EDILBERTO P. ETOM, JR., PETITIONER, VS. AROMA LODGING HOUSE THROUGH EDUARDO G. LEM, PROPRIETOR AND GENERAL MANAGER, RESPONDENT.

Etom versus Aroma Lodging House

The Case

This is a labor case in which Edilberto Etom, a roomboy, sued Aroma Lodging House for illegal dismissal and money claims. The Labor Arbiter and the National Labor Relations Commission found that he had been legally dismissed but had been underpaid, and awarded him salary differential, thirteenth month pay, and holiday pay. The Court of Appeals reversed and set those awards aside, relying on a notarized affidavit in which Etom himself had said he was paid above the minimum wage. The Supreme Court took up the case to settle two things every labor practitioner must know: when a motion for reconsideration before the labor tribunal may be treated as timely filed, and who carries the burden of proving payment of an employee's money claims.

Procedural History

Etom filed a complaint for illegal dismissal and money claims before the Labor Arbiter. The Labor Arbiter found the dismissal legal but ordered Aroma Lodging House to pay punitive damages, salary differential, holiday pay, and thirteenth month pay. Aroma appealed to the National Labor Relations Commission, which affirmed the finding of underpayment but deleted the punitive damages. Aroma moved for reconsideration; the Commission denied it.

Aroma then filed a petition for certiorari with the Court of Appeals. The Court of Appeals granted the petition, set aside the Commission's decision and resolution, and held that Aroma's motion for reconsideration had been timely filed, that Etom's earlier notarized affidavit barred his claim of underpayment, and that there was no factual basis for the thirteenth month pay and holiday pay. The Court of Appeals denied Etom's motion for reconsideration.

Etom elevated the matter to the Supreme Court by petition for review on certiorari, raising the timeliness of the motion for reconsideration, the evidentiary value of the affidavit, and the denial of his opportunity to file a reply or memorandum.

Facts

Etom claimed that Aroma Lodging House, a business providing affordable lodging, employed him as a roomboy in 1997 at a monthly salary of 2,500 pesos, working from five in the morning to eleven at night, Monday to Saturday, including holidays, cleaning the lodge and washing towels and bedsheets. He claimed that on February 4, 2008, the respondent refused to let him report for work, without informing him of any violation and without giving him a chance to explain.

Aroma, for its part, said it employed Etom only in 2000, paid him above the required minimum wage, holiday pay, thirteenth month pay, and overtime pay, and gave him free meals, tips, and commissions. It also said that despite these benefits Etom caused trouble at work, stole from customers, figured in a fistfight with a co-roomboy whom he tried to stab, and on separate occasions chased two co-employees while armed with a knife. Aroma served a memorandum requiring him to explain, which he refused to receive, and then terminated him for serious misconduct.

In an earlier labor case, Etom and a co-employee had executed a notarized joint affidavit stating that since 2000 they had been regular employees receiving salaries above the minimum wage fixed by law, plus free board, food, utilities, tips, and commissions. Etom later claimed that this affidavit was signed under pressure during the pendency of a criminal case against him, and that he is illiterate and did not understand its implications.

Issues

• Whether or not the Court of Appeals erred in holding that the respondent's motion for reconsideration of the National Labor Relations Commission decision was filed within the reglementary period.
• Whether or not the Court of Appeals erred in giving evidentiary weight to the petitioner's notarized joint affidavit as an admission that he was paid wages above the minimum required by law.
• Whether or not the petitioner was denied the opportunity to file a reply and a memorandum under Rule 65 of the Rules of Court.

Applicable Provisions

Section 6 of Rule 65 of the Rules of Court provides:

Section 6. Order to Comment. In petitions for certiorari before the Supreme Court and the Court of Appeals, the provisions of Section 2, Rule 56, shall be observed. Before giving due course thereto, the court may require the respondents to file their comment to, and not a motion to dismiss, the petition. Thereafter, the court may require the filing of a reply and such other responsive or other pleadings as it may deem necessary and proper.

This provision governs Etom's claim that he was deprived of the chance to file a reply, and its use of the word may is the textual hook for the Court's ruling that the filing of a reply rests on the sound judgment of the court.

Section 8 of Rule 65 of the Rules of Court provides:

Section 8. Proceedings After Comment is Filed. After the comment or other pleadings required by the court are filed, or the time for the filing thereof has expired, the court may hear the case or require the parties to submit memoranda. If, after such hearing or filing of memoranda or the expiration of the period for filing, the court finds that the allegations of the petition are true, it shall render judgment for the relief prayed for to which the petitioner is entitled.

This provision likewise makes the filing of memoranda discretionary, which disposes of Etom's claim that he was denied the opportunity to file one.

Ruling

On the first issue, the Court held that the respondent's motion for reconsideration was timely filed. A motion for reconsideration of a National Labor Relations Commission decision must be filed within ten days from receipt of the assailed decision, and the perfection of an appeal within the period required by law is mandatory and jurisdictional. But the Commission is not bound by technical rules of procedure and may liberally apply its rules. The respondent explained that the deadline fell on a Saturday, so the motion was filed on the next working day, and that a glitch in the docket machine stamped it with a later date and time, which the docket section corrected. The Court found this explanation convincing, noting that the Commission itself took cognizance of the motion and resolved it on the merits, and that a full resolution of the case on the merits is the more palpable explanation for the liberal application of its rules.

On the second issue, the Court held that the Court of Appeals erred in relying on the affidavit to defeat the money claims. While a notarized document is presumed regular, that presumption is not absolute and may be overcome by clear and convincing evidence to the contrary; the fact that a document is notarized is not a guarantee of the validity of its contents. Etom was an unlettered employee who may not have understood the full import of his statements, and the affidavit did not even state the specific amount of the alleged above-minimum salary. More fundamentally, the Court restated the rule on burden of proof: once the employee has asserted with particularity in his position paper that his employer failed to pay his benefits, it becomes incumbent upon the employer to prove payment of the employee's money claims. The burden is on the employer to prove payment, not on the employee to establish non-payment. The respondent's mere reliance on the affidavit was misplaced, because the requirement is for the employer to prove payment, and not merely to deny the accusation of non-payment on the basis of the employee's own declaration.

On the third issue, the Court held that the contention was unmeritorious. Under Sections 6 and 8 of Rule 65, the filing of a reply and other subsequent pleadings, as well as memoranda, is subject to the sound judgment of the court. The word may, when used in a statute, is permissive only and operates to confer discretion. The Court of Appeals, in the exercise of its judgment, could submit the case for resolution after the petition and the comment had been filed.

Doctrine

First, a motion for reconsideration of a National Labor Relations Commission decision must be filed within ten days from receipt, and the perfection of an appeal within the period fixed by law is mandatory and jurisdictional; failure to appeal on time renders the assailed decision final and executory. Nevertheless, the Commission is not bound by technical rules of procedure and may liberally apply its rules, especially where a full resolution of the case on the merits is the more palpable explanation for the liberal application.

Second, once the employee asserts with particularity in his position paper that the employer failed to pay his benefits, the burden shifts to the employer to prove payment of the money claims. The employer must present substantial evidence of payment; it cannot simply deny the accusation by pointing to the employee's own declaration.

Third, a notarized document enjoys a presumption of regularity, but that presumption is not absolute and may be overcome by clear and convincing evidence to the contrary. The fact that a document is notarized is not a guarantee of the validity of its contents, particularly where the affiant is an unlettered employee who may not have understood the full import of his statements.

Fourth, under Sections 6 and 8 of Rule 65, the filing of a reply and of memoranda is discretionary upon the court, because the word may is permissive only and operates to confer discretion.

Disposition

The petition was granted; the Court of Appeals decision and resolution were reversed and set aside, and the National Labor Relations Commission decision and resolution awarding salary differential, thirteenth month pay, and holiday pay in favor of Etom were reinstated and affirmed.

Remember This

Memorize this line: once the employee asserts with particularity that his benefits were not paid, the burden is on the employer to prove payment, and a notarized affidavit of the employee is not enough to discharge that burden. Examiners use this case to test the burden of proof in money claims and the liberal application of procedural rules by the National Labor Relations Commission.