AMID THE continuing development of our Philippine labor and employment system, job/service contracting or subcontracting arrangements continue to prevail as an established practice. In the Department of Labor’s Statistics on Employment Facilitation Services from 2011 up to the second quarter of 2013, job and service contractors or subcontractors placement had the second highest rate in job applicants’ placement, after private recruitment and placement agencies.
Complexities, however, arise when a contractor evades liabilities, causing its employees to go after the principal.
By reason of such chaos brought about by the employees’ misunderstanding of the law, courts are, at some point, easily swayed by the employees’ disposition. Thus, the manner by which a principal is held liable in a legitimate contracting arrangement should be reexamined.
In legitimate contracting, the principal is merely an indirect employer of his contractor’s employees. The law creates an employer-employee relationship only for a limited purpose, which is to ensure that the employees are paid their wages.
Being so, the principal becomes solidarily liable with the contractor if the latter fails to pay the employees’ wages even if he has paid the worker’s wage rates stipulated in the contract with the contractor.
The Labor Code provides that the liability of the principal will only be “to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.”
This was interpreted in the case of Rosewood Processing, Inc. v. NLRC to mean that the principal’s liability to the contractor’s employees extends only to the period during which they were working for the principal. Likewise, in a GSIS v. NLRC et al. case, the Supreme Court ruled that the liability covers the payment of the employees’ salary differential and 13th-month pay during the time they worked for the principal.
Under Article 109 of the Labor Code, the principal can also be held liable for any violation of any provision of the Labor Code. This liability is qualified or limited liability. That is, if the liability involves an award for back wages and separation pay because of an illegal dismissal of the contractor’s employees, the liability should be solely that of the contractor, in the absence of proof that the principal conspired with the contractor in the commission of the illegal dismissal.
In two other cases, it was held that the solidary liability of a principal extends not only to wages but also to other violations of the Labor Code. These cases, however, were modified such that the contractor’s employees can no longer insist their claims of back wages and separation pay from the principal.
As an example, in Meralco Industrial Engineering Services Corporation v. NLRC, the Supreme Court ruled that Article 109 of the Labor Code must be read in relation to Articles 106 and 107 and, therefore, the principal is only solidarily liable with the contractor if the latter fails to pay the wages of its employees.
This principle is also applied in Vigilla et al. v. Philippine College of Criminology, Inc., which established that, in legitimate contracting arrangement, the principal becomes jointly and severally liable with the contractor only for the payment of the employees’ wages whenever the contractor fails to pay them, and is not responsible for any claim made by the contractor’s employees.
It follows then that the liability of the principal under Article 109 of the Labor Code is limited by Article106, which limits the liability of a principal to the wages of the contractor’s employees. As such, it is on good authority that the current rule pronounced in the Rosewood case and cases thereafter remains good law.
Other than the obligation of the contractors and principals to strictly comply with the requisites for legitimate contracting arrangements, courts also have the duty to observe legal precedents laid down by the Supreme Court in order not to make the principals liable for claims that are beyond the principal’s responsibility.
Mayette H. Tapia is an associate of the Labor and Employment Department of the Angara Abello Concepcion Regala & Cruz Law Offices.
mhtapia@accralaw.com
source: Businessworld
Tuesday, November 11, 2014
Monday, September 15, 2014
Protecting rights, interests of working children in mass media
Dear PAO,
Lately, I noticed the rise of popularity and exposure of children and teenagers in mass media. I believe these young people are happy with their work and their rights and interests are protected. But I am curious about the rights of a working child. May I know what his/her rights are especially with respect to his/her working hours and income?
Popo
Lately, I noticed the rise of popularity and exposure of children and teenagers in mass media. I believe these young people are happy with their work and their rights and interests are protected. But I am curious about the rights of a working child. May I know what his/her rights are especially with respect to his/her working hours and income?
Popo
Dear Popo,
Other than the requirement of a special work permit before engaging children for work, our laws provide conditions aimed at protecting the rights and interests of working children. In general, there is a prohibition on engaging children in the worst forms of labor such as slavery, prostitution and pornography, engagement in illegal activities or those that are hazardous or likely to be harmful to the health, safety or morals of children (Section 5, Republic Act (RA) 7610 as amended by RA 9231). There is also a prohibition on engaging children as a model in any advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography (Sec. 6, RA 7610 as amended by RA 9231).
Other than the requirement of a special work permit before engaging children for work, our laws provide conditions aimed at protecting the rights and interests of working children. In general, there is a prohibition on engaging children in the worst forms of labor such as slavery, prostitution and pornography, engagement in illegal activities or those that are hazardous or likely to be harmful to the health, safety or morals of children (Section 5, Republic Act (RA) 7610 as amended by RA 9231). There is also a prohibition on engaging children as a model in any advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography (Sec. 6, RA 7610 as amended by RA 9231).
Moreover, employers of children engaged in public entertainment are strictly required to ensure the protection, health, safety, morals and normal development of the child, institute measures to prevent the child’s exploitation or discrimination and formulate and implement a continuing program for training and skills acquisition of the child. This includes providing a working child with access to at least primary and secondary education (Sec. 13, RA 7610 as amended by RA 9231).
To implement this provision of law, the Rules issued by the Department of Labor and Employment (DOLE) prohibit employers from requiring children to work during school hours, or hinder access to education during school days.
As to working hours, there are special rules for working children that mainly state that children cannot be required to render overtime and late-night work.
Specifically, children below fifteen (15) years of age can only be required to work up to twenty (20) hours a week with daily work not exceeding four (4) hours each day, and they are not allowed to work between eight o’clock in the evening and six o’clock in the morning of the following day. On the other hand, children fifteen (15) years of age but below eighteen (18) cannot be compelled to work more than eight (8) hours a day, and in no case beyond forty (40) hours a week, and they are not allowed to work between ten o’clock in the evening and six o’clock in the morning of the following day (Sec. 12-A, RA 7610 as amended by RA 9231). Hence, a child cannot be required to render overtime or late-night work.
With respect to income from work, the law provides that it belongs to the child. The parents or legal guardian only serve as administrators of the income of the working child and are not free to dispose of the income according to their discretion. According to the law, the income shall be set aside primarily for support, education or skills acquisition of the child, and secondarily to the collective needs of the family. But not all of the income can be used for the needs of the family. Only a maximum of twenty percent (20 percent ) of the child’s income may be used for the collective needs of the family (Sec. 12-B, RA 7610 as amended by RA 9231). The rest must either be used or saved for the benefit of the working child. In connection with this rule and in compliance with the law and established rules, at least thirty percent (30 percent) of the earnings of a child shall be deposited in a trust fund in case the income amounts to at least two hundred thousand pesos (P200,000.00) annually, or in a savings account in case the annual income is below this amount (Sec. 18, DOLE Department Order No. 65-04).
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
Sunday, August 31, 2014
Court orders ballot recount in bank employees’ union case
THE COURT of Appeals (CA) has upheld an order calling for a recount of ballots that would determine whether Standard Chartered Bank’s high-ranking employees in the Philippines would have a labor union of its own.
In an eleven-page decision, the appellate court’s Special Eleventh Decision has junked a petition filed by Standard Chartered, asking the CA to stick to a ruling by Department of Labor and Employment (DoLE) mediator-arbiter Joel P. Petaca.
The Feb. 11,2013 decision declared that the National Union Bank Employees (NUBE)-Standard Chartered Bank Supervisors’ Association (SCBSA) cannot be certified as the sole and exclusive bargaining representative of the supervisory employees of Standard Chartered.
In October 2011, NUBE, on behalf of the Supervisors’ Association, filed a petition for certification election before the DoLE seeking to represent the supervisors of Standard Chartered.
Labor arbiter-mediator Mr. Petaca granted the petition.
Standard Chartered then submitted a list of eligible voters of 66 supervisors, a move that was later challenged by NUBE-SCBSA.
After elections took place on July 3, 2012, the bank had earlier challenged a new list of voters which it said included confidential or managerial employees.
As SCB raised questions about the employees on the list, Mr. Petaca ordered the canvassing of all ballots except for twelve contested votes.
Twenty-two votes were cast against the creation of the supervisors’ association, defeating the “yes” votes by just one ballot. It then prompted Mr. Petaca to declare that the association could not be a collective bargaining agent of Standard Chartered.
Mr. Petaca, in 2013, upheld his decision as he found that segregated ballots belonged to managerial and confidential employees.
However, in a decision dated Dec. 23, 2013, DoLE Undersecretary Rebecca Chato reversed the Feb. 23, 2013 order of Mr. Petaca and called for the opening and counting of the segregated ballots.
Ms. Chato said the 12 employees were not managerial nor confidential employees, contrary to the claim of Standard Chartered.
Standard Chartered then elevated the case to the CA, which later found it lacking in merit.
The bank contended that while the 12 employees perform other tasks which may be typically associated with rank-and-file or supervisory personnel, their tasks do not negate their managerial status, given the “peculiar” organizational structure of Standard Chartered as a foreign banking institution.
The bank also argued that four of the 12 employees are confidential employees as they have access to highly sensitive banking information which are under its custody.
The court ruled that the employees in question do not perform the responsibilities of the bank’s definition of a managerial employee.
The four alleged confidential employees “are not occupying confidential positions that would disqualify them from casting their votes in the certification election.”
“We find that the assailed decision is supported by justifiable reason and cannot be faulted with grave abuse of discretion,” the court said. -- Reden D. Madrid
source: BusinessworldThe Feb. 11,2013 decision declared that the National Union Bank Employees (NUBE)-Standard Chartered Bank Supervisors’ Association (SCBSA) cannot be certified as the sole and exclusive bargaining representative of the supervisory employees of Standard Chartered.
In October 2011, NUBE, on behalf of the Supervisors’ Association, filed a petition for certification election before the DoLE seeking to represent the supervisors of Standard Chartered.
Labor arbiter-mediator Mr. Petaca granted the petition.
Standard Chartered then submitted a list of eligible voters of 66 supervisors, a move that was later challenged by NUBE-SCBSA.
After elections took place on July 3, 2012, the bank had earlier challenged a new list of voters which it said included confidential or managerial employees.
As SCB raised questions about the employees on the list, Mr. Petaca ordered the canvassing of all ballots except for twelve contested votes.
Twenty-two votes were cast against the creation of the supervisors’ association, defeating the “yes” votes by just one ballot. It then prompted Mr. Petaca to declare that the association could not be a collective bargaining agent of Standard Chartered.
Mr. Petaca, in 2013, upheld his decision as he found that segregated ballots belonged to managerial and confidential employees.
However, in a decision dated Dec. 23, 2013, DoLE Undersecretary Rebecca Chato reversed the Feb. 23, 2013 order of Mr. Petaca and called for the opening and counting of the segregated ballots.
Ms. Chato said the 12 employees were not managerial nor confidential employees, contrary to the claim of Standard Chartered.
Standard Chartered then elevated the case to the CA, which later found it lacking in merit.
The bank contended that while the 12 employees perform other tasks which may be typically associated with rank-and-file or supervisory personnel, their tasks do not negate their managerial status, given the “peculiar” organizational structure of Standard Chartered as a foreign banking institution.
The bank also argued that four of the 12 employees are confidential employees as they have access to highly sensitive banking information which are under its custody.
The court ruled that the employees in question do not perform the responsibilities of the bank’s definition of a managerial employee.
The four alleged confidential employees “are not occupying confidential positions that would disqualify them from casting their votes in the certification election.”
“We find that the assailed decision is supported by justifiable reason and cannot be faulted with grave abuse of discretion,” the court said. -- Reden D. Madrid
Tuesday, April 1, 2014
The length of a worker’s lunch break
Dear PAO,
My family has been operating a medium-sized factory. Recently, we had a dispute with some of our employees because of the length of their lunch time. We are currently implementing a 45-minute lunch period but some of the employees are complaining about this. We think this lunch period is reasonable for the kind of work that they do. We’d like to know if there are any laws providing for the proper length of lunch periods that we might be violating. We hope for your advice. Thanks!
Ronnel
Dear Ronnel,
Your question primarily deals with an employee’s meal period to which the law specifically provides for a mandatory duration.
According to the Implementing Rules of the Labor Code of the Philippines:
Section 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. (Book III, Rule I)
This cited law clearly indicates that employees are entitled to a regular meal period of not less than one hour. And should the said meal period be less than one hour, the employer is bound to provide compensation for the employee during the said shortened meal period.
The law also recognizes situations wherein the duration of a meal period can be less than one hour but not shorter than twenty minutes. However, this arrangement is applicable only if the nature of the work and the working conditions are among those described in the above-cited law. And even during this shortened meal period, the employees must be compensated.
Therefore, your factory’s implementation of a 45-minute meal period is legal if the employees are compensated during the said meal period and if the nature of their work is among those enumerated above. Otherwise your factory’s period policy is contrary and in violation of Philippine labor laws.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
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
My family has been operating a medium-sized factory. Recently, we had a dispute with some of our employees because of the length of their lunch time. We are currently implementing a 45-minute lunch period but some of the employees are complaining about this. We think this lunch period is reasonable for the kind of work that they do. We’d like to know if there are any laws providing for the proper length of lunch periods that we might be violating. We hope for your advice. Thanks!
Ronnel
Dear Ronnel,
Your question primarily deals with an employee’s meal period to which the law specifically provides for a mandatory duration.
According to the Implementing Rules of the Labor Code of the Philippines:
Section 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. (Book III, Rule I)
This cited law clearly indicates that employees are entitled to a regular meal period of not less than one hour. And should the said meal period be less than one hour, the employer is bound to provide compensation for the employee during the said shortened meal period.
The law also recognizes situations wherein the duration of a meal period can be less than one hour but not shorter than twenty minutes. However, this arrangement is applicable only if the nature of the work and the working conditions are among those described in the above-cited law. And even during this shortened meal period, the employees must be compensated.
Therefore, your factory’s implementation of a 45-minute meal period is legal if the employees are compensated during the said meal period and if the nature of their work is among those enumerated above. Otherwise your factory’s period policy is contrary and in violation of Philippine labor laws.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
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
Monday, March 24, 2014
Rules for exemption from paying minimum wage (Part 2)
Dear PAO,
I am planning to start a small business but I am not sure if I could afford to pay the minimum wage to my employees. Is it possible to be exempted from the payment of minimum wage? If so, what are the requirements?
Jess
Dear Jess,
As discussed in yesterday’s article, Republic Act (RA) No. 6727 or the Wage Rationalization Act itself provides for exemption from compliance with the minimum wage. But aside from the exemptions provided by the said law, there is an additional exemption found in RA No. 9178, otherwise known as the Barangay Micro Business Enterprises (BMBE) Act of 2002.
Under the BMBE Law, a barangay micro business enterprise (BMBE) is granted, among others, exemption from the coverage of the Minimum Wage Law provided the employees are granted the same benefits given to any regular employee such as social security and healthcare benefits.
A BMBE refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated shall not be more than Three Million Pesos (P3,000,000.00). The “service” of business entity mentioned excludes those rendered by any one, who is a duly licensed government professional after having passed a government licensure examination, in connection with the exercise of one’s profession (Section 3(a), RA No. 9178).
To be considered a BMBE, one must register with the Office of the Treasurer of the appropriate city or municipality and secure a Certificate of Authority (Section 4, RA No. 9178). The applicant shall submit the duly filled out application form in triplicate, signed by the owner or manager of the entity (Section 5, DTI DAO No. 1, s. 2003). Any person, natural or juridical, or cooperative, or association, having the mentioned qualifications may apply for registration as BMBE (Section 5, RA No. 9178).
The Certificate of Authority will grant the entity the right to operate as a BMBE and to enjoy the benefits and privileges granted by the law to a BMBE (Section 3 (b), RA No. 9178). It will be effective for a period of two (2) years, renewable for a period of two (2) years for every renewal.
In addition to exemption from the minimum wage law, a BMBE is also entitled to exemption from tax for income arising from the operations of the enterprise (Section 7, RA No. 9178). A BMBE may likewise avail of the special credit windows which the law mandates the Land Bank of the Philippines (LBP), the Development Bank of the Philippines (DBP), the Small Business Guarantee and Finance Corporation (SBGFC), and the People’s Credit and Finance Corporation (PCFC), Government Service Insurance System (GSIS) and Social Security System (SSS) to set up to service the financing needs of BMBEs (Section 9, RA No. 9178).
If your planned business satisfies the conditions for registration as a BMBE, we recommend that you file an application with the appropriate city or municipal treasurer’s office to avail of the exemption from compliance with the Minimum Wage Law, as well as the other benefits and privileges accorded to a BMBE that are all aimed to encourage the growth and development of small businesses.
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 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
Saturday, March 1, 2014
Holidays not deducted from paternity leave benefits
Dear PAO,
How do we compute paternity leave when it falls on a holiday? Does the seven-day paternity leave includes holiday/special holiday/Sunday or do we have to count only the regular working days?
Ms. Joy
Dear Ms. Joy,
Paternity leave is a privilege given to a male employee enabling him to earn compensation even if he does not report for work in cases where his legal wife with whom he is cohabiting gives birth to a child or suffers miscarriage. This benefit is granted under Republic Act (R.A.) No. 8187 or the Paternity Leave Act of 1996. Section 2 thereof provides:
“SECTION 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the private and public sectors shall be entitled to a paternity leave of seven (7) days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave shall notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery.”
As defined, paternity leave refers to the benefits granted to a married male employee allowing him not to report for work for seven (7) days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child (Section 3, Republic Act No. 8187).
Based on the above definition, it can be easily deduced that paternity leave may be used only during those days that the male employee is supposed to be reporting for work but due to the condition or situation of his wife and/or newborn child, he is excused from reporting for work for seven (7) days. Since during holidays or those days that are declared non-working days he is not required to report for work, it fol–lows that the same shall not be deducted from his paternity leave benefits if he did not report for work on those days.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to guide you with our opinion on the matter.
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
source: Manila Times
How do we compute paternity leave when it falls on a holiday? Does the seven-day paternity leave includes holiday/special holiday/Sunday or do we have to count only the regular working days?
Ms. Joy
Dear Ms. Joy,
Paternity leave is a privilege given to a male employee enabling him to earn compensation even if he does not report for work in cases where his legal wife with whom he is cohabiting gives birth to a child or suffers miscarriage. This benefit is granted under Republic Act (R.A.) No. 8187 or the Paternity Leave Act of 1996. Section 2 thereof provides:
“SECTION 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the private and public sectors shall be entitled to a paternity leave of seven (7) days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave shall notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery.”
As defined, paternity leave refers to the benefits granted to a married male employee allowing him not to report for work for seven (7) days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child (Section 3, Republic Act No. 8187).
Based on the above definition, it can be easily deduced that paternity leave may be used only during those days that the male employee is supposed to be reporting for work but due to the condition or situation of his wife and/or newborn child, he is excused from reporting for work for seven (7) days. Since during holidays or those days that are declared non-working days he is not required to report for work, it fol–lows that the same shall not be deducted from his paternity leave benefits if he did not report for work on those days.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to guide you with our opinion on the matter.
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
source: Manila Times
Saturday, February 22, 2014
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
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
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