Case Digest: Juana T. Vda. de Racho v. Municipality of Ilagan, G.R. No. L-23542, January 2, 1968

Labor Law | Art. 99 Minimum Wage

Facts: 

Juana T. Vda. de Racho was the widow of Manuel Racho.

In 1954, Manuel was appointed as a market cleaner in the Municipality of Ilagan, Isabela. He was paid P 55.00 monthly.

In 1958, he was promoted and his salary increased to P 60.00 monthly.

In 1960, he tendered his resignation. He died the same year.

Juana filed a claim for salary differentials from 1957 - 1960 based on the monthly wage rate of P 120.00 pursuant to the Minimum Wage Law.

The Municipality of Ilagan claimed that its shortage and lack of available funds and expected revenue validly exempted it from complying with the Minimum Wage Law.

Issue: 

WoN the Municipality of Ilagan is validly exempted from complying with the Minimum Wage Law. NO

Held:

The appeal must be dismissed. We have already answered the question posed in Rivera vs. Colago, L-12323, February 24, 1961, wherein We ruled that lack of funds of a municipality does not excuse it from paying the statutory minimum wages to its employees, which, after all, is a mandatory statutory obligation of the municipality. To uphold such defense of lack of available funds would render the Minimum Wage Law futile and defeat its purpose. This also disposes of the implication appellant is trying to make that its duty to pay minimum wages is not a statutory obligation which would command preference in the municipal budget and appropriation ordinance. 

Moreover, We cannot sanction appellant's proposition that it would eventually and gradually implement the Minimum Wage Law, "if and when its revenues can afford." The law — insofar as it affects government employees — took effect in 1952. It should have been implemented — or at least steps to implement it should have been taken — right then. To excuse the defendant municipality now would be to permit it to benefit from its non-feasance. It would also make the effectivity of the law dependent upon the will and initiative of said municipality without statutory sanction. Defendant's remedy, therefore, is not to seek an excuse from implementing the law but, as the lower court suggested, to upgrade and improve its tax collection machinery with a view towards realizing more revenues. Or, it could for the present forego all non-essential expenditures.

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