GR 98111; (April, 1993) (Digest)
G.R. No. 98111 . April 7, 1993.
UNION OF FILIPINO WORKERS (UFW), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) AND MAKATI SPORTS CLUB, INC., respondents.
FACTS
The Union of Filipino Workers (UFW), the certified bargaining agent for the rank-and-file employees of Makati Sports Club, Inc., filed a complaint for violation of Republic Act No. 6727 (the Wage Rationalization Act) and underpayment of separation pay. During CBA negotiations, the parties reached an agreement on May 17, 1989, which included a wage increase of P300.00 monthly effective January 1, 1989, and a stipulation that “Legislated wages shall be credited to the said wage increases.” The CBA was signed on June 22, 1989. Republic Act No. 6727 , providing for a P25.00 daily wage increase, took effect on July 1, 1989. The Club credited the CBA wage increase against the legislated increase and computed the separation pay of retrenched employees based on the basic pay including the P300.00 CBA increase but excluding the R.A. No. 6727 increase. The Union protested this crediting and the computation of separation pay. The Labor Arbiter ruled in favor of the Union, ordering payment of an additional P300.00 monthly wage increase and computation of separation pay according to the legislated wage increase without crediting. The NLRC reversed this decision on appeal. The Union then filed this petition for certiorari.
ISSUE
1. Whether the wage increase granted in the Collective Bargaining Agreement (CBA) can be credited to the wage increase mandated by Republic Act No. 6727 .
2. Whether the retrenchment conducted by the private respondent was valid, particularly regarding the notice requirement to the Department of Labor and Employment (DOLE).
3. Whether the separation pay of the retrenched employees was correctly computed.
4. Whether the NLRC correctly gave due course to the private respondent’s appeal despite the late filing of the appeal bond.
RULING
1. Yes, the CBA wage increase can be credited to the legislated wage increase. The Supreme Court upheld the NLRC’s finding that the parties intended the crediting of the CBA wage increase to the legislated increase, as expressly provided in their CBA signed on June 22, 1989. This complies with the requisites under Section 4(d) of R.A. No. 6727 , which allows crediting if expressly provided in the CBA and the increases were granted by employers three months before the effectivity of the Act. The CBA, being the law between the parties, effectively governed their agreement on crediting.
2. No, the retrenchment was not fully valid due to non-compliance with the notice requirement. While retrenchment was justified to prevent losses after a fire, the Club failed to strictly comply with the mandatory requirement of serving a written notice to the DOLE at least one month before the effective date of retrenchment. The “Conciliation Minutes” dated May 17, 1989, could not substitute for the required written notice, as it lacked necessary details like the names of employees to be retrenched.
3. No, the separation pay was incorrectly computed. The effective date of retrenchment, for the purpose of computing separation pay, should be at least one month after the proper notice was filed with DOLE (July 22, 1989). Therefore, the basis for computation should be the basic pay as of July 22, 1989, which must include the wage increment mandated by R.A. No. 6727 , subject to the crediting of the CBA wage increase of P300.00 monthly.
4. Yes, the NLRC correctly gave due course to the appeal. The posting of a bond is necessary to perfect an employer’s appeal from a monetary judgment. However, in this case, the Labor Arbiter’s decision did not state the exact monetary award, ordering instead a computation by an examiner. The private respondent could not be expected to post a bond for an undetermined amount. It filed the bond promptly after the NLRC’s appeal section provided a tentative computation. There was no showing of abuse of the leniency granted, and giving due course to the appeal served the ends of justice.
DISPOSITIVE PORTION:
The petition was GRANTED in part. The NLRC Decision was MODIFIED. Private respondent Makati Sports Club, Inc. was ordered to recompute the separation pay of the retrenched employees using the basic pay as of July 22, 1989 as the basis, subject to the crediting of the CBA monthly wage increase of P300.00. No costs.