KAR Asia, Inc. vs. Corona

A signed payslip bearing the employee's acknowledgement of full compensation constitutes substantial proof of actual payment of wages and allowances, even if the payroll itself is unsigned by the employee; there is no hard-and-fast rule requiring that the employee's signature on the payroll is the only acceptable proof of payment.

Respondents were regular employees of petitioner KAR Asia, Inc., an automotive dealer in Davao City, while Celestino S. Barretto was the company's president and CEO. The dispute centered on the payment of cost of living allowance (COLA) mandated by Regional Tripartite and Wages Productivity Board (RTWPB) XI Wage Order No. 3. The statutory backdrop includes Article 291 of the Labor Code, which requires that all money claims arising from employer-employee relations be filed within three years from the time the cause of action accrued.

Respondents were regular employees of petitioner KAR Asia, Inc., an automotive dealer in Davao City, whose president and CEO was Celestino S. Barretto. On September 24, 1997, respondents filed a complaint for underpayment of wages and attorney's fees before Branch XI, Regional Arbitration Branch of Davao City, claiming that they were not paid their cost of living allowance (COLA) as mandated by RTWPB XI Wage Order No. 3 for the months of December 1993 and December 1994. They prayed that petitioner be ordered to pay the unpaid COLA with 1% interest per month and attorney's fees equivalent to 10% of the total monetary award.

Petitioner company and its president countered that the complaint was false and malicious and that respondents had already been paid their COLA for the said periods. Petitioners presented in evidence the payrolls for December 1993 and December 1994 showing that respondents acknowledged in writing the receipt of their COLA, as well as the affidavits of Ermina Daray and Cristina Arana, cashiers of KAR Asia, refuting respondents' claim that they were made to sign blank pieces of paper. Petitioners also alleged that respondents had scared off potential customers and caused a substantial reduction in the company's income estimated at approximately P1,000,000.00 when they picketed and put up streamers with insulting and derogatory slogans.

On August 31, 1998, the Labor Arbiter rendered a decision in favor of petitioners, ordering respondents to pay attorney's fees of P50,000.00, moral damages of P150,000.00 to Celestino Barretto, and litigation expenses of P5,000.00. Respondents appealed to the NLRC, which affirmed the Labor Arbiter's decision but deleted the awards for moral damages, attorney's fees, and litigation expenses for lack of sufficient basis in a Resolution dated August 23, 1999. Respondents then filed a petition for certiorari with the Court of Appeals, which reversed the NLRC and ordered petitioner company to pay the P25.00 per day COLA for December 1 to 31, 1994, plus 1% monthly interest computed from the time it was withheld up to actual payment. The appellate court found that the December 1993 COLA claim had already prescribed but held that there was insufficient evidence to justify a finding that the December 1994 COLA had been paid, noting that the payroll did not bear the signatures of the employees acknowledging receipt and was merely a copy approved for payment.

• Misapprehension of Facts: Petitioners argued that the Court of Appeals premised its finding on a supposed absence of evidence contradicted by the record, specifically that the president and CEO executed a position paper under oath with the December 1994 payroll annexed, eliminating the need for a separate affidavit, and that the paymaster certified on each page of the payroll that she had actually paid the amounts listed therein.
• Clarificatory Hearing: Petitioners maintained that the Labor Arbiter conducted a clarificatory hearing wherein the cashiers of petitioner, including the paymaster, confirmed that they had actually paid respondents their alleged unpaid COLA.
• Scope of Certiorari Review: Petitioners argued that since respondents filed a petition for certiorari under Rule 65, the Court of Appeals should have limited its review to issues of jurisdiction and grave abuse of discretion by the Labor Arbiter and the NLRC, rather than evaluating the correctness and sufficiency of the evidence, which is beyond the office of an extraordinary writ of certiorari.
• Abandonment of December 1994 Claim: Petitioners contended that respondents had abandoned their claim for the December 1994 COLA, as subsequent pleadings showed they only pursued their demand for the December 1993 COLA.

• Prescription of December 1993 COLA Claim: Whether the claim for the December 1993 COLA had already prescribed when the complaint was filed on September 24, 1997.
• Sufficiency of Evidence for December 1994 COLA Payment: Whether the payrolls and payslips for December 1994 constitute sufficient evidence that the COLA for that period was actually paid to respondents.
• Scope of Certiorari Review: Whether the Court of Appeals exceeded its power of review under Rule 65 by inquiring into the correctness of the evaluation of evidence by the Labor Arbiter and the NLRC.

• Prescription of December 1993 COLA Claim: Yes. The claim for the December 1993 COLA had prescribed, the complaint having been filed on September 24, 1997, more than three years after the cause of action accrued, pursuant to Article 291 of the Labor Code.
• Sufficiency of Evidence for December 1994 COLA Payment: Yes. The signed payslips bearing respondents' signatures and an acknowledgement of full compensation constituted substantial proof of actual payment of the December 1994 COLA, notwithstanding the absence of employee signatures on the payroll itself.
• Scope of Certiorari Review: Yes. The Court of Appeals erred in placing undue reliance on the unsigned payrolls and disregarding the signed payslips, effectively re-evaluating the sufficiency of evidence beyond the proper scope of certiorari.

• Prescription of December 1993 COLA Claim: Article 291 of the Labor Code requires that all money claims arising from employer-employee relations be filed within three years from the time the cause of action accrued; otherwise they shall be barred forever. The complaint was filed on September 24, 1997, more than three years after December 1993. Additionally, the payroll for the December 1993 COLA bore the signatures of respondents opposite their printed names and the amount of P654.00, and respondents' unsubstantiated allegations of harassment could not overturn the evidentiary weight of those signatures. The Labor Arbiter also observed that in 1993 there was no labor dispute, as the labor unrest occurred only in the latter part of 1997, negating any motive for management to harass employees.

• Sufficiency of Evidence for December 1994 COLA Payment: The December 1994 payrolls showed an allowance of P327.00 for each semi-monthly period, totaling P654.00 for the entire month — the same amount as the December 1993 COLA. Although the December 1994 payroll entries were denominated merely as "allowance" rather than "COLA," the identical amount was not coincidental and unmistakably represented the cost of living allowance under RTWPB XI Wage Order No. 3. While the December 1994 payroll lacked employee signatures, the payslips for the same period bore respondents' signatures plus a certification that they received full compensation for services rendered. A payslip, ordinarily merely a statement of gross income, becomes substantial proof of actual payment when the employee's signature is coupled with an acknowledgement of full compensation. There is no hard-and-fast rule requiring that the employee's signature on the payroll is the only acceptable proof of payment. The affidavits of Ermina Daray and Cristita Arana confirmed the truthfulness of the payroll entries, and entries in the payroll, being entries in the course of business, enjoy the presumption of regularity under Rule 130, Section 43 of the Rules of Court. Respondents' naked assertions without corroborating proof were insufficient to overcome this disputable presumption.

• Scope of Certiorari Review: Factual findings by quasi-judicial agencies such as the NLRC, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but even finality. The Court of Appeals erred when it placed undue reliance on the unsigned payrolls and disregarded the signed payslips, thereby exceeding the proper scope of certiorari review by re-evaluating the correctness and sufficiency of evidence rather than confining itself to determining whether the labor tribunals lacked jurisdiction or committed grave abuse of discretion.

• Prescription of Labor Money Claims — Under Article 291 of the Labor Code, all money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrues; otherwise, they are barred forever. The Court applied this provision to hold that the claim for the December 1993 COLA had prescribed when the complaint was filed on September 24, 1997.

• Evidentiary Weight of Payroll Entries — Entries in payroll records, being entries in the course of business, enjoy the presumption of regularity under Rule 130, Section 43 of the Rules of Court. The burden falls upon the party disputing the entries to adduce clear and convincing evidence to overcome this disputable presumption. The Court found that respondents' naked assertions without corroborating proof were insufficient to overcome the presumption.

• Payslip as Proof of Payment — While a payslip is ordinarily only a statement of gross monthly income, the employee's signature thereon coupled with an acknowledgement of full compensation alters its legal character and transforms it into substantial proof of actual payment. There is no hard-and-fast rule requiring that the employee's signature on the payroll is the only acceptable proof of payment.

• Finality of Quasi-Judicial Factual Findings — Factual findings by quasi-judicial agencies such as the NLRC, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but even finality.

• "While ordinarily a payslip is only a statement of the gross monthly income of the employee, his signature therein coupled by an acknowledgement of full compensation alter the legal complexion of the document. The payslip becomes a substantial proof of actual payment." — This passage articulates the ratio decidendi on the evidentiary value of signed payslips, establishing that an employee's signature with an acknowledgement of full compensation converts a payslip into proof of actual payment.

• "Moreover, there is no hard-and-fast rule requiring that the employee's signature in the payroll is the only acceptable proof of payment." — This formulation defines the doctrinal rule that proof of wage payment is not limited to signatures on the payroll, frequently cited in subsequent labor jurisprudence on wage payment evidence.

• "Entries in the payroll, being entries in the course of business, enjoy the presumption of regularity under Rule 130, Section 43 of the Rules of Court." — This passage establishes the application of the business entries rule to payroll records in labor disputes, placing the burden on the claimant to overcome the presumption with clear and convincing evidence.

• Columbus Philippine Bus Corporation vs. NLRC, G.R. Nos. 114858-59, September 7, 2001, 364 SCRA 606 — Cited as supporting authority for the doctrine that factual findings by quasi-judicial agencies such as the NLRC are generally accorded respect and even finality.
• Conti vs. NLRC, G.R. No. 119253, April 10, 1997, 271 SCRA 114 — Cited alongside Columbus Philippine Bus Corporation for the same proposition regarding the finality of factual findings by labor tribunals.

• Article 291, Labor Code — Requires that all money claims arising from employer-employee relations be filed within three years from the time the cause of action accrued; otherwise they shall be barred forever. Applied to hold that the December 1993 COLA claim had prescribed.
• Rule 130, Section 43, Rules of Court — Provides the presumption of regularity for entries made in the course of business. Applied to payroll entries to hold that they enjoy a disputable presumption of regularity, placing the burden on respondents to adduce clear and convincing evidence to the contrary.
• RTWPB XI Wage Order No. 3 — The wage order mandating the payment of COLA that formed the basis of respondents' money claim. The Court interpreted the P654.00 allowance appearing in the December 1994 payroll and payslips as representing the COLA under this wage order, notwithstanding the denomination as "allowance" rather than "COLA."

Chief Justice Davide, Jr. (Chairman), Justice Quisumbing, and Justice Azcuna concurred. Justice Carpio was on official leave.