G.R. No. 78909 June 30, 1989
MATERNITY CHILDREN’S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs. THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DIRECTOR OF LABOR, REGION X, respondents.

FACTS

Petitioner Maternity Children’s Hospital, a semi-government entity, was the subject of a complaint filed by ten employees on May 23, 1986, for underpayment of statutory wages and Emergency Cost of Living Allowances (ECOLAs). Following the complaint, the Regional Director of Labor, Region X, exercised his visitorial powers, directing labor inspectors to examine the hospital’s payrolls. The inspection confirmed underpayments affecting numerous employees. Consequently, the Regional Director issued an Order on August 4, 1986, directing the hospital to pay deficiency wages and ECOLAs totaling P723,888.58 to all its employees. The Secretary of Labor affirmed this order but modified the computation period to cover only three years prior to the complaint’s filing. The hospital challenged the orders via certiorari, arguing the Regional Director lacked jurisdiction over money claims and that the award improperly covered non-complainants and former employees.

ISSUE

The primary issue is whether the Regional Director had jurisdiction to adjudicate the money claims for wage differentials and ECOLAs under Article 128 of the Labor Code, as it stood at the time the complaint was filed on May 23, 1986.

RULING

The Supreme Court dismissed the petition, upholding the Regional Director’s jurisdiction. The legal logic hinges on the distinction between the visitorial/enforcement power under Article 128 and the adjudicatory power under Article 217. The Court clarified that prior to the effectivity of Executive Order No. 111 on March 3, 1987, the Regional Director’s authority under Article 128 was limited to the enforcement of labor standards through the exercise of visitorial powers, which included the power to order and enforce compliance, such as the payment of prescribed wages. This enforcement power was separate from the Labor Arbiter’s exclusive jurisdiction over money claims under Article 217. The Court held that the Regional Director’s order in this case was a legitimate exercise of this enforcement power, not an adjudication of a money claim per se. The order was a direct result of a routine inspection triggered by a complaint, which confirmed violations of labor standards. The coverage of all employees found to be underpaid, not just the complainants, was justified as the inspection revealed a general pattern of non-compliance affecting the entire workforce. The Court emphasized that the power to ensure compliance with minimum labor standards inherently includes the authority to direct restitution for all affected workers discovered during the enforcement process, thereby achieving the remedial purpose of the labor standards provisions.