A construction engineer received a monthly salary of P4,500 in the 1990s.  In addition to the engineer’s salary, his employer orally agreed to give him a share in the profits after the project’s completion.  The employer also agreed that the construction engineer would be entitled to an overtime rate of P27.85 per hour for any work rendered in excess of the eight hours of work per day, or during the weekends and legal holidays.

After one year, the employer informed the construction engineer of his termination “due to the impending completion of the aforementioned project and the lack of upcoming contracted works for our company in the immediate future” without any prejudice to his re-employment for local and overseas projects if the need for his services would arise in the future.  Outraged, the construction engineer filed a complaint against his employer for illegal dismissal and, among others, overtime pay, premium pay for holidays, rest days, and service incentive leave pay with the National Labor Relations Commission (NLRC).  The Labor Arbiter (LA), however, dismissed the complaint for lack of merit.  In his decision, the LA ruled that the construction engineer was a managerial employee.  As such, he was “exempt from payment of benefits such as overtime pay, service incentive leave pay, and premium pay for holidays and rest days” under the law.  On appeal, the NLRC affirmed the LA’s decision.

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