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G.R. No. 179652 M!" # 2$$9

the 3ourt of *ppeals committed gra%e abuse of discretion (hen it dismissed their appeal (ithout del%ing on the issue of emplo er$emplo ee relationship" ISS&E< =hether or not the )ecretar of Labor has the po(er to determine the e1istence of an emplo er$emplo ee relationship"

FACTS% Jandeleon Juezan (Juezan) filed a complaint before the DOLE against Bombo Rad o !hils" (Bombo Rad o) for illegal deduction# non$pa ment of ser%ice HELD% :O" *rt" &7; (b) of the Labor 3ode# as amended b R"*" 99'6 reads< incenti%e lea%e# &'th month pa # premium pa for holida and rest da and illegal :ot(ithstanding the pro%isions of *rticles &78 and 7&9 of this 3ode to the diminution of benefits# dela ed pa ment of (ages and non$co%erage of )))# !*+$ contrar # and in cases where the relationship of employer-employee still exists # ,B,+ and !hilhealth" On the basis of the complaint# the DOLE conducted a plant the )ecretar of Labor and Emplo ment or his dul authorized representati%es le%el inspection" -he Labor ,nspector in his report (rote#
.anagement representati%e informed that (Juezan) complainant is a drama talent hired on a per drama /participation basis0 hence no emplo er$emplo er relationship e1isted bet(een them" *s proof of this# management presented photocopies of cash %ouchers# billing statement# emplo ments of specific underta2ing# etc" -he management has no control of the talent if he %entures into another contract (ith other broadcasting industries" shall ha%e the po(er to issue compliance orders to gi%e effect to the labor standards pro%isions of this 3ode and other labor legislation based on the findings of labor emplo ment and enforcement officers or industrial safet engineers made in the course of inspection"

-he pro%ision is e1plicit that the %isitorial and enforcement po(er of the DOLE comes into pla onl in cases (hen the relationship of emplo er$emplo ee still e1ists" -his clause signifies that the emplo er$emplo ee relationship must ha%e -he DOLE Regional Director issued an order ruling that Juezan is an emplo ee of e1isted e%en before the emergence of the contro%ers " :ecessaril # the DOLE0s Bombo Rad o# and that Juezan is entitled to his mone claims" Bombo Rad o po(er does not appl in t(o instances# namel < (i) (here the emplo er$emplo ee sought reconsideration claiming that the Regional Director ga%e credence to the relationship has ceased> and (ii) (here no such relationship has e%er e1isted" documents offered b Juezan (ithout e1amining the originals# but at the same time the Regional Director missed or failed to consider Bombo Rad o0s e%idence" -he -he first situation is categoricall co%ered b )ec" '# Rule && of the Rules on the motion for reconsideration (as denied" On appeal# the *cting DOLE )ecretar Disposition of Labor )tandards 3ases issued b the DOLE )ecretar " ,t reads< dismissed the appeal on the ground that Bombo Rad o did not post a cash or suret =here emplo er$emplo ee relationship no longer e1ists b reason of the fact that bond and instead submitted a Deed of *ssignment of Ban2 Deposit" Bombo Rad o ele%ated the case to the 3ourt of *ppeals# claiming that it (as denied due process (hen the DOLE )ecretar disregarded the e%idence it presented and failed to gi%e it the opportunit to refute the claims of Juezan" ,t maintained that no emplo er$emplo ee relationship had e%er e1isted bet(een it and Juezan because it (as the drama directors and producers (ho paid# super%ised and disciplined him" ,t also added that the case (as be ond the DOLE0s 4urisdiction because Juezan0s claim e1ceeded !5#666" -he 3ourt of *ppeals held that the DOLE )ecretar had the po(er to order and enforce compliance (ith labor standard la(s irrespecti%e of the amount of indi%idual claims because the limitation imposed b *rt" 78 of the Labor 3ode had been repealed b R"*" 99'6"
it has alread been se%ered# claims for pa ment of monetar benefits fall (ithin the e1clusi%e and original 4urisdiction of the labor arbiters" *ccordingl # if on the face of the complaint# it can be ascertained that emplo er$emplo ee relationship no longer e1ists# the case# (hether accompanied b an allegation of illegal dismissal# shall immediatel be endorsed b the Regional Director to the appropriate branch of the :ational Labor Relations 3ommission (:LR3)"

-he la( accords a prerogati%e to the :LR3 o%er the claim (hen the emplo er$ emplo ee relationship has terminated or such relationship has not arisen at all" -he e1istence of an emplo er$emplo ee relationship is a matter (hich is not easil determinable from an ordinar inspection because the elements of such a relationship are not %erifiable from a mere ocular e1amination" -he intricacies and implications of an emplo er$emplo ee relationship demand that the le%el of scrutin should be far abo%e the superficial" =hile documents# particularl Bombo Rad o argues that the :LR3 (not the DOLE )ecretar ) has 4urisdiction documents found in the emplo er0s office are the primar source materials# (hat o%er Juezan0s claim# in %ie( of *rts" 7&9 and &7; of the Labor 3ode" ,t adds that ma pro%e decisi%e are factors related to the histor of the emplo er0s business operations# its current state as (ell as accepted contemporar practices in the


industr " .ore often than not# the ?uestion of emplo er$emplo ee relationship becomes a battle of e%idence# the determination of (hich should be comprehensi%e and intensi%e and therefore best left to the specialized ?uasi$4udicial bod of the :LR3" ,t can be assumed that the DOLE in the e1ercise of its %isitorial and enforcement po(er someho( has to ma2e a determination of the e1istence of an emplo er$ emplo ee relationship" @o(e%er# such determination cannot be coe1tensi%e (ith the %isitorial and enforcement po(er itself" )uch is merel preliminar # incidental and collateral to the DOLE0s primar function of enforcing labor standards pro%isions" -he determination of the e1istence of emplo er$emplo ee relationship is still primaril lodged (ith the :LR3" -his is the meaning of the clause in cases (here the relationship of emplo er$emplo ee still e1ists in *rt" &7; (b)" -hus# before the DOLE ma e1ercise its po(ers under *rt" &7;# t(o important ?uestions must be resol%ed< (i) Does the emplo er$emplo ee relationship still e1ist# or alternati%el # (as there e%er an emplo er$emplo ee relationship to spea2 of> and (ii) *re there %iolations of the Labor 3ode or of an labor la(A -he e1istence of an emplo er$emplo ee relationship is a statutor prere?uisite to and a limitation on the po(er of the )ecretar of Labor# one (hich the legislati%e branch is entitled to impose" -he rationale underl ing this limitation is to eliminate the prospect of competing conclusions of the )ecretar of Labor and the :LR3" ,f the )ecretar of Labor proceeds to e1ercise his %isitorial and enforcement po(ers absent the first re?uisite# his office confers 4urisdiction on itself (hich it cannot other(ise ac?uire" :e%ertheless# a mere assertion of absence of emplo er$emplo ee relationship does not depri%e the DOLE of 4urisdiction o%er the claim" *t least a prima facie sho(ing of such absence of relationship# as in this case# is needed to preclude the DOLE from the e1ercise of its po(er" =ithout a doubt# Bombo Rad o# since the inception of this case had been consistent in maintaining that Juezan is not its emplo ee" * preliminar determination# based on the e%idence offered and noted b the Labor ,nspector during the inspection as (ell as submitted during the proceedings before the Regional Director puts in genuine doubt the e1istence of emplo er$emplo ee relationship" Brom that point on# the prudent recourse on the part of the DOLE should ha%e been to refer Juezan to the :LR3 for the proper dispensation of his claims" Burthermore# e%en the e%idence relied on b the Regional Director in his order are mere self$ser%ing declarations of Juezan# and hence cannot be relied upon as proof of emplo er$emplo ee relationship"