National Semiconductor (HK) Distribution, Ltd. vs. NLRC

The burden of proving payment of night shift differential rests on the employer, not the employee, because the pertinent records are in the employer's custody and control; and due process in dismissal is satisfied where the employer follows the natural sequence of notice, hearing or investigation, and judgment, even without a formal or trial-type hearing.

Petitioner National Semiconductor (HK) Distribution, Ltd. (NSC) is a foreign corporation licensed to do business in the Philippines, engaged in the manufacture and assembly of electronic parts for export at the Mactan Export Processing Zone. Private respondent Edgar Philip C. Santos was employed by NSC as a technician in its Special Products Group, assigned to the graveyard shift from 10:00 P.M. to 6:00 A.M., with a monthly salary of P5,501.00. The dispute arose from Santos' dismissal for falsifying his daily time record and his subsequent claim for illegal dismissal and various monetary benefits, including unpaid night shift differentials.

Edgar Philip C. Santos was employed by National Semiconductor (HK) Distribution, Ltd. (NSC) as a technician in its Special Products Group, assigned to the graveyard shift from 10:00 P.M. to 6:00 A.M. with a monthly salary of P5,501.00. On 8 January 1993, Santos did not report for work on his shift. He resumed his duties as night shift Technician Support on 9 January 1993. However, at the end of his shift the following morning, he made two entries in his daily time record (DTR) to make it appear that he had worked on both 8 and 9 January 1993.

Santos' immediate supervisor, Joel Limsiaco, received a report that there was no technician in the graveyard shift on 8 January 1993. Limsiaco checked the DTRs and confirmed that Santos had not reported for work on that date. When he rechecked Santos' DTR on the morning of 9 January 1993, he found the entry Santos had made for the previous day. Informal investigations were conducted by management. Santos was required, by memorandum, to explain in writing within 48 hours from notice why no disciplinary action should be taken against him for dishonesty, falsifying his DTR, and violation of company rules and regulations.

On 11 January 1993, Santos submitted his written explanation alleging that he was ill on the day he was absent and that the entry for 8 January was merely due to oversight or carelessness. Finding the explanation unsatisfactory, NSC dismissed Santos on 14 January 1993 on the ground of falsification of his DTR, an act deemed inimical to the company and constituting dishonesty and serious misconduct. On 20 January 1993, Santos filed a complaint for illegal dismissal and non-payment of back wages, premium pay for holidays and rest days, night shift differential pay, allowances, separation pay, moral damages, and attorney's fees.

The Labor Arbiter found that Santos was dismissed on legal grounds but was not afforded due process, ordering NSC to indemnify him P1,000.00 and to pay P19,801.47 representing unpaid night shift differentials. The NLRC affirmed the Labor Arbiter, sustaining his factual findings and conclusions. NSC elevated the matter to the Supreme Court via petition for certiorari, imputing grave abuse of discretion to the NLRC.

• Night Shift Differential Not Properly Raised: Petitioner contended that the question of non-payment of night shift differentials was never raised as an issue nor pursued and proved by Santos in the proceedings before the Labor Arbiter.
• Payment Already Made: Petitioner argued that Santos was already paid his night shift differentials, and any further payment would amount to unjust enrichment.
• Indemnity Unjustified: Petitioner maintained that the P1,000.00 indemnity for alleged violation of due process was totally unjustified, as Santos was afforded ample opportunity to be heard before his dismissal.

• Burden of Proof on Night Shift Differential: Whether the burden of proving a claim for night shift differential pay rests on the worker who claims non-payment, or on the employer in custody of pertinent documents which would prove the fact of payment.
• Due Process in Dismissal: Whether the requirements of due process were substantially complied with in the dismissal of the worker.

• Burden of Proof on Night Shift Differential: The burden rests on the employer. Santos' allegation of non-payment is a negative allegation that need not be supported by evidence, and the pertinent payroll records are in the employer's custody and absolute control; the employer's failure to present them gives rise to a presumption adverse to its cause.
• Due Process in Dismissal: Yes. The minimum requirements of due process were fulfilled, Santos having been furnished notice of the charges, given the opportunity to submit a written explanation, subjected to investigations, and notified of the decision to terminate; the P1,000.00 indemnity was accordingly deleted.

• Burden of Proof on Night Shift Differential: A perusal of Santos' position paper before the Labor Arbiter revealed that the question of non-payment of night shift differentials was specifically raised as an issue and was never abandoned. The fact that Santos neglected to substantiate his claim was not prejudicial to his cause, because the burden of proving payment rests on the employer. Santos' allegation of non-payment is a negative allegation which need not be supported by evidence unless it is an essential part of his cause of action; his main cause of action was illegal dismissal, and the night shift differential claim was but an incident thereof. The burden of proving that payment was made rests upon the party who would suffer if no evidence at all were presented by either party. Santos could not adequately prove non-payment because the pertinent employee files, payrolls, records, remittances, and similar documents were not in his possession but in the custody and absolute control of NSC. Santos had been in NSC's employ for five years, and NSC never denied that he rendered night shift work. By choosing not to fully and completely disclose information to prove payment, NSC failed to discharge the burden of proof. The award was sustained but limited to three years, considering the prescriptive period of money claims.

• Due Process in Dismissal: The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side. NSC furnished Santos notice as to the particular acts constituting the ground for his dismissal and required him to submit a written explanation within 48 hours. Santos availed of this opportunity by submitting his explanation. Investigations were actually conducted on 9 and 11 January 1993, as testified to by NSC's witness Reynaldo Gandionco. Santos was notified on 14 January 1993 of the decision to terminate his services. That the investigations may not be considered formal or recorded hearings is immaterial; a formal or trial-type hearing is not always essential to due process, the requirements of which are satisfied where the parties are afforded a fair and reasonable opportunity to explain their side. It is sufficient for the employer to follow the natural sequence of notice, hearing, and judgment. Accordingly, the P1,000.00 indemnity was deleted.

• Burden of Proof on Payment of Labor Benefits — As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege non-payment, the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. The Court applied this doctrine by holding that NSC, as employer in custody of payroll records and other pertinent documents, bore the burden of proving that night shift differentials had been paid; its failure to present such records gave rise to a presumption that either it did not have them or their presentation would be prejudicial to its cause.
• Due Process in Administrative Proceedings — The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side. A formal or trial-type hearing is not essential to due process in all instances; the requirements are satisfied where the parties are afforded a fair and reasonable opportunity to explain their side of the controversy. It is sufficient for the employer to follow the natural sequence of notice, hearing, and judgment. The Court found that NSC satisfied these requirements by furnishing Santos notice of the charges, conducting investigations, receiving his written explanation, and notifying him of the termination decision.

• "As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment." — This passage, quoted from Jimenez vs. National Labor Relations Commission, articulates the controlling rule on burden of proof for payment of labor benefits and is the ratio decidendi for the night shift differential issue.
• "The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side." — This passage defines the canonical formulation of due process in administrative or labor proceedings and is frequently cited in subsequent jurisprudence on procedural due process in dismissal cases.
• "A formal or trial type hearing is not all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy." — This passage establishes that informal investigations suffice for due process in employer-employee dismissal contexts, provided the natural sequence of notice, hearing, and judgment is followed.

• Jimenez vs. National Labor Relations Commission, G.R. No. 116960, 2 April 1996, 256 SCRA 84 — Followed. Cited for the rule that the burden of proving payment rests on the party who pleads payment, not on the party alleging non-payment.
• Philippine Phosphate Fertilizer Corporation vs. Torres, et al., G.R. No. 98050, 17 March 1994, 231 SCRA 335 — Followed. Cited for the principle that the essence of due process is the opportunity to be heard.
• Llora Motors, Inc. vs. Drilon, G.R. No. 82895, 7 November 1989, 179 SCRA 175 — Followed. Cited for the rule that a formal or trial-type hearing is not always essential to due process.
• Ruffy vs. National Labor Relations Commission, G.R. No. 84193, 15 February 1990, 182 SCRA 1 — Followed. Cited for the principle that it is sufficient for the employer to follow the natural sequence of notice, hearing, and judgment.
• Seaborne Carries Corporation vs. National Labor Relations Commission, G.R. No. 88795, 4 October 1994, 237 SCRA 343 — Cited in support of the proposition that the burden of proving payment rests on the party who will suffer if no evidence is presented by either party.

• Section 2, Rule II, Book Three, Implementing Rules of the Labor Code — Provides that an employee regularly assigned to the night shift (10:00 P.M. to 7:00 A.M.) is entitled to an additional benefit of not less than ten percent (10%) of his regular wage for each hour of work performed. The Court applied this provision to sustain the award of night shift differentials to Santos.
• Sections 6, 7, 8, 11 and 12, Rule X, Book III, Implementing Rules of the Labor Code — Require the employer to keep payroll records, vouchers, daily time records, and similar documents. The Court relied on these provisions to hold that NSC's failure to present such records gave rise to a presumption adverse to its cause.

Davide, Jr., Vitug, Panganiban, and Quisumbing, JJ., concurred.