Case Digest: Jimenez v. NLRC, G.R. No. 116960, April 2, 1996

   Labor Law | Art. 102 Forms of Payment

Facts: 

Private respondents Pedro and Fredelito Juanatas filed a claim for unpaid wages/commissions, separation pay, and damages against JJ’s Trucking and/or Dr. Bernardo Jimenez. 

They alleged they were hired by Jimenez in 1987 and were paid on a commission basis for hauling soft drinks for Coca-Cola Bottling Company.

Private respondents claimed they received only partial commissions for 1988 and 1989 and were owed a substantial amount. They alleged that their services were illegally terminated in March 1990.

Petitioners denied the claims, stating that commissions were duly paid, and Fredelito Juanatas was not an employee but a helper of his father.

Labor Arbiter: Ordered petitioners to pay Pedro Juanatas separation pay and attorney’s fees but dismissed Fredelito Juanatas' claim.

NLRC: Modified the decision, declaring Fredelito Juanatas an employee and ordering payment of unpaid commissions to both complainants.

Issues: 

WoN private respondents were not paid their commission in full. YES

WoN respondent Fredelito Juanatas was an employee of JJ’s Truckin. NO

Held:

On the first issue, we find no reason to disturb the findings if respondent NLRC that the entire amount of commissions was not paid, this by reason of the evident failure of herein petitioner to present evidence that full payment there has been made. It is a basic rule in evidence that each party must prove his affirmative allegation. Since the burden of evidence lies with the party who asserts an affirmative allegation, the plaintiff or complainant has to prove his affirmative allegation, in the complaint and the defendant or respondent has to prove the affirmative allegations in his affirmative defenses and counterclaim. Considering that petitioners herein assert that the disputed commission have been paid, they have the bounden duty to prove that fact.

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.

When the existence of a debt is fully established by the evidence contained in the record, the burden of proving that it has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the creditor. Where the debtor introduces some evidence of payment, the burden of going forward with the evidence — as distinct from the general burden of proof — shifts to the creditor, who is then under a duty of producing some evidence to show non-payment. 

In the instant case, the right of respondent Pedro Juanatas to be paid a commission equivalent to 17%, later increased to 20%, of the gross income is not disputed by petitioners. Although private respondents admit receipt of partial payment, petitioners still have to present proof of full payment. Where the defendant sued for a debt admits that the debt was originally owed, and pleads payment in whole or in part, it is incumbent upon him to prove such payment. That a plaintiff admits that some payments have been made does not change the burden of proof. The defendant still has the burden of establishing payments beyond those admitted by plaintiff. 

The testimony of petitioners which merely denied the claim of private respondents, unsupported by documentary evidence, is not sufficient to establish payment. Although petitioners submitted a notebook showing the alleged vales of private respondents for the year 1990, the same is inadmissible and cannot be given probative value considering that it is not property accomplished, is undated and unsigned, and is thus uncertain as to its origin and authenticity.

The positive testimony of a creditor may be sufficient of itself to show non-payment, even when met by indefinite testimony of the debtor. Similarly, the testimony of the debtor may also be sufficient to show payment but, where his testimony is contradicted by the other party or by a disinterested witness, the issue may be determined against the debtor since he has the burden of proof. The testimony of the debtor creating merely an inference of payment will not be regarded as conclusive on that issue. 

Hence, for failure to present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the allegations of private respondents.

With respect to the second issues, however, we agree with petitioners that the NLRC erred in holding that the son, Fredelito, was an employee of petitioners.

We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, with the control test assuming primacy in the overall consideration.

In the case at bar, the aforementioned elements are not present. The agreement was between petitioner JJ’s Trucking and respondent Pedro Juanatas, The hiring of a helper was discretionary on the part of Pedro. Under their contract, should he employ a helper, he would be responsible for the latter’s compensation. With or without a helper, respondent Pedro Juanatas was entitled to the same percentage of commission. Respondent Fredelito Juanatas was hired by his father, Pedro, and the compensation he received was paid by his father out of the latter’s commission. Further, Fredelito was not subject to the control and supervision of and dismissal by petitioners but of and by his father.

Even the Solicitor General, in his comment, agreed with the finding of the labor arbiter that Fredelito was not an employee of petitioners, to wit:

"Public respondent committed grave abuse of discretion in holding that said private respondent is an employee of JJ’s Trucking on the ground that, citing Article 281 of the Labor Code, ‘Fredelito’s functions as helper was (sic) necessary and desirable to respondent’s trucking business’.

"In the first place, Article 281 of the Labor Code does not refer to the basic factors that must underlie every existing employer-employee relationship, the absence of any of which will negate such existence. It refers instead to the qualifications of" (A)n employee who is allowed to work after a probationary period’ and who, employee who as a consequence, "shall be considered a regular employee.’ Secondly, the test in determining the existence of an employee-employer relationship is not the necessity and /or desirability of one’s functions in relation to an employer’s business, but ‘(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. The latter is the most important element’ (Singer Sewing Machine Company v. Drilon, 193 SCRA 270, 2575; Deferia v. NLRC, 194 SCRA 531, 525; Ecal v. NLRC, 224, 228; Hijos De F. Escano, Inc. v. NLRC, 224 SCRA 781, 785). The aforequoted pertinent findings of the Labor Arbiter indicate (that) the foregoing requirements do not exist between petitioner and private respondent Fredelito Juanatas. Thus, the labor arbiter stated that respondent Fredelito Juanatas was never hired by petitioners. Instead the former’s services were availed of by respondent Pedro Juanatas his father, who, at the same time, supervised and controlled his work and paid his commissions. Respondent NLRC’s ruling did not traverse these findings of the labor arbiter" 

WHEREFORE, the judgment of respondent National Labor Relations Commission is hereby AFFIRMED, with the MODIFICATION that paragraph 1 thereof, declaring Fredelito Juanatas an employee of petitioners and entitled to share in the award for commission and separation pay, is hereby DELETED.