CASE DIGEST: Loon vs. Power Master

G.R. No. 189404 : December 11, 2013




Respondents Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as janitors and leadsmen in various Philippine Long Distance Telephone Company (PLDT) offices in Metro Manila area. Subsequently, the petitioners filed a complaint for money claims against Power Master, Inc., Tri-C General Services and their officers, the spouses Homer and Carina Alumisin collectively, the respondents. The petitioners alleged in their complaint that they were not paid 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. They claimed that the respondents relieved them from service in retaliation for the filing of their original complaint.

Notably, the respondents did not participate in the proceedings before the Labor Arbiter except on April 19, 2001 and May 21, 2001 when Mr. Romulo Pacia, Jr. appeared on the respondent's behalf. The respondents counsel also appeared in a preliminary mandatory conference on July 5, 2001. However, the respondents neither filed any position paper nor proffered pieces of evidence in their defense despite their knowledge of the pendency of the case.

In a decision dated March 15, 2002, the Labor Arbiter 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, the LA denied the petitioners claims for backwages, overtime, holiday, and premium pays. The LA observed that the petitioners failed to show that they rendered overtime work and worked on holidays and rest days without compensation. The LA further concluded that the petitioners cannot be declared to have been dismissed from employment because they did not show any notice of termination of employment. They were also not barred from entering the respondents premises.

Both parties appealed the LAs ruling with the National Labor Relations Commission. The petitioners disputed the LAs denial of their claim for back wages, 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 because they were not personally served with summons and other processes. They also claimed that they paid the petitioners minimum wages, service incentive leave and thirteenth month pays. As proofs, they attached photocopied and computerized copies of payroll sheets to their memorandum on appeal. They further maintained that the petitioners were validly dismissed. They argued that the petitioners repeated defiance to their transfer to different workplaces and their violations of the company rules and regulations constituted serious misconduct and willful disobedience.

On January 3, 2003, the respondents filed an unverified supplemental appeal. They attached photocopied and computerized copies of list of employees with automated teller machine (ATM) cards to the supplemental appeal. This list also showed the amounts allegedly deposited in the employees ATM cards. They also attached documentary evidence showing that the petitioners were dismissed for cause and had been accorded due process.

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.

Subsequently,thepetitioners filed an Urgent Manifestation with Reiterating Motion to Strike-Off the Record Supplemental Appeal/Reply, Quitclaims and Spurious Documents Attached to Respondents Appeal dated August 7, 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.

In a resolution dated November 27, 2003, the NLRC partially ruled in favor of the respondents. The NLRC affirmed the LAs awards of holiday pay and attorneys fees. It also maintained that the LA acquired jurisdiction over the persons of the respondents through their voluntary appearance.

However, 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. It found that the respondents did not actually receive the LAs processes. It also admitted the respondents unverified supplemental appeal on the ground that technicalities may be disregarded to serve the greater interest of substantial due process. Furthermore, the Rules of Court do not require the verification of a supplemental pleading.

The NLRC also vacated the LAs awards of salary differential, thirteenth month and service incentive leave pays. In so ruling, it gave weight to the pieces of evidence attached to the memorandum on appeal and the supplemental appeal. 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 further ruled that the petitioners were lawfully dismissed on grounds of serious misconduct and willful disobedience. It found that the petitioners failed to comply with various memoranda directing them to transfer to other workplaces and to attend training seminars for the intended reorganization and reshuffling.

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.

The CA affirmed the NLRCs ruling. The CA held that the petitioners were afforded substantive and procedural due process. Accordingly, the petitioners deliberately did not explain their side. Instead, they continuously resisted their transfer to other PLDT offices and violated company rules and regulations. It also upheld the NLRCs findings on the petitioners monetary claims.

The CA denied the petitioners motion for reconsideration in a resolution dated August 28, 2009, prompting the petitioners to file the present petition. Hence, this petition.
1. Whether or not the Court of Appeals erred when it did not find that the NLRC committed grave abuse of discretion in giving due course to the respondents appeal?
2. Whether or not the respondents were estopped from submitting pieces of evidence for the first time on appeal? 
3. Whether or not the petitioners were illegally dismissed and are thus entitled to backwages? 
4. Whether or not the petitioners are entitled to salary differential, overtime, holiday, premium, service incentive leave, and thirteenth month pays? 
5. Whether or not the petitioners are entitled to attorneys fees? 
HELD: Court of Appeals decision is reversed.

REMEDIAL LAW: prospective application of bonding company authority

Paragraph 2, Article 223 of the Labor Code provides that in case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

Contrary to the respondents claim, the issue of the appeal bonds validity may be raised for the first time on appeal since its proper filing is a jurisdictional requirement. The requirement that the appeal bond should be issued by an accredited bonding company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from using an appeal to delay or evade the employees' just and lawful claims. It is intended to assure the workers that they will receive the money judgment in their favor upon the dismissal of the employers appeal.

In the present case, the respondents filed a surety bond issued by Security Pacific Assurance Corporation(Security Pacific) on June 28, 2002. At that time, Security Pacific was still an accredited bonding company. However, the NLRC revoked its accreditation on February 16, 2003. Nonetheless, this subsequent revocation should not prejudice the respondents who relied on its then subsisting accreditation in good faith. In Del Rosario v. Philippine Journalists, Inc., we ruled that a bonding companys revocation of authority is prospective in application.

However, the respondents should post a new bond issued by an accredited bonding company in compliance with paragraph 4, Section 6, Rule 6 of the NLRC Rules of Procedure. This provision states that a cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated or the award satisfied.

REMEDIAL LAW: verification

The CA also correctly ruled that the NLRC properly gave due course to the respondents supplemental appeal. Neither the laws nor the rules require the verification of the supplemental appeal. Furthermore, verification is a formal, not a jurisdictional, requirement. It is mainly intended for the assurance that the matters alleged in the pleading are true and correct and not of mere speculation. Also, a supplemental appeal is merely an addendum to the verified memorandum on appeal that was earlier filed in the present case; hence, the requirement for verification has substantially been complied with.

The respondents also timely filed their supplemental appeal on January 3, 2003. The records of the case show that the petitioners themselves agreed that the pleading shall be filed until December 18, 2002. The NLRC further extended the filing of the supplemental pleading until January 3, 2003 upon the respondents motion for extension.

LABOR LAW: technical rules of procedure not binding

In labor cases, strict adherence to the technical rules of procedure is not required. Time and again, we have allowed evidence to be submitted for the first time on appeal with the NLRC in the interest of substantial justice. Thus, we have consistently supported the rule that labor officials should use all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, in the interest of due process.

However, this liberal policy should still be subject to rules of reason and fairplay. The liberality of procedural rules is qualified by two requirements: (1) a party should adequately explain any delay in the submission of evidence; and (2) a party should sufficiently prove the allegations sought to be proven. The reason for these requirements is that the liberal application of the rules before quasi-judicial agencies cannot be used to perpetuate injustice and hamper the just resolution of the case. Neither is the rule on liberal construction a license to disregard the rules of procedure.

Guided by these principles, the CA grossly erred in ruling that the NLRC did not commit grave abuse of discretion in arbitrarily admitting and giving weight to the respondents pieces of evidence for the first time on appeal.

REMEDIAL LAW: delay in submission of evidence

We cannot accept the respondents cavalier attitude in blatantly disregarding the NLRC Rules of Procedure. The CA gravely erred when it overlooked that the NLRC blindly admitted and arbitrarily gave probative value to the respondents evidence despite their failure to adequately explain their delay in the submission of evidence. Notably, the respondents delay was anchored on their assertion that they were oblivious of the proceedings before the LA. However, the respondents did not dispute the LAs finding that Mr. Romulo Pacia, Jr. appeared on their behalf on April 19, 2001 and May 21, 2001. The respondents also failed to contest the petitioners assertion that the respondents counsel appeared in a preliminary mandatory conference on July 5, 2001.

Indeed, the NLRC capriciously and whimsically admitted and gave weight to the respondents evidence despite its finding that they voluntarily appeared in the compulsory arbitration proceedings. The NLRC blatantly disregarded the fact that the respondents voluntarily opted not to participate, to adduce evidence in their defense and to file a position paper despite their knowledge of the pendency of the proceedings before the LA. The respondents were also grossly negligent in not informing the LA of the specific building unit where the respondents were conducting their business and their counsels address despite their knowledge of their non-receipt of the processes.

REMEDIAL LAW: failure to prove allegations

Furthermore, the respondents failed to sufficiently prove the allegations sought to be proven. Why the respondents photocopied and computerized copies of documentary evidence were not presented at the earliest opportunity is a serious question that lends credence to the petitioners claim that the respondents fabricated the evidence for purposes of appeal. While we generally admit in evidence and give probative value to photocopied documents in administrative proceedings, allegations of forgery and fabrication should prompt the adverse party to present the original documents for inspection. It was incumbent upon the respondents to present the originals, especially in this case where the petitioners had submitted their specimen signatures. Instead, the respondents effectively deprived the petitioners of the opportunity to examine and controvert the alleged spurious evidence by not adducing the originals. This Court is thus left with no option but to rule that the respondents failure to present the originals raises the presumption that evidence willfully suppressed would be adverse if produced.

It was also gross error for the CA to affirm the NLRCs proposition that it is of common knowledge that there are many people who use at least two or more different signatures. The NLRC cannot take judicial notice that many people use at least two signatures, especially in this case where the petitioners themselves disown the signatures in the respondents assailed documentary evidence. The NLRCs position is unwarranted and is patently unsupported by the law and jurisprudence.

Viewed in these lights, the scales of justice must tilt in favor of the employees. This conclusion is consistent with the rule that the employers cause can only succeed on the strength of its own evidence and not on the weakness of the employees evidence.

LABOR LAW: burden of proof on valid dismissal

Based on the above considerations, we reverse the NLRC and the CAs 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 employers failure to discharge this burden results in the finding that the dismissal is unjustified. This is exactly what happened in the present case.

LABOR LAW: salary differential, service incentive, holiday, and thirteenth month pay

We also reverse the NLRC and the CAs 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.

LABOR LAW: overtime and premium pay

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.

CIVIL LAW: attorneys fees

The award of attorneys fees is also warranted under the circumstances of this case. An employee is entitled to an award of attorneys fees equivalent to ten percent (10%) of the amount of the wages in actions for unlawful withholding of wages.

As a final note, we observe that Rodelito Ayala, Winelito Ojel, Renato Rodrego and Welito Loon are also named as petitioners in this case. However, we deny their petition for the reason that they were not part of the proceedings before the CA. Their failure to timely seek redress before the CA precludes this Court from awarding them monetary claims.

All told, we find that the NLRC committed grave abuse of discretion in admitting and giving probative value to the respondents' evidence on appeal, which errors the CA replicated when it upheld the NLRC rulings.

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