G.R. No. 108556 - Manila Mandarin Employees Union vs. National Labor Relations Commission

The Manila Mandarin Employees Union (“UNION”) filed a complaint on October 30, 1986, before the NLRC Arbitration Branch seeking to compel the Manila Mandarin Hotel (“MANDARIN”) to pay salary differentials and correct wage distortions.
The complaint was based on alleged underpayments arising from the failure of MANDARIN to adjust salaries in accordance with various wage increases issued by Presidential Decrees and Wage Orders.

PD 1389 – Mandated an increase of P3.00 in the statutory minimum wage over a three-year period (starting in 1978, 1979, and 1980).
PD 1614 – Provided for a P2.00 increase and set a minimum of P12.00 for non-agricultural workers in Metro Manila.
PD 1713 – Increased wages by P1.00 and provided additional mandatory allowances.
PD 1751 – Integrated previous mandatory allowances into the basic pay.
Wage Order No. 1 – Adjusted emergency living allowances for various employee types.
Wage Order No. 2 – Increased both minimum wage and cost of living allowances for multiple categories of workers.
Wage Order No. 3 – Raised the statutory minimum wage in two stages during 1983.
Wage Order No. 4 – Raised minimum wages further by integrating cost of living allowances into the basic wage.
Wage Order No. 5 – Increased the minimum wage rates effective June 16, 1984.
Wage Order No. 6 – Provided an additional wage increase effective November 1, 1984.

The UNION further filed a Position Paper on January 15, 1987, and an Amended Complaint on March 25, 1987, to include claims for additional salary adjustments and wage differential payments.

The Labor Arbiter ruled in favor of the UNION, finding evidence of wage distortions and underpayments.
The decision awarded salary adjustments totaling P26,173,601.25 to 541 employees and an additional P1,978,296.18 for underpayments to 182 employees, in addition to attorney’s fees.
The Labor Arbiter ordered restoration of the correct basic monthly rates for the respective employees.

MANDARIN appealed the Labor Arbiter’s decision, leading to the involvement of the NLRC’s Second Division.
The Second Division set aside the Labor Arbiter’s judgment and dismissed the UNION’s complaint on grounds including:

A certification by Deputy Executive Clerk Gaudencio P. Demaisip, Jr. explained that procedural delays in the payment of the appeal fee were due to the unavailability of designated NLRC employees.
The UNION challenged the timeliness and validity of MANDARIN’s appeal, citing anomalies in the receipt of the appeal fee and concerning the adequacy of the supersedeas bond.

The UNION presented a “Sample Comparison of Salary Rates” listing 13 employees allegedly affected by wage distortion.
MANDARIN countered that the wage differences were due primarily to:

Additionally, MANDARIN argued that its computation of the monthly equivalent of the minimum wage using a factor of 313 (as opposed to 365) was correct, referencing established Department of Labor guidelines.
The parties had previously entered into a Compromise Agreement (July 30, 1985) which affirmed that the hotel had satisfied its wage obligations under the relevant issuances.

Whether the NLRC had jurisdiction to review an appeal from the Labor Arbiter’s decision despite the alleged tardiness in filing by MANDARIN.
Whether the delayed payment of the appeal fee, due to circumstances beyond the control of MANDARIN’s counsel, should warrant dismissal.

Whether the initial bond issued by Plaridel Surety & Insurance Company, and its subsequent replacement by Commonwealth Insurance Company, met the legal requirements despite concerns over the companies’ financial capacities.

Whether there was an actual wage distortion as defined by the applicable wage orders and amended by Republic Act No. 6727.
Whether the differences in salary were due to improper implementation of wage increases or simply a result of legitimate differences arising from various employment conditions (e.g., hiring dates, initial positions, promotions).

Whether the employment practice of using 313 days (comprising 303 working days plus 10 paid holidays) to compute the monthly equivalent of the minimum wage was correct, as opposed to the contested computation multiplying by 365 days.

Whether the Compromise Agreement entered into on July 30, 1985, and the subsequent collective bargaining agreement, precluded the UNION from raising further claims of wage distortion or underpayment.