In determining whether an employee is managerial or supervisory, designation

should be reconciled with the actual job description. the mere fact than an employee is
designated manager does not necessarily make him one. Otherwise, there would be an
absurd situation where one can be given the title just to be deprived of the right to be a
member union. In the case of National Steel Corporation vs. Laguesma, [G.R. No. 103743,
January 29, 1996]. it was stressed that : “What is essential is the nature of the employee’s
function and not the nomenclature or title given to the job which determines whether
the employee has rank-and-file or managerial status, or whether he is a supervisory
employee.” (Pepsi-Cola Products Philippines, Inc. vs. Hon. Secretary of Labor, et. al., G.R. No. 96663 and Pepsi-Cola
Products Philippines, Inc. vs. Office of the Secretary, DOLE, et.al., G.R. No. 103300, August 10, 1999; Dunlop Slazenger
[Phils.], Inc. vs. Secretary of Labor and Employment, et. al., G.R. No.131248, December 11, 1998, 300 SCRA 120, citing
Engineering Equipment, Inc. vs. NLRC, et.al., 133 SCRA 752[1984]).

The test of managerial status has been defined as an authority to act in the
interest of the employer, which authority is not merely routinary or clerical in nature
but requires the use of independent judgment. (Magos vs. NLRC, et al., G.R. No. 123421, December 28,
1998; Dunlop Slazenger [Phils.], Inc. vs. Secretary of Labor and Employment, et. al., G.R. No.131248, December 11, 1998, 300
SCRA 120; Pier 8 Arrastre and Stevedoring Services, Inc. vs. Confesor, et al., G.R. No. 110854, February 13,1995, 241 SCRA
294,304; Franklin Baker Co. vs. Trajano, 157 SCRA 416, 422 [1988]).

The term “manager” generally refers to “anyone who is responsible for subordinates
and other organizational resources.” As a class, managers constitutes three levels of a
pyramid:
Top Management

Middle Management

First-Line Management
(also called Supervisor)

Operatives or Operating Employees

First Line Managers. – The lowest level in an organization at which individuals

are responsible for the work of others is called first-line or first level management. First-
line managers direct operating employees only; they do not supervise other managers.
Examples of first-line managers are the “foreman” or production supervisor in a manufacturing
plant, the technical supervisor in a research department, and the clerical supervisor in a large
office. First-level managers are often called supervisors.

Middle Managers. – The term middle management can refer to more than one
level in organization. Middle managers direct the activities of other managers and
sometimes also those operation employees. The middle managers’ principal
responsibilities are to direct the activities that implement their organization’s policies
and to balance the demands of their superiors with the capacities of their subordinates.
A plant manager in an electronic firm is an example of a middle manager.

Top Managers. – Composed of a comparatively small group of executives, top

management is responsible for the overall management of organization. It establishes
operating policies and guides the organization’s interactions with its environment.
Typical titles of top managers are “chief executive officer”, “president”, and “senior
vice-president.” Actual titles vary from one organization to another and are not always
a reliable guide to membership in the highest management classification.

As can be seen from the foregoing description, a distinction exists between those
who have the authority to devise, implement and control strategic and operational
policies (top and middle managers) and those whose task is simply to ensure that such
policies are carried out by the rank-and-file employees of an organization (first-level
managers/supervisors). What distinguishes them from the rank-and-file employees is
that they act in the interest of the employer in supervising such rank-and-file
employees.

“Managerial employees” may, therefore, be said to fall into two (2) distinct
categories: the “managers” per se. who compose the former group described above, and
the “supervisors” who form the latter group. Whether they belong to the first or the
second category, managers, vis-à-vis employers are, likewise, employees. (Paper Industries
Corporation of the Philippines vs. Laguesma, et al., G.R. No. 101738, April 12, 2000; United Pepsi-Cola Supervisory Union
[UPSU] vs. Laguesma, et al., G.R. No. 122226, March 25, 1998, 288 SCRA 15, 21-23 citing James A.F. Stoner & Charles
Wankel, Management II, 3rd ed., 1987; Atlantic Gulf & Pacific Co. of Manila vs. Court of Industrial Relations, 113 Phil. 650
[1961]).

The principal distinction between managerial employees and supervisory

employees is: the former have the power to decide and do managerial acts; while the
latter have the power only to recommend managerial acts such as laying down policy,
hiring or dismissal of employees and the like.

A managerial employee may not necessarily be a manager if he has no power to

lay down and execute management policies, hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. (Reynolds Corporation vs. Eslava, 137 SCRA 259; D.M.
Consunji, Inc. vs. NLRC, et al., 143 SCRA 204).

The test of “supervisory” or “managerial” status depends on whether a person

processes authority to act in the interest of his employer on the matter specified in
Article 212 (k) [now Article 212 (m)] of the Labor Code and Section 1 (m) [now Section 1
(t)] of its Implementing Rules, and whether such authority is not merely routinary or
clerical in nature, but requires the use of independent judgment. Thus, where such
recommendatory powers are subject to evaluation, review and final action by the
department heads and other higher executives of the company, the same, although
poresent, are not effective and not an exercise of independent judgment as required by
law. (Franklin Baker Co. vs. Trajano, 157 SCRA 416, [1988]; Southern Philippines Federation of Labor vs. Ferrer-Calleja, et
al., 172 SCRA 676 [1989]; Golden Farms, Inc. vs. Ferrer-Calleja, et al., G.R. No. 78755, July 19,1989; Pier 8 Arrastre and
Stevedoring Services, Inc. vs. Confesor, et al., G.R. No. 110854, February 13,1995, 241 SCRA 294; Engineering Equipment,
Inc. vs. NLRC, et al., 133 SCRA 752; National Waterworks and Sewerage Authority vs. NWSA Consolidated Unions, 11
SCRA 766; National Warehousing Corporation vs. CIR, et al., 7 SCRA 602 [1963]; Kapisanan ng mga Manggagawa vs. CIR, et
al., 106 Phil. 607; Magalit vs. CIR, et al., 14 SCRA 72).

In one case, the Supreme Court declared the department managers, branch
managers, cashiers and controllers of a bank as not managerial employees but
supervisory employees. The reason is, they do not participate in policy-making but are
given approved and established policies to execute and standard practices to observe.
However, said branch managers, cashiers and controllers, being confidential
employees, are disqualified from joining or assisting or forming any labor organization.
(National Association of Trade Unions [NATU]- Republic Planters Bank Supervisors Chapter vs. Torres, et al., G.R. No. 93468,
December 29, 1994; Franklin Baker Company of the Philippines vs. Trajano, G.R. No. 75039, January 28, 1988, 157 SCRA
416).