Nature of work determines status as managerial employee

Dear PAO,

I am a new manager in a company.  Because of the heavy workload, I had to work long hours to finish my duties. On certain weeks, I even had to work during weekend. I was made to understand that my services beyond my normal work hours would be compensated, but it appears that the company has no plan of paying me.  Do I have the right to file a claim for overtime pay?

Maki

Dear Maki,
Our Labor Code has provisions concerning overtime work. It considers work performed beyond eight (8) hours as overtime for which the employee is entitled to receive an additional compen–sation. However, the Labor Code provisions on overtime do not apply to all employees.  Excepted from the coverage of the law are government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and worker who are paid by results as determined by the Secretary of Labor in appropriate regulations (Article 82, Labor Code). These employees are not guaranteed by law to receive additional compen–sation for work performed beyond the normal working hours.

As to managerial employees, the law defines managerial employees as those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff (Article 82, Labor Code). The Implementing Rules of the Labor Code further elaborates on the matter by providing that before an employee may be considered as a managerial employee, all the following conditions must be met:
(1)    Their primary duty con–sists of the management of the establishment in which they are employed or of a department or sub-division thereof.
(2)    They customarily and regularly direct the work of two or more employees therein.
(3)    They have the authority to hire or fire employees of lower rank; or their suggestions and recom–mendations as to hiring and firing and as to the promotion or any other change of status of other em–ployees, are given particular weight (Book III, Rule I, Section 2, Omnibus Rules Implementing the Labor Code).

On the other hand, an employee is considered as an officer or member of the managerial staff if he performs the following duties and responsibilities:
(1)    The primary duty consists of the performance of work directly related to management policies;
(2)    Customarily and regularly exercise discretion and indepen–dent judgment; and
(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 super–vision 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 work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above (Book III, Rule I, Section 2, Omnibus Rules Implementing the Labor Code).

The foregoing provisions show that it is not the designation of an employee that ultimately deter–mines his status as managerial employee, but rather the nature of his work.  Thus, if you do not meet all the conditions prescribed by the Omnibus Rules, despite your designation as manager, you are not a managerial employee which means you are entitled by law to overtime pay.  On the other hand, if you meet all the conditions, you are considered a managerial employee and thus, is not covered by the law on overtime. In the latter’s case, you may refer to your contract, or policy and practice of your company concerning over–time to determine if you have a right to additional compensation.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts that you have narrated and our appreci–ation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

Gross negligence a just cause to fire worker

Dear PAO,

I have been working with a credit company for 15 years. Last year, I received a notice from our HR informing me that I will be investigated on account of the discrepancies they found in my credit reports. I was also asked to submit my explanation regarding such discrepancies, which I did. After several months, I received another notice informing me of the decision of the company to terminate my services. They did not accept my explanation. The truth is that I did not really intend to have those discrepancies in my report. It was just that I was so preoccupied then with so many family problems. Instead of absolving me, they found gross negligence on my part, which, according to them, resulted in losses for the company.

I just want to know if I can ask for any form of financial assistance or separation pay from the company considering that I have worked with them for many years. I hope you can advise me.

Penny

Dear Penny,
You mentioned in your letter that your employer terminated your services because of your gross negligence in performing your tasks and such negligence resulted in company losses. You declared as well that you were notified by your employer concerning the infraction that you committed and you were given the opportunity to explain yourself relative thereto. Your letter further revealed that you were notified by your employer of their decision to terminate your employment.

Taking these into consideration, we believe that you will not be entitled to receive separation pay from your company, unless such benefit is expressly conferred under your contract of employment or the company policy. We want to emphasize that, under the law, the benefit of separation pay is only granted to those employees who were terminated on account of any of the authorized causes set forth under Articles 283 and 284 of the Labor Code, to wit: (1) installation of labor saving devices; (2) redundancy; (3) retrenchment to prevent losses; (4) closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses; or (5) disease which is prejudicial to your health or to the health of your co-workers.

In view of the fact that you were terminated on account of gross negligence, one of the just causes for termination of employment by the employer pursuant to Article 282 of the said law, the claim for separation pay will necessarily fail.

We likewise believe that you will not be entitled to receive any form of financial assistance. While our courts have allowed the grant of such benefit on account of equity and social justice, this is not applicable in all instances. In fact, the Supreme Court (SC) in the case of Reno Foods Inc. vs. Nagkakaisang Lakas ng Manggagawa (NLM)—KATIPUNAN, (G.R. No. 164016, March 15, 2010), reiterated its ruling in Toyota Motors Philippines, Corp. Workers Association (TMPCWA) v. National Labor Relations Commission, wherein the SC stated: “x x x labor adjudicatory officials and the CA must demur the award of separation pay based on social justice when an employee’s dismissal is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of the employer or his immediate family—grounds under Article 282 of the Labor Code that sanction dismissals of employees. They must be most judicious and circumspect in awarding separation pay or financial assistance as the constitutional policy to provide full protection to labor is not meant to be an instrument to oppress the employers. The commitment of the Court to the cause of labor should not embarrass us from sustaining the employers when they are right, as here. In fine, we should be more cautious in awarding financial assistance to the undeserving and those who are unworthy of the liberality of the law. x x x”
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net