FIRST DIVISION
[G.R. No. 230886. September 14, 2021.]
PHILIP GUEVARRA, DOING BUSINESS UNDER THE NAME AND STYLE BARO DE MANILA — THE ART OF FILIPINO, petitioner, vs.MARIA BRIGIDA C. PAIGMA, respondent.
[G.R. No. 230966. September 14, 2021.]
MARIA BRIGIDA C. PAIGMA, petitioner, vs.BARO DE MANILA — THE ART OF FILIPINO AND PHILIP GUEVARRA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedSeptember 14, 2021which reads as follows:
"G.R. No. 230886 (Philip Guevarra, doing business under the name and style Baro de Manila — The Art of Filipino, petitioner, v. Maria Brigida C. Paigma, respondent); and G.R. No. 230966 (Maria Brigida C. Paigma, petitioner, v. Baro de Manila — The Art of Filipino and Philip Guevarra, respondents).
These consolidated appeals by certiorari seek to reverse and set aside the August 16, 2016 Decision 1 and March 31, 2017 Resolution 2 of the Court of Appeals (CA) in CA-G.R. SP No. 139002. The CA upheld with modification the August 29, 2014 Decision 3 and October 27, 2014 Resolution 4 of the National Labor Relations Commission (NLRC), which affirmed the October 10, 2013 Decision 5 of the Labor Arbiter (LA), dismissing the complaint for monetary benefits filed by Maria Brigida C. Paigma (Paigma) against Philip Guevarra (Guevarra), doing business under the name and style Baro de Manila — The Art of Filipino. CAIHTE
The Antecedents
The facts as culled from the CA are as follows:
Petitioner Maria Brigida Paigma filed a complaint with the Labor Arbiter against private respondents Baro De Manila — The Art of Filipino and Philip Guevarra for non-payment of retirement benefits. On the same day, the complaint was amended to include underpayment of salary/wages; non-payment of overtime pay, holiday pay, holiday premium, rest day premium, service incentive leave, 13th month pay, retirement benefits, ECOLA; and, moral and exemplary damages; and attorney's fees. The case was docketed as NLRC NCR Case No. 01-00136-13.
Labor Arbiter Pablo Gajardo, Jr. directed the parties to submit their position papers after the preliminary mandatory conference with them yielded no positive results.
In her position paper, petitioner averred that she worked with private respondent company as a sewer since 2003. She was paid One Hundred Twenty-Five Pesos (P125.00) for every piece of work she completed and was given a daily allowance of Forty Pesos (P40.00). For her 13th month pay, she was initially paid Five Thousand Pesos (P5,000.00), but said amount was later reduced to Two Thousand Pesos (P2,000.00) and eventually to Three Hundred Fifty Pesos (P350.00). In the latter part of her employment, she was hardly given any task, prompting her to file the instant complaint against private respondents.
On the other hand, private respondents averred that Baro De Manila is a retail store of ready-made barong regularly employing not more than ten (10) employees and is, thus, exempt from paying their employees' retirement benefits, holiday pay and service incentive leave pay. Sewing jobs, whenever required, were done through their usual sub-contractors, Ely Divas and Roque Gabuat Garcia, both of whom have enough employees, materials and sewing machines to meet respondents' orders.
However, during certain times of the year, one (1) or two (2) seasonal employees were hired for about three (3) to six (6) months (not necessarily continuous), whenever needed. For the duration of a project, the employees were provided with a sewing machine, necessary materials and workplace. They were not given a fixed schedule and were paid on a piece rate basis. Moreover, they were never required to work on their rest day. Petitioner was one of those seasonal employees.
Private respondents alleged that, from 2004 to 2012, at an average duration of about three (3) to six (6) months per year, petitioner could not have accumulated a total of five (5) years in service because of the on-and-off nature of her job. She was never required to work on her rest day, as can be seen from her time cards. Her vouchers show that she was contracted on the following months: (1) August 2010 to November 2010 and was paid Fourteen Thousand Eight Hundred Twenty-Five Pesos (P14,825.00); (2) March 2011 to November 2011 and was paid Twenty-Six Thousand Four Hundred Forty Pesos (P26,440.00); and (3) July 2012 to December 2012 and was paid Seventeen Thousand Five Hundred Five Pesos (P17,505.00). Moreover, additional vouchers indicated that she was paid her 13th month pay on pro rata basis in the last three (3) years. 6
The LA Ruling
In its Decision 7 dated October 10, 2013, the LA ruled that Paigma was not a regular employee of Guevarra; thus, she was not entitled to retirement benefits and other monetary claims. 8
Aggrieved, Paigma appealed to the NLRC.
The NLRC Ruling
In its Decision 9 dated August 29, 2014, the NLRC reversed the LA's finding that Paigma was not a regular employee. It ruled that Paigma was a regular employee because there was a reasonable connection between the services she performed and the usual business or trade of Guevarra. However, the NLRC found that Paigma was not entitled to retirement pay since she failed to prove that she was not covered by the exemptions specifically provided in Republic Act (R.A.) No. 7641 or the Retirement Pay Law. 10 Hence, Paigma's appealwas denied.
Paigma's motion for reconsideration was likewise denied by the NLRC in its Resolution dated October 27, 2014. Paigma then filed a petition for certiorari before the CA. DETACa
The CA Ruling
In its Decision 11 dated August 16, 2016, the CA partly granted the petition. It ruled that the burden of proof rests upon Guevarra to prove that he is exempted from paying benefits provided under the Labor Code. The CA held that Guevarra failed to substantiate his claim that he employs not more than ten (10) workers in his establishment; 12 hence, his business is not covered by the exemption. The CA also ruled that Paigma is entitled to the standard minimum wage, retirement pay, service incentive leave pay and holiday pay. It, however, disregarded Paigma's claim for 13th month pay because the records show that she did receive her 13th month pay. The CA likewise denied Paigma's claim for premium pay, overtime pay, moral and exemplary damages, as well as attorney's fees.
Both Paigma and Guevarra moved for the partial reconsideration of the decision, but their motions were denied by the CA in its Resolution dated March 31, 2017. Hence, both filed separate Petitions for Review on Certiorari13 which the Court consolidated through its Resolution 14 dated July 26, 2017.
Issues
I. WHETHER THE CA ERRED IN RULING THAT PAIGMA IS ENTITLED TO WAGE DIFFERENTIALS, RETIREMENT PAY, SERVICE INCENTIVE LEAVE AND HOLIDAY PAY;
II. WHETHER THE CA ERRED IN FINDING THAT PAIGMA IS NOT ENTITLED TO 13TH MONTH PAY, MORAL AND EXEMPLARY DAMAGES, AND ATTORNEY'S FEES.
Paigma reiterates her claim that the vouchers she signed indicating that she received her 13th month pay were falsified and her signatures thereon were forged. She argues that the CA erred in disregarding her claim of forgery. Moreover, she claims that the CA should have adjusted her 13th month pay to match her increased basic salary. She also insists that she is entitled to moral and exemplary damages because there was bad faith on the part of Guevarra, as he wanted to evade his obligation under the Labor Code. Lastly, Paigma claims that she is entitled to attorney's fees even if she is represented by the Public Attorney's Office (PAO).
For his part, Guevarra claims that his business is covered by the exemption because he has less than ten (10) employees which Paigma herself admitted under oath. As such, Paigma is not entitled to retirement pay and other monetary benefits.
In her Comment 15 to Guevarra's petition, Paigma explained that she mistakenly indicated in the complaint that there were only six (6) workers. She adds that there were usually more than ten (10) in her department, but only six (6) remained at the time of filing of the complaint. 16 Including those in other departments, there was a total of sixty (60) employees; that is why she amended her original complaint. She insists that Guevarra failed to prove that he had not more than ten (10) employees and that his business was granted an exempt status before the Regional Board.
In his Comment 17 to Paigma's petition, Guevarra reiterated the arguments he raised in his petition.
The Court's Ruling
Guevarra was not able to prove
Guevarra's main defense in controverting Paigma's claim for retirement pay and other monetary benefits is that his business is exempt from the application of the minimum wage law. Thus, contrary to the findings of the NLRC, the burden of proving such exemption rests on Guevarra.
R.A. No. 6727, 18 known as the Wage Rationalization Act, provides for the statutory minimum wage rate of all workers and employees in the private sector. Section 4 of the Act provides for exemption from the coverage, thus:
Sec. 4.
xxx xxx xxx
(c) Exempted from the provisions of this Act are household or domestic helpers and persons employed in the personal service of another, including family drivers.
Retail/service establishments regularly employing not more than ten (10) workers may be exempted from the applicability of this Act upon application with and as determined by the appropriate Regional Board in accordance with the applicable rules and regulations issued by the Commission. Whenever an application for exemption has been duly filed with the appropriate Regional Board, action on any complaint for alleged non-compliance with this Act shall be deferred pending resolution of the application for exemption by the appropriate Regional Board.
In the event that applications for exemptions are not granted, employees shall receive the appropriate compensation due them as provided for by this Act plus interest of one percent (1%) per month retroactive to the effectivity of this Act. (emphasis supplied)
Clearly, for a retail establishment to be exempted from the coverage of the law, it must be shown that the establishment is regularly employing not more than ten (10) workers and had applied for exemptions with and as determined by the appropriate Regional Board in accordance with the applicable rules and regulations issued by the Commission. 19 Aside from his bare allegations, Guevarra had not shown any evidence to prove that he had applied for such exemption, and if he had applied, his application was granted. The CA correctly explained, to wit: aDSIHc
In this case, private respondents failed to substantiate their claim that they employ more than ten (10) workers in their establishment. Instead of presenting evidence to prove that they have less than ten (10) employees in the company, private respondents shifted the burden of proof to show the number of employees in their establishment to petitioner. This cannot be done. Private respondents' allegations that they employ not more than ten (10) employees, without presenting evidence to justify the same, amount to nothing but self-serving allegations which cannot be given credence. Hence, having failed to prove their allegations, respondents cannot claim exemption from paying monetary benefits under the law. 20
Paigma is entitled to salary
Considering that Guevarra failed to prove that his business falls under the exemption, he must comply with the provision of the Wage Standardization Law. The Court, thus, agrees with the findings of the CA that Paigma is entitled to the benefits provided under the law, particularly the prescribed minimum wage, retirement pay, service incentive leave and holiday pay.
As cited by the CA, the Department of Labor and Employment's Handbook on Worker's Statutory Monetary Benefits provides that:
All workers paid by result, including homeworkers and those who are paid on piece rate, takay, pakyaw or task basis, shall receive not less than the prescribed minimum wage rates under the Regional Wage Orders for normal working hours which shall not exceed eight (8) hours a day, or a proportion thereof[.] 21 (emphasis and underscoring in the original)
Clearly, Guevarra was liable to pay Paigma the prescribed minimum wage. As pointed out by the CA, the cash vouchers on record showed that Paigma was receiving weekly wages averaging from P250.00 to P1,750.00 which were below the standard minimum wage set by law. As such, Paigma is entitled to salary differentials from 2010-2012. Accordingly, Paigma's 13th month pay must also be adjusted to conform to the adjusted minimum wage mandated by law.
Anent the retirement pay, the Court agrees with the findings of the CA that Paigma is entitled to retirement pay considering that Guevarra's business is not exempt from paying the same. R.A. No. 7641, 22 which provides for retirement pay to qualified private sector employees in the absence of any retirement plan in the establishment, states:
Section 1. Article 287 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby amended to read as follows:
xxx xxx xxx
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term one half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.
Retail, service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision.
As found by the CA, Paigma had complied with the five-year minimum service requirement in the above-mentioned law, to wit:
As to the 5-year minimum service requirement, private respondents aver that, according to the Guidelines for the Effective Implementation of R.A. [No.] 7641, a fraction of less than six months in a year is disregarded, thus, petitioner was not able to comply with the service requirement as she was never employed for twelve (12) months but only for a quarter or so in any year. Private respondents' contention is misplaced. The phrase stated in the law, "a fraction of at least six (6) months being considered as one whole year," pertains to the computation of retirement pay, and not to the 5-year minimum service requirement.
Records show that petitioner had been employed by private respondents from 2003 to 2012. Clearly, petitioner met the minimum service requirement of five (5) years as provided for in the Retirement Pay Law and should, therefore, be entitled to retirement pay.23 (emphasis supplied)
Additionally, Paigma is also entitled to service incentive leave pay and holiday pay because records show that she worked for Guevarra for nine (9) years without enjoying the benefit of service incentive leave pay and holiday pay. ETHIDa
Paigma is not entitled to moral
Paigma failed to prove that there was bad faith on the part of Guevarra. In Ching v. Quezon City Sports Club, Inc., 24 the Court explained the elements necessary for the award of moral damages, to wit:
The elements for the award of moral damages in a case are: (1) an injury clearly sustained by the claimant; (2) a culpable act or omission factually established; (3) a wrongful act or omission by the defendant as the proximate cause of the injury sustained by the claimant; and (4) the award of damages predicated on any of the cases stated in Article 2219 of the Civil Code. Also, the person claiming moral damages must prove the existence of bad faith by clear and convincing evidence, for the law always presumes good faith. It is not enough that one suffered sleepless nights, mental anguish, and serious anxiety as the result of the actuations of the other party. Invariably, such action must be shown to have been willfully done in bad faith or with ill motive. 25 (emphasis supplied)
In alleging that Guevarra acted in bad faith, Paigma has the burden of proof to present evidence in support of her claim. Basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. 26 Paigma failed to overcome such burden to prove bad faith on the part of Guevarra. Paigma had not presented any clear and convincing evidence to show bad faith. As observed by the CA, her mere allegations of false representations and forgery are self-serving and cannot be given credence. 27
Since the basis for moral damages had not been established, there is no basis to recover exemplary damages and attorney's fees, as well. 28
Under Article 2229 of the Civil Code, "[e]xemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages." 29 Article 2234 of the same Code further provides that "[w]hile the amount of the exemplary damages need not be proven, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded." 30 Since petitioner failed to show that she is entitled to moral damages, it follows that the Court cannot award exemplary damages as well.
Attorney's fees may be awarded
The CA ruled that Paigma is not entitled to attorney's fees because she is represented by the PAO, which, thus, exempted her from the payment of docket and other fees incidental to instituting an action in court and other quasi-judicial bodies, as an original proceeding or on appeal. 31
The Court does not agree. In Our Haus Realty DevelopmentCorporation v. Parian, 32 the Court explained that a party may still be entitled to attorney's fees even if he/she is represented by the lawyers of the PAO, to wit:
Finally, we affirm that respondents are entitled to attorney's fees. Our Haus' asserts that respondents' availment of free legal services from the PAO disqualifies them from such award. We find this untenable.
It is settled that in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney's fees is legally and morally justifiable. Moreover, under the PAO Law or Republic Act No. 9406, the costs of the suit, attorney's fees and contingent fees imposed uponthe adversary of the PAO clients after a successful litigation shall be deposited in the National Treasury as trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the PAO.
Thus, the respondents are still entitled to attorney's fees. The attorney's fees awarded to them shall be paid to the PAO. It serves as a token recompense to the PAO for its provision of free legal services to litigants who have no means of hiring a private lawyer. 33 (italics in the original; citations omitted)
Significantly, attorney's fees may be awarded when it has been determined that petitioner was underpaid her wages. 34 There need not even be any showing that the employer acted maliciously or in bad faith; there need only be a showing that lawful wages were not paid accordingly, as in this case. 35
WHEREFORE, the petition of Philip Guevarra is DENIED. The petition of Maria Brigida C. Paigma is PARTLY GRANTED. The Decision dated August 16, 2016 and the Resolution dated March 31, 2017, of the Court of Appeals in CA-G.R. SP No. 139002, are hereby AFFIRMED with MODIFICATIONS. Maria Brigida C. Paigma is also entitled to 13th month pay differential and attorney's fees at ten percent (10%) of the total monetary award, plus legal interest of six percent (6%) per annum from finality of this Resolution until fully paid. Let this case be REMANDED to the Labor Arbiter for the proper computation of her benefits. cSEDTC
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo (G.R. No. 230886), pp. 18-32; penned by Associate Justice Elihu A. Ybañez with Associate Justices Magdangal M. De Leon and Victoria Isabel A. Paredes, concurring.
2.Id. at 39-40.
3.Rollo (G.R. No. 230966), pp. 69-76; penned by Presiding Commissioner Grace E. Maniquiz-Tan with Commissioners Dolores M. Peralta-Beley and Mercedes R. Posada-Lacap, concurring.
4.Id. at 78-79.
5.Id. at 131-140; penned by Labor Arbiter Pablo A. Gajardo, Jr.
6.Rollo (G.R. No. 230886), pp. 19-20.
7.Rollo (G.R. No. 230966), pp. 131-140.
8.Rollo (G.R. No. 230886), pp. 20-21.
9.Rollo (G.R. No. 230966), pp. 69-76.
10.Rollo (G.R. No. 230886), p. 21.
11.Id. at 18-32.
12.Id. at 23.
13. G.R. No. 230886 (Philip Guevarra, doing business under the name and style Baro de Manila — The Art of Filipino v. Maria Brigida C. Paigma) and G.R. No. 230966 (Maria Brigida C. Paigma v. Baro de Manila — The Art of Filipino and Philip Guevarra).
14.Rollo (G.R. No. 230886), pp. 44-45.
15.Id. at 59-78.
16.Id. at 65.
17.Rollo (G.R. No. 230966), pp. 212-215.
18. An Act to Rationalize Wage Policy Determination by Establishing the Mechanism and Proper Standards Therefor, Amending for the Purpose Article 99 of, and Incorporating Articles 120, 121, 122, 123, 124, 126 and 127 into, Presidential Decree No. 442, as Amended, Otherwise Known as the Labor Code of the Philippines, Fixing New Wage Rates, Providing Wage Incentives for Industrial Dispersal to the Countryside, and for Other Purposes, June 9, 1989.
19.C. Planas Commercial v. National Labor Relations Commission, 511 Phil. 232, 242 (2005).
20.Rollo (G.R. No. 230886), p. 23.
21.Id. at 24.
22. An Act Amending Article 287 of Presidential Decree No. 442, as Amended, otherwise known as the Labor Code of the Philippines, by Providing for Retirement Pay to Qualified Private Sector Employees in the Absence of Any Retirement Plan in the Establishment, December 9, 1992.
23.Rollo (G.R. No. 230886), p. 26.
24. 798 Phil. 45 (2016).
25.Id. at 73-74.
26.Aliling v. Feliciano, 686 Phil. 889, 920 (2012), citing Culili v. Eastern TelecommunicationsPhilippines, Inc., 657 Phil. 342, 368 (2011).
27.Rollo (G.R. No. 230886), p. 31.
28.Ching v. Quezon City Sports Club, Inc., supra note 24, at 74.
29.Id.
30.Id.
31.Rollo (G.R. No. 230966), p. 43.
32. 740 Phil. 699 (2014).
33.Id. at 720.
34.Cosue v. Ferritz Integrated Development Corporation, 814 Phil. 77, 92 (2017).
35.Id. at 92-93.