Vilma De Peralta was an Insurance Sales Executive at Toyoya Pasig. In 2012, she was investigated for allegedly falsifying documents which resulted in her getting commissions for transactions that were supposed to be credited to another department in the said company. She admitted the wrongdoing during investigation. As a result, her services were terminated.
De Peralta then sued Toyota Pasig, Inc. alleging that she was illegally dismissed. She claims that the real reason for her firing was because her husband was a union leader which did not sit well with the management of Toyota.
One of the issues in the labor case she filed was the non-payment of her commissions. Toyota Pasig argued that her claim for payment was baseless. During trial, the labor arbiter directed Toyota Pasig to submit documents to rebut De Peralta’s claims but Toyota Pasig opted not to present any evidence. The Labor Arbiter then directed De Peralta to compute her claims.
After trial, the Labor Arbiter ruled against De Peralta. On appeal, the National Labor Relations Commission (NLRC) affirmed the decision of the Arbiter but awarded De Peralta her claim for unpaid commissions amounting to Php617,248.08. On further appeal, the Court of Appeals (CA) affirmed en toto the Resolution of the NLRC. Toyota Pasig now questions the CA ruling.
ISSUE 1: Whether or not commissions are part of wage.
HELD: Yes. “Wage” paid to any employee shall mean the remuneration of earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis.
While commissions are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remunerations for services rendered.
But won’t this interpretation be disadvantageous to workers especially so that this would negate the practice of granting commissions only after an employee has earned the minimum wage or over?
Ideally, commissions should be paid after the minimum wage is met/paid. But this is not the case in general. “In truth, [the Supreme Court] has taken judicial notice of the fact that some salesmen do not receive any basic salary but depend entirely on commissions and allowances or commissions alone, although an employer-employee relationship exists. Undoubtedly, this salary structure is intended for the benefit of the corporation establishing such, on the apparent assumption that thereby its salesmen would be moved to greater enterprise and diligence and close more sales in the expectation of increasing their sales commissions. This, however, does not detract from the character of such commissions as part of the salary or wage paid to each of its salesmen for rendering services to the corporation.” In short, since most commission earners are not paid the minimum wage or receive way below the minimum wage, the foregoing interpretation serves better the welfare of workers in general.
ISSUE 2: Since commissions are part of wages, whose burden is it to prove that the same were paid?
HELD: The employer. Once the employee has set out with particularity in his complaint, position paper, affidavits and other documents the labor standard benefits he is entitled to, and which he alleged that the employer failed to pay him, it becomes the employer’s burden to prove that it has paid these money claims. One who pleads payment has the burden of proving it, and even where the employees must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employees to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances, and other similar documents – which will show that overtime, differentials, service incentive leave, and other claims of the worker have been paid – are not in the possession of the worker but in the custody and absolute control of the employer.
