G.R. No. 74156 - Globe Mackay Cable vs. National Labor Relations Commission

A special civil action for certiorari and a prayer for a Temporary Restraining Order (TRO) was filed by Globe Mackay Cable and Radio Corporation, along with its officers, petitioners in this case.
The petition sought to enjoin the enforcement of an NLRC decision dated March 10, 1986, which had declared the company guilty of illegal deductions related to the cost‐of-living allowance (COLA) of its employees.

Petitioners: Globe Mackay Cable and Radio Corporation, Frederick White, and Jesus Santiago.
Respondents: National Labor Relations Commission (NLRC), the FFW-Globe Mackay Employees Union, and Eda Concepcion.
Initial TRO was issued on May 19, 1986, and after due course of submission of memoranda, the case was reviewed.

Wage Order No. 6, effective October 30, 1984, increased the COLA for non-agricultural workers to P3.00 per day.
The petitioners computed the monthly COLA by multiplying the P3.00 daily rate by 22 days, reflecting the number of working days in the company.
The respondent union contended that the computation should be done on a 30-day basis since the daily rate was mandated regardless of work on weekends and holidays.

The union argued that prior to Wage Order No. 6, the petitioner corporation had been paying the COLA on a 30-day basis, establishing a long-standing employer practice that could not be unilaterally withdrawn.
The CBA between the parties, executed in 1982, explicitly set the monthly salary computation on a five-day work week, or 22 days a month.
Additional payroll evidences, including overtime and leave computations, reinforced the practice of using a 22-day basis in the company’s computations.

The Labor Arbiter, Adelaido F. Martinez, ruled in favor of the petitioner corporation by supporting the computation on the basis of 22 days and noting that the officers acted in their corporate capacities.
On appeal, the NLRC reversed the Labor Arbiter’s decision, holding that:

COLA should be computed on a 30-day basis, since monthly-paid employees are entitled to COLA on Saturdays, Sundays, and legal holidays—even if unworked.
The full allowance paid before the execution of the 1982 CBA amounted to a voluntary employer practice that could not now be unilaterally retracted.
The individual officers were properly impleaded as respondents.

Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5, and 6 emphasizes that covered employees are entitled to their daily living allowance even on unworked days, provided basic wage is paid.
Prior guidelines, as seen in the formula issued on May 21, 1984, intended for companies with a five-day work week, yielded the equivalent of approximately 21.8 days, inadvertently supporting the 22-day computation basis.
The petitioner corporation’s error arose from a “doubtful or difficult question of law” during a period when administrative guidelines were still evolving.

The Supreme Court, acknowledging the peculiar circumstances of a 5-day work week under the CBA, held that COLA for monthly-paid employees must be computed on the basis of 22 days—the period during which they receive their basic wage.
Certiorari was granted; the NLRC decision was set aside and the Labor Arbiter’s decision reinstated.
The TRO issued earlier was made permanent, and no further discussion on the personal liability of the individual officers was rendered necessary.

Should the monthly COLA be computed on the basis of 30 days, as mandated by the Wage Order, or on the basis of 22 days, reflecting the actual paid working days under the company’s practice and the CBA?

Can the voluntary employer practice of computing COLA on a 30-day basis, which existed prior to the CBA, be unilaterally withdrawn by the petitioner corporation?
Whether such past payment practices, if not consistent and deliberate over a long period, qualify as binding employer practice.

Whether the petitioner corporation’s computation error constitutes a “mistake in the construction or application of a doubtful or difficult question of law.”
The implications of such an error on the rights of the employees and the company under the relevant wage orders and collective bargaining agreement.

Whether the NLRC committed a grave abuse of discretion in reversing the Labor Arbiter’s finding by mandating a 30-day computation.
The appropriate deference due to the terms of the CBA as the law between the parties.