G.R. No. 110656 September 3, 1998
Philippine Airlines, Inc., petitioner, vs. National Labor Relations Commission (First Division), Philippine Airlines Employees Association (PALEA), Arlene Santos, et al., respondents.

FACTS

In 1987, private respondents were employed by Philippine Airlines, Inc. (PAL) as Junior Aircraft Mechanics with a monthly salary of P1,860.00. On October 1, 1987, they received a P400.00 monthly salary increase under the Collective Bargaining Agreement (CBA), making their total monthly compensation P2,260.00. Upon the effectivity of Republic Act No. 6640 (RA 6640) on December 14, 1987, which raised the minimum wage, their salaries were adjusted to P2,564.00 per month (P1,860.00 basic + P400.00 CBA increase + P304.00 RA 6640 increase). In June 1988, private respondents were promoted to Avionics Mechanic C with a basic pay of P2,300.00 plus the P400.00 CBA increase, resulting in a gross monthly pay of P2,700.00. Private respondents contended that, despite their promotion, they should still receive the P304.00 wage increase under RA 6640, making their gross monthly pay P3,004.00. PAL considered the P440.00 difference between the new basic pay (P2,300.00) and the old basic pay (P1,860.00) as sufficient compliance with RA 6640, allocating P304.00 for the mandated increase and P136.00 as promotional increase. Private respondents filed a case for violation of RA 6640. The Labor Arbiter ruled in their favor, ordering PAL to integrate the P304.00 into their monthly salary and pay differentials. The NLRC affirmed the decision. PAL filed a petition for certiorari.

ISSUE

1. Whether RA 6640 was meant to grant permanent wage increases that must be maintained as a fixed component of an employee’s monthly salary throughout career growth, regardless of substantial promotional increases.
2. Whether the NLRC gravely abused its discretion in ruling that it had no jurisdiction to rule upon petitioner’s submission of an issue over a question of law.

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the NLRC Decision.
1. The wage increase under RA 6640 is permanent and cannot be offset by subsequent promotional salary increases. RA 6640 contains no creditability provision that would allow such offsetting, unlike the Wage Orders in the Apex Mining case relied upon by PAL. Section 7 of RA 6640 prohibits the diminution of existing benefits and allowances. Therefore, it was improper for PAL to consider the promotional salary increase as compliance with the mandated wage hike. The proviso in Section 2 of RA 6640, which grants an increase to those receiving above the minimum wage up to P100.00, is not a wage distortion mechanism; Section 3 of the same law separately addresses wage distortion.
2. The NLRC did not gravely abuse its discretion. Its statement that ruling the wage increase as temporary would be acting beyond the limit of its jurisdiction was interpreted by the Supreme Court to mean that it could not grant the relief prayed for by PAL, not that it was disinclined to exercise its jurisdiction over the issue. The NLRC’s decision was within its competence.