GR 157098; (June, 2005) (Digest)
G.R. No. 157098; June 30, 2005
NORKIS FREE AND INDEPENDENT WORKERS UNION, Petitioner, vs. NORKIS TRADING COMPANY, INC., Respondent.
FACTS
The parties had a Collective Bargaining Agreement (CBA) effective from 1994 to 1999. Section 2, Article XII of the CBA stipulated that “In the event that a law is enacted increasing minimum wage, an across-the-board increase shall be granted by the company according to the provisions of the law.” In 1998, the Regional Tripartite Wages and Productivity Board (RTWPB) for Region VII issued Wage Order No. ROVII-06, which prescribed a new minimum daily wage of ₱165.00, to be achieved through two ₱5.00 increases.
Prior to this Wage Order, the parties had renegotiated and executed a Memorandum of Agreement granting salary increases. By August 1, 1998, the employees were already receiving a daily wage of ₱175.00, which exceeded the new ₱165.00 minimum set by the Wage Order effective October 1, 1998. The Union demanded an across-the-board increase pursuant to the CBA provision, arguing that the Wage Order triggered this contractual obligation. The Company refused, contending it had already complied by paying above the new minimum.
ISSUE
Whether the respondent company is obligated under the CBA to grant an across-the-board wage increase to all employees upon the issuance of Wage Order No. ROVII-06, even when the employees are already receiving wages higher than the new minimum wage rate.
RULING
No. The Supreme Court ruled that the respondent company had lawfully complied with Wage Order No. ROVII-06 and was not required to grant an additional across-the-board increase. The legal logic is anchored on the distinct nature and purpose of a wage order versus a contractual wage increase. A wage order issued by the RTWPB, pursuant to Republic Act No. 6727 (the Wage Rationalization Act), is a legislative function that prescribes a new floor or minimum wage rate. It is not intended to grant a general, uniform increase to all employees regardless of their current wage levels.
The Court emphasized that the CBA provision must be interpreted in harmony with the law. The clause “according to the provisions of the law” in the CBA refers to the manner of implementation prescribed by the wage order itself. Since Wage Order No. ROVII-06 only mandated an increase for those receiving less than the new minimum, its “provisions” did not require an adjustment for employees already above the new floor. The Company’s earlier negotiated increases, which placed its employees’ wages above the new statutory minimum, constituted compliance. To compel an additional across-the-board increase would distort the purpose of the wage order and grant the employees a double benefit not contemplated by the law or the CBA’s reference to it.