G & M (Phil.) v. Batomalaque
REITERATIONFacts
The Antecedents: Respondent Willie Batomalaque was hired as a car painter by Abdul Aziz Abdullah Al Muhaimid Najad Car Maintenance Association (Abdul Aziz), a Saudi Arabian entity, through its agent, petitioner G&M (Phil.), Inc., for a two-year period at a monthly salary of US$370.00. Respondent claimed he was paid less than the agreed salary for several months and was jobless for eleven months. He resigned in May 1994 due to non-payment of salaries for March and April 1994. He filed a complaint for non-payment and underpayment of salaries and damages. Procedural History: The Labor Arbiter found merit in the claim for underpayment of salaries for the first year of employment, awarding SR5,500.00, but denied other claims. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision. The Court of Appeals dismissed petitioner's petition for certiorari, holding that the NLRC committed no error. The Petition: Petitioner G&M (Phil.), Inc. filed a petition for review, maintaining that respondent was paid his salaries in full and that the burden was on respondent to prove otherwise. The Supreme Court modified the award, reducing it to SR5,200.00.
Issue(s)
Whether petitioner G&M (Phil.), Inc. is solidarily liable with its principal for the unpaid wages of respondent. Whether the burden of proof to show full payment of salaries rests on the employer, even in cases of alleged underpayment. Whether the award for salary differentials should be modified.
Ruling
The Court affirmed the decision of the Court of Appeals with modification, reducing the award to respondent Willie Batomalaque to 5,200 Saudi riyals instead of 5,500 Saudi riyals.
Ratio Decidendi
On the issue of solidary liability of the recruitment agency: Petitioner G&M (Phil.), Inc., as the recruiter and agent of Abdul Aziz, is solidarily liable with the foreign principal for the unpaid wages of respondent. This liability stems from the contractual undertakings petitioner assumed when it applied for its license to operate as a private employment agency. These undertakings, including the requirement to submit a verified document assuming responsibility for the implementation of employment contracts and to file an agency contract empowering the agency to sue and be sued jointly and solidarily with the foreign principal, form the legal basis for holding recruitment agencies jointly and severally liable with foreign-based employers for claims arising from service agreements or employment contracts. The Court cited Royal Crown Internationale v. NLRC to support this principle. On the burden of proof for payment: The Court reiterated the settled rule that a party alleging payment as a defense has the burden of proving it. Specifically in labor cases, the employer bears the burden of proving payment of monetary claims because the pertinent records are in their custody and control. Petitioner failed to discharge this burden by merely alleging full payment without presenting any evidence, such as payroll or payslips, to support its defense. The Court clarified that this rule applies even in cases of alleged underpayment, as partial payment does not extinguish the obligation, and the burden of proof remains with the debtor (employer) to show that the obligation has been discharged. On the modification of the award: The Court found that the appellate court's affirmance of the award of salaries for a 13-month period, as reflected in the Labor Arbiter's computation, needed modification. Respondent himself alleged underpayment for 12 months in his Complaint-Affidavit, and his prayer for salary differential specified SR500 per month for seven months, totaling SR3,500. Considering the agreed salary of 1,200 Saudi riyals and the amounts received, the Court determined that respondent was entitled to SR5,200, representing the total deficient payment for a 12-month period, not SR5,500 as awarded by the Labor Arbiter.
Main Doctrine
The employer bears the burden of proving payment of monetary claims, and this burden is not shifted to the employee even in cases of alleged underpayment, as partial payment does not extinguish the obligation. A recruitment agency is solidarily liable with the foreign principal for unpaid wages based on its contractual undertakings.