Nature of work determines status as managerial employee

The law defines managerial employees as 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 (Article 82, Labor Code).

The Implementing Rules of the Labor Code further elaborates on the matter by providing that before
an employee may be considered as a managerial employee, all the following conditions must be met:

(1) Their primary duty consists of the management of the establishment in which they are employed
or of a department or sub-division thereof.

(2) They customarily and regularly direct the work of two or more employees therein.

(3) They have the authority to hire or fire employees of lower rank; or their suggestions and
recommendations as to hiring and firing and as to the promotion or any other change of status of
other employees, are given particular weight (Book III, Rule I, Section 2, Omnibus Rules Implementing
the Labor Code).

On the other hand, an employee is considered as an officer or member of the managerial staff if he
performs the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies;

(2) Customarily and regularly exercise discretion and independent judgment; and

(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 supervision work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute, under general supervision, special assignments
and tasks; and

(4) Who do not devote more than 20 percent of their hours worked in a work week to activities
which are not directly and closely related to the performance of the work described in paragraphs (1),
(2) and (3) above (Book III, Rule I, Section 2, Omnibus Rules Implementing the Labor Code).

The foregoing provisions show that it is not the designation of an employee that ultimately determines
his status as managerial employee, but rather the nature of his work. Thus, if you do not meet all the
conditions prescribed by the Omnibus Rules, despite your designation as manager, you are not a
managerial employee which means you are entitled by law to overtime pay. On the other hand, if you
meet all the conditions, you are considered a managerial employee and thus, is not covered by the
law on overtime. In the latter’s case, you may refer to your contract, or policy and practice of your
company concerning over–time to determine if you have a right to additional compensation.

DOLE Order No. 147-2015

Sec. 4 (I): “Insubordination” refers to refusal to obey some order, which a superior is entitled to give
and have obeyed. It is a willful or intentional disregard of the lawful and reasonable instructions of the
employer.