GR 96169; (September, 1991) (Digest)
G.R. No. 96169 September 24, 1991
EMPLOYERS CONFEDERATION OF THE PHILIPPINES, petitioner, vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION AND REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD-NCR, TRADE UNION CONGRESS OF THE PHILIPPINES, respondents.
FACTS
The Regional Tripartite Wages and Productivity Board for the National Capital Region (RTWPB-NCR) issued Wage Order No. NCR-01-A, granting a daily wage increase of P17.00 not only to workers receiving the statutory minimum wage but also to those earning above the minimum up to P125.00 per day. This order was promulgated pursuant to Republic Act No. 6727 , the Wage Rationalization Act. The petitioner, Employers Confederation of the Philippines (ECOP), appealed to the National Wages and Productivity Commission (NWPC), arguing that the regional board exceeded its authority by granting an “across-the-board” increase. The NWPC dismissed ECOP’s appeal, prompting this petition.
ECOP contends that RA 6727 only authorizes the regional boards to prescribe new minimum wage rates, not to determine salary ceilings or grant increases to workers already earning above the minimum. It asserts that such action preempts collective bargaining. The Solicitor General defended the wage order, explaining that the board utilized the “salary-ceiling method” to fix wages, a method historically employed to prevent and correct wage distortions that arise when only floor wages are adjusted.
ISSUE
Whether the Regional Tripartite Wages and Productivity Board (RTWPB-NCR) exceeded its authority under RA 6727 by issuing Wage Order No. NCR-01-A, which granted a wage increase to workers earning above the statutory minimum wage up to a specified ceiling.
RULING
The Supreme Court ruled that the RTWPB-NCR did not exceed its authority. The legal logic is anchored on the broad statutory purpose of RA 6727 to rationalize wage policy and correct wage distortions. The Court agreed with the NWPC’s historical analysis distinguishing between the “floor-wage” method and the “salary-ceiling” method. The legislature’s shift towards the salary-ceiling method in prior laws was a deliberate policy response to minimize industrial unrest caused by wage distortions—a situation where the wage differential between different employee groups is significantly disrupted.
The Court held that confining the boards to adjusting only floor wages would be too restrictive and would frustrate the law’s objective of maintaining equitable wage structures. The authority to prescribe “minimum wages” under RA 6727 is not limited to setting a bare floor but includes the power to define wage structures within a region to achieve social justice and industrial peace. The salary-ceiling method is a reasonable and recognized tool within this delegated power. Therefore, Wage Order No. NCR-01-A is a valid exercise of the board’s quasi-legislative function to implement the legislative policy effectively. The petition was denied.