G.R. No.
189404 December 11, 2013
WILGEN LOON, et. al., Petitioners,
vs.
POWER MASTER, INC., et al., Respondents.
Facts:
Wilgen Loon and several others filed a complaint against Power Master, Tri-C, and
spouses Alumisin underpayment of minimum wages, overtime, holiday, premium, service
incentive leave, and thirteenth month pays. They further averred that the respondents made them
sign blank payroll sheets. On June 11, 2001, the petitioners amended their complaint and
included illegal dismissal as their cause of action.
LAs Ruling:
The Labor Arbiter (LA) Elias H. Salinas partially ruled in favor of the petitioners. The LA
awarded the petitioners salary differential, service incentive leave, and thirteenth month pays. In
awarding these claims, the LA stated that the burden of proving the payment of these money
claims rests with the employer. The LA also awarded attorneys fees in favor of the petitioners,
pursuant to Article 111 of the Labor Code.
However, claims for backwages, overtime, holiday, and premium pays were dismissed due to
insufficiency of evidence. Illegal dismissal was not also entertained because of failure to present
notice of termination of employment.
Both parties appealed the LAs ruling with the National Labor Relations Commission. The
petitioners disputed the LAs denial of their claim for backwages, overtime, holiday and
premium pays. Meanwhile, the respondents questioned the LAs ruling on the ground that the
LA did not acquire jurisdiction over their persons.
Respondents, on their January 2003, attached photocopied and computerized copies of list of
employees with automated teller machine (ATM) cards to the supplemental appeal together
with the list of amounts allegedly deposited in the employees ATM cards.
On January 22, 2003, the petitioners filed an Urgent Manifestation and Motion where they
asked for the deletion of the supplemental appeal from the records because it allegedly suffered
from infirmities. First, the supplemental appeal was not verified. Second, it was belatedly filed
six months from the filing of the respondents notice of appeal with memorandum on appeal. The
petitioners pointed out that they only agreed to the respondents filing of a responsive pleading
until December 18, 2002. Third the attached documentary evidence on the supplemental appeal
bore the petitioners forged signatures.
In their Urgent Motion to Resolve Manifestation and Motion (To Expunge from the
Records Respondents Supplemental Appeal, Reply and/or Rejoinder) dated January 31,
2003 the petitioners argued in this last motion that the payrolls should not be given probative
value because they were the respondents fabrications. They reiterated that the genuine payrolls
bore their signatures, unlike the respondents photocopies of the payrolls. They also maintained
that their signatures in the respondents documents (which showed their receipt of thirteenth
month pay) had been forged.
NLRC ruling:
NLRC partially ruled in favor of the LAs ruling awarding only Holiday pay and attorneys fees to the
petitioner dismissing the claims for salary differential, thirteenth month and service incentive
leave pays . It allowed the respondents to submit pieces of evidence for the first time on
appeal on the ground that they had been deprived of due process for failure to receive LAs
processes and gave weight to these pieces of evidence. The unverified supplemental appeal of
the respondents was admitted disregarding the technicalities of Rule of Procedure to serve the
greater interest of substantial due process.
It maintained that the absence of the petitioners signatures in the payrolls was not an
indispensable factor for their authenticity. It pointed out that the payment of money claims was
further evidenced by the list of employees with ATM cards. It also found that the petitioners
signatures were not forged. It took judicial notice that many people use at least two or more
different signatures.
The NLRC denied the petitioners motion for reconsideration in a resolution dated April 28,
2006. Aggrieved, the petitioners filed a petition for certiorari under Rule 65 of the Rules of
Court before the CA.
CAs Ruling:
NLRCs ruling affirmed. It also upheld the NLRCs findings on the petitioners monetary claims.
The CA denied the petitioners motion for reconsideration.
Issue:
Whether the petitioners are entitled to salary differential, overtime, holiday, premium,
service incentive leave, and thirteenth month pays.
SCs Ruling:
The petitioners are entitled to
backwages
The NLRC and CAs finding that the petitioners were terminated for just cause and were
afforded procedural due process is reversed. In termination cases, the burden of proving just and
valid cause for dismissing an employee from his employment rests upon the employer. The
employers failure to discharge this burden results in the finding that the dismissal is unjustified.
This is exactly what happened in the present case.
The petitioners are entitled to salary
differential, service incentive,
holiday, and thirteenth month pays
The NLRC and the CAs finding that the petitioners are not entitled to salary differential, service
incentive, holiday, and thirteenth month pays is reversed. As in illegal dismissal cases, the
general rule is that the burden rests on the defendant to prove payment rather than on the plaintiff
to prove non-payment of these money claims. The rationale for this rule is that the pertinent
personnel files, payrolls, records, remittances and other similar documents which will show
that differentials, service incentive leave and other claims of workers have been paid are not in
the possession of the worker but are in the custody and control of the employer.
The petitioners are not entitled to
overtime and premium pays
However, the CA was correct in its finding that the petitioners failed to provide sufficient factual
basis for the award of overtime, and premium pays for holidays and rest days. The burden of
proving entitlement to overtime pay and premium pay for holidays and rest days rests on the
employee because these are not incurred in the normal course of business. In the present case, the
petitioners failed to adduce any evidence that would show that they actually rendered service in
excess of the regular eight working hours a day, and that they in fact worked on holidays and rest
days.
PURE FOODS CORPORATON, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETA
CRUSIS, ET AL., respondents.
*
Facts:
Petitioner, Pure Foods Corporation hired contractual workers numbering to 906 for its
tuna cannery plant in General Santos City. These workers shall be employed for a fixed period of
five months only. According to the Petitioner, it has been there practice to hire workers to work
for five months period only which if added since the practice began up to January 1990 would
sum up to 10,000 personnel. Consequently, the contractual workers were out of work after five
months.
A complaint of illegal dismissal was lodged by the private respondent against Pure Foods
Corporation. Pure Foods moved for the dismissal of the case grounded on the premise that since
the private petitioners were contractual workers they could not avail the law on security of
tenure. It also maintained that there was an agreement between them and the private respondent
which was signed by the latter to render services for five months only.
LAs Ruling:
Labor Arbiter Arturo P. Aponesto ruled in favor of the Petitioner Company. The private
respondents were mere contractual workers, and not regular employees; hence, they
could not avail of the law on security of tenure. The termination of their services by
reason of the expiration of their contracts of employment was, therefore, justified.
The private respondents appealed from the decision to the National Labor Relations
Commission (NLRC).
NLRCs Ruling:
The NLRC affirmed the Labor Arbiter's decision but later rendered another
decision vacating and setting aside its previous decision holding that the private
respondents and their co-complainants were regular employees.
It declared that the contract of employment for five months was a clandestine scheme
employed by [the petitioner] to stifle [private respondents] right to security of tenure and
should therefore be struck down and disregarded for being contrary to law, public policy,
and morals. Hence, their dismissal on account of the expiration of their respective
contracts was illegal.
Petitioners motion for reconsideration was denied. Hence, the case was elevated to
CA.
The petitioner contended that respondent NLRC committed grave abuse of
discretion amounting to lack of jurisdiction in reversing the decision of the Labor Arbiter.
The petitioner maintained that the private respondents were estopped by their express
conformity with the five-month duration of their employment contracts. Petitioner also
argued that private respondents fell within the exception provided in Article 280 of the
Labor Code which reads: [E]xcept where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee.
In its Comment, the Office of the Solicitor General (OSG) advances the argument that
the private respondents were regular employees, since they performed activities
necessary and desirable in the business or trade of the petitioner. The period of
employment stipulated in the contracts of employment was null and void for being
contrary to law and public policy, as its purpose was to circumvent the law on security of
tenure. The expiration of the contract did not, therefore, justify the termination of their
employment.
CAs ruling:
NLRCs decision affirmed.
Issue:
Whether employees hired for a definite period and whose services are necessary and
desirable in the usual business or trade of the employer are regular employees.
Held:
Yes.
The five-month period specified in private respondents employment contracts having
been imposed precisely to circumvent the constitutional guarantee on security of tenure
should, therefore, be struck down or disregarded as contrary to public policy or morals. To
uphold the contractual arrangement between the petitioner and the private respondents
would, in effect, permit the former to avoid hiring permanent or regular employees by
simply hiring them on a temporary or casual basis, thereby violating the employees
security of tenure in their jobs.
Now on the validity of private respondents' five-month contracts of employment. In
the leading case of Brent School, Inc. v. Zamora, which was reaffirmed in numerous
subsequent cases, this Court has upheld the legality of fixed-term employment. It ruled
that the decisive determinant in term employment should not be the activities that the
employee is called upon to perform but the day certain agreed upon by the parties for the
commencement and termination of their employment relationship. But, this Court went on
to say that where from the circumstances it is apparent that the periods have been
imposed to preclude acquisition of tenurial security by the employee, they should be
struck down or disregarded as contrary to public policy and morals.
Brent also laid down the criteria under which term employment cannot be said to be
in circumvention of the law on security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the
parties without any force, duress, or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other
on more or less equal terms with no moral dominance exercised by the former or the
latter.
None of these criteria had been met in the present case. As pointed out by the private
respondents:
It could not be supposed that private respondents and all other so-called casual
workers of [the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month
employment contract. Cannery workers are never on equal terms with their
employers. Almost always, they agree to any terms of an employment contract just to
get employed considering that it is difficult to find work given their ordinary
qualifications. Their freedom to contract is empty and hollow because theirs is the
freedom to starve if they refuse to work as casual or contractual workers. Indeed, to the
unemployed, security of tenure has no value. It could not then be said that petitioner
and private respondents "dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter.
