FIRST DIVISION
CHARLITO PEÑARANDA,
G.R.
No. 159577
Petitioner,
Present:
Panganiban, CJ,
Chairman,
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ
BAGANGA
PLYWOOD
CORPORATION and Promulgated:
Respondents.
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PANGANIBAN, CJ:
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anagerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.
Before us
is a Petition for Review[1]
under Rule 45 of the Rules of Court, assailing the
“WHEREFORE, premises considered, the
instant petition is hereby DISMISSED.”[4]
The latter Resolution
denied reconsideration.
On the
other hand, the Decision of the National Labor Relations Commission (NLRC)
challenged in the CA disposed as follows:
“WHEREFORE, premises considered, the
decision of the Labor Arbiter below awarding overtime pay and premium pay for
rest day to complainant is hereby REVERSED
and SET ASIDE, and the complaint in the
above-entitled case dismissed for lack of merit.[5]
Sometime in
June 1999, Petitioner Charlito Peñaranda was hired as an employee of Baganga
Plywood Corporation (BPC) to take charge of the operations and maintenance of
its steam plant boiler.[6] In May 2001, Peñaranda filed a Complaint for
illegal dismissal with money claims against BPC and its general manager, Hudson
Chua, before the NLRC.[7]
After the
parties failed to settle amicably, the labor arbiter[8]
directed the parties to file their position papers and submit supporting
documents.[9]
Their respective allegations are summarized by the labor arbiter as follows:
“[Peñaranda] through
counsel in his position paper alleges that he was employed by respondent
[Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as Foreman/Boiler
Head/Shift Engineer until he was illegally terminated on December 19,
2000. Further, [he] alleges that his
services [were] terminated without the benefit of due process and valid grounds
in accordance with law. Furthermore, he
was not paid his overtime pay, premium pay for working during holidays/rest
days, night shift differentials and finally claims for payment of damages and
attorney’s fees having been forced to litigate the present complaint.
“Upon the other hand,
respondent [BPC] is a domestic corporation duly organized and existing under
Philippine laws and is represented herein by its General Manager HUDSON CHUA,
[the] individual respondent. Respondents
thru counsel allege that complainant’s separation from service was done
pursuant to Art. 283 of the Labor Code. The
respondent [BPC] was on temporary closure due to repair and general maintenance
and it applied for clearance with the Department of Labor and Employment,
Regional Office No. XI to shut down and to dismiss employees (par. 2 position
paper). And due to the insistence of
herein complainant he was paid his separation benefits (Annexes C and D,
ibid). Consequently, when respondent [BPC]
partially reopened in January 2001, [Peñaranda] failed to reapply. Hence, he was not terminated from employment
much less illegally. He opted to severe
employment when he insisted payment of his separation benefits. Furthermore, being a managerial employee he
is not entitled to overtime pay and if ever he rendered services beyond the
normal hours of work, [there] was no office order/or authorization for him to
do so. Finally, respondents allege that
the claim for damages has no legal and factual basis and that the instant
complaint must necessarily fail for lack of merit.”[10]
The labor
arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint
was premature because he was still employed by BPC.[11] The temporary closure of BPC’s plant did not
terminate his employment, hence, he need not reapply when the plant reopened.
According
to the labor arbiter, petitioner’s money claims for illegal dismissal was also
weakened by his quitclaim and admission
during the clarificatory conference that he accepted separation benefits, sick
and vacation leave conversions and thirteenth month pay.[12]
Nevertheless,
the labor arbiter found petitioner entitled to overtime pay, premium pay for
working on rest days, and attorney’s fees in the total amount of P21,257.98.[13]
Ruling of the NLRC
Respondents filed an appeal to the NLRC,
which deleted the award of overtime pay and premium pay for working on rest
days. According to the Commission, petitioner
was not entitled to these awards because he was a managerial employee.[14]
Ruling of
the Court of Appeals
In
its Resolution dated
In its later Resolution dated
Hence this
Petition.[17]
The Issues
Petitioner states
the issues in this wise:
“The [NLRC]
committed grave abuse of discretion amounting to excess or lack of jurisdiction
when it entertained the APPEAL of the respondent[s] despite the lapse of the
mandatory period of TEN DAYS.
“The [NLRC]
committed grave abuse of discretion amounting to an excess or lack of jurisdiction
when it rendered the assailed RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002
REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL FINDINGS of the [labor
arbiter] with respect to the following:
“I. The
finding of the [labor arbiter] that [Peñaranda] is a
regular, common employee entitled to monetary benefits under Art. 82 [of the
Labor Code].
“II. The
finding that [Peñaranda] is
entitled to the payment of OVERTIME PAY and OTHER MONETARY BENEFITS.”[18]
The Petition is not meritorious.
Preliminary Issue:
Resolution
on the Merits
The CA dismissed Peñaranda’s Petition on
purely technical grounds, particularly with regard to the failure to submit
supporting documents.
In Atillo v. Bombay,[19]
the Court held that the crucial issue is whether the documents accompanying the
petition before the CA sufficiently supported the allegations therein. Citing this case, Piglas-Kamao v. NLRC[20]
stayed the dismissal of an appeal in the exercise of its equity jurisdiction to
order the adjudication on the merits.
The Petition
filed with the CA shows a prima facie
case. Petitioner attached his evidence
to challenge the finding that he was a managerial employee.[21] In his Motion for Reconsideration, petitioner
also submitted the pleadings before the labor arbiter in an attempt to comply
with the CA rules.[22] Evidently, the CA could have ruled on the Petition
on the basis of these attachments.
Petitioner should be deemed in substantial compliance with the
procedural requirements.
Under these
extenuating circumstances, the Court does not hesitate to grant liberality in
favor of petitioner and to tackle his substantive arguments in the present case. Rules of procedure must be adopted to help promote,
not frustrate, substantial justice.[23] The Court frowns upon the practice of
dismissing cases purely on
procedural grounds.[24] Considering that there was substantial
compliance,[25]
a liberal interpretation of procedural rules in this labor case is more in
keeping with the constitutional mandate to secure social justice.[26]
First Issue:
Under the
Rules of Procedure of the NLRC, an appeal from the decision of the labor
arbiter should be filed within 10 days from receipt thereof.[27]
Petitioner’s
claim that respondents filed their appeal beyond the required period is not
substantiated. In the pleadings before
us, petitioner fails to indicate when respondents received the Decision of the
labor arbiter. Neither did the petitioner
attach a copy of the challenged appeal. Thus,
this Court has no means to determine from the records when the 10-day period
commenced and terminated. Since
petitioner utterly failed to support his claim that respondents’ appeal was
filed out of time, we need not belabor that point. The parties alleging have the burden of
substantiating their allegations.[28]
Second Issue:
Petitioner claims that he was not a
managerial employee, and therefore, entitled to the award granted by the labor
arbiter.
Article 82 of the Labor Code exempts
managerial employees from the coverage of labor standards. Labor standards provide the working
conditions of employees, including entitlement to overtime pay and premium pay
for working on rest days.[29] Under this provision, managerial employees
are “those whose primary duty consists of the management of the establishment
in which they are employed or of a department or subdivision.”[30]
The Implementing Rules of the Labor
Code state that managerial employees are those who meet the following
conditions:
“(1) Their primary
duty consists of the management of the establishment in which they are employed
or of a department or subdivision thereof;
“(2) They
customarily and regularly direct the work of two or more employees therein;
“(3) They have the
authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any
other change of status of other employees are given particular weight.”[31]
The Court disagrees with the NLRC’s
finding that petitioner was a managerial employee. However, petitioner was a member of the
managerial staff, which also takes him out of the coverage of labor
standards. Like managerial employees,
officers and members of the managerial staff are not entitled to the provisions
of law on labor standards.[32] The Implementing Rules of the Labor Code define
members of a managerial staff as those with the following duties and
responsibilities:
“(1)
The primary duty consists of the performance of work directly related to
management policies of the employer;
“(2)
Customarily and regularly exercise discretion and independent judgment;
“(3)
(i) Regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which he is
employed or subdivision thereof; or (ii) execute under general supervision work
along specialized or technical lines requiring special training, experience, or
knowledge; or (iii) execute under general supervision special assignments and
tasks; and
“(4)
who do not devote more than 20 percent of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the
work described in paragraphs (1), (2), and (3) above.”[33]
As shift engineer, petitioner’s duties
and responsibilities were as follows:
“1. To supply the required and continuous steam
to all consuming units at minimum cost.
“2. To
supervise, check and monitor manpower workmanship as well as operation of
boiler and accessories.
“3. To
evaluate performance of machinery and manpower.
“4. To
follow-up supply of waste and other materials for fuel.
“5. To
train new employees for effective and safety while working.
“6. Recommend parts and supplies purchases.
“7. To recommend personnel actions such as:
promotion, or disciplinary action.
“8. To check water from the boiler, feedwater
and softener, regenerate softener if beyond hardness limit.
“9. Implement Chemical Dosing.
“10. Perform other task as required by the superior
from time to time.”[34]
The
foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that
petitioner was a member of the managerial staff. His duties and responsibilities conform to
the definition of a member of a managerial staff under the Implementing
Rules.
Petitioner supervised
the engineering section of the steam plant boiler. His work involved overseeing the operation of
the machines and the performance of the workers in the engineering section. This work necessarily required the use of
discretion and independent judgment to ensure the proper functioning of the
steam plant boiler. As supervisor, petitioner is deemed a member of the
managerial staff.[35]
Noteworthy,
even petitioner admitted that he was a supervisor. In his Position Paper, he stated that he was
the foreman responsible for the operation of the boiler.[36] The term foreman
implies that he was the representative of management over the workers and
the operation of the department.[37] Petitioner’s evidence also showed that he was
the supervisor of the steam plant.[38] His classification as supervisor is further evident
from the manner his salary was paid. He
belonged to the 10% of respondent’s 354 employees who were paid on a monthly
basis; the others were paid only on a daily basis.[39]
On the
basis of the foregoing, the Court finds no justification to award overtime pay
and premium pay for rest days to petitioner.
WHEREFORE,
the Petition is DENIED. Costs against
petitioner.
SO ORDERED.
ARTEMIO V. PANGANIBAN
Chief Justice
Chairman, First Division
W E C O N C U
R:
CONSUELO YNARES-
Associate
Justice Associate Justice
ROMEO J.
CALLEJO, SR. MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice
CERTIFICATION
Pursuant to
Section 13, Article VIII of the Constitution, I certify that the conclusions in
the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
ARTEMIO V.
PANGANIBAN
Chief
Justice
[1] Rollo, pp. 4-11.
[2]
[3]
[4]
[5]
[6] Petitioner’s Memorandum, p. 3; rollo, p. 266.
[7]
[8] The labor arbiter assigned to the case was Arturo L. Gamolo.
[9] Decision of the Labor Arbiter, p. 1; rollo, p. 21.
[10]
[11]
[12]
[13]
[14]
NLRC Resolution dated
[15]
Assailed CA Resolution dated
[16]
Assailed CA Resolution dated
[17]
This Petition was deemed
submitted for decision on
[18] Petitioner’s Memorandum, pp. 5-6; rollo, pp. 268-269.
[19]
351 SCRA 361,
[20]
357 SCRA 640,
[21] Petitioner attached his pay slips and job designation, and the company’s manpower schedule as Annexes “C,” “D,” and “E” (CA rollo, pp. 20-31).
[22] Petitioner submitted the parties’ position papers before the labor arbiter and their respective supporting documents (CA rollo, pp. 43-64).
[23]
Chua v. Absolute Management Corporation, 412 SCRA 547, October 16,
2003; Pacific Life Assurance Corporation
v. Sison, 359 Phil. 332, November 20, 1998; Gregorio v. Court of Appeals, 72 SCRA 120, July 28, 1976.
[24]
Pacific Life Assurance Corporation v. Sison, id.; Empire Insurance Company v. National Labor
Relations Commission, 355 Phil. 694, August 14, 1998; People Security Inc. v. National Labor Relations Commission, 226
SCRA 146, September 8, 1993; Tamargo v.
Court of Appeals, 209 SCRA 518, June 3, 1992.
[25]
Chua v. Absolute Management Corporation, supra note 23; Cusi-Hernandez v. Diaz, 336 SCRA 113,
[26]
Constitution
Art. II, Sec. 18 and Art. XIII, Sec. 3.
See Ablaza v. Court of Industrial
Relations, 126 SCRA 247,
[27] New Rules of Procedure of the National Labor Relations Commission, Rule VI, Sec. 1.
[28] Rules of Court, Rule 131, Sec. 1.
[29] Labor standards is found in Book 3 of the Labor Code, entitled “Conditions of Employment.” Arts. 87 and 93 provide:
“Arts. 87. Overtime work. – Work may be performed beyond eight (8) hours a day
provided that the employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at least twenty-five (25%) per
cent thereof. Work performed beyond
eight hours on a holiday or rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday or rest day plus
at least thirty percent thereof.”
“Art.
93. Compensation
for rest day, Sunday or holiday work. – (a) Where an employee is made or
permitted to work on his scheduled rest day, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular wage. An employee shall be entitled to such
additional compensation for work performed on Sunday only when it is his
established rest day.
(b)
When the nature of the work of the employee is such that he has no regular
workdays and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage
for work performed on Sundays and holidays.
(c)
Work performed on any special holiday shall be paid an additional compensation
of at least thirty percent (30%) of the regular wage of the employee. Where such holiday work falls on the
employees scheduled rest day, he shall be entitled to an additional
compensation of at least fifty percent (50%) of his regular wage.
(d)
Where the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than that prescribed
under this Article, the employer shall pay such higher rate.”
[30] The
other definition of a managerial employee found in the Labor Code Art. 212(m)
is in connection with labor relations or the right to engage in unionization. Under this provision, a managerial
employee is one “vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees.”
C. Azucena,
Everyone’s
Labor Code, 58 (2001 ed.).
[31] Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(b).
[32] Labor Code, Art. 82.
[33] Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(c).
[34] Job Description, submitted as petitioner’s Annex to his Memorandum; rollo, p. 312.
[35] See Quebec v. National Labor Relations Commission, 361 Phil. 555, January 22, 1999; Salazar v. National Labor Relations Commission, 326 Phil. 288, April 17, 1996; National Sugar Refineries Corporation v. National Labor Relations Commission, 220 SCRA 452, March 24, 1993.
[36] Petitioner’s Position Paper, p. 1; rollo, p. 14.
[37] Webster’s Third New International Dictionary, 889 (1976).
[38] Servicing Schedule, submitted as petitioner’s Annex to his Memorandum; rollo p. 315.
[39] Respondent’s Termination Report submitted to the Department of Labor and Employment; rollo, pp. 49-61.