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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 75510 October 27, 1987

RUFINA SORIANO, petitioner,vs.THE NATIONAL LABOR RELATIONS COMMISSION and KINGLY COMMODITIES TRADERSAND MULTI-RESOURCES, INC., respondents.

R E S O L U T I O N

FELICIANO, J .:

Petitioner started working with respondent commodities trading Corporation in November 1977 asInvestment Counselor and eventually became Vice-President, Marketing. On 18 September 1984,petitioner was charged with allowing or failing to supervise and monitor certain activities of investmentcounselors in her department, which included the signing of a contract opening an account for a clientby an investment counselor without authority from the client, transfers of funds from one account toanother without the knowledge and authority of the clients involved, unauthorized transactions inforeign currency with clients of the respondent Corporation, unauthorized approval of leave formembers of her department, and resulting in loss of confidence in petitioner. Petitioner waspreventively suspended and required to explain her acts or failure to act. Two (2) days later, petitionersubmitted her detailed answer or explanation. On 27 September, 1984, the Executive Vice-Presidentand General Manager of respondent Corporation found petitioner's written explanation unsatisfactory

and notified petitioner that the Corporation had lost confidence on her ability to discharge the functionsof her office and accordingly terminated her services.

Petitioner filed a complaint for illegal suspension and dismissal against respondent Corporation andMr. Guil Rivera, Senior Vice-President, and Mr. Richard Tan, Executive Vice-President and GeneralManager. She asked for reinstatement with backwages, as well as moral and exemplary damages,medical expenses, attorney's fees and other litigation expenses.

On 8 July 1985, Labor Arbiter A.L Sevilla rendered a Decision requiring the respondent Corporationto pay petitioner: (1) separation pay in the amount of P10,500.00; (2) six (6) months backwages in theamount of P120,000.00; (3) moral damages in the amount of P500,000.00; (4) exemplary damages inthe amount of P100,000.00; and (5) attorney's fees equivalent to 10% of the award.

On appeal by the private respondents, public respondent NLRC, in a Decision dated 10 March 1986,modified the Labor Arbiter's award by deleting the award of moral and exemplary damages andrequiring respondent Corporation to pay: (1) separation pay amounting to P21,000.00; (2) three (3)months backwages without qualification and deduction amounting to P9,000.00; and (3) 10% of theaward as attorney's fees.

Both the Labor Arbiter and respondent NLRC found that because of the strained relations betweenpetitioner and respondent Corporation, reinstatement of petitioner was not feasible. Respondent

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Corporation had alleged that petitioner had immediately found employment with Onapal PhilippinesCommodities, which had not been denied or refuted by petitioner. Because respondent Corporationhad failed to specify the definite date of her employment, respondent NLRC granted petitioner three(3) months backwages without qualification and deduction.

In the present Petition for Certiorari, petitioner seeks the annulment of the Decision of respondent

NLRC dated 10 March 1986 and the revival or reinstatement of the Decision of Iabor Arbiter Sevilladated 8 July 1985.

Petitioner claims that respondent Corporation acted in bad faith in suspending and terminating herservices. Petitioner asserts that:

1. respondent Corporation had violated her right to due process by suspending herimmediately without the benefit of hearing. She argues that the notice of preventivesuspension served her on 18 September 1986 was "living proof" that the corporationhad already concluded she was guilty of the charges levelled against her even beforeshe could submit her written explanation.

2. the "true reason" for her "illegal dismissal" was the "personal grudge which Riveraharbored against her.

3. respondent Corporation's bad faith was also demonstrated in discrimination againsther in relation to other employees of the Corporation who had been in the past similarlycharged with alleged infractions of the corporation's rules. More specifically, petitionerasserts discrimination against herself consisting of the failure of the respondentCorporation to dismiss the two (2) immediate supervisors of the investment counselorwho had carried out the unauthorized manipulations of clients' accounts in petitioner'sdepartment.

4. petitioner also charges respondent Corporation with having misrepresented theextent of her participation in or the scope of her duties in respect of unauthorized actsand transactions of her subordinates in the marketing department of respondentcompany.

The Court considers that petitioner has failed to show a grave abuse of discretion, or an act performedwithout or in excess of jurisdiction, on the part of the respondent NLRC.

In respect of Item 1, preventive suspension does not in itself prove that the company had prejudgedthat petitioner was guilty of the charges she was asked to answer and explain. Preventive suspensionmay be necessary for the protection of the company, its operations and assets, pending investigationof the alleged malfeasance or misfeasance on the part of officers or employees of the company andpending a decision on the part of the company (See Sec. 3 of Rule XIV, Book V, of the Omnibus RulesImplementing the Labor Code). Considering the very senior and sensitive character of petitioner's

position as head of a Department, a fine position as distinguished from a staff or planning position,and considering the unauthorized transactions then just discovered by the respondent Corporation,we do not believe that the preventive suspension was an arbitrary and capricious act amounting tobad faith on the part of the respondent Corporation.

In respect of Item 2, the alleged personal motive behind petitioner's dismissal-personal envy orfeelings of personal insecurity on the part of Guil Rivera, Senior Vice-President, respondent NLRCfound that petitioner had not sufficiently established her assertion. Petitioner's assertion on this pointappears no more than a conjecture or supposition and does not afford an adequate basis for

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overturning respondent NLRC's finding on this point. Further, if petitioner had clearly proven suchpersonal ill-will on the part of Mr. Rivera, a serious question would arise as to whether the respondentCorporation (as distinguished from Mr. Rivera) could be held liable at all for Mr. Rivera's acts in theabsence of clear authorization for, or approval or adoption of, such act by the respondentCorporation with knowledge of the personal malice on the part of Mr. Rivera.

In respect of Item 3, respondent NLRC's decision was silent. The Court believes, however, thatrespondent Corporation must be accorded reasonable latitude in determining who among erringofficers or employees should be punished by the company and to what extent. In the instant case,respondent Corporation presumably found it was not necessary to terminate the services also of thetwo (2) section heads in petitioner's department, who clearly are much lower in the corporate hierarchythan petitioner.

With respect to the last and most important of the above listed items, the scope of petitioner'sresponsibility for the operations of her department and the extent of her supervisory authority over hersubordinates in the marketing department, respondent NLRC set forth the following discussion andevaluation:

Appellants stressed the point that complainant, as vice president, marketing, is actuallya department head of one of the company's sales department (sic). As such, her basicfunction is the supervision and monitoring the daily activities of her department and theemployees she supervises (sic). By the nature of the company's business, complainantas a department head should see to it that the clients' trust and confidence in thecompany is upheld through above-board transactions, untainted relations, satisfactoryservicing and unquestioned integrity of its officers and staff, aside from the promotionof cordial employee relations among her personnel through unbiased and uniformimplementation of company policies affecting employee benefits and welfare.

According to the appellants, the finding of the Labor Arbiter that 'complainant is notexpected to keep an eye or be aware of all day-to-day transactions of her workersparticularly Investment Consultants in her department' does not conform to the facts

prevailing in this case.

In the Panemanglor case, which is the crucial point at issue, Panemanglor opened anaccount with the respondent corporation on June 28, 1984 by depositing the amountof P50,000.00 through Sofia Nazareno, investment counselor. Instead of the clientsigning the Customers Agreement, it was Nazareno who signed the agreement andthe signature card in the name of the client, which is highly irregular. Had she exercised

prudence in the supervision of her investment consultants, the irregularity could hatebeen earlier detected.As a result, the sum of P25,000.00 from Panemanglor's accountwas transferred by Nazareno to the account of Ramon Lopez, without the knowledgeof Panemanglor on July 9, 1984. On July 13, 1984 the said client withdrew the sum ofP25,000.00 through a Payment Instruction Form that was approved by the

complainant. On August 6, 1964, the amount of P4,052.59 was transferred byNazareno to the account of Panemanglor from the account of Ramon Lopez. Thistransaction was with the approval of the complainant. On September 3, 1984,Panemanglor demanded the payment of the balance of P25,000.00 from therespondent company to close his account and the letter of Panemanglor was referredto complainant by respondent Guil Rivera for necessary action. In her memorandumto senior vice president Guil Rivera complainant confirmed the irregularity in thehandling of the account of Panemanglor, but she failed to take appropriate actionagainst the erring employee which was within her power to discipline employees under

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her supervision ater on February 4, 1985, a complaint was filed before the Securitiesand Exchange Commission by Panemanglor for the recovery of the P25,000.00 plusdamages against the respondent corporation, contrary to her claim that the client willnot file a recovery suit against the corporation since the obligation was purely personalto Nazareno.

Respondents contend that complainant could have immediately discovered theunauthorized signature of Sofia Nazareno that led to the illegal transfers of fund, hadshe followed the company procedure and practice for her to be personally acquaintedwith new clients and her admission that she was not aware of the complained acts hasbrought to light that she was remiss in her supervisory and monitoring function. On topof this, she failed to institute disciplinary action

xxx xxx xxx

As head of one of the company's sales department (sic) and a managerial employeeat that, complainant is expected to monitor the daily activities of the investmentcounselors and the transactions of clients in her department. As a matter of practice

and procedure, complainant, as vice-president marketing, is always informed of newclients for her to be personally acquainted with the client. We agree with the appellantsthat had the complainant adhered to this procedure, she could have immediatelynoticed the unauthorized signature by Sofia Nazareno that enabled her to transferfunds from one account to another. Likewise, since the complainant approved thepayment instruction for P25,000.00 on July 13, 1984, the transfer of P4,052.59 on

August 6, 1984 from the account of Ramon Lopez to Panemanglor's account, and thewithdrawal of the transferred amount on August 7, 1984, she could have easilysuspected that something was irregular with the transaction Yet, it took several monthsbefore she knew of the anomaly and it took her superior, respondent Guil Rivera, tobring the matter to her attention. Under the circumstances, it cannot be truthfully saidthat complainant has not been without any fault whatsoever. For this reason, the basisfor the award of the moral and exemplary damages has not been suffiiciently or

satisfactorily against the erring employee. gently or satisfactorily established by thecomplainant. And besides the dismissal of the complainant by the respondent wasdone in good faith. ... (Emphasis supplied)

Petitioner's argument that, because she was head of the entire marketing (sales) department, shecould not be expected to monitor the detailed or day-to-day acts and behaviour of the staff membersof her department, does not address what appears to be the thrust of the respondent NLRC's decision,

And that is, that as head of the department, it was her responsibility to adopt ways and means ofkeeping herself sufficiently informed of the activities of her staff members so as to prevent or at leastdiscover at an early stage, e.g., unauthorized or illegal transactions and manipulation of clients'accounts. On the one hand, the above position taken by the respondent NLRC cannot be regarded asso obviously unreasonable and despotic as to constitute a grave abuse of discretion, given thecharacter of the business of a commodities trading company and the fact that very substantial sumsof money are handled daily by petitioner's department. Upon the other hand, petitioner's logic wouldlead to the conclusion that the more senior the management position, the slighter the responsibility formalfeasance or nonfeasance that can be laid upon the position holder; the chief executive officer of acorporation would effectively have, under this logic, little or no responsibility at all.

Turning to the specific award made by respondent NLRC, the salary base properly used in computingthe separation pay and the backwages due to petitioner should include not just the basic salary butalso the regular allowances that petitioner had been receiving (See Santos v. National Labor Relations

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Commission G.R. No. 76721, 21 September 1987). In petitioner's case, the base figure properlyincludes her: (a) basic salary of P3,000.00 a month; and (b) living allowance of P2,400 a month(petitioner's Affidavit, dated 12 April 1985, Exhibit "G", Rollo, p. 105). The commissions also claimedby petitioner ("override commission" plus "net deposit incentive") are not properly includible in suchbase figure since such commissions must be earned by actual market transactions attributable topetitioner. Neither should "travels equivalent" [an unusual and unexplained term; P10,000.00 a month]

and "commission in trading personal clients" P3,000.00 a month] be included in such base figure.Considering that the charge of bad faith on the part of private respondents was not proven, therespondent NLRC having, on the contrary, made a finding that petitioner's dismissal was made in goodfaith there appears no real basis for the award of attorney's fees (Art. 2208 5 Civil Code). This awardshould not exceed a nominal amount which we set at P1,500.00.

Thus, the appropriate computation would be:

A. Separationpay-P5,400.00/month 7 = P37,800.00 (in view of petitioner's seven (7)years of service)

B. Backwages-P5,400.00/month x 3 mos. = P16,200.00

Sub-Total P54,000.00

plus nominal attorney's fees 1,500.00

TOTAL P55,500.00

ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. TheDecision of the respondent NLRC dated 10 March 1986 is modified so as to award petitioner thefollowing items: a) separation pay in the amount of P37,800.00; b) backwages for three (3) months inthe amount of P16,200.00; and c) attorney's fees of P1,500.00, making a total of P55,500.00.

SO ORDERED.

Fernan (Chairman), Gutierrez, Jr., Bidin and Cortes, JJ., concur.

G.R. No. L-50999 March 23, 1990

JOSE SONGCO, ROMEO CIPRES, and AMANCIO MANUEL, petitioners,vsNATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), LABOR ARBITER FLAVIOAGUAS, and F.E. ZUELLIG (M), INC., respondents.

MEDIALDEA, J .:

This is a petition for certiorari seeking to modify the decision of the National Labor RelationsCommission in NLRC Case No. RB-IV-20840-78-T entitled, "Jose Songco and Romeo Cipres,Complainants-Appellants, v. F.E. Zuellig (M), Inc., Respondent-Appellee" and NLRC Case No. RN-IV-20855-78-T entitled, "Amancio Manuel, Complainant-Appellant, v. F.E. Zuellig (M), Inc.,Respondent-Appellee,"which dismissed the appeal of petitioners herein and in effect affirmed thedecision of the Labor Arbiter ordering private respondent to pay petitioners separation pay equivalentto their one month salary (exclusive of commissions, allowances, etc.) for every year of service.

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The antecedent facts are as follows:

Private respondent F.E. Zuellig (M), Inc., (hereinafter referred to as Zuellig) filed with the Departmentof Labor (Regional Office No. 4) an application seeking clearance to terminate the services ofpetitioners Jose Songco, Romeo Cipres, and Amancio Manuel (hereinafter referred to as petitioners)allegedly on the ground of retrenchment due to financial losses. This application was seasonably

opposed by petitioners alleging that the company is not suffering from any losses. They alleged furtherthat they are being dismissed because of their membership in the union. At the last hearing of thecase, however, petitioners manifested that they are no longer contesting their dismissal. The partiesthen agreed that the sole issue to be resolved is the basis of the separation pay due to petitioners.Petitioners, who were in the sales force of Zuellig received monthly salaries of at least P40,000. Inaddition, they received commissions for every sale they made.

The collective Bargaining Agreement entered into between Zuellig and F.E. Zuellig EmployeesAssociation, of which petitioners are members, contains the following provision (p. 71, Rollo):

ARTICLE XIV Retirement Gratuity

Section l(a)-Any employee, who is separated from employment due to old age,sickness, death or permanent lay-off not due to the fault of said employee shall receivefrom the company a retirement gratuity in an amount equivalent to one (1)month's salaryper year of service. One month of salary as used in this paragraph shallbe deemed equivalent to the salary at date of retirement; years of service shall bedeemed equivalent to total service credits, a fraction of at least six months beingconsidered one year, including probationary employment. (Emphasis supplied)

On the other hand, Article 284 of the Labor Code then prevailing provides:

Art. 284. Reduction of personnel. The termination of employment of any employeedue to the installation of labor saving-devices, redundancy, retrenchment to preventlosses, and other similar causes, shall entitle the employee affected thereby toseparationpay. In case of termination due to the installation of labor-saving devices orredundancy, the separation pay shall be equivalent to one (1) monthpayor to at leastone (1) month pay for every year of service, whichever is higher. In case ofretrenchment to prevent losses and other similar causes, the separation pay shall beequivalent to one (1) month pay or at least one-half (1/2) month pay for every year ofservice, whichever is higher. A fraction of at least six (6) months shall be consideredone (1) whole year. (Emphasis supplied)

In addition, Sections 9(b) and 10, Rule 1, Book VI of the Rules Implementing the Labor Code provide:

x x x

Sec. 9(b). Where the termination of employment is due to retrechment initiated by theemployer to prevent losses or other similar causes, or where the employee suffersfrom a disease and his continued employment is prohibited by law or is prejudicial tohis health or to the health of his co-employees, the employee shall be entitled totermination pay equivalent at least to his one month salary, or to one-half monthpayforevery year of service, whichever is higher, a fraction of at least six (6) months beingconsidered as one whole year.

x x x

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Sec. 10. Basis of termination pay. The computation of the termination pay of anemployee as provided herein shall be based on his latest salary rate, unless the samewas reduced by the employer to defeat the intention of the Code, in which case thebasis of computation shall be the rate before its deduction. (Emphasis supplied)

On June 26,1978, the Labor Arbiter rendered a decision, the dispositive portion of which reads (p.

78, Rollo):

RESPONSIVE TO THE FOREGOING, respondent should be as it is hereby, orderedto pay the complainants separation pay equivalent to their one month salary (exclusiveof commissions, allowances, etc.) for every year of service that they have worked withthe company.

SO ORDERED.

The appeal by petitioners to the National Labor Relations Commission was dismissed for lack of merit.

Hence, the present petition.

On June 2, 1980, the Court, acting on the verified "Notice of Voluntary Abandonment and Withdrawalof Petition dated April 7, 1980 filed by petitioner Romeo Cipres, based on the ground that he wants "toabide by the decision appealed from" since he had "received, to his full and complete satisfaction, hisseparation pay," resolved to dismiss the petition as to him.

The issue is whether or not earned sales commissions and allowances should be included in themonthly salary of petitioners for the purpose of computation of their separation pay.

The petition is impressed with merit.

Petitioners' position was that in arriving at the correct and legal amount of separation pay due them,

whether under the Labor Code or the CBA, their basic salary, earned sales commissions andallowances should be added together. They cited Article 97(f) of the Labor Code which includescommission as part on one's salary, to wit;

(f) 'Wage' paid to any employee shall mean the remuneration or earnings, howeverdesignated, capable of being expressed in terms of money, whether fixed orascertained on a time, task, piece, or commission basis, or other method of calculatingthe same, which is payable by an employer to an employee under a written or unwrittencontract of employment for work done or to be done, or for services rendered or to berendered, and includes the fair and reasonable value, as determined by the Secretaryof Labor, of board, lodging, or other facilities customarily furnished by the employer tothe employee. 'Fair reasonable value' shall not include any profit to the employer or toany person affiliated with the employer.

Zuellig argues that if it were really the intention of the Labor Code as well as its implementing rules toinclude commission in the computation of separation pay, it could have explicitly said so in clear andunequivocal terms. Furthermore, in the definition of the term "wage", "commission" is used only asone of the features or designations attached to the word remuneration or earnings.

Insofar as the issue of whether or not allowances should be included in the monthly salary of petitionersfor the purpose of computation of their separation pay is concerned, this has been settled in the case

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of Santos v. NLRC, et al.,G.R. No. 76721, September 21, 1987, 154 SCRA 166, where We ruled that"in the computation of backwages and separation pay, account must be taken not only of the basicsalary of petitioner but also of her transportation and emergency living allowances." This ruling wasreiterated in Soriano v. NLRC, et al.,G.R. No. 75510, October 27, 1987, 155 SCRA 124 and recently,in Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989.

We shall concern ourselves now with the issue of whether or not earned sales commission should beincluded in the monthly salary of petitioner for the purpose of computation of their separation pay.

Article 97(f) by itself is explicit that commission is included in the definition of the term "wage". It hasbeen repeatedly declared by the courts that where the law speaks in clear and categorical language,there is no room for interpretation or construction; there is only room for application (Cebu PortlandCement Co. v. Municipality of Naga, G.R. Nos. 24116-17, August 22, 1968, 24 SCRA 708; Gonzagav. Court of Appeals, G.R.No. L-2 7455, June 28,1973, 51 SCRA 381). A plain and unambiguous statutespeaks for itself, and any attempt to make it clearer is vain labor and tends only to obscurity. However, it may be argued that if We correlate Article 97(f) with Article XIV of the Collective Bargaining

Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of the Implementing Rules, thereappears to be an ambiguity. In this regard, the Labor Arbiter rationalized his decision in this manner(pp. 74-76, Rollo):

The definition of 'wage' provided in Article 96 (sic) of the Code can be correctly be (sic)stated as a general definition. It is 'wage ' in its generic sense. A careful perusal of thesame does not show any indication that commission is part of salary. We can say thatcommission by itself may be considered a wage. This is not something novel for itcannot be gainsaid that certain types of employees like agents, field personnel andsalesmen do not earn any regular daily, weekly or monthly salaries, but rely mainly oncommission earned.

Upon the other hand, the provisions of Section 10, Rule 1, Book VI of the implementingrules in conjunction with Articles 273 and 274 (sic) of the Code specifically states thatthe basis of the termination pay due to one who is sought to be legally separated from

the service is 'his latest salary rates.

x x x.

Even Articles 273 and 274 (sic) invariably use 'monthly pay or monthly salary'.

The above terms found in those Articles and the particular Rules were intentionallyused to express the intent of the framers of the law that for purposes of separation paythey mean to be specifically referring to salary only.

.... Each particular benefit provided in the Code and other Decrees on Labor has itsown pecularities and nuances and should be interpreted in that light. Thus, for a

specific provision, a specific meaning is attached to simplify matters that may arisethere from. The general guidelines in (sic) the formation of specific rules for particularpurpose. Thus, that what should be controlling in matters concerning termination payshould be the specific provisions of both Book VI of the Code and the Rules. At anyrate, settled is the rule that in matters of conflict between the general provision of lawand that of a particular- or specific provision, the latter should prevail.

On its part, the NLRC ruled (p. 110, Rollo):

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From the aforequoted provisions of the law and the implementing rules, it could bededuced that wage is used in its generic sense and obviously refers to the basic wagerate to be ascertained on a time, task, piece or commission basis or other method ofcalculating the same. It does not, however, mean that commission, allowances oranalogous income necessarily forms part of the employee's salary because to do sowould lead to anomalies (sic), if not absurd, construction of the word "salary." For what

will prevent the employee from insisting that emergency living allowance, 13th monthpay, overtime, and premium pay, and other fringe benefits should be added to thecomputation of their separation pay. This situation, to our mind, is not the real intent ofthe Code and its rules.

We rule otherwise. The ambiguity between Article 97(f), which defines the term 'wage' and Article XIVof the Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of theImplementing Rules, which mention the terms "pay" and "salary", is more apparent than real. Broadly,the word "salary" means a recompense or consideration made to a person for his pains or industry inanother man's business. Whether it be derived from "salarium," or more fancifully from "sal," the payof the Roman soldier, it carries with it the fundamental idea of compensation for services rendered.Indeed, there is eminent authority for holding that the words "wages" and "salary" are in essencesynonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85N.Y.S. 839,841,89 App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which is the Latin word"salarium," is often used interchangeably with "wage", the etymology of which is the Middle Englishword "wagen". Both words generally refer to one and the same meaning, that is, a reward orrecompense for services performed. Likewise, "pay" is the synonym of "wages" and "salary" (Black'sLaw Dictionary, 5th Ed.). Inasmuch as the words "wages", "pay" and "salary" have the same meaning,and commission is included in the definition of "wage", the logical conclusion, therefore, is, in thecomputation of the separation pay of petitioners, their salary base should include also their earnedsales commissions.

The aforequoted provisions are not the only consideration for deciding the petition in favor of thepetitioners.

We agree with the Solicitor General that granting, in gratia argumenti, that the commissions were inthe form of incentives or encouragement, so that the petitioners would be inspired to put a little moreindustry on the jobs particularly assigned to them, still these commissions are direct remunerationservices rendered which contributed to the increase of income of Zuellig . Commission is therecompense, compensation or reward of an agent, salesman, executor, trustees, receiver, factor,broker or bailee, when the same is calculated as a percentage on the amount of his transactions oron the profit to the principal (Black's Law Dictionary, 5th Ed., citing Weiner v. Swales, 217 Md. 123,141 A.2d 749, 750). The nature of the work of a salesman and the reason for such type of remunerationfor services rendered demonstrate clearly that commission are part of petitioners' wage or salary. Wetake judicial notice of the fact that some salesmen do not receive any basic salary but depend oncommissions and allowances or commissions alone, are part of petitioners' wage or salary. We take

judicial notice of the fact that some salesman do not received any basic salary but depend oncommissions and allowances or commissions alone, although an employer-employee relationshipexists. Bearing in mind the preceeding dicussions, if we adopt the opposite view that commissions, donot form part of wage or salary, then, in effect, We will be saying that this kind of salesmen do notreceive any salary and therefore, not entitled to separation pay in the event of discharge fromemployment. Will this not be absurd? This narrow interpretation is not in accord with the liberal spiritof our labor laws and considering the purpose of separation pay which is, to alleviate the difficultieswhich confront a dismissed employee thrown the the streets to face the harsh necessities of life.

Additionally, in Soriano v. NLRC, et al., supra, in resolving the issue of the salary base that should beused in computing the separation pay, We held that:

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The commissions also claimed by petitioner ('override commission' plus 'net depositincentive') are not properly includible in such base figure since such commissions mustbe earned by actual market transactions attributable to petitioner.

Applying this by analogy, since the commissions in the present case were earned by actual markettransactions attributable to petitioners, these should be included in their separation pay. In the

computation thereof, what should be taken into account is the average commissions earned duringtheir last year of employment.

The final consideration is, in carrying out and interpreting the Labor Code's provisions and itsimplementing regulations, the workingman's welfare should be the primordial and paramountconsideration. This kind of interpretation gives meaning and substance to the liberal andcompassionate spirit of the law as provided for in Article 4 of the Labor Code which states that "alldoubts in the implementation and interpretation of the provisions of the Labor Code including itsimplementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No.71812, July 30,1987,152 SCRA 140; Manila Electric Company v. NLRC, et al., G.R. No. 78763, July12,1989), and Article 1702 of the Civil Code which provides that "in case of doubt, all labor legislationand all labor contracts shall be construed in favor of the safety and decent living for the laborer.

ACCORDINGLY, the petition is hereby GRANTED. The decision of the respondent National LaborRelations Commission is MODIFIED by including allowances and commissions in the separation payof petitioners Jose Songco and Amancio Manuel. The case is remanded to the Labor Arbiter for theproper computation of said separation pay.

SO ORDERED.

G.R. No. 192558 February 15, 2012

BITOY JAVIER (DANILO P. JAVIER),Petitioner,vs.

FLY ACE CORPORATION/FLORDELYN CASTILLO,Respondents.

MENDOZA, J .:

This is a petition under Rule 45 of the Rules of Civil Procedure assailing the March 18, 2010Decision1of the Court of Appeals (CA)and its June 7, 2010 Resolution,2in CA-G.R. SP No. 109975,which reversed the May 28, 2009 Decision3of the National Labor Relations Commission (NLRC)inthe case entitled Bitoy Javier v. Fly Ace/Flordelyn Castillo,4 holding that petitioner BitoyJavier (Javier)was illegally dismissed from employment and ordering Fly Ace Corporation (Fly Ace)topay backwages and separation pay in lieu of reinstatement.

Antecedent Facts

On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of salaries and otherlabor standard benefits. He alleged that he was an employee of Fly Ace since September 2007,performing various tasks at the respondents warehouse such as cleaning and arranging the canneditems before their delivery to certain locations, except in instances when he would be ordered toaccompany the companys delivery vehicles, aspahinante; that he reported for work from Monday toSaturday from 7:00 oclock in the morning to 5:00 oclock in the afternoon; that during his employment,he was not issued an identification card and payslips by the company; that on May 6, 2008, he reportedfor work but he was no longer allowed to enter the company premises by the security guard upon the

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instruction of Ruben Ong (Mr. Ong), his superior;5that after several minutes of begging to the guardto allow him to enter, he saw Ong whom he approached and asked why he was being barred fromentering the premises; that Ong replied by saying, "Tanungin mo anak mo;"6that he then went homeand discussed the matter with his family; that he discovered that Ong had been courting his daughter

Annalyn after the two met at a fiesta celebration in Malabon City; that Annalyn tried to talk to Ong andconvince him to spare her father from trouble but he refused to accede; that thereafter, Javier was

terminated from his employment without notice; and that he was neither given the opportunity to refutethe cause/s of his dismissal from work.

To support his allegations, Javier presented an affidavit of one Bengie Valenzuela who alleged thatJavier was a stevedore or pahinanteof Fly Ace from September 2007 to January 2008. The saidaffidavit was subscribed before the Labor Arbiter (LA).7

For its part, Fly Ace averred that it was engaged in the business of importation and sales of groceries.Sometime in December 2007, Javier was contracted by its employee, Mr. Ong, as extra helper onapakyawbasis at an agreed rate of P 300.00 per trip, which was later increased to P 325.00 in January2008. Mr. Ong contracted Javier roughly 5 to 6 times only in a month whenever the vehicle of itscontracted hauler, Milmar Hauling Services, was not available. On April 30, 2008, Fly Ace no longerneeded the services of Javier. Denying that he was their employee, Fly Ace insisted that there was noillegal dismissal.8Fly Ace submitted a copy of its agreement with Milmar Hauling Services and copiesof acknowledgment receipts evidencing payment to Javier for his contracted services bearing thewords, "daily manpower (pakyaw/piece rate pay)" and the latters signatures/initials.

Ruling of the Labor Arbiter

On November 28, 2008, the LA dismissed the complaint for lack of merit on the ground that Javierfailed to present proof that he was a regular employee of Fly Ace. He wrote:

Complainant has no employee ID showing his employment with the Respondent nor any documentshowing that he received the benefits accorded to regular employees of the Respondents. Hiscontention that Respondent failed to give him said ID and payslips implies that indeed he was not a

regular employee of Fly Ace considering that complainant was a helper and that Respondent companyhas contracted a regular trucking for the delivery of its products.

Respondent Fly Ace is not engaged in trucking business but in the importation and sales of groceries.Since there is a regular hauler to deliver its products, we give credence to Respondents claim thatcomplainant was contracted on "pakiao" basis.

As to the claim for underpayment of salaries, the payroll presented by the Respondents showingsalaries of workers on "pakiao" basis has evidentiary weight because although the signature of thecomplainant appearing thereon are not uniform, they appeared to be his true signature.

x x x x

Hence, as complainant received the rightful salary as shown by the above described payrolls,Respondents are not liable for salary differentials.9

Ruling of the NLRC

On appeal with the NLRC, Javier was favored. It ruled that the LA skirted the argument of Javier andimmediately concluded that he was not a regular employee simply because he failed to present proof.

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It was of the view that apakyaw-basis arrangement did not preclude the existence of employer-employee relationship. "Payment by result x x x is a method of compensation and does not define theessence of the relation. It is a mere method of computing compensation, not a basis for determiningthe existence or absence of an employer-employee relationship.10"The NLRC further averred that itdid not follow that a worker was a job contractor and not an employee, just because the work he wasdoing was not directly related to the employers trade or business or the work may be considered as

"extra" helper as in this case; and that the relationship of an employer and an employee wasdetermined by law and the same would prevail whatever the parties may call it. In this case, the NLRCheld that substantial evidence was sufficient basis for judgment on the existence of the employer-employee relationship. Javier was a regular employee of Fly Ace because there was reasonableconnection between the particular activity performed by the employee (as a "pahinante")in relation tothe usual business or trade of the employer (importation, sales and delivery of groceries). He may notbe considered as an independent contractor because he could not exercise any judgment in thedelivery of company products. He was only engaged as a "helper."

Finding Javier to be a regular employee, the NLRC ruled that he was entitled to a security of tenure.For failing to present proof of a valid cause for his termination, Fly Ace was found to be liable for illegaldismissal of Javier who was likewise entitled to backwages and separation pay in lieu of reinstatement.The NLRC thus ordered:

WHEREFORE, premises considered, complainants appeal is partially GRANTED. The assailedDecision of the labor arbiter is VACATED and a new one is hereby entered holding respondent FLY

ACE CORPORATION guilty of illegal dismissal and non-payment of 13th month pay. Consequently, itis hereby ordered to pay complainant DANILO "Bitoy" JAVIER the following:

1. Backwages -P 45,770.83

2. Separation pay, in lieu of reinstatement - 8,450.00

3. Unpaid 13th month pay (proportionate) - 5,633.33

TOTAL -P 59,854.16

All other claims are dismissed for lack of merit.

SO ORDERED.11

Ruling of the Court of Appeals

On March 18, 2010, the CA annulled the NLRC findings that Javier was indeed a former employee ofFly Ace and reinstated the dismissal of Javiers complaint as ordered by the LA. The CA exercised itsauthority to make its own factual determination anent the issue of the existence of an employer-employee relationship between the parties. According to the CA:

x x x

In an illegal dismissal case the onus probandi rests on the employer to prove that its dismissal was fora valid cause. However, before a case for illegal dismissal can prosper, an employer-employeerelationship must first be established. x x x it is incumbent upon private respondent to prove theemployee-employer relationship by substantial evidence.

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x x x

It is incumbent upon private respondent to prove, by substantial evidence, that he is an employee ofpetitioners, but he failed to discharge his burden. The non-issuance of a company-issued identificationcard to private respondent supports petitioners contention that private respondent was not itsemployee.12

The CA likewise added that Javiers failure topresent salary vouchers, payslips, or other pieces ofevidence to bolster his contention, pointed to the inescapable conclusion that he was not an employeeof Fly Ace. Further, it found that Javiers work was not necessary and desirable to the business ortrade of the company, as it was only when there were scheduled deliveries, which a regular haulingservice could not deliver, that Fly Ace would contract the services of Javier as an extra helper. Lastly,the CA declared that the facts alleged by Javier did not pass the "control test."

He contracted work outside the company premises; he was not required to observe definite hours ofwork; he was not required to report daily; and he was free to accept other work elsewhere as therewas no exclusivity of his contracted service to the company, the same being co-terminous with the triponly.13Since no substantial evidence was presented to establish an employer-employee relationship,

the case for illegal dismissal could not prosper.

The petitioners moved for reconsideration, but to no avail.

Hence, this appeal anchored on the following grounds:

I.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THEPETITIONER WAS NOT A REGULAR EMPLOYEE OF FLY ACE.

II.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THEPETITIONER IS NOT ENTITLED TO HIS MONETARY CLAIMS.14

The petitioner contends that other than its bare allegations and self-serving affidavits of the otheremployees, Fly Ace has nothing to substantiate its claim that Javier was engaged on apakyawbasis.

Assuming that Javier was indeed hired on apakyawbasis, it does not preclude his regular employmentwith the company. Even the acknowledgment receipts bearing his signature and the confirming receiptof his salaries will not show the true nature of his employment as they do not reflect the necessarydetails of the commissioned task. Besides, Javiers tasks as pahinanteare related, necessary anddesirable to the line of business by Fly Ace which is engaged in the importation and sale of groceryitems. "On days when there were no scheduled deliveries, he worked in petitioners warehouse,arranging and cleaning the stored cans for delivery to clients."15More importantly, Javier was subjectto the control and supervision of the company, as he was made to report to the office from Monday toSaturday, from 7:00 oclock in the morning until 5:00 oclock in the afternoon. The list of deliverablegoods, together with the corresponding clients and their respective purchases and addresses, wouldnecessarily have been prepared by Fly Ace. Clearly, he was subjected to compliance with companyrules and regulations as regards working hours, delivery schedule and output, and his other duties inthe warehouse.16

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The petitioner chiefly relied on Chavez v. NLRC,17where the Court ruled that payment to a worker ona per trip basis is not significant because "this is merely a method of computing compensation and nota basis for determining the existence of employer-employee relationship." Javier likewise invokes therule that, "in controversies between a laborer and his master, x x x doubts reasonably arising from theevidence should be resolved in the formers favour. The policy is reflected is no less than theConstitution, Labor Code and Civil Code."18

Claiming to be an employee of Fly Ace, petitioner asserts that he was illegally dismissed by the lattersfailure to observe substantive and procedural due process. Since his dismissal was not based on anyof the causes recognized by law, and was implemented without notice, Javier is entitled to separationpay and backwages.

In its Comment,19Fly Ace insists that there was no substantial evidence to prove employer-employeerelationship. Having a service contract with Milmar Hauling Services for the purpose of transportingand delivering company products to customers, Fly Ace contracted Javier as an extra helperor pahinante on a mere "per trip basis." Javier, who was actually a loiterer in the area, onlyaccompanied and assisted the company driver when Milmar could not deliver or when the exigencyof extra deliveries arises for roughly five to six times a month. Before making a delivery, Fly Ace wouldturn over to the driver and Javier the delivery vehicle with its loaded company products. With thevehicle and products in their custody, the driver and Javier "would leave the company premises usingtheir own means, method, best judgment and discretion on how to deliver, time to deliver, where and[when] to start, and manner of delivering the products."20

Fly Ace dismisses Javiers claims of employment as baseless assertions. Aside from his bareallegations, he presented nothing to substantiate his status as an employee. "It is a basic rule ofevidence that each party must prove his affirmative allegation. If he claims a right granted by law, hemust prove his claim by competent evidence, relying on the strength of his own evidence and not uponthe weakness of his opponent."21Invoking the case ofLopez v. Bodega City,22Fly Ace insists that inan illegal dismissal case, the burden of proof is upon the complainant who claims to be an employee.It is essential that an employer-employee relationship be proved by substantial evidence. Thus, it cites:

In an illegal dismissal case, the onus probandirests on the employer to prove that its dismissal of anemployee was for a valid cause. However, before a case for illegal dismissal can prosper, anemployer-employee relationship must first be established.

Fly Ace points out that Javier merely offers factual assertions that he was an employee of Fly Ace,"which are unfortunately not supported by proof, documentary or otherwise."23Javier simply assumedthat he was an employee of Fly Ace, absent any competent or relevant evidence to support it. "Heperformed his contracted work outside the premises of the respondent; he was not even required toreport to work at regular hours; he was not made to register his time in and time out every time he wascontracted to work; he was not subjected to any disciplinary sanction imposed to other employees forcompany violations; he was not issued a company I.D.; he was not accorded the same benefits givento other employees; he was not registered with the Social Security System (SSS) as petitioners

employee; and, he was free to leave, accept and engage in other means of livelihood as there is noexclusivity of his contracted services with the petitioner, his services being co-terminus with the triponly. All these lead to the conclusion that petitioner is not an employee of the respondents."24

Moreover, Fly Ace claims that it had "no right to control the result, means, manner and methods bywhich Javier would perform his work or by which the same is to be accomplished."25In other words,Javier and the company driver were given a free hand as to how they would perform their contractedservices and neither were they subjected to definite hours or condition of work.

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Fly Ace likewise claims that Javiers function as apahinantewas not directly related or necessary toits principal business of importation and sales of groceries. Even without Javier, the business couldoperate its usual course as it did not involve the business of inland transportation. Lastly, theacknowledgment receipts bearing Javiers signature and words "pakiaorate," referring to his earnedsalaries on a per trip basis, have evidentiary weight that the LA correctly considered in arriving at theconclusion that Javier was not an employee of the company.

The Court affirms the assailed CA decision.

It must be noted that the issue of Javiers alleged illegal dismissal is anchored on the existence of anemployer-employee relationship between him and Fly Ace. This is essentially a question of fact.Generally, the Court does not review errors that raise factual questions. However, when there isconflict among the factual findings of the antecedent deciding bodies like the LA, the NLRC and theCA, "it is proper, in the exercise of Our equity jurisdiction, to review and re-evaluate the factual issuesand to look into the records of the case and re-examine the questioned findings."26 In dealing withfactual issues in labor cases, "substantial evidence that amount of relevant evidence which areasonable mind might accept as adequate to justify a conclusionis sufficient."27

As the records bear out, the LA and the CA found Javiers claim of employment with Fly Ace as wantingand deficient. The Court is constrained to agree. Although Section 10, Rule VII of the New Rules ofProcedure of the NLRC28allows a relaxation of the rules of procedure and evidence in labor cases,this rule of liberality does not mean a complete dispensation of proof. Labor officials are enjoined touse reasonable means to ascertain the facts speedily and objectively with little regard to technicalitiesor formalities but nowhere in the rules are they provided a license to completely discount evidence, orthe lack of it. The quantum of proof required, however, must still be satisfied. Hence, "when confrontedwith conflicting versions on factual matters, it is for them in the exercise of discretion to determinewhich party deserves credence on the basis of evidence received, subject only to the requirement thattheir decision must be supported by substantial evidence."29Accordingly, the petitioner needs to showby substantial evidence that he was indeed an employee of the company against which he claimsillegal dismissal.

Expectedly, opposing parties would stand poles apart and proffer allegations as different as chalk andcheese. It is, therefore, incumbent upon the Court to determine whether the party on whom the burdento prove lies was able to hurdle the same. "No particular form of evidence is required to prove theexistence of such employer-employee relationship. Any competent and relevant evidence to prove therelationship may be admitted.http://www.lawphil.net/judjuris/juri2009/may2009/gr_179652_2009.html- fnt31 Hence, while no particular form of evidence is required, a finding that such relationship existsmust still rest on some substantial evidence. Moreover, the substantiality of the evidence depends onits quantitative as well as its qualitativeaspects."30Although substantial evidence is not a function ofquantity but rather of quality, the x x x circumstances of the instant case demand that something moreshould have been proffered. Had there been other proofs of employment, such as x x x inclusion inpetitioners payroll, or a clear exercise of control, the Court would have affirmed the finding ofemployer-employee relationship."31

In sum, the rule of thumb remains: the onus probandi falls on petitioner to establish or substantiatesuch claim by the requisite quantum of evidence.32 "Whoever claims entitlement to the benefitsprovided by law should establish his or her right thereto x x x."33 Sadly, Javier failed to adducesubstantial evidence as basis for the grant of relief.

In this case, the LA and the CA both concluded that Javier failed to establish his employment with FlyAce. By way of evidence on this point, all that Javier presented were his self-serving statementspurportedly showing his activities as an employee of Fly Ace. Clearly, Javier failed to pass the

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substantiality requirement to support his claim. Hence, the Court sees no reason to depart from thefindings of the CA.

While Javier remains firm in his position that as an employed stevedore of Fly Ace, he was made towork in the company premises during weekdays arranging and cleaning grocery items for delivery toclients, no other proof was submitted to fortify his claim. The lone affidavit executed by one Bengie

Valenzuela was unsuccessful in strengthening Javiers cause. In said document, all Valenzuelaattested to was that he would frequently see Javier at the workplace where the latter was also hiredas stevedore.34Certainly, in gauging the evidence presented by Javier, the Court cannot ignore theinescapable conclusion that his mere presence at the workplace falls short in proving employmenttherein. The supporting affidavit could have, to an extent, bolstered Javiers claim of being tasked toclean grocery items when there were no scheduled delivery trips, but no information was offered inthis subject simply because the witness had no personal knowledge of Javiers employment status inthe company. Verily, the Court cannot accept Javiers statements, hook, line and sinker.

The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests todetermine the existence of an employer-employee relationship, viz: (1) the selection and engagementof the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to controlthe employees conduct. Of these elements, the most important criterion is whether the employercontrols or has reserved the right to control the employee not only as to the result of the work but alsoas to the means and methods by which the result is to be accomplished.35

In this case, Javier was not able to persuade the Court that the above elements exist in his case. 1avvphi1Hecould not submit competent proof that Fly Ace engaged his services as a regular employee; that Fly

Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should be while atwork. In other words, Javiers allegations did not establish that his relationship with Fly Ace had theattributes of an employer-employee relationship on the basis of the above-mentioned four-fold test.Worse, Javier was not able to refute Fly Aces assertion that it had an agreement with a haulingcompany to undertake the delivery of its goods. It was also baffling to realize that Javier did not disputeFly Aces denial of his services exclusivity to the company. In short, all that Javier laid down were bareallegations without corroborative proof.

Fly Ace does not dispute having contracted Javier and paid him on a "per trip" rate as a stevedore,albeit on apakyawbasis. The Court cannot fail to note that Fly Ace presented documentary proof thatJavier was indeed paid on apakyawbasis per the acknowledgment receipts admitted as competentevidence by the LA. Unfortunately for Javier, his mere denial of the signatures affixed therein cannotautomatically sway us to ignore the documents because "forgery cannot be presumed and must beproved by clear, positive and convincing evidence and the burden of proof lies on the party allegingforgery."36

Considering the above findings, the Court does not see the necessity to resolve the second issuepresented.

One final note. The Courts decision does not contradict the settled rule that "payment by the piece isjust a method of compensation and does not define the essence of the relation."37Payment on a piece-rate basis does not negate regular employment. "The term wage is broadly defined in Article 97 ofthe Labor Code as remuneration or earnings, capable of being expressed in terms of money whetherfixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a methodof compensation and does not define the essence of the relations. Nor does the fact that the petitioneris not covered by the SSS affect the employer-employee relationship. However, in determiningwhether the relationship is that of employer and employee or one of an independent contractor, eachcase must be determined on its own facts and all the features of the relationship are to be

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considered."38Unfortunately for Javier, the attendant facts and circumstances of the instant case donot provide the Court with sufficient reason to uphold his claimed status as employee of Fly Ace.

While the Constitution is committed to the policy of social justice and the protection of the workingclass, it should not be supposed that every labor dispute will be automatically decided in favor of labor.Management also has its rights which are entitled to respect and enforcement in the interest of simple

fair play. Out of its concern for the less privileged in life, the Court has inclined, more often than not,toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however,has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed inthe light of the established facts and the applicable law and doctrine.39

WHEREFORE, the petition is DENIED. The March 18, 2010 Decision of the Court of Appeals and itsJune 7, 2010 Resolution, in CA-G.R. SP No. 109975, are hereby AFFIRMED.

SO ORDERED.

JOSE CATRAL MENDOZAAssociate Justice

G.R. No. 172161 March 2, 2011

SLL INTERNATIONAL CABLES SPECIALIST and SONNY L. LAGON,Petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION, 4th DIVISION, ROLDAN LOPEZ, EDGARDOZUIGA and DANILO CAETE,Respondents.

D E C I S I O N

MENDOZA, J .:

Assailed in this petition for review on certiorari are the January 11, 2006 Decision1and the March 31,2006 Resolution2 of the Court of Appeals (CA), in CA-G.R. SP No. 00598 which affirmed withmodification the March 31, 2004 Decision3and December 15, 2004 Resolution4of the National LaborRelations Commission (NLRC).The NLRC Decision found the petitioners, SLL International CablesSpecialist (SLL)and its manager, Sonny L. Lagon(petitioners), not liable for the illegal dismissal ofRoldan Lopez, Danilo Caete and Edgardo Zuiga (private respondents)but held them jointly andseverallyliable for payment of certain monetary claims to said respondents.

A chronicle of the factual antecedents has been succinctly summarized by the CA as follows:

Sometime in 1996, and January 1997, private respondents Roldan Lopez (Lopez for brevity) andDanilo Caete (Caete for brevity), and Edgardo Zuiga (Zuiga for brevity) respectively, were hired

by petitioner Lagon as apprentice or trainee cable/lineman. The three were paid the full minimum wageand other benefits but since they were only trainees, they did not report for work regularly but came inas substitutes to the regular workers or in undertakings that needed extra workers to expeditecompletion of work. After their training, Zuiga, Caete and Lopez were engaged as project employeesby the petitioners in their Islacom project in Bohol. Private respondents started on March 15, 1997 untilDecember 1997. Upon the completion of their project, their employment was also terminated. Privaterespondents received the amount of P145.00, the minimum prescribed daily wage for Region VII. InJuly 1997, the amount of P145 was increased to P150.00 by the Regional Wage Board (RWB) and inOctober of the same year, the latter was increased to P155.00. Sometime in March 1998, Zuiga and

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Caete were engaged again by Lagon as project employees for its PLDT Antipolo, Rizal project, whichended sometime in (sic) the late September 1998. As a consequence, Zuiga and Caetesemployment was terminated. For this project, Zuiga and Caete received only the wage of P145.00daily. The minimum prescribed wage for Rizal at that time was P160.00.

Sometime in late November 1998, private respondents re-applied in the Racitelcom project of Lagon

in Bulacan. Zuiga and Caete were re-employed. Lopez was also hired for the said specific project.For this, private respondents received the wage of P145.00. Again, after the completion of their projectin March 1999, private respondents went home to Cebu City.

On May 21, 1999, private respondents for the 4th time worked with Lagon s project in Camarin,Caloocan City with Furukawa Corporation as the general contractor. Their contract would expire onFebruary 28, 2000, the period of completion of the project. From May 21, 1997-December 1999,private respondents received the wage ofP145.00. At this time, the minimum prescribed rate for Manilawas P198.00. In January to February 28, the three received the wage of P165.00. The existing rate atthat time was P213.00.

For reasons of delay on the delivery of imported materials from Furukawa Corporation, the Camarin

project was not completed on the scheduled date of completion. Face[d] with economic problem[s],Lagon was constrained to cut down the overtime work of its worker[s][,] including private respondents.Thus, when requested by private respondents on February 28, 2000 to work overtime, Lagon refusedand told private respondents that if they insist, they would have to go home at their own expense andthat they would not be given anymore time nor allowed to stay in the quarters. This prompted privaterespondents to leave their work and went home to Cebu. On March 3, 2000, private respondents fileda complaint for illegal dismissal, non-payment of wages, holiday pay, 13th month pay for 1997 and1998 and service incentive leave pay as well as damages and attorneys fees.

In their answers, petitioners admit employment of private respondents but claimed that the latter wereonly project employees[,] for their services were merely engaged for a specific project or undertakingand the same were covered by contracts duly signed by private respondents. Petitioners furtheralleged that the food allowance ofP63.00 per day as well as private respondents allowance for lodging

house, transportation, electricity, water and snacks allowance should be added to their basic pay. Withthese, petitioners claimed that private respondents received higher wage rate than that prescribed inRizal and Manila.

Lastly, petitioners alleged that since the workplaces of private respondents were all in Manila, thecomplaint should be filed there. Thus, petitioners prayed for the dismissal of the complaint for lack of

jurisdiction and utter lack of merit. (Citations omitted.)

On January 18, 2001, Labor Arbiter Reynoso Belarmino (LA)rendered his decision5declaring that hisoffice had jurisdiction to hear and decide the complaint filed by private respondents. Referring to RuleIV, Sec. 1 (a) of the NLRC Rules of Procedure prevailing at that time,6 the LA ruled that it had

jurisdiction because the "workplace," as defined in the said rule, included the place where the

employee was supposed to report back after a temporary detail, assignment or travel, which in thiscase was Cebu.

As to the status of their employment, the LA opined that private respondents were regular employeesbecause they were repeatedly hired by petitioners and they performed activities which were usual,necessary and desirable in the business or trade of the employer.

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With regard to the underpayment of wages, the LA found that private respondents were underpaid. Itruled that the free board and lodging, electricity, water, and food enjoyed by them could not be includedin the computation of their wages because these were given without their written consent.

The LA, however, found that petitioners were not liable for illegal dismissal. The LA viewed privaterespondents act of going home as an act of indifference when petitioners decided to prohibit overtime

work.7

In its March 31, 2004 Decision, the NLRC affirmed the findings of the LA. In addition, the NLRC notedthat not a single report of project completion was filed with the nearest Public Employment Office asrequiredby the Department of Labor and Employment (DOLE) Department Order No. 19, Series of 1993.8TheNLRC later denied9the motion for reconsideration10subsequently filed by petitioners.

When the matter was elevated to the CA on a petition for certiorari, it affirmed the findings that theprivate respondents were regular employees. It considered the fact that they performed functionswhich were the regular and usual business of petitioners. According to the CA, they were clearlymembers of a work pool from which petitioners drew their project employees.

The CA also stated that the failure of petitioners to comply with the simple but compulsory requirementto submit a report of termination to the nearest Public Employment Office every time privaterespondents employment was terminated was proof that the latter were not project employees butregular employees.

The CA likewise found that the private respondents were underpaid. It ruled that the board and lodging,electricity, water, and food enjoyed by the private respondents could not be included in thecomputation of their wages because these were given without their written consent. The CA addedthat the private respondents were entitled to 13th month pay.

The CA also agreed with the NLRC that there was no illegal dismissal. The CA opined that it was thepetitioners prerogative to grant or deny any request for overtime work and that the privaterespondents act of leaving the workplace after their request was denied was an act of abandonment.

In modifying the decision of the labor tribunal, however, the CA noted that respondent Roldan Lopezdid not work in the Antipolo project and, thus, was not entitled to wage differentials. Also, in computingthe differentials for the period January and February 2000, the CA disagreed in the award ofdifferentials based on the minimum daily wage of P223.00, as the prevailing minimum daily wage thenwas only P213.00. Petitioners sought reconsideration but the CA denied it in its March 31, 2006Resolution.11

In this petition for review on certiorari,12 petitioners seek the reversal and setting aside of the CAdecision anchored on this lone:

GROUND/ASSIGNMENT OF ERROR

THE PUBLIC RESPONDENT NLRC COMMITTED A SERIOUS ERROR IN LAW IN AWARDINGWAGE DIFFERENTIALS TO THE PRIVATE COMPLAINANTS ON THE BASES OF MERETECHNICALITIES, THAT IS, FOR LACK OF WRITTEN CONFORMITY x x x AND LACK OF NOTICETO THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE)[,] AND THUS, THE COURT OF

APPEALS GRAVELY ERRED IN AFFIRMING WITH MODIFICATION THE NLRC DECISION IN THELIGHT OF THE RULING IN THE CASE OF JENNY M. AGABON and VIRGILIO AGABON vs, NLRC,ET AL., GR NO. 158963, NOVEMBER 17, 2004, 442 SCRA 573, [AND SUBSEQUENTLY IN THE

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CASE OF GLAXO WELLCOME PHILIPPINES, INC. VS. NAGAKAKAISANG EMPLEYADO NGWELLCOME-DFA (NEW DFA), ET AL., GR NO. 149349, 11 MARCH 2005], WHICH FINDS

APPLICATION IN THE INSTANT CASE BY ANALOGY.13

Petitioners reiterated their position that the value of the facilities that the private respondents enjoyedshould be included in the computation of the "wages" received by them. They argued that the rulings

in Agabon v. NLRC14and Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado Ng Wellcome-DFA15should be applied by analogy, in the sense that the lack of written acceptance of the employeesof the facilities enjoyed by them should not mean that the value of the facilities could not be includedin the computation of the private respondents "wages."

On November 29, 2006, the Court resolved to issue a Temporary Restraining Order (TRO)enjoiningthe public respondent from enforcing the NLRC and CA decisions until further orders from the Court.

After a thorough review of the records, however, the Court finds no merit in the petition.

This petition generally involves factual issues, such as, whether or not there is evidence on record tosupport the findings of the LA, the NLRC and the CA that private respondents were project or regular

employees and that their salary differentials had been paid. This calls for a re-examination of theevidence, which the Court cannot entertain. Settled is the rule that factual findings of labor officials,who are deemed to have acquired expertise in matters within their respective jurisdiction, are generallyaccorded not only respect but even finality, and bind the Court when supported by substantialevidence. It is not the Courts function to assess and evaluate the evidence

all over again, particularly where the findings of both the Labor tribunals and the CA concur.16

As a general rule, on payment of wages, a party who alleges payment as a defense has the burdenof proving it.17Specifically with respect to labor cases, the burden of proving payment of monetaryclaims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records,remittances and other similar documents which will show that overtime, differentials, serviceincentive leave and other claims of workers have been paid are not in the possession of the workerbut in the custody and absolute control of the employer.18

In this case, petitioners, aside from bare allegations that private respondents received wages higherthan the prescribed minimum, failed to present any evidence, such as payroll or payslips, to supporttheir defense of payment. Thus, petitioners utterly failed to discharge the onus probandi.

Private respondents, on the other hand, are entitled to be paid the minimum wage, whether they areregular or non-regular employees.

Section 3, Rule VII of the Rules to Implement the Labor Code19specifically enumerates those who arenot covered by the payment of minimum wage. Project employees are not among them.

On whether the value of the facilities should be included in the computation of the "wages" receivedby private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employermay provide subsidized meals and snacks to his employees provided that the subsidy shall not beless that 30% of the fair and reasonable value of such facilities. In such cases, the employer maydeduct from the wages of the employees not more than 70% of the value of the meals and snacksenjoyed by the latter, provided that such deduction is with the written authorization of the employeesconcerned.

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Moreover, before the value of facilities can be deducted from the empl oyees wages, the followingrequisites must all be attendant: first, proof must be shown that such facilities are customarily furnishedby the trade; second, the provision of deductible facilities must be voluntarily accepted in writing bythe employee; and finally, facilities must be charged at reasonable value.20Mere availment is notsufficient