Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 161787               April 27, 2011

MASING AND SONS DEVELOPMENT CORPORATION and CRISPIN CHAN, Petitioners,

DECISION

BERSAMIN, J.:

In any controversy between a laborer and his master, doubts reasonably arising from the evidence
are resolved in favor of the laborer.

(Rogelio) brought against Chan a complaint for retirement pay

Rogelio was first employed in 1949 by Pan Phil. Copra Dealer, MSDC’s predecessor, which
engaged in the buying and selling of copra Masing Chan owned and managed Pan Phil. Copra
Dealer, Chan changed the business name of Pan Phil. Copra Dealer until Finally, Masing Chan
adopted the business name of Masing and Sons Development Corporation (MSDC), appointing
Wynne or Wayne Lim (Lim) as the Branch Manager wherein Rogelio worked as a laborer in the
along with twelve other employees.

In January 1974, Rogelio was reported for Social Security System (SSS) coverage. After paying
contributions to the SSS for more than 10 years, he became entitled to receive retirement
benefits from the SSS. Thus, in 1991, he availed himself of the SSS retirement benefits, and in
order to facilitate the grant of such benefits, he entered into an internal arrangement with Chan and
MSDC to the effect that MSDC would issue a certification of his separation from employment
notwithstanding that he would continue working as a laborer.

On March 17, 1997, Rogelio was paid his last salary. Lim, informed Rogelio that he was deemed
retired as of that date. Chan confirmed to Rogelio that he had already reached the compulsory
retirement age. Rogelio was then 67 years old.

Considering that Rogelio was supposedly receiving a daily salary of ₱70.00 until 1997, but
did not receive any 13th month pay, service incentive leave, premium pay for holidays and
rest days and COLA, and even any retirement benefit from MSDC upon his retirement in March
1997, he commenced his claim for such pay and benefits.

Rogelio submitted the January 19, 1998 affidavits of his co-workers, whereby they each declared
that Rogelio had already been working at the Ibajay Branch by the time that MSDC’s predecessor
had hired them in the 1950s to work in that branch; and that MSDC and Chan had continuously
employed them until their own retirements, and confirmed that like Rogelio, they did not receive any
retirement benefits from Chan and MSDC upon their retirement.
In their defense, MSDC and Chan denied having engaged in copra buying. They asserted that
Lim had not been their agent or employee, because he had been an independent copra buyer.
They averred, however, that Rogelio was their former employee, retired on June 30,
1989;7 and that Rogelio was thereafter employed by Lim starting from July 1, 1989 until the
filing of the complaint.

MSDC and Chan submitted the affidavit of Lim, whereby Lim stated that Rogelio was one of his
employees from 1989 until the termination of his services.8 ----- affidavit of Guevarra12 and
Señeres,13 whereby said affiants denied having executed or signed the January 19, 1998 affidavits
submitted by Rogelio.

the LA dismissed the complaint against Chan and MSDC, ruling that there exists no
employer-employee relationship between the parties

Rogelio appealed, but the NLRC affirmed the decision of the LA, The NLRC denied Rogelio’s motion
for reconsideration.

Ruling of the CA

holding that Rogelio had substantially established that he had been an employee of Chan and
MSDC

Issues

1. WON Rogelio had remained their employee from July 6, 1989 up to March 17, 1997; - YES

2. WON he is entitled to retirement benefits

Ruling

Respondent remained the petitioners’

In dealing with such question, substantial evidence – that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion 19 – is sufficient. Although no
particular form of evidence is required to prove the existence of the relationship, and any competent
and relevant evidence to prove the relationship may be admitted, 20 a finding that the relationship
exists must nonetheless rest on substantial evidence.

As to the factual issue, the petitioner’s evidence consists of his own statements and those of his
alleged co-worker from 1950 until 1997, Juanito Palomata, who unlike his former co-workers
Domingo Guevarra and Ambrosio Señeres, did not disown the "Sinumpaang Salaysay" he executed,
in corroboration of petitioner’s allegations; and the Certification dated August 10, 1991 stating that
petitioner was first placed under coverage of the SSS in January 1974 to June 30, 1989 and was
separated from service effective July 1, 1989, a certification executed by respondent Crispin Amigo
Chan which, petitioner maintains, was only intended for his application for retirement benefits with
the SSS.
Private respondents’ evidence, on the other hand, consisted of respondent Crispin Amigo Chan’s counter
statements as well as documentary evidence consisting of (1) Wayne Lim’s Affidavit which petitioner
acknowledged in his Reply dated July 11, 1998, par. 8, admitting to being the employer of petitioner from
July 1, 1989 until the filing of the complaint; (2) Certification dated October 22, 1991 showing petitioner’s
employment with respondents to have been between January 3, 1977 until July 1, 1989; (3) Affidavits of
Guevarra and Señeres disowning their signatures in the affidavits submitted in evidence by the petitioner;
(4) SSS report executed by Wayne Lim of his initial list of employees as of July 1, 1989 which includes
the petitioner. On appeal, the respondents further submitted documentary evidence showing that Wayne
Lim registered his business name on July 11, 1989 and apparently went into business buying copra.

At this point, we should note the following factual discrepancies in the evidence on hand: First, the
respondents issued certificates stating the commencement of petitioner’s employment on different
dates, i.e. January 1974 and January 1977, although the earlier date referred only to the period
when petitioner was first placed under the coverage of the SSS, which need not necessarily refer to
the commencement of his employment. Secondly, while respondent Crispin Amigo Chan denied having
ever engaged in copra buying in Ibajay, the certificates he issued both dated in 1991 state otherwise, for
he declared himself as a "copra dealer" with address in Ibajay. Then there is the statement of the
petitioner that Wayne Lim was the respondents’ manager in their branch office in Ibajay since 1984, a
statement that respondents failed to disavow. Instead, respondents insisted on their non sequitur
argument that they had never engaged in copra buying activities in Ibajay, and that Wayne Lim was in
business all by himself in regard to such activity.

The denial on respondents’ part of their copra buying activities in Ibajay begs the obvious question:
What were petitioner and his witness Juanito Palomata then doing for respondents as laborers in
Ibajay prior to July 1, 1989? Indeed, what did petitioner do for the respondents as the latter’s laborer
prior to July 1, 1989, which was different from what he did after said date? The records showed that
he continued doing the same job, i.e. as laborer and trusted employee tasked with the responsibility
of getting money from the Kalibo office of respondents which was used to buy copra and pay the
employees’ salaries. He did not only continue doing the same thing but he apparently did the same
at or from the same place, i.e. the bodega in Ibajay, which his co-worker Palomata believed to
belong to the respondent Masing & Sons. Since respondents admitted to employing petitioner from
1977 to 1989, we have to conclude that, indeed, the bodega in Ibajay was owned by respondents at
least prior to July 1, 1989 since petitioner had consistently stated that he worked for the respondents
continuously in their branch office in Ibajay under different managers and nowhere else.

We believe that the respondents’ strongest evidence in regard to the alleged separation of petitioner
from service effective July 1, 1989 would be the affidavit of Wayne Lim, owning to being the
employer of petitioner since July 1, 1989 and the SSS report that he executed listing petitioner as
one of his employees since said date. But in light of the incontrovertible physical reality that
petitioner and his co-workers did go to work day in and day out for such a long period of time, doing
the same thing and in the same place, without apparent discontinuity, except on paper, these
documents cannot be taken at their face value. We note that Wayne Lim apparently inherited, at
least on paper, ten (10) employees of respondent Crispin Amigo Chan, including petitioner, all on the
same day, i.e. on July 1, 1989. We note, too, that while there exists an initial report of employees to
the SSS by Wayne Lim, no other document apart from his affidavit and business registration was
offered by respondents to bolster their contention, irrespective of the fact that Wayne Lim was not a
party respondent. What were the circumstances underlying such alleged mass transfer of
employment? Unfortunately, the evidence for the respondents does not provide us with ready
answers. We could conclude that respondents sold their business in Ibajay and assets to Wayne Lim
on July 1, 1989; however, as pointed out above, respondent Crispin Amigo Chan himself said that
he was a "copra dealer" from Ibajay in August and October of 1991. Whether or not he was
registered as a copra buyer is immaterial, given that he declared himself a "copra dealer" and had
apparently engaged in the activity of buying copra, as shown precisely by the employment of
petitioner and Palomata. If Wayne Lim, from being the respondents’ manager in Ibajay became an
independent businessman and took over the respondents’ business in Ibajay along with all their
employees, why did not the respondents’ simply state that fact for the record? More importantly, why
did the petitioner and Palomata continue believing that Wayne Lim was only the respondents’
manager? Given the long employment of petitioner with the respondents, was it possible for him and
his witness to make such mistake? We do not think so. In case of doubt, the doubt is resolved in
favor of labor, in favor of the safety and decent living for the laborer as mandated by Article 1702 of
the Civil Code. The reality of the petitioner’s toil speaks louder than words. xxx 22

We agree with the CA’s factual findings, because they were based on the evidence and records of
the case submitted before the LA. The CA essentially complied with the guidepost that the
substantiality of evidence depends on both its quantitative and its qualitative aspects. 23 Indeed, the
records substantially established that Chan and MSDC had employed Rogelio until 1997. In
contrast, Chan and MSDC failed to adduce credible substantiation of their averment that Rogelio
had been Lim’s employee from July 1989 until 1997. Credible proof that could outweigh the showing
by Rogelio to the contrary was demanded of Chan and MSDC to establish the veracity of their
allegation, for their mere allegation of Rogelio’s employment under Lim did not constitute
evidence,24 but they did not submit such proof, sadly failing to discharge their burden of proving their
own affirmative allegation.25 In this regard, as we pointed out at the start, the doubts reasonably
arising from the evidence are resolved in favor of the laborer in any controversy between a laborer
and his master.

II

Respondent entitled to retirement benefits

Article 287 of the Labor Code, as amended by Republic Act No. 7641, provides:

Article 287. Retirement. – Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining agreement and other agreements;
Provided, however, That an employee’s retirement benefits under any collective bargaining and
other agreements shall not be less than those provided herein.

In the absence of a retirement plan or agreement providing for retirement benefits of employees in
the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at
least five (5) years in the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six
(6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean
fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more
than five (5) days of service incentive leaves.

Retail, service and agricultural establishments or operations employing not more than ten (10)
employees or workers are exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal provisions provided
under Article 288 of this Code.

Was Rogelio entitled to the retirement benefits under Article 287 of the Labor Code, as amended by
Republic Act No. 7641?

The CA held so in its decision, to wit:

Having reached the conclusion that petitioner was an employee of the respondents from 1950 to
March 17, 1997, and considering his uncontroverted allegation that in the Ibajay branch office where
he was assigned, respondents employed no less than 12 workers at said later date, thus affording
private respondents no relief from the duty of providing retirement benefits to their employees, we
see no reason why petitioner should not be entitled to the retirement benefits as provided for under
Article 287 of the Labor Code, as amended. The beneficent provisions of said law, as applied in Oro
Enterprises Inc. v. NLRC, is apart from the retirement benefits that can be claimed by a qualified
employee under the social security law. Attorney’s fees are also granted to the petitioner. But the
monetary benefits claimed by petitioner cannot be granted on the basis of the evidence at hand. 26

We concur with the CA’s holding. The third paragraph of the aforequoted provision of the Labor
Code entitled Rogelio to retirement benefits as a necessary consequence of the finding that Rogelio
was an employee of MSDC and Chan. Indeed, there should be little, if any, doubt that the benefits
under Republic Act No. 7641, which was enacted as a labor protection measure and as a curative
statute to respond, in part at least, to the financial well-being of workers during their twilight years
soon following their life of labor, can be extended not only from the date of its enactment but
retroactively to the time the employment contracts started. 27

WHEREFORE, the Court denies the petition for review on certiorari, and affirms the decision
promulgated on October 24, 2003 in CA-G.R. SP No.75983.

Costs of suit to be paid by the petitioners.

SO ORDERED.