Case Digests on Wages (Labor)

Cagayan Sugar Milling Company (CARSUMCO) vs. Secretary of Labor and Employment, Director Ricardo S. Martinez, Sr., and CARSUMCO Employees Union G.R. No. 128399 January 15, 1998 PUNO, J.:

Facts: On November 16, 1993, Regional Wage Order No. RO2-02 was issued by the Regional Tripartite Wage and Productivity Board (RTWPB) of the Department of Labor and Employment (DOLE). On September 12 and 13, 1994, labor inspectors from the DOLE Regional Office examined the books of the petitioner CARSUMCO to determine its compliance with the wage order and found that it did not implement an across the board increase in the salary of its employees. At the hearing for the alleged violation, CARSUMCO maintained that it paid the mandated increase in the minimum wage. In an Order dated December 16, 1994, the public respondent Regional Director Ricardo S. Martinez, Sr. ordered CARSUMCO to pay the deficiency in the salary of its employees in the total amount of P555,133.41. On January 6, 1995, CARSUMCO appealed to the public respondent Labor Secretary Leonardo A. Quisumbing. On October 8, 1996, Quisumbing dismissed the appeal, affirmed the Order and denied the motion for reconsideration. On February 12, 1997, the private respondent CARSUMCO Employees Union moved for execution of the December 16, 1994 Order. Martinez, Sr. granted the motion and issued the writ of execution. On March 4, 1997, CARSUMCO moved for reconsideration to set aside the writ. On March 5, the DOLE regional sheriff served on CARSUMCO a notice of garnishment of its account with the Far East Bank and Trust Company. On March 10, the sheriff seized petitioner's dump truck and scheduled its public sale on March 20, 1997. The Court issued a temporary restraining order (TRO) enjoining the respondents from enforcing and conducting further proceedings until further orders.

Issues: Whether or not the Wage Order is null and void for having been issued in violation of the procedure provided by law and of the petitioner's right to due process of law Whether or not the Wage Order clearly provided for the fixing of a statutory minimum wage rate, not an across the board increase in wages

Ruling: Wage Order No. RO2-02, passed on November 16, 1993, provided for an increase in the statutory minimum wage rates for Region II. More than a year later, or on January 6, 1995, the Regional Board passed Wage Order RO2-02-A amending the earlier wage order and providing instead for an across the board increase in wages of employees in Region II, retroactive to the date of effectivity of Wage Order RO2-02. CARSUMCO assails the validity of Wage Order RO2-02-A on the ground that it was passed without the required public consultation and newspaper publication. Article 123 of the Labor Code provides: "ART. 123. Wage Order. Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts, and, based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage Order should be issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1) newspaper of general circulation in the region. In the performance of its wage-determining functions, the Regional Board shall conduct public hearings/consultations, giving notices to employees' and employers' groups and other interested parties. x x x" The record shows that there was no prior public hearings/consultations and newspaper publication insofar as Wage Order No. RO2-02-A is concerned. In fact, these allegations were not denied by the public respondents in their Comment. Their position is that there was no need to comply with the legal requirements as Wage Order No. RO2-02-A merely clarified the ambiguous provision of the original wage order.

Metropolitan Bank and Trust Company Employees Union-ALU-TUCP (MBTCEU) and its President Antonio V. Balinang vs. National Labor Relations Commission (NLRC) and Metropolitan Bank And Trust Company G.R. No. 102636 September 10, 1993 VITUG, J.:

Facts: On May 25, 1989, the bank entered into a collective bargaining agreement (CBA) with the MBTCEU, granting only regular employees a monthly P900 wage increase effective January 1, 1989, P600 wage increase effective January 1, 1990, and P200 wage increase effective January 1, 1991. Barely a month later, or on January 1, 1989, Republic Act No. 6727, "An act to rationalize wage policy determination by establishing the mechanism and proper standards thereof, . . . fixing new wage rates, providing wage incentives for industrial dispersal to the countryside, and for other purposes," took effect. Pursuant to the provisions, the bank gave the P25 increase per day, or P750 a month, to its probationary employees and to those who had been promoted to regular or permanent status before July 1, 1989 but whose daily rate was P100 and below. Contending that the bank's implementation resulted in the categorization of the employees and that, between the two groups, there emerged a substantially reduced salary gap, the MBTCEU sought the correction of the alleged distortion in pay. In order to avert an impending strike, the parties ultimately agreed to refer the issue for compulsory arbitration to the NLRC.

Issue: Whether or not the bank’s implementation of R.A. 6727 created a distortion that would require an adjustment in the wages of its other employees

Ruling: The term “wage distortion” means a situation where an increase in prescribed wage rates results in the elimination or severe contradiction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. In keeping then with the intendment of the law and the agreement of the parties themselves, along with the often repeated rule that all doubts in the interpretation and implementation of labor laws should be resolved in favor of labor, an acceptable quantitative difference between and among the CBA agreed work levels must be approximated.

Producers Bank of the Philippines vs. National Labor Relations Commission (NLRC) and Producers Bank Employees Association G.R. No. 100701 March 28, 2001 Gonzaga-Reyes, J.:

Facts: On February 11, 1988, the private respondent association filed a complaint with the NLRC, charging the petitioner bank with diminution of benefits, noncompliance with Wage Order No. 6 and non-payment of holiday pay, and praying for damages. On March 31, 1989, Labor Arbiter Nieves V. de Castro found the claims to be unmeritorious and dismissed the complaint. In a complete reversal, however, the NLRC granted all of the association’s claims, except for damages. The bank is ordered to pay the unpaid bonus (mid-year and Christmas bonus) and 13 th month pay; wage differentials under Wage Order No. 6 for November 1, 1984 and the corresponding adjustment thereof; and holiday pay under Article 94 of the Labor Code, not exceeding three (3) years. In a Resolution issued on June 18, 1991, the NLRC denied the bank’s Motion for Partial Reconsideration. Wage Order No. 6, which came into effect on November 1, 1984, increased the statutory minimum wage of workers, with different increases being specified for agricultural plantation and non-agricultural workers. Section 4 thereof reads “Section 4. All wage increase in wage and/or allowance granted by employers between June 17, 1984 and the effectivity of this Order shall be credited as

compliance with the minimum wage and allowance adjustments prescribed herein provided that where the increases are less than the applicable amount provided in this Order, the employer shall pay the difference. Such increases shall not include anniversary wage increases provided in collective bargaining agreements unless the agreement expressly provide otherwise.”

Issue: Whether or not the bank complied with Wage Order No. 6

Ruling: The creditability provision in Wage Order No. 6 is based on an important public policy - the encouragement of employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed. The Court held in Apex Mining Company, Inc. v. NLRC that: “[t]o obliterate the creditability provisions in the Wage Orders through interpretation or otherwise, and to compel employers simply to add on legislated increases without regard to what is already being paid, would be to penalize employers who grant their workers more than the statutorily prescribed minimum rates of increases. The creditability provisions in the Wage Orders prevent the penalizing of employers who are industry leaders and who do not wait for statutorily prescribed increases and pay their workers more than what is required.”