5. Peñarada v. Banaga (Sylina) c.

(i) Regularly and directly assist a proprietor or a

May 3, 2006 | Panganiban, CJ | Coverage - Exemption from labor standards managerial employee whose primary duty consists of the
provisions management of the establishment in which he is employed
PETITIONER: CHARLITO PEÑARANDA or subdivision thereof; or (ii) execute under general
RESPONDENTS: BAGANGA PLYWOOD CORPORATION and HUDSON supervision work along specialized or technical lines
CHUA requiring special training, experience, or knowledge; or
(iii) execute under general supervision special assignments
and tasks; and
SUMMARY: Peñaranda was hired as an employee of BPC to take charge of the d. who do not devote more than 20 percent of their hours
operations and maintenance of its steam plant boiler. Peñaranda filed a worked in a workweek to activities which are not directly
Complaint for illegal dismissal with money claims against BPC and its general and closely related to the performance of the work
manager, Hudson Chua, before the NLRC. BPC alleges that complainant’s described in paragraphs (1), (2), and (3) above.
separation from service was done pursuant to Art. 283 of the Labor Code. They
were on temporary closure due to repair and general maintenance and it applied
for clearance with the DOLE to shut down and to dismiss employees. Further, FACTS:
they claim that being a managerial employee, Peñaranda is not entitled to 1. Charlito Peñaranda was hired as an employee of Baganga Plywood
overtime pay and if ever he rendered services beyond the normal hours of work, Corporation (BPC) to take charge of the operations and
there was no office order/or authorization for him to do so. The main issue is maintenance of its steam plant boiler
WON Peñaranda is a regular employee entitled to the payment of 2. Peñaranda filed a Complaint for illegal dismissal with money
OVERTIME PAY and OTHER MONETARY BENEFITS to which the claims against BPC and its general manager, Hudson Chua, before
Court held in the negative. Peñaranda was a member of the managerial staff. His the NLRC.
duties and responsibilities conform to the definition of a member of a managerial 3. They failed to settle amicably
staff under the Implementing Rules. 4. Peñaranda alleges that he was employed by respondent BPC on
March 15, 1999 with a monthly salary of P5K as Foreman/Boiler
DOCTRINE:Article 82 of the Labor Code exempts managerial employees Head/Shift Engineer until he was illegally terminated on December
from the coverage of labor standards. Like managerial employees, officers 19, 2000.
and members of the managerial staff are not entitled to the provisions of a. Peñaranda claims that his services were terminated
law on labor standards. without the benefit of due process and valid grounds in
IRR of the Labor Code define members of a managerial staff as those with accordance with law.
the following duties and responsibilities: b. Furthermore, he was not paid his overtime pay, premium
a. The primary duty consists of the performance of work pay for working during holidays/rest days, night shift
directly related to management policies of the employer; differentials and finally claims for payment of damages
b. Customarily and regularly exercise discretion and and attorney’s fees having been forced to litigate the
independent judgment; present complaint.
 5. BPC alleges that complainant’s separation from service was done 2. Court does not hesitate to grant liberality in favor of petitioner and
pursuant to Art. 283 of the Labor Code. to tackle his substantive arguments in the present case. Rules of
a. They were on temporary closure due to repair and general procedure must be adopted to help promote, not frustrate,
maintenance and it applied for clearance with the DOLE substantial justice.
to shut down and to dismiss employees 3. The Court frowns upon the practice of dismissing cases purely on
b. Peñaranda was paid separation benefits due to his procedural grounds.
insistence 4. Considering that there was substantial compliance, a liberal
c. When BPC reopened, Peñaranda didn’t reapply interpretation of procedural rules in this labor case is more in
d. Peñaranda was not terminated from employment much keeping with the constitutional mandate to secure social justice.
less illegally. He opted to severe employment when he 5. Petitioner’s claim that respondents filed their appeal beyond the
insisted payment of his separation benefits. required period is not substantiated. In the pleadings before us,
e. Being a managerial employee, Peñaranda is not entitled to petitioner fails to indicate when respondents received the Decision
overtime pay and if ever he rendered services beyond the of the labor arbiter. Neither did the petitioner attach a copy of the
normal hours of work, there was no office order/or challenged appeal. Thus, this Court has no means to determine
authorization for him to do so. from the records when the 10-day period commenced and
6. LA: no illegal dismissal terminated. Since petitioner utterly failed to support his claim that
7. NLRC: deleted the award of overtime pay and premium pay for respondents’ appeal was filed out of time, we need not belabor that
working on rest days. Peñaranda was not entitled to these awards point. The parties alleging have the burden of substantiating their
because he was a managerial employee. allegations.
8. CA dismissed Peñaranda’s Petition for Certiorari as Peñaranda
failed to: 1) attach copies of the pleadings submitted before the WON Peñaranda is a regular employee entitled to the payment of
labor arbiter and NLRC; and 2) explain why the filing and service OVERTIME PAY and OTHER MONETARY BENEFITS.
of the Petition was not done by personal service 6. Article 82 of the Labor Code exempts managerial employees
ISSUES: from the coverage of labor standards.
1. WON NLRC committed GADALEJ when it entertained the 7. Labor standards provide the working conditions of employees,
APPEAL of the respondent[s] despite the lapse of the mandatory including entitlement to overtime pay and premium pay for
period of TEN DAYS. NO working on rest days.
2. WON Peñaranda is a regular employee entitled to the payment 8. Under this provision, managerial employees are "those whose
of OVERTIME PAY and OTHER MONETARY BENEFITS. primary duty consists of the management of the establishment in
NO which they are employed or of a department or subdivision.
9. IRR of the Labor Code state that managerial employees are those
RATIO: who meet the following conditions:
a. Their primary duty consists of the management of the
WON NLRC committed GADALEJ when it entertained the APPEAL of the establishment in which they are employed or of a
respondent[s] despite the lapse of the mandatory period of TEN DAYS. department or subdivision thereof;
 b. They customarily and regularly direct the work of two or a. To supply the required and continuous steam to all
more employees therein; consuming units at minimum cost.
c. They have the authority to hire or fire other employees of b. To supervise, check and monitor manpower workmanship
lower rank; or their suggestions and recommendations as as well as operation of boiler and accessories.
to the hiring and firing and as to the promotion or any c. To evaluate performance of machinery and manpower.
other change of status of other employees are given d. To follow-up supply of waste and other materials for fuel.
particular weight. e. To train new employees for effective and safety while
10. Peñaranda is not a managerial employee but a managerial working.
staff, which also takes him out of the coverage of the labor f. Recommend parts and supplies purchases.
standard g. To recommend personnel actions such as: promotion, or
11. Like managerial employees, officers and members of the disciplinary action.
managerial staff are not entitled to the provisions of law on h. To check water from the boiler, feedwater and softener,
labor standards. regenerate softener if beyond hardness limit.
12. IRR of the Labor Code define members of a managerial staff i. Implement Chemical Dosing.
as those with the following duties and responsibilities: j. Perform other task as required by the superior from time
a. The primary duty consists of the performance of work to time."
directly related to management policies of the 14. The foregoing enumeration, particularly items 1, 2, 3, 5 and 7
employer; illustrates that Peñaranda was a member of the managerial staff.
b. Customarily and regularly exercise discretion and His duties and responsibilities conform to the definition of a
independent judgment; member of a managerial staff under the Implementing Rules.
c. (i) Regularly and directly assist a proprietor or a 15. He supervised the engineering section of the steam plant boiler.
managerial employee whose primary duty consists of 16. This work necessarily required the use of discretion and
the management of the establishment in which he is independent judgment to ensure the proper functioning of the
employed or subdivision thereof; or (ii) execute under steam plant boiler. As supervisor, petitioner is deemed a member
general supervision work along specialized or of the managerial staff.
technical lines requiring special training, experience,
or knowledge; or (iii) execute under general
supervision special assignments and tasks; and
d. 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.
13. As shift engineer, petitioner’s duties and responsibilities were as
follows: