Almirante: Fiduciary rank and file employee

Dominador A. Almirante
·4 min read

On June 7, 2009, petitioner Fiamette A. Ramil was hired as spa supervisor and massage therapist at respondent’s establishment, Stoneleaf Spa and Wellness Center. She was paid a monthly salary of P10,000 and P100 per massage service rendered.

On Sept. 27, 2012, respondent terminated her services due to serious misconduct, betrayal of trust and loss of confidence. She filed a complaint for illegal dismissal against respondent, praying for reinstatement, unpaid commission, labor standard benefits and attorney’s fees.

She further claimed that she was fired on the same day that she was notified of her dismissal without affording her due process.

The National Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter (LA) holding that Ramil was not a managerial employee and was awarded service incentive leave pay and holiday pay for three years, pro-rated 13th month pay and attorney’s fees. The Court of Appeals (CA) modified the NLRC decision and held that Ramil was a supervisory/managerial employee.

Consequently, she was not entitled to 13th month pay, holiday pay, service incentive leave pay and attorney’s fees.

Did the CA err?

Ruling: Yes.

The records show that Ramil does not have the prerogative to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The scope of her assignment pertains to the daily operation of the spa by making sure that the business runs smoothly. However, her tasks do not include the regular exercise of discretion. Her authority is limited to the execution of company procedures and policies. She has plenty of administrative work, but none of it involves the use of independent judgment. Her duties are also subject to De Guzman’s approval.

The Court concurs with the NLRC’s conclusion that Ramil is not a managerial employee, but a rank-and-file employee.

Specifically, she is a fiduciary rank-and-file employee. Weleyan University Phils. v. Reyes, 740 Phil. 297, 311 (2014), defines a fiduciary rank-and-file employee as one who in the normal and routine exercise of his/her functions regularly handles significant amounts of money or property. Cashiers, auditors and property custodians are some of the employees in the second class.

Here, Ramil regularly handles significant amounts of money or property in the normal and routine exercise of her functions. She was in charge of the facilities of the spa by making sure it is in good condition and that the items needed are in full stock all the time. She was also in charge of the sales of the spa when she took over the duties of the receptionist/cashier. In fact, Stoneleaf admitted in its comment that she was entrusted with the finances of the spa, including the handling of cash receipts, billing statements, and the care of the spa’s property.

Therefore, Ramil is a fiduciary rank-and-file employee, and she is entitled to service incentive leave pay, holiday pay and pro-rated 13th month pay. She is also entitled to attorney’s fees equivalent to 10 percent of the monetary award, because she was compelled to file a complaint to protect her interests.

The Court disagrees with Stoneleaf’s argument that Ramil is a corporate officer. While the Articles of Incorporation states that she is one of the incorporators, Stoneleaf was unable to rebut Ramil’s claim that she has no capital contribution to the corporation. She is merely an incorporator on paper, but not in fact. There was no proof that she participated in any corporate meeting or exercised functions related to a corporate officer.

The Court observes that Stoneleaf was not able to demonstrate how Ramil recommends managerial actions that would make her a managerial employee. What is clear was Stoneleaf’s admission that Ramil oversees the daily operation of the spa and supervises the employees.

Stoneleaf admitted the scope of assignment given to her.

In sum, Ramil was able to overcome the burden of proving that she is a fiduciary rank-and-file employee, while Stoneleaf was unable to show evidence that she is a corporate officer. Ramil is entitled to service incentive leave pay, holiday pay, pro-rated 13th month pay, and attorney’s fees equivalent to 10 percent of the monetary award. Pursuant to Nacar v. Gallery Frames, 716 Phil. 267, 283 (2013), the monetary awards are subject to six percent interest per annum from the finality of this decision until fully paid. (Fiamette A. Ramil vs. Stoneleaft Inc., et al., G.R. 222416, June 17, 2020).