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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
An employer with a bank crediting arrangement for its employees’ salaries and benefits may prove payment of the same by submitting evidence that it transmitted a copy of the payroll or advisory to the bank, and that such was duly received by the latter. Once the employer submits valid proof of receipt by the crediting bank, the burden of evidence shifts to the employees who will have to refute the claim of payment by submitting evidence that their respective bank accounts were not credited with the amounts subject of their claim.
In the recent case of Philippine Airlines, Inc. v. Romeo Ahmee, et al. (G.R. No. 221065, April 5, 2025), the Supreme Court held that to prove salary payment through banks, employers must show the payroll was submitted to and received by the bank.
In claiming that it had paid the unpaid salaries and 13th month pay of its employees, Philippine Airlines, Inc. (PAL) contends that the PAL Payroll Listing for Allied Bank and the 1998 13th Month Pay Payroll Register are sufficient and substantial evidence of payment of the purported unpaid money claims as these documents allegedly show the amounts credited to the PAL employees’ bank accounts as their salaries and 13th month pay, which to a reasonable mind, constitute as acceptable proof of payment.
The Supreme Court disagreed, holding that the burden of proving payment of monetary claims rests on the employer. It is a rule that one who pleads payment has the burden of proving it. Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The Court has consistently emphasized the reasonability of this rule because the pertinent personnel files, payrolls, records, remittances and other similar documents— which will show that overtime, differentials, service incentive leave and other claims of workers have been paid— are not in the possession of the worker but in the custody and absolute control of the employer.
Verily, in determining whether an employer has paid the salary or benefits being claimed by the employee, there must be substantial evidence of payment. The Court has generally treated payroll sheets or vouchers submitted by the employer as substantial evidence of payment of the employee’s monetary claims.
It should be emphasized, however, that payroll and vouchers are treated as substantial evidence of payment only if they sufficiently show both receipt of payment by the employee and the date or period covering the alleged payment.
Accordingly, the Court only treats payrolls and vouchers as substantial evidence of payment when they: (1) indicate that the employee has actually received the alleged unpaid salaries or monetary benefits; and (2) reflect the dates or period covering the alleged unpaid money claims.
The novelty, however, of the case is that PAL makes reference to the automatic crediting of salaries and monetary benefits to the employees bank accounts. It argues that the payrolls constitute substantial evidence that the salaries and 13th month pay had been credited to the claimants’ bank accounts. Unfortunately, the Supreme Court found that this position cannot be sustained.
The Court is not unaware of the workplace arrangement of automatic crediting of salaries to the bank payroll accounts of the employees. Under this arrangement, the employer will have to prepare the payroll showing the employees’ names, bank accounts, and the amounts that they are entitled to. Depending on the bank’s regulations and policies, the employer will then furnish the bank with a copy of the payroll or submit a bank advisory. Based on the payroll or advisory, the bank will now credit the amounts to the employees’ respective bank accounts.
From here, We can identify three stages in a bank crediting arrangement of employees’ salaries and other benefits: (1) the preparation of payroll by the employer; (2) the employer’s submission and corresponding receipt by the bank of the payroll or advisory; and (3) the crediting of the amounts to the employees’ bank accounts. In the first stage, the employer is the only actor, while in the second, the employer and the bank play active roles in the process. The third stage, however, concerns purely bank operations, to which the employer has no control and active participation. It should be pointed out that in this last stage, the employer as a client of the bank, can reasonably presume that the latter has fulfilled its duty to immediately deposit the amounts to the employees’ bank accounts.
Thus, the minimum requirement to prove payment by an employer with an existing bank crediting arrangement of its employees’ salaries and other benefits is evidence of the second stage, i.e., proof of submission or receipt by the bank of the payroll or advisory. The submission by the employer of the payroll or bank advisory or the acknowledgment receipt by the bank constitutes substantial evidence of payment of the employees’ salaries and monetary benefits. Such document showing the receipt by the bank of the payroll or bank advisory will lead a reasonable person to conclude that payment has been made by the employer of the salaries and monetary benefits of the employees. Once the employer submits valid proof of the second stage, the burden of evidence will shift to the employees who will then refute the claim of payment and prove that their respective bank accounts were not credited with any amounts during the applicable periods.
Ineluctably, the payrolls submitted by PAL failed to substantially prove that it paid the subject salaries and 13th month pay. Such documents only constitute substantial evidence of the first stage— that PAL had prepared the payrolls for the salaries covering the period of May 16 to 31, 1998 and the 13th month pay for 1998. These payrolls cannot be treated as substantial evidence of payment because they failed to reflect that the same had been submitted to Allied Bank, or that the latter had received them.
The payrolls that PAL submitted only constitute substantial evidence that PAL had prepared the corresponding payrolls. Such did not prove payment because there was no indication of transmittal to Allied Bank for the consequent crediting of the amounts to PAL employees’ respective bank accounts.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
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