ASSOCIATED LABOR UNIONS-TUCP REPRESENTING ITS MEMBERS, DMPIEU-ALU­-TUCP, LOCAL 302 AND/OR GERONIMO DE LOS SANTOS, PETITIONERS, VS. THE HON. NATIONAL LABOR RELA­TONS COMMISSION (…

This is a special civil action of certiorari to set aside
the decision and resolution dated June 22, 1992 and September 14, 1992
respectively of the National Labor Relations Commission (Fifth Division).^[1]

The antecedent facts are as follows:

On July 1, 1989, Republic Act No. 6727, otherwise known as the
Wage Rationalization Act, took effect, granting a P25.00/day increase in the
statutory minimum wage of all workers and employees in the private sector,
subject to certain conditions.

In implementation of the law, private respondent Del Monte
Philippines, Inc. gave a P25.00/day increase to the P54.00/day wages of its
temporary employees or “broilers.” Because the regular employees,
members of petitioner union, who were then receiving P100.80 a day were not
granted a similar increase, they complained to the management of private
respondent.

On February 14, 1990, the parties executed a Memorandum Agreement
wherein private respondent, “in positive response to the union’s
representations and notwithstanding that it has no legal or contractual
obligation,” granted the members of petitioner union a P10.00/day wage
increase effective January 1, 1990, subject to the latter’s right to claim
P15.00/day as balance, through compulsory arbitration.^[2]

On June 5, 1990, petitioners (Associated Labor Union-TUCP,
representing its members, DMPIEU-ALU-TUCP, Local 302 and Geronimo de los
Santos) filed a complaint against private respondent in the National Labor
Relations Commission (NLRC) Regional Arbitration Branch X in Cagayan de Oro
City. They alleged that a wage
distortion^[3]
had been created by the grant to its temporary employees of a P25.00/day salary
increase under Republic Act No. 6727, thereby reducing to P21.80 from the
previous P46.80, the difference in salaries between the regular employees
(herein petitioners) and the temporary employees.

On November 27, 1990, the Labor
Arbiter, Noel Augusto S. Miranda, dismissed the complaint for lack of
merit. He found no wage distortion in
view of a series of salary increases which respondent had granted to petitioners
vis-a-vis the temporary
employees, as shown by the following table:

On appeal the NLRC affirmed the Labor
Arbiter’s findings and denied petitioners’ motion for reconsideration. Hence this petition.

Petitioners contend that the increases mandated by the parties’
Collective Bargaining Agreement and the voluntary agreement dated February 14,
1990 should not be considered as having corrected the wage distortion, since
employee benefits derived from law are exclusive, distinct, and separate from
those obtained through negotiation and agreement.

The contention has no merit.

Art. 124 of the Labor Code, as amended by Republic Act No. 6727,
expressly provides that where the application of any prescribed wage increase
by virtue of a law or wage order issued by any Regional Board results in
distortions of the wage structure within an establishment, the employer and the
union shall negotiate to correct the distortions. The law recognizes, therefore, the validity of negotiated wage
increases to correct wage distortions. The legislative intent is to encourage the parties to seek solution to
the problem of wage distortions through voluntary negotiation or arbitration,
rather than strikes, lockouts, or other concerted activities of the employees
or management.^[4]
Recognition and validation of wage increases given by employers either unilaterally
or as a result of collective bargaining negotiations for the purpose of
correcting wage distortions are in keeping with the public policy of
encouraging employers to grant wage and allowance increases to their employees
which are higher than the minimum rates of increases prescribed by statute or
administrative regulation.^[5] As
this Court stated in Apex Mining, Inc. v. NLRC:^[6]

To compel employers simply to add on
legislated increases in salary or allowances without regard to what is already
paid, would be to penalize employers who grant their workers more than the
statutorily prescribed minimum rates of increases. Clearly, this would be counterproductive so far as securing the
interest of labor is concerned.

Thus in Cardona v.
NLRC,^[7] it was held that there was no wage
distortion where the employer made salary adjustments in terms of restructuring
of benefits and allowances and there was an increase pursuant to the CBA.

There is thus, to use the language of the law, no “effective
obliterat[ion of] the distinction embodied in [private respondent’s] wage
structure based on skills, length of service, or other logical basis of
differentiation” in this case. For
it is undisputed that the difference in wages between petitioners and the
temporary employees is now even greater than it used to be prior to the grant
of the P25.00/day increase to the latter pay pursuant to Republic Act No. 6727.

Finally, whether or not a wage distortion exists by reason of the
grant of a wage increase to certain employees is essentially a question of
fact. In this case, the findings of the
Labor Arbiter, affirmed by the NLRC, that no wage distortion exists being based
on substantial evidence, are entitled to respect and finality.^[8]

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Puno, JJ., concur.

^[1]
Per Commissioner Leon G. Gonzaga, Jr., Commissioners Musib M. Buat and Oscar N.
Bella, concurring.

^[2]
Exhibit G, Rollo, p. 38.

^[3]
Under Art. 124 of the Labor Code, as amended by Republic Act No. 6727, a
“wage distortion” is defined as “a situation where an increase
in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates betwen 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 differention.”

^[4]
Ilaw at Buklod ng Mangagagawa v. NLRC, G.R. No. 91980, June 27, 1991,
198 SCRA 586, 595.

^[5]
National Federation of Labor v. NLRC and Franklin Baker Company of the
Philippines (Davao Plant), G.R. No. 103586, July 21, 1994.

^[6]
G.R. No. 86200, February 25, 1992, 206 SCRA 497, 501.

^[7]
G.R. No. 89007, March 11, 1991, 195 SCRA 92, 97.

^[8]
Cardona v. NLRC, supra; Metropolitan
Bank and Trust Company Employees Union-ALU-TUCP v. NLRC and Metropolitan
Bank and Trust Company, G.R No. 102636, September 10, 1993, 226 SCRA 268.