GR 108556; (November, 1996) (Digest)
G.R. No. 108556 November 19, 1996
MANILA MANDARIN EMPLOYEES UNION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, Second Division, and the MANILA MANDARIN HOTEL, respondents.
FACTS
The Manila Mandarin Employees Union filed a complaint against Manila Mandarin Hotel to compel payment of salary differentials due to alleged wage distortions. The Union claimed that various Presidential Decrees and Wage Orders, which increased the statutory minimum wage from 1978 to 1984, created distortions in the salary structure between newly-hired and longer-tenured employees. It argued the Hotel failed to properly adjust the basic salary rates of new hires in accordance with these laws, thereby depressing the wage scale and creating inequities.
The Labor Arbiter ruled in favor of the Union, ordering the Hotel to pay over P26 million in salary adjustments for wage distortions and nearly P2 million for underpayment of wages. On appeal, the National Labor Relations Commission (NLRC) reversed this decision. The NLRC found that the Hotel’s employees were, at all relevant times, paid salaries above the statutory minimums prescribed by the cited decrees and orders. It held that no legal underpayment occurred and that the claimed wage distortion was not substantiated.
ISSUE
Whether the NLRC committed grave abuse of discretion in reversing the Labor Arbiter’s decision and dismissing the Union’s complaint for wage distortions and underpayment of wages.
RULING
The Supreme Court affirmed the NLRC’s decision, finding no grave abuse of discretion. The legal logic is anchored on the principle that wage distortion presupposes a situation where the increases in prescribed wage rates eliminate the quantitative differences in salary grades among employees performing substantially similar work. For a claim of wage distortion to succeed, it must be proven that the distortion exists as a result of the mandated wage increases.
The Court meticulously examined the salary data and the applicable wage laws. The evidence conclusively showed that the Hotel’s employees received salaries exceeding the minimum wage rates mandated by Presidential Decrees 1389, 1614, 1713, 1751, and Wage Orders Nos. 1 to 6. Since there was no underpayment of the statutory minimum, the foundational element for a compulsory wage adjustment under the distortion principle was absent. The Union’s claim essentially sought a general salary increase, which is a matter for collective bargaining, not a judicial or administrative remedy for correcting a statutory violation. The NLRC’s findings were based on substantial evidence and in accordance with law; thus, its reversal of the Labor Arbiter was proper.