• This landmark labor case clarifies what an employer must do to prove it has paid salaries through a bank crediting system. The Supreme Court ruled that simply presenting a payroll list is not enough. The employer must show proof that the payroll was actually transmitted to and received by the bank. The case also addresses procedural issues regarding multiple employees in a single case and whether an employer can forfeit benefits guaranteed in a Collective Bargaining Agreement (CBA) based on a separate company policy.

• The Strike and Dismissal: In 1998, members of the Airline Pilots' Association of the Philippines (ALPAP) went on strike. Philippine Airlines, Inc. (PAL) terminated the employment of 49 pilots (the respondents) for failing to comply with a return-to-work order.
• Corporate Rehabilitation: Shortly after, PAL was placed under corporate rehabilitation, and the Securities and Exchange Commission (SEC) suspended all claims against the company.
• Monetary Claims: In 2001, the pilots filed a complaint for illegal dismissal and various unpaid monetary benefits, including salaries, 13th-month pay, allowances, and other benefits under their CBA. The Labor Arbiter suspended the resolution of these claims due to the rehabilitation.
• Resumption of Proceedings: After PAL exited rehabilitation in 2007, the pilots moved to resume the proceedings for their monetary claims in 2009.

• Labor Arbiter (LA) Ruling: The LA found that PAL had paid the salaries and 13th-month pay based on payroll documents presented. Other claims were dismissed.
• NLRC Ruling: The NLRC affirmed the LA's decision. It also noted that since only 10 of the 49 pilots signed the appeal verification, the decision was final for the others.
• Court of Appeals (CA) Ruling: The CA reversed the NLRC. It ruled that PAL's payroll lists were not sufficient proof of payment. It remanded the case to the NLRC for computation of benefits, but only for the 18 pilots who eventually signed the verification for the appeal.

• Should the case be dismissed for those employees who did not sign the verification and certification against forum shopping?
• What constitutes substantial evidence of payment when salaries are paid through a bank?
• Can an employer use its own personnel policy to forfeit benefits that are guaranteed in a CBA?

The Supreme Court affirmed the CA Decision with modifications, ruling in favor of all 49 employees.

• On Procedural Defect: The Court ruled that the signatures of only some of the employees were sufficient. Because all 49 employees shared a common interest and cause of action, the case was "collective" in nature, and the rule on verification was substantially complied with for everyone.
• On Proof of Payment: A payroll list alone is not substantial evidence of payment. The employer must provide proof that it transmitted the payroll or a bank advisory to the bank and that the bank *received* it. Once the employer does this, the burden shifts to the employees to prove their accounts were not credited. PAL failed to provide this proof.
• On Forfeiture of Benefits: PAL could not use its internal personnel policy to forfeit the employees' benefits. The CBA is the law between the parties. Since the forfeiture policy was not part of the CBA, it could not be used to deny the benefits guaranteed within it.

• Substantial Compliance on Verification: In a collective action where parties share a common interest, the signature of one or some of the parties on a verification/certification against forum shopping can be considered substantial compliance for all.
• Proof of Payment via Bank Crediting: An employer must prove payment by showing not just the payroll list, but evidence of its transmittal to and receipt by the bank.
• CBA as the Law Between Parties: A Collective Bargaining Agreement's provisions are binding and cannot be unilaterally modified or overridden by a separate, un-incorporated company policy, especially concerning the forfeiture of earned benefits.