SC: Employers must show bank records to prove wages paid

June 20, 2025 , 05:52 PM

(June 20, 2025) – The Supreme Court has ruled that employers must present solid proof such as bank payroll receipts or records to show that their workers received their salaries, stressing that verbal claims or general statements are not enough.

In a decision promulgated on April 7 but made public on Friday, the high court’s First Division said these documents are necessary to counter workers’ claims of non-payment or underpayment.

“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,” read the decision penned by Chief Justice Alexander Gesmundo.

“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.”

The case stemmed from the dismissal of several Philippine Airlines (PAL) pilots who joined a strike in 1998. When the Department of Labor and Employment ordered them back to work, they refused, believing they could continue their protest in good faith. PAL then terminated their employment.

The Labor Arbiter and National Labor Relations Commission upheld PAL’s action, but the Court of Appeals (CA) reversed this, saying that the pilots were illegally dismissed and entitled to monetary benefits.

The Supreme Court affirmed the CA’s ruling, finding that PAL failed to present proof that salaries, including 13th month pay, were actually paid.

The High Court explained that for bank-based payments, employers must show that they submitted the payroll or advisory to the bank and that the bank received it.

PAL’s documents only showed that payrolls were prepared, not that these were sent to or received by the bank for crediting to the pilots’ accounts.

“To reiterate, 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,” added the decision.

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