San Miguel Corporation et.al., v. Layoc, et.al., [G.R. No. 149640] Case Digest

 

●     San Miguel Corporation et.al., v. Layoc, et.al., G.R. No. 149640, Oct 19, 2007

 

 

Facts:

                Respondents were among the "Supervisory Security Guards" of the Beer Division of the San Miguel Corporation.  They started working as guards with the petitioner San Miguel Corporation assigned to the Beer Division on different dates until such time that they were promoted as supervising security guards.

                From the commencement of their employment, the private respondents were required to punch their time cards for purposes of determining the time they would come in and out of the company’s work place. Corollary [sic], the private respondents were availing the benefits for overtime, holiday and night premium duty through time card punching.  In the early 1990’s, the San Miguel Corporation embarked on a Decentralization Program aimed at enabling the separate divisions of the San Miguel Corporation to pursue a more efficient and effective management of their respective operations.

                As a result of the Decentralization Program, the Beer Division of the San Miguel Corporation implemented a "no time card policy" whereby the Supervisory I and II composing of the supervising security guards of the Beer Division were no longer required to punch their time cards.   Consequently, on January 16, 1993, without prior consultation with the private respondents, the time cards were ordered confiscated and the latter were no longer allowed to render overtime work.

                However, in lieu of the overtime pay and the premium pay, the personnel of the Beer Division of the petitioner San Miguel Corporation affected by the "No Time Card Policy" were given a 10% across-the-board increase on their basic pay while the supervisors who were assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging from ₱2,000.00 to ₱2,500.00 a month.

                Respondents filed a complaint for unfair labor practice, violation of Article 100 of the Labor Code of the Philippines, and violation of the equal protection clause and due process of law.

                The Labor Arbiter held decision hereby ordering the petitioners to restore to the [respondents] their right to earn for overtime services rendered as enjoyed by the other employees and payment of indemnity.  NLRC affirmed with modification the ruling of Arbiter Canizares that respondents suffered a diminution of benefits as a result of the adoption of the "no time card policy." CA set aside the ruling of the NLRC and entered a new judgment in favor of respondents.

 

Issue:

                Whether or not the "no time card policy" affecting all of the supervisory employees of the Beer Division is a valid exercise of management prerogative

 

Held:

                Yes.

 

Ratio:

                Both petitioners and respondents agree that respondents are supervising security guards and, thus, managerial employees.

                Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. The other provisions in the Title include normal hours of work (Article 83), hours worked (Article 84), meal periods (Article 85), night shift differential (Article 86), overtime work (Article 87), undertime not offset by overtime (Article 88), emergency overtime work (Article 89), and computation of additional compensation (Article 90). It is thus clear that, generally, managerial employees such as respondents are not entitled to overtime pay for services rendered in excess of eight hours a day. Respondents failed to show that the circumstances of the present case constitute an exception to this general rule.

SC agree with petitioners’ position that given the discretion granted to the various divisions of SMC in the management and operation of their respective businesses and in the formulation and implementation of policies affecting their operations and their personnel, the "no time card policy" affecting all of the supervisory employees of the Beer Division is a valid exercise of management prerogative. The "no time card policy" undoubtedly caused pecuniary loss to respondents. However, petitioners granted to respondents and other supervisory employees a 10% across-the-board increase in pay and night shift allowance, in addition to their yearly merit increase in basic salary, to cushion the impact of the loss. So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, Court will uphold them.