SECOND DIVISION

PEOPLES BROADCASTING
(BOMBO RADYO PHILS., INC.),
Petitioner,

- versus -

G.R. No. 179652

Present:
CARPIO MORALES, J.,*
Acting Chairperson,
TINGA,
VELASCO, JR.,
LEONARDO-DE CASTRO,** and
BRION, JJ.

THE SECRETARY OF THE

DEPARTMENT OF LABOR AND
Promulgated:
EMPLOYMENT, THE REGIONAL
DIRECTOR, DOLE REGION VII,
May 8, 2009
and JANDELEON JUEZAN,
Respondents.
x----------------------------------------------------------------------------x
DECISION
TINGA, J.:
The present controversy concerns a matter of first impression,
requiring as it does the determination of the demarcation line
between the prerogative of the DOLE Secretary and his duly
authorized representatives, on the one hand, and the jurisdiction of
the NLRC, on the other, under Article 128 (b) of the Labor Code in an
instance where the employer has challenged the jurisdiction of the
DOLE at the very first level on the ground that no employer-employee
relationship ever existed between the parties.
I.
The instant petition for certiorari under Rule 65 assails the
decision and the resolution of the CA dated 26 October 2006 and 26
June 2007, respectively.
The petition traces its origins to a complaint filed by Jandeleon
Juezan
(respondent)
against
Peoples
Broadcasting
Service,
Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction, nonpayment of service incentive leave, 13 th month pay, premium pay for
holiday and rest day and illegal diminution of benefits, delayed
payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth
before the DOLE Regional Office VII Cebu City. On the basis of the
complaint, the DOLE conducted a plant level inspection on 23
September 2003. In the Inspection Report Form, the Labor Inspector
wrote under the heading Findings/Recommendations non-diminution
of benefits and Note: Respondent deny employer-employee
relationship with the complainant- see Notice of Inspection results. In

the Notice of Inspection Results[4] also bearing the date 23 September

2003, the Labor Inspector made the following notations:
Management representative informed that
complainant is a drama talent hired on a per drama
participation basis hence no employer-employeeship
[sic] existed
between
them. As
proof
of
this,
management presented photocopies of cash vouchers,
billing statement, employments of specific undertaking
(a contract between the talent director & the
complainant), etc. The mgt. has no control of the talent
if
he
ventures
into
another
contract
w/
other broadcasting industries.
On the other hand, complainant Juezans alleged
violation of non-diminution of benefits is computed as
follows:
@ P 2,000/15 days + 1.5 mos = P 6,000
(August 1/03 to Sept 15/03)
Note: Recommend for summary
whatever action deem proper.[5]

investigation

or

Petitioner was required to rectify/restitute the violations within 5

days from receipt. No rectification was effected by petitioner; thus,
summary investigations were conducted, with the parties eventually
ordered to submit their respective position papers.[6]
In his Order dated 27 February 2004, DOLE Regional Director Atty.
Rodolfo M. Sabulao (Regional Director) ruled that respondent is an
employee of petitioner, and that the former is entitled to his money
claims amounting to P203,726.30. Petitioner sought reconsideration of
the Order, claiming that the Regional Director gave credence to the
documents offered by respondent without examining the originals, but
at
the
same
time
he
missed
or
failed
to
consider
petitioners evidence. Petitioners motion for reconsideration was
denied. On appeal to the DOLE Secretary, petitioner denied once more
the existence of employer-employee relationship. In its Order dated 27
January 2005, the Acting DOLE Secretary dismissed the appeal on the
ground that petitioner did not post a cash or surety bond and instead
submitted a Deed of Assignment of Bank Deposit.
Petitioner elevated the case to the CA, claiming that it was denied
due process when the DOLE Secretary disregarded the evidence it
presented and failed to give it the opportunity to refute the claims of
respondent. Petitioner maintained that there is no employer-employee
relationship had ever existed between it and respondent because it
was the drama directors and producers who paid, supervised and
disciplined respondent. It also added that the case was beyond the
jurisdiction of the DOLE and should have been considered by the labor
arbiter because respondents claim exceededP5,000.00.

The CA held that petitioner was not deprived of due process as

the essence thereof is only an opportunity to be heard, which
petitioner had when it filed a motion for reconsideration with the DOLE
Secretary. It further ruled that the latter had the power to order and
enforce compliance with labor standard laws irrespective of the
amount of individual claims under Article 129 (As amended by RA
7730) Petitioner sought reconsideration of the decision but its motion
was denied.
Before this Court, petitioner argues that the NLRC and not the
DOLE Secretary, has jurisdiction over respondents claim, in view of
Articles 217 and 128 of the Labor Code.[12] It adds that the Court of
Appeals committed grave abuse of discretion when it dismissed
petitioners appeal without delving on the issues raised therein,
particularly the claim that no employer-employee relationship had ever
existed between petitioner and respondent. Finally, petitioner avers
that there is no appeal, or any plain, speedy and adequate remedy in
the ordinary course of law available to it.
On the other hand, respondent posits that the CA did not abuse its
discretion. He invokes Republic Act No. 7730, which removes the
jurisdiction of the Secretary of Labor and Employment or his duly
authorized representatives, from the effects of the restrictive
provisions of Article 129 and 217 of the Labor Code, regarding the
confinement
of
jurisdiction
based
on
the
amount
of
claims.[13] Respondent also claims that petitioner was not denied due
process since even when the case was with the Regional Director, a
hearing was conducted and pieces of evidence were presented.
Respondent stands by the propriety of the Court of Appeals ruling that
there exists an employer-employee relationship between him and
petitioner. Finally, respondent argues that the instant petition for
certiorari is a wrong mode of appeal considering that petitioner had
earlier filed a Petition for Certiorari, Mandamus and Prohibition with the
Court of Appeals; petitioner, instead, should have filed a Petition for
Review.[14]
II.
The significance of this case may be reduced to one simple
questiondoes the Secretary of Labor have the power to determine
the existence of an employer-employee relationship?
To resolve this pivotal issue, one must look into the extent of the
visitorial and enforcement power of the DOLE found in Article 128 (b)
of the Labor Code, as amended by Republic Act 7730. It reads:
Article 128 (b) Notwithstanding the provisions of
Articles 129 and 217 of this Code to the contrary, and in
cases where the relationship of employeremployee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall

have the power to issue compliance orders to give

effect to the labor standards provisions of this
Code and other labor legislation based on the
findings of labor employment and enforcement officers
or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized
representative shall issue writs of execution to the
appropriate authority for the enforcement of their
orders, except in cases where the employer contests
the findings of the labor employment and enforcement
officer and raises issues supported by documentary
proofs which were not considered in the course of
inspection. (emphasis supplied)
xxx

The provision is quite explicit that the visitorial and

enforcement power of the DOLE comes into play only in cases when
the relationship of employer-employee still exists. It also underscores
the avowed objective underlying the grant of power to the DOLE which
is to give effect to the labor standard provision of this Code and other
labor legislation. Of course, a persons entitlement to labor standard
benefits under the labor laws presupposes the existence of employeremployee relationship in the first place.
The clause in cases where the relationship of employeremployee
still
exists
signifies
that
the employer-employee
relationship must have existed even before the emergence of the
controversy. Necessarily, the DOLEs power does not apply in
two instances, namely: (a) where the employer-employee
relationship has ceased; and (b) where no such relationship
has ever existed.
The first situation is categorically covered by Sec. 3, Rule 11 of
the Rules on the Disposition of Labor Standards Cases [15] issued by the
DOLE Secretary. It reads:
Section 3, (Rules Disposition of Labor Standards Law Cases in the Regional Offices). Where employeremployee relationship no longer exists by reason of the fact that it has already
been severed, claims for payment of monetary benefits fall within the exclusive
and original jurisdiction of the labor arbiters. Accordingly, if on the face of the
complaint, it can be ascertained that employer-employee relationship no longer
exists, the case, whether or not accompanied by an allegations of illegal
dismissal, shall immediately be endorsed by the Regional Director to the
appropriate Branch of the NLRC

In the recent case of Bay Haven, Inc. v. Abuan,[16] this Court

recognized the first situation and accordingly ruled that a
complainants allegation of his illegal dismissal had deprived the DOLE
of jurisdiction as per Article 217 of the Labor Code. [17]

In the first situation, the claim has to be referred to the NLRC

because it is the NLRC which has jurisdiction in view of the termination
of the employer-employee relationship. The same procedure has to be
followed in the second situation since it is the NLRC that has
jurisdiction in view of the absence of employer-employee relationship
between the evidentiary parties from the start.
Clearly the law accords a prerogative to the NLRC over the claim
when the employer-employee relationship has terminated or such
relationship has not arisen at all. The reason is obvious. In the second
situation especially, the existence of an employer-employee
relationship is a matter which is not easily determinable from an
ordinary inspection, necessarily so, because the elements of such a
relationship are not verifiable from a mere ocular examination. The
intricacies
and
implications
of
an
employer-employee
relationship demand that the level of scrutiny should be far above the
cursory
and
the
mechanical. While documents, particularly documents found in the
employers office are the primary source materials, what may
prove decisive are factors related to the history of the employers
business operations, its current state as well as accepted
contemporary practices in the industry. More often than not, the
question of employer-employee relationship becomes a battle of
evidence, the determination of which should be comprehensive and
intensive and therefore best left to the specialized quasi-judicial body
that is the NLRC.
It can be assumed that the DOLE in the exercise of its
visitorial and enforcement power somehow has to make a
determination of the existence of an employer-employee
relationship. Such prerogatival determination, however, cannot
be coextensive with the visitorial and enforcement power
itself. Indeed, such determination is merely preliminary,
incidental and collateral to the DOLEs primary function of
enforcing labor standards provisions. The determination of
the existence of employer-employee relationship is still
primarily lodged with the NLRC. This is the meaning of the
clause in cases where the relationship of employer-employee
still exists in Art. 128 (b).
Thus, before the DOLE may exercise its powers under Article
128, two important questions must be resolved: (1) Does the
employer-employee relationship still exist, or alternatively, was there
ever an employer-employee relationship to speak of; and (2) Are there
violations of the Labor Code or of any labor law?

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. The rationale underlying this limitation is to eliminate the

prospect of competing conclusions of the Secretary of Labor and the

NLRC, on a matter fraught with questions of fact and law, which is best
resolved by the quasi-judicial body, which is the NRLC, rather than an
administrative official of the executive branch of the government. If
the Secretary of Labor proceeds to exercise his visitorial and
enforcement powers absent the first requisite, as the dissent
proposes, his office confers jurisdiction on itself which it cannot
otherwise acquire.
The approach suggested by the dissent is frowned upon by
common law. To wit:
[I]t is a general rule, that no court of limited
jurisdiction can give itself jurisdiction by a wrong
decision on a point collateral to the merits of the
case upon which the limit to its jurisdiction
depends; and however its decision may be final on all
particulars, making up together that subject matter
which, if true, is within its jurisdiction, and however
necessary in many cases it may be for it to make
a preliminary inquiry, whether some collateral matter be
or be not within the limits, yet, upon this preliminary
question, its decision must always be open to inquiry in
the superior court.[18]

A more liberal interpretative mode, pragmatic or functional

analysis, has also emerged in ascertaining the jurisdictional
boundaries of administrative agencies whose jurisdiction is established
by statute. Under this approach, the Court examines the intended
function of the tribunal and decides whether a particular provision falls
within or outside that function, rather than making the provision itself
the determining centerpiece of the analysis. [19] Yet even under this
more expansive approach, the dissent fails.
A reading of Art. 128 of the Labor Code reveals that the
Secretary of Labor or his authorized representatives was 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. Necessarily, the actual existence of an employer-employee
relationship affects the complexion of the putative findings that the
Secretary of Labor may determine, since employees are entitled to a
different set of rights under the Labor Code from the employer as
opposed to non-employees. Among these differentiated rights are
those accorded by the labor standards provisions of the Labor Code,
which the Secretary of Labor is mandated to enforce. If there is no
employer-employee relationship in the first place, the duty of the
employer to adhere to those labor standards with respect to the nonemployees is questionable.

This decision should not be considered as placing an undue

burden on the Secretary of Labor in the exercise of visitorial and
enforcement powers, nor seen as an unprecedented diminution of the
same, but rather a recognition of the statutory limitations thereon. A
mere assertion of absence of employer-employee relationship does not
deprive the DOLE of jurisdiction over the claim under Article 128 of the
Labor Code. At least a prima facie showing of such absence of
relationship, as in this case, is needed to preclude the DOLE from the
exercise of its power. The Secretary of Labor would not have been
precluded from exercising the powers under Article 128 (b) over
petitioner if another person with better-grounded claim of
employment than that which respondent had. Respondent, especially
if he were an employee, could have very well enjoined other
employees to complain with the DOLE, and, at the same time,
petitioner could ill-afford to disclaim an employment relationship with
all of the people under its aegis.
Without a doubt, petitioner, since the inception of this case had
been consistent in maintaining that respondent is not its employee.
Certainly, a preliminary determination, based on the evidence offered,
and noted by the Labor Inspector during the inspection as well as
submitted during the proceedings before the Regional Director puts in

genuine doubt the existence of employer-employee relationship. From

that point on, the prudent recourse on the part of the DOLE should
have been to refer respondent to the NLRC for the proper dispensation
of his claims. Furthermore, as discussed earlier, even the evidence
relied on by the Regional Director in his order are mere self-serving
declarations of respondent, and hence cannot be relied upon as proof
of employer-employee relationship.
III.
Aside from lack of jurisdiction, there is another cogent
reason to to set aside the Regional Directors 27 February
2004 Order. A careful study of the case reveals that the said Order,
which found respondent as an employee of petitioner and directed the
payment of respondents money claims, is not supported by
substantial evidence, and was even made in disregard of the evidence
on record.
It is not enough that the evidence be simply considered. The
standard is substantial evidence as in all other quasi-judicial
agencies. The standard employed in the last sentence of Article 128(b)
of the Labor Code that the documentary proofs be considered in the
course of inspection does not apply. It applies only to issues other
than the fundamental issue of existence of employer-employee
relationship. A contrary rule would lead to controversies on the part of
labor officials in resolving the issue of employer-employee
relationship. The onset of arbitrariness is the advent of denial of
substantive due process.
As a general rule, the Supreme Court is not a trier of facts. This
applies with greater force in cases before quasi-judicial agencies whose
findings of fact are accorded great respect and even finality. To be
sure, the same findings should be supported by substantial evidence
from which the said tribunals can make its own independent evaluation
of the facts. Likewise, it must not be rendered with grave abuse of
discretion; otherwise, this Court will not uphold the tribunals
conclusion.[20] In the same manner, this Court will not hesitate to set
aside the labor tribunals findings of fact when it is clearly shown that
they were arrived at arbitrarily or in disregard of the evidence on
record or when there is showing of fraud or error of law. [21]
At the onset, it is the Courts considered view that the existence
of employer- employee relationship could have been easily resolved, or
at least prima facie determined by the labor inspector, during the
inspection by looking at the records of petitioner which can be found in
the work premises. Nevertheless, even if the labor inspector had noted
petitioners manifestation and documents in the Notice of Inspection
Results, it is clear that he did not give much credence to said evidence,
as he did not find the need to investigate the matter
further. Considering that the documents shown by petitioner, namely:

cash vouchers, checks and statements of account, summary

billings evidencing
payment
to
the
alleged
real
employer
of respondent, letter-contracts denominated as Employment for a
Specific Undertaking,prima facie negate the existence of employeremployee relationship, the labor inspector could have exerted a bit
more effort and looked into petitioners payroll, for example, or its roll
of employees, or interviewed other employees in the premises. After
all, the labor inspector, as a labor regulation officer is given access to
employers records and premises at any time of day or night whenever
work is being undertaken therein, and the right to copy therefrom, to
question any employee and investigate any fact, condition or matter
which may be necessary to determine violations or which may aid in
the enforcement of this Code and of any labor law, wage order or rules
and regulations pursuant thereto.[22] Despite these far-reaching
powers of labor regulation officers, records reveal that no additional
efforts were exerted in the course of the inspection.
The Court further examined the records and discovered to its
dismay that even the Regional Director turned a blind eye to the
evidence presented by petitioner and relied instead on the self-serving
claims of respondent.
In his position paper, respondent claimed that he was hired by
petitioner in September 1996 as a radio talent/spinner, working
from 8:00 am until 5 p.m., six days a week, on a gross rate of P60.00
per script, earning an average of P15,0000.00 per month, payable on a
semi-monthly basis. He added that the payment of wages was delayed;
that he was not given any service incentive leave or its monetary
commutation, or his 13th month pay; and that he was not made a
member of the Social Security System (SSS), Pag-Ibig and
PhilHealth. By January 2001, the number of radio programs of which
respondent was a talent/spinner was reduced, resulting in the
reduction of his monthly income from P15,000.00 to only P4,000.00, an
amount he could barely live on. Anent the claim of petitioner that no
employer-employee relationship ever existed, respondent argued that
that he was hired by petitioner, his wages were paid under the payroll
of the latter, he was under the control of petitioner and its agents, and
it was petitioner who had the power to dismiss him from his
employment.[23] In support of his position paper, respondent attached a
photocopy of an identification card purportedly issued by
petitioner, bearing respondents picture and name with the
designation Spinner; at the back of the I.D., the following is written:
This certifies that the card holder is a duly Authorized MEDIA
Representative of BOMBO RADYO PHILIPPINES THE NO.1 Radio
Network in the Country ***BASTA RADYO BOMBO*** [24] Respondent
likewise included a Certification which reads:
This is to certify that MR. JANDELEON JUEZAN is a
program employee of PEOPLES BROADCASTING
SERVICES, INC. (DYMF- Bombo Radyo Cebu) since 1990
up to the present.

Furtherly certifies that Mr. Juezan is receiving a

monthly salary of FIFTEEN THOUSAND (P15,000.00)
PESOS.
This certification is issued upon the request of the
above stated name to substantiate loan requirement.
Given
this
City , Philippines.

18th day

of

April

2000, Cebu

(signed)
GREMAN B. SOLANTE
Station Manager

On the other hand, petitioner maintained in its position paper

that respondent had never been its employee. Attached as annexes to
its position paper are photocopies of cash vouchers it issued to drama
producers, as well as letters of employment captioned Employment
for a Specific Undertaking, wherein respondent was appointed by
different drama directors as spinner/narrator for specific radio
programs.[25]

In his Order, the Regional Director merely made a passing

remark on petitioners claim of lack of employer-employee relationship
a token paragraphand proceeded to a detailed recitation of
respondents allegations. The documents introduced by petitioner in
its position paper and even those presented during the inspection were
not given an iota of credibility. Instead, full recognition and acceptance
was accorded to the claims of respondentfrom the hours of work to
his monthly salary, to his alleged actual duties, as well as to his alleged
evidence. In fact, the findings are anchored almost verbatim on the
self-serving allegations of respondent.
Furthermore,
respondents
pieces
of
evidence
the identification card and the certification issued by petitioners
Greman Solante are not even determinative of an employeremployee relationship. The certification, issued upon the request of
respondent, specifically stated that MR. JANDELEON JUEZAN is a
program employee of PEOPLES BROADCASTING SERVICES, INC. (DYMFBombo Radyo Cebu), it is not therefore crystal clear that
complainant is a station employee rather than a program employee
hence entitled to all the benefits appurtenant thereto, [26] as found by
the DOLE Regional Director. Respondent should be bound by his own
evidence. Moreover, the classification as to whether one is a station
employee and program employee, as lifted from Policy Instruction
No. 40,[27] dividing the workers in the broadcast industry into only two

groups is not binding on this Court, especially when the classification

has no basis either in law or in fact. [28]
Even the identification card purportedly issued by petitioner is
not proof of employer-employee relationship since it only identified
respondent as an Authorized Representative of Bombo Radyo, and
not as an employee. The phrase gains significance when compared vis
a vis the following notation in the sample identification cards presented
by petitioner in its motion for reconsideration:
1.
2.

This is to certify that the person whose

picture and signature appear hereon is an
employee of Bombo Radio Philippines.
This ID must be worn at all times within Bombo
Radyo Philippines premises
for
proper
identification and security. Furthermore, this is
the
property
of
Bombo
Radyo Philippines and must
be
surrendered upon separation from the company.
HUMAN RESOURCE DEPARMENT
(Signed)
JENALIN D. PALER
HRD HEAD

Respondent tried to address the discrepancy between

his identification card and the standard identification cards issued by
petitioner to its employees by arguing that what he annexed to his
position paper was the old identification card issued to him by
petitioner. He then presented a photocopy of another old
identification card, this time purportedly issued to one of the
employees who was issued the new identification card presented by
petitioner.[29] Respondents argument does not convince. If it were true
that he is an employee of petitioner, he would have been issued a new
identification card similar to the ones presented by petitioner, and he
should have presented a copy of such new identification card. His
failure to show a new identification card merely demonstrates that
what he has is only his Media ID, which does not constitute proof of
his employment with petitioner.
It has long been established that in administrative and quasijudicial proceedings, substantial evidence is sufficient as a basis for
judgment
on
the
existence
of
employer-employee
relationship. Substantial evidence, which is the quantum of proof
required in labor cases, is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a
conclusion.[30] No particular form of evidence is required to prove the
existence of such employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted.
[31]
Hence, while no particular form of evidence is required, a finding

that such relationship exists must still rest on some substantial

evidence. Moreover, the substantiality of the evidence depends on its
quantitative as well as its qualitativeaspects.[32]
In the instant case, save for respondents self-serving
allegations and self-defeating evidence, there is no substantial basis to
warrant the Regional Directors finding that respondent is an employee
of petitioner. Interestingly, the Order of the Secretary of Labor denying
petitioners appeal dated 27 January 2005, as well as the decision of
the Court of Appeals dismissing the petition for certiorari, are silent on
the issue of the existence of an employer-employee relationship, which
further suggests that no real and proper determination the existence of
such relationship was ever made by these tribunals. Even the dissent
skirted away from the issue of the existence of employer-employee
relationship and conveniently ignored the dearth of evidence presented
by respondent.
Although substantial evidence is not a function of quantity but
rather of quality, the peculiar environmental circumstances of the
instant case demand that something more should have been proffered.
[33]
Had there been other proofs of employment, such as respondents
inclusion in petitioners payroll, or a clear exercise of control, the Court
would
have
affirmed
the
finding
of
employer-employee
relationship. The Regional Director, therefore, committed grievous error
in ordering petitioner to answer for respondents claims. Moreover,
with the conclusion that no employer-employee relationship has ever
existed between petitioner and respondent, it is crystal-clear that the
DOLE Regional Director had no jurisdiction over respondents
complaint. Thus, the improvident exercise of power by the Secretary
of Labor and the Regional Director behooves the court to subject their
actions for review and to invalidate all the subsequent orders they
issued.

IV.
The records show that petitioners appeal was denied because it
had allegedly failed to post a cash or surety bond. What it attached
instead to its appeal was the Letter Agreement executed by petitioner
and its bank, the cash voucher, and the Deed of Assignment of Bank
Deposits. According to the DOLE, these documents do not
constitute the cash or surety bond contemplated by law; thus, it is as if
no cash or surety bond was posted when it filed its appeal.
The Court does not agree.
The provision on appeals from the DOLE Regional Offices to the
DOLE Secretary is in the last paragraph of Art. 128 (b) of the Labor
Code, which reads:
An order issued by the duly authorized
representative of the Secretary of Labor and
Employment under this article may be appealed to the
latter. In case said order involves a monetary
award, an appeal by the employer may be
perfected only upon the posting of a cash or
surety bond issued by a reputable bonding
company duly accredited by the Secretary of
Labor and Employment in the amount equivalent
to the monetary award in the order appealed
from. (emphasis supplied)

While the requirements for perfecting an appeal must be

strictly followed as they are considered indispensable interdictions
against needless delays and for orderly discharge of judicial business,
the law does admit exceptions when warranted by the circumstances.
Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. [37] Thus,
in some cases, the bond requirement on appeals involving monetary
awards had been relaxed, such as when (i) there was substantial
compliance with the Rules; (ii) the surrounding facts and circumstances
constitute meritorious ground to reduce the bond; (iii) a liberal
interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits; or (iv) the
appellants, at the very least exhibited their willingness and/or good
faith by posting a partial bond during the reglementary period. [38]
A review of the documents submitted by petitioner is called for to
determine whether they should have been admitted as or in lieu of the
surety or cash bond to sustain the appeal and serve the ends of
substantial justice.
The Deed of Assignment reads:

DEED OF ASSIGNMENT OF BANK DEPOSIT

WITH SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GREMAN B. SOLANTE in my capacity as
Station Manager of DYMF Cebu City, PEOPLES
BROADCASTING SERVICES, INC., a corporation duly
authorized and existing under and by virtue of the
laws of the Philippines, for and in consideration of the
sum of PESOS: TWO HUNDRED THREE THOUSAND
SEVEN HUNDRED TWENTY SIX PESOS & 30/100 ONLY
(P203,726.30) Phil. Currency, as CASH BOND
GUARANTEE for the monetary award in favor to the
Plaintiff in the Labor Case docketed as LSED Case No.
R0700-2003-09-CI-09, now pending appeal.
That
Respondent-Appellant
do
hereby
undertake to guarantee available and sufficient funds
covered by Platinum Savings Deposit (PSD) No. 0108-00038-4 of PEOPLES BROADCASTING SERVICES,
INC. in the amount of PESOS: TWO HUNDRED THREE
THOUSAND SEVEN HUNDRED TWENTY SIX PESOS &
30/100 ONLY (P203,726.30) payable to PlaintiffAppellee/Department of Labor and Employment
Regional Office VII at Queen City Development Bank,
Cebu Branch, Sanciangko St. Cebu City.
It is understood that the said bank has the full
control of Platinum Savings Deposit (PSD) No. 010-800038-4 from and after this date and that said sum
cannot be withdrawn by the Plaintiff-Appellee/
Department of Labor and Employment Regional
Office VII until such time that a Writ of Execution shall
be ordered by the Appellate Office.
FURTHER, this Deed of Assignment is limited to
the principal amount of PESOS: TWO HUNDRED
THREE THOUSAND SEVEN HUNDRED TWENTY SIX
PESOS & 30/100 ONLY (P203,726.30) Phil. Currency,
therefore, any interest to be earned from the said
Deposit will be for the account holder.
IN WITNESS WHEREOF, I have hereunto affixed
my signature this 18th day if June, 2004, in the City of
Cebu, Philippines.
PEOPLES

BROADCASTING

SERVICES,

INC.
By:
(Signed)
GREMAN B. SOLANTE
Station Manager

As priorly mentioned, the Deed of Assignment was accompanied

by a Letter Agreement between Queen City Development Bank and
petitioner concerning Platinum Savings Deposit (PSD) No. 010-8-

00038-4,[39] and a Cash Voucher issued by petitioner

the amount of P203,726.30 deposited at the said bank.

showing

Casting aside the technical imprecision and inaptness of words

that mark the three documents, a liberal reading reveals the
documents petitioner did assign, as cash bond for the monetary award
in favor of respondent in LSED Case NO. RO700-2003-CI-09, the
amount of P203,726.30 covered by petitioners PSD Account No. 010-800038-4 with the Queen City Development Bank at Sanciangko St.
Cebu City, with the depositary bank authorized to remit the amount to,
and upon withdrawal by respondent and or the Department of Labor
and Employment Regional Office VII, on the basis of the proper writ of
execution. The Court finds that the Deed of Assignment constitutes
substantial compliance with the bond requirement.
The purpose of an appeal bond is to ensure, during the
period of appeal, against any occurrence that would defeat or diminish
recovery by the aggrieved employees under the judgment if
subsequently affirmed.[40] The Deed of Assignment in the instant case,
like a cash or surety bond, serves the same purpose. First, the Deed of
Assignment constitutes not just a partial amount, but rather the entire
award in the appealed Order. Second, it is clear from the Deed of
Assignment that the entire amount is under the full control of the bank,
and not of petitioner, and is in fact payable to the DOLE Regional
Office, to be withdrawn by the same office after it had issued a writ of
execution. For all intents and purposes, the Deed of Assignment in
tandem with the Letter Agreement and Cash Voucher is as good as
cash. Third, the Court finds that the execution of the Deed of
Assignment, the Letter Agreement and the Cash Voucher were made in
good
faith,
and
constituted clear manifestation
of
petitioners willingness to pay the judgment amount.
The Deed of Assignment must be distinguished from the type
of bank certification submitted by appellants in Cordova v. Keysas
Boutique,[41] wherein this Court found that such bank certification
did not come close to the cash or surety bond required by law. The
bank certification in Cordova merely stated that the employer
maintains a depository account with a balance of P23,008.19, and that
the certification was issued upon the depositors request for whatever
legal purposes it may serve. There was no indication that the said
deposit was made specifically for the pending appeal, as in the instant
case. Thus, the Court ruled that the bank certification had not in any
way ensured that the award would be paid should the appeal fail.
Neither was the appellee in the case prevented from making
withdrawals from the savings account. Finally, the amount deposited
was measly compared to the total monetary award in the judgment. [42]
V.
Another question of technicality was posed against the instant
petition in the hope that it would not be given due course. Respondent

asserts that petitioner pursued the wrong mode of appeal and thus the
instant petition must be dismissed. Once more, the Court is not
convinced.
A petition for certiorari (Rule 65) is the proper remedy when
any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction
and there is no appeal, nor any plain speedy, and adequate remedy at
law. There is grave abuse of discretion when respondent acts in a
capricious or whimsical manner in the exercise of its judgment as to be
equivalent to lack of jurisdiction. [43]
Respondent may have a point in asserting that in this case
a Rule 65 petition is a wrong mode of appeal, as indeed the writ of
certiorari is an extraordinary remedy, and certiorari jurisdiction is not
to be equated with appellate jurisdiction. Nevertheless, it is settled, as
a general proposition, that the availability of an appeal does not
foreclose recourse to the extraordinary remedies, such as certiorari and
prohibition, where appeal is not adequate or equally beneficial, speedy
and sufficient, as where the orders of the trial court were issued in
excess of or without jurisdiction, or there is need to promptly relieve
the aggrieved party from the injurious effects of the acts of an inferior
court or tribunal, e.g., the court has authorized execution of the
judgment.[44] This Court has even recognized that a recourse to
certiorari is proper not only where there is a clear deprivation of
petitioners fundamental right to due process, but so also where other
special circumstances warrant immediate and more direct action. [45]
In one case, it was held that the extraordinary writ of certiorari
will lie if it is satisfactorily established that the tribunal acted
capriciously and whimsically in total disregard of evidence material to
or even decisive of the controversy, [46] and if it is shown that the refusal
to allow a Rule 65 petition would result in the infliction of an injustice
on a party by a judgment that evidently was rendered whimsically and
capriciously, ignoring and disregarding uncontroverted facts and
familiar legal principles without any valid cause whatsoever. [47]
It must be remembered that a wide breadth of discretion is
granted a court of justice in certiorari proceedings. [48] The Court has
not too infrequently given due course to a petition for certiorari, even
when the proper remedy would have been an appeal, where valid and
compelling considerations would warrant such a recourse. [49] Moreover,
the Court allowed a Rule 65 petition, despite the availability of plain,
speedy
or
adequate remedy, in view of the importance of the issues
raised therein.[50] The rules were also relaxed by the Court after
considering the public interest involved in the case; [51] when public
welfare and the advancement of public policy dictates; when the
broader interest of justice so requires; when the writs issued are null

and void; or when the questioned order amounts to an oppressive

exercise of judicial authority.[52]
The peculiar circumstances of this case warrant, as we held
in Republic v. Court of Appeals, 107 SCRA 504, 524, the exercise once
more of our exclusive prerogative to suspend our own rules or to
exempt a particular case from its operation as in x x Republic of
the Philippines v. Court of Appeals, et al., (83 SCRA 453, 478-480
[1978]), thus: x x The Rules have been drafted with the primary
objective of enhancing fair trials and expediting justice. As a corollary,
if their applications and operation tend to subvert and defeat instead
of promote and enhance it, their suspension is justified. [53]
The Regional Director fully relied on the self-serving allegations of
respondent and misinterpreted the documents presented as evidence
by respondent. To make matters worse, DOLE denied petitioners
appeal based solely on petitioners alleged failure to file a cash or
surety bond, without any discussion on the merits of the case. Since
the petition for certiorari before the Court of Appeals sought the
reversal of the two aforesaid orders, the appellate court necessarily
had to examine the evidence anew to determine whether the
conclusions of the DOLE were supported by the evidence presented. It
appears, however, that the Court of Appeals did not even review the
assailed orders and focused instead on a general discussion of due
process and the jurisdiction of the Regional Director. Had the appellate
court truly reviewed the records of the case, it would have seen that
there existed valid and sufficient grounds for finding grave abuse of
discretion on the part of the DOLE Secretary as well the Regional
Director. In ruling and acting as it did, the Court finds that the Court of
Appeals may be properly subjected to its certiorari jurisdiction. After
all, this Court has previously ruled
that the extraordinary writ of certiorari will lie if it is
satisfactorily
established that the tribunal had acted capriciously and whimsically in
total disregard of evidence material to or even decisive of the
controversy.
The most important consideration for the allowance of the
instant petition is the opportunity for the Court not only to set
the demarcation between the NLRCs jurisdiction and the
DOLEs prerogative but also the procedure when the case
involves the fundamental challenge on the DOLEs prerogative
based
on
lack
of
employer-employee
relationship.
As exhaustively discussed here, the DOLEs prerogative hinges
on the existence of employer-employee relationship, the issue
is which is at the very heart of this case. And the evidence
clearly indicates private respondent has never been
petitioners employee. But the DOLE did not address, while the
Court of Appeals glossed over, the issue. The peremptory
dismissal
of
the
instant
petition
on
a
technicality
would deprive
the
Court
of
the
opportunity
to
resolve the novel controversy.
WHEREFORE, the petition is GRANTED. The Decision dated 26
October 2006 and the Resolution dated 26 June 2007 of the Court of
Appeals in C.A. G.R. CEB-SP No. 00855 are REVERSED and SET

ASIDE. The Order of the then Acting Secretary of the Department of

Labor and Employment dated 27 January 2005 denying petitioners
appeal, and the Orders of the Director, DOLE Regional Office No. VII,
dated 24
May
2004 and 27
February
2004,
respectively,
are ANNULLED. The complaint against petitioner is DISMISSED.
SO ORDERED.

[12]
Petitioner maintains that the instant case is beyond the
jurisdiction of the Regional Director because respondents claim
exceeds P 5,000. The argument must be struck down at once, as it is
well settled, following the amendment of the Labor Code by R.A. 7730
on 2 June 1994, that the visitorial and enforcement powers of the
Regional Director can be exercised even if the individual claim exceeds
P 5,000. See Allied Investigation Bureaus, Inc. v. Secretary of
Labor, G.R. No. 122006, 24 November 1999, 319 SCRA 175,Cirineo
Bowling Plaza, Inc. v. Sensing, G.R. No. 146572, 14 January 2005, 448
SCRA 175. Ex-Bataan Veterans Security Agency, Inc. v. Laguesma, G.R.
No. 152396, 20 November 2007, 537 SCRA 2007.

[16]

G.R. No. 160859, 30 July 2008, 560 SCRA 457.

Id. at 469. The Court made the ruling only as regards

respondent Abuan who had made a claim of illegal dismissal but
qualified that the same (the ruling) does not hold for the rest of
respondents, who do not claim to have illegally dismissed.
[17]

Bunbury v. Fuller 9 Ex. 111, 140 (1853), cited in CASES,

MATERIALS AND COMMENTARY ON ADMINISTRATIVE LAW by S.H.
Bailey, B.L. Jones, A.R. Mowbray, p. 423. This view is more popularly
called the preliminary or collateral question.
[18]

[19]
Re Ontario Nurses Association v. Pay Equity Hearings
Tribunal and Glengarry Memorial Hospital, 10 April 1995, Decision of
the Ontario Court of Appeals.

Ropali Trading Corporation v. NLRC, G.R. No. 122409, 25

September 1998, .
[20]

Felix
v.
Enertech
Systems
Industries,
Inc.,
G.R.
No. 142007, 28 March 2001, 355 SCRA 680.
[27]
Issued by then Minister of Labor Blas F. Ople on 8 January
1979, it governs the employer-employee relationship, hours of work
and disputes settlement in the broadcast industry.
[21]

[28]
Sonza v. ABS-CBN Broadcasting Corporation, G.R. No.
138051, 10 June 2004, 431 SCRA 583,606.
[29]
The argument was made in respondents Comments on
Respondents Motion for Reconsideration, DOLE Records, pp. 135-138,
photocopy of the identification card is on p. 134.
[30]

RULES OF COURT, Rule 133, Sec. 5.

[31]
Opulencia Ice Plant and Storage v. NLRC, G.R. No. 98368, 15
December 1993, 228 SCRA 473.
[32]
Insular Life Assurance Co., Ltd. Employees Association-Natu,
et al. v. Insular Life Assurance Co., Ltd., et al., G.R. No. L-25291, 10
March 1977, 76 SCRA 51.

Pacific Maritime Services, Inc., et al. v. Nicanor Ranay, et al.,

G.R. No. 111002, July 21, 1997, 275 SCRA 717.
[33]

Orozco v. Court of Appeals, G.R. No. 155207, 29 April 2005,

457 SCRA 700, 709, citations omitted.
[37]

[38]
Nicol v. Footjoy Industrial Corp., G.R. No. 159372, 27 July
2007, 528 SCRA 300, 318.
[39]
The Letter Agreement contains the interest rate for the
deposit, the maturity date, the stipulated interest rates in case the
principal is withdrawn within a certain period, as well as the 20%
withholding tax.
[40]
Cordova v. Keysas Boutique, G.R. No. 156379, 16
September 2005, 470 SCRA 144, 154, citing Your Bus Lines v. NLRC,
G.R. No. 93381, 28 September 1990, 190 SCRA 160.
[41]

Id.

Id. In this case, the bank certification merely stated that the
spouses/ employer have/has a depository account containing a certain
amount, and that the certification was issued upon the clients request
for whatever legal purposes it may serve them. There was no
indication that the said deposit was made specifically for the pending
appeal, as in the instant case.
[42]

Condo Suite Club Travel, Inc. v. NLRC, G. R. No. 125671,

January 28, 2000, 323 SCRA 679.
[44]
Provident International Resources Corp. v. Court of Appeals,
G. R. No. 119328, 26 July 1996, 259 SCRA 510.
[43]

Conti v. Court of Appeals, G. R. No. 134441, 19 May 1999,

307 SCRA 486 citing Detective & Protective Bureau v. Cloribel, L-23428,
29 November 1968, 26 SCRA 255 and Matute v. Court of Appeals, L26085, 31 January 1969, 26 SCRA 768.
[45]

[46]

Zarate v. Olegario, G.R. No. 90655, 7 October 1996,263

SCRA 1.
Destileria Limtuaco & Co., Inc. v. IAC, L-74369, 29 January
1988, 157 SCRA 706,715.
[47]

Gutib v. Court of Appeals, G.R. No. 131209, 13 August 1999,

312 SCRA 365.
[48]

Santo Tomas University Hospital v.

No. 129718, 17 August 1998, 294 SCRA 382.
[49]

Surla,

G.R.

Filoteo v. Sandiganbayan, G.R. No. 79543, 16 October 1996,

263 SCRA 222.
[50]

Osmea III, et al. v. Sandiganbayan, G.R. No. 116941, 31

[51]

May 2001
Chua, et al. v. Santos, G.R. No. 132467, 440 SCRA 365, 374375, citing MMDA v. JANCON Environmental Corp., G.R. No. 147465, 30
January 2002, 375 SCRA 320.
[52]

[53]
Destileria Limtuaco & Co., Inc. v. IAC, L-74369, 29 January
1988, 157 SCRA 706, 716, citing Republic v. Court of Appeals, L-54886,
10 September 1981, 107 SCRA 504 and Republic v. Court of Appeals,
L-31303-04, 31 May 1978, 83 SCRA 459..

Supra note 46..

[54]

Art. 128 : Visitorial and Enforcement Power of the Secretary of Labor or his duly
authorized representative.
1.

Access to ERs records and premises at anytime of the day or night

whenever work is being undertaken therein;

2.

Question any EE; and

3.

Investigate any fact, condition or matter which may be necessary to

determine violations of this Code of any labor law, wage order or rules
and regulations issued pursuant thereto;

4. Notwithstanding the provisions of Articles 129 and 217 of this Code to

the contrary, and in cases where the relationship of employer-employee
still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to Issue compliance
orders to give effect to the labor standards provisions of the Labor Code
based on the findings of labor employment and enforcement officers or
industrial safety engineers made in the course of inspection. The
Secretary or his duly authorized representatives shall issue writs of
execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of
the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the
course of inspection. An order issued by the duly authorized
representative of the Secretary of DOLE under this Article may be
appealed to the latter. In case said order involves a monetary award, an
appeal by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly
accredited by the Secretary of DOLE in the amount equivalent to the
monetary award in the order appealed from.
5.

Order stoppage of work or suspension of operations of any unit or

department of an establishment when non-compliance with the law or
implementing rules and regulations poses grave and imminent danger
to the health and safety of workers in the workplace. Within 24 hours, a
hearing shall be conducted to determine whether an order for the

stoppage of work or suspension of operations shall be lifted or not. In

case the violation is attributable to the fault of the employer, he shall pay
the employees concerned their salaries or wages during the period of
such stoppage of work or suspension of operation.
6.

It shall be unlawful for any person or entity to obstruct, delay or

otherwise render ineffective the orders of the Secretary of Labor and
Employment or his duly authorized representatives issued pursuant to
the authority granted under this Article, and no inferior court or entity
shall issue temporary or permanent injunction or restraining order or
otherwise assume jurisdiction over any case involving the enforcement
orders issued in accordance with this Article.

7.

Any government EE found guilty of violation of, or abuse of authority,

under this Article shall, after appropriate administrative investigation,
be subject to summary dismissal from the service.

8.

The Secretary of Labor and Employment may, by appropriate

regulations, require employers to keep and maintain such employment
records as may be necessary in aid of his visitorial and enforcement
powers under this Code.