G.R. No. 118506 April 18, 1997 3.

That we are all (8) employees in the hotel and assigned

in each respective shifts;
NORMA MABEZA, petitioner,
vs. 4. That we have no complaints against the management
NATIONAL LABOR RELATIONS COMMISSION, PETER NG/HOTEL of the Hotel Supreme as we are paid accordingly and that
SUPREME, respondents. we are treated well.

5. That we are executing this affidavit voluntarily without

any force or intimidation and for the purpose of informing
KAPUNAN, J.: the authorities concerned and to dispute the alleged
report of the Labor Inspector of the Department of Labor
This petition seeking the nullification of a resolution of public respondent and Employment conducted on the said establishment on
National Labor Relations Commission dated April 28, 1994 vividly February 2, 1991.
illustrates why courts should be ever vigilant in the preservation of the
constitutionally enshrined rights of the working class. Without the IN WITNESS WHEREOF, we have hereunto set our
protection accorded by our laws and the tempering of courts, the natural hands this 7th day of May, 1991 at Baguio City,
and historical inclination of capital to ride roughshod over the rights of Philippines.
labor would run unabated.
(Sgd.) (Sgd.) (Sgd.)
The facts of the case at bar, culled from the conflicting versions of SYLVIA IGAMA HERMINIGILDO AQUINO EVELYN
petitioner and private respondent, are illustrative. OGOY

Petitioner Norma Mabeza contends that around the first week of May, (Sgd.) (Sgd.) (Sgd.)
1991, she and her co-employees at the Hotel Supreme in Baguio City MACARIA JUGUETA ADELAIDA NONOG NORMA
were asked by the hotel's management to sign an instrument attesting to MABEZA.
the latter's compliance with minimum wage and other labor standard
provisions of law. 1 The instrument provides: 2 (Sgd.) (Sgd.)
JONATHAN PICART JOSE DIZON
JOINT AFFIDAVIT
SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at
We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN Baguio City, Philippines.
OGOY, MACARIA JUGUETA, ADELAIDA NONOG,
NORMA MABEZA, JONATHAN PICART and JOSE Asst. City Prosecutor
DIZON, all of legal ages (sic), Filipinos and residents of
Baguio City, under oath, depose and say: Petitioner signed the affidavit but refused to go to the City Prosecutor's
Office to swear to the veracity and contents of the affidavit as instructed
1. That we are employees of Mr. Peter L. Ng of his Hotel by management. The affidavit was nevertheless submitted on the same
Supreme situated at No. 416 Magsaysay Ave., Baguio day to the Regional Office of the Department of Labor and Employment
City. in Baguio City.

2. That the said Hotel is separately operated from the As gleaned from the affidavit, the same was drawn by management for
Ivy's Grill and Restaurant; the sole purpose of refuting findings of the Labor Inspector of DOLE (in
an inspection of respondent's establishment on February 2, 1991)
apparently adverse to the private respondent. 3
After she refused to proceed to the City Prosecutor's Office — on the
same day the affidavit was submitted to the Cordillera Regional Office of
DOLE — petitioner avers that she was ordered by the hotel management
to turn over the keys to her living quarters and to remove her belongings
from the hotel
premises. 4 According to her, respondent strongly chided her for refusing
to proceed to the City Prosecutor's Office to attest to the affidavit. 5 She
thereafter reluctantly filed a leave of absence from her job which was
denied by management. When she attempted to return to work on May
10, 1991, the hotel's cashier, Margarita Choy, informed her that she
should not report to work and, instead, continue with her unofficial leave
of absence. Consequently, on May 13, 1991, three days after her attempt
to return to work, petitioner filed a complaint for illegal dismissal before
the Arbitration Branch of the National Labor Relations Commission —
CAR Baguio City. In addition to her complaint for illegal dismissal, she
alleged underpayment of wages, non-payment of holiday pay, service
incentive leave pay, 13th month pay, night differential and other benefits.
The complaint was docketed as NLRC Case No. RAB-CAR-05-0198-91
and assigned to Labor Arbiter Felipe P. Pati.
Responding to the allegations made in support of petitioner's complaint
for illegal dismissal, private respondent Peter Ng alleged before Labor
Arbiter Pati that petitioner "surreptitiously left (her job) without notice to
the management" 6 and that she actually abandoned her work. He
maintained that there was no basis for the money claims for
underpayment and other benefits as these were paid in the form of
facilities to petitioner and the hotel's other employee. 7 Pointing to the
Affidavit of May 7, 1991, the private respondent asserted that his
employees actually have no problems with management. In a
supplemental answer submitted eleven (11) months after the original
complaint for illegal dismissal was filed, private respondent raised a new
ground, loss of confidence, which was supported by a criminal complaint
for Qualified Theft he filed before the prosecutor's office of the City of
Baguio against petitioner on July 4, 1991. 8
On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing
petitioner's complaint on the ground of loss of confidence. His
disquisitions in support of his conclusion read as follows:
It appears from the evidence of respondent that
complainant carted away or stole one (1) blanket, 1 piece
bedsheet, 1 piece thermos, 2 pieces towel (Exhibits "9",
"9-A," "9-B," "9-C" and "10" pages 12-14 TSN, December
1, 1992).
In fact, this was the reason why respondent Peter Ng
lodged a criminal complaint against complainant for
qualified theft and perjury. The fiscal's office finding
a prima facie evidence that complainant committed the
crime of qualified theft issued a resolution for its filing in
court but dismissing the charge of perjury (Exhibit "4" for
respondent and Exhibit "B-7" for complainant). As a
consequence, complainant was charged in court for the
said crime (Exhibit "5" for respondent and Exhibit "B-6" for
the complainant).
With these pieces of evidence, complainant committed
serious misconduct against her employer which is one of
the just and valid grounds for an employer to terminate an
employee (Article 282 of the Labor Code as amended). 9
On April 28, 1994, respondent NLRC promulgated its assailed
Resolution 10 — affirming the Labor Arbiter's decision. The resolution
substantially incorporated the findings of the Labor Arbiter. 11 Unsatisfied,
petitioner instituted the instant special civil action for certiorari under Rule
65 of the Rules of Court on the following grounds: 12
1. WITH ALL DUE RESPECT, THE HONORABLE
NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR
AMOUNTING TO GRAVE ABUSE OF DISCRETION IN
ITS FAILURE TO CONSIDER THAT THE ALLEGED
LOSS OF CONFIDENCE IS A FALSE CAUSE AND AN
AFTERTHOUGHT ON THE PART OF THE
RESPONDENT-EMPLOYER TO JUSTIFY, ALBEIT
ILLEGALLY, THE DISMISSAL OF THE COMPLAINANT
FROM HER EMPLOYMENT;
2. WITH ALL DUE RESPECT, THE HONORABLE
NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR
AMOUNTING TO GRAVE ABUSE OF DISCRETION IN
ADOPTING THE RULING OF THE LABOR ARBITER
THAT THERE WAS NO UNDERPAYMENT OF WAGES
 AND BENEFITS ON THE BASIS OF EXHIBIT "8" (AN
UNDATED SUMMARY OF COMPUTATION PREPARED
BY ALLEGEDLY BY RESPONDENT'S EXTERNAL
ACCOUNTANT) WHICH IS TOTALLY INADMISSIBLE
AS AN EVIDENCE TO PROVE PAYMENT OF WAGES
AND BENEFITS;
3. WITH ALL DUE RESPECT, THE HONORABLE
NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR
AMOUNTING TO GRAVE ABUSE OF DISCRETION IN
FAILING TO CONSIDER THE EVIDENCE ADDUCED
BEFORE THE LABOR ARBITER AS CONSTITUTING
UNFAIR LABOR PRACTICE COMMITTED BY THE
RESPONDENT.
The Solicitor General, in a Manifestation in lieu of Comment dated
August 8, 1995 rejects private respondent's principal claims and
defenses and urges this Court to set aside the public respondent's
assailed resolution. 13
We agree.
It is settled that in termination cases the employer bears the burden of
proof to show that the dismissal is for just cause, the failure of which
would mean that the dismissal is not justified and the employee is entitled
to reinstatement. 14
In the case at bar, the private respondent initially claimed that petitioner
abandoned her job when she failed to return to work on May 8, 1991.
Additionally, in order to strengthen his contention that there existed
sufficient cause for the termination of petitioner, he belatedly included a
complaint for loss of confidence, supporting this with charges that
petitioner had stolen a blanket, a bedsheet and two towels from the
hotel. 15 Appended to his last complaint was a suit for qualified theft filed
with the Baguio City prosecutor's office.
From the evidence on record, it is crystal clear that the circumstances
upon which private respondent anchored his claim that petitioner
"abandoned" her job were not enough to constitute just cause to sanction
the termination of her services under Article 283 of the Labor Code. For
abandonment to arise, there must be concurrence of two things: 1) lack
of intention to work; 16 and 2) the presence of overt acts signifying the
employee's intention not to work. 17
In the instant case, respondent does not dispute the fact that petitioner
tried to file a leave of absence when she learned that the hotel
management was displeased with her refusal to attest to the affidavit.
The fact that she made this attempt clearly indicates not an intention to
abandon but an intention to return to work after the period of her leave of
absence, had it been granted, shall have expired.
Furthermore, while absence from work for a prolonged period may
suggest abandonment in certain instances, mere absence of one or two
days would not be enough to sustain such a claim. The overt act
(absence) ought
to unerringly point to the fact that the employee has no intention to return
to work, 18 which is patently not the case here. In fact, several days after
she had been advised to take an informal leave, petitioner tried to
resume working with the hotel, to no avail. It was only after she had been
repeatedly rebuffed that she filed a case for illegal dismissal. These acts
militate against the private respondent's claim that petitioner abandoned
her job. As the Solicitor General in his manifestation observed:
Petitioner's absence on that day should not be construed
as abandonment of her job. She did not report because
the cashier told her not to report anymore, and that
private respondent Ng did not want to see her in the hotel
premises. But two days later or on the 10th of May, after
realizing that she had to clarify her employment status,
she again reported for work. However, she was prevented
from working by private respondents. 19
We now come to the second cause raised by private respondent to
support his contention that petitioner was validly dismissed from her job.
Loss of confidence as a just cause for dismissal was never intended to
provide employers with a blank check for terminating their employees.
Such a vague, all-encompassing pretext as loss of confidence, if
unqualifiedly given the seal of approval by this Court, could readily
reduce to barren form the words of the constitutional guarantee of
security of tenure. Having this in mind, loss of confidence should ideally
apply only to cases involving employees occupying positions of trust and
confidence or to those situations where the employee is routinely
charged with the care and custody of the employer's money or property.
To the first class belong managerial employees, i.e., those vested with
the powers or prerogatives to lay down management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions; and to the
second class belong cashiers, auditors, property custodians, etc., or
those who, in the normal and routine exercise of their functions, regularly
handle significant amounts of money or property. Evidently, an ordinary
chambermaid who has to sign out for linen and other hotel property from
the property custodian each day and who has to account for each and
every towel or bedsheet utilized by the hotel's guests at the end of her
shift would not fall under any of these two classes of employees for which
loss of confidence, if ably supported by evidence, would normally apply.
Illustrating this distinction, this Court in Marina Port Services,
Inc. vs. NLRC, 20 has stated that:
To be sure, every employee must enjoy some degree of
trust and confidence from the employer as that is one
reason why he was employed in the first place. One
certainly does not employ a person he distrusts. Indeed,
even the lowly janitor must enjoy that trust and confidence
in some measure if only because he is the one who
opens the office in the morning and closes it at night and
in this sense is entrusted with the care or protection of the
employer's property. The keys he holds are the symbol of
that trust and confidence.
By the same token, the security guard must also be
considered as enjoying the trust and confidence of his
employer, whose property he is safeguarding. Like the
janitor, he has access to this property. He too, is charged
with its care and protection.
Notably, however, and like the janitor again, he is
entrusted only with the physical task of protecting that
property. The employer's trust and confidence in him is
limited to that ministerial function. He is not entrusted, in
the Labor Arbiter's words, with the duties of safekeeping
and safeguarding company policies, management
instructions, and company secrets such as operation
devices. He is not privy to these confidential matters,
which are shared only in the higher echelons of
management. It is the persons on such levels who,
because they discharge these sensitive duties, may be
considered holding positions of trust and confidence. The
security guard does not belong in such category. 21
More importantly, we have repeatedly held that loss of confidence should
not be simulated in order to justify what would otherwise be, under the
provisions of law, an illegal dismissal. "It should not be used as a
subterfuge for causes which are illegal, improper and unjustified. It must
be genuine, not a mere afterthought to justify an earlier action taken in
bad faith." 22
In the case at bar, the suspicious delay in private respondent's filing of
qualified theft charges against petitioner long after the latter exposed the
hotel's scheme (to avoid its obligations as employer under the Labor
Code) by her act of filing illegal dismissal charges against the private
respondent would hardly warrant serious consideration of loss of
confidence as a valid ground for dismissal. Notably, the Solicitor General
has himself taken a position opposite the public respondent and has
observed that:
If petitioner had really committed the acts charged against
her by private respondents (stealing supplies of
respondent hotel), private respondents should have
confronted her before dismissing her on that ground.
Private respondents did not do so. In fact, private
respondent Ng did not raise the matter when petitioner
went to see him on May 9, 1991, and handed him her
application for leave. It took private respondents 52 days
or up to July 4, 1991 before finally deciding to file a
criminal complaint against petitioner, in an obvious
attempt to build a case against her.
The manipulations of private respondents should not be
countenanced. 23
Clearly, the efforts to justify petitioner's dismissal — on top of the private
respondent's scheme of inducing his employees to sign an affidavit
absolving him from possible violations of the Labor Code — taints with
evident bad faith and deliberate malice petitioner's summary termination
from employment.
Having said this, we turn to the important question of whether or not the
dismissal by the private respondent of petitioner constitutes an unfair
labor practice.
The answer in this case must inevitably be in the affirmative.
The pivotal question in any case where unfair labor practice on the part of
the employer is alleged is whether or not the employer has exerted
pressure, in the form of restraint, interference or coercion, against his
employee's right to institute concerted action for better terms and
conditions of employment. Without doubt, the act of compelling
employees to sign an instrument indicating that the employer observed
labor standards provisions of law when he might have not, together with
the act of terminating or coercing those who refuse to cooperate with the
employer's scheme constitutes unfair labor practice. The first act clearly
preempts the right of the hotel's workers to seek better terms and
conditions of employment through concerted action.
We agree with the Solicitor General's observation in his manifestation
that "[t]his actuation . . . is analogous to the situation envisaged in
paragraph (f) of Article 248 of the Labor Code" 24 which distinctly makes it
an unfair labor practice "to dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given or being about to give
testimony" 25 under the Labor Code. For in not giving positive testimony in
favor of her employer, petitioner had reserved not only her right to
dispute the claim and proffer evidence in support thereof but also to work
for better terms and conditions of employment.
For refusing to cooperate with the private respondent's scheme,
petitioner was obviously held up as an example to all of the hotel's
employees, that they could only cause trouble to management at great
personal inconvenience. Implicit in the act of petitioner's termination and
the subsequent filing of charges against her was the warning that they
would not only be deprived of their means of livelihood, but also possibly,
their personal liberty.
This Court does not normally overturn findings and conclusions of quasi-
judicial agencies when the same are ably supported by the evidence on
record. However, where such conclusions are based on a misperception
of facts or where they patently fly in the face of reason and logic, we will
not hesitate to set aside those conclusions. Going into the issue of
petitioner's money claims, we find one more salient reason in this case to
set things right: the labor arbiter's evaluation of the money claims in this
case incredibly ignores existing law and jurisprudence on the matter. Its
blatant one-sidedness simply raises the suspicion that something more
than the facts, the law and jurisprudence may have influenced the
decision at the level of the Arbiter.
Labor Arbiter Pati accepted hook, line and sinker the private respondent's
bare claim that the reason the monetary benefits received by petitioner
between 1981 to 1987 were less than minimum wage was because
petitioner did not factor in the meals, lodging, electric consumption and
water she received during the period in her computations. 26 Granting that
meals and lodging were provided and indeed constituted facilities, such
facilities could not be deducted without the employer complying first with
certain legal requirements. Without satisfying these requirements, the
employer simply cannot deduct the value from the employee's ages.
First, proof must be shown that such facilities are customarily furnished
by the trade. Second, the provision of deductible facilities must be
voluntarily accepted in writing by the employee. Finally, facilities must be
charged at fair and reasonable value. 27
These requirements were not met in the instant case. Private respondent
"failed to present any company policy or guideline to show that the meal
and lodging . . . (are) part of the salary;" 28 he failed to provide proof of the
employee's written authorization; and, he failed to show how he arrived at
the valuations. 29
Curiously, in the case at bench, the only valuations relied upon by the
labor arbiter in his decision were figures furnished by the private
respondent's own accountant, without corroborative evidence. On the
pretext that records prior to the July 16, 1990 earthquake were lost or
destroyed, respondent failed to produce payroll records, receipts and
other relevant documents, where he could have, as has been pointed out
in the Solicitor General's manifestation, "secured certified copies thereof
from the nearest regional office of the Department of Labor, the SSS or
the BIR." 30
More significantly, the food and lodging, or the electricity and water
consumed by the petitioner were not facilities but supplements. A benefit
or privilege granted to an employee for the convenience of the employer
is not a facility. The criterion in making a distinction between the two not
so much lies in the kind (food, lodging) but the purpose. 31 Considering,
therefore, that hotel workers are required to work different shifts and are
expected to be available at various odd hours, their ready availability is a
necessary matter in the operations of a small hotel, such as the private
respondent's hotel.
It is therefore evident that petitioner is entitled to the payment of the
deficiency in her wages equivalent to the fullwage applicable from May
13, 1988 up to the date of her illegal dismissal.
Additionally, petitioner is entitled to payment of service incentive leave
pay, emergency cost of living allowance, night differential pay, and 13th
month pay for the periods alleged by the petitioner as the private
respondent has never been able to adduce proof that petitioner was paid
the aforestated benefits.
However, the claims covering the period of October 1987 up to the time
of filing the case on May 13, 1988 are barred by prescription as P.D. 442
(as amended) and its implementing rules limit all money claims arising
out of employer-employee relationship to three (3) years from the time
the cause of action accrues. 32
police and added as a supplemental answer to petitioner's complaint.
Clearly, the dismissal of petitioner without the benefit of notice and
hearing prior to her termination violated her constitutional right to due
process. Under the circumstance an award of One Thousand Pesos
(P1,000.00) on top of payment of the deficiency in wages and benefits for
the period aforestated would be proper.
WHEREFORE, premises considered, the RESOLUTION of the National
Labor Relations Commission dated April 24, 1994 is REVERSED and
SET ASIDE, with costs. For clarity, the economic benefits due the
petitioner are hereby summarized as follows:

We depart from the settled rule that an employee who is unjustly 1) Deficiency wages and the applicable ECOLA from May 13, 1988 up to
dismissed from work normally should be reinstated without loss of the date of petitioner's illegal dismissal;
seniority rights and other privileges. Owing to the strained relations
between petitioner and private respondent, allowing the former to return 2) Service incentive leave pay; night differential pay and 13th month pay
to her job would only subject her to possible harassment and future for the same period;
embarrassment. In the instant case, separation pay equivalent to one
month's salary for every year of continuous service with the private 3) Separation pay equal to one month's salary for every year of
respondent would be proper, starting with her job at the Belfront Hotel. petitioner's continuous service with the private respondent starting with
her job at the Belfront Hotel;
In addition to separation pay, backwages are in order. Pursuant to R.A.
6715 and our decision in Osmalik Bustamante, et al. vs. National Labor 4) Full backwages, without qualification or deduction, from the date of
Relations Commission, 33 petitioner is entitled to full backwages from the petitioner's illegal dismissal up to the date of promulgation of this decision
time of her illegal dismissal up to the date of promulgation of this decision pursuant to our ruling in Bustamante vs. NLRC. 34
without qualification or deduction.
5) P1,000.00.
Finally, in dismissal cases, the law requires that the employer must
furnish the employee sought to be terminated from employment with two
ORDERED.
written notices before the same may be legally effected. The first is a
written notice containing a statement of the cause(s) for dismissal; the
second is a notice informing the employee of the employer's decision to
terminate him stating the basis of the dismissal. During the process
leading to the second notice, the employer must give the employee
ample opportunity to be heard and defend himself, with the assistance of
counsel if he so desires.

Given the seriousness of the second cause (qualified theft) of the

petitioner's dismissal, it is noteworthy that the private respondent never
even bothered to inform petitioner of the charges against her. Neither
was petitioner given the opportunity to explain the loss of the articles. It
was only almost two months after petitioner had filed a complaint for
illegal dismissal, as an afterthought, that the loss was reported to the
 G.R. No. 204651 August 6, 2014 Bernardo N.
1994 16 years 2007-2010- Quezon City ₱383.5
Tenedero
OUR HAUS REALTY DEVELOPMENT CORPORATION, Petitioner,
vs.
ALEXANDER PARIAN, JAY C. ERINCO, ALEXANDER CANLAS, Sometime in May 2010, Our Haus experienced financial distress. To
BERNARD TENEDERO and JERRY SABULAO,Respondents. alleviate its condition, Our Haus suspended some of its construction
projects and asked the affected workers, including the respondents, to
take vacation leaves.8
DECISION
Eventually, the respondents were asked to report back to work but
BRION, J.:
instead of doing so, they filed with the LA a complaint for underpayment
of their daily wages. They claimed that except for respondent Bernardo
We resolve in this petition for review on certiorari1 the challenge to the N. Tenedero, their wages were below the minimum rates prescribed in
May 7, 2012 decision2 and the November 27, 2012 resolution3 (assailed the following wage orders from 2007 to 2010:
CA rulings) of the Court of Appeals (CA) in CA-G.R. SP No. 123273.
These assailed CA rulings affirmed the July 20, 2011 decision4 and the
1. Wage Order No. NCR-13, which provides for a daily minimum
December 2, 2011 resolution5 (NLRC rulings) of the National Labor
wage rate of ₱362.00for the non-agriculture sector (effective from
Relations Commission (NLRC) in NLRC LAC No. 02-000489-11 (NLRC
August 28, 2007 until June 13, 2008); and
NCR Case No. 06-08544-10). The NLRC rulings in turn reversed and set
aside the December 10, 2010 decision6 of the labor arbiter (LA).
2. Wage Order No. NCR-14, which provides for a daily minimum
wage rate of ₱382.00for the non-agriculture sector (effective from
Factual Antecedents
June 14, 2008 until June 30, 2010).
Respondents Alexander Parian, Jay Erinco, Alexander Canlas, Jerry
The respondents also alleged thatOur Haus failed to pay them their
Sabulao and Bernardo Tenederowere all laborers working for petitioner
holiday, service incentive leave (SIL), 13th month and overtime pays.9
Our Haus Realty Development Corporation (Our Haus), a company
engaged in the construction business.The respondents’ respective
employment records and daily wage rates from 2007 to 2010 are The Labor Arbitration Rulings
summarized in the table7 below:
Before the LA, Our Haus primarily argued that the respondents’ wages
complied with the law’s minimum requirement. Aside from paying the
Years of Dailymonetary amount of the respondents’ wages, Our Haus also subsidized
Name Date Hired Year and Place of Assignment
Service Ratetheir meals (3 times a day), and gave them free lodging near the
Alexander M. October construction project they were assigned to.10 In determining the total
10 years 2007-2010- Quezon City ₱353.50
amount of the respondents’ daily wages, the value of these benefits
Parian 1999
should be considered, in line with Article 97(f)11 of the Labor Code.
January 2008- Quezon City 2009- Antipolo
Jay C. Erinco 10 years ₱342.00
2000 2010- Quezon City Our Haus also rejected the respondents’ other monetary claims for lack
Alexander R. of proof that they were entitled to it.12
2005 5 years 2007-2010- Quezon City ₱312.00
Canlas
On the other hand, the respondents argued that the value of their meals
rry Q. Sabulao
August
10 years
2008- Quezon City 2009- Antipolo should not be considered in determining their wages’ total amount since
₱342.00
1999 2010- Quezon City the requirements set under Section 413 of DOLE14 Memorandum Circular
No. 215were not complied with.
The respondents pointed out that Our Haus never presented any proof
that they agreed in writing to the inclusion of their meals’ value in their
wages.16 Also, Our Haus failed to prove that the value of the facilities it
furnished was fair and reasonable.17 Finally, instead of deducting the
maximum amount of 70% of the value of the meals, Our Haus actually
withheld its full value (which was Php290.00 per week for each
employee).18
The LA ruled in favor of Our Haus. He held that if the reasonable values
of the board and lodging would be taken into account, the respondents’
daily wages would meet the minimum wage rate.19 As to the other
benefits, the LA found that the respondents were not able to substantiate
their claims for it.20
The respondents appealed the LA’s decision to the NLRC, which in turn,
reversed it. Citing the case of Mayon Hotel & Restaurant v. Adana,21 the
NLRC noted that the respondents did not authorize Our Haus in writing to
charge the values of their board and lodging to their wages. Thus, the
samecannot be credited.
The NLRC also ruled that the respondents are entitled to their respective
proportionate 13th month payments for the year 2010 and SIL payments
for at least three years,immediately preceding May 31, 2010, the date
when the respondents leftOur Haus. However, the NLRC sustained the
LA’s ruling that the respondents were not entitled to overtime pay since
the exact dates and times when they rendered overtime work had not
been proven.22
Our Haus moved for the reconsideration23 of the NLRC’s decision and
submitted new evidence (the five kasunduans) to show that the
respondents authorized Our Haus in writing to charge the values of their
meals and lodging to their wages.
The NLRC denied Our Haus’ motion, thus it filed a Rule 65 petition24 with
the CA. In its petition, Our Haus propounded a new theory. It made a
distinction between deduction and charging. A written authorization is
only necessary if the facility’s value will be deducted and will not be
needed if it will merely be charged or included in the computation of
wages.25 Our Haus claimed that it did not actually deduct the values of the
meals and housing benefits. It only considered these in computing the
total amount of wages paid to the respondents for purposes of
compliance with the minimum wage law. Hence, the written authorization
requirement should not apply.
Our Haus also asserted that the respondents’ claim for SIL pay should be
denied as this was not included in their pro formacomplaint. Lastly, it
questioned the respondents’entitlement to attorney’s fees because they
were not represented by a private lawyer but by the Public Attorney’s
Office (PAO).
The CA’s Ruling
The CA dismissed Our Haus’ certiorari petition and affirmed the NLRC
rulings in toto. It found no real distinction between deduction and
charging,26 and ruled that the legal requirements before any deduction or
charging can be made, apply to both. Our Haus, however, failed to prove
that it complied with any of the requirements laid down in Mabeza v.
National Labor Relations Commission.27 Accordingly, it cannot consider
the values of its meal and housing facilities in the computation of the
respondents’ total wages.
Also, the CA ruled that since the respondents were able to allege non-
payment of SIL in their position paper, and Our Haus, in fact, opposed it
in its various pleadings,28 then the NLRC properly considered it as part of
the respondents’ causes of action. Lastly, the CA affirmed the
respondent’s entitlement to attorney’s fees.29
Our Haus filed a motion for reconsideration but the CA denied its motion,
prompting it to file the present petition for review on certiorari under Rule
45.
The Petition
Our Haus submits that the CA erred in ruling that the legal requirements
apply without distinction ―whether the facility’s value will be deducted or
merely included in the computation of the wages. At any rate, it complied
with the requirements for deductibility of the value of the facilities. First,
the five kasunduans executed by the respondents constitute the written
authorization for the inclusion of the board and lodging’s values to their
wages. Second, Our Haus only withheld the amount of ₱290.00 which
represents the food’s raw value; the weekly cooking cost (cook’s wage,
LPG, water) at ₱239.40 per person is a separate expense that Our Haus
did not withhold from the respondents’ wages.30 This disproves the
respondents’claim that it deducted the full amount of the meals’ value.
Lastly, the CA erred in ruling that the claim for SIL pay may still be
granted though not raised in the complaint; and that the respondents are
entitled to an award of attorney’s fees.31
The Case for the Respondents
The respondents prayed for the denial of the petition.32 They maintained
that the CA did not err inruling that the values of the board and lodging
cannot be deducted from their wages for failure to comply with the
requirements set by law.33 And though the claim for SIL pay was not
included in their pro forma complaint, they raised their claims in their
position paper and Our Haus had the opportunity to contradict it in its
pleadings.34
Finally, under the PAO law, the availment of the PAO’s legal services
does not exempt its clients from an award of attorney’s fees.35
The Court’s Ruling
We resolve to DENYthe petition.
The nature of a Rule 45 petition ― only questions of law
Basic is the rule that only questions of lawmay be raised in a Rule 45
petition.36 However, in this case, weare confronted with mixed questions
of fact and law that are subsumed under the issue of whether Our Haus
complied with the legal requirements on the deductibility of the value of
facilities. Strictly, factual issues cannot be considered under Rule 45
except in the course of resolving if the CA correctly determined whether
or not the NLRC committed grave abuse of discretion in considering and
appreciating the factual issues before it.37
In ruling for legal correctness, we have to view the CA decision in the
same context that the petition for certiorariit ruled upon was presented to
it; we have to examine the CA decision from the prism of whether it
correctly determined the presence or absence of grave abuse of
discretion in the NLRC decision before it, not on the basis of whether the
NLRC decision, on the merits of the case, was correct. In other words, we
have to be keenly aware that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it. This is the
approach that should bebasic in a Rule 45 review of a CA ruling in a
labor case. In question form, the question to ask in the present case is:
did the CA correctly determine that the NLRC did not commit grave
abuse of discretion in ruling on the case?38 We rule that the CA correctly
did.
No substantial distinction between deducting and charging a facility’s
value from the employee’s wage; the legal requirements for creditability
apply to both
To justify its non-compliance with the requirements for the deductibility of
a facility, Our Haus asks us to believe that there is a substantial
distinction between the deduction and the charging of a facility’s value to
the wages. Our Haus explains that in deduction, the amount of the wage
(which may already be below the minimum) would still be lessened by the
facility’s value, thus needing the employee’s consent. On the other hand,
in charging, there is no reduction of the employee’s wage since the
facility’s value will just be theoretically added to the wage for purposes of
complying with the minimum wage requirement.39
Our Haus’ argument is a vain attempt to circumvent the minimum wage
law by trying to create a distinction where none exists.
In reality, deduction and charging both operate to lessen the actual take-
home pay of an employee; they are two sides of the same coin. In both,
the employee receives a lessened amount because supposedly, the
facility’s value, which is part of his wage, had already been paid to him in
kind. As there is no substantial distinction between the two, the
requirements set by law must apply to both.
As the CA correctly ruled, these requirements, as summarized in
Mabeza, are the following:
a. proof must be shown thatsuch facilities are customarily
furnished by the trade;
b. the provision of deductiblefacilities must be voluntarily
accepted in writingby the employee; and
c. The facilities must be charged at fair and reasonable value.40
We examine Our Haus’ compliance with each of these requirements in
seriatim.
a. The facility must be customarily furnished by the trade
In a string of cases, we have concluded that one of the badges to show
that a facility is customarily furnished by the trade is the existence of a
company policy or guideline showing that provisions for a facility were
designated as part of the employees’ salaries.41 To comply with this, Our
Haus presented in its motion for reconsideration with the NLRC the joint
sinumpaang salaysayof four of its alleged employees. These employees
averred that they were recipients of free lodging, electricity and water, as
well as subsidized meals from Our Haus.42
We agree with the NLRC’s finding that the sinumpaang salaysay
statements submitted by Our Haus are self-serving. For one, Our Haus
1âw phi1
only produced the documents when the NLRC had already earlier
determined that Our Haus failed to prove that it was traditionally giving
the respondents their board and lodging. This document did not state
whether these benefits had been consistently enjoyed by the rest of Our
Haus’ employees. Moreover, the records reveal that the board and
lodging were given on a per project basis. Our Haus did not show if these
benefits were also provided inits other construction projects, thus
negating its claimed customary nature. Even assuming the sinumpaang
salaysay to be true, this document would still work against Our Haus’
case. If Our Haus really had the practice of freely giving lodging,
electricity and water provisions to its employees, then Our Haus should
not deduct its values from the respondents’ wages. Otherwise, this will
run contrary to the affiants’ claim that these benefits were traditionally
given free of charge.
Apart from company policy, the employer may also prove compliance
with the first requirement by showing the existence of an industry-wide
practice of furnishingthe benefits in question among enterprises engaged
in the same line of business. If it were customary among construction
companies to provide board and lodging to their workers and treat their
values as part of their wages, we would have more reason to conclude
that these benefits were really facilities.
However, Our Haus could not really be expected to prove compliance
with the first requirement since the living accommodation of workers in
the construction industry is not simply a matter of business practice.
Peculiar to the construction business are the occupational safety and
health (OSH) services which the law itself mandates employers to
provide to their workers. This isto ensure the humane working conditions
of construction employees despite their constant exposure to hazardous
working environments. Under Section 16 of DOLE Department Order
(DO) No. 13, series of 1998,43 employers engaged in the construction
business are required to providethe following welfare amenities:
16.1 Adequate supply of safe drinking water
16.2 Adequate sanitaryand washing facilities
16.3 Suitable living accommodation for workers, and as may be
applicable, for their families
16.4 Separate sanitary, washing and sleeping facilitiesfor men
and women workers. [emphasis ours]
Moreover, DOLE DO No. 56, series of 2005, which sets out the
guidelines for the implementation ofDOLE DO No. 13, mandates that the
cost of the implementation of the requirements for the construction safety
and health of workers, shall be integrated to the overall project cost.44 The
rationale behind this isto ensure that the living accommodation of the
workers is not substandard and is strictly compliant with the DOLE’s OSH
criteria.
As part of the project cost that construction companies already charge to
their clients, the value of the housing of their workers cannot be charged
again to their employees’ salaries. Our Haus cannot pass the burden of
the OSH costs of its construction projects to its employees by deducting it
as facilities. This is Our Haus’ obligation under the law.
Lastly, even if a benefit is customarily provided by the trade, it must still
pass the purpose testset by jurisprudence. Under this test, if a benefit or
privilege granted to the employee is clearly for the employer’s
convenience, it will not be considered as a facility but a
supplement.45 Here, careful consideration is given to the nature of the
employer’s business in relation to the work performed by the employee.
This test is used to address inequitable situations wherein employers
consider a benefit deductible from the wages even if the factual
circumstances show that it clearly redounds to the employers’ greater
advantage.
While the rules serve as the initial test in characterizing a benefit as a
facility, the purpose test additionally recognizes that the employer and the
employee do not stand at the same bargaining positions on benefits that
must or must not formpart of an employee’s wage. In the ultimate
analysis, the purpose test seeks to prevent a circumvention of the
minimum wage law.
a1. The purpose test in jurisprudence
Under the law,46 only the value of the facilities may be deducted from the
employees’ wages but not the value of supplements. Facilities include
articles or services for the benefit of the employee or his family but
exclude tools of the trade or articles or services primarily for the benefit of
the employer or necessary to the conduct of the employer’s business.47
The law also prescribes that the computation of wages shall exclude
whatever benefits, supplementsor allowances given to employees.
Supplements are paid to employees on top of their basic pay and are free
of charge.48 Since it does not form part of the wage, a supplement’s value
may not be includedin the determination of whether an employer
complied with the prescribed minimum wage rates.
In the present case, the board and lodging provided by Our Haus cannot
be categorized asfacilities but as supplements. In SLL International
Cables Specialist v. National Labor Relations Commission,49 this Court
was confronted with the issue on the proper characterization of the free
board and lodging provided by the employer. We explained:
The Court, at this point, makes a distinction between "facilities" and
"supplements". It is of the view that the food and lodging, or the electricity
and water allegedly consumed by private respondents in this case were
not facilities but supplements. In the case of Atok-Big Wedge Assn. v.
Atok-Big Wedge Co., the two terms were distinguished from one another
in this wise:
"Supplements", therefore, constitute extra remuneration or special
privileges or benefits given to or received by the laborers overand above
their ordinary earnings or wages. "Facilities", on the other hand, are items
of expense necessary for the laborer's and his family's existence and
subsistence so thatby express provision of law (Sec. 2[g]), they form part
of the wage and when furnished by the employer are deductible
therefrom, since if they are not so furnished, the laborer would spend and
pay for them just the same.
In short, the benefit or privilege given to the employee which constitutes
an extra remuneration above and over his basic or ordinary earning or
wage is supplement; and when said benefit or privilege is part of the
laborers' basic wages, it is a facility. The distinction lies not so much in
the kind of benefit or item (food, lodging, bonus or sick leave) given, but
in the purpose for which it is given.In the case at bench, the items
provided were given freely by SLLfor the purpose of maintaining the
efficiency and health of its workers while they were working attheir
respective projects.50
Ultimately, the real difference lies not on the kind of the benefit but on the
purpose why it was given by the employer. If it is primarily for the
employee’s gain, then the benefit is a facility; if its provision is mainly for
the employer’s advantage, then it is a supplement. Again, this is to
ensure that employees are protected in circumstances where the
employer designates a benefit as deductible from the wages even though
it clearly works to the employer’s greater convenience or advantage.
Under the purpose test, substantial consideration must be given to the
nature of the employer’s business inrelation to the character or type of
work performed by the employees involved.
Our Haus is engaged in the construction business, a laborintensive
enterprise. The success of its projects is largely a function of the physical
strength, vitality and efficiency of its laborers. Its business will be
jeopardized if its workers are weak, sickly, and lack the required energy
to perform strenuous physical activities. Thus, by ensuring that the
workers are adequately and well fed, the employer is actually investing
on its business.
Unlike in office enterprises where the work is focused on desk jobs, the
construction industry relies heavily and directly on the physical capacity
and endurance of its workers. This is not to say that desk jobs do not
require muscle strength; wesimply emphasize that in the construction
business, bulk of the work performed are strenuous physical activities.
Moreover, in the construction business, contractors are usually faced with
the problem ofmeeting target deadlines. More often than not, work is
performed continuously, day and night, in order to finish the project on
the designated turn-over date. Thus, it will be more convenient to the
employer if itsworkers are housed near the construction site to ensure
their ready availability during urgent or emergency circumstances. Also,
productivity issues like tardiness and unexpected absences would be
minimized. This observation strongly bears in the present case since
three of the respondents are not residents of the National Capital Region.
The board and lodging provision might have been a substantial
consideration in their acceptance of employment in a place distant from
their provincial residences.
Based on these considerations, we conclude that even under the
purpose test, the subsidized meals and free lodging provided by Our
Haus are actually supplements. Although they also work to benefit the
respondents, an analysis of the nature of these benefits in relation to Our
Haus’ business shows that they were given primarily for Our Haus’
greater convenience and advantage. If weighed on a scale, the balance
tilts more towards Our Haus’ side. Accordingly, their values cannot be
considered in computing the total amount of the respondents’ wages.
Under the circumstances, the dailywages paid to the respondents are
clearly below the prescribed minimum wage rates in the years 2007-
2010.
b. The provision of deductible facilities must be voluntarily accepted in
writing by the employee
In Mayon Hotel, we reiterated that a facility may only be deducted from
the wage if the employer was authorized in writingby the concerned
employee.51 As it diminishes the take-home pay of an employee, the
deduction must be with his express consent.
Again, in the motion for reconsideration with the NLRC, Our Haus
belatedly submitted five kasunduans, supposedly executed by the
respondents, containing their conformity to the inclusion of the values of
the meals and housing to their total wages. Oddly, Our Haus only offered
these documents when the NLRC had already ruled that respondents did
not accomplish any written authorization, to allow deduction from their
wages. These five kasunduans were also undated, making us wonder if
they had reallybeen executed when respondents first assumed their jobs.
Moreover, in the earlier sinumpaang salaysay by Our Haus’ four
employees, it was not mentioned that they also executed a kasunduanfor
their board and lodging benefits. Because of these surrounding
circumstances and the suspicious timing when the five kasunduanswere
submitted as evidence, we agree withthe CA that the NLRC committed
no grave abuse of discretion in disregarding these documents for being
self serving.
c. The facility must be charged at a fair and reasonable value
Our Haus admitted that it deducted the amount of ₱290.00 per week from
each of the respondents for their meals. But it now submits that it did not
actually withhold the entire amount as it did not figure in the computation
the money it expended for the salary of the cook, the water, and the LPG
used for cooking, which amounts to ₱249.40 per week per person. From
these, it appears that the total meal expense per week for each person is
₱529.40,making Our Haus’ ₱290.00 deduction within the 70% ceiling
prescribed by the rules.
However, Our Haus’ valuation cannotbe plucked out of thin air. The
valuation of a facility must besupported by relevant documents such as
receipts and company records for it to be considered as fair and
reasonable. In Mabeza, we noted:
Curiously, in the case at bench, the only valuations relied upon by the
labor arbiter in his decision were figures furnished by the private
respondent's own accountant, without corroborative evidence.On the
pretext that records prior to the July 16, 1990 earthquake were lost or
destroyed, respondent failed to produce payroll records, receipts and
other relevant documents, where he could have, as has been pointedout
in the Solicitor General's manifestation, "secured certified copies thereof
from the nearest regional office of the Department of Labor, the SSS or
the BIR".52 [emphasis ours]
In the present case, Our Haus never explained how it came up with the
valuesit assigned for the benefits it provided; it merely listed its supposed
expenses without any supporting document. Since Our Haus is using
these additional expenses (cook’s salary, water and LPG) to support its
claim that it did not withhold the full amount of the meals’ value, Our
Haus is burdened to present evidence to corroborate its claim. The
records however, are bereft of any evidence to support Our Haus’ meal
expense computation. Eventhe value it assigned for the respondents’
living accommodations was not supported by any documentary evidence.
Without any corroborative evidence, it cannot be said that Our Haus
complied withthis third requisite.
A claim not raised in the pro forma complaint may still beraised in the
position paper.
Our Haus questions the respondents’ entitlement to SIL pay by pointing
out that this claim was not included in the pro forma complaint filed with
the NLRC. However, we agree with the CA that such omission does not
bar the labor tribunals from touching upon this cause of action since this
was raised and discussed inthe respondents’ position paper. In Samar-
Med Distribution v. National Labor Relations Commission,53 we held:
Firstly, petitioner’s contention that the validity of Gutang’s dismissal
should not be determined because it had not been included in his
complaint before the NLRC is bereft of merit. The complaint of Gutang
was a mere checklist of possible causes of action that he might have
against Roleda. Such manner of preparing the complaint was obviously
designed to facilitate the filing of complaints by employees and laborers
who are thereby enabled to expediently set forth their grievances in a
general manner. But the non-inclusion in the complaint of the issue on
the dismissal did not necessarily mean that the validity of the dismissal
could not be an issue.The rules of the NLRC require the submission of
verified position papers by the parties should they fail to agree upon an
amicable settlement, and bar the inclusion of any cause of action not
mentioned in the complaint or position paper from the time of their
submission by the parties. In view of this, Gutang’s cause of action
should be ascertained not from a reading of his complaint alone but also
from a consideration and evaluation of both his complaint and position
paper.54
The respondents’ entitlement to the other monetary benefits
Generally a party who alleges payment as a defense has the burden of
proving it.Particularly in labor cases, the burden of proving payment of
monetary claims rests on the employeron the reasoning that the pertinent
personnel files, payrolls, records, remittances and other similar
documents — which will show that overtime, differentials, service
incentive leave and other claims of workers have been paid — are not in
the possession of the worker but in the custody and absolute control of
the employer.55
Unfortunately, records will disclose the absence of any credible
document which will show that respondents had been paid their 13th
month pay, holiday and SIL pays. Our Haus merely presented a
handwritten certification from its administrative officer that its employees
automatically become entitled to five days of service incentive leave as
soon as they pass probation. This certification was not even subscribed
under oath. Our Haus could have at least submitted its payroll or copies
of the pay slips of respondents to show payment of these benefits.
However, it failed to do so.
Respondents are entitled to attorney’s fees.
Finally, we affirm that respondents are entitled to attorney’s fees. Our
Haus’ asserts that respondents’ availment of free legal services from the
PAO disqualifies them from such award. We find this untenable.
It is settled that in actions for recovery of wages or where an employee
was forced to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney's fees is legally and morally
justifiable.56Moreover, under the PAO Law or Republic Act No. 9406, the
costs of the suit, attorney's fees and contingent fees imposed upon the
adversary of the PAO clients after a successful litigation shall be
deposited in the National Treasury as trust fund and shall be disbursed
for special allowances of authorized officials and lawyers of the PAO.57
Thus, the respondents are still entitled to attorney's fees. The attorney's
fees awarded to them shall be paid to the PAO. It serves as a token
recompense to the PAO for its provision of free legal services to litigants
who have no means of hiring a private lawyer.
WHEREFORE, in light of these considerations, we conclude that the
Court of Appeals correctly found that the National Labor Relations
Commission did not abuse its discretion in its decision of July 20, 2011
and Resolution of December 2, 2011. Consequently we DENY the
1âwphi1
petition and AFFIRM the Court of Appeals' decision dated May 7, 2012
and resolution dated November 27, 2012 in CA-G.R. SP No. 123273. No
costs.
SO ORDERED.