Toyota Pasig, Inc. vs. Vilma S. De Peralta

Commissions, tax rebates for achieved monthly targets, and success share/profit sharing are included in "wages" under Article 97(f) of the Labor Code; once the employee particularizes such monetary claims, the employer bears the burden of proving payment or non-entitlement, and failure to submit records in its possession gives rise to a presumption prejudicial to its cause.

Toyota Pasig, Inc. is a corporation engaged in car dealership, including service and sales of parts and accessories of Toyota motor vehicles. Vilma S. De Peralta was its employee, initially hired as a cashier in March 1997 and later serving as Insurance Sales Executive from 2007 to 2012. The dispute concerns her monetary claims for commissions, tax rebates, salary deductions, unpaid salary, and success share/profit sharing under the Labor Code. Article 97(f) of the Labor Code defines "wage" and supplies the statutory backdrop for the Court's ruling.

Toyota Pasig, Inc. is a corporation engaged in the business of car dealership, including service and sales of parts and accessories of Toyota motor vehicles. It initially hired Vilma S. De Peralta as a cashier in March 1997. Eventually, in 2004, she worked her way up to the position of Insurance Sales Executive (ISE), which she held from 2007 to 2012 and where she received various distinctions from petitioner, including "Best Insurance Sales Executive" for the years 2007 and 2011.

De Peralta's husband, Romulo "Romper" De Peralta, was also petitioner's employee and the President of the Toyota Shaw-Pasig Workers Union - Automotive Industry Workers Alliance (TSPWU-AIWA). He organized a collective bargaining unit through a certification election. According to De Peralta, petitioner suddenly dismissed from service the officials/directors of TSPWU-AIWA, including her husband. Thereafter, petitioner allegedly started harassing De Peralta for her husband's active involvement in TSPWU-AIWA, which resulted in the issuance of a Notice to Explain dated January 3, 2012 accusing her of "having committed various acts" relative to the processing of insurance of three (3) units as "outside transactions" and claiming commissions therefor, instead of considering the said transactions as "new business accounts" under the dealership's marketing department. She was preventively suspended because of such charge. On February 3, 2012, De Peralta received a Notice of Termination, which prompted her to file the complaint, where she also prayed for the payment of her earned substantial commissions, tax rebates, and other benefits dating back from July 2011 to January 2012, amounting to ₱617,248.08.

In their defense, petitioner and Lim, et al. maintained that De Peralta was dismissed from service for just cause and with due process. They explained that De Peralta was charged and proven to have committed acts of dishonesty and falsification by claiming commissions for new business accounts which should have been duly credited to the dealership's marketing department. They further averred that De Peralta's claims for commissions, tax rebates, and other benefits were unfounded and without documentation and validation.

The Labor Arbiter found that De Peralta herself admitted through her letter-explanation to the Notice to Explain that she indeed processed the insurance of units from petitioner's own dealership, and as a result, received commissions which were rightly attributable to the dealership's marketing department, not being "outside transactions." The Labor Arbiter also found no basis to grant her claims for unpaid commissions because the documents submitted in support thereof were mere computations insufficient as proof of entitlement. The NLRC likewise found that petitioner failed to present documents showing that De Peralta was not entitled to her other monetary claims, as per her computation.

• Burden of Proof: Petitioner argued that the CA erred in awarding respondent her monetary claims despite her failure to prove her entitlement thereto, and that because such claims do not partake of unpaid wages/salaries or labor standard benefits, petitioner as employer did not bear the burden of proving payment or that respondent was not entitled thereto.
• Nature of Claims: Petitioner maintained that the monetary claims do not partake of unpaid wages/salaries, as well as the labor standard benefits of employees as provided by law, such as 13th month pay, overtime pay, service incentive leave pay, night differential pay, and holiday pay.
• Lack of Documentation and Validation: Petitioner averred that respondent's claims for commissions, tax rebates, and other benefits were unfounded and without documentation and validation.

• Employer Liability for Monetary Claims: Whether the CA correctly upheld petitioner's liability to respondent in the amount of ₱617,248.08 representing unpaid commissions, tax rebate for achieved monthly targets, salary deductions, unpaid salary for January 2012, and success share/profit sharing.
• Classification of Monetary Claims as Wages: Whether commissions, tax rebates for achieved monthly targets, and success share/profit sharing are included in "wages" under Article 97(f) of the Labor Code.
• Burden of Proof: Whether petitioner, as employer, bore the burden of proving payment of such monetary claims or that respondent was not entitled thereto.

• Employer Liability for Monetary Claims: Yes. The CA correctly upheld petitioner's liability for ₱617,248.08, as petitioner failed to discharge its burden to prove payment or non-entitlement to the monetary claims.
• Classification of Monetary Claims as Wages: Yes. Commissions are expressly included in "wages" under Article 97(f) of the Labor Code, and tax rebates for achieved monthly targets and success share/profit sharing are incentives for services that fall within the general term "commissions."
• Burden of Proof: Yes. Once the employee particularizes the monetary claims, the employer must prove payment or non-entitlement; failure to submit records in its possession gives rise to a presumption prejudicial to its cause.

• Employer Liability for Monetary Claims: The petition was without merit. Petitioner simply dismissed respondent's claims as purely self-serving and unfounded without presenting any proof that respondent was already paid such benefits or that she was not entitled thereto. Petitioner was even given the opportunity to submit pertinent company records to rebut respondent's claims but opted not to do so. Because petitioner failed to discharge its burden, it was bound to pay the monetary benefits claimed by respondent. Since respondent already earned these monetary benefits, she must promptly receive the same notwithstanding the fact that she was legally terminated from employment.
• Classification of Monetary Claims as Wages: Article 97(f) of the Labor Code defines "wage" to include remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered. The provision explicitly includes commissions as part of wages. In Iran vs. NLRC, the Court explained that while commissions are incentives or forms of encouragement, they are direct remunerations for services rendered and part of a salesman's wage or salary. Respondent's monetary claims, such as commissions, tax rebates for achieved monthly targets, and success share/profit sharing, were given to her as incentives or forms of encouragement to put extra effort in performing her duties as an ISE. They fall within the ambit of the general term "commissions" and thus within the definition of wages. Respondent's allegation of nonpayment therefore placed the burden on petitioner to prove with a reasonable degree of certainty that it paid said benefits and that respondent actually received such payment, or that respondent was not entitled thereto.
• Burden of Proof: In Heirs of Ridad vs. Gregorio Araneta University Foundation, the Court held that once the employee has set out with particularity in the complaint, position paper, affidavits, and other documents the labor standard benefits he is entitled to and which he alleged the employer failed to pay, it becomes the employer's burden to prove that it has paid these money claims. One who pleads payment has the burden of proving it, and even where the employees must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employees to prove non-payment. The reason is 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. Petitioner failed to submit the necessary documents in its possession, giving rise to the presumption that the presentation thereof is prejudicial to its cause.

• Commissions as Wages — Under Article 97(f) of the Labor Code, "wage" includes remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same. Commissions are direct remunerations for services rendered, even if they also serve as incentives. The Court applied this to hold that tax rebates for achieved monthly targets and success share/profit sharing, given as incentives for respondent's duties as an ISE, fall within the general term "commissions" and thus within the statutory definition of wages.
• Employer's Burden of Proof on Monetary Claims — Once an employee has set out with particularity the labor standard benefits claimed and alleged nonpayment, the employer bears the burden of proving that it paid those money claims or that the employee was not entitled thereto. The reason is that the pertinent personnel files, payrolls, records, remittances, and similar documents are in the employer's custody and absolute control. The Court applied this rule because petitioner failed to present any proof of payment or non-entitlement despite being given the opportunity to submit company records.
• Presumption from Non-Production of Records — The failure of employers to submit the necessary documents that are in their possession gives rise to the presumption that the presentation thereof is prejudicial to its cause. The Court applied this presumption against petitioner, which opted not to submit pertinent company records to rebut respondent's claims.
• Earned Monetary Benefits Survive Valid Dismissal — Where the employee has already earned monetary benefits, she must promptly receive the same notwithstanding the fact that she was legally terminated from employment. The Court applied this principle in affirming the award of ₱617,248.08 despite the finality of the ruling upholding respondent's dismissal.

• "Wage" paid to any employee shall mean the remuneration of earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer. — This is the Court's quotation of Article 97(f) of the Labor Code, the statutory basis for including commissions and similar incentives within the definition of wages.
• "This definition explicitly includes commissions as part of wages." — Quoted from Iran vs. NLRC, this passage states the core rule that commissions are not merely incentives but are part of wages.
• "Well-settled is the rule that once the employee has set out with particularity in his complaint, position paper, affidavits and other documents the labor standard benefits he is entitled to, and which he alleged that the employer failed to pay him, it becomes the employer's burden to prove that it has paid these money claims. One who pleads payment has the burden of proving it, and even where the employees must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employees to prove non-payment." — Quoted from Heirs of Ridad vs. Gregorio Araneta University Foundation, this passage defines the employer's burden of proof on monetary claims.
• "It is well-settled that the failure of employers to submit the necessary documents that are in their possession gives rise to the presumption that the presentation thereof is prejudicial to its cause." — This passage supplied the presumption applied against petitioner after it failed to submit company records to rebut respondent's claims.

• Iran vs. NLRC, 352 Phil. 261 (1998) — Cited to explain that commissions, although incentives or forms of encouragement, are direct remunerations for services rendered and form part of a salesman's wage or salary.
• Heirs of Ridad vs. Gregorio Araneta University Foundation, 703 Phil. 531 (2013) — Cited as instructive on the rule that once an employee particularizes the labor standard benefits claimed and alleges nonpayment, the employer bears the burden of proving payment.
• JARL Construction vs. Atencio, 692 Phil. 256, 271 (2012) — Cited for the proposition that nonpayment of monetary benefits places the burden on the employer to prove payment or non-entitlement.
• Grandteq Industrial Steel Products, Inc. vs. Margallo, 611 Phil. 612, 629 (2009) — Cited for the presumption that failure of employers to submit necessary documents in their possession is prejudicial to their cause; it in turn cites National Semiconductor (HK) Distribution, Ltd. vs. NLRC, 353 Phil. 551, 558 (1998).

• Article 97(f), Labor Code — Defines "wage" to include remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, payable under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered. The Court applied this provision to hold that respondent's commissions, tax rebates for achieved monthly targets, and success share/profit sharing are wages, thereby placing the burden on petitioner to prove payment or non-entitlement.

Sereno, C.J., Leonardo-De Castro, Bersamin, and Caguioa, JJ., concur.