Philippine Supreme Court rules in salary dispute
Employers must present a bank receipt confirming payroll submission to prove salary payments were made through banks, according to the Philippine Supreme Court (SC).
The SC stated that the minimum requirement for employers to prove that they paid employees through an existing bank arrangement is by showing the submission or receipt by the bank of the payroll.
The SC issued the remarks in upholding a Court of Appeals (CA) decision that dealt with an airline and its former pilots.
The case dates back to 2001, when 49 pilots filed a complaint alleging that they were illegally dismissed from work. They also alleged unfair labour practice and non-payment of monetary benefits, such as salaries, allowances, and bonuses.
The National Labour Relations Commission (NLRC) dismissed the claims of illegal dismissal and unfair labour practice.
The Labour Arbiter and the NLRC also accepted the payroll documents from the airline to prove that they paid the former employees.
But the CA reversed this decision and emphasised that payroll records and vouchers presented by the airline "did not prove payment of the employees' salaries and 13th month pay."
"The payroll listing merely listed the names and account numbers of the employees, as well as their net pay, similar to the 13th month payroll, which merely specified each employee's details," the CA previously ruled.
"[The airline] did not present any proof showing that the employees received the amounts indicated in the payroll."
SC upholds CA decision
The SC First Division recently upheld this decision, and also identified three stages in the bank crediting arrangement for salaries and benefits:
- The presentation of payroll by the employer
- The employer's submission and corresponding receipt by the bank of the payroll or advisory
- The crediting of the amounts to the employees' bank accounts
The first stage involves only the employer, while the second stage involves both the employer and the bank in the process.
The third stage only involves the bank operations, which the employer has no control over and no active participation.
According to the SC, the documents submitted by the airline only presented the evidence of the first stage — that they prepared the payrolls for the salaries and the 13th month pay.
"These payrolls cannot be treated as substantial evidence of payment because they failed to reflect that the same had been submitted to [the bank], or that the latter had received them," the SC said.
It stated that the minimum requirement to prove payment by an employer with an existing bank crediting arrangement is "proof of submission or receipt by the bank of the payroll or advisory."
"The submission by the employer of the payroll or bank advisory or the acknowledgment receipt by the bank constitutes substantial evidence of payment of the employees' salaries and monetary benefits," the SC said.
"Such document showing the receipt by the bank of the payroll or bank advisory will lead a reasonable person to conclude that payment has been made by the employer of the salaries and monetary benefits of the employees."
The case is now returned to the NLRC to determine the exact amount owed to the former employees, according to the SC.
