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SAN MIGUEL CORPORATION v. NUMERIANO LAYOC

FACTS:

This case involves a labor dispute between San Miguel Corporation (SMC) and several individuals, including Numeriano Layoc, Jr. The Court of Appeals (CA) rendered a decision setting aside the previous rulings and ordering SMC to pay Layoc overtime pay from January 1993 until his retirement on June 30, 1997. The CA also awarded nominal damages to the other respondents.

The respondents were previously employed as "Supervisory Security Guards" of the Beer Division of SMC. They were initially employed as guards and were later promoted to supervising security guards. Their employment dates ranged from January 1969 to January 1989. As supervising security guards, they had various responsibilities such as supervising the facility security force, conducting inspections, responding to emergencies, and performing other assigned duties.

Initially, the respondents recorded their time in and out of the workplace using time cards, based on which they claimed overtime, holiday, and night premium duty benefits. However, SMC implemented a Decentralization Program in the early 1990s, which led to the discontinuation of time card punching. As a result, the respondents were no longer able to claim overtime pay and other benefits based on the time cards. Instead, they received a 10% increase in basic pay and night shift allowances.

The guards filed a complaint against SMC, alleging unfair labor practices, violation of labor laws, and violation of the equal protection clause and due process of law. They sought various damages and the restoration of their right to earn overtime pay. SMC argued that the guards were exempt from the provisions on hours of work and rest periods, and that the "no time card policy" was a valid exercise of management prerogative.

The Labor Arbiter ruled in favor of the guards, ordering SMC to restore their right to earn overtime pay and to pay damages. The National Labor Relations Commission (NLRC) affirmed this ruling, finding that the guards suffered a diminution of benefits.

ISSUES:

  1. Whether the circumstances in the present case constitute an exception to the rule that supervisory employees are not entitled to overtime pay.

  2. Whether the petitioners were required to file a motion for reconsideration before the appellate court.

  3. Whether supervisory employees are entitled to overtime pay despite the "no time card policy" implemented by the employer.

  4. Whether the respondents are entitled to overtime pay from the petitioners.

  5. Whether the "no time card policy" of the petitioner is a valid exercise of management prerogative.

  6. Whether there is discrimination between the treatment of supervising security guards in different divisions of the petitioner.

RULING:

  1. The appellate court held that the circumstances in the present case do constitute an exception to the rule that supervisory employees are not entitled to overtime pay. While the implementation of the "no time card policy" was a valid exercise of management prerogative, the rendering of overtime work by respondents was a long-accepted practice that could not be peremptorily withdrawn without running afoul with the principles of justice and equity. Therefore, the petitioners are ordered to pay the respondents the amount of overtime pay they could have earned from the date of the implementation of the "no time card policy" until the date of their retirement.

  2. The petitioners were not required to file a motion for reconsideration before the appellate court. The Supreme Court clarified that certiorari as a mode of appeal and certiorari as an original special civil action have distinct differences. In an appeal by certiorari, a motion for reconsideration is not required, while in certiorari as an original action, a motion for reconsideration is a condition precedent, subject to exceptions.

  3. Supervisory employees, including the respondents, are generally not entitled to overtime pay for services rendered in excess of eight hours a day. Article 82 of the Labor Code exempts managerial employees from the provisions of the Labor Code on working conditions and rest periods. The court found that the circumstances of the case did not qualify as an exception to this general rule. The court further emphasized that the payment for overtime work was not freely given as a benefit but was compensation for services rendered beyond regular working hours. Respondents were also unable to provide sufficient evidence supporting their claim that supervising security guards in other divisions of the same company are allowed to render overtime work and receive overtime pay.

  4. The respondents are not entitled to overtime pay from the petitioners.

  5. The "no time card policy" of the petitioner is a valid exercise of management prerogative.

  6. There is no discrimination between the treatment of supervising security guards in different divisions of the petitioner.

PRINCIPLES:

  • There are distinct differences between certiorari as a mode of appeal and certiorari as an original special civil action.

  • Supervisory employees, as managerial employees, are generally not entitled to overtime pay as stated in Article 82 of the Labor Code.

  • Overtime pay requires the rendering of additional service and does not fall within the definition of benefits under Article 100 of the Labor Code.

  • A company's management prerogatives will be upheld if exercised in good faith for the advancement of the employer's interest and not to defeat or circumvent the rights of employees under special laws or valid agreements.