G.R. No. 144619 November 11, 2005
C. PLANAS COMMERCIAL and/or MARCIAL COHU, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, ALFREDO OFIALDA, DIOLETO MORENTE and RUDY ALLAUIGAN, Respondents.

FACTS

Private respondents Alfredo Ofialda, Dioleto Morente, and Rudy Allauigan filed a complaint against petitioners for underpayment of wages and non-payment of overtime, holiday, service incentive leave, and night shift differential pay. They alleged they were hired as helpers/laborers, paid below minimum wage, worked over eight hours daily without overtime, and worked seven days a week without holiday or rest day pay. Petitioners admitted employing the respondents but claimed exemption from the minimum wage and other benefits, arguing they were a retail/service establishment regularly employing less than ten workers. The Labor Arbiter dismissed the complaint, ruling the employees failed to prove the establishment employed more than ten workers.
On appeal, the NLRC reversed the Labor Arbiter. It held that the burden of proof to establish an exemption from labor standards rests on the employer invoking it. Since petitioners merely alleged they employed less than ten workers but presented no evidence like payrolls to substantiate this, their defense failed. The NLRC awarded monetary claims to all three employees. The Court of Appeals affirmed the NLRC decision. During the pendency of the appeal, however, Morente and Allauigan executed quitclaims and motions to dismiss their claims.

ISSUE

Whether the NLRC and the Court of Appeals correctly placed the burden of proof on the petitioners to establish their exemption from minimum wage and other benefit laws.

RULING

Yes, the Supreme Court affirmed the legal principle on burden of proof but modified the monetary awards. The Court reiterated that the burden of proof lies upon the party who asserts an affirmative allegation. In claims for non-payment of wages and benefits, the employer who interposes an exemption has the burden to prove the factual basis for that exemption. Petitioners’ mere allegation of employing less than ten workers, without supporting evidence, was insufficient to discharge this burden. Therefore, the defense of exemption was correctly rejected.
However, the Court modified the dispositive portion regarding the awards. The quitclaims and motions to dismiss filed by Morente and Allauigan during the appeal were deemed valid waivers of their claims, as they were executed voluntarily and for valuable consideration without any showing of deceit. Consequently, the monetary awards in their favor were deleted. Only the award for Alfredo Ofialda, who did not file a quitclaim, was upheld. The petition was partly granted, affirming the CA decision but ordering payment only to Ofialda.