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G.R. No.

189404 December 11, 2013

WILGEN LOON, et. al., Petitioners,
POWER MASTER, INC., et al., Respondents.


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.

LA’s 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 attorney’s 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 LA’s ruling with the National Labor Relations Commission. The
petitioners disputed the LA’s denial of their claim for backwages, overtime, holiday and
premium pays. Meanwhile, the respondents questioned the LA’s 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

Aggrieved. unlike the respondents’ photocopies of the payrolls. 2006. It also upheld the NLRC’s findings on the petitioners’ monetary claims. It pointed out that the payment of money claims was further evidenced by the list of employees with ATM cards. The NLRC denied the petitioners’ motion for reconsideration in a resolution dated April 28. 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.until December 18. Third¸ the attached documentary evidence on the supplemental appeal bore the petitioners’ forged signatures. 2003 the petitioners argued in this last motion that the payrolls should not be given probative value because they were the respondents’ fabrications. It also found that the petitioners’ signatures were not forged. Reply and/or Rejoinder) dated January 31. 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 LA’s processes and gave weight to these pieces of evidence. NLRC ruling: NLRC partially ruled in favor of the LA’s ruling awarding only Holiday pay and attorney’s fees to the petitioner dismissing the claims for salary differential. They reiterated that the genuine payrolls bore their signatures. CA’s Ruling: NLRC’s ruling affirmed. It maintained that the absence of the petitioners’ signatures in the payrolls was not an indispensable factor for their authenticity. 2002. They also maintained that their signatures in the respondents’ documents (which showed their receipt of thirteenth month pay) had been forged. the petitioners filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. . It took judicial notice that many people use at least two or more different signatures. thirteenth month and service incentive leave pays . The CA denied the petitioners’ motion for reconsideration. In their Urgent Motion to Resolve Manifestation and Motion (To Expunge from the Records Respondents’ Supplemental Appeal.

In the present case. and premium pays for holidays and rest days. The petitioners are not entitled to overtime and premium pays However. holiday. SC’s Ruling: The petitioners are entitled to backwages The NLRC and CA’s finding that the petitioners were terminated for just cause and were afforded procedural due process is reversed. In termination cases. the petitioners failed to adduce any evidence that would show that they actually rendered service in . This is exactly what happened in the present case. The rationale for this rule is that the pertinent personnel files. 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. service incentive leave. The employer’s failure to discharge this burden results in the finding that the dismissal is unjustified. records. and thirteenth month pays The NLRC and the CA’s finding that the petitioners are not entitled to salary differential. As in illegal dismissal cases. service incentive. service incentive. holiday. and thirteenth month pays is reversed. the CA was correct in its finding that the petitioners failed to provide sufficient factual basis for the award of overtime. overtime. 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. payrolls. and thirteenth month pays. remittances and other similar documents – which will show that differentials. The petitioners are entitled to salary differential.Issue: Whether the petitioners are entitled to salary differential. 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. the burden of proving just and valid cause for dismissing an employee from his employment rests upon the employer. premium. holiday.

respondents. RODOLFO CORDOVA.excess of the regular eight working hours a day. The termination of their services by reason of the expiration of their contracts of employment was. they could not avail of the law on security of tenure. These workers shall be employed for a fixed period of five months only. and that they in fact worked on holidays and rest days.. 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. VIOLETA CRUSIS. and not regular employees. Consequently. * Facts: Petitioner. Pure Foods Corporation hired contractual workers numbering to 906 for its tuna cannery plant in General Santos City. Aponesto ruled in favor of the Petitioner Company. A complaint of illegal dismissal was lodged by the private respondent against Pure Foods Corporation. The private respondents appealed from the decision to the National Labor Relations Commission (NLRC). The private respondents were mere contractual workers. 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. justified. hence. PURE FOODS CORPORATON. therefore. 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. the contractual workers were out of work after five months. NATIONAL LABOR RELATIONS COMMISSION. petitioner. LA’s Ruling: Labor Arbiter Arturo P. According to the Petitioner. . ET AL.000 personnel. vs.

In its Comment. and morals. their dismissal on account of the expiration of their respective contracts was illegal. The petitioner contended that respondent NLRC committed grave abuse of discretion amounting to lack of jurisdiction in reversing the decision of the Labor Arbiter. Petitioner’s motion for reconsideration was denied. 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. . Hence. the case was elevated to CA. The petitioner maintained that the private respondents were estopped by their express conformity with the five-month duration of their employment contracts. since they performed activities necessary and desirable in the business or trade of the petitioner. therefore. public policy. The expiration of the contract did not. justify the termination of their employment. CA’s ruling: NLRC’s decision affirmed. The period of employment stipulated in the contracts of employment was null and void for being contrary to law and public policy. 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. as its purpose was to circumvent the law on security of tenure. Hence. the Office of the Solicitor General (OSG) advances the argument that the private respondents were regular employees. 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.NLRC’s 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.

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. 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. in effect. Now on the validity of private respondents' five-month contracts of employment. v. this Court has upheld the legality of fixed-term employment. But. to the . Indeed. therefore. Almost always.Held: Yes. they should be struck down or disregarded as contrary to public policy and morals. The five-month period specified in private respondents employment contracts having been imposed precisely to circumvent the constitutional guarantee on security of tenure should. be struck down or disregarded as contrary to public policy or morals. In the leading case of Brent School. 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. 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. thereby violating the employees security of tenure in their jobs. To uphold the contractual arrangement between the petitioner and the private respondents would. duress. None of these criteria had been met in the present case. 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. or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent. Zamora. Inc. permit the former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis. 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. 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. which was reaffirmed in numerous subsequent cases.

security of tenure has no value. .unemployed. 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.