G.R. No. 116008 July 11, 1995
Metro Transit Organization, Inc., petitioner, vs. The Honorable National Labor Relations Commission, et al., and The Supervisory Employees Association of Metro (SEAM), respondents.

FACTS

Petitioner Metro Transit Organization, Inc. (Metro) operates the Light Railway Transit System. Prior to December 1989, its supervisory employees, represented by respondent SEAM, had no collective bargaining agreement (CBA). A company practice existed wherein whenever rank-and-file employees received a statutorily mandated salary increase, supervisory employees were granted the same amount plus a P50.00 premium to prevent wage distortion. On April 17, 1989, Metro paid its rank-and-file a P500.00 monthly increase per their CBA but did not grant a corresponding increase to supervisors. The first CBA between Metro and SEAM took effect on December 1, 1989. On April 17, 1990, Metro paid both groups a P600.00 increase. For supervisors, this P600.00 was an advance from their second-year CBA increase of P1,000.00 effective December 1, 1990. The remaining P400.00 balance was paid on that later date. SEAM filed a notice of strike, alleging wage discrimination and underpayment.

ISSUE

The principal issue is whether a wage distortion existed between the rank-and-file and supervisory employees and, if so, whether it was lawfully corrected by Metro.

RULING

The Supreme Court granted the petition, setting aside the NLRC decision. The Court found no wage distortion existed or, if one did, it was lawfully corrected. A wage distortion presupposes a historical hierarchy of wages based on skills, length of service, or other logical bases, which is eliminated by significant across-the-board increases. The previous practice of granting supervisors the rank-and-file increase plus a P50.00 premium was a voluntary act to maintain parity, not a contractual obligation creating a vested right. The failure to grant this in April 1989 did not automatically create a distortion, as the supervisory CBA was being negotiated. Crucially, by December 1, 1991, after the full implementation of the three-year supervisory CBA increases, any alleged gap was eliminated. The Court’s comparative computation showed that the salary difference between the highest-paid rank-and-file and the lowest-paid supervisor was restored to a rational and significant differential, thereby correcting any distortion. The NLRC’s award, which essentially enforced the lapsed voluntary practice as a demandable right, constituted a grave abuse of discretion.