Case Title: Peñaranda v. Baganga Plywood Corp.

Docket Number: G.R. No. 159577

Date: May 3, 2006
Digest by: Nico Ballesteros
Summary/Nature of the Case:

Facts of the Case

1. 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. In May 2001, Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its
general manager, Hudson Chua, before the NLRC.
2. When efforts to reach a settlement failed, the labor arbiter directed both parties to file their position papers. Petitioner contends that he was
employed by respondent Baganga and was terminated illegally and moreover he claims 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.
3. Respondent Corporation contends, thru their counsel that the separation was done in accord with Art. 283 of the Labor Code – the corporation
was closed due to repair and general maintenance and it had acquired permission for DOLE to shut down and dismiss employees. And when it
reopened, petitioner failed to reapply. Moreover, petitioner was a managerial employee and thus he is not entitled to overtime pay.
4. The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was premature because he was still employed by BPC.
The temporary closure of BPC’s plant did not terminate his employment, hence, he need not reapply when the plant reopened. And that during
the he clarificatory conference that he accepted separation benefits, sick and vacation leave conversions and thirteenth month pay. However,
he ruled that petitioner was entitled to overtime pay, premium pay for working on rest days, and attorney’s fees.
5. 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.
6. The CA dismissed Peñaranda’s Petition for Certiorari, alleging that he failed to attach copies of the pleadings submitted before the labor arbiter
and NLRC; and 2) explain why the filing and service of the Petition was not done by personal service. An MR was later filed but was still denied.
Hence, the petition to the SC.

Issue/s
1. Whether the NLRC committed grave abuse of discretion when a) it entertained the appeal of respondent despite the lapse of the mandatory ten
day period; b) when it reversed and set aside the decision of the labor arbiter in finding that petitioner was an employee entitled overtime pay
and monetary benefits.

Ruling

1. The claim of petitioner does not hold water. 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. Petitioner failed to indicate when respondents received the decision of the labor arbiter neither did
he attach a copy of the challenged appeal.
2. Petitioner is not entitled to benefits and overtime pay.
a. The NLRC found out that petitioner was a managerial employee. However, he was part of the managerial staff and therefore excluded from
coverage of the labor standards. This is in pursuant to Article 82 of the Labor Code which 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.
b. Under the same 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.”
c. Petitioner was a shift engineer of the corporation in which his responsibilities among others involved supervision of the engineering section
of the steam plant boiler and overseeing the operation of the machines and the performance of the workers. 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. Moreover, in his position paper, he admitted that he was a supervisor.

Disposition: Petition is denied.

Additional Notes:
1. IRR of the Labor Code states that managerial employees are those who meet the ff:
"(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