SC affirms ruling PAL did not sufficiently prove payment of employees' salaries

MANILA — The Supreme Court has upheld the ruling of the Court of Appeals that Philippine Airlines did not sufficiently prove the payment of salaries and 13th month pay of its former employees.

The high court’s 1st Division ruled in its decision promulgated on April 7, 2025 that to prove salary payment through banks, employers must show that the payroll was submitted to and received by the bank.

The case stemmed from the 1998 strike by 49 PAL pilots who later on filed a complaint with the National Labor Relations Commission over alleged illegal dismissal, unfair labor practice and non-payment of various monetary benefits such as salaries, allowances and bonuses.

“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,” the court said in the decision penned by Chief Justice Alexander Gesmundo.

The Supreme Court noted that at the NLRC level, the labor arbiter dismissed the claims of illegal dismissal and unfair labor practice. For the monetary claims, PAL presented payroll documents to prove payment of salaries which were accepted by the NLRC. The salaries and other fees of the 45 employees who submitted claims ranged P60,000 to 1.6 million.

The CA however reversed the decision, stressing that the documents were not enough to prove that payment was made. In upholding the CA’s decision, the SC emphasized that payroll records and vouchers can only be considered strong proof if it was clearly shown that the employees actually received the money as well as the date of payment.

The SC highlighted that in the case of PAL, the documents indicated payroll preparation for the period of May 16 to 31, 1998 and 13th month pay for 1998,  but not the actual submission to or receipt by the bank, which is tantamount to failure to demonstrate actual payment.

For its part, PAL reasoned out that the bank documents show that amounts were credited to the claimants’ bank accounts in a workplace arrangement automatically crediting salaries and other fees to the bank accounts of its employees.

“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 court said.