G.R. No. L-32630. April 30, 1979
PHILIPPINE NATIONAL RAILWAYS, PETITIONER, VS. UNION DE MAQUINISTAS, FOGONEROS Y MOTORMEN, KAPISANAN NG MGA MANGGAGAWA SA PEROKARIL, AND THE COURT OF INDUSTRIAL RELATIONS, RESPON…
MAKASIAR, J.:
This is a petition for certiorari to review the order (Exh. G, pp. 183-198, rec.) and resolution (Exh. I, pp.
232-236, rec.), respectively dated March 30, 1970 and August 26, 1970 of
respondent Court of Industrial Relations in CIR Case No. 50-IPA entitled
“Union de Maquinistas y Motormen, et al. versus
Philippine National Railways.”
On September 12, 1964, the respondent unions, Union de Maquinistas, Fogoneros y
Motormen, hereinafter referred to as the Maquinistas,
and the Kapisanan ng mga Manggagawa sa Perokaril, hereinafter
referred to as the Kapisanan, declared a strike
because of the inequities in the salaries of the members of the respondent
unions compared to that of the Mechanical Department Labor Union, another union
of employees in the petitioner’s establishment.
In a decision dated September 21, 1964, respondent Court of
Industrial Relations, finding that there were inequities in the wages of the
workers, granted a staggered wage increase of 20% and 15% respectively to the
members of the Maquinistas and Kapisanan
for a period of four years until September, 1968. The respondent Court likewise commended the
move of the general manager of the PNR to standardize the salaries of the
employees and recommended the formation of a management-labor panel, where all
the thirteen unions in the company will be properly represented, to study the
matter of salary standardization of all employees of the company and establish
the true foundation of standardized salaries for all, under the theory of equal
pay for equal work.
However, on February 18,
1965, the management of the PNR extended the 20% salary increase to
all the employees of the company, thereby reverting
the situation to where it was before the 1964 strike. Respondent unions protested and petitioner
PNR tried to placate the members. Hence,
the following negotiations ensued:
“January 12, 1968
“Col. NICANOR T. JIMENEZ
General Manager
Philippine National
Railways
Manila
S i r :
“I understand that the present management is very much
interested in solving the remaining inequities with regards to the salaries of
employees in the Philippine National Railways.
The undersigned President of the Union de Maquinistas,
Fogoneros y Motormen, believes that the salaries of
its members are behind as compared to other group of employees, especially the
employees under the Mechanical Department Labor Union, after the Job Evaluation
was granted to them by the previous administration. While it is also true that to compare the
risk, hazards, responsibility and human endurance is none comparable to other
group of employees. We will therefore
submit a scale salary standardization during our
conference.
“In addition to the above demand, we are attaching our other
demands as annex ‘A’ hereof. We are
willing however that these demands be differed (sic) pending the consideration
of the above cited demands.
“In this connection, we propose that the Union officers and
management panel must have an early conference to thresh out means and ways to
solve this sad plight of the Engine crews as what had been granted to others.
“Hoping that this request be given due course at the earliest
possible time convenient to you.
Very respectfully,
(SGD.) JOSE S. CAPISTRANO
President
[Annex ‘A’ p. 65, rec.]
“February 13, 1968
Mr. Jose Capistrano
President, UMFAM
Manila
S i r :
Your letter of January 12th seeking justice to resolve the alleged
existing inequities in pay of the employees covered by the collective
bargaining unit of the Union de Maquinistas, Fogoneros y Motormen was initially taken up in our Panel
meeting this morning, but was at a loss to deliberate on it further due to the
absence of your Union proposal on the matter.
“In view of the unresolved position with which the Management
Panel could present in meeting your Union Panel on the matter, we request to
temporarily postpone our scheduled negotiation for this week until after your Union
submits its proposal and the Management Panel has the opportunity to study the
same.
Yours truly,
Original signed by:
PACIFICO M. CRUZ
Vice Chairman”
[Annex ‘B’, p. 66, rec.]
“February 14, 1968
“Mr. Pacifico
M. Cruz
Vice Chairman
Management Panel
Philippine National Railways
S i r :
“I acknowledge receipt of your letter dated February 13, 1968 requesting the
proposal of the Union with regards to my letter January 12, 1968 seeking justice to
resolve the existing inequities in pay of the employees who are members of the
Union de Maquinistas, Fogoneros
y Motormen.
“In compliance therewith the following are the proposal of the
Union:
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“I want to make it clear that the Chief Engine Crew
Dispatcher, Asst. Engine Crew Dispatcher, Dist. Engine Crew Dispatcher and Asst.
are not permanent because these are being selected or assign(ed) by means of
election.
Yours truly,
(SGD.) JOSE S. CAPISTRANO
President
Union de Maquinistas, Fogoneros
y
Motormen”
[Annex ‘C’, p. 67, rec.]
“May 10, 1968
“Mr. Jose S.
Capistrano
President, Union de Maquinistas,
Fogoneros
y Motormen
850
Arqueros St., Tondo
Manila
S i r :
“This is in connection with the negotiation this morning
regarding your Union’s request for salary adjustments of Engine Crew personnel
to correct the alleged inequities resulting from the extension of the grant of
20% staggered increase under case No. 50-IPA to all other employees of the
Company, particularly employees company covered by the Mechanical Department
Labor Union. In counter proposal to your
proposed salary rates the management panel submitted a salary plan which with a
little modification was acceptable to your Union, to
wit:
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“I fully appreciate your position and believe in the justification
for your request. I wish to let you know
therefore that I have directed that the hereinabove salary rates be included in
the final consolidation of the budget and plantilla of the Company for
fiscal year 1968-1969. Please be
further advised that should there be any changes as a result of the final
review of the Company’s budget proposal we will consult with you before such
changes are made.
“This advance information is furnished so that you can report
to your members the progress of the negotiations.
Very truly yours,
(SGD.)
NICANOR T. JIMENEZ
General Manager”
[Annex ‘D’, p. 68, rec.].
From the above, it is clear that the general manager of
petitioner PNR finally agreed to a standard salary scale for the members of the
Maquinistas.
These salaries represented a graduated increase in monthly salaries from
P10.00 in the case of third class fogoneros to P27.00
in the case of first class maquinistas. However, the inclusion of the above salary
rates in the final consolidation of the budget and plantilla
of the Company for the fiscal year 1968-1969 failed to materialize for the
matter was deferred by the Company board of directors.
On July 23, 1968,
the Maquinistas filed a notice of strike (p. 35, rec.)
against the petitioner for violation of the duty to bargain and to implement
what has been bargained upon in good faith.
An urgent motion (pp. 36-41, rec.) dated July 24, 1968 was filed in court by petitioner
praying that:
“(a) This Honorable
Court immediately call the parties to a hearing/conference for the purpose of
settling their disputes in order that industrial peace may be maintained in
respondent Company;
“(b) Pending final settlement of said disputes,
that this Court issue a writ of injunction enjoining the Union de Maquinistas, Fogoneros y
Motormen, its officers, members or agents from striking against respondent
Company, or if they have already done so, to immediately order them to return
to work under the last terms and conditions existing prior thereto.”
In a subsequent conference called by the respondent Court, the Maquinistas submitted to the court’s jurisdiction, and
stated that they were litigating on the merits of their case and foregoing the
planned strike. (p. 5
of respondent Unions’ Brief, p. 357, rec.).
On August 26, 1968, to placate the members of the other unions,
petitioner PNR offered a company-wide salary standardization plan which was
approved in principle by the PNR board of directors in 1965 (p. 83, rec.). The Kapisanan disagreed
with this kind of plan because it was based on a P4.00 minimum wage which was
obsolete since the minimum wage was already increased to P6.00 in April, 1965
and was to be increased further to P8.00.
Also on August 26, 1968, the PNR Supervisors Association filed a
manifestation stating, among others, that it entered on August 11, 1967 with
the Philippine National Railways into a Memorandum of Agreement, in which the
parties agreed to a categorization and adjustment of salaries of supervisory
personnel; that the said memorandum agreement has not been fully implemented
although full implementation may be made in due time; that there is no
standardization of salaries of supervisors in the Company but hoped and
expected for one in due time; and that the 20% salary increases granted to
supervisors when the decision of respondent CIR of September 21, 1964 was
extended to them, be based on the agreed categorized or standardized salaries
of supervisors (see allegation VI of petition, pp. 13-14, rec;
p. 6 of petitioner’s brief, p. 355, rec.; Exhibit “E”, pp. 138-140;
Annex “A” of Exh. “E”,
pp. 141-150, rec.; and p. 6 of respondent Unions’ Brief, p. 357, rec.). However, this manifestation was
withdrawn because the PNR board of directors decided to implement the salary
increases of the supervisors by approving the memorandum of its general manager
dated May 20, 1969 and by issuing resolution No. 375 (pp. 252-253, rec.;
allegation 5 of respondent Unions’ Answer, pp. 284-285), to wit:
“Res. No. 375
“WHEREAS, the General Manager submitted his memorandum dated May 20, 1969, reading as follows:
‘This has reference to the case of the remaining 60% of the
categorized salaries of the supervisors of the Company which they have
withdrawn from the Court of Industrial Relations. In connection therewith, I would like to
recommend the following:
1. That the remaining 60% shall be implemented
as follows:
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2. That the remaining portion, after the
partial implementation of the 60% shall be incorporated in the Budget and Plantilla of the Company for fiscal year 1969-1970;
3. That the implementation of the partial payment
of the 60% categorized salaries shall be effective July 1, 1968 but payment starts April 1969;
4. That the arrears since July 1968 to March
1969 shall be paid in accordance with the pattern that the remaining 5% of the
20% staggered salary increase shall be paid; and
5. That the amount of P112,667.64
be appropriated for the partial implementation of the 60% categorized salary.
‘It will be noted that the original appropriation required for the
full implementation of the remaining 60% amounts to P179,544.67
per annum. With the plan of partial
implementation herein above described, the cash outlay required will be chopped
down to P125,063.92.
‘Noting that the list of officers and employees whose salaries were
categorized includes some whose positions are non-supervisory, attention of the
PNR Supervisors’ Association was called upon.
The association recognizes this observation and agrees to delete these
positions from the list without prejudice to further study of the matter. Consequently, the amount required will
further be reduced to P112,667.64.’
“WHEREAS, after perusal of the above memorandum this Board
expressed accedence on the proposals contained
therein; NOW, THEREFORE –
“RESOLVED, That the implementation of
the remaining 60% of the categorized salaries of the Supervisors of the PNR as
proposed above by the General Manager, be, and it hereby is, approved in toto.”
The MARMEDENA, a union of physicians, dentists and nurses, also
withdrew their intervention in the case after petitioner PNR granted their
salary increases by virtue of resolution No. 417 which approved the memorandum
of the general manager dated May 29, 1969 (pp. 249-251, rec.), to wit:
“Res. No. 417
“Whereas, in a letter to the Management dated May 23, 1969, the President of the MARMEDENA, wrote the following:
‘Sir:
‘Pursuant to our collective Bargaining Agreement the Part-time
physicians are entitled to the adjustment of their salaries. However, they are not given adjustments in
the adjustment of salaries recently made.
‘As these physicians are members of the MARMEDENA, I would like to
request that they should also be given the 5% increase which is given to other
employees of the Company. As of this
date they are receiving 15% increase based on their basic pay.
‘Hoping to hear from you.
Yours truly,’
“Whereas, in view thereof the following memorandum dated May 29, 1969, was submitted by the
General Manager, to wit:
‘One of the cases in the Court of Industrial Relations under the Case
No. 50-IPA involves the salary adjustments of higher category position within
the bargaining unit of the MARMEDENA.
This case was withdrawn from the Court for negotiations between
MARMEDENA and the management. The
following were agreed upon.
‘1. That the following are the adjustments
to be made:
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‘2. That the adjustments
shall be made effective July 1, 1968;
and the payment starts April and followed every month thereafter; and
‘3. That the arrears from July 1968 to March 1969
shall be paid in the same pattern as the 5% of the 20% staggered salary
increase will be paid.
‘Approval of the foregoing is recommended together with the
appropriation of P23,241.10.
‘Together with this, the appropriation of P1,848.00
is likewise requested to provide for the payment of the remaining 5% of the 20%
staggered salary increase to the part time physicians.’
“Whereas, this Board felt the propriety of the instant
proposal; NOW, THEREFORE –
“Resolved, That the proposal of the
General Manager as above recommended be, and it hereby is, approved.”
Then on May 9, 1969, petitioner PNR filed a motion to withdraw
(pp. 151-158, rec.) its alternative proposal to defer for another year the
salary increase pursuant to the CIR decision of September 21, 1964 and to split
the remaining 5% fifth installment due September 1, 1968 in the following
manner: 2% to be paid on September 1,
1968 and 3% to be paid on September 1, 1969 contained in its August 28, 1968
manifestation. Consequently, only the
other alternative proposal remained, that is, the approval and adoption of the
Company-Wide Salary Standardization Plan of 1965 which however was opposed by
all the unions for being obsolete (pp. 187-188, rec.).
Presiding Judge Arsenio I. Martinez of
CIR issued an order dated March 30,
1970, which We quote in full:
“O R D
E R
“This concerns the demands of two unions at the Philippine
National Railways for salary standardization for their respective members, to
wit: the Union de Maquinistas,
Fogoneros y Motormen, hereinafter referred to as
petitioner, and the Kapisanan ng
mga Manggagawa sa Perokaril,
referred to hereafter as the Kapisanan.
“Petitioner seeks to implement the agreement between labor and
management panels regarding salaries of Engine Crew Personnel as contained in
the letter of May 10, 1968, Exhibit ‘2’.
The Salary Rates sought to be implemented are as follows:
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“On the other hand the Kapisanan
proposes a new salary standardization scale for its members as shown in Annex ‘A’
of its pleading entitled ‘Reply and Manifestation’ filed on August 20, 1968. The position classification under the
proposed plan is based on the Revised Salary Standardization Plan of 1962.
“Both demands for salary standardization by the two unions are
based on the alleged inequities of the salary of PNR employees especially so
after the extension of the 20% staggered salary increase to the Mechanical
Department Labor Union.
“It will be recalled that on September 12 and 13, 1964, the
petitioner and the Kapisanan staged a strike for
alleged inequity or disparity in pay between members of striking unions and
that of the Mechanical Department Labor Union.
On September 21, 1964,
the Court issued a Decision granting the petitioner union a 20% salary increase
and the Kapisanan a 15% salary increase, both
increases staggered for a period of four (4) years, starting September 1, 1964. In effect, this Court sustained the claim
that there were inequities in the salary of the workers of the company thus the
petition for salary increase was granted.
“In 1965, the company extended the 20% staggered salary
increase to all the unions in the Company including the Mechanical Department
Labor Union. The 15% increase originally
granted by the Court in favor of the Kapisanan
members was increased by the Company to 20%.
As a consequence of the extension of 20% increase to all other unions,
the petitioner union filed on March
26, 1966 a ‘Petition to Extend Another 20%
salary increase to the members of the Maquinistas.’
The Kapisanan on the other hand filed a motion
seeking a reopening of the case. Both
are still pending, as the parties went slow in
pursuing their respective demands in Court.
Instead, the unions and the Company went through negotiations outside of
Court.
“With respect to the Union de Maquinistas,
demand for the implementation of their salary increase, records show that on February 13, 1968, the Management
agreed to negotiate with the petitioner union on its demand for a salary
standardization of its members.
Management asked the union to submit its proposal for management panel
to study. The following day, the union
submitted its proposal. Finally, on May 10, 1968, the General Manager
wrote the President of the petitioner union as follows:
‘PHILIPPINE NATIONAL RAILWAYS
Manila,
Philippines
May 10, 1968
‘Mr. Jose S.
Capistrano
President, Union de Maquinistas,
Fogoneros
y Motormen
850 Arqueres St., Tondo
Manila
‘S i r :
This is in connection with the negotiation this morning regarding
your Unions request for salary adjustments of Engine Crew Personnel to correct
the alleged inequities resulting from the extension of the grant of 20%
staggered increase under case no. 50-IPA to all other employees of the Company,
particularly employees Company covered by the Mechanical Department Labor
Union. In counter proposal to your
proposed salary rates the management panel submitted a salary plan which with a
little modification was acceptable to your Union, to
wit:
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‘1st Class Maquinistas – – P465.00 |
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2nd Class Maquinistas – – 420.00 |
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3rd Class Maquinistas – – 390.00 |
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1st Class Fogoneros – – 345.00 |
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2nd Class Fogoneros – – 325.00 |
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3rd Class Fogoneros – – 310.00 |
‘I fully appreciate your position and believe in the justification
for your request. I wish to let you know
therefore that I have directed that the hereinabove salary rates be included in
the final consolidation of the budget and plantilla
of the Company for fiscal year 1968-1969.
Please be further advised that should there be any changes as a result
of the final review of the Company’s budget proposal we will consult with you
before such changes are made.
‘This advance information is furnished so that you can report to
your members the progress of the negotiations.
Very truly yours,
(SGD.) NICANOR T. JIMENEZ
General Manager’
“The inaction of the Board of Directors of the PNR on the
above-quoted letter of agreement caused the petitioner union to file on July 23, 1968, a Notice of Strike
before the Department of Labor. The
following day, the Company filed with this Court an Urgent Motion praying among
others, that the petitioner union be enjoined from declaring the strike. Immediately, the Court called the parties to
a conference instructing all the unions to submit their respective positions on
the matter. At the conference the
petitioner union agreed to ventilate the issue before the Court and not to go
on strike. It stressed that the
implementation of the May 10, 1968
agreement will solve the inequities occasioned by the extension of the Court’s
grant of 20% to all employees. It
emphasized further that its members occupy draft positions in the
Mechanical Department of the Company and which positions have not been
standardized for a long time.
“The respondent on its part maintained that the PNR Board of
Directors deferred action on the agreement for salary standardization for
Engine Crew Personnel as embodied in the letter of May 10, 1968, on the
following grounds: a) that the poor
financial condition of the Company does not warrant the grant of salary
increases to its employees and workers; b) that other unions in the company
have indicated their intention to file separate claims for salary increases;
and c) that there is pending for consideration in this Court a demand by the
Union de Maquinistas for another 20% salary increase
for its members.
“The Company in its manifestation filed on August 28, 1968
offered two alternative propositions regarding the demand for salary
standardization of all its employees including the petitioner and Kapisanan member:
One, the approval and adoption of the Company-Wide Salary
Standardization Pay Plan of 1965 Exhibit ’13-C’ and; two, defer for another
year the salary increase contained in the decision of September 21, 1964 and to
split the remaining 5% fifth installments due September 1, 1968 in the
following manner: 2% to be paid on
September 1, 1968 and 3% to be paid on September 1, 1969.
“These two alternative propositions of management met vehement
objections from all the labor unions.
Hearings therefore followed, where parties presented their respective
evidences in support of their stand.
Subsequently, Management withdrew its alternative proposal to defer and
split the last 5% installment of the 20% staggered increase. This 5% installment was at last fully paid by
the Company. The other alternative
proposal remained, that is, the approval and adoption of Company-Wide Salary
Standardization Plan of 1965.
“From the records of the case, it appears clear that labor
and management are agreed on at least two propositions: that there exist inequities in pay among
the employees and workers of the Company, and that the Company is in a very
poor financial state.
“Actually therefore the company is not against the salary
standardization of its workers. The company, as earlier stated, offers to implement the
company-wide salary standardization of 1965 Exh.
’13-C’ which all the unions opposed. The Court, finds
support to the unions’ objection to the offer of the Company. While it is true that the Court is for a
salary standardization plan for all the company employees, it finds the Company
plan, Exhibit ’13-Co’ obsolete. The plan
as will be seen was prepared and completed when the Minimum Wage for industrial
workers was only P4.00 a day. In April
1965 the minimum wage was increased to P6.00 per day, and the minimum wage is
now being increased again as the government is aware of the spiraling of prices
of commodities. The buying power of the
peso has gone down so low lately. A
comparative study of the present and actual salaries of company employees based
on the PNR Budget and Plantilla for Fiscal Year
1969-1970, and the Company-Wide Salary Standardization Plan, shows that many
employees are already receiving more than Step ‘A’, which the Company offers to
implement.
“The Federation of Labor Union in the PNR is for a salary standardization for all through bargaining with
management for an Omnibus Bargaining Agreement.
As a matter of fact negotiation is in progress. The federation prefers bargaining out of
Court. The Mechanical Department Labor
Union is for the Company to continue negotiation with the labor groups on its
proposed company-wide salary standardization plan and to respect and implement
all previously secured Job Evaluation and Classification obtained through
negotiation and/or collective bargaining.
“On May 9, 1969,
the Company filed a pleading stating among others: that respondent Company has found another
source of income, not previously considered, which will enable respondent
company to pay now the remaining 5% of the 20% staggered increase. Thereafter payment of the same was made. On the same date, May 9, 1969, the PNR
Supervisors Association and the MRRCo Medical,
Dental, and Nurses Association (MARMEDENA), through their respective Presidents
and assisted by their counsel filed a ‘Motion to Withdraw’ their petition for
full implementation of the categorization of salaries and adjustment of
salaries as they have already agreed to the full implementation of the same,
whereby the salary adjustment are to be included in the payroll of April 1,
1969 and the salary differentials are to be paid in three equal installment.
“With these implementation of salary adjustments extended
to the two unions, namely, the Supervisors Union and the MARMEDENA, the Court
sees no reason why the Agreement for salary adjustment of herein petitioner and
management as contained in the letter of May 10, 1968, should not be approved
and implemented. We also consider
the fact that the company has already fully paid the 20% staggered increases,
and the fact that actually the increase would not entail so much
funds. It has to be emphasized that
based in the Budget and Plantilla of Fiscal Year
1969-1970, the increase would only be as follows –
“(1) 1st Class Maquinistas
– From P438 to P465 or an increase of P27 a month.
“(2) 2nd Class Maquinistas
– From P402 to P420, or an increase of P18.00 per month.
“(3) 3rd Class Maquinistas
– From P378 to P390 a month or an increase of P12.00 only.
“(4) 1st Class Fogoneros –
From P330 to P345 or an increase of P15.00 a month.
“(5) 2nd Class Fogoneros –
From P312 to P325 or an increase of P12.50 and
“(6) 3rd Class Fogoneros –
From P300 to P310 a month or an increase of P10.00 only.
“And considering the poor finances of the Company, the
increase shall only be effective on Sept.
1, 1969 instead of July 1, 1968.
To give the Company time for adjustment, the Company is allowed to
include these increases in the payroll of June 1, 1970, and the salary differentials for
the period of Sept. 1, 1969
to May 31, 1970
shall be subject to negotiations for deferred payments. It shall be understood that the 20%
increase earlier demanded by the petitioner shall be considered abandoned
and/or waived by the petitioner.
“On the claim of the Kapisanan Ng
Mga Manggagawa, it is
claimed that inequities exist in the company salary structure. It therefore proposes a New Salary
Standardization Scale of its own, prepared and submitted by its
Standardization Committee, contained in its Annex ‘A’ of the Reply and
Manifestation dated August 12, 1968. The Kapisanan
classified its member-employees into the following position-groupings with
their respective pay scale, to wit:
“Grade I ………………. P250/month
Grade II ………………. 265/month
Grade III……………….
300/month
Grade IV-A……………
330/month
Grade IV-B ………….. 350/month
Grade IV-C……………
375/month
Grade V-A …………… 400/month
Grade V-B…………….
450/month
Grade V-C …………. 500/month
Grade VI-A……………
650/month
Grade VI-B ………….. 750/month
Grade VI-C……………
850/month
And for special classification of salaries
for conductors and drivers, the Kapisanan proposes
the following:
First Class Conductor………………… P350/month
Second Class Conductor……………. 325/month
Third Class Conductor……………….. 300/month
First Class Driver ……………………… 375/month
Second Class Driver …………………. 350/month
Third Class Driver …………………….. 325/month
This job classification is based on the
Revised Salary Standardization Plan of 1962.
The proposed salary rates under the new plan unlike the 1962
Plan, do(es)
not provide for a minimum, medium and maximum rate. It only provides for one rate for all
positions under a specified grade.
“It is very significant to note that the Company’s
own Committee Report on Salary Standardization contained the following:
‘PAY CLASSIFICATION
‘A comprehensive and comparative study of the salary structure
in the Philippine National Railways embracing most collective Bargaining
Agreements as typified by samples shown below, reveals many inconsistencies
and inequities, that have resulted in dissatisfaction and demoralization
among the officials and employees. We
find that several positions are rated unequally under different collective
bargaining agreements. Some supervisors
receive lower salaries than their subordinates.
Other receive a very much higher compensation when they perform work
less quantitatively on which they do hardly carry any responsibility. Also, it becomes obvious that there is no standard pattern nor uniformity in the increments of
salaries when medium and maximum salary scales are provided for.
‘A. VARIATION IN SALARIES FOR SIMILAR
POSITIONS WITH UNION CONTRACT:
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‘EXAMPLES OF
SUPERVISORS RECEIVING SALARIES
LOWER THAN OR THE SAME
AS THEIR SUBORDINATES
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“Certainly this report is the best argument in support of
the demand of the Kapisanan for salary
standardization of its own. There
can be no valid justification to deny the demand — not even the
claim of the Company on its poor financial condition. The inconsistencies and inequities on
the salary structure of the PNR employees should be amended and/or corrected. The principle of equal pay for equal work
should be maintained. For instance a
laborer, a messenger or a clerk of the Kapisanan
should receive the same rate of pay as the laborer, a messenger or a clerk
belonging to another union. And
certainly, a supervisor should not be receiving less or the same salary as his
subordinates as reflected on page 86 of the Committee report.
“Of course management proposes to implement its salary
Standardization Plan of 1965 by giving step ‘A’ or the minimum salary provided
for under said plan to all the workers and employees of the Company. This was opposed by all the unions,
understandably, because with the incorporation of the 20% increase to their
salary, most of them are now receiving more than the Step ‘A’ now being
offered them. As a matter of fact,
actual and present salaries of the Company employees and workers, based on the
budget and plantilla for Fiscal Year 1969-70, are
almost close to the maximum rate or the Step ‘E’ of the Company-Wide
Standardization Plan of 1965. Among the
lower income bracket, there are even those whose salaries are already above the
maximum or Step ‘E’. For instance, the
maximum pay for workers under Pay Class I – is P198; for Pay Class 2, is
P203.50; and for Pay Class 3, is P211.00 per month. Under the current budget these people are
already receiving a monthly salary of P216.
“As earlier stated, the Company-Wide Salary Standardization
Plan was prepared and completed in the year 1964-65, during which period the
minimum wage for industrial workers was still P4.00. In April 1965, the minimum wage was increased
to P6.00 and now it is being increased again to P8.00 per day. With these developments, there can be no
doubt that said company-wide salary standardization plan of 1965 may not be
considered.
“It has to be pointed out that said plan was submitted by the
committee on May 31, 1965. If said plan was implemented starting July 1,
1965 and the step increase, Step A to E, was granted yearly thereafter, the
company employees should have started receiving the maximum or Step ‘E’ of the
plan, since July 1, 1969, and by now a new salary standardization plan is due.
“At this point, it has to be mentioned and emphasized that
actually there is not much difference between the union proposal and the Step
‘E’ of the Company. A comparative study
of both proposals shows that the difference if there is any, involves only a
few pesos per month.
“IN VIEW OF ALL THE FOREGOING, the Court hereby grants the
demand of the Kapisanan ng mga Manggagawa for
a new standardization rates of pay for its members, to wit: –
“Grade I ……………………………………. P250.00 per month
Grade II ……………………………………. 265.00 “
Grade III …………………………………… 300.00 “
Grade IV-A ………………………………. 330.00 “
Grade IV-B .……………………………… 350.00 “
Grade V-A ………………………………… 400.00 “
Grade V-B ………………………………… 450.00 “
Grade V-C ……………………………….. 500.00 “
Grade VI-A ………………………………. 650.00 “
Grade VI-B ……………………………….. 750.00 “
Grade VI-C ……………………………….. 850.00 “
And for conductors and drivers of the Luzon
Bus Lines, the new rates shall be as follows:
“1st Class Driver ………………………. P375.00 per month
2nd Class Driver……………………….. 350.00 “
3rd Class Driver ……………………….. 325.00 “
1st Class Conductors-……………….. 350.00 “
2nd Class Conductors-………………. 325.00 “
3rd Class Conductors-……………….. 300.00 “
“These new rates shall be effective on Sept. 1, 1969 only, since after all, the last 5%
fifth installment of the 20% staggered increase was due Sept. 1, 1968, though payment was delayed for a
year. As in the case of the Maquinistas, and for the same reason, the new rates shall
be incorporated in the payroll of June
1, 1970, and the salary differential for the period of Sept. 1, 1969 to May 31, 1970, shall be subject to negotiation
between the union and management for a possible deferred payment.
“WHEREFORE, judgment is hereby entered in this case in
accordance with the disposition contained in the body of this order. Parties are hereby enjoined to comply with
this order in full honesty and good faith.” [p. 183-198,
rec.]
A motion for reconsideration of the above-quoted order (pp.
199-210, rec.) was filed by petitioner PNR on the ground that said order is
contrary to facts and the law.
On September 30, 1970,
PNR received the copy of the resolution of the CIR en banc dated August 26, 1970, denying petitioner’s
motion for reconsideration. Said
resolution of August 26, 1970
reads:
“This concerns two (2) Motions for Reconsideration to
wit: one filed on April 4, 1970 by the
Union de Maquinistas seeking partial reconsideration
of the Order of this Court dated March 30, 1970; and the other filed by the
Philippine National Railways on April 6, 1970 seeking reconsideration of the
same Order which granted salary adjustment to the Union de Maquinistas
and the Kapisanan ng mga Manggagawa.
Petitioner union only seeks to change the effectivity
date of the award for salary adjustment and/or increase from September 1, 1969 to July 1, 1968. After a careful consideration of the
arguments of both parties, and their respective evidences, the Court en banc
finds good, valid and justifiable ground in sustaining the change from
September 1, 1969 to July 1, 1968, for it is shown that petitioner is similarly
situated as the Supervisors Association and the Medical and Dental Association
of the Company whose agreements for salary adjustment were both implemented by
Management effective July 1, 1968. The
Court sees no valid reason in limiting the effectivity
date of the agreement or in providing for a different date of effectivity as those of the Supervisors and Medical
Association. On the Motion for Reconsideration
of the Company pertaining to the award in favor of the Kapisanan
ng mga Manggagawa,
the Court after a thorough study of the allegations and issues raised therein
decides to dismiss the same for lack of merit.
The Company for instance alleges that the Court under the Order sought
to be reconsidered granted salary increases as follows:
“Grade I –
P250.00 per month or an increase of P70.00 per month from the former rate of
P180.00;
“Grade II –
P265.00 per month or an increase of P67.00 per month from the former rate of
P198.00;
“Grade III –
P300.00 per month or an increase of P94.00 per month from the former rate of
P216.00 per month;
“Grade IV-A – P330.00
per month or an increase of P66.00 per month from the former rate of P264.00
per month; and so on.
This allegation is undoubtedly untenable
as borne by the PNR, Budget and Plantilla for
FY-1969-1970, as will be shown hereunder;
(a) A Bus Cleaner who falls under Grade I
receives a monthly compensation of P216.00 per month. So, the increase granted him by the Court is
from P216.00 to P250.00 or an increase of P34.00 only and not P70.00 per month
[Page 4, Luzon Bus Lines, PNR];
(b) A Gate Crossing Keeper classified under
Grade II is actually receiving a monthly compensation of P234.00 which is
proposed to a monthly compensation of P265.00 with an increase therefore of
P31.00 only and not P67.00 as contended by the Company [Page 19, Engineering
Dept. PNR];
(c) A Checker under the Yard and Signal Division
falling under the classification of Grade III is actually receiving P246.00 per
month is proposed to a monthly salary of P300.00 or an increase of P54.00, not
P94.00 as pointed out by the Company [Page 11, Transportation Dept.]; and
“(d) A Telephone Operator falling under the
classification of Grade IV-A actually receives P300.00 per month and is
proposed for P330.00 a month with an increase therefore of P30.00 only and not
P66.00 as pointed out by the Company in its Motion for Reconsideration [Page 5,
Transportation Dept.]. On the whole, the
allegation by the Company that the Court granted unprecedented high salary
increase does not jibe with the records.
Necessarily, the allegation that the award in favor of the Kapisanan would amount to a total of P2,300,000.00
(Annex ‘A’ Motion), is, likewise without factual basis. In addition, it has to be emphasized, that
even the proposed salaries for Grades I and II, are just a bit over the new
minimum wage of P8.00 per day of P240.00 per month.
“Respondent also alleges that the Company suffered a total
loss from operation in the amount of P24,711,334.00
from 1964-1968. As of June 30, 1969, the company again
suffered a loss of P444,567.00 (Annex ‘B’). While it is admitted that the company
continuously incurred losses from operation from 1964 to 1969, it has to be
pointed out, however, that based on the Annex ‘B’, the Railway Proper realized
a Net Profit of P24,700.00, P140,538.00, and P1,470,860 for the years 1967,
1968 and 1969 respectively. The overall
losses by the Philippine National Railways for the same years,
are due to the losses incurred by its subsidiaries like the Luzon Bus Lines, Benguet Auto Lines and the PNR
Hospital. For instance the PNR
Hospital incurred the following
losses: P594,453
for 1967; P782,517 for 1968 and P741,791 for 1969. But it has again to be pointed out that the
respondent granted salary adjustment and/or increase to the doctors, dentist,
nurses and medical staff of the hospital, effective July 1968. It certainly is hard to justify the act of
management in granting the salary increases to employees of the losing
subsidiary company and the denial of salary increases to the employees of
supporting principal corporation.
“WHEREFORE, the motion of the Union de Maquinistas
is hereby granted, and the award for salary adjustment in its favor is hereby
modified insofar as the effectivity date is
concerned, from September 1, 1969
to July 1, 1968. Insofar as the motion for
reconsideration filed by the Philippine National Railways, the same is hereby
denied for lack of merit” (pp. 232-236, rec.).
On October 8, 1970,
petitioner filed a notice of appeal from the order of March 30, 1970 and the resolution en banc
of respondent CIR dated August 26,
1970, [p. 23, rec.]. Also on the same date, October 8, 1970, petitioner filed its petition
for extension of time to file petition for review by writ of certiorari.
And on October 23, 1970,
it filed its petition for review by writ of certiorari, with the
following assignment of errors:
“(A) Respondent CIR committed a grave abuse of
discretion, tantamount to lack of jurisdiction, when it granted salary
increases to employees represented by respondents MAQUINISTAS and KAPISANAN
despite evidence that the Company cannot afford to pay the same;
“(B) Respondent CIR committed a grave abuse of
discretion, tantamount to lack of jurisdiction, when it awarded salary
increases to employees represented by respondents MAQUINISTAS and KAPISANAN
merely because the Railways proper realized net profits for the years 1967,
1968 and 1969 although the entire operations of the Company show it sustained
losses for the same period.
“(C) Respondent CIR erred in awarding salary
increases to employees represented by respondent KAPISANAN even if no evidence
was presented by it in support of its demand” (p. 18, rec.).
Petitioner PNR questions the order and resolution of respondent
CIR allowing the salary adjustments of the members of the two unions, namely,
the MAQUINISTAS and the KAPISANAN after finding that there existed salary
inequities among the employees of petitioner.
The issues to be resolved are:
I. Whether or not salary
adjustment should be made, and
II. Whether or not enough evidence was presented
to justify salary adjustment.
I
In the case at bar, the demands of both unions to standardize the
salaries of their members are based on the alleged inequities of the salaries
of PNR employees.
The ruling of the Court of Industrial Relations that there
existed inequities disparities in the salaries of employees of petitioner PNR
is well taken. It is clear from the
petitioner’s own committee report that such inequities exist, to wit:
“A.
VARIATION IN SALARIES FOR SIMILAR POSITIONS WITH UNION CONTRACT:
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From the above, WE can see the inconsistencies and inequities in
the salary structure of the employees of the PNR, and this situation must be
remedied. As the respondent CIR held,
the principle of equal pay for equal work should be maintained in order that
industrial peace within the company could be preserved. The above report of petitioner’s own
committee is enough justification to grant the demands for salary adjustment of
the unions.
It is true that the PNR offered to implement the company-wide
standardization plan of 1965 but was opposed by the unions since it was based
on a P4.00 minimum wage which is obsolete since the minimum wage was already
increased to P6.00 in April, 1965 and was increased further to P8.00. Furthermore, based on the PNR budget and plantilla for the fiscal year 1969-1970, it is shown that
many PNR employees were already receiving almost the same amount as, if not
more than, what the company was offering to implement. Therefore, the objections of the unions are
based on valid and just grounds.
II
WE reiterate that from the records of the case, We find
(1) that on May 9, 1969, PNR filed a pleading
stating among others that PNR has found another source of income which was not
previously considered and thus will enable it to pay the remaining 5% of
the 20% staggered increase (pp. 151-157, rec.) and payment was made thereafter;
(2) that the PNR board of directors decided to
increase the salaries of the members of the PNR Supervisors Association by
virtue of resolution No. 375 which approved the memorandum of the general
manager dated May 20, 1969 (pp. 252-253, rec.);
(3) that the PNR granted the salary increases of
the members of the MARMEDENA by virtue of resolution No. 417 which approved the
memorandum of the general manager dated May 29, 1969 (pp. 249-251, rec.);
(4) that the salary increases granted to
physicians, dentists, nurses and pharmacists of the PNR hospital by virtue of
resolution No. 417 were not made as an implementation of R.A. 4657,
approved June 17, 1966, which provided for a statutory annual minimum
compensation of P6,000 for physicians, P5,400 for dentists, P4,200 for nurses
and P3,600 for pharmacists because from the said resolution alone (p. 250,
rec.), it is patent that the physicians, dentists, nurses and pharmacists were
already receiving the minimum wage.
The PNR did not implement R.A. 4657 as it has repeatedly alleged, but it
increased the salaries of said employees despite its pretended financial
losses; and
(5) that the PNR board of directors bypassed the
memorandum of PNR General Manager Jimenez which directed the increase of
salaries of the members of the respondent unions, by taking no action
whatsoever to remedy the situation, thereby evading its duty to bargain
collectively.
It is a statutory duty of both labor and management that
negotiations leading to a collective agreement should be continued with utmost
good faith. The Industrial Peace Act
specifically provides:
“Duty to Bargain
Collectively – In the absence of an agreement or other voluntary arrangement
providing for a more expeditious manner of collective bargaining, it shall be
the duty of an employer and the representative of his employees to bargain
collectively in accordance with the provisions of this Act. Such duty to bargain collectively means the
performance of the mutual obligation to meet and confer promptly and
expeditiously and in good faith, for the purpose of negotiating an agreement
with respect to wages, hours, and/or other terms and conditions of employment,
and of executing a written contract incorporating such agreement if requested
by either party, or for the purpose of adjusting any grievances or question
arising under such agreement, but such duty does not compel any party to agree
to a proposal or to make concession” (Sec. 13, Vol. III, p. 449, Phil.
Permanent Statutes).
Petitioner failed to comply with its duty to resolve whatever
differences there were between it and the unions. It is unmistakable that there was a valid
cause for respondent unions to complain against the conduct of the PNR, which
indicated a disregard to live up to what is enjoined by the Industrial Peace
Act — to bargain collectively in good faith, to insure harmonious
labor-management relations.
WHEREFORE, THE PETITION IS HEREBY DENIED, WITH COSTS
AGAINST PETITIONER.
Teehankee, (Chairman), Guerrero, De
Castro, and Melencio-Herrera,
JJ., concur.
Fernandez, J., took no part.