Meteoro et al v.

Creative Creatures
G.R. No. 171275; Jul. 13, 2009; Nachura, J.
Digest prepared by Paolo Tamase
A. Facts
1. CREATIVE Creatures, Inc. is a business that primarily caters to the production
design requirements of ABS-CBN. CREATIVE hired the 33 PETITIONERS as
artists, carpenters, and welders to design, create, assemble, set-up and
dismantle the props of production sets.
2. [Feb./Mar. 1999] PETITIONERS filed complaints for non-payment and
illegal deductions with DOLE-NCR. The benefits allegedly unpaid were the
night-shift differential, overtime, holiday, 12 th month, premium (Sunday
and/or rest day), SIL, and paternity leave pay, and other benefits.
a. During investigation, the labor inspector noted that records were
not made available, and that CREATIVE claimed the
PETITIONERS were independent talent workers.
b. In their position paper, CREATIVE argued that DOLE had no
jurisdiction since there is an absence of an employer-employee
relationship, as PETITIONERS were free-lance
3. [Apr. 1999] PETITIONERS filed complaints for illegal dismissal with
payment with the NLRC.
4. [Oct. 1999] The DOLE Regional Director issued an Order in the DOLENCR case, directing CREATIVE to pay the money claims (totaling P2.7
Million).
a. The Reg. Director sustained PETITIONERs claim (1) of an employeremployee relationship, and (2) that they were regular employees,
and that (3) DOLE had jurisdiction
b. On appeal, the DOLE Secretary affirmed the Regional Director. She
anchored DOLEs jurisdiction on the agencys visitorial and
enforcement powers.
5. [May 2005] The CA declared the DOLE decisions as null and void.
a. It noted that under art. 128, the Regional Director may be divested of
jurisdiction when the respondent disputes the existence of an
employer-employee relationship, as in this case.
b. It no longer referred the case to the NLRC as there was one pending
already.
B. Issue: WON the DOLE was divested of jurisdiction, i.e. the case falls within the
exception clause in art. 128(b) of the Labor Code. YES
C. Held: Petition dismissed; CA decision, affirmed. The case falls within the
exclusive jurisdiction of the NLRC.
D. Ratio:
1. The DOLE Secretary or her authorized representative has jurisdiction to
enforce compliance with labor standards under their broad visitorial and
enforcement powers in art. 128.
2. Legislative history: Art. 128 has gone through several amendments. In
Servandos v. SOLE, the Court held that the DOLE did not have visitorial and
enforcement powers when the amounts claimed exceed P5,000. This would
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later be reversed in Guico v. Quisumbing, Allied Investigation v. SOLE, and

Cireneo v. Bowling. In any event, the issue was settled by R.A. No. 7730,
which freed art. 128(b) from the jurisdiction restrictions in art. 129 and 217.
Nevertheless, the power of the Regional Director to hear and decide
monetary claims is not absolute. Under art. 128(b), there is an exception
clause, which divests the DOLE of jurisdiction when the following elements
all concur: (1) the employer contests and raises issues with the findings of
the inspector; (2) in order to resolve the issues, there is a need to examine
evidentiary matters; and (3) the matters are not verifiable in the
normal course of inspection.
The CA correctly applied the exception clause: (1) CREATIVE registered its
objection during inspection and in its position paper, and it continues to
contest the DOLE jurisdiction; (2) there is a need to examine evidentiary
matters, since the four-fold test involves questions of fact; (3) the key
requirement, that the evidentiary matters are not verifiable in the normal
course of inspection, is also present, since while the check vouchers could be
readily verified, the claims of CREATIVE that the PETITIONERS were not
working exclusively for them could not.
To contest does not mean to simply raise lack of jurisdiction, but to
question the findings of the inspection.
In sum, because the three requisites have been met, the DOLE Reg. Director
should have endorsed the case to the NLRC.