GR 167217; (February, 2008) (Digest)
G.R. No. 167217 ; February 4, 2008
P.I. MANUFACTURING, INCORPORATED, petitioner, vs. P.I. MANUFACTURING SUPERVISORS AND FOREMAN ASSOCIATION and the NATIONAL LABOR UNION, respondents.
FACTS
Petitioner P.I. Manufacturing, Inc. and respondent PIMASUFA entered into a Collective Bargaining Agreement (CBA) on December 18, 1987, granting supervisors and foremen substantial monthly wage increases retroactive to May 12, 1987. Subsequently, Republic Act No. 6640 was enacted, mandating a P10.00 daily increase for employees receiving up to P100.00 daily. Respondents filed a complaint, alleging that the implementation of this law created a wage distortion between the rank-and-file and supervisory employees, as the former received a legislated increase while the latter did not. They sought a corrective wage adjustment.
The Labor Arbiter and the National Labor Relations Commission ruled in favor of the union, ordering petitioner to grant a percentage increase based on the statutory hike. The Court of Appeals affirmed but modified the percentage. Petitioner filed a motion for reconsideration with the Supreme Court, arguing that the CBA increases, which were higher and granted earlier, had already offset any potential distortion.
ISSUE
Whether the implementation of R.A. No. 6640 created a wage distortion that obligated the employer to grant further wage increases to its supervisory employees under their existing CBA.
RULING
The Supreme Court granted the motion for reconsideration and reversed the Court of Appeals. The Court held that no wage distortion existed. The legal logic is anchored on the principle that voluntary grants of wage increases through a CBA, especially those higher than statutory minimums, are to be encouraged and recognized as valid corrections to any potential wage distortion. A wage distortion presupposes an existing historical or agreed parity in the wage structure that is suddenly disrupted. In this case, the CBA increases for supervisors and foremen were substantial, retroactive, and negotiated prior to the effectivity of R.A. No. 6640 . These increases were intended to maintain the differential and could not be deemed inferior to the later statutory increase given to rank-and-file.
The Court emphasized that the CBA is the law between the parties, and its provisions, including the specific wage increases, must be respected. To require an additional increase would be to grant a double benefit and disregard the concessions voluntarily agreed upon. The policy of the law is to foster collective bargaining agreements that stabilize employer-employee relations, not to allow one party to invoke beneficial provisions while disavowing related concessions. Therefore, the employer had no further obligation to correct a non-existent distortion.