Oreshoot Mining Co.

vs Arellano
GR Nos. L - 75746-48; 14 December 1987

NATURE:
Assailed in this special civil action of certiorari is the Order of the Deputy Minister of
Labor and Employment, affirming with modification the Order of the Director of Regional Office
No. IV which, in three (3) separate but consolidated proceedings, directed the reinstatement of
private respondents and the payment to them of back wages and certain other benefits.

FACTS:
Oreshoot filed two (2) motions for reconsideration. The first was denied; the second was
treated as an appeal and transmitted by the Regional Director to the Office of the Minister of
Labor and Employment. Acting thereon, the Deputy Minister rendered an Order, affirming the
aforesaid adjudgment made by the Regional Director with the modification that sixteen (16)
employees, who signed an affidavit of desistance in Oreshoot's favor, were dropped as party
complainants.

Oreshoot has come to this Court advocating the theory that all the proceedings above
mentioned are void because the Regional Director had no jurisdiction to take cognizance of and
adjudicate the claims of private respondents. Additionally, it imputes grave abuse of discretion
to the Regional Director in (1) consolidating the three cases filed against it and deciding them as
one notwithstanding that the last two cases were filed after the first had already been submitted
for decision; (2) in not informing it (Oreshoot) of the non-indorsement of the cases to the Labor
Arbiter as required by Article 227 (now Article 228) of the Labor Code; and (3) ruling that there
were no valid grounds for its shutdown of its business on account of economic difficulties
caused by world-wide recession.

ISSUE:
1. W/N respondent Regional Director had jurisdiction over the case

HELD:

Oreshoot is correct as regards its claim of the Regional Director's lack of competence
over the cases in question. The respondent Regional Director had no jurisdiction to try and
decide claims of workers and employees of their illegal dismissal from employment, and for their
reinstatement and recovery of monetary and other benefits consequent thereto.

The applicable provision is Art. 217 of the Labor Code, which states as follows:
Art. 217 Jurisdiction of Labor Arbiters and the Commission. - (a) The Labor Arbiters shall have
the original and exclusive jurisdiction to hear and decide within thirty (30) working days after
submission of the cases by the parties for decision, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work, and other terms and
conditions of employment;
3. All money claims of workers, including those based on non-payment or underpayment
of wages, overtime compensation, separation pay, and other benefits provided by law or
appropriate agreement, except claims for employees’ compensation, social security, medicare,
and maternity benefits;
4. Cases involving household services; and
 5. Cases arising from any violation of Art. 265 of this Code, including questions involving
the legality of strikes and lockouts.
xxx xxx xxx
"This article does not even need construction. It is obvious therefrom that only the labor arbiter
could decide the cases ;led by the employees as they involved 'money claims' falling under No.
3 of the enumeration. As for the regional director, the authority he invokes under Article 128 of
the Labor Code confers upon him only visitorial powers over the employer's premises and
records, including the right to require compliance with the labor standards provisions of the
Code, such as those relating to industrial safety. Nowhere in the said article is the regional
director empowered to share the 'original and exclusive jurisdiction’ conferred on the labor
arbiters by Article 217.”

NOTES:
The Regional Director had direct and administrative control and supervision over "(a)ll Labor
Arbiters in his region." 4 As such he was empowered to assign cases to Labor Arbiters, "taking
into consideration their workload, nature of the case, complexity of the issues involved and other
factors, with the view of expediting disposition of cases." A Labor Arbiter could take cognizance
only of "cases indorsed to him for compulsory arbitration by the Bureau or by the Regional
Director," but the “indorsement or non-indorsement of the Regional Director . . (could) be
appealed to the Bureau within ten working days from receipt of the notice.

In the case of a money claim, the Regional Director's power was limited to receiving the
complaint, investigating it and trying to effect conciliation, and, if no settlement was reached,
certifying the case to the Labor Arbiter. That certification could not however be made if (a) the
complaint patently lacks cause of action; (b) the causes of action have already prescribed: (c)
the complaint patently partakes of the nature of harassment; and (d) the complaint is barred by
prior judgment.

In cases of shutdowns or dismissals, as to which prior clearance was formerly required, the
Regional Director was empowered to initially decide whether to certify the same to the
Executive Labor Arbiter or to summarily investigate and decide it within 10 days from filing; but if
there had been a "preventive suspension on the employee effected by the employer, the
Regional Director . . . (was) bound to rule first thereon: whether to lift or sustain the same or to
stop or give due course to an intended one." As a matter of policy the Regional Director certified
the case to the Executive Arbiter "(a) if the nature of the case does not suit summary
investigation, or (b) if intricate questions of law are involved." And if he did not deny the
application, he had to “immediately certify the case to the Executive Arbiter for hearing and
decision on the merits.”

The latest amendment to Article 217 of the Labor Code was worked by Section 2 , Batas
Pambansa Bilang 227, effective June 1, 1982. Said Section 217, as lastly amended, is
reproduced in full in the excerpt from Zambales Base Metals, Inc. v. Minister of Labor, 146
SCRA 50 quoted earlier in this opinion. 11 It will at once be perceived that the amendment does
not at all affect, much less expand, the jurisdiction of the Regional Director. The Director
continues to be without competence or authority to hear and decide any of the matters
specifically placed by law within the original and exclusive jurisdiction of Labor Arbiters.

In this case the Court will therefore make the same disposition as it did in Zambales. "Inasmuch
as the proceedings before the regional director were null and void ab initio for lack of
jurisdiction, the complaints for (back) wages and other benefits filed by the employees against
the petitioner should be remanded to the labor arbiter for appropriate action," with the
expectation "that resolution of these cases will be effected with the least possible delay."