DOJ OPINION NO. 174, s. 1988
August 26, 1988

Secretary Franklin M. Drilon
Department of Labor and Employment
M a n i l a

S i r :

        This refers to your request for opinion on whether the Department of Labor and Employment (DOLE) or the Department of Agrarian Reform (DAR) has the authority to adjudicate disputes involving money claims arising from the production sharing provisions of Section 16, Executive Order No. 229 (Comprehensive Agrarian Reform Program) in relation to Section 17 of the same Executive Order.

        You state that under Article 217 of the Labor Code, "the Labor Arbiters and the Commission (National Labor Relations Commission) shall have original and exclusive jurisdiction to hear and decide . . . the following cases involving all workers, whether agricultural or non-agricultural.

"1.     xxx                    xxx                    xxx

"3.     All money claims of workers, including those based on non-payment or under payment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims or employees compensation, social security, Medicare and maternity benefits."

        In the light of the enactment of Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of 1988), which has modified some of the provisions in the aforesaid executive order, we shall delve on the pertinent provisions in the new Act, related to production-sharing, viz:

"SEC. 3.        Definitions. — For the purpose of this Act, unless the context indicates otherwise:

"(a)    Agrarian Reform means redistribution of lands, regardless of crops or fruits produced, to farmers and regular farmworkers who are landless, irrespective of tenurial arrangement, to include the totality of factors, and support services designed to lift the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands, such as production or profit-sharing, labor administration, and the distribution of shares of stock, which will allow beneficiaries to receive a just share of the fruits of the lands they work."

xxx                    xxx                    xxx

"SEC. 13.      Producing-sharing Plan — Any enterprise adopting the scheme provided for in Section 32 hereof or operating under a production venture, lease, management contract or other similar arrangement and any farm covered by Section 8 and 11 hereof is hereby mandated to execute within ninety (90) days from the effectivity of this Act, a production-sharing plan, under guidelines prescribed by the appropriate government agency.

"Nothing herein shall be construed to sanction the diminution of any benefits such as salaries, bonuses, leaves and working condition granted to the employee beneficiaries under existing laws, agreements, and voluntary practice by the enterprise, nor shall the enterprise and its employee-beneficiaries be prevented from entering into any agreement with terms more favorable to the latter."

xxx                    xxx                    xxx

"SEC. 32.         Production-Sharing. — Pending final land transfer, individuals or entities owning, or operating under lease or management contract, agricultural lands are hereby mandated to execute a production-sharing plan with their farmworkers or farmworkers organization, if any, whereby three (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as compensation to regular and another farmworkers in such lands over and above the compensation they lands over and above the compensation they recently received: Provided, that these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determines a lower ceiling.

"In the event that the individual or entity releases a profit, an additional ten percent (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days at the end of the fiscal year.

"To forestall any disruption in the normal operation of lands to be turned over to the farmworker-beneficiaries mentioned above, a transitory period, the length of which shall be determined by the DAR, shall be established.

"During this transitory period, at least one percent (1%) of the sales gross of the entity shall be distributed to the managerial, supervisory and technical group in place at the time of the effectivity of this Act, as compensation for such transitory managerial and technical functions as it will perform pursuant to an agreement that the farmworker-beneficiaries and the managerial, supervisory and technical group may conclude, subject to the approval of the DAR."

"xxx                    xxx                    xxx

"SEC. 49.      Rules and regulations. — The PARC and the DAR shall have the power to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect ten (10) days after publication in two (2) national newspapers of general circulation."

"SEC. 50.      Quasi-Judicial Powers of the DAR. — The DAR is hereby vested primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agricultural (DA) and the Department of Environment and Natural Resources (DENR).

xxx                    xxx                    xxx"

        It will be seen from the definition is Section 3(a) of R.A. 6657 that "Agrarian Reform" includes all other arrangements alternative to the physical redistribution of lands such as production such as production or profit-sharing. The aforesaid Act also explicitly grants the DAR quasi-judicial powers vesting it with primary jurisdiction to determine and adjudicate agrarian reform matters and in the exercise of said power, it shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources (Section 50). In the implementation of the exercise of the powers under the Act, the Presidential Agrarian Reform Council and the DAR have the power to issue rules and regulations to carry out the objectives and purposes of the Act (Section 49).

        Moreover, it is a familiar rule of statutory construction that where there are two statutes, one which is special and particular and certainly includes the matter in question and the other general which, if standing alone, would include the same matter and thus conflict with the special act or provision, the special act must be taken as intended to constitute an exception to the general rule, as the legislature is not presumed to have intended a conflict (Gonzaga, Statutes and Their Constructions, p. 232). The Comprehensive Agrarian Reform Law is a special law and of later enactment than the Labor Code so that if conflict exists between the provisions of the former and the latter act, the Comprehensive Agrarian Reform Law should prevail over the Labor Code.

        In view of all the foregoing, we are of the opinion that the DAR has the authority to adjudicate disputes involving money claims arising from the production-sharing provisions of R.A. No. 6657.

        Please be guided accordingly.

Very truly yours,

(SGD.) SEDFREY A. ORDOÑEZ

Secretary of Justice