Published — February 13, 2019
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Related Article: Issuance of payslips and maintenance of payroll
Running a business follows that the owner should know the basic labor policies to ensure compliance thereto. It includes knowing the basics on how to compute the compensation of his employees. A common inquiry of employees is the addition to their gross pay of overtime work pay.
Overtime Work defined
Overtime work is defined as work beyond the eight (8) hours prescribed. Normally, employees are required to render eight (8) hours of work per day unless the company is observing the compressed work week.
An employee who renders overtime work provided it is substantiated by proof “may be given an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. While “work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof” (Article 87 of the Labor Code of the Philippines”).
Coverage
Article 82 of the Labor Code of the Philippines provides to wit:
“The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate 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 members of the managerial staff.
“Field personnel” shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty”.
Not all employees are covered by the provisions of Labor Code of the Philippines. Article 82 of the Labor Code specifically delineates who are entitled to the overtime premiums and other pay premiums of the Labor Code and the exemptions thereto.
Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards which provides the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days. Under this provision, managerial employees are those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision.
The Implementing Rules of the Labor Code state that managerial employees are those who meet the following conditions:
(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof;
(2) They customarily and regularly direct the work of two or more employees therein;
(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 employees are given particular weight (Pearanda v. Baganga Plywood Corporation, G.R.No. 159577, May 3,2006).
In the case Salazar v. NLRC, G.R. No. 109210, April 17,2016, petitioner confirmed that his job was to supervise the laborers in the construction project. Hence, although petitioner cannot strictly be classified as a managerial employee under Art. 82 of the Labor Code, and Sec. 2(b),Rule 1, Book III of the Omnibus Rules Implementing the Labor Code, nonetheless he is still not entitled to payment of the afore-stated benefits because he falls squarely under another exempt category – officers or members of a managerial staff as defined under Sec. 2(c) of the abovementioned implementing rules and therefore has no legal claim to the said benefits. It is well and good that petitioner was compensated for his overtime services. However, this does not translate into a right on the part of petitioner to demand additional payment when, under the law, petitioner is clearly exempted therefrom.
Overtime work must be proven
Entitlement to overtime pay must first be established by proof that the overtime work was actually performed before the employee may properly claim the benefit. The burden of proving entitlement to overtime pay rests on the employee because the benefit is not incurred in the normal course of business. Failure to prove such actual performance transgresses the principles of fair play and equity(Robina Farms Cebu v. Elizabeth Villa, G.R.No. 175869, April 28,2016).
In the case of Pigcaulan v. Security and Credit Investigation, Inc., G.R. No. 173648, January 16,2012, the Court ruled that “the handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove that the two were underpaid of their salaries. We find nothing in the records which could substantially support Pigcaulan’s contention that he had rendered service beyond eight hours to entitle him to overtime pay and during Sundays to entitle him to rest day pay. Hence, in the absence of any concrete proof that additional service beyond the normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay”.
While in the case of Labadan v. Forest Hills Academy, G.R. No. 172295, December 23,2008, the Court ruled that petitioners claims for overtime pay must be denied, for other than the uncorroborated affidavits of her colleagues, there is no concrete proof that she is entitled thereto.
Hence, the mere fact that an employee rendered overtime work is not sufficient to claim overtime payment. It must be substantiated by actual and concrete proof that indeed overtime work has been performed.
When overtime is required
Article 89 of the Labor Code of the Philippines provides for Emergency Overtime Work wherein
“Any employee may be required by the employer to perform overtime work in any of the following cases:
(a) When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive;
(b) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
(c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature;
(d) When the work is necessary to prevent loss or damage to perishable goods; and
(e) Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.
Undertime cannot be offset by Overtime
Article 88 of the Labor Code states that “undertime work on any particular day shall not be offset by overtime work on any other day”.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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