Case Summary (G.R. No. 172161)
Applicable Law and Jurisdictional Background
The case was adjudicated under the 1987 Philippine Constitution and labor laws including the Rules to Implement the Labor Code, DOLE Department Orders, and relevant jurisprudence. Jurisdiction was affirmed by the Labor Arbiter (LA) based on Rule IV, Sec. 1(a) of the NLRC Rules, which defines "workplace" to include the place employees are regularly assigned or supposed to report back to after temporary assignments, such as Cebu City for the respondents.
Employment Status and Nature of Engagement
The respondents were initially hired as apprentices or trainee cable/linemen in 1996 and early 1997 and later engaged as project employees for specific undertakings. Their employment was renewed upon commencement of new projects but terminated upon project completion. The labor bodies and the Court of Appeals (CA) found that despite being labeled as project employees, the respondents were in fact regular employees due to the repeated nature of their engagements and the performance of work necessary and usual to petitioners’ business.
Wage Payments and Alleged Underpayment
Respondents were paid wages below the prevailing minimum wage rates dictated by the Regional Wage Board for the specific regions and periods. Petitioners claimed that allowances for food, lodging, utilities, and other benefits, although given without written employee consent, should be considered part of the respondents’ wages to raise their total remuneration above the minimum wage. The LA, NLRC, and CA rejected this argument, holding that these benefits could not be computed as wages in the absence of written authorization from employees and proper valuation. The Court distinguished between "facilities" (which form part of wages and are deductible if submitted in writing) and "supplements" (extra remuneration beyond basic wages), concluding the benefits were supplements meant to maintain worker efficiency rather than obligatory facilities.
Compliance with DOLE Reporting and Legal Formalities
The petitioners failed to submit required termination reports to DOLE as mandated by Department Order No. 19, Series of 1993, a procedural lapse that contributed to the finding that respondents were regular employees rather than project employees. This failure undermined the petitioners’ claim of project-based employment and compliance with legal standards for such classification.
Claims for Illegal Dismissal and Overtime Refusal
The respondents filed for illegal dismissal and other entitlements, alleging they were unjustly terminated and underpaid. The LA and NLRC ruled that there was no illegal dismissal as the respondents voluntarily left work upon petitioners’ refusal to allow overtime, which was viewed as abandonment rather than forced dismissal. The CA agreed, affirming that petitioners had the discretion to deny overtime and that respondents’ departure was a voluntary act.
Burden of Proof Regarding Payment of Wages
The Court emphasized that employers bear the burden of proof to show payment of wages and monetary claims because relevant payroll and compensation records are within their control. Petitioners failed to produce any documentary evidence substantiating their payments or wage computations. Accordingly, the respondents were deemed entitled to the statutory minimum
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Case Syllabus (G.R. No. 172161)
Facts and Procedural History
- Private respondents Roldan Lopez, Danilo CaAete, and Edgardo ZuAiga were initially hired in 1996 and January 1997 as apprentice or trainee cable/linemen by petitioner Sonny L. Lagon.
- As trainees, they were paid minimum wages and received benefits but did not report for work regularly, appearing only as substitutes or to expedite project completion.
- After training, they were engaged as project employees on various projects: Islacom project in Bohol (Mar-Dec 1997), PLDT Antipolo, Rizal project (Mar-Sep 1998), Racitelcom project in Bulacan (late 1998 to Mar 1999), and Camarin, Caloocan City project (May 1999-Feb 2000).
- During these employments, they were paid wages lower than the legally prescribed minimum wage rates for the respective regions at times, particularly from 1997 until February 2000.
- The Camarin project was delayed due to imported material delivery issues, resulting in reduced overtime work. When respondents requested overtime in February 2000, petitioner refused and warned them that insisting would lead to their dismissal and no lodging.
- Respondents left their work and returned to Cebu City, and subsequently, on March 3, 2000, filed complaints for illegal dismissal, non-payment of wages, holiday pay, 13th month pay (for 1997 and 1998), service incentive leave, damages, and attorney's fees.
- The Labor Arbiter (LA) found jurisdiction proper in Cebu as the workplace was deemed the location employees were supposed to report after temporary assignment; he ruled respondents as regular employees due to repeated hiring and performance of usual business functions.
- The LA found respondents underpaid as employer failed to provide written consent for inclusion of free board, lodging, utilities, and food allowances in wage computation.
- The LA ruled petitioners not liable for illegal dismissal as respondents’ leaving was considered abandonment after denial of overtime work.
- The National Labor Relations Commission (NLRC) affirmed the LA decision noting petitioners' failure to comply with mandatory DOLE reporting for project employee termination.
- The Court of Appeals (CA) further affirmed respondents’ regular employee status citing repetitive hiring, their work as part of regular business, and petitioners’ failure to file termination reports.
- The CA agreed respondents were underpaid; free board and lodging not included in wages due to lack of written consent.
- The CA also ruled no illegal dismissal, affirming respondents’ leaving as abandonment, and modified wage differential awards based on actual project participation and correct wage rates.
- Petitioners’ motion for reconsideration before the CA was denied.
Issues Presented
- Whether the respondents were regular employees or project employees.
- Whether the petitioners were liable for payment of wage differentials given alleged inclusion of non-monetary benefits in wage computation.
- Whether respondents suffered illegal dismissal.
- Whether venue for filing the complaint lay with the place of fabricated work (Manila) or place where respondents were supposed to report