It shall guarantee the rights of all workers to self-organization, ISSUE: Is a guideline issued by an RTWPB without approval or
collective bargaining and negotiations, and peaceful concerted contrary to guidelines by NWPC valid? NO
activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions RATIO:
of work, and a living wage. They shall also participate in policy Art.121 and 122 of LC as amended by RA2727 grants the
and decision-making processes affecting their rights and NWPC, not the RTWPB, the power to prescribe the rules
benefits as may be provided by law. and guidelines for determination of minimum wage and
productivity measures.
The State shall promote the principle of shared responsibility o Wage orders issued by RTWPB are subject to
between workers and employers and the preferential use of guidelines prescribed by NWPC
voluntary modes in settling disputes, including conciliation, and o Exemptions also subject to guidelines issued by
shall enforce their mutual compliance therewith to foster NWPC
industrial peace. In this case, to allow RTWPB’s guideline to take effect
without approval of NWPC is to arrogate unto RTWPB a
The State shall regulate the relations between workers and power vested in the NWPC by the law (usurpation of
employers, recognizing the right of labor to its just share in the authority the law cannot be broadened by a mere
fruits of production and the right of enterprises to reasonable admin issuance)
returns to investments, and to expansion and growth o There is no vested right on petitioners because
of invalidity of the guideline
2. Agencies in Wage Fixing Machinery Definition of distressed in the guideline = ambiguous. All
doubts in implementation and interpretation of LC
a. National Wages and Productivity provisions must be resolved in favour of labor.
Commission – Labor Code, Sec. 3; 120, 121, o By exempting all establishments belonging to a
and 126 distressed industry, the guideline surreptitiously
and irregularly took away the mandatory increase
b. Regional Tripartite Wages and Productivity in minimum wage contrary to State policy of
Board – Labor Code, Sec. 3; 122 and 126 rationalizing the fixing of minimum wage...
Thus, the guideline is void not only because it lacks
NASIPIT LUMBER CO. V. NWPC approval but because it is inconsistent with State policies
The Regional Tripartite Wages and Productivity Board for protective of labor
Northern Mindanao issued a wage order increasing the
minimum wage for worker in the private sector by 9 to 13 RULING: Petition DISMISSED. NWPC decision AFFIRMED.
pesos a day.
Nasipit Lumber Co. (NALCO), Philippine Wallboard Corp. 3. Standards/Criteria for Minimum Wage Fixing – Sec. 3;
(PWC), and Anakan Lumber Co. (ALCO) jointly filed an 124
application for exemption from the wage order as
distressed establishments 4. Wage Order – Sec. 3; 123-124
o NOTE: in the guideline issued by the board,
distressed establishment = establishment a. Methods of Fixing
engaged in an industry that is distressed due to
conditions beyond its control as may be i. Floor wage method
determined by the board in consultation with DTI
ii. Salary-ceiling method RELATION BETWEEN LABOR AND CAPITAL:
1) The Constitution calls upon the State to
EMPLOYERS CONFEDERATION OF THE PHIL. V. NWPC protect the rights of workers and promote
Petitioner ECOP questions the validity of Wage Order No. their welfare
NCR-01-A (October 23, 1990) issued by the RTWPB 2) The Constitution also makes it a duty of the
which granted an “across-the-board” wage increase by State “to intervene when the common goal
P17.00 to all workers and employees in the private sector so demands” in regulating property and
in NCR already receiving wages above the statutory property relations
minimum wage rates up to P125.00 a day. 3) The Charter urges Congress to give priority
o The Wage Order is pursuant to RA6727 to the enactment of measures, among other
o Prior to WO No. NCR-01-A is WO No. NCR-01, things, to diffuse the wealth of the nation and
which increased the minimum wage by P17/daily to regulate the use of property
in NCR. The questioned WO amended this by 4) The Charter recognizes the "just share of
also granting the increase to all other workers labor in the fruits of production
earning more than the minimum wage. 5) Under the Labor Code, the State shall
ECOP argues: regulate the relations between labor and
o The Board exceeded its authority under RA6727 management
to only prescribe “minimum wages”, not 6) Under Republic Act No. 6727 itself, the State
determine “salary ceilings.” is interested in seeing that workers receive
o RA6727 promotes CBAs as the primary mode of fair and equitable wages
settling wages, and ECOP believes that the 7) The Constitution is primarily a document of
Boards cannot preempt CBAs by establishing social justice, and although it has recognized
ceilings. the importance of the private sector, it has
OSG argues: not embraced fully the concept of laissez
o The across-the-board hike fixed minimum wages faire or otherwise, relied on pure market
according to the “salary-ceiling method,” forces to govern the economy
intended to correct “wage distortions.”
It is also another question whether the salary-cap method
ISSUE: W/N the Board exceeded its authority in prescribing utilized by the Board may serve the purposes of Republic Act
“salary-ceilings”? NO No. 6727 in future cases and whether that method is after all, a
lasting policy of the Board; however, it is a question on which
RATIO: we may only speculate at the moment. At the moment, we find
FLOOR WAGE METHOD SALARY CEILING it to be reasonable policy (apparently, it has since been
METHOD Government policy); and if in the future it would be perceptibly
fixing of a determinate wage adjustment is applied unfair to management, we will take it up then.
amount that would be added to employees receiving a
to the prevailing statutory denominated salary ceiling RULING: PETITION DENIED
minimum wage
The floor-wage method was adopted in earlier wage b. Validity
orders, while the salary ceiling method was also used in
RAs 6640 and 6727 and also to a few earlier issuances. METROBANK V. NWPC AND RTWPB
The shift from floor wage method to the salary ceiling • RTWPB Cagayan issued a wage order. Sec. 1 thereof
method was brought about by labor disputes arising from granted an across-the-board increase of P15 to all
wage distortions, a consequence of the implementation employees and workers in the private sector in Region II.
of the said wage orders. Apparently, the wage order Sec 13 states that any party aggrieved by it may file an
provisions that wage distortions shall be resolved through appeal before the NWPC, through the board, within 10
grievance procedures was perceived by legislators as days from publication of the WO.
ineffective in checking industrial arrest resulting from • The Bankers' Council for Personnel Management sent a
wage order implementations. With the establishment of letter inquiry to the NWPC, seeking exemption from the
the second method as a practice in minimum wage fixing, WO on behalf of its member banks with head offices
wage distortion disputes were minimized. outside Region II. According to the council, such member
RA6727 is meant to rationalize wages by having banks were already paying more than the prevailing
permanent boards decide the wages rather than leave it miminum wage rate in NCR, which is the principal place of
up to the determination of Congress. As mentioned above, their business. The next letter inquiry from petitioner Metro
the shift from floor wage method to the salary ceiling bank asked for an interpretation of the applicability of the
method was brought about by labor disputes arising from WO.
wage distortions. The salary ceiling method is intended to • NWPC replied that the WO covers all establishments in
prevent, or lessen, those disputes. The fact of the matter Region II, regardless of their voluntary adoption of wage
is that RA6727 sought a “thinking” group of men and orders applicable in Metro Manila, and irrespective of the
women bound by statutory standards (standards listed amounts they are already paying their employees.
under Art 124 LC). • Metrobank filed a petition for certiorari and prohibition with
There is no unlawful act of legislation done by the Board. the CA, averring that the board, in issuing the WO, acted
Congress may delegate the power to fix rates as long as it beyond its authority and praying for nullification of WO as
leaves sufficient standards. The standards provided for its implementation would cause financial losses and labor
under Art 124 LC are sufficient, and in the light of the unrest
floor-wage method’s failure, the Court believes that the • CA denied petition:
Commission correctly upheld the NCR Board. 1. writ of prohibition can’t be issued as WO and IRR have
already become fait accompli as both have already
RA6727 DOES NOT INTEND TO DEREGULATE THE
taken effect
2. writ of certiorari is an improper remedy as it may only PRUBANKERS ASSOC. V. PRUDENTIAL BANK & TRUST
issue in relation to the exercise of judicial and quasi- CO.
judicial, not administrative functions RTWPB of Region V issued Wage Order No. RB 05-03 which
3. Metrobank didn’t utilize right to appeal under Sec 13 of provided for a Cost of Living Allowance (COLA) to workers in
WO the private sector who ha[d] rendered service for at least three
(3) months before its effectivity, and for the same period
ISSUE 1: W/N the WO is valid — partly YES [t]hereafter, in the following categories: -
Pursuant to the state policy to rationalize the fixing of - (P17.50) in the cities of Naga and Legaspi;
minimum wages, RA6727 created NWPC, vesting it with - (P15.50) in the municipalities of Tabaco, Daraga, Pili
vesting it with the power to prescribe guidelines for the and the city of Iriga; and
determination of appropriate minimum wages; and - (P10.00) for all other areas in the Bicol Region.
authorized RTWPB to determine and fix the minimum RTWPB of Region VII issued Wage Order No. RB VII-03,
wage rates in their respective regions, provinces, or which directed the integration of the COLA mandated
industries. pursuant to Wage Order No. RO VII-02-A into the basic
In this case, the board did not fix the minimum wage using pay of all workers.
any of the two methods cited in ECOP v. NWPC (the floor - established an increase in the minimum wage rates
wage method and the salary ceiling method). Instead, it for all workers and employees in the private sector as
granted an across the board wage increase of P15 to all follows:
employees and workers of Region II, whether earning o (P10.00) in the cities of Cebu, Mandaue and
minimum wage or not. The Board exceeded its authority in Lapulapu; (P5.00) in the municipalities of
doing so. Compostela, Liloan, Consolacion, Cordova,
The WO granted additional benefits not contemplated by Talisay, Minglanilla, Naga and the cities of
RA6727 Davao, Toledo, Dumaguete, Bais, Canlaon
o WO ultra vires and unreasonable: admin and Tagbilaran.
issuance that changed the intended scope of the The petitioner then granted a COLA of P17.50 to its
law employees at its Naga Branch, the only branch covered
o Thus, Sec. 1 is void insofar as it grants a wage by Wage Order No. RB 5-03, and integrated the P150.00
increase to employees earning more than the per month COLA into the basic pay of its rank-and-file
minimum wage rate employees at its Cebu, Mabolo and P. del Rosario
o BUT pursuant to the separability clause, Sec. 1 is branches, the branches covered by Wage Order No. RB
declared valid with respect to employees earning VII-03.
the prevailing minimum wage rate. Prubankers Association wrote the company requesting
Note: the Court no longer ordered the employees who wrongly that the Labor Management Committee be immediately
received the increase mandated by the Wage Order to refund convened to discuss and resolve the alleged wage
the amounts received by them since they received the increase distortion created in the salary structure upon the
in good faith, in the honest belief that they were entitled to it. implementation of the said wage orders. The association
then demanded that the company extend the application
ISSUE 2: W/N Metrobank's resource to a petition for certiorari of the wage orders to its employees outside Regions V
and prohibition was proper -- NO and VII.
• The issuance of WO was done in the Board's rule-making VOLUNTARY ARBITRATION COMMITTEE: the Bank's
power as delegated by RA6727. . Thus it is not the proper separate and regional implementation of Wage Order No.
subject of a certiorari or prohibition as both actions are VII-03 at its Cebu, Mabolo and P. del Rosario branches
resorted to only if the disputed acts are performed in the created a wage distortion in the Bank nationwide which
exercise of judicial or quasi-judicial power. should be resolved in accordance with Art. 124 of the
• Also, Metrobank should have availed of remedy provided Labor Code.
by Sec 13 of WO. Metro bank failed to invoke power of CA REVERSED: the variance in the salary rates of
NWPC to review wage levels set by the Board. It went to employees in different regions of the country was justified
CA right away, mistakenly impleading NWPC. Metrobank by RA 6727.
failed to exhaust remedies available to it. o the underlying considerations in issuing the wage
orders are diverse, based on the distinctive
Note: SC dismissed respondents claim that issues raised have situations and needs existing in each region.
become moot as Order and IRR have already taken effect. SC Hence, there is no basis to apply the salary
notes that such implementation does not in any way render the increases imposed by Wage Order No. VII-03 to
case moot, since the issue of the validity of the Order subsists employees outside of Region VII
even after the implementation. o the distinctions between each employee group in
the region are maintained, as all employees were
RULING: PETITION PARTIALLY GRANTED. granted an increase in minimum wage rate
c. Wage distortion – Sec. 3; Sec. 124 ISSUE: WON there is a wage distortion - NO
RATIO:
In the said branches, there was an increase in the salary
rates of all pay classes. Furthermore, the hierarchy of
positions based on skills, length of service and other
logical bases of differentiation was preserved.
In other words, the quantitative difference in
compensation between different pay classes remained the
same in all branches in the affected region. Put differently,
the distinction between Pay Class 1 and Pay Class 2, for
example, was not eliminated as a result of the
implementation of the two Wage Orders in the said region. "Section 12. Any person, corporation, trust, firm, partnership,
Hence, it cannot be said that there was a wage distortion. association or entity which refuses or fails to pay any of the
A disparity in wages between employees holding similar prescribed increases or adjustments in the wage rates made in
positions but in different regions does not constitute wage accordance with this Act shall be punished by a fine not less
distortion as contemplated by law. than Twenty five thousand pesos (P25,000) nor more than One
A wage distortion arises when a wage order engenders hundred thousand pesos (P100,000) or imprisonment of not
wage parity between employees in different rungs of the less than two (2) years nor more than four (4) years, or both
organizational ladder of the same establishment. It bears such fine and imprisonment at the discretion of the court:
emphasis that wage distortion involves a parity in the Provided, That any person convicted under this Act shall not be
salary rates of different pay classes which, as a result, entitled to the benefits provided for under the Probation Law.
eliminates the distinction between the different ranks in
the same region. "The employer concerned shall be ordered to pay an amount
RA6727 recognizes "existing regional disparities in the equivalent to double the unpaid benefits owing to the
cost of living”. Based on Sec. 2 of RA6727 and Art.124, employees: Provided, That payment of indemnity shall not
LC as amended, a disparity in wages between employees absolve the employer from the criminal liability imposable
with similar positions in different regions is necessarily under this Act.
expected.
a uniform national wage structure is antithetical to the "If the violation is committed by a corporation, trust or firm,
purpose of RA 6727. It must be understood that varying partnership, association or any other entity the penalty of
in each region of the country are controlling factors such imprisonment shall be imposed upon the entity's responsible
as the cost of living; supply and demand of basic goods, officers, including, but not limited to, the president, vice-
services and necessities; and the purchasing power of the president, chief executive officer, general manager, managing
peso. Other considerations underscore the necessity of director or partner."
the law. Wages in some areas may be increased in order
to prevent migration to the NCR and, hence, to decongest C. WAGE PAYMENT AND PROTECTION
the metropolis. Therefore, what the petitioner herein
bewails is precisely what the law provides in order to 1. Form of payment – Labor Code Art. 102
achieve its purpose.
On the equal-pay-for-equal-work principle: RA 6727 NCC, ART. 1705. The laborer's wages shall be paid in legal
recognizes that there are different needs for the different currency
situations in different regions of the country. The fact that
a person is receiving more in one region does not a. Rule - Omnibus Rules Book III, Rule VIII, Sec. 1
necessarily mean that he or she is better off than a person
receiving less in another region b. Exception - Omnibus Rules Book III, Rule VIII, Sec. 2
On the meaning of “establishment”: the statutory provision
does not support petitioner's view that "establishment" Omnibus Rules Book III, Rule VIII
includes all branches and offices in different regions
because Sec. 13 of RA6727 provides that “minimum wage SEC. 1. Manner of wage payment. - As a general rule, wages
rates of workers working in branches or agencies of shall be paid in legal tender and the use of tokens, promissory
establishments in or outside the NCR shall be those notes, vouchers, coupons, or any other form alleged to
applicable in the place where they are sanctioned”. represent legal tender is absolutely prohibited even when
The nationwide uniform wage policy of the Bank had been expressly requested by the employee.
adopted prior to the enactment of RA 6727. After the
passage of said law, the Bank was mandated to SEC. 2. Payment by check. - Payment of wages by bank
regionalize its wage structure. checks, postal checks or money orders is allowed where such
manner of wage payment is customary on the date of the
Wage distortion involves four elements: effectivity of the Code, where it is so stipulated in a collective
1. An existing hierarchy of positions with corresponding agreement, or where all of the following conditions are met: (a)
salary rates There is a bank or other facility for encashment within a radius
2. A significant change in the salary rate of a lower pay class of one (1) kilometer from the workplace; (b) The employer or
without a concomitant increase in the salary rate of a any of his agents or representatives does not receive any
higher one pecuniary benefit directly or indirectly from the arrangement;
3. The elimination of the distinction between the two levels (c) The employees are given reasonable time during banking
4. The existence of the distortion in the same region of the hours to withdraw their wages from the bank which time shall
country be considered as compensable hours worked if done during
working hours; and (d) The payment by check is with the
RULING: Petition DENIED. CA Decision AFFIRMED. written consent of the employees concerned if there is no
collective agreement authorizing the payment of wages by
5. Freedom to bargain – Art. 125; RA6727, Sec. 2, 2nd par. bank checks.
Omnibus Rules Book III, Rule VIII ISSUE 1: W/N the Court may order the manner of
reinstating a dismissed employee –NO, it involves an
SEC. 4.Place of payment. - As a general rule, the place of exercise of management prerogative
payment shall be at or near the place of undertaking. Payment In case of strained relations or non-availability of
in a place other than the work place shall be permissible only positions, the employer is given the option to reinstate
under the following circumstances: (a) When payment cannot the employee merely in the payroll, precisely to avoid
be effected at or near the place of work by reason of the the intolerable presence in the workplace of the
deterioration of peace and order conditions, or by reason of unwanted employee
actual or impending emergencies caused by fire, flood, IN CASE AT BAR: The physical restoration of
epidemic or other calamity rendering payment thereat respondents to their former positions would be impractical
impossible; (b) When the employer provides free transportation and would hardly promote the best interest of both parties
to the employees back and forth; and (c) Under any other o Relationship was so strained that physical
analogous circumstances; Provided, That the time spent by the clashes ensued every time respondents tried to
employees in collecting their wages shall be considered as enter RPN compound – their presence is not
compensable hours worked; (d) No employer shall pay his only distracting but even disruptive.
employees in any bar, night or day club, drinking The proposal to pay the respondents’ salaries
establishment, massage clinic, dance hall, or other similar through ATM cards, now a wide practice cannot be
places or in places where games are played with stakes of said to be prejudicial or oppressive since it would not
money or things representing money except in the case of entail any unusual effort by the respondents to
persons employed in said places. collect their money.
As to the respondents’ demand to be paid their salaries
RADIO PHILIPPINES NETWORK, INC. V. RUTH YAP on the 15th and 30th of the month along with the other
RPN and RPN Employees Union (RPNEU) entered into a employees, instead of on the 5th and 20th days, the law
CBA with a union security clause providing that a member only requires that the fortnightly intervals be
who has been expelled from the union shall also be observed.
terminated from the company
RPNEU submitted a letter to the president of RPN ISSUE 2: W/N RPN have substantially complied in good
demanding the respondents’ termination of employment faith with the terms of payroll reinstatement –YES
due to a conflict between the respondents and the union’s The salaries for Oct 2006 to Jan 2007 were already
other members delivered. The salary checks for February to May 15,
RPN notified the respondents that their employment would 2007 were deposited with the NLRC’s cashier
be terminated RPN has been asking the respondents to open ATM
respondents filed with the Labor Arbiter (LA) a complaint accounts to facilitate the deposit of their salaries, but they
for illegal dismissal and non-payment of benefits have refused.
o LA Decision: found RPN failed to establish legal
basis for termination of employment, ordered the ISSUE 3: W/N RPN is guilty of indirect contempt – NO
reinstatement of the respondents with payment sufficient basis for charge of indirect contempt, and that it
was made without due regard for their right to exercise
their management prerogatives to preserve the viability of
the company and the harmony of the workplace
After the order of reinstatement of the respondents, RPN
forthwith restored respondents in its payroll without
diminution of their benefits and privileges, or loss of
seniority rights. They retained their entitlement to the
benefits under the CBA.
Respondents regularly received their salaries and
benefits, notwithstanding that the company has been in
financial straits. Any delays appear to have been due to
misunderstandings as to the exact place and time of the
fortnightly payments, or because the respondents were
tardy in collecting them from the Bank of Commerce at
Broadcast City Branch or from the NLRC cashier. The
petitioners tried proposing opening an ATM accounts for
them, but the respondents rejected the idea.