GR 130693; (March, 2004) (Digest)
G.R. No. 130693 ; March 4, 2004
Mindanao Steel Corporation, petitioner, vs. Minsteel Free Workers Organization (MINFREWO-NFL) Cagayan de Oro, respondent.
FACTS
Petitioner Mindanao Steel Corporation and respondent Minsteel Free Workers Organization executed a Collective Bargaining Agreement (CBA) on June 29, 1990, providing for a daily wage increase of ₱20.00 effective January 1, 1991. Subsequently, due to a fuel price hike in December 1990, the Regional Tripartite Wages and Productivity Board issued Interim Wage Order No. RX-02, granting an emergency cost of living allowance (ECOLA) for three months starting January 7, 1991. Petitioner refused to pay the ECOLA, arguing its earlier CBA wage increase constituted compliance with the wage order.
Respondent union filed a complaint for non-payment of ECOLA. The dispute was submitted to voluntary arbitration. The Voluntary Arbitrator ruled in favor of the union, ordering payment of the ECOLA. The Court of Appeals affirmed this decision, prompting petitioner to elevate the case to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether the wage increase granted under the CBA exempts petitioner from paying the ECOLA mandated by Interim Wage Order No. RX-02.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The legal logic is anchored on the clear stipulation in the CBA and the distinct purpose of the wage order. Section 3, Article VII of the CBA explicitly states: “It is hereby agreed that these salary increases shall be exclusive of any wage increase that may be provided by law as a result of any economic change.” This provision is unambiguous and must be interpreted according to its literal meaning. It establishes that the contractual ₱20.00 increase is separate from, and not in lieu of, any legislated wage adjustment arising from economic changes like the fuel price hike.
Furthermore, the ECOLA under the interim wage order was a specific, temporary relief measure responding to an emergency economic contingency. In contrast, the CBA increase was a product of negotiation intended as a general wage adjustment. Petitioner’s claim of crediting the CBA increase against the ECOLA obligation under the wage order’s implementing rules fails because the CBA increase was not granted “because of, or in anticipation of the fuel price hikes” but was a pre-existing contractual obligation. Therefore, the CBA provision governs, and the wage order’s ECOLA is an additional, legally mandated benefit. The terms of a CBA constitute the law between the parties, and petitioner is bound by its own agreement to keep the negotiated increases exclusive of statutory wage adjustments.