Regular Seasonal Workers Payrolls and the Presumption of Regularity in Illegal Dismissal Cases

In Ramiro Lim & Sons Agricultural Co., Inc. v. Guilaran (G.R. No. 221967, February 6, 2019), the Supreme Court addressed two important points in labor litigation: how courts should treat employer payrolls when computing backwages, and what happens when the presumption of regularity attached to business records is challenged. The case involved 33 agricultural workers on a sugar hacienda who were dismissed after asking for wage-order compliance. The ruling is instructive for both employers maintaining payroll records and workers seeking to contest them.

The Facts of the Case

The respondents were agricultural workers on an 84-hectare hacienda owned by the petitioners. They were paid on a mixed pakyaw (task or piece-rate) and daily basis. In July 2000, after they demanded payment based on prevailing Wage Order rates, they were dismissed. The petitioners claimed the workers abandoned their jobs after refusing to return to work.

The Labor Arbiter initially dismissed the complaints, ruling that the workers had abandoned their employment. However, the Court of Appeals (CA) reversed this finding, ruling that the workers were regular seasonal employees because their services were necessary and desirable to the employer's business. This finding was affirmed with finality by the Supreme Court in 2009.

The Dispute Over Payrolls

The central dispute in this case concerned how to compute the workers' backwages. The petitioners submitted payrolls showing that most respondents worked less than one month per year. Based on these payrolls, the NLRC computed backwages using the workers' average monthly income for the twelve months before dismissal.

The CA, however, rejected the payrolls as "self-serving, unreliable, and unsubstantial evidence." The appellate court found that the signatures on the payrolls were inconsistent "to the naked eye," that some signatures appeared to belong to unknown or unauthorized persons, and that the claim that workers labored only one hour per day was "hardly believable and contrary to human experience."

The Presumption of Regularity Is Disputable

The Supreme Court affirmed the CA's ruling. While entries in payrolls enjoy the presumption of regularity as entries made in the course of business under Section 43, Rule 130 of the Rules of Court, this presumption is merely disputable. It may be overthrown by clear and convincing evidence to the contrary.

The Court explained that prima facie evidence is not conclusive — it may be contradicted by other evidence. Here, the workers vehemently denied the payrolls' authenticity, alleging forgery and incompleteness. Given the visible inconsistencies in signatures, the presumption was effectively rebutted.

Backwages for Pakyaw Workers

The Court also clarified how backwages should be computed for piece-rate or pakyaw workers. Under Article 124 of the Labor Code, workers paid by result — including those on piecework, takay, pakyaw, or task basis — must receive not less than the prescribed wage rates per eight hours of work a day, or a proportionate amount for less work.

Citing Pulp and Paper, Inc. v. NLRC, the Court held that in the absence of wage rates approved by the Secretary of Labor based on time and motion studies, the ordinary minimum wage rates prescribed by the Regional Tripartite Wages and Productivity Boards apply. Since the petitioners failed to show any agreed pakyaw rates approved by the Secretary of Labor, the Labor Arbiter correctly applied the minimum wage rates under the applicable Wage Orders.

The Court also noted that jurisprudence recognizes sugarcane industry seasons lasting six to eight months. Since the petitioners' payrolls were discredited, the burden fell on them to prove that the workers rendered less service — a burden they failed to discharge.

Practical Takeaways

• Payrolls are not automatically conclusive. While business records enjoy a presumption of regularity, this presumption can be overcome by evidence of forgery, irregularities, or inconsistencies in signatures.
• Employers must maintain credible payroll records. Payrolls with questionable signatures or entries that defy human experience will likely be disregarded by courts, shifting the burden back to the employer.
• Seasonal workers can be regular employees. Workers who perform tasks necessary and desirable to the business, even if only during specific seasons, may be considered regular seasonal employees entitled to backwages upon illegal dismissal.
• Pakyaw workers are entitled to minimum wage rates. In the absence of approved time and motion studies, piece-rate workers must be paid at least the applicable minimum wage rates under prevailing Wage Orders.
• Legal interest applies to monetary awards. Backwages and other monetary awards earn 12% interest per annum from the finality of the dismissal finding until June 30, 2013, and 6% per annum thereafter until full satisfaction, per the Nacar v. Gallery Frames ruling.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.