the Department of Labor and Employment had no effect on the resolution of the present petition.

    Further reading:

    • U R Employed International Corp. v. Pinmiliw, G.R. No. 225263, March 16, 2022.

  • But the Claims Exceeded Php5,000.00

    On February 12, 2014, the Department of Labor and Employment, through its Regional Director, issued Labor Standards Compliance Certificates to Del Monte Motor Works, Inc. (Del Monte Motor Works) for having complied with Department Order No. 118-12, other labor laws, rules and regulations.

    For context, Department Order No. 118-12 was issued on January 13, 2012 by the Department of Labor and Employment, in the exercise of its rule-making power. The issuance provides for a fixed and performance compensation scheme in the computation of public utility bus driver’s or conductor’s wage. Its goal was to ensure public road transport safety by improving the working conditions, compensation and competence of bus drivers and conductors thereby eliminating their risk-taking behavior.

    On July 28, 2014, a complaint for money claims was filed against Del Monte Land Transport Bus, Co., Inc. (Del Monte Land Transport) by its bus drivers and conductors before the Office of the Labor Arbiter.

    They averred that since the start of their employment, they have yet to receive certain labor standards benefits and their daily salaries were below the prevailing daily minimum wage, in violation of Department Order No. 118-12.

    Del Monte Land Transport contended that the salaries and benefits of its drivers and conductors were in accordance with law and that its Labor Standards Compliance Certificates established compliance with labor standards requirements. Furthermore, it raised the issue of jurisdiction. Specifically, it claimed that the Office of the Labor Arbiter had no jurisdiction to render judgment or award on the money claims since it was the Department of Labor and Employment which had jurisdiction under Article 128 of the Labor Code of the Philippines.

    In asserting that the Office of the Labor Arbiter had jurisdiction, the drivers and conductors argued:

    • Their money claims fell within the cases covered by Article 217 of the Labor Code of the Philippines as it exceeded the aggregate amount of five thousand pesos. Hence, the authority to hear and decide said cases is vested on the Office of the Labor Arbiter, to the exclusion of all other courts or quasi-judicial bodies or tribunals;
    • No complaint was filed before the Department of Labor and Employment for the latter to exercise its jurisdiction over their claim.
    • Neither was there any inspection conducted at Del Monte Land Transport as the Labor Standards Compliance Certificates in question were issued for the alleged compliance of Del Monte Motor Works, a separate and distinct corporation.
    • In issuing the Labor Standards Compliance Certificates, the Department of Labor and Employment exercised its visitorial and compliance powers under Article 128 (b) and not its enforcement and adjudicatory powers under Article 129 of the Labor Code.

    Did the Office of the Labor Arbiter have jurisdiction over the claims of the drivers and conductors?

    The Supreme Court ruled in the negative. This was because Department Order No. 118-12 clearly conferred jurisdiction with the Regional Office the claims of the bus drivers and conductors.

    The Court stressed that jurisdiction over the subject matter or authority to try a certain case is conferred by law and not by the whims, consent or acquiescence of the interested parties nor by the erroneous belief of the court or tribunal that it exists. It should be exercised precisely by the person in authority or body in whose hands it has been placed by the law; otherwise, acts of the court or tribunal shall be void and with no legal consequence.

    In the present case, the Regional Director issued several Labor Standard Compliance Certificates dated February 12, 2014, certifying Del Monte Land Transport’s compliance with the law. Five months after or on July 28, 2014, the bus drivers and conductors filed a complaint before the Office of the Labor Arbiter for money claims and alleged a violation of the requirements of Department Order No. 118-12 in their Position Paper.

    According to the Court, this fact should have prompted the Office of the Labor Arbiter to refer the case to the Department of Labor and Employment as it was evident that the money claims of the bus drivers and conductors were beyond its jurisdiction.

    Furthermore, the Court noticed the categorical statement of the bus drivers and conductors that they would not have filed the instant case for money claims had there been real compliance of the mandate of Department Order No. 118-12. The Court stated that such statement only revealed that the claims were the offshoot of the Regional Officer’s issuance of the certificates of compliance.

    For the Court, this constituted a challenge by the bus drivers and conductors on the certificates of compliance issued by the Regional Officer relative to the labor standard requirements under Department Order No. 118-12, which should have been lodged before the Department of Labor and Employment.

    On the other hand, the Court did not accept the argument of the bus drivers and conductors that jurisdiction over their claims was vested with the Office of the Labor Arbiter given that the aggregate amount subject of this case exceeded five thousand pesos.

    The Court stated that Article 128 of the Labor Code of the Philippines speaks of the jurisdiction of the Secretary of Labor and his representatives over labor standards violations based on findings made in the course of visitation and inspection of the business premises of an employer. The Court emphasized that the authority under Article 128 may be exercised by the Department of Labor and Employment regardless of the amount of the award claimed for provided there exists employer-employee relationship.

    The Court noted certain views espousing the proposition that the mode and fora by which the action has been initiated should determine jurisdiction. However, the Court clarified that this had been settled in People’s Broadcasting Service v. Secretary of the Department of Labor and Employment1People’s Broadcasting Service v. Secretary of the Department of Labor and Employment, G.R. No. 179652 (Resolution), [March 6, 2012], 683 PHIL 509-526). which summed up the rules governing jurisdiction on labor standards claims, as follows:

    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and provided that there is an existing employer-employee relationship, jurisdiction is with the Department of Labor and Employment regardless of whether the action was brought about by the filing of a complaint or not; and
    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and there is no existing employer-employee relationship or the claim is coupled with a prayer for reinstatement, jurisdiction is with the Office of the Labor Arbiter/National Labor Relations Commission.

    For the Court, the claims of the bus drivers and conductors were within the purview of the jurisdiction of the Department of Labor and Employment under Article 128 and the provisions of Department Order No. 118-12. The Court accordingly dismissed the complaint of the bus drivers and conductors for lack of jurisdiction.

    Further reading:

    • Del Monte Land Transport Bus, Co. v. Armenta, G.R. No. 240144, February 3, 2021.

  • Union Deprived Member’s Right to Appeal

    Petitioner was a member of the Manila Water Employees Union (MWEU).

    On 11 April 2007, MWEU informed petitioner that it was unable to fully deduct the increased union dues from his salary because the latter failed to issue a check-off authorization. It warned petitioner that his failure to pay the union dues would result in sanctions upon him.

    MWEU, through its executive board, soon charged petitioner because he failed to pay his union dues. After hearing, the board imposed a penalty of suspension.

    Following the provisions of the MWEU constitution and by-laws, petitioner appealed the decision of the executive board to MWEU’s general membership assembly. The assembly denied the appeal, stating that the prescribed period for appeal had expired. Petitioner wrote the assembly demanding that it should entertain his appeal, but the latter did not act on the same.

    Thereafter, petitioner was charged again in connection with his failure to pay union dues. After hearing, the board penalized him with suspension.

    Petitioner invoked his right to appeal to the assembly. However, the board did not act on the same.

    Meanwhile, MWEU scheduled an election of officers, to which petitioner filed his certificate of candidacy for Vice-President. MWEU disqualified him for not being a member in good standing on account of his suspension.

    MWEU charged petitioner with non-payment of union dues for the third time, but the latter did not attend the scheduled hearing. This time, the board imposed the penalty of expulsion from MWEU.

    Petitioner’s plea for an appeal to the assembly were once more unheeded.

    Petitioner filed a complaint against MWEU and its officers for unfair labor practices, damages, and attorney’s fees before the National Labor Relations Commission (NLRC). Petitioner accused the respondents of illegal termination from MWEU in connection with the events relative to his non-payment of union dues.

    Respondents countered:

    • the Office of the Labor Arbiter had no jurisdiction over the dispute, it being intra-union in nature;
    • the Bureau of Labor Relations (BLR) was the proper venue, in accordance with law1Article 232 (Formerly Article 226) of the Labor Code of the Philippines and prevailing rules;2Section 1, Rule XI of Department of Labor and Employment (DOLE) Order 40-03, Series of 2003; and
    • they were not guilty of unfair labor practices, discrimination, coercion, or restraint.

    The Supreme Court acknowledged that some of petitioner’s causes of action constitute intra-union cases cognizable by the BLR under the Labor Code of the Philippines:

    “An intra-union dispute refers to any conflict between and among union members, including grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union’s constitution and by-laws, or disputes arising from chartering or disaffiliation of the union. Sections 1 and 2, Rule XI of Department Order No. 40-03, Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union disputes.”

    However, the Court ruled that petitioner’s charge of unfair labor practices fell within the original and exclusive jurisdiction of the Office of the Labor Arbiter under law.3Article 224 (Formerly Article 217) of the Labor Code of the Philippines In addition, the law4Article 258 (Formerly Article 247) of the Labor Code of the Philippines provides that:

    “the civil aspects of all cases involving unfair labor practices, which may include claims for actual, moral, exemplary and other forms of damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor Arbiters.”

    Unfair labor practices may be committed both by the employer5Under Article 259 (Formerly Article 248) of the Labor Code of the Philippines and by labor organizations6Under Article 260 (Formerly Article 249) of the Labor Code of the Philippines. With regard to labor organizations, the law provides:

    “ART. 260 (Formerly 249). Unfair labor practices of labor organizations. — It shall be unfair labor practice for a labor organization, its officers, agents or representatives:

    “(a) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership;

    “(b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with respect to whom membership in such organization has been denied or to terminate an employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members;” x x x

    Petitioner contended that the respondents committed unfair labor practices when he was illegally suspended and expelled with the denial of his right to appeal his case to the assembly.

    On the other hand, respondents argued that such charge was intra-union in nature, and that petitioner lost his right to appeal when he failed to petition to convene the assembly in accordance with MWEU’s constitution and by-laws.

    The Supreme Court interpreted said constitution and by-laws and noted that:

    • When an MWEU member is suspended, he is given the right to appeal such suspension within three working days from the date of notice of said suspension, which appeal the board is obligated to act upon by a simple majority vote.
    • When the member is expelled, said member is given seven days from notice of said dismissal and/or expulsion to appeal to the board, which is required to act by a simple majority vote of its members.
    • The board’s decision shall then be approved/disapproved by a majority vote of the assembly in a meeting duly called for the purpose.

    The Court found that when the petitioner received the decision to suspend him for the second time, he immediately and timely filed a written appeal. However, the board did not act thereon. Then again, when petitioner was charged for the third time and meted the penalty of expulsion from MWEU, the board did not act on his timely appeal.

    Thus, the Court did not agree with respondents’ argument that petitioner lost his right to appeal when he failed to petition to convene the assembly under MWEU’s constitution and by-laws. The Court ruled that the petitioner was illegally suspended for the second time and thereafter unlawfully expelled from MWEU due to respondents’ failure to act on his appeals.

    According to the Court, the required petition to convene the assembly does not apply in petitioner’s case because the board must first act on his two appeals before the matter could properly be referred to the assembly.

    Because respondents did not act on the two (2) appeals, petitioner was:

    • unceremoniously suspended;
    • disqualified and deprived of his right to run for the position of MWEU Vice-President;
    • expelled from MWEU; and
    • forced to join another union.

    For these, the Court concluded that the respondents were guilty of unfair labor practices under law7Article 260 (Formerly Article 249) (a) and (b) of the Labor Code of the Philippines through the:

    • violation of petitioner’s right to self-organization;
    • his unlawful discrimination; and
    • illegal termination of his union membership.

    According to the court, petitioner’s case falls within the original and exclusive jurisdiction of the Office of the Labor Arbiter.8In accordance with Article 224 (Formerly Article 217) of the Labor Code of the Philippines

    Further reading:

    • Mendoza v. Officers of Manila Water Employees Union, G.R. No. 201595, January 25, 2016.

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