G.R. No. 82144. March 8, 1989.
RURAL BANK OF SAN MIGUEL (BOHOL), INC., petitioner, vs. HON. NATIONAL LABOR RELATIONS COMMISSION, TEODORO BONIOR, CECILIA MENDEZ, NELIA QUISMUNDO, DEMETRIA ANUTA AND PRIMO ALMEDILLA, respondents.

FACTS

Private respondents, former employees of petitioner Rural Bank of San Miguel (Bohol), Inc., filed a complaint for illegal dismissal and various monetary claims, including payment for unused vacation and sick leave. The petitioner bank, in its answer, specifically alleged that respondent Teodoro Bonior had already been paid his accrued vacation and sick leave, and that the other private respondents had already enjoyed their respective leaves. After conciliation failed, the case was assigned to a Labor Arbiter.
Labor Arbiter Felix G. Gaudier rendered a decision dismissing the illegal dismissal claim but awarding service incentive leave pay, vacation leave pay, and sick leave pay for a three-year period prior to the filing of the complaint. The arbiter based the award for vacation and sick leave on the petitioner’s failure to specifically deny the grant of such benefits in its answer. The petitioner appealed to the NLRC, which deleted the service incentive leave pay but affirmed the awards for vacation and sick leave pay. The NLRC adopted the arbiter’s reasoning that the petitioner’s answer constituted an admission of the policy granting these leaves.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the award of vacation and sick leave pay to the private respondents despite the absence of substantial evidence to support the exact monetary claim.

RULING

Yes. The Supreme Court granted the petition and annulled the NLRC’s award for vacation and sick leave pay. The Court clarified that while the petitioner’s answer admitted the existence of a policy granting vacation and sick leave, this admission did not automatically prove the merit of the employees’ claim for payment of unused leaves. The admission merely established the policy; it did not constitute proof that the employees had unused leave credits or that they were entitled to monetary conversion for the entire claimed period.
The Court emphasized that the burden of proof to substantiate their claim for unused leave benefits rested primarily on the private respondents as claimants. This burden was not discharged, as they failed to file a required position paper and no formal hearing was conducted to receive evidence. The Labor Arbiter and the NLRC erred by awarding the claims based solely on the complaint form and the petitioner’s alleged failure to deny the grant, without any evidentiary basis to determine the exact number of unused leave days for each employee. The awards were thus made without substantial evidence, violating due process. The Court, while generally respecting factual findings of quasi-judicial agencies, is not bound by conclusions lacking factual support. Consequently, the challenged portion of the NLRC resolution was set aside for lack of evidentiary basis.