PAG-ASA STEEL WORKS, INC. vs.

CA
G.R. No. 166647

CALLEJO, SR., J.:

FACTS:

Petitioner Pag - Asa Steel Works, Inc. is a corporation duly organized and existing under
Philippine laws and is engaged in the manufacture of steel bars and wire rods.

Pag-Asa Steel Workers Union is the duly authorized bargaining agent of the rank – and - file
employees of the petitioner.

The CBA between the company and the union provided for a wage adjustment every July 1st for
the years 1999- 2000. In October of 1999, Wage Order # NCR - 07 was issued by Regional Tripartite
Wages and Productivity Board (Wage Board) of NCR providing for a Php25.50 per day increase in the
salary of minimum wage earners. This wage increase was paid accordingly by the petitioner. In July
2000, the rank and file employees were again given an increase in accordance with the provision of the
CBA. In November 2000, Wage Order # NCR - 08 was issued providing for a Php26.50 per day increase in
the salary of minimum wage earners, making the minimum wage Php250/day.

The Union President requested for the implementation of the wage order in favor of the rank
and file employees. Petitioner however refused because none of the employees were receiving a daily
salary rate lower than Php250, there was no wage distortion and it is not obliged to grant the wage
increase.

The parties subjected their disputes to voluntary arbitration wherein the arbitrator gave the
award in favor of the company,

The case was appealed to CA wherein it was reversed and decided in favor of the Labor Union.
The CA contended that the CBA is clear as to granting wage increases as ordered by the Wage Board in
addition to the CBA mandated salary increase. It was also held that it had been the company’s practice
to pay the said increase by the Wage Board.

Thus this instant petition

ISSUE:

WON the petitioner is obliged to grant the wage increase under Wage Order No. NCR -08 even if
all of its employees are already receiving a salary above P250 as a matter of practice?

Held:
 No, because it was clearly stated in the Wage Order that only those in private sector receiving
salaries below the prescribed minimum would be entitled to the salary increase. The fact that none of
the company employees are receiving a salary below the prescribed minimum, petitioner is not obliged
to grant the wage increase.

The contention that it had been the practice of the company to provide salary increase as
ordered by the Wage Board is found to be without merit as no proof was provided by the Labor Union to
support the claim. The petitioner contended that such increases by the wage board were only granted
because some of its employees were earning below minimum salary as provided by the Wage Board.

WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals in CA-
G.R. SP No. 65171 and Resolution dated January 11, 2005 are REVERSED and SET ASIDE. The Decision of
the Voluntary Arbitrator is REINSTATED. No costs.