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 banks 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 associations 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 banks 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.