G.R. No. 103525 - Marcopper Mining Corp. vs. National Labor Relations Commission

Marcopper Mining Corporation, a duly organized mining corporation engaged in mineral prospecting, exploration, and extraction, entered into a Collective Bargaining Agreement (CBA) with the Marcopper Employees Union (through private respondent NAMAWU-MIF, a duly registered labor federation).
The CBA was effective from May 1, 1984, to April 30, 1987, and contained provisions for scheduled wage increases and an exclusive clause concerning increases in the minimum wage or other mandatory allowances.

The agreement explicitly stated that the wage increase was “exclusive of any increase in the minimum wage and/or mandatory living allowance,” thereby indicating that benefits provided later by law were to remain separate from the contractual benefit.

On July 25, 1986, prior to the expiration of the CBA, the parties executed an MOA to modify the terms regarding wage increases and allowances:

A wage increase structured as 5% effective May 1, 1986 and an additional 5% effective May 1, 1987, cumulatively resulting in a 10% increase.
An increase in the facilities allowance from ₱50.00 to ₱100.00 per month effective May 1, 1986.

On June 1, 1987, Executive Order (EO) No. 178 was promulgated, mandating the integration of the cost-of-living allowance (COLA) under various Wage Orders into the basic wage of workers, with retroactive effect to May 1, 1987.
As a result, for non-agricultural workers, the basic wage was automatically increased by ₱9.00 per day when the COLA was integrated.
Marcopper implemented the second 5% wage increase on May 1, 1987 based on this “integrated” basic wage.

Private respondent (NAMAWU-MIF) challenged the manner in which the second wage increase was computed, arguing:

The COLA, being an additional benefit under EO No. 178, should be integrated first into the basic wage.
The wage increase should then be computed on the “unintegrated” basic wage, thereby entitling the workers to a higher wage differential.

On December 15, 1988, the union filed a complaint for underpayment of wages before the Regional Arbitration Branch IV, Quezon City.
The Labor Arbiter rendered a decision on July 24, 1989, in favor of the union, directing Marcopper to pay wage differentials retroactive to May 1, 1987.
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision on November 18, 1991, and subsequently denied Marcopper's motion for reconsideration on December 20, 1991.

Marcopper Mining Corporation petitioned for certiorari and prohibition under Rule 65 of the Revised Rules of Court.
The petitioner contended that:

Without EO No. 178, the basic wage as originally intended in the CBA did not include the COLA.
The NLRC’s and Labor Arbiter’s reliance on the “non-chargeability” clause was misplaced.
The computation of the wage increase should be based on the unintegrated basic wage as stipulated in the original agreement and its modification.
The doctrine of liberal interpretation in favor of labor did not apply to a private contractual arrangement such as the CBA.

Should the wage increase mandated by the CBA and MOA be computed based on the unintegrated basic wage (excluding the cost-of-living allowance) as originally intended by the parties?
Or must it be computed on the “integrated” basic wage, which, by virtue of EO No. 178, includes the COLA?

Does the retroactive effect of EO No. 178, which mandated the integration of the COLA into the basic wage as of May 1, 1987, override the parties’ original contractual intentions?
Can the exclusive clause in the CBA, designed to keep the contractual wage increase separate from statutory benefits, be given effect when statutory changes occur?

Is it appropriate to invoke the principle of liberal interpretation in favor of labor in resolving ambiguities, particularly when statutory mandates conflict with private agreements?
How should the conflicting interests of labor and management be weighed in light of constitutional provisions on social justice and labor protection?

Did the parties’ conduct and the timing of the MOA amendment clearly establish an intention to exclude the COLA from the computation of the wage increase?
Or is the clear statutory directive for integration determinative regardless of the contractual language?