Saturday, August 12, 2017


G.R. No. 175869, Apr 18, 2016
Topic: Overtime Pay, Overtime Work Authorization, Burden of proving entitlement to Overtime Pay
Labor Law Case Digest by John Paul C. Ladiao (12 August 2017)


Respondent Elizabeth Villa brought against the petitioner her complaint for illegal suspension, illegal dismissal, nonpayment of overtime pay, and nonpayment of service incentive leave pay in the Regional Arbitration Branch No. VII of the NLRC in Cebu City.

On April 21, 2003, Labor Arbiter Violeta Ortiz-Bantug rendered her decision finding that Villa had not been dismissed from employment.

Although ordering Villa's reinstatement, the Labor Arbiter denied her claim for backwages and overtime pay because she had not adduced evidence of the overtime work actually performed. The Labor Arbiter declared that Villa was entitled to service incentive leave pay for the period of the last three years counted from the filing of her complaint because the petitioner did not refute her claim thereon.

On February 23, 2005, the NLRC rendered its judgment dismissing the appeal by the petitioner but granting that of Villa.

The decision of the Labor Arbiter is REVERSED and SET ASIDE and a new one ENTERED declaring complainant to have been illegally dismissed. Consequently, respondents are hereby directed to immediately reinstate complainant to her former position without loss of seniority rights and other privileges within ten (10) days from receipt of this decision and to pay complainant Overtime Pay.

According to the NLRC, the petitioner's appeal was fatally defective and was being dismissed outright because it lacked the proper verification and certificate of non-forum shopping.

On September 27, 2006, the CA promulgated its assailed decision dismissing the petition for certiorari.

WHEREFORE, premises considered, the instant petition is hereby ordered DISMISSED for lack of merit. The assailed decision is AFFIRMED with MODIFICATION, in that petitioner Lily Ngochua should not be held liable with petitioner corporation.

The petitioner posits that the CA erroneously affirmed the giving of overtime pay and service incentive leave pay to Villa; that she did not adduce proof of her having rendered actual overtime work; that she had not been authorized to render overtime work; and that her availment of vacation and sick leaves that had been paid precluded her claiming the service incentive leave pay.


Whether or not the burden of proving entitlement to overtime pay rests on the employer?


Whether or not any employee could render overtime work without prior authorization by the management?


No. The burden of proving entitlement to overtime pay rests on the employee.

No. Any employee can render overtime work only when there was a prior authorization by the management.

We partly agree with the petitioner's position.

Firstly, entitlement to overtime pay must first be established by proof that the overtime work was actually performed before the employee may properly claim the benefit. The burden of proving entitlement to overtime pay rests on the employee because the benefit is not incurred in the normal course of business. Failure to prove such actual performance transgresses the principles of fair play and equity.

And, secondly, the NLRC's reliance on the daily time records (DTRs) showing that Villa had stayed in the company's premises beyond eight hours was misplaced. The DTRs did not substantially prove the actual performance of overtime work. The petitioner correctly points out that any employee could render overtime work only when there was a prior authorization therefor by the management. Without the prior authorization, therefore, Villa could not validly claim having performed work beyond the normal hours of work. Moreover, Section 4(c), Rule I, Book III of the Omnibus Rules Implementing the Labor Code relevantly states as follows:

Section 4. Principles in determining hours worked. – The following general principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule:

    x x x.
    x x x.
    If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. (bold emphasis supplied)

    (d)      x x x.