NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION, LTD.

, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDGAR PHILIP C.
SANTOS, respondents.

The fact that Santos neglected to substantiate his claim for night shift differentials is not
prejudicial to his cause. After all, the burden of proving payment rests on petitioner NSC.
Santos' allegation of non-payment of this benefit, to which he is by law entitled, is a negative
allegation which need not be supported by evidence unless it is an essential part of his cause
of action. It must be noted that his main cause of action is his illegal dismissal, and the claim
for night shift differential is but an incident of the protest against such dismissal. Thus, the
burden of proving that payment of such benefit has been made rests upon the party who will
suffer if no evidence at all is presented by either party.   Moreover, in Jimerez v. National
8

Labor Relations Commission,   we declared —

9

As a general rule, one who pleads payment has the burden of proving it. Even
where the plaintiff must allege non-payment, the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove
non-payment. The debtor has the burden of showing with legal certainty that
the obligation has been discharged by payment.

For sure, private respondent cannot adequately prove the fact of non-payment of night shift
differentials since the pertinent employee files, payrolls, records, remittances and other
similar documents — which will show that private respondent rendered night shift work; the
time he rendered services; and, the amounts owed as night shift differentials — are not in his
possession but in the custody and absolute control of petitioner.

REGGIE ORBISTA ZONIO, PETITIONER, VS. 1ST QUANTUM LEAP SECURITY AGENCY, INC.
AND ROMULO Q. PAR, RESPONDENTS.

In determining the employee's entitlement to monetary claims, the burden of proof is shifted from the
employer or the employee, depending on the monetary claim sought. 21 In claims for payment of
salary differential, service incentive leave, holiday pay, and 13th month pay, the burden rests on
the employer to prove payment. This standard follows the basic rule that in all illegal dismissal cases
the burden rests on the defendant-employer to prove payment rather than on the plaintiff-employee
to prove non-payment. This likewise stems from the fact that all pertinent personnel files, payrolls,
records, remittances and other similar documents - which show that the differentials, service
incentive leave and other claims of workers have been paid - are not in the possession of the worker
but are in the custody and control of the employer. 22 On the other hand, for overtime pay, premium
pays for holidays and rest days, the burden is shifted on the employee, as these monetary claims
are not incurred in the normal course of business. It is thus incumbent upon the employee to first
prove that he actually rendered service in excess of the regular eight working hours a day, and that
he in fact worked on holidays and rest days.23

NIPPON PAINT PHILIPPINES, INC., PETITIONER, VS. NIPPON PAINT PHILIPPINES

EMPLOYEES ASSOCIATION [NIPPEA], RESPONDENT.

As a rule, employees have a vested right over existing benefits voluntarily granted to them by their
employer.34 Any benefit and supplement being enjoyed by the employees cannot be reduced,
diminished, discontinued, or eliminated by the employer.35 The principle of non-diminution of
benefits under Article 10036 of the Labor Code is actually founded on the constitutional mandate to
protect the rights of workers, promote their welfare, and afford them full protection. In turn, Article 4
of the Labor Code states that "[a]ll doubts in the implementation and interpretation of this Code,
including its implementing rules and regulations, shall be rendered in favor of labor."37

There is diminution of benefits "when the following requisites are present: (1) the grant or benefit is
founded on a policy or has ripened into a practice over a long period of time; (2) the practice is
consistent and deliberate; (3) the practice is not due to error in the construction or application of a
doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by
the employer."38

In Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.,39 the Court ruled that to establish the
existence of a regular company practice, the employee must prove by substantial evidence that the
giving of the benefit is done over a long period of time and that it has been made consistently and
deliberately, i.e., despite the employer's knowledge that the payment of a benefit is not required by
any law or agreement. The Court ruled:

To be considered as a regular company practice the employee must prove by substantial evidence

that the giving of the benefit is done over a long period of time, and that it has been made
consistently and deliberately. Jurisprudence has not laid down any hard-and-fast rule as to the
length of time that company practice should have been exercised in order to constitute voluntary
employer practice.  The common denominator in previously decided cases appears to be the
1aшphi1

regularity and deliberateness of the grant of benefits over a significant period of time. It requires an
indubitable showing that the employer agreed to continue giving the benefit knowing fully well that
the employees are not covered by any provision of the law or agreement requiring payment
thereof. In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the
employer to grant the benefit over a considerable period of time.40 (Emphasis supplied; citations
omitted.)

As to the absence of a hard-and-fast rule on the length of time by which a benefit is considered to
have ripened into a company practice, the Court, on different occasions, found the existence of a
company practice as to the benefits that have been given for six years,41 three years and nine
months,42 three years and four months,43 and as will be discussed below, at least two years.44
NATIONAL FEDERATION OF LABOR (NFL) vs THE HON. COURT OF APPEALS (8th DIV.)

Payment by check- payment of wages by bank checks, postal checks or money orders is allowed
where such manner of wage payment is customary on the date of the effectivity of the Code, where
it is stipulated in a collective bargaining agreement, or where all of the following conditions are met:

1. There is a bank or other facility for encashment within a radius of one (1) kilometer from
the workplace;

2. The employer, or any of his agents or representatives, does not receive any pecuniary
benefit directly or indirectly from the arrangement;

3. The employee are given reasonable time during banking hours to withdraw their wages
from the bank which time shall be considered as compensable hours worked if done during
the working hours; and

4. The payment by check is with the written consent of the employees concerned if there is
no collective agreement authorizing the payment of wages by bank checks. 28

The term "wage" was defined in Article 97(f) of the Labor Code as "the remuneration or earnings,
however, designated, capable of being expressed in terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis, or other method of calculating the unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered and includes
the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the employee. Wages shall be paid only by
29 

means of legal tender. The only instance when an employer is permitted to pay wages in forms other
than legal tender, that is by checks or money order, is when the circumstances prescribed in the
second paragraph of Article 102 are present.

BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and BANKARD, INC., respondents.

Prubankers Association v. Prudential Bank and Trust Company 5 laid down the four elements of wage
distortion, to wit: (1.) An existing hierarchy of positions with corresponding salary rates; (2) A
significant change in the salary rate of a lower pay class without a concomitant increase in the salary
rate of a higher one; (3) The elimination of the distinction between the two levels; and (4) The
existence of the distortion in the same region of the country.

Normally, a company has a wage structure or method of determining the wages of its employees. In
a problem dealing with "wage distortion," the basic assumption is that there exists a grouping or
classification of employees that establishes distinctions among them on some relevant or legitimate
bases.6

Involved in the classification of employees are various factors such as the degrees of responsibility,
the skills and knowledge required, the complexity of the job, or other logical basis of differentiation.
The differing wage rate for each of the existing classes of employees reflects this classification.