Facts:

The case involves Bankard Employees Union-Workers Alliance Trade Unions as the petitioner and the National Labor Relations Commission (NLRC) and Bankard, Inc. as respondents. The events unfolded when Bankard, a company that classifies its employees into five levels (I to V), approved a new salary scale on May 28, 1993. This scale aimed to improve competition in the labor market by increasing the hiring rates for new employees: an increase of one thousand pesos (₱1,000) for Levels I and V, and nine hundred pesos (₱900) for Levels II, III, and IV. Subsequently, the salaries of existing employees whose pay fell below these new rates were adjusted accordingly. However, the Bankard Employees Union-WATU, which represents the regular rank and file employees, highlighted that this new salary structure resulted in a wage disparity between newly hired and existing employees, demanding that management also increase the salaries of older employees. When Bankard rejected these requests, the

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Facts:

Background of the Case

• Bankard, Inc. (Bankard) implemented a "New Salary Scale" approved by its Board of Directors on May 28, 1993, retroactive to April 1, 1993.
• The purpose of the new scale was to render its hiring rate competitive in the industry’s labor market.
• Under the new scale, employees were classified by levels (I to V) with specific salary ranges.
• The increase in salary rates was differentiated:
• Levels I and V received an increase of P1,000.00.
• Levels II, III, and IV received an increase of P900.00.
• The adjustment was made so that salaries below the new minimum rates for each respective level were brought up to standard.

Dispute and Union Involvement

• The Bankard Employees Union-WATU, as the duly certified exclusive bargaining agent, sought an across-the-board salary increase for its regular or old employees.
• Bankard maintained that there was no obligation to extend the same increase to all employees uniformly, arguing that the wage structure was based on levels rather than seniority.
• The union contended that the unilateral enhancement of hiring rates created wage distortion among old and new employees.

Labor Action and Proceedings

• The union filed a Notice of Strike on August 26, 1993 alleging discrimination and other unfair labor practices after its repeated salary increase demands were not met.
• A director of the National Conciliation and Mediation Board treated the notice as a "Preventive Mediation Case" on the ground that the issues were not deemed strikeable.
• A subsequent Notice of Strike was filed on October 8, 1993, grounded on refusal to bargain and union busting, which was later averted through certification for compulsory arbitration by the Secretary of Labor and Employment.

Judicial and Quasi-Judicial Developments

• The Second Division of the NLRC dismissed the case on May 31, 1995, finding no wage distortion.
• The dismissal was reaffirmed upon the petitioner's motion for reconsideration on July 28, 1995.
• The petition for certiorari was initially filed before the Court and then referred to the Court of Appeals, which denied it for lack of merit on October 28, 1999.
• The petitioner faulted the appellate court for:
• Misapprehending the basic issues by considering that the adjusted salary rates still reflected the old salary gaps based on classification.
• Erroneously concluding that wage distortion did not exist, contrary to law and jurisprudence.

Issue:

• Whether the unilateral adoption by Bankard of a "New Salary Scale" that increased the hiring rates of new employees—but not an automatic corresponding increase for regular employees—resulted in wage distortion within the meaning of Article 124 of the Labor Code.
• Whether the basis of classification for determining wage distortion should be on the differences between newly hired and old employees, as argued by the petitioner, or on the established level system recognized by the employer.
• Whether petitioner's contention that there exists an actionable wage distortion has merit in light of the management prerogative to adjust compensation based on legitimate business judgment and competitive hiring considerations.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)