SLL INTERNATIONAL CABLES SPECIALIST and LAGON VS NLRC, LOPEZ, ZUÑIGA and CAÑETE (2011) – FACILITIES and SUPPLEMENTS

FACTS:

Private Respondents were hired by Lagon as apprentice or trainee cable/lineman and were paid the full minimum wage and other benefits; they did not report to work regularly, since they are trainees, but came in substitutes for other regular workers. After their training, they were engaged as Project Employees in different parts of the Country (Bohol, Anitpolo, Bulacan and Caloocan) upon which they have to re-apply after every completion. Faced with economic problems, Lagon was constrained to cut down the overtime work of its workers. Thus, when private respondents requested to work overtime, Lagon refused. Private respondents went home to Cebu and filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13th month pay and service incentive leave pay as well as damages and attorney’s fees.

Petitioners admitted private respondents’ employment but claimed that the latter were only project employees for their services were merely engaged for a specific project or undertaking and the same were covered by contracts duly signed by private respondents. And since the workplaces of private respondents were all in Manila, the complaint should be filed there. Thus, petitioners prayed for the dismissal of the complaint for lack of jurisdiction and utter lack of merit.

The LA claimed that his office had jurisdiction under RULE 4 SEC 1 of the NLRC RULES 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 this case was Cebu. As to the status of their employment, the LA opined that private respondents were regular employees because they were repeatedly hired by petitioners and they performed activities which were usual, necessary and desirable in the business or trade of the employer.

LA found that private respondents were underpaid. It ruled that the free board and lodging, electricity, water, and food enjoyed by them could not be included in the computation of their wages because these were given without their written consent. However, petitioners were not liable for illegal dismissal. The LA viewed private respondents’ act of going home as an act of indifference when petitioners decided to prohibit overtime work.

The NLRC affirmed the LA’s decision. It noted that no single report of project completion was filed with the PUBLIC EMPLOYMENT office as required by DOLE. The CA affirmed both the LA’s and NLRC’s decisions and considered that petitioners failure to comply with the simple but compulsory requirement to submit a report of termination to the nearest Public Employment Office every time private respondents’ employment was terminated was proof that the latter were not project employees but regular employees.

ISSUE(S):

WON private respondents are entitled to be paid the minimum wage.

HELD:

YES. As a general rule, on payment of wages, a party who alleges payment as a defense has the burden of proving it. Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents are not in the possession of the worker but in the custody and absolute control of the employer.

In this case, petitioners, aside from bare allegations that private respondents received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their 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 are regular or non-regular employees.

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

Moreover, before the value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value. Mere availment is not sufficient to allow deductions from employees’ wages.

These requirements, however, have not been met in this case. SLL failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employee’s salaries. It also failed to provide proof of the employees’ written authorization, much less show how they arrived at their valuations. At any rate, it is not even clear whether private respondents actually enjoyed said facilities.

Facilities VS Supplements

"Supplements," therefore, constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. "Facilities," on the other hand, are items of expense necessary for the laborers and his family's existence and subsistence so that by express provision of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.

In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given. In the case at bench, the items provided were given freely by SLL for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects.

VERGARA VS COCA COLA BOTTLERS (2013) – DIMINUTION OF BENEFITS

FACTS:

Vergara was an employee of Coca Cola Bottlers for 34 years as District Sales Supervisor (DSS) for Las Pinas City. As stipulated in his retirement plan rule and regulations at the time, the annual performance incentive pay of RSMs, DSS and SSS shall be considered in the computation of retirement benefits as follows: Basic Monthly Salary + Monthly Average Performance (total performance incentive earned during the year /12 months) x No. of years in Service.

Vergara filed a complaint before the NLRC alleging that respondent illegally deducted his Sales Management Incentives representing the unpaid accounts of two dealers within his jurisdiction. The LA favored Vergara and directed respondent to reimburse the amount illegally deducted from the latter’s retirement package and to integrate his SMI privilege. Upon appeal of respondent, the NLRC modified the award and deleted the payment of the SMI. The parties executed a compromised agreement.

ISSUE:

WON the SMI should be included in the computation of Vergara’s retirement benefits on the ground of consistent company practice.

HELD:

NO. The SC ruled that it is not within their function to assess and evaluate evidence all over again, particularly where the finding of both the NLRC and the CA coincide.

Generally, employees have a vested right over existing benefits voluntarily granted by their employers. Thus any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is actually founded on the Constitutional mandate to protect the rights of workers, to promote their welfare and to afford them full protection, in turn the said mandate is the basis of Article 4 of the LC.

There is diminution of benefits when the following requisites are present: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer.

To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time, and that it has been made consistently and deliberately. In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to grant the benefit over a considerable period of time.

The SC find no substantial evidence to prove that the grant of SMI to all retired DSSs regardless of whether or not they qualify to the same had ripened into company practice. Despite more than sufficient opportunity given him while his case was pending before the NLRC, the CA, and even to this Court, petitioner utterly failed to adduce proof to establish his allegation that SMI has been consistently, deliberately and voluntarily granted to all retired DSSs without any qualification or conditions whatsoever.

Therefore, respondent's isolated act of including the SMI in the retirement package of Velazquez could hardly be classified as a company practice that may be considered an enforceable obligation. To repeat, the principle against diminution of benefits is applicable only if the grant or benefit is founded on an express policy or has ripened into a

practice over a long period of time which is consistent and deliberate; it presupposes that a company practice, policy and tradition favorable to the employees has been clearly established; and that the payments made by the company pursuant to it have ripened into benefits enjoyed by them. Certainly, a practice or custom is, as a general rule, not a source of a legally demandable or enforceable right.

ECC and GSIS VS. CA and ARREOLA (1996) – COMPENSABLE DISEASES

FACTS:

Arreola was an employee of the NBI for more than 20 years. Her nature of work deals with research; instrumental analysis of drugs, insecticides, volatile poisons, fuels, and inorganic compound; attendance to field cases; taking of paraffin casts at morgue and in the office; and assisting NBI agents in field work in the matters of investigation of industrial corporations engaged in nefarious activities. Arreola was diagnose to have stone deposits in her urinary bladder. After her operation, she filed with GSIS for compensation benefit under PD 626. GSIS denied her claim on the grounds that her ailment is a non-occupational disease and she failed to show that her position has increased the risked in contracting the sickness.

Arreola interposed an appeal to the Employee’s Compensation Commission but was dismissed for lack of merit. She then filed a petition for review with the CA. The CA sustained the position of Arreola and reversed the ECC’s decision and ordered the GSIS to pay the amount due under PD 626.

ISSUES:

WON the respondent Court of Appeals err in holding that the nature of the private respondent’s work increased the risk of contracting ureterolithiasis, thereby entitling her to compensation under PD 626, as amended.

HELD:

NO. PD 626 further amended Title II of Book IV on the ECC and State Insurance Fund of the Labor Code of the Philippines (P.D. No. 442, as amended). This law abandoned the presumption of compensability and the theory of aggravation under the Workmen’s Compensation Act. For the sickness and resulting disability or death to be compensable, the claimant must prove that: (a) the sickness must be the result of an occupational disease listed under Annex “A” of the Rules on Employees’ Compensation, or (b) the risk of contracting the disease was increased by the claimant’s working conditions. This means that if the claimant’s illness or disease is not included in the said Annex “A,” then he is entitled to compensation only if he can prove that the risk of contracting the illness or disease was increased by his working conditions.

Despite the abandonment of the presumption of compensability established by the old law, the present law has not ceased to be an employees’ compensation law or a social legislation; hence, the liberality of the law in favor of the working man and woman still prevails, and the official agency charged by law to implement the constitutional guarantee of social justice should adopt a liberal attitude in favor of the employee in deciding claims for compensability, especially in light of the compassionate policy towards labor which the 1987 Constitution vivifies and enhances. Elsewise stated, all doubts to the right to compensation must be resolved in favor of the employee or laborer. Verily, the policy is to extend the applicability of the law on employees’ compensation to as many employees who can avail of the benefits thereunder.

The private respondent concedes that her ailment, ureterolithiasis, is not included in Annex “A” of the Rules on Employees’ Compensation. Nevertheless, she asserts that she was able to prove that the risk of contracting it was increased by the exigency and nature of her work. Her burden of evidence did not require the presentation of proof beyond reasonable doubt nor a preponderance of evidence. It was enough that she adduced substantial

evidence. In cases filed before administrative or quasi-judicial bodies, like the ECC, a fact is deemed established if it is supported by substantial evidence or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. It was then enough if the private respondent was able to show that the nature of her work or her working conditions increased the risk of her contracting ureterolithiasis. Certainly, it was not necessary for her to breach the parameters of substantial evidence and to cross the difficult area of preponderance of evidence. We agree with the Court of Appeals that the private respondent successfully discharged her burden of evidence and convincingly showed that, indeed, the nature of her work or her working conditions increased the risk of contracting ureterolithiasis.

ORIENTAL SHIPMANAGEMENT CO., INC, Herrera and Bennet Shipping (principal) VS. NAZAL (2013) - Temporary or partial total disability benefits

FACTS:

Nazal entered into a 12 month contract of employment, as a cook with Oriental for its principal, Benet; other than his two earlier contracts with the petitioners. He was to receive USD500 plus other benefits. After he finished his contracts, Nazal, through the company-designated physician, found to suffer from diabetes and high blood pressure. He then asked for compensation and medical assistance, but the agency denied his requests and was advised to not work again. After receiving a certification that he is unfit to work as a seaman, Nazal demanded permanent total disability compensation from petitioners contending that his ailments developed during his employment with the latter.

The LA dismissed Nazal’s complaint principally on the ground that the latter failed to comply with the mandatory reporting requirement under his standard employment contract. On appeal, the NLRC favored Nazal and emphasized that Nazal’s subsequent voyage did not prove that he had not been sick or that his sickness had not been aggravated by his work on board the vessel. The CA dismissed the petition outright for having been filed out of time.

ISSUE:

WON the petitioner and its principal are liable for partial total disability benefits.

HELD:

The SC find no substantial evidence supporting the ruling that the agency and its principal are liable to Nazal by way of temporary or partial total disability benefits. The labor tribunal and the appellate court grossly misappreciated the facts and even completely disregarded vital pieces of evidence in resolving the case.

First. Nazal disembarked from the vessel for a "finished contract," not for medical reasons. The absence of a medical report or certification of Nazal’s ailments and disability only signifies that his post-employment medical examination did not take place as claimed.

Second. While we have ruled out laches as a bar to Nazal’s claim, the inordinate delay in the institution of the complaint casts a grave suspicion on Nazal’s true intentions against the petitioners. It took him two years and 10 months to file the complaint.

It is unfortunate that Nazal died before the case could be resolved, but his death cannot erase the fact that his claim for disability benefits was brought against the wrong party, nor the reality that his claim against the petitioners suffered from fatal defects.