G.R. No. L-5406 May 29, 1953
TALISAY-SILAY MILLING CO., petitioner, vs. TALISAY EMPLOYEES AND LABORERS’ UNION, respondents.

FACTS

The Talisay Employees and Laborers Union, a legitimate labor organization of employees of the Talisay-Silay Milling Co. (the central), presented several demands concerning wages, hours, and conditions of employment in February 1950. The dispute reached the Court of Industrial Relations. After hearings, the Court rendered a decision on July 26, 1951. The union’s demand included the standardization of wages based on rates paid by other sugar centrals and a supplementary petition for a minimum daily wage of P4 for common laborers and a 25% increase for others. The Court found that the central paid a minimum daily wage of P2.50, with the next scale at P2.75, and that 25% and 75% of employees received these rates, respectively. Employees also received rice rations and housing with utilities. The average daily expenses for an employee with 4-6 dependents were P3 to P3.50, forcing many to obtain loans. Evidence showed neighboring centrals, Philippine Hawaiian Sugar Central and Bacolod-Murcia Milling Co., paid minimum wages of P3 and P2.50 plus a P0.50 living bonus, respectively. The Court concluded the central’s wages were insufficient for basic necessities and ordered a general increase of P0.50 per day for all employees and laborers, effective February 8, 1951. The central moved for reconsideration, arguing the facts did not justify a general increase for all irrespective of current wages, but the motion was denied. The central then petitioned for review, objecting specifically to the general wage increase, contending it would impose an additional annual outlay of P126,000 for its approximately 700 employees, while not opposing the increase for those earning P2.50 and P2.75 per day.

ISSUE

Whether the Court of Industrial Relations erred in ordering a general increase of P0.50 per day for all employees and laborers of the Talisay-Silay Milling Co., irrespective of their current wages, based on the finding that the wages of those at the lowest levels were insufficient.

RULING

The Supreme Court sustained the central’s exception to the general increase. The award was affirmed only insofar as it directed that laborers receiving wages of P2.50 and P2.75 per day shall receive an additional P0.50 per day. The Court held that the findings of the lower court justified an increase for workers receiving less than P3 per day, as their wages were insufficient compared to the cost of living and wages at neighboring centrals. However, these findings did not demonstrate the necessity or justice of increasing the wages of those already receiving higher pay (e.g., P6 per day or P300 a month). The decision under review contained no comparative finding that the central paid all its employee classes lower than the other centrals. The union’s argument for maintaining “equilibrium” in the wage scale was rejected; such maintenance is a matter of employer discretion and not enforceable by government decree, which must be based on necessity and justice. The guiding principle under Commonwealth Act No. 103 is to give labor just compensation and an adequate income while allowing capital a fair return on investment. The award’s failure to consider the central’s capacity to pay (the central alleged it was still in a state of rehabilitation) was objectionable. Furthermore, enforcing a general increase to maintain equilibrium could be detrimental to labor, as it might discourage employers from improving conditions for the lowest-paid if they must increase all wages, and during times of necessary salary reductions from the top, maintaining equilibrium would force reductions all the way down, harming low-income workers the most.