G.R. No. 103525. March 29, 1996.
MARCOPPER MINING CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NATIONAL MINES AND ALLIED WORKERS’ UNION (NAMAWU-MIF), respondents.

FACTS

Marcopper Mining Corporation and the National Mines and Allied Workers’ Union (NAMAWU-MIF) entered into a Collective Bargaining Agreement (CBA) effective from May 1, 1984, to April 30, 1987. The CBA provided for a 5% general wage increase effective May 1, 1986, and another 5% increase effective May 1, 1987. A “non-chargeability” clause stated these increases were exclusive of any government-mandated minimum wage or living allowance increases. The parties later executed a Memorandum of Agreement modifying the schedule, granting a 10% increase: 5% effective May 1, 1986, and 5% effective May 1, 1987. Marcopper implemented the first increase.
On June 1, 1987, Executive Order No. 178 was promulgated, mandating the integration of the cost of living allowance (COLA) into the basic wage, retroactive to May 1, 1987. Consequently, effective May 1, 1987, the basic wage of Marcopper’s workers was increased by P9.00 per day. Marcopper implemented the second 5% CBA increase and then added the integrated COLA. The union contested this sequence, arguing the COLA should first be integrated into the basic wage before computing the 5% contractual increase, resulting in a higher final wage.

ISSUE

Whether the 5% wage increase under the CBA for May 1, 1987, should be computed based on the basic wage rate before or after the integration of the COLA mandated by Executive Order No. 178.

RULING

The Supreme Court ruled in favor of the union, affirming the NLRC’s decision. The legal logic hinges on interpreting the CBA’s “non-chargeability” clause and applying the constitutional and statutory policy of protection to labor. The clause explicitly stated that the contractual wage increases were “exclusive of any increase in the minimum wage and/or mandatory living allowance.” This manifested the parties’ clear intention that benefits derived from law are separate from and cannot be diminished by benefits negotiated under the CBA. Therefore, the government-mandated integration of the COLA, which increased the baseline basic wage by P9.00 effective May 1, 1987, must be given full effect first. The subsequent 5% contractual increase must then be calculated on this new, higher basic wage. To compute the 5% on the pre-integration wage and then simply add the COLA would effectively credit the contractual increase against the statutory benefit, violating the CBA’s exclusive terms and diminishing the total benefit intended for the workers. This interpretation harmonizes the contractual right with the statutory grant, ensuring neither is subsumed by the other. Furthermore, pursuant to the rule that all doubts in the implementation of labor laws shall be resolved in favor of labor, the computation favoring the workers is upheld.