G.R. No. 227200 . June 10, 2019.
MANUEL B. PABLICO AND MASTER’S PAB RESTO BAR, PETITIONERS, VS. NUMERIANO B. CERRO, JR., MICHAEL CALIGUIRAN, EFREN PANGANIBAN, GENIUS PAUIG, REYNALIE LIM, GLORIA NAPITAN, RICHARD CARONAN AND MANNY BAGUNO, RESPONDENTS.

FACTS

Petitioner Manuel Pablico purchased and took over Master’s Pab Resto Bar (MPRB) on November 18, 2008, promoting respondent Numeriano Cerro, Jr. to Officer-in-Charge. Cerro then hired the other respondents for various positions. In September 2011, due to infractions, Cerro was transferred to another establishment. Subsequently, in October 2011, the other respondents received text messages they interpreted as termination notices due to their association with Cerro. They filed a complaint for illegal dismissal and monetary claims. The Labor Arbiter dismissed the complaint, finding no illegal dismissal and that payrolls proved payment. The NLRC modified this, dismissing the illegal dismissal claim but awarding wage differentials and 13th-month pay for three years, and ordering reinstatement or separation pay. The Court of Appeals affirmed the NLRC’s monetary awards but deleted the separation pay.

ISSUE

Whether the NLRC and CA correctly held petitioners liable for wage differentials and 13th-month pay despite petitioners’ claim of exemption from minimum wage laws as a small-scale enterprise.

RULING

The Supreme Court denied the petition and affirmed the CA’s amended decision. The legal logic is twofold. First, on the claim of exemption, the Court held that the exemption under Republic Act No. 6727 or the Wage Rationalization Act for establishments with fewer than ten employees is not self-executing. An employer must first apply for and be granted such an exemption by the Department of Labor and Employment (DOLE). Petitioners failed to present any DOLE certification or approval of an exemption application. Mere allegation of employing fewer than ten workers is insufficient; the burden of proof lies with the employer claiming the exemption, which petitioners did not discharge. Second, on the monetary awards, the Court upheld the findings of the NLRC and CA that petitioners’ presented payrolls were insufficient to refute the underpayment claims. The payrolls lacked essential details like the specific workdays and hours rendered, making them unreliable for proving compliance with minimum wage laws. Consequently, the award of wage differentials and 13th-month pay, computed based on the applicable minimum wage rates, was sustained as supported by substantial evidence.