CASE 12: Maternity Children's Hospital v. Secretary of Labor (G.R. No. 78909, June 30, 1989)

Visitorial and Enforcement Powers (Article 128, Labor Code)

The Secretary of Labor and Employment or the Regional Director has the power to conduct inspections of establishments to enforce compliance with labor standards laws, including ordering payment of wage differentials and benefits.

Jurisdiction Over Labor Standards Cases (Article 217, Labor Code)

Labor Arbiters have original and exclusive jurisdiction over money claims, but the Court upheld the Regional Director’s authority to order compliance when there is no contest from the employer.

Recovery of Wages and Money Claims (Article 129, Labor Code, as amended by R.A. No. 6715)

Regional Directors can decide on simple wage recovery cases where the employee-employer relationship still exists, provided the total claim does not exceed ₱5,000.00.

Social Justice in Labor Law (Article XIII, Section 3, 1987 Constitution)

The Court emphasized that labor laws must be interpreted in favor of the workers, ensuring they receive fair wages and benefits without burdensome litigation.

Scope of Wage and Benefit Claims in Enforcement Actions

Labor inspectors may recommend wage adjustments for all affected employees in an establishment, not just those who filed complaints, as labor regulations are meant to protect all workers.

Due Process in Wage Enforcement Cases

Employers must be given notice and an opportunity to contest findings in wage enforcement actions, but failure to dispute an inspection report may result in automatic enforcement.

Retroactive Application of Wage Differentials

The Supreme Court limited the computation of wage differentials and allowances to three years prior to the complaint, following the prescriptive period for money claims under the Labor Code.

Employee Coverage in Labor Enforcement Orders

Only employees still working at the establishment at the time of the complaint are covered by the enforcement order; those who resigned or were terminated must file claims with the Labor Arbiter.

Labor Standards vs. Arbitration System

Labor standards enforcement ensures compliance with minimum labor laws, while arbitration addresses disputes over employment contracts and termination. The Court upheld that uncontested labor standards violations fall under enforcement jurisdiction.

Judicial Respect for Administrative Interpretation

The Court deferred to the Department of Labor and Employment’s interpretation of its authority, recognizing the agency’s role in ensuring compliance with labor laws.