Actual work performed, and not the job title, determines whether a person is a managerial employee

Case Title: Fiamette A. Ramil v. Stoneleaf Inc./Joey De Guzman/Mac Dones/Criselda Dones

Date of Promulgation: G.R. No. 222416 | June 17, 2020

FACTS: Ramil was hired as a Spa Supervisor and Massage Therapist at respondent's establishment, Stoneleaf Spa and Wellness Center. Ramil was also an incorporator/director in Stoneleaf's Articles of Incorporation.

On a particular day, a regular client came in for massage service. However, the service was not recorded by Ramil in the computer as required by company procedure. This was reported by other employees to respondent De Guzman Stoneleaf President. The latter investigated the matter and discovered Ramil's dishonest act. When Ramil was confronted, she denied the allegation against her. Stoneleaf terminated Ramil's employment due to serious misconduct, betrayal of trust, and loss of confidence.

Ramil filed a complaint for illegal dismissal. The Labor Arbiter (LA) ruled that Ramil was dismissed for a valid cause, that is, loss of trust and confidence for her dishonest act. Stoneleaf appealed to the National Labor Relations Commission (NLRC), which affirmed the LA's Decision. Also, it found that Ramil is a rank-and-file employee, and not a managerial employee/staff, thus, she was entitled to the labor standards benefits awarded by the LA. The Court of Appeals (CA) resolved that Ramil was a supervisory/managerial employee. Consequently, she was not entitled to 13th month pay, holiday pay, and service incentive leave pay.

ISSUE: Is Ramil a managerial employee, therefore, not entitled to labor standards benefits?

RULING: No. Under the Labor Code, rank-and-file employees are entitled to service incentive leave pay, holiday pay, and pro-rated 13th month, but not managerial employees.

In determining whether Ramil is a managerial employee/staff, her actual work performed, and not her job title, must be considered. The records show that Ramil does not have the prerogative to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The scope of her assignment pertains to the daily operation of the spa by making sure that the business runs smoothly. However, her tasks do not include the regular exercise of discretion. Her authority is limited to the execution of company procedures and policies. She has plenty of administrative work, but none of it involves the use of independent judgment. Her duties are also subject to De Guzman's approval.

The Court concurs with the NLRC's conclusion that Ramil is not a managerial employee, but a rank-and-file employee. Specifically, she is a fiduciary rank-and-file employee defined as one who in the normal and routine exercise of his/her functions regularly handle significant amounts of money or property. Cashiers, auditors, and property custodians are some of the employees in this class. Here, Ramil regularly handles significant amounts of money or property in the normal and routine exercise of her functions. Therefore, Ramil is a fiduciary rank-and-file employee, and she is entitled to service incentive leave pay, holiday pay, and pro-rated 13th-month pay.

The Court disagrees with Stoneleaf's argument that Ramil is a corporate officer. While the Articles of Incorporation states that she is one of the incorporators, Stoneleaf was unable to rebut Ramil's claim that she has no capital contribution to the corporation. She is merely an incorporator on paper, but not in fact. There was no proof that she participated in any corporate meeting or exercised functions related to a corporate officer.

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