522 Phil. 640 their position papers and submit supporting documents.

[9] Their respective allegations

are summarized by the labor arbiter as follows:

"[Peñaranda] through counsel in his position paper alleges that he was

FIRST DIVISION
employed by respondent [Baganga] on March 15, 1999 with a monthly
salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was
[ G.R. NO. 159577, May 03, 2006 ] illegally terminated on December 19, 2000. Further, [he] alleges that his
services [were] terminated without the benefit of due process and valid
CHARLITO PEÑARANDA, PETITIONER, VS. BAGANGA PLYWOOD grounds in accordance with law. Furthermore, he was not paid his overtime
CORPORATION AND HUDSON CHUA, RESPONDENTS. pay, premium pay for working during holidays/rest days, night shift
differentials and finally claims for payment of damages and attorney's fees
DECISION having been forced to litigate the present complaint.

PANGANIBAN, CJ: "Upon the other hand, respondent [BPC] is a domestic corporation duly
organized and existing under Philippine laws and is represented herein by its
Managerial employees and members of the managerial staff are exempted from the
General Manager HUDSON CHUA, [the] individual respondent. Respondents
provisions of the Labor Code on labor standards. Since petitioner belongs to this class
thru counsel allege that complainant's separation from service was done
of employees, he is not entitled to overtime pay and premium pay for working on rest
pursuant to Art. 283 of the Labor Code. The respondent [BPC] was on
days.
temporary closure due to repair and general maintenance and it applied for
clearance with the Department of Labor and Employment, Regional Office
The Case
No. XI to shut down and to dismiss employees (par. 2 position paper). And
due to the insistence of herein complainant he was paid his separation
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the benefits (Annexes C and D, ibid). Consequently, when respondent [BPC]
January 27, 2003[2] and July 4, 2003[3] Resolutions of the Court of Appeals (CA) in CA- partially reopened in January 2001, [Peñaranda] failed to reapply. Hence, he
GR SP No. 74358. The earlier Resolution disposed as follows: was not terminated from employment much less illegally. He opted to severe
employment when he insisted payment of his separation benefits.
"WHEREFORE, premises considered, the instant petition is hereby Furthermore, being a managerial employee he is not entitled to overtime
DISMISSED."[4] pay and if ever he rendered services beyond the normal hours of work,
[there] was no office order/or authorization for him to do so. Finally,
The latter Resolution denied reconsideration. respondents allege that the claim for damages has no legal and factual basis
and that the instant complaint must necessarily fail for lack of merit."[10]
On the other hand, the Decision of the National Labor Relations Commission (NLRC)
challenged in the CA disposed as follows: The labor arbiter ruled that there was no illegal dismissal and that petitioner's
"WHEREFORE, premises considered, the decision of the Labor Arbiter below Complaint was premature because he was still employed by BPC.[11] The temporary
awarding overtime pay and premium pay for rest day to complainant is closure of BPC's plant did not terminate his employment, hence, he need not reapply
hereby REVERSED and SET ASIDE, and the complaint in the above-entitled when the plant reopened.
case dismissed for lack of merit.[5]
According to the labor arbiter, petitioner's money claims for illegal dismissal was also
The Facts weakened by his quitclaim and admission during the clarificatory conference that he
accepted separation benefits, sick and vacation leave conversions and thirteenth month
Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of pay.[12]
Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance
of its steam plant boiler.[6] In May 2001, Peñaranda filed a Complaint for illegal Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay
dismissal with money claims against BPC and its general manager, Hudson Chua, for working on rest days, and attorney's fees in the total amount of P21,257.98.[13]
before the NLRC.[7]
Ruling of the NLRC
After the parties failed to settle amicably, the labor arbiter[8] directed the parties to file
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 exercise of its equity jurisdiction to order the adjudication on the merits.
not entitled to these awards because he was a managerial employee.[14]
The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence
Ruling of the Court of Appeals to challenge the finding that he was a managerial employee.[21] In his Motion for
Reconsideration, petitioner also submitted the pleadings before the labor arbiter in an
In its Resolution dated January 27, 2003, the CA dismissed Peñaranda's Petition for attempt to comply with the CA rules.[22] Evidently, the CA could have ruled on the
Certiorari. The appellate court held that he failed to: 1) attach copies of the pleadings Petition on the basis of these attachments. Petitioner should be deemed in substantial
submitted before the labor arbiter and NLRC; and 2) explain why the filing and service compliance with the procedural requirements.
of the Petition was not done by personal service.[15]
Under these extenuating circumstances, the Court does not hesitate to grant liberality
In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground in favor of petitioner and to tackle his substantive arguments in the present case. Rules
that petitioner still failed to submit the pleadings filed before the NLRC.[16] of procedure must be adopted to help promote, not frustrate, substantial justice.[23]
The Court frowns upon the practice of dismissing cases purely on procedural grounds.
Hence this Petition.[17] [24] Considering that there was substantial compliance,[25] a liberal interpretation of

procedural rules in this labor case is more in keeping with the constitutional mandate to
The Issues secure social justice.[26]

Petitioner states the issues in this wise: First Issue:

Timeliness of Appeal
"The [NLRC] committed grave abuse of discretion amounting to excess or
lack of jurisdiction when it entertained the APPEAL of the respondent[s]
Under the Rules of Procedure of the NLRC, an appeal from the decision of the labor
despite the lapse of the mandatory period of TEN DAYS.
arbiter should be filed within 10 days from receipt thereof.[27]
"The [NLRC] committed grave abuse of discretion amounting to an excess or
lack of jurisdiction when it rendered the assailed RESOLUTIONS dated May Petitioner's claim that respondents filed their appeal beyond the required period is not
8, 2002 and AUGUST 16, 2002 REVERSING AND SETTING ASIDE the substantiated. In the pleadings before us, petitioner fails to indicate when respondents
FACTUAL AND LEGAL FINDINGS of the [labor arbiter] with respect to the received the Decision of the labor arbiter. Neither did the petitioner attach a copy of the
following: challenged appeal. Thus, this Court has no means to determine from the records when
the 10-day period commenced and terminated. Since petitioner utterly failed to support
"I. The finding of the [labor arbiter] that [Peñaranda] is a regular, common his claim that respondents' appeal was filed out of time, we need not belabor that
employee entitled to monetary benefits under Art. 82 [of the Labor Code]. point. The parties alleging have the burden of substantiating their allegations.[28]

"II. The finding that [Peñaranda] is entitled to the payment of OVERTIME Second Issue:
PAY and OTHER MONETARY BENEFITS."[18] Nature of Employment

The Court's Ruling Petitioner claims that he was not a managerial employee, and therefore, entitled to the
award granted by the labor arbiter.
The Petition is not meritorious.
Article 82 of the Labor Code exempts managerial employees from the coverage of labor
Preliminary Issue: standards. Labor standards provide the working conditions of employees, including
Resolution on the Merits entitlement to overtime pay and premium pay for working on rest days.[29] Under this
provision, managerial employees are "those whose primary duty consists of the
The CA dismissed Peñaranda's Petition on purely technical grounds, particularly with management of the establishment in which they are employed or of a department or
regard to the failure to submit supporting documents. subdivision."[30]

In Atillo v. Bombay,[19] the Court held that the crucial issue is whether the documents The Implementing Rules of the Labor Code state that managerial employees are those
accompanying the petition before the CA sufficiently supported the allegations therein. who meet the following conditions:
Citing this case, Piglas-Kamao v. NLRC[20] stayed the dismissal of an appeal in the
 "(1) Their primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof; "6. Recommend parts and supplies purchases.

"(2) They customarily and regularly direct the work of two or more "7. To recommend personnel actions such as: promotion, or disciplinary
employees therein; action.

"(3) They have the authority to hire or fire other employees of lower rank; "8. To check water from the boiler, feedwater and softener, regenerate
or their suggestions and recommendations as to the hiring and firing and as softener if beyond hardness limit.
to the promotion or any other change of status of other employees are given
particular weight."[31] "9. Implement Chemical Dosing.

The Court disagrees with the NLRC's finding that petitioner was a managerial employee. "10. Perform other task as required by the superior from time to time."[34]
However, petitioner was a member of the managerial staff, which also takes him out of
the coverage of labor standards. Like managerial employees, officers and members of The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner
the managerial staff are not entitled to the provisions of law on labor standards.[32] was a member of the managerial staff. His duties and responsibilities conform to the
The Implementing Rules of the Labor Code define members of a managerial staff as definition of a member of a managerial staff under the Implementing Rules.
those with the following duties and responsibilities:
Petitioner supervised the engineering section of the steam plant boiler. His work
"(1) The primary duty consists of the performance of work directly related to involved overseeing the operation of the machines and the performance of the workers
management policies of the employer; in the engineering section. This work necessarily required the use of discretion and
independent judgment to ensure the proper functioning of the steam plant boiler. As
"(2) Customarily and regularly exercise discretion and independent supervisor, petitioner is deemed a member of the managerial staff.[35]
judgment;
Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he
"(3) (i) Regularly and directly assist a proprietor or a managerial employee
stated that he was the foreman responsible for the operation of the boiler.[36] The term
whose primary duty consists of the management of the establishment in
foreman implies that he was the representative of management over the workers and
which he is employed or subdivision thereof; or (ii) execute under general
supervision work along specialized or technical lines requiring special the operation of the department.[37] Petitioner's evidence also showed that he was the
training, experience, or knowledge; or (iii) execute under general supervisor of the steam plant.[38] His classification as supervisor is further evident from
supervision special assignments and tasks; and the manner his salary was paid. He belonged to the 10% of respondent's 354
employees who were paid on a monthly basis; the others were paid only on a daily
"(4) who do not devote more than 20 percent of their hours worked in a basis.[39]
workweek to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2), and (3) above." On the basis of the foregoing, the Court finds no justification to award overtime pay
[33] and premium pay for rest days to petitioner.

As shift engineer, petitioner's duties and responsibilities were as follows: WHEREFORE, the Petition is DENIED. Costs against petitioner.
"1. To supply the required and continuous steam to all consuming units at
SO ORDERED.
minimum cost.

Ynares-Santiago, Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

"2. To supervise, check and monitor manpower workmanship as well as
operation of boiler and accessories.

"3. To evaluate performance of machinery and manpower. [1] Rollo, pp. 4-11.

"4. To follow-up supply of waste and other materials for fuel.

[2] Id. at 64-65 & 298-299. Former Sixteenth Division. Penned by Justice Rodrigo V.

"5. To train new employees for effective and safety while working. Cosico (Division chairperson), with the concurrence of Justices Rebecca de Guia-
Salvador and Regalado E. Maambong (members). respective supporting documents (CA rollo, pp. 43-64).

[3] Id. at 51-52. [23] Chua v. Absolute Management Corporation, 412 SCRA 547, October 16, 2003;

Pacific Life Assurance Corporation v. Sison, 359 Phil. 332, November 20, 1998;
[4] Id. at 65 & 299. Gregorio v. Court of Appeals, 72 SCRA 120, July 28, 1976.

[5] Id. at 34. [24] Pacific Life Assurance Corporation v. Sison, id.; Empire Insurance Company v.

National Labor Relations Commission, 355 Phil. 694, August 14, 1998; People Security
[6] Petitioner's Memorandum, p. 3; rollo, p. 266. Inc. v. National Labor Relations Commission, 226 SCRA 146, September 8, 1993;
Tamargo v. Court of Appeals, 209 SCRA 518, June 3, 1992.
[7] Id. at 2; id. at 265.
[25] Chua v. Absolute Management Corporation, supra note 23; Cusi-Hernandez v.

[8] The labor arbiter assigned to the case was Arturo L. Gamolo.
Diaz, 336 SCRA 113, July 18, 2000.

[26] Constitution Art. II, Sec. 18 and Art. XIII, Sec. 3. See Ablaza v. Court of Industrial
[9] Decision of the Labor Arbiter, p. 1; rollo, p. 21.
Relations, 126 SCRA 247, December 21, 1983.

[10] Id. at 2; id. at 22.

[27] New Rules of Procedure of the National Labor Relations Commission, Rule VI, Sec.

1.
[11] Id. at 3; id. at 23.

[28] Rules of Court, Rule 131, Sec. 1.

[12] Id. at 4; id. at 24.

[29] Labor standards is found in Book 3 of the Labor Code, entitled "Conditions of
[13] Id. at 5; id. at 25.
Employment." Arts. 87 and 93 provide:

[14] NLRC Resolution dated May 8, 2002, p. 2; rollo, p. 33. "Arts. 87. Overtime work. - Work may be performed beyond eight (8) hours
a day provided that the employee is paid for the overtime work, an
[15] Assailed CA Resolution dated January 27, 2003, pp. 1-2; rollo, pp. 298-299. additional compensation equivalent to his regular wage plus at least twenty-
five (25%) per cent thereof. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional compensation equivalent to
[16] Assailed CA Resolution dated July 4, 2003, p. 1; id. at 51.
the rate of the first eight hours on a holiday or rest day plus at least thirty
percent thereof."
[17] This Petition was deemed submitted for decision on June 29, 2005 upon this

Court's receipt of petitioner's Memorandum, which he signed with the assistance of "Art. 93. Compensation for rest day, Sunday or holiday work. - (a) Where an
Atty. Angela A. Librado. Respondents' Memorandum, signed by Atty. Leo N. Caubang, employee is made or permitted to work on his scheduled rest day, he shall
was received by this Court on May 26, 2005. be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation
[18] Petitioner's Memorandum, pp. 5-6; rollo, pp. 268-269. for work performed on Sunday only when it is his established rest day.

[19] 351 SCRA 361, February 7, 2001. (b) When the nature of the work of the employee is such that he has no
regular workdays and no regular rest days can be scheduled, he shall be
[20] 357 SCRA 640, May 9, 2001. paid an additional compensation of at least thirty percent (30%) of his
regular wage for work performed on Sundays and holidays.

[21] Petitioner attached his pay slips and job designation, and the company's manpower
(c) Work performed on any special holiday shall be paid an additional
schedule as Annexes "C," "D," and "E" (CA rollo, pp. 20-31). compensation of at least thirty percent (30%) of the regular wage of the
employee. Where such holiday work falls on the employees scheduled rest
[22] Petitioner submitted the parties' position papers before the labor arbiter and their
 day, he shall be entitled to an additional compensation of at least fifty
percent (50%) of his regular wage.

(d) Where the collective bargaining agreement or other applicable

employment contract stipulates the payment of a higher premium pay than
that prescribed under this Article, the employer shall pay such higher rate."

[30] The other definition of a managerial employee found in the Labor Code Art. 212(m)

is in connection with labor relations or the right to engage in unionization. Under this
provision, a managerial employee is one "vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees." C. Azucena, Everyone's Labor Code, 58
(2001 ed.).

[31] Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(b).

[32] Labor Code, Art. 82.

[33] Implementing Rules of the Labor Code, Book III, Rule I, Sec. 2(c).

[34] Job Description, submitted as petitioner's Annex to his Memorandum; rollo, p. 312.

[35] See Quebec v. National Labor Relations Commission, 361 Phil. 555, January 22,

1999; Salazar v. National Labor Relations Commission, 326 Phil. 288, April 17, 1996;
National Sugar Refineries Corporation v. National Labor Relations Commission, 220
SCRA 452, March 24, 1993.

[36] Petitioner's Position Paper, p. 1; rollo, p. 14.

[37] Webster's Third New International Dictionary, 889 (1976).

[38] Servicing Schedule, submitted as petitioner's Annex to his Memorandum; rollo p.

315.

[39] Respondent's Termination Report submitted to the Department of Labor and

Employment; rollo, pp. 49-61.

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