Zion Construction v. Tagalog

FIRST DIVISION

[G.R. No. 255729. July 6, 2021.]

ZION CONSTRUCTION/EMELIA M. BACUS, petitioners, vs. JOHN MARK TAGALOG AND ARLENE TAGALOG, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated July 6, 2021 which reads as follows:

"G.R. No. 255729 — (Zion Construction/Emelia M. Bacus, Petitioners,v. John Mark Tagalog and Arlene Tagalog, Respondents.) — This petition for review under Rule 45 assails the Decision dated 27 August 2020 and Resolution dated 23 November 2020 of the Court of Appeals in CA-G.R. SP No. 12187.

The case stems from a complaint for salary differentials filed by respondents John Mark Tagalog (John) and Arlene Tagalog (Arlene) (collectively, respondents) against petitioners Zion Construction (Zion) and its owner, Emelia M. Bacus (Emelia) (collectively, petitioners). John and Arlene were employed by Zion as liaison officer and secretary, respectively. They claimed that the salaries they were paid were below the minimum wage and illegal deductions made thereon. Moreover, they alleged non-payment of overtime, holiday pay, premium holiday pay, 13th month pay, and service incentive leave pay (SILP).

The Labor Arbiter (LA) denied respondents' claim for salary differentials. The LA held that even though respondents were paid a salary below minimum wage, petitioners provided them, and their child, with free housing, water, electricity, and meals. John's claim for unpaid salaries was also granted for the period 16 August 2017 to 09 September 2017. On the other hand, Arlene's claim for 13th month pay was granted as to Arlene, and partly granted for John for the year 2017. The LA also granted the claim for SILP by Arlene. However, the claims for overtime pay, holiday pay, premium holiday pay, and rest day were denied for respondents' failure to prove that they were required to work on the days claimed. Finally, the claim for damages and attorney's fees were denied for lack of factual and legal basis.

However, since it was undisputed that John still had an outstanding obligation to petitioners, the latter were entitled to offset the amount John still owed from the monetary award due to him.

Petitioners appealed to the NLRC, which partially granted the same in its Decision dated 29 June 2018. It held that respondents are entitled to salary differentials considering that petitioners failed to present any company policy or guideline stating that the free housing, utilities, meals, and snacks are customarily provided such that they formed part of the employees' salaries. Moreover, there is no written proof that respondents consented to the deduction of the value of these benefits from their salaries, as required by law. Petitioners also failed to adduce any basis for its computation of the value of these benefits. Given the foregoing, respondents' salary fell below the mandated minimum wage rate; hence, petitioners are liable to pay the difference. TAIaHE

The NLRC affirmed all the other findings of the LA, but modified the computation for the monetary awards, holding that the basis for computation of the same should be the mandated minimum wage and not the amount of respondents' actual salary.

The CA affirmed the NLRC decision in toto. Aggrieved, petitioners filed the present petition for review.

We DENY the petition lack of merit.

The Court is not a trier of facts, and this doctrine applies with greater force in labor cases. When supported by substantial evidence, factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, more so when upheld by the CA. 1 In this case, the CA correctly held that the NLRC did not gravely abuse its discretion in its ruling since the same is in accord with law and prevailing jurisprudence.

The award for salary differentials is correct. In Our Haus Realty Development Corp. v. Parian, 2 the Court explained:

As the CA correctly ruled, these requirements, as summarized in Mabeza, are the following:

a. proof must be shown that such facilities are customarily furnished by the trade;

b. the provision of deductible facilities must be voluntarily accepted in writing by the employee; and

c. The facilities must be charged at fair and reasonable value.

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In a string of cases, we have concluded that one of the badges to show that a facility is customarily furnished by the trade is the existence of a company policy or guideline showing that provisions for a facility were designated as part of the employees' salaries.

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Apart from company policy, the employer may also prove compliance with the first requirement by showing the existence of an industry-wide practice of furnishing the benefits in question among enterprises engaged in the same line of business. If it were customary among construction companies to provide board and lodging to their workers and treat their values as part of their wages, we would have more reason to conclude that these benefits were really facilities.

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Lastly, even if a benefit is customarily provided by the trade, it must still pass the purpose test set by jurisprudence. Under this test, if a benefit or privilege granted to the employee is clearly for the employer's convenience, it will not be considered as a facility but a supplement.

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The law also prescribes that the computation of wages shall exclude whatever benefits, supplements or allowances given to employees. Supplements are paid to employees on top of their basic pay and are free of charge. Since it does not form part of the wage, a supplement's value may not be included in the determination of whether an employer complied with the prescribed minimum wage rates.

Considering that petitioners failed to show proof it has complied with any of these requirements, the free housing, utilities, and food given to respondents cannot be considered as part of their salary. Thus, petitioners are liable to pay respondents the salary differentials to meet the mandated minimum wage rate.

Nonetheless, petitioner is entitled to off-set John's unpaid obligation from the amounts adjudged to him. The fact of John's indebtedness to petitioners is indubitably established, with his own admissions and the fact of partial payment.

In Milan v. National Labor Relations Commission, 3 the Court upheld the employer's right to withhold petitioners' wages and benefits because of this existing debt or liability. It expounded thus:

In Solas v. Power and Telephone Supply Phils., Inc., et al., this court recognized this right of the employer when it ruled that the employee in that case was not constructively dismissed. Thus:

There was valid reason for respondents' withholding of petitioner's salary for the month of February 2000. Petitioner does not deny that he is indebted to his employer in the amount of around P95,000.00. Respondents explained that petitioner's salary for the period of February 1-15, 2000 was applied as partial payment for his debt and for withholding taxes on his income; while for the period of February 15-28, 2000, petitioner was already on absence without leave, hence, was not entitled to any pay.

The law does not sanction a situation where employees who do not even assert any claim over the employer's property are allowed to take all the benefits out of their employment while they simultaneously withhold possession of their employer's property for no rightful reason.

Withholding of payment by the employer does not mean that the employer may renege on its obligation to pay employees their wages, termination payments, and due benefits. The employees' benefits are also not being reduced. It is only subjected to the condition that the employees return properties properly belonging to the employer. This is only consistent with the equitable principle that "no one shall be unjustly enriched or benefited at the expense of another."

Finally, We note that there was no legal interest imposed upon the monetary awards. Thus, We rectify this oversight and order petitioners to pay legal interest at the rate of 6% per annum on the total monetary awards computed from the finality of the Decision of the NLRC dated 29 June 2018 until fully paid. cDHAES

WHEREFORE, the foregoing premises considered, the petition is DENIED, and the Decision dated 27 August 2020 and Resolution dated 23 November 2020 of the Court of Appeals in CA-G.R. SP No. 12187 are AFFIRMED with MODIFICATION in that legal interest of six percent (6%) per annum is imposed on the total monetary awards, to be computed from the finality of the NLRC's Decision dated 29 June 2018 until fully paid.

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.Cosue v. Ferritz Integrated Development Corp., 814 Phil. 77 (2017), G.R. No. 230664, 24 July 2017 [Per J. Tijam].

2. 740 Phil. 699 (2014), G.R. No. 204651, 06 August 2014 [Per J. Brion]. Citations omitted. Emphasis in the original.

3. 753 Phil. 217 (2015), G.R. No. 202961, 04 February 2015, [Per J. Leonen], citing Solas v. Power Telephone Supply Phils., Inc., 585 Phil. 513 (2008), G.R. No. 162332, 28 August 2008 [Per J. Austria-Martinez].