G.R. No. L-24940 - People vs. Saclao

The Employers Confederation of the Philippines (ECOP) challenged the validity of a wage order issued by the Regional Tripartite Wages and Productivity Board-NCR.
The wage order in question—Wage Order No. NCR-01-A—was promulgated pursuant to Republic Act No. 6727, which rationalizes wage policy determination in the Philippines.

On October 15, 1990, the Regional Board issued Wage Order No. NCR-01, which increased the minimum wage in the National Capital Region by P17.00 daily.
Subsequent to protests by the Trade Union Congress of the Philippines (TUCP) and the Personnel Management Association of the Philippines (PMAP), the Board issued Wage Order No. NCR-01-A on October 23, 1990.

Wage Order No. NCR-01-A amended the previous order by extending the P17.00 increase to private sector workers already earning above the statutory minimum wage (up to P125.00 per day).
The modification was applied “across-the-board” and not limited solely to those receiving the minimum wage.

ECOP contended that the Board, by implementing an across-the-board wage increase, exceeded its statutory authority under RA 6727.
It argued that the Board could only prescribe minimum wages (floor wages) and did not have the power to set salary ceilings.
Additionally, ECOP maintained that the purpose of RA 6727 was to encourage collective bargaining between labor and management rather than judicial or administrative imposition of wage ceilings.

The National Wages and Productivity Commission (NWPC) dismissed ECOP’s appeal, finding the wage order to be within the Board’s authority.
The Solicitor General supported the Board’s action, explaining that the adjustment was not an extra benefit but a reflection of the “salary-ceiling method” used to rationalize wages.
The government stressed that the legislative intent behind RA 6727 was to resolve wage distortions and ensure a socially just distribution of income.

The wage determination process had historically involved two methods: the floor-wage method (fixed increases to the minimum wage) and the salary-ceiling method (adjustments affecting employees earning above a specified salary level).
The statutory framework and subsequent wage orders aimed to address economic realities, reduce wage distortions, and minimize industrial unrest by incorporating economic and social development factors.
The Act provided the Board with considerable discretion to set wages in line with evolving economic conditions, emphasizing expert judgment over rigid formulas.

Whether the issuance of Wage Order No. NCR-01-A by the Regional Board exceeded the delegated authority under Republic Act No. 6727.
Whether the use of the salary-ceiling method (granting wage increases to workers already earning above the statutory minimum) falls within the Board’s lawful exercise of power.

Whether wage-fixing is solely a legislative function and if delegating such power to the Board undermines the role of Congress.
Whether the implementation of the salary-ceiling method preempts or conflicts with the principles of collective bargaining intended by the law.

Whether the wage order appropriately addresses the issues of wage distortion and social justice as envisioned by RA 6727.
Whether the across-the-board wage increase is a reasonable administrative response to economic conditions without upsetting the balance between labor rights and managerial interests.