DOLE FINDINGS OF LABOR STANDARDS LIABILITIES REQUIRE DETERMINATION OF EMPLOYER-EMPLOYEE RELATIONSHIP AS PART OF DUE PROCESS

South Cotabato Communications Corporation and Gauvain J. Benzonan vs. Hon. Patricia Sto. Tomas, et al.
G.R. No. 217575. June 15, 2016

Facts:

The DOLE conducted a Complaint Inspection at the premises of DXCP Radio Station, which is owned by petitioner South Cotabato Communications Corporation. The inspection yielded a finding of violation of labor standards provisions of the Labor Code involving the nine (9) private respondents.

Consequently, the DOLE issued a Notice of Inspection Result directing petitioners, to effect restitution and/or correction of the alleged violations within five (5) days from notice. Due to petitioners’ failure to comply with its directive, the DOLE scheduled a Summary Investigation at its Regional Office. However, petitioners failed to appear despite due notice. Another hearing was scheduled wherein petitioners’ counsel failed to attend due to an alleged conflict in schedule. Instead, his secretary, Nona Gido, appeared on his behalf to request a resetting, which the DOLE Hearing Officer denied.

Thus, in an Order the DOLE Regional Director directed petitioners to pay private respondents the total amount of P759,752.00 representing private respondents’ claim for wage differentials, 13^th month pay differentials, service incentive leave pay, holiday premium pay, and rest day premium pay. Therefrom, petitioners appealed to the Secretary of Labor, raising two grounds: (1) denial of due process; and (2) lack of factual and legal basis of the assailed Order. The denial of due process was predicated on the refusal of the Hearing Officer to reset the hearing which thus allegedly deprived petitioners the opportunity to present their evidence. Likewise, petitioners asserted that the Order of the Regional Director does not state that an employer-employee relationship exists between petitioners and private respondents, which is necessary to confer jurisdiction to the DOLE over the alleged violations.

SOLE Ruling:

The Secretary of Labor affirmed the findings of the DOLE Regional Director on the postulate that petitioners failed to question, despite notice of hearing, the noted violations or to submit any proof of compliance therewith. And in view of petitioners’ failure to present their evidence before the Regional Director, the Secretary of Labor adopted the findings of the Labor Inspector and considered the interviews conducted as substantial evidence.

Petitioners moved for, but was denied, reconsideration of the Secretary of Labor’s Order. Petitioners elevated the case to the Court of Appeals (CA) via a Petition for Certiorari under Rule 65.

CA Ruling:

The CA upheld the Secretary of Labor, holding that petitioners cannot claim denial of due process, their failure to present evidence being attributed to their negligence. Petitioners moved for the reconsideration of the Decision, grounded on similar arguments raised before the Secretary of Labor. The CA denied petitioners’ motion for reconsideration in its Resolution dated March 5, 2014. Hence, the petition.

Issue/s:

1. Whether or not the DOLE Order, without establishing ER-EE in its findings, are valid

2. Whether or not there was denial of due process when the conference was not reset

SC Ruling:

There was no denial of due process. The essence of due process, jurisprudence teaches, is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. As long as the parties are, in fine, given the opportunity to be heard before judgment is rendered, the demands of due process are sufficiently met. That petitioners were given ample opportunity to present their evidence before the Regional Director is indisputable. They were notified of the summary investigations which they failed to attend. To justify their non-appearance, petitioners claim they requested a resetting of the April 1, 2004 hearing due to the unavailability of their counsel. However, no such explanation was proffered as to why they failed to attend the first hearing. At any rate, it behooved the petitioners to ensure that they, as well as their counsel, would be available on the dates set for the summary investigation as this would enable them to prove their claim of non-existence of an employer-employee relationship. Clearly, their own negligence did them in. Their lament that they have been deprived of due process is specious.

Under Article 128 of the Labor Code, the Secretary of Labor, or any of his or her authorized representatives, is granted visitorial and enforcement powers for the purpose of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules and regulations issued pursuant thereto. Indispensable to the DOLE’ s exercise of such power is the existence of an actual employer-employee relationship between the parties. The power of the DOLE to determine the existence of an employer-employee relationship between petitioners and private respondents in order to carry out its mandate under Article 128 has been established beyond cavil in Bomba Radyo stating that he DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an employer-employee relationship. Further, that 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.

Like the NLRC, the DOLE has the authority to rule on the existence of an employer-employee relationship between the parties, considering that the existence of an employer-employee relationship is a condition sine qua non for the exercise of its visitorial power. Nevertheless, it must be emphasized that without an employer-employee relationship, or if one has already been terminated, the Secretary of Labor is without jurisdiction to determine if violations of labor standards provision had in fact been committed, and to direct employers to comply with their alleged violations of labor standards. As can be gleaned from the above-quoted Order, the Regional Director merely noted the discovery of violations of labor standards provisions in the course of inspection of the DXCP premises. No such categorical determination was made on the existence of an employer-employee relationship utilizing any of the guidelines set forth.

It cannot be stressed enough that the existence of an employer-employee relationship between the parties is essential to confer jurisdiction of the case to the DOLE. Without such express finding, the DOLE cannot assume to have jurisdiction to resolve the complaints of private respondents as jurisdiction in that instance lies with the NLRC. The said Orders contravene Article VIII, Section 14 of the Constitution, which requires courts to express clearly and distinctly the facts and law on which decisions are based. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court (or quasi-judicial body) for review by a higher tribunal. Accordingly, this Court will not hesitate to strike down decisions rendered not hewing to the Constitutional directive.