John Kriska Logistics, Inc. vs. Mendoza

An employer who alleges payment of wages and labor benefits as a defense bears the burden of proving payment with payrolls, pay slips, and similar records in its custody; failure to do so supports the employee’s monetary claims. The SC also held that proportionate 13th month pay may be awarded despite the absence of a specific prayer.

John Kriska Distribution Center Inc./John Kriska Logistics, Inc. employed Elizardo T. Mendoza as a delivery helper, a position that involved manually carrying and transporting boxes to malls, supermarkets, and other establishments. The parties’ dispute concerns monetary claims arising from that employment relationship, governed by the Labor Code and its implementing rules on minimum wage, service incentive leave, cash bond, and 13th month pay.

On February 6, 2006, John Kriska hired Elizardo T. Mendoza as a delivery helper, and his work required him to manually carry and transport boxes to malls, supermarkets, and other establishments. Sometime in September 2016, Mendoza stopped reporting for work after a cataract surgery on his left eye. To Mendoza’s mind, his doctor’s advice not to carry heavy objects meant that he could no longer work. According to petitioners, John Kriska’s Human Resource Head explained to Mendoza that they needed his medical certificate stating that his illness was incurable within six months pursuant to Article 299 of the Labor Code, but Mendoza’s medical certificate did not contain any statement to that effect; nonetheless, he insisted that he be paid his separation pay.

Thereafter, Mendoza requested assistance through the Single Entry Approach on September 20, 2016, but the parties failed to reach an agreement. On October 26, 2016, Mendoza filed a complaint against petitioners. In his Position Paper before the Labor Arbiter, Mendoza alleged that his daily wage rates were below the minimum wage rate. He further alleged that petitioners deducted a cash bond of P100.00 from his wages every week and that the underpayment of his wages resulted in the underpayment of his 13th month pay. He prayed for salary differential, 13th month pay differential, cash equivalent of his service incentive leave (SIL), cash bond, attorney’s fees, and other just and equitable reliefs. Petitioners argued that Mendoza decided not to report back for work after his eye operation and was therefore not entitled to separation pay. They further argued that Mendoza admitted that he was already paid his 13th month pay and had already used his SIL of five days.

The Labor Arbiter held a hearing on November 23, 2016. The minutes stated that Mendoza appeared with counsel and that, as cleared by Mendoza, he was paid his 13th month pay for 2015 and had already used his five days of SIL. Mendoza also manifested that he did not report for work after his operation because of the medical certificate advising him not to carry heavy objects. For purposes of settlement, petitioners offered P14,037.27 representing Mendoza’s salary differentials, proportionate 13th month pay, and cash bond, but Mendoza refused. In his Reply dated January 13, 2017, Mendoza emphasized that he never claimed that he was illegally dismissed and that his complaint was anchored on the underpayment of his wages.

In his Decision dated January 31, 2017, the Labor Arbiter dismissed Mendoza’s complaint with prejudice for lack of merit. Limiting himself to the pay slips attached by Mendoza to his pleadings, the Labor Arbiter ruled that Mendoza was not underpaid because his daily salary and allowance of P365.00 in August 2016 was within the minimum wage under Wage Order No. RB-III-19, which took effect on January 1, 2016. He also noted Mendoza’s admission that he was already paid his 13th month pay and had used his SIL of five days. He further ruled that Mendoza was not entitled to separation pay because he was not illegally terminated.

The NLRC found that petitioners failed to adduce any evidence to prove that they paid Mendoza’s wages and benefits in compliance with the prescribed minimum wage rate. It found that the P40.00 meal allowance provided to Mendoza could not be deemed part of his basic wage because petitioners failed to meet the legal requisites for its inclusion. On the SIL claim, the NLRC noted that petitioners presented evidence showing that Mendoza consumed his SIL for 2015 and 2016 but were silent as to whether his SIL for prior years were utilized, exhausted, or commutated. On the cash bond, the NLRC noted that petitioners did not deny deducting P100.00 from Mendoza’s wages on a weekly basis.

• Separation Pay: Petitioners argued that respondent decided not to report back for work after his eye operation, so he was not entitled to separation pay.
• 13th Month Pay and SIL: Petitioners argued that respondent admitted that he was already paid his 13th month pay and had already used his five-day SIL.
• Salary Differential: Petitioners argued that the NLRC acted with grave abuse of discretion because its finding of underpayment amounting to almost P9,000.00 out of the P12,480.00 salary differential for January 1 to December 31, 2015 had no documentary or evidentiary basis and was contrary to the March 2015 and August 2015 weekly pay slips submitted by respondent; they asserted that respondent’s salary differential for 2015 amounted to P3,770.00 only.
• Pay Slips and Three-Year Limit: Petitioners argued that respondent should furnish John Kriska his pay slips from 2009 to 2015 and that the amount demandable by respondent was limited to benefits within three years prior to the filing of the complaint.
• Cash Bond: Petitioners argued that they offered to give respondent a check representing his cash bond but he refused, and that the NLRC should not have admitted respondent’s cash bond computation for the first time on appeal.
• Attorney’s Fees: Petitioners maintained that respondent was not entitled to attorney’s fees because he was never illegally dismissed and they had a valid justification not to give in to his baseless demands for money claims.

• Underpayment of Wages: Respondent alleged that his daily wage rates were below the minimum wage rate and that the underpayment of his wages resulted in the underpayment of his 13th month pay.
• Cash Bond: Respondent alleged that petitioners deducted a cash bond of P100.00 from his wages every week.
• SIL: Respondent claimed the cash equivalent of his service incentive leave.
• Nature of Complaint: Respondent emphasized that he never claimed illegal dismissal and that his complaint was anchored on the underpayment of his wages.
• Monetary Claims: Respondent prayed for salary differential, 13th month pay differential, cash equivalent of SIL, cash bond, attorney’s fees, and other just and equitable reliefs.

• Grave Abuse of Discretion — Monetary Claims: Whether the CA erred in not finding grave abuse of discretion on the part of the NLRC when it granted respondent’s monetary claims consisting of salary differential, 13th month pay differential, SIL, and cash bond.
• Proportionate 13th Month Pay for 2016: Whether respondent is entitled to proportionate 13th month pay from January 1, 2016 to September 20, 2016 despite not specifically praying for it.

• Grave Abuse of Discretion — Monetary Claims: No. The NLRC did not act with grave abuse of discretion in awarding salary differential, 13th month pay differential, SIL, and cash bond; its findings were supported by substantial evidence and the employer failed to prove payment.
• Proportionate 13th Month Pay for 2016: Yes. Respondent is entitled to proportionate 13th month pay from January 1, 2016 to September 20, 2016 under the Revised Guidelines on the 13th Month Pay Law, even if he did not specifically pray for it.

• Grave Abuse of Discretion — Monetary Claims: In a Rule 45 review of labor cases, the SC examines the CA’s Decision from the prism of whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC’s Decision. Grave abuse of discretion exists when the NLRC’s findings and conclusions are not supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Although a Rule 45 petition shall raise only questions of law as a rule, the SC looked into the facts because the LA’s findings conflicted with those of the NLRC as affirmed by the CA. On the salary differential, the SC held that the NLRC did not act with grave abuse of discretion in finding that respondent was paid below the prescribed minimum wage. In labor cases involving payment of wages, the employer who alleges payment as a defense bears the burden of proving payment, because payrolls, attendance sheets, pay slips, bank remittances, and similar documents are in the employer’s custody and absolute control. John Kriska had to present respondent’s pay slips to show that his wage was equal to or above the minimum wage, show proof that the meal allowance should be considered part of daily wages as a facility, present evidence that respondent used, commutated, or exhausted all SIL earned, and prove that the cash bond was released to and received by respondent. Petitioners did not deny the correctness of the daily wage rates in their reply and instead argued that respondent should furnish the pay slips, that respondent admitted receiving his 13th month pay and using five days of SIL, that the demand was limited to benefits within three years, and that they offered a check for the cash bond but respondent refused. They failed to raise before the labor tribunals the inconsistency between respondent’s Position Paper and the March 2015 and August 2015 pay slips. Even if the NLRC overlooked that inconsistency, it was at most an error of judgment, not an error of jurisdiction, and the NLRC could not be said to have capriciously disregarded the pay slips when petitioners did not raise the issue. On the meal allowance, the SC held that John Kriska had to prove that the P40.00 meal allowance was paid as a facility and that the requisites were present: (1) the meal allowance is customarily furnished by the trade; (2) the employee voluntarily agreed that the meal allowance shall be deducted from the daily wage rate; and (3) the meal allowance was charged at fair and reasonable value. Petitioners adduced no evidence on these requisites, so the NLRC and CA correctly excluded the meal allowance from the daily wage rate. On SIL, the SC held that respondent was undisputedly entitled to SIL under Section 2, Rule V, Book III of the Omnibus Implementing Rules Implementing the Labor Code, which provides that every employee who has rendered at least one year of service is entitled to a yearly service incentive leave of five days with pay. Because SIL benefits are cumulative, John Kriska had to account for respondent’s SIL utilization or commutation from the commencement of his employment up to the time he stopped reporting for work. The NLRC found that respondent had utilized his SIL for 2015 and 2016, leaving the SIL earned from February 2006 to December 2014. The SC did not agree that respondent admitted using all accumulated SIL from February 6, 2006 to September 20, 2016, because the minutes of the November 23, 2016 hearing did not specify which year respondent was referring to when he said he had used his five-day SIL. In labor cases, doubts are resolved in favor of the employee, so the ambiguity could not be interpreted to his prejudice. The leave forms presented by petitioners did not show that respondent received compensation despite being absent, and the attendance sheets and payroll prepared by John Kriska’s accountant could not be given credence because they did not bear respondent’s acknowledgment. On the cash bond, the SC held that the CA correctly upheld the NLRC’s order for John Kriska to refund respondent’s cash bond computed at P100.00 for three years under Article 306 of the Labor Code. Respondent alleged that P100.00 was deducted weekly, and his weekly pay slips showed cash bond of P100.00 on the deductions column. Although petitioners offered a check for the cash bond, they did not present evidence to determine the balance. They presented cash bond slips for 2013, 2014, and 2015 only in their motion for reconsideration before the NLRC, after the NLRC had ordered the refund. The NLRC may consider evidence submitted for the first time on appeal in the interest of substantial justice, but only if the submission does not prejudice the other party; here, considering the cash bond slips would have denied respondent due process because he had no opportunity to present counter-evidence before the LA and the NLRC. The SC also found it suspicious that petitioners did not present respondent’s cash bond slip for 2016 showing the balance at the time his employment was severed. Under Metropolitan Bank & Trust Company vs. Court of Appeals, when a party refuses to produce evidence to prove a material fact that imposes liability on itself although it has the power to produce it, the presumption arises that the evidence, if produced, would operate to its prejudice and support the adversary’s case. By choosing not to fully and completely disclose the cash bond documents, petitioners failed to discharge their burden of proving payment. The SC thus found no compelling reason to reverse the CA’s ruling that the NLRC did not act with grave abuse of discretion in granting respondent’s monetary claims.
• Proportionate 13th Month Pay for 2016: The SC noted that respondent included non-payment of his 13th month pay among the causes of action in his complaint, but the NLRC’s award of P51,687.86 did not include it. Respondent admitted receiving his 13th month pay for 2015, but no evidence showed that John Kriska paid his proportionate 13th month pay for 2016 after he refused the settlement offered during the November 23, 2016 hearing. Under No. 6 of the Revised Guidelines on the Implementation of the 13th Month Pay Law (Presidential Decree No. 851) dated November 18, 1987, an employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to 13th month pay in proportion to the length of time he worked during the year. Respondent was therefore entitled to proportionate 13th month pay from January 1, 2016 to September 20, 2016. Although he failed to specifically pray for it, the SC applied General Baptist Bible College vs. NLRC, which held that the SC is for the granting of the relief an employee is entitled to under the law although he or she failed to specifically pray for the same. In the interest of justice, the SC ordered John Kriska to pay the proportionate 13th month pay for 2016.

• Employer’s Burden of Proof in Wage Payment Cases — In labor cases involving payment of wages, an employer who alleges payment as a defense bears the burden of proving payment, because payrolls, attendance sheets, pay slips, bank remittances, and similar documents are in the employer’s custody and absolute control. The SC applied this to John Kriska, which failed to present pay slips, proof that the meal allowance was a facility, proof of SIL utilization or commutation, and proof of cash bond release.
• Meal Allowance as Facility — Requisites — For a meal allowance to be considered part of daily wages as a facility, the employer must prove: (1) the meal allowance is customarily furnished by the trade; (2) the employee voluntarily agreed that the meal allowance shall be deducted from the daily wage rate; and (3) the meal allowance was charged at fair and reasonable value. John Kriska presented no evidence, so the P40.00 meal allowance was excluded from the daily wage rate.
• Cumulative Service Incentive Leave and Employer Accounting — Every employee who has rendered at least one year of service is entitled to a yearly service incentive leave of five days with pay. Because SIL benefits are cumulative, the employer must account for the employee’s SIL utilization or commutation from the commencement of employment up to the time the employee stopped reporting for work. The SC held that John Kriska failed to account for prior years, and the ambiguity in the minutes did not prove that respondent had used all accumulated SIL.
• Doubts in Labor Cases Resolved in Favor of Employee — In labor cases, doubts are resolved in favor of the employee in line with the State’s policy to afford greater protection to labor. The SC applied this to the ambiguous minutes of the November 23, 2016 hearing, holding that respondent’s statement that he used five days of SIL did not specify the year and could not be interpreted to his prejudice.
• Cash Bond and Suppression of Evidence — The employer bears the burden of proving payment or release of cash bond deducted from wages. When a party refuses to produce evidence to prove a material fact that imposes liability on itself although it has the power to produce it, the presumption arises that the evidence, if produced, would operate to its prejudice and support the adversary’s case. The SC applied this to John Kriska’s failure to present the 2016 cash bond slip and its belated presentation of cash bond slips for 2013 to 2015.
• Evidence First Time on Appeal in Labor Cases — The NLRC may consider evidence submitted for the first time on appeal in the interest of substantial justice, but only if the submission does not prejudice the other party. The SC held that admitting the cash bond slips for the first time in the motion for reconsideration would have denied respondent due process.
• Proportionate 13th Month Pay — An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to 13th month pay in proportion to the length of time worked during the year. The SC applied this to award respondent proportionate 13th month pay from January 1, 2016 to September 20, 2016.
• Relief Not Specifically Prayed May Be Granted — In the interest of justice, a relief to which an employee is entitled under the law may be granted although the employee failed to specifically pray for it. The SC applied this to award the proportionate 13th month pay for 2016 despite the absence of a specific prayer.
• Grave Abuse of Discretion in Labor Cases — In a Rule 45 review of labor cases, the SC examines whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC’s decision. Grave abuse of discretion exists when the NLRC’s findings and conclusions are not supported by substantial evidence. Although a Rule 45 petition generally raises only questions of law, the SC may review facts when the LA’s findings conflict with the NLRC’s. The SC held that the NLRC did not act with grave abuse of discretion in awarding respondent’s monetary claims.
• Counsel’s Duty of Candor — Counsel are officers of the court and owe candor, fairness, and good faith to the court. The SC reminded counsel of this duty after noting that petitioners belatedly presented cash bond slips and failed to present the 2016 cash bond slip.

• “In labor cases involving the payment of wages, an employer who alleges payment as a defense has the burden of proving the same, the rationale being that the pertinent files of the employee, i.e., payrolls, attendance sheets, pay slips, bank remittances and other similar documents, are in the custody and absolute control of the employer.” — This establishes the employer’s burden of proof on wage payment.
• “Due to the cumulative nature of SIL benefits, John Kriska must give an accounting of respondent’s SIL utilization or commutation from the commencement of his employment up to the time he stopped reporting for work.” — This states the employer’s duty to account for cumulative SIL benefits.
• “It is settled rule that in labor cases, doubts are resolved in favor of an employee in line with the policy of the State to afford greater protection to labor.” — This supports resolving the ambiguity in the hearing minutes in favor of respondent.
• “when a party refuses to produce evidence to prove a material fact which imposes liability on himself or herself although he has it in his or her power to produce such evidence, the presumption arises that the evidence, if produced, would operate to his or her prejudice and would support the case of his or her adversary.” — This supports the presumption against John Kriska for failing to present the 2016 cash bond slip.

• Slord Development Corp. vs. Noya, G.R. No. 232687, February 4, 2019 — Followed for the standard of review in a Rule 45 labor case: the SC examines whether the CA correctly determined grave abuse of discretion in the NLRC.
• Mayon Hotel & Restaurant vs. Adana, 497 Phil. 892, 907 (2005) — Followed for the rule that the SC may look into the facts when the LA’s findings conflict with those of the NLRC as affirmed by the CA.
• SLL International Cables Specialist vs. NLRC, 659 Phil. 472, 481 (2011) — Followed for the employer’s burden of proving payment of wages because payrolls, pay slips, and similar records are in its custody and control.
• Mansion Printing Center vs. Bitara, Jr., 680 Phil. 43 (2012) — Followed for the distinction between an error of judgment and an error of jurisdiction, and for the cumulative nature of SIL benefits requiring an accounting.
• Mabeza vs. NLRC, 338 Phil. 386 (1907) — Followed for the requisites before a meal allowance may be considered a facility forming part of daily wages.
• GDI Lightning Solutions vs. Unating, G.R. No. 243414, May 3, 2021 — Followed for the rule that doubts in labor cases are resolved in favor of the employee.
• Metropolitan Bank & Trust Company vs. Court of Appeals, 388 Phil. 880 (2008) — Followed for the presumption that evidence withheld by a party would be prejudicial to that party and support the adversary.
• General Baptist Bible College vs. NLRC, 292 Phil. 547 (1993) — Followed for granting a relief to which an employee is entitled under the law despite the absence of a specific prayer.

• Article 306, Labor Code — All money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued; applied to limit the cash bond refund to deductions from October 26, 2013 onwards. The NLRC cited Article 305, but the SC noted that the quoted provision refers to Article 306.
• Section 2, Rule V, Book III, Omnibus Implementing Rules Implementing the Labor Code — Every employee who has rendered at least one year of service is entitled to a yearly service incentive leave of five days with pay; applied to hold respondent entitled to SIL and to require John Kriska to account for utilization or commutation.
• No. 6, Revised Guidelines on the Implementation of the 13th Month Pay Law (Presidential Decree No. 851), dated November 18, 1987 — An employee who has resigned or whose services were terminated before the time for payment of the 13th month pay is entitled to 13th month pay in proportion to the length of time worked during the year; applied to award proportionate 13th month pay for January 1, 2016 to September 20, 2016.
• Section 1, Rule 45, Rules of Court — A petition for review on certiorari shall raise only questions of law; applied as the general rule, but the SC deviated and reviewed facts because the LA’s findings conflicted with the NLRC’s findings affirmed by the CA.
• Canon 10, Code of Professional Responsibility — Counsel owe candor, fairness, and good faith to the court; applied as a reminder to counsel after the belated presentation of cash bond slips.