Case Digest: Metropolitan Bank & Trust Company Employees Union v. NLRC, G.R. No. 102636, September 10, 1993

 Labor Law | Art. 124

Facts:

  • On 25 May 1989, Metropolitan Bank and Trust Company (MBTC) entered into a collective bargaining agreement with MBTC Employees Union (MBTCEU), granting a monthly P900 wage increase effective 01 January 1989, P600 wage increase 01 January 1990, and P200 wage increase effective 01 January 1991.
  • MBTCEU sought inclusion of probationary employees in the P900 increase, but MBTC refused, granting the increase only to regular employees as of 01 January 1989, excluding probationary employees.
  • Republic Act 6727, effective 01 January 1989, mandated a P25 per day increase in statutory minimum wage rates for private sector employees. It allowed crediting of recent increases, excluding certain types, and provided for resolution of disputes arising from wage distortions.
  • MBTC implemented the P25 increase for probationary employees and those promoted to regular status before 01 July 1989 but not for regular employees receiving more than P100 per day and recipients of the P900 CBA increase.
  • MBTCEU claimed a wage distortion, pointing to a reduced salary gap between employee groups due to the unequal implementation.
  • The case was referred to compulsory arbitration at the NLRC after the parties agreed to resolve the issue.

  • Labor Arbiter Eduardo J. Carpio: Ruled in favor of MBTCEU, directing MBTC to restore the P900 wage gap through a P750 monthly increase for affected employees.
  • NLRC Second Division: Reversed the decision, stating that the wage gaps between employee levels were maintained and the reduction was not significant enough to warrant correction.
WoN the implementation by the Metropolitan Bank and Trust Company of Republic Act No. 6727, mandating an increase in pay of P25 per day for certain employees in the private sector, created a distortion that would require an adjustment under said law in the wages of the latter's other various groups of employees. YES

Held:

The term "wage distortion", under the Rules Implementing Republic Act 6727, is defined, thus: 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.

The issue of whether or not a wage distortion exists as a consequence of the grant of a wage increase to certain employees, we agree, is, by and large, a question of fact the determination of which is the statutory function of the NLRC. Judicial review of labor cases, we may add, does not go beyond the evaluation of the sufficiency of the evidence upon which the labor official's findings rest. As such, factual findings of the NLRC are generally accorded not only respect but also finality provided that its decision are supported by substantial evidence and devoid of any taint of unfairness of arbitrariness. When, however, the members of the same labor tribunal are not in accord on those aspects of a case, as in this case, this Court is well cautioned not to be as so conscious in passing upon the sufficiency of the evidence, let alone the conclusions derived therefrom.

In this case, the majority of the members of the NLRC, as well as its dissenting member, agree that there is a wage distortion arising from the bank's implementation of the P25 wage increase; they do differ, however, on the extent of the distortion that can warrant the adoption of corrective measures required by law.

The definition of "wage distortion," aforequoted, shows that such distortion can so exist when, as a result of an increase in the prescribed wage rate, an "elimination or severe contraction of intentional quantitative differences in wage or salary rates" would occur "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 mandating an adjustment, the law did not require that there be an elimination or total abrogation of quantitative wage or salary differences; a severe contraction thereof is enough. As has been aptly observed by Presiding Commissioner Edna Bonto-Perez in her dissenting opinion, the contraction between personnel groupings comes close to eighty-three (83%), which cannot, by any stretch of imagination, be considered less than severe.

The "intentional quantitative differences" in wage among employees of the bank has been set by the CBA to about P900 per month as of 01 January 1989. It is intentional as it has been arrived at through the collective bargaining process to which the parties are thereby concluded. The Solicitor General, in recommending the grant of due course to the petition, has correctly emphasized that the intention of the parties, whether the benefits under a collective bargaining agreement should be equated with those granted by law or not, unless there are compelling reasons otherwise, must prevail and be given effect.

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, we must approximate an acceptable quantitative difference between and among the CBA agreed work levels. We, however, do not subscribe to the labor arbiter's exacting prescription in correcting the wage distortion. Like the majority of the members of the NLRC, we are also of the view that giving the employees an across-the-board increase of P750 may not be conducive to the policy of encouraging "employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed by statute or administrative regulation," particularly in this case where both Republic Act 6727 and the CBA allow a credit for voluntary compliance. As the Court, through Associate Justice Florentino Feliciano, also pointed out in Apex Mining Company, Inc. v. NLRC: 

. . . . (T)o compel employers simply to add on legislated increases in salaries or allowances 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. Clearly, this would be counter-productive so far as securing the interests of labor is concerned. . . .

We find the formula suggested then by Commissioner Bonto-Perez, which has also been the standard considered by the regional Tripartite Wages and Productivity Commission for the correction of pay scale structures in cases of wage distortion, to well be the appropriate measure to balance the respective contentions of the parties in this instance. We also view it as being just and equitable.

Minimum Wage = % x Prescribed = Distortion

—————— Increased Adjustment
Actual Salary

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