PLACIDO O. URBANES, JR. VS SECRETARY OF LABOR AND EMPLOYMENT

PLACIDO O. URBANES, JR.

VS

SECRETARY OF LABOR AND EMPLOYMENT
397 SCRA 531 (2003)

When the relief sought is not under the Labor Code but for payment of a sum of money and damages on a breach of contract, it is within the realm of civil law and jurisdiction belongs to the regular courts.

Petitioner Placido O. Urbanes agreed to provide security services to Social Security Systems (SSS). During the pendency of their agreement, Urbanes requested SSS for an upward adjustment of their contract rate in compliance with the mandated wage increases.

SSS ignored the request which led Urbanes to pull out his agency’s services and to subsequently file a complaint against SSS for the implementation of the wage increase. The Regional Director of the DOLE-NCR issued an order in favor of Urbanes. SSS filed an appeal to the Secretary of Labor who later on set aside the order of the Regional Director.

Urbanes filed an appeal by certiorari to the Supreme Court stating that the Secretary of Labor does not have jurisdiction to review appeals from decisions of the Regional Director over complaints for recovery of wages when it should have been appealed to the National Labor Relations Commission. SSS, on the other hand, contends that Art. 128, not Art. 129 of the Labor Code should be applied.

ISSUE:
Whether or not the DOLE Secretary can exercise jurisdiction over decisions of Regional Directors involving complaints for recovery of wages

HELD:
Neither the Ubanes’ contention nor the SSS’ is impressed with merit. Lapanday Agricultural Development Corporation v. Court of Appeals instructs so. In that case, the security agency filed a complaint before the Regional Trial Court (RTC) against the principal or client Lapanday for the upward adjustment of the contract rate in accordance with Wage Order Nos. 5 and 6. Lapanday argued that it is the National Labor Relations Commission, not the civil courts, which has jurisdiction to resolve the issue in the case, it involving the enforcement of wage adjustment and other benefits due the agency’s security guards as mandated by several wage orders.

The Court ruled in Lapanday that the RTC has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner’s alleged breach of its obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists.

In the case at bar, even if Urbanes filed the complaint on his and also on behalf of the security guards, the relief sought has to do with the enforcement of the contract between him and the SSS which was deemed amended by virtue of Wage Order No. NCR-03. The controversy subject of the case at bar is thus a civil dispute, the proper forum for the resolution of which is the civil courts.

But even assuming arguendo that Urbanes’ complaint were filed with the proper forum, for lack of cause of action it must be dismissed. In fine, the liability of the SSS to reimburse Urbanes’ arises only if and when Urbanes pays his employee-security guards ―the increases‖ mandated by Wage Order No. NCR-03.

The Court in Lapanday Agricultural Development Corporation v. Court of Appeals held that: ―It is only when the contractor pays the increases mandated that it can claim an adjustment from the principal to cover the increases payable to the security guards.‖
The records do not show that Urbanes’ has paid the mandated increases to the security guards. The security guards in fact have filed a complaint with the NLRC against Urbanes’ relative to, among other things, underpayment of wages.