Dennis Jay A.

Paras
Labor Law 1- Block C

Wilgen Loon, et. al. vs. Power Master, Inc., Tri-C General Services and
Sps. Alumisin
G.R. 189404
December 11, 2013

Facts:

Herein petitioners (Loon et. al) were employed by herein respondents, Power Master, Inc.
and Tri-C General Services as janitors and leadmen for different Philippine Long Distance
Telephone Company (PLDT for brevity) offices within the Metro Manila area. They filed a
complaint for money claims against herein respondents for failure to pay them with minimum
wages, overtime, holiday, premium, service incentive leave (SIL) and thirteenth month pays.
On June 21, 2001, the petitioners averred that they were made to sign blank payroll sheets
and were terminated in retaliation for the filing of the original complaint. The respondents on
the other hand had neither filed any position paper nor presented any evidence on their
defense.

The petitioners filed the case with the Labor Arbiter, which ruled in their favor on March 15,
2002, awarding them with the entitlement for salary differential, service incentive leave, and
thirteenth month pays, as well as attorney’s fees, pursuant to Article 11 of the Labor Code.
However, the LA denied their claims for backwages, overtime, holiday and premium pays, as
it was found out by the former that the petitioners had failed to present any proof that they
hadrendered overtime work and had worked on holidays and rest days. It was also concluded
by the LA that petitioners cannot be declared to have been dismissed from their employment
because they did not show any notice of termination of employment.

Unsatisfied with the LA’s ruling, the petitioners appealed with the NLRC. In its decision, the
NLRC partially ruled in favor of the respondents. It allowed the respondents to submit pieces
of evidence for the first time on the ground that they had been deprived of their right to due
process. Meanwhile, the NLRC affirmed the awards of holiday pay and attorney’s fees to the
petitioners. On appeal in the CA, the latter affirmed the ruling of NLRC, and denied the
motion for reconsideration of petitioners. Hence, this appeal.

Issues:

(1) Whether the petitioners were illegally dismissed and are thus entitled to backwages
(2) Whether the petitioners are entitled to salary differential, overtime, holiday, premium,
service incentive leave, and thirteenth month pays
Ruling:

(1) Yes. The petitioners are entitled to backwages. Based on the above considerations, we
reverse the NLRC and the CA’s finding that the petitioners were terminated for just
cause and were afforded procedural due process. In termination cases, the burden of
proving just and valid cause for dismissing an employee from his employment rests
upon the employer. The employer’s failure to discharge this burden results in the
finding that the dismissal is unjustified. This is exactly what happened in the present
case.

(2) Yes. The petitioners are entitled to salary differential, service incentive leave, holiday
and thirteenth month pays. We also reverse the NLRC and the CA’s finding that the
petitioners are not entitled to salary differential, service incentive, holiday, and
thirteenth month pays. 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.

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.43 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.

Decision:

WHEREFORE, based on these premises, we REVERSE and SET ASIDE the decision

dated June 5, 2009, and the resolution dated August 28, 2009 of the Court of Appeals in CA-
G.R. SP No. 95182. This case is REMANDED to the Labor Arbiter for the sole purpose of
computing petitioners' (Wilgen Loon, Jerry Arcilla, Albert Pereye, Arnold Pereye, Edgardo
Obose, Arnel Malaras, Patrocino Toetin, Evelyn Leonardo, Elmer Glocenda, Rufo Cunamay,
Rolando Sajol, Rolando Abucayon, Jennifer Natividad, Maritess Torion, Ammndo Lonzaga,
Rizal Gellido, Evirdly Haque, Myrna Vinas, Nena Abina, Emalyn Oliveros, Louie Ilagan,
Joel Entig, Amel Araneta, Benjamin Cose and William Alipao) full backwages (computed
from the date of their respective dismissals up to the finality of this decision) and their salary
differential, service incentive leave, holiday, thirteenth month pays, and attorney's fees
equivalent to ten percent (10%) of the withheld wages. The respondents are further directed
to immediately post a satisfactory bond conditioned on the satisfaction of the awards affirmed
in this Decision.
Nate Casket Maker Armando and Anely Nate vs. Elias Arango, Edwin Mapusao, Jorge
Carino, et. al.
October 05, 2016
G.R. No. 192282

Herein petitioners (spouses Armando and Anely Nate) are the proprietors of A. Nate Casket
Maker, while herein respondents are employed as carpenters, mascilladors and painters of
their casket-making business, under a “pakyaw” basis since 1998. The petitioners averred that
herein respondents were provided with free board and lodging. They also added that
respondents would always quarrel over useless things, and that they would always drink,
which would affect the conduct of their jobs.

Because of these issues, the petitioners furnished a contract with herein respondents on
February 3, 2007, which provided the following terms: (1) They shall be working on
contractual basis for (5) months; (2) renewal of contract would depend on their performance;
(3) in case of unsatisfactory performance, the owners have the right to terminate the services
of herein respondents; (4) their wages shall be in piece-rate basis; (5) their schedules should
be strictly followed in the performance of their assigned tasks; (6) that they will not be
eligible for sick leave pay, vacation leave pay, or any other benefits given to regular
employees. Herein respondents refused to sign the said contract, which resulted in their
termination.

On February 8, 2007, respondents filed before the LA a complaint for illegal dismissal and
non-payment of separation pay against petitioners. It was later on amended to include money
claims, such as underpayment of wages, non-payment of overtime pay, holiday pay, 5-day
service incentive leave pay and 13th month pay. The LA ruled in favor of herein petitioners,
stating that respondents were not illegally dismissed, and that they are not entitled to
backwages and other money claims, as they earn more than the minimum wage. Disgruntled
with the LA’s decision, respondents appealed to the NLRC, which ruled to affirm the LA’s
decision. The respondents then appealed to the CA, which ruled in their favor. The CA ruled
that the NLRC’s decision be reversed and set aside. The petitioners filed a motion for
consideration before the CA, but it was denied.

Hence, this petition.

Issue:

(1) Whether or not respondents’ employment was terminated

(2) Whether respondents who are pakyaw workers and considered regular workers are
entitled to overtime pay, holiday pay, service incentive leave pay and 113th month pay
Ruling:

(1) In termination cases, the burden of proving just and valid cause for dismissing an
employee from his employment rests upon the employer, and the latter's failure to do
so would result in a finding that the dismissal IS unjustified. Petitioners failed to
discharge this burden. Petitioners violated respondents' rights to security of tenure and
constitutional right to due process in not even serving them with a written notice of
termination which would recite any valid or just cause for their dismissal.
Respondents were merely told that their services are terminated. Thus, the Court of
Appeals correctly ruled that private respondents were illegally dismissed.

(2) Yes. That being said, the amount of backwages to which each respondent is entitled,
however, cannot be fully settled at this time. As respondents are piece-rate workers
being paid by the piece, there is need to determine the varying degrees of production
and days worked by each worker. As to the other benefits, namely, holiday pay,
13th month pay, service incentive leave pay and overtime pay which respondents
prayed for in their complaint, We affirm the ruling of the CA that respondents are so
entitled to these benefits.

Decision:

WHEREFORE, the Petition is PARTIALLY GRANTED in so far as the payment of

13th month pay to respondents is concerned. In all other aspects, the Court AFFIRMS the
Decision dated January 6, 2010 and the Resolution dated May 13, 2010 of the Court of
Appeals in CA-G.R. SP No. 106965.
Philippine Duplicators, Inc. vs. NLRC and Philippine Duplicators Employees Union-
Tupas
November 11, 1993
G.R. No. 110068

Facts:

Herein petitioner (Philippine Duplicators, Inc.) is a domestic corporation that is engaged in

the distribution of imported duplicating machines and other related products, while herein
respondent Philippine Duplicators Employees Union (PDEU for brevity) are comprised of
salesmen who are paid a fixed or guaranteed salary plus commissions, which are computed
on the selling price of the duplicating machines sold by the respective salesmen. On
December 16, 1975, P.D. 851 was promulgated. It prescribed the payment of 13th month pay
to employees with a basic salary of Php 1,000.00. On 1986, then-President Cory Aquino
issued M.O. No. 28, which modified the previous law to include all the owners for
entitlement to 13th month pay. In response to M.O. 28, the Minister Of Labor and
Employment (MOLE) issued MOLE Explanatory Bulletin No. 86-12. Item 5(a) of said
issuance provides for the inclusion of those employees who are paid a fixed and guaranteed
wage plus commission to be entitled to 13th month pay, based on their total earnings during
the calendar year.

Private respondent union asked from the petitioner for the payment of 13th month pay to be
computed pursuant to Item 5(a) of the MOLE E.B. No. 86-12. However, the petitioner
refused to grant respondent union’s request. Instead, herein petitioner asked for the opinion of
the MOLE regarding the matter at hand. After knowing this, the MOLE rendered an opinion,
reiterating Item 5(a) of its recent issuance. Despite the rendered opinion of the MOLE, the
petitioner had once again refused to pay the members of the respondent union with their 13th
month pay which is to be computed pursuant to E.B. No. 86-12, Item 5(a).

Respondent union instituted a complaint before the Labor Arbiter, which rendered a decision
in their favor. Herein petitioner appealed to the NLRC, which affirmed the award of the LA.

Hence, this petition.

Issue:

What is the appropriate mode of computation of the 13th month pay of employees who
receive a fixed or guaranteed salary plus sales commissions?

Ruling:

The standard set by Item 5(a) of MOLE E.B. No. 86-12 must be followed. To recapitulate,
the 13th month pay of employees paid a fixed or guaranteed wage plus sales commissions
must be equivalent to one-twelfth (1/12) of the total earnings (fixed or guaranteed wage-cum-
sales commissions) during the calendar year. Considering that petitioner has excluded from
the computation of the 13th month pay the sales commissions earned by its individual
salesmen, we believe and so hold that petitioner must be held liable to pay for the deficiency.
Our Haus Realty Development Corp. vs. Alexamder Parian, Jay Enrico, Alexander
Canlas, Bernard Tenedero and Jerry Sabulao
August 6, 2014
G.R. No. 204651

Facts:

Sometime in May 2010, herein petitioner (Our Haus Realty Dev’t Corp.) experienced
financial instability. In order to mitigate the effects of the crisis, petitioner decided to halt
some of its ongoing construction projects and lay off the employees assigned to those
projects. Herein respondents are employees of respondents from 2007-2010 and were one of
those who were unfortunately laid off, by way of vacation leave. After the crisis was gone,
the petitioner had now asked the laid off employees to report back to work.

Instead of coming back for work, the respondents had instituted a complaint before the LA
against Our Haus Realty for underpayment of their daily wages. They averred that except for
Tenedoro, all of them had been paid wages that were below the minimum rates prescribed by
law from 2007-2010. On top of that, respondents also averred that Our Haus failed to pay
them their holiday, service incentive leave (SIL), 13th month and overtime pays.

In its defense, Our Haus argued that it had provided the respondents with free meals (3 times
a day) as well as board and lodging, which is ideally situated near at the place of their work.
It had also rejected other monetary claims by the respondents. The LA rendered a decision in
favor of Our Haus, stating 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.

The NLRC reversed the LA’s decision upon the appeal of respondents, stating that they are
entitled to their 13th month pays for the year 2010 and SLI payments for at least three years,
immediately preceding May 31, 2010. Our Haus moved for reconsideration but the same was
also rejected by NLRC. Herein petitioner then appealed before the CA, which in turn
dismissed its petition and affirmed that of the NLRC’s.

Hence, this petition.

Issue:

Whether or not the facility’s value will be deducted or merely included in the computation of
the wages.

Ruling:

No. Under the law, 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. 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 daily wages paid to the respondents are clearly below the
prescribed minimum wage rates in the years 2007-2010.