FIRST CASE:

G.R. No. 179652               May 8, 2009

PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.), Petitioner, defendant
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL
DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, Respondents, plaintiff

TINGA, J.:

FACTS:

This case stemmed from a complaint filed by respondent Jandeleon Juezan against
petitioner People’s Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) for illegal deduction,
non-payment of service incentive leave, 13th month pay, premium pay for holiday and rest day
and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-
IBIG and Philhealth (non-diminution of benefits in the amount allegedly 6K) before the
Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City.

In particular, the respondent claimed that he was hired by petitioner in September 1996
as a radio talent/spinner, working from 8:00 am until 5 p.m., 6 days a week, on a gross rate of
₱60.00 per script, earning an average of ₱15,0000.00 per month, payable on a semi-monthly
basis. He added that the payment of wages was delayed; that he was not given any service
incentive leave or its monetary commutation, or his 13th month pay; and that he was not made
a member of the Social Security System (SSS), Pag-Ibig and PhilHealth. By January 2001, the
number of radio programs of which respondent was a talent/spinner was reduced, resulting in
the reduction of his monthly income from ₱15,000.00 to only ₱4,000.00, an amount he could
barely live on. Respondent attached a photocopy of an identification card purportedly issued by
petitioner, bearing respondent’s picture and name with the designation "Spinner"; at the back of
the I.D, it was indicated that he was an Authorized MEDIA Representative of petitioner. He also
attached a certification issued by petitioner’s Station Manger, German Solante indicating that he
was a program employee receiving a monthly salary of P15,000

On the basis of the complaint, the DOLE conducted a plant level inspection on 23
September 2003. Labor Inspector wrote under the heading “Findings/Recommendations” “non-
diminution of benefits” and “Note: Respondent deny employer-employee relationship with the
complainant- see Notice of Inspection results.” In the Inspection Report Form conducted by
DOLE, respondent Bombo Radyo Phils., Inc denied that there is an employer-employee
relationship with the complainant since respondent Juenzan is a drama talent hired on a per
drama “participation basis.” As such, no employer-employee relationship existed between them.
To further this claim, petitioner’s management representative presented as pieces of evidence
the photocopies of cash vouchers, billing statement, employments of specific undertaking (a
contract between the talent director & the complainant), summary of billing of drama
production, among other. Petitioner further claimed that it has no control of respondent as
talent as that he could venture into another contract with other broadcasting industries.

The DOLE Regional Director Rodolfo Sabulao ruled in favor of respondent and held that
latter as an employee of petitioner. As such, the former is entitled to his money claims
amounting to P203,726.30. The MR of petitioner was denied. The DOLE Secretary likewise
dismissed the appeal on the ground that petitioner did not post a cash or surety bond and
instead submitted a Deed of Assignment of Bank Deposit.

Upon appeal to CA, petitioner Bombo Radyo Phils., Inc reiterated its claim that there was
no employer-employee relationship between it and respondent Juezan because it was the
drama directors and producers who paid, supervised and disciplined respondent Juezan. It also
added that the case was beyond the jurisdiction of the DOLE and should have been considered
by the labor arbiter because respondent’s claim exceeded P5,000.00. It further claimed that that
it was denied due process when the DOLE Secretary disregarded the evidence it presented and
failed to give it the opportunity to refute the claims of respondent. The CA denied this.

Hence, this petition where petitioner argued that the National Labor Relations
Commission (NLRC), and not the DOLE Secretary, has jurisdiction over respondent’s claim, in
view of Articles 217 and 128 of the Labor Code. Respondent, on the other hand, contended that
Republic Act No. 7730, “removes the jurisdiction of the Secretary of Labor and Employment or his
duly authorized representatives, from the effects of the restrictive provisions of Article 129 and
217 of the Labor Code, regarding the confinement of jurisdiction based on the amount of claims.”

ISSUES:
1. Whether or not there exist an employer-employee relationship between petitioner and
Juezan – NO
2. Whether or not the Secretary of Labor has the power to determine the existence of an
employer-employee relationship in the exercise of its visitorial and enforcement power –
NO

HELD: Since no employer-employee relationship in this case, the visitorial and enforcement
power of the Secretary of Labor should not have been exercised. While the DOLE may make a
determination of the existence of an employer-employee relationship, this function could not be
co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor
Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) is the primary
agency in determining the existence of an employer-employee relationship.
 1. The private respondent was employed under a contract of “Employment for a Specific
Undertaking" wherein he was appointed by different drama directors as spinner/narrator
for specific radio programs.

The findings of the Regional Director were not based on substantial evidence. The petitioner
presented pieces of evidence proving this which the Regional Director had not given an iota of
credibility. Instead, full recognition and acceptance was accorded to the claims of respondent—
from the hours of work to his monthly salary, to his alleged actual duties, as well as to his
alleged "evidence."

The respondent’s pieces of evidence—the identification card and the certification issued by
petitioner’s Greman Solante stating that he is a program employee of petitioner — are not even
determinative of an employer-employee relationship. Moreover, his ID is different from those
issued to identified employees of the petitioner.

Considering that the documents shown by petitioner, namely: cash vouchers, checks and
statements of account, summary billings evidencing payment to the alleged real employer of
respondent, letter-contracts denominated as "Employment for a Specific Undertaking," prima
facie negate the existence of employer-employee relationship, the labor inspector did not
exerted effort and exercised its power to look into petitioner’s payroll, and other records, or its
roll of employees, or interviewed other employees in the premises to substantiate the claim of
employer-employee relationship.

2. The visitorial and enforcement power of the DOLE comes into play only “in cases when
the relationship of employer-employee still exists.”

The clause in Article 128 (b) of the Labor Code, as amended by Republic Act 7730 on the
visitorial and enforcement power of DOLE provides "in cases where the relationship of
employer-employee still exists." This signifies that the employer-employee relationship must
have existed even before the controversy. Hence, the DOLE’s power does not apply in 2
instances, namely: (a) where the employer-employee relationship has ceased; and (b) where no
such relationship has ever existed.

Hence, if on the face of the complaint, it can be ascertained that employer-employee

relationship no longer exists, the case, whether accompanied by an allegation of illegal
dismissal, SOLE Secretary shall immediately be endorsed by the Regional Director to the
appropriate branch of the National Labor Relations Commission (NLRC).

As such, the law accords a prerogative to the NLRC over the claim when the employer-
employee relationship has terminated or such relationship has not arisen at all. The rationale of
the law is the recognition that the existence of an employer-employee relationship is a matter
which is not easily determinable from an ordinary inspection because the elements of such a
relationship are not verifiable from a mere ocular examination. The determination of which
should be comprehensive and intensive and therefore best left to the specialized quasi-judicial
body that is the NLRC.

The existence of an employer-employee relationship is a statutory prerequisite to and a

limitation on the power of the Secretary of Labor, one which the legislative branch is entitled to
impose. The rationale underlying this limitation is to eliminate the prospect of competing
conclusions of the Secretary of Labor and the NLRC, on a matter fraught with questions of fact
and law, which is best resolved by the quasi-judicial body, which is the NRLC, rather than an
administrative official of the executive branch of the government. If the Secretary of Labor
proceeds to exercise his visitorial and enforcement powers absent the employer-employee
relationship, his office confers jurisdiction on itself which it cannot otherwise acquire.

Petition granted.

SECOND CASE:

G.R. No. 179652 March 6, 2012

PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), Petitioner, 
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL
DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, Respondents.

RESOLUTION

FACTS:

Same facts as the above previous case.

This Resolution was in response to the Motion for Clarification of Decision (with Leave
of Court) filed by Public Attorney’s Office (PAO) seeking for calrification as to when the visitorial
and enforcement power of the DOLE be not considered as co-extensive with the power to
determine the existence of an employer-employee relationship. In its Comment, the DOLE
sought clarification as well, as to the extent of its visitorial and enforcement power under the
Labor Code, as amended.

SC treated the Motion for Clarification as a second motion for reconsideration, granting
said motion and reinstating the petition as it is apparent that there is a need to delineate the
jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC.
ISSUE: Whether or not DOLE ahs the power to determine the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power – YES

HELD: In the exercise of the said powers, the DOLE must have the power to determine whether
or not an employer-employee relationship exists, and from there to decide whether or not to
issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA
7730. As such, the previous decision was AFFIRMED, with the MODIFICATION that in the
exercise of the DOLE’s visitorial and enforcement power, the Labor Secretary or the latter’s
authorized representative shall have the power to determine the existence of an employer-
employee relationship, to the exclusion of the NLRC.

The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would
be rendered nugatory if the alleged employer could, by the simple expedient of disputing the
employer-employee relationship, force the referral of the matter to the NLRC. However, it is
precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to
see if the same does successfully refute the existence of an employer-employee relationship.

Hence, the following rules are clarified:

a. if a complaint is brought before the DOLE to give effect to the labor standards provisions
of the Labor Code or other labor legislation, and there is a finding by the DOLE that there
is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. However, if the DOLE finds that there is no employer-employee
relationship, the jurisdiction is properly with the NLRC.
b. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement,
the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code,
which provides that the Labor Arbiter has original and exclusive jurisdiction over those
cases involving wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement.
c. If a complaint is filed with the NLRC, and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE,
however, may still be questioned through a petition for certiorari under Rule 65 of the
Rules of Court.

The DOLE, in determining the existence of an employer-employee relationship follows

the same guidelines as that of the courts. The elements to determine the existence of an
employment relationship are: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; (4) the employer’s power to control the
employee’s conduct. The use of this test is not solely limited to the NLRC. The DOLE Secretary,
or his or her representatives, can utilize the same test, even in the course of inspection, making
use of the same evidence that would have been presented before the NLRC.

In the present case, the finding of the DOLE Regional Director that there was an
employer-employee relationship has already been set aside by the SC with the finding being that
there was no employer-employee relationship between petitioner and private respondent, based
on the evidence presented. Private respondent presented self-serving allegations as well as
self-defeating evidence. The findings of the Regional Director were not based on substantial
evidence, and private respondent failed to prove the existence of an employer-employee
relationship. The DOLE had no jurisdiction over the case, as there was no employer-employee
relationship present. Thus, the dismissal of the complaint against petitioner is proper.