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RepublicofthePhilippines
SUPREMECOURT
Manila

SECONDDIVISION

G.R.No.101761.March24,1993.

NATIONALSUGARREFINERIESCORPORATION,petitioner,vs.NATIONALLABORRELATIONSCOMMISSION
andNBSRSUPERVISORYUNION,(PACIWU)TUCP,respondents.

JoseMarioC.Bunagforpetitioner.

TheSolicitorGeneralandtheChiefLegalOfficer,NLRC,forpublicrespondent.

ZoiloV.delaCruzforprivaterespondent.

DECISION

REGALADO,Jp:

Themainissuepresentedforresolutioninthisoriginalpetitionforcertiorariiswhethersupervisoryemployees,as
defined in Article 212 (m), Book V of the Labor Code, should be considered as officers or members of the
managerialstaffunderArticle82,BookIIIofthesameCode,andhencearenotentitledtoovertimerestdayand
holidaypay.

Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and
controlledbytheGovernment,operatesthree(3)sugarrefinerieslocatedatBukidnon,IloiloandBatangas.The
BatangasrefinerywasprivatizedonApril11,1992pursuanttoProclamationNo.50.1Privaterespondentunion
representstheformersupervisorsoftheNASUREFCOBatangasSugarRefinery,namely,theTechnicalAssistant
to the Refinery Operations Manager, Shift Sugar Warehouse Supervisor, Senior Financial/Budget Analyst,
General Accountant, Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler
Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor, General Services Supervisor, Instrumentation
Supervisor,CommunityDevelopmentOfficer,EmploymentandTrainingSupervisor,AssistantSafetyandSecurity
Officer,HeadandPersonnelServices,HeadNurse,PropertyWarehouseSupervisor,HeadofInventoryControl
Section,ShiftProcessSupervisor,DayMaintenanceSupervisorandMotorpoolSupervisor.

OnJune1,1988,petitionerimplementedaJobEvaluation(JE)Programaffectingallemployees,fromrankand
filetodepartmentheads.TheJEProgramwasdesignedtorationalizedthedutiesandfunctionsofallpositions,
reestablish levels of responsibility, and recognize both wage and operational structures. Jobs were ranked
according to effort, responsibility, training and working conditions and relative worth of the job. As a result, all
positionswerereevaluated,andallemployeesincludingthemembersofrespondentunionweregrantedsalary
adjustmentsandincreasesinbenefitscommensuratetotheiractualdutiesandfunctions.

WegleanfromtherecordsthatforabouttenyearspriortotheJEProgram,themembersofrespondentunion
weretreatedinthesamemannerasrankandfileemployees.Assuch,theyusedtobepaidovertime,restday
and holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended. With the
implementationoftheJEProgram,thefollowingadjustmentsweremade:(1)themembersofrespondentunion
were reclassified under levels S5 to S8 which are considered managerial staff for purposes of compensation
and benefits (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE
Program,withtheunionmembersnowenjoyingawidegap(P1,269.00permonth)inbasicpaycomparedtothe
highest paid rankandfile employee (3) longevity pay was increased on top of alignment adjustments (4) they
wereentitledtoincreasedcompanyCOLAofP225.00permonth(5)therewasagrantofP100.00allowancefor
restday/holidaywork.

OnMay11,1990,petitionerNASUREFCOrecognizedhereinrespondentunion,whichwasorganizedpursuantto
RepublicActNO.6715allowingsupervisoryemployeestoformtheirownunions,asthebargainingrepresentative
ofallthesupervisoryemployeesattheNASUREFCOBatangasSugarRefinery.

Two years after the implementation of the JE Program, specifically on June 20, 1990, the members of herein
respondentunionfiledacomplainantwiththeexecutivelaborarbiterfornonpaymentofovertime,restdayand
holidaypayallegedlyinviolationofArticle100oftheLaborCode.

OnJanuary7,1991,ExecutiveLaborArbiterAntonioC.Pidorenderedadecision2disposingasfollows:

"WHEREFORE,premisesconsidered,respondentNationalSugarrefineriesCorporationisherebydirectedto

1.paytheindividualmembersofcomplainantuniontheusualovertimepay,restdaypayandholidaypayenjoyed
bytheminsteadoftheP100.00specialallowancewhichwasimplementedonJune11,1988and

2.paytheindividualmembersofcomplainantunionthedifferenceinmoneyvaluebetweentheP100.00special
allowance and the overtime pay, rest day pay and holiday pay that they ought to have received from June 1,
1988.

Allotherclaimsareherebydismissedforlackofmerit.

SOORDERED."

Infindingforthemembersthereinrespondentunion,thelaborruledthatthealongspanoftimeduringwhichthe
benefitswerebeingpaidtothesupervisorshasaccusedthepaymentthereoftoripenintocontractualobligation
atthecomplainantscannotbeestoppedfromquestioningthevalidityofthenewcompensationpackagedespite
thefactthattheyhavebeenreceivingthebenefitstherefrom,consideringthatrespondentunionwasformedonly
a year after the implementation of the Job Evaluation Program, hence there was no way for the individual
supervisorstoexpresstheircollectiveresponsetheretopriortotheformationoftheunionandthecomparative
computations presented by the private respondent union showed that the P100.00 special allowance given
NASUREFCOfellshortofwhatthesupervisorsoughttoreceivehadtheovertimepayrestdaypayandholiday
paynotbeendiscontinued,whicharrangement,therefore,amountedtoadiminutionofbenefits.

Onappeal,inadecisionpromulgatedonJuly19,1991byitsThirdDivision,respondentNationalLaborRelations
Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent
unionarenotmanagerialemployees,asdefinedunderArticle212(m)oftheLaborCodeand,therefore,theyare
entitledtoovertime,restdayandholidaypay.RespondentNLRCdeclaredthatthesesupervisoryemployeesare
merelyexercisingrecommendatorypowerssubjecttotheevaluation,reviewandfinalactionbytheirdepartment
heads their responsibilities do not require the exercise of discretion and independent judgment they do not
participate in the formulation of management policies nor in the hiring or firing of employees and their main
function is to carry out the ready policies and plans of the corporation. 3 Reconsideration of said decision was
deniedinaresolutionofpublicrespondentdatedAugust30,1991.4

Hence this petition for certiorari, with petitioner NASUREFCO asseverating that public respondent commission
committedagraveabuseofdiscretioninrefusingtorecognizedthefactthatthemembersofrespondentunion
are members of the managerial staff who are not entitled to overtime, rest day and holiday pay and in making
petitionerassumethe"doubleburden"ofgivingthebenefitsduetorankandfileemployeestogetherwiththose
duetosupervisorsundertheJEProgram.

Wefindcreditablemeritinthepetitionandthattheextraordinarywritofcertiorarishallaccordinglyissue.

Theprimordialissuetoberesolvedhereiniswhetherthemembersofrespondentunionareentitledtoovertime,
restdayandholidaypay.Beforethiscanberesolved,howeveritmustofnecessitybeascertainedfirstwhetheror
not the union members, as supervisory employees, are to be considered as officers or members of the
managerialstaffwhoareexemptfromthecoverageofArticle82oftheLaborCode.

It is not disputed that the members of respondent union are supervisory employees, as defined employees, as
definedunderArticle212(m),BookVoftheLaborCodeonLaborRelations,whichreads:

"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute
managementpoliciesand/ortohire,transfer,suspend,layoff,recall,discharged,assignordisciplineemployees.
Supervisory employees are those who, in the interest of the employer effectively recommend such managerial
actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of
independentjudgment.Allemployeesnotfallingwithinanyofthoseabovedefinitionsareconsideredrankandfile
employeesofthisBook."

RespondentNLRC,inholdingthattheunionmembersareentitledtoovertime,restdayandholidaypay,andin
ruling that the latter are not managerial employees, adopted the definition stated in the aforequoted statutory
provision.
Petitioner,however,aversthatforpurposesofdeterminingwhetherornotthemembersofrespondentunionare
entitledtoovertime,restdayandholidaypay,saidemployeesshouldbeconsideredas"officersormembersof
the managerial staff" as defined under Article 82, Book III of the Labor Code on "Working Conditions and Rest
Periods"andamplifiedinSection2,RuleI,BookIIIoftheRulestoImplementtheLaborCode,towit:

"Art.82Coverage.Theprovisionsofthistitleshallapplytoemployeesinallestablishmentsandundertakings
whetherforprofitornot,butnottogovernmentemployees,managerialemployees,fieldpersonnel,membersof
the family of the employer who are dependent on him for support, domestic helpers, persons in the personal
serviceofanother,andworkerswhoarepaidbyresultsasdeterminedbytheSecretaryofLaborinAppropriate
regulations.

"As used herein, 'managerial employees' refer to 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
membersofthemanagerialstaff."(Emphasissupplied.)

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'Sec. 2. Exemption. The provisions of this rule shall not apply to the following persons if they qualify for
exemptionundertheconditionsetforthherein:

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(b)Managerialemployees,iftheymeetallofthefollowingconditions,namely:

(1) Their primary duty consists of the management of the establishment in which they are employed or of a
departmentorsubdivisionthereof:

(2)Theycustomarilyandregularlydirecttheworkoftwoormoreemployeestherein:

(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
employeesaregivenparticularweight.

(c)Officersormembersofamanagerialstaffiftheyperformthefollowingdutiesandresponsibilities:

(1) The primary duty consists of the performance of work directly related to management policies of their
employer

(2)Customarilyandregularlyexercisediscretionandindependentjudgment

(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
supervisionworkalongspecializedortechnicallinesrequiringspecialtraining,experience,orknowledgeor(iii)
executeundergeneralsupervisionspecialassignmentsandtasksand

(4)Whodonotdevotemore20percentoftheirhoursworkedinaworkweektoactivitieswhicharenotdirectly
andcloselyrelatedtotheperformanceoftheworkdescribedinparagraphs(1),(2),andabove."

It is the submission of petitioner that while the members of respondent union, as supervisors, may not be
occupyingmanagerialpositions,theyareclearlyofficersormembersofthemanagerialstaffbecausetheymeet
all the conditions prescribed by law and, hence, they are not entitled to overtime, rest day and supervisory
employees under Article 212 (m) should be made to apply only to the provisions on Labor Relations, while the
right of said employees to the questioned benefits should be considered in the light of the meaning of a
managerialemployeeandoftheofficersormembersofthemanagerialstaff,ascontemplatedunderArticle82of
the Code and Section 2, Rule I Book III of the implementing rules. In other words, for purposes of forming and
joining unions, certification elections, collective bargaining, and so forth, the union members are supervisory
employees.Intermsofworkingconditionsandrestperiodsandentitlementtothequestionedbenefits,however,
theyareofficersormembersofthemanagerialstaff,hencetheyarenotentitledthereto.

WhiletheConstitutioniscommittedtothepolicyofsocialjusticeandtheprotectionoftheworkingclass,itshould
notbesupposedthateverylabordisputewillbeautomaticallydecidedinfavoroflabor.Managementalsohasits
own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its
concern for those with less privileges in life, this Court has inclined more often than not toward the worker and
upheldhiscauseinhisconflictswiththeemployer.Suchfavoritism,however,hasnotblindedustotherulethat
justiceisineverycaseforthedeserving,tobedispensedinthelightoftheestablishedfactsandtheapplicable
lawanddoctrine.5

Thisisonesuchcasewhereweareinclinedtotipthescalesofjusticeinfavoroftheemployer.
Thequestionwhetheragivenemployeeisexemptfromthebenefitsofthelawisafactualonedependentonthe
circumstancesoftheparticularcase,Indeterminingwhetheranemployeeiswithinthetermsofthestatutes,the
criterionisthecharacteroftheworkperformed,ratherthanthetitleoftheemployee'sposition.6

Consequently,whilegenerallythisCourtisnotsupposedtoreviewthefactualfindingsofrespondentcommission,
substantialjusticeandthepeculiarcircumstancesobtaininghereinmandateadeviationfromtherule.

AcursoryperusaloftheJobValueContributionStatements7oftheunionmemberswillreadilyshowthatthese
supervisoryemployeesareunderthedirectsupervisionoftheirrespectivedepartmentsuperintendentsandthat
generallytheyassistthelatterinplanning,organizing,staffing,directing,controllingcommunicatingandinmaking
decisions in attaining the company's set goals and objectives. These supervisory employees are likewise
responsiblefortheeffectiveandefficientoperationoftheirrespectivedepartments.Morespecifically,theirduties
andfunctionsinclude,amongothers,thefollowingoperationswherebytheemployee:

1)assiststhedepartmentsuperintendentinthefollowing:

a)planningofsystemsandproceduresrelativetodepartmentactivities

b)organizingandschedulingofworkactivitiesofthedepartment,whichincludesemployeeshiftingscheduledand
manningcomplement

c)decisionmakingbyprovidingrelevantinformationdataandotherinputs

d)attainingthecompany'ssetgoalsandobjectivesbygivinghisfullsupport

e)selectingtheappropriatemantohandlethejobinthedepartmentand

f)preparingannualdepartmentalbudget

2)observes,followsandimplementscompanypoliciesatalltimesandrecommendsdisciplinaryactiononerring
subordinates

3)trainsandguidessubordinatesonhowtoassumeresponsibilitiesandbecomemoreproductive

4)conductssemiannualperformanceevaluationofhissubordinatesandrecommendsnecessaryactionfortheir
development/advancement

5)representsthesuperintendentorthedepartmentwhenappointedandauthorizedbytheformer

6)coordinatesandcommunicateswithotherinterandintradepartmentsupervisorswhennecessary

7)recommendsdisciplinaryactions/promotions

8) recommends measures to improve work methods, equipment performance, quality of service and working
conditions

9) sees to it that safety rules and regulations and procedure and are implemented and followed by all
NASUREFCO employees, recommends revisions or modifications to said rules when deemed necessary, and
initiatesandpreparesreportsforanyobservedabnormalitywithintherefinery

10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are
properlyimplementedand

11)performsotherrelatedtasksasmaybeassignedbyhisimmediatesuperior.

From the foregoing, it is apparent that the members of respondent union discharge duties and responsibilities
whichineluctablyqualifythemasofficersormembersofthemanagerialstaff,asdefinedinSection2,RuleIBook
IIIoftheaforestatedRulestoImplementtheLaborCode,viz.:(1)theirprimarydutyconsistsoftheperformance
of work directly related to management policies of their employer (2) they customarily and regularly exercise
discretion and independent judgment (3) they regularly and directly assist the managerial employee whose
primary duty consist of the management of a department of the establishment in which they are employed (4)
they execute, under general supervision, work along specialized or technical lines requiring special training,
experience,orknowledge(5)theyexecute,undergeneralsupervision,specialassignmentsandtasksand(6)
theydonotdevotemorethan20%oftheirhoursworkedinaworkweektoactivitieswhicharenotdirectlyand
clearlyrelatedtotheperformanceoftheirworkhereinbeforedescribed.

Underthefactsobtaininginthiscase,weareconstrainedtoagreewithpetitionerthattheunionmembersshould
beconsideredasofficersandmembersofthemanagerialstaffandare,therefore,exemptfromthecoverageof
Article82.Perforce,theyarenotentitledtoovertime,restdayandholiday.

The distinction made by respondent NLRC on the basis of whether or not the union members are managerial
employees,todeterminethelatter'sentitlementtothequestionedbenefits,ismisplacedandinappropriate.Itis
admittedthattheseunionmembersaresupervisoryemployeesandthisisoneinstancewherethenomenclatures
or titles of their jobs conform with the nature of their functions. Hence, to distinguish them from a managerial
employee, as defined either under Articles 82 or 212 (m) of the Labor Code, is puerile and in efficacious. The
controversyactuallyinvolvedhereseeksadeterminationofwhetherornotthesesupervisoryemployeesoughtto
beconsideredasofficersormembersofthemanagerialstaff.Thedistinction,therefore,shouldhavebeenmade
alongthatlineanditscorrespondingconceptualcriteria.

II.Welikewisenonotsubscribetothefindingofthelaborarbiterthatthepaymentofthequestionedbenefitsto
theunionmembershasripenedintoacontractualobligation.

A.PriortotheJEProgram,theunionmembers,whilebeingsupervisors,receivedbenefitssimilartotherankand
fileemployeessuchasovertime,restdayandholidaypay,simplybecausetheyweretreatedinthesamemanner
asrankandfileemployees,andtheirbasicpaywasnearlyonthesamelevelasthoseofthelatter,asidefrom
thefactthattheirspecificfunctionsanddutiesthenassupervisorshadnotbeenproperlydefinedanddelineated
from those of the rankandfile. Such fact is apparent from the clarification made by petitioner in its motion for
reconsideration8filedwithrespondentcommissioninNLRCCaseNo.CANo.I000058,datedAugust16,1991,
wherein,itlucidlyexplained:

"But, complainants no longer occupy the same positions they held before the JE Program. Those positions
formerly classified as 'supervisory' and found after the JE Program to be rankandfile were classified correctly
andcontinuetoreceiveovertime,holidayandrestdaypay.Astothem,thepracticesubsists.

"However,thosewhosedutiesconfirmedthemtobesupervisory,werereevaluated,theirdutiesredefinedandin
mostcasestheirorganizationalpositionsredesignatedtoconfirmtheirsuperiorrankandduties.Thus,afterthe
JEprogram,complainantscannotbesaidtooccupythesamepositions."9

Itbearsmentionthatthispositionalsubmissionwasneverrefutednorcontrovertedbyrespondentunioninanyof
itspleadingsfiledbeforehereinpublicrespondentorwiththisCourt.Hence,itcanbesafelyconcludedtherefrom
that the members of respondent union were paid the questioned benefits for the reason that, at that time, they
wererightfullyentitledthereto.PriortotheJEProgram,theycouldnotbecategoricallyclassifiedasmembersor
officersofthemanagerialstaffconsideringthattheywerethentreatedmerelyonthesamelevelasrankandfile.
Consequently,thepaymentthereofcouldnotbeconstruedasconstitutiveofvoluntaryemployerpractice,which
cannotbenowbeunilaterallywithdrawnbypetitioner.Tobeconsideredassuch,itshouldhavebeenpracticed
overalongperiodoftime,andmustbeshowntohavebeenconsistentanddeliberate.10

The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to
continuegivingthebenefitsknowinglyfullywellthatsaidemployeesarenotcoveredbythelawrequiringpayment
thereof.11Inthecaseatbar,respondentunionfailedtosufficientlyestablishthatpetitionerhasbeenmotivated
oriswonttogivethesebenefitsoutofpuregenerosity.

B. It remains undisputed that the implementation of the JE Program, the members of private respondent union
werereclassifiedunderlevelsS5S8whichwereconsideredundertheprogramasmanagerialstaffpurposesof
compensationandbenefits,thattheyoccupiedreevaluatedpositions,andthattheirbasicpaywasincreasedby
anaverageof50%oftheirbasicsalarypriortotheJEProgram.Inotherwords,aftertheJEProgramtherewas
anascentinposition,rankandsalary.Thisinessenceisapromotionwhichisdefinedastheadvancementfrom
one position to another with an increase in duties and responsibilities as authorized by law, and usually
accompaniedbyanincreaseinsalary.12

Quintessentially,withthepromotionoftheunionmembers,theyarenolongerentitledtothebenefitswhichattach
andpertainexclusivelytotheirpositions.Entitlementtothebenefitsprovidedforbylawrequirespriorcompliance
with the conditions set forth therein. With the promotion of the members of respondent union, they occupied
positions which no longer met the requirements imposed by law. Their assumption of these positions removed
themfromthecoverageofthelaw,ergo,theirexemptiontherefrom.

Ascorrectlypointedoutbypetitioner,iftheunionmembersreallywantedtocontinuereceivingthebenefitswhich
attachtotheirformerpositions,therewasnothingtopreventthemfromrefusingtoaccepttheirpromotionsand
their corresponding benefits. As the sating goes by, they cannot have their cake and eat it too or, as petitioner
suggests, they could not, as a simple matter of law and fairness, get the best of both worlds at the expense of
NASUREFCO.

Promotion of its employees is one of the jurisprudentiallyrecognized exclusive prerogatives of management,

provideditisdoneingoodfaith.Inthecaseatbar,privaterespondentunionhasmiserablyfailedtoconvincethis
Court that the petitioner acted implementing the JE Program. There is no showing that the JE Program was
intended to circumvent the law and deprive the members of respondent union of the benefits they used to
receive.

Notsolongago,onthisparticularscore,wehadtheoccasiontoholdthat:

"...itistheprerogativeofthemanagementtoregulate,accordingtoitsdiscretionandjudgment,allaspectsof
employment. This flows from the established rule that labor law does not authorize the substitution of the
judgmentoftheemployerintheconductofitsbusiness.Suchmanagementprerogativemaybeavailedofwithout
fearofanyliabilitysolongasitisexercisedingoodfaithfortheadvancementoftheemployer'sinterestandnot
forthepurposeofdefeatingoncircumventingtherightsofemployeesunderspeciallawsorvalidagreementand
arenotexercisedinamalicious,harsh,oppressive,vindictiveorwantonmanneroroutofmaliceorspite."13

WHEREFORE, the impugned decision and resolution of respondent National Labor Relations Commission
promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED and SET ASIDE for
havingbeenrenderedandadoptedwithgraveabuseofdiscretion,andthebasiccomplaintofprivaterespondent
unionisDISMISSED.

Narvasa,C.J.,Padilla,NoconandCampos,Jr.,JJ.,concur.

Footnotes

1.Rollo,209.

2.AnnexE,PetitionRollo,51,5657.

3.AnnexA,id.ibid.,2027NLRCCaseCANo.L000058pennedbyPres.Comm.LourdesC.Javier,withthe
concurrenceofComm.IreneoB.BernardoandRegalioI.Rayala.

4.Rollo,2829.

5.Sositovs.AguinaldoDevelopmentCorporation,156SCRA392(1987).

6.56C.J.S.,MasterandServant,Sec.151(11).

7.AnnexesItoI23,PetitionRollo,84149.

8.AnnexG,PetitionRollo,72.

9.Rollo,79

10.GlobeMackayCableandRadioCorporation,etal.vs.NLRCetal.,163SCRA71(1988).

11.OceanicPharmacalEmployeesUnion(FFW)vs.Inciong,etal.,94SCRA270(1979).

12.Millaresvs.Subido,etal.,20SCRA954(1967)Dosch,vs.NLRC,etal.,123SCRA296(1983).

13.WiseandCo.,Inc.vs.WiseandCo.,Inc.EmployeesUnionNatu,etal.,SCRA536(1989).

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