G.R. No. 116008 - Metro Transit Organization, Inc. vs. National Labor Relations Commission

Metro Transit Organization, Inc. (Metro) is the operator and manager of the Light Railway Transit System in Metro Manila.
Supervisory employees, numbering over 200, and rank-and-file employees (close to 1,000) work for Metro.
The Supervisory Employees Association of Metro (SEAM), a union representing supervisory employees, was certified in May 1989 as the sole bargaining unit for this group.

Prior to December 1989, Metro had a CBA only with its rank-and-file employees, while supervisory employees were governed by company practice.
Under this practice, whenever rank-and-file employees received a statutorily mandated salary increase, supervisory employees were also awarded the same increase plus an additional premium of P50.00.
On 1 December 1989, Metro commenced a CBA with SEAM covering supervisory employees, formalizing the salary increase arrangement for that group.

April 17, 1989 – Rank-and-file employees were given a monthly increase of P500.00 per the terms of their CBA, but supervisory employees did not receive a corresponding increase at that time.
December 1, 1989 – Under the newly effective CBA with SEAM, supervisory employees received a salary increase of P800.00 per month.
April 17, 1990 – Both rank-and-file and supervisory employees received a P600.00 monthly increase; for supervisors, this P600.00 was advanced from their second year increase (which was scheduled at P1,000.00 effective 1 December 1990).
December 1, 1990 – Supervisory employees were paid the remaining balance of P400.00 per month, completing the second year CBA increase.
Subsequent third year increments were given on April 17, 1991 (for rank-and-file) and December 1, 1991 (for supervisory employees) as provided in their respective CBAs.

March 24, 1992 – SEAM filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB), charging Metro with:

With conciliation failing, jurisdiction over the dispute was transferred to the NLRC for compulsory arbitration through certification by the Secretary of Labor on June 23, 1992.
March 30, 1994 – The NLRC rendered a decision ordering Metro to:

Pay P550.00 per month as a wage increase for supervisory employees effective April 17, 1989, and
Pay an additional P600.00 per month for the underpayment of the scheduled increase effective December 1, 1990.

June 22, 1994 – The NLRC denied Metro’s motion for reconsideration.
July 14, 1994 – Metro filed a Petition for Certiorari challenging the NLRC decision and sought a temporary restraining order to prevent enforcement of the award.
August 31, 1994 – The Court issued a Resolution encouraging amicable settlement and ordering the parties to maintain the status quo.
September 29–30, 1994 – Both parties informed the Court that efforts to settle the dispute had failed.

SEAM asserted that a wage distortion existed because, on April 17, 1989, rank-and-file employees received their CBA-stipulated increase (P500.00) while supervisory employees did not receive a corresponding increase plus the customary premium, thus aggravating the existing disparity.
SEAM contended that even with later adjustments (P800.00 on December 1, 1989, and subsequent adjustments), an inequitable gap remained and that supervisory employees should benefit from the same retroactive increase as rank-and-file employees.
Metro maintained that their practice of granting additional increases was discretionary—a bonus rather than a compulsory wage element—and asserted that SEAM, despite being aware of this practice, had not negotiated for the retroactive benefit in its own CBA.
Metro further argued that the P800.00 increase on December 1, 1989, should be deemed to incorporate the P550.00 wage increase and that later adjustments (including the P600.00 advance) should not result in perpetual additional payments.

Whether a wage distortion existed between the wage increases granted to rank-and-file and supervisory employees due to the nonsynchronized effectivity dates of their respective increases.
Whether Metro’s practice of granting a higher or additional increase to supervisory employees (as a matter of company practice or bonus) created an enforceable expectation and thus constituted part of their wages.
Whether the retroactive application of the P550.00 monthly wage increase, as claimed by SEAM for the period from April 17, 1989 to November 30, 1989, was warranted.
Whether the NLRC’s ruling that mandated additional monthly increases (including the P600.00 advance from April 17, 1990) for supervisory employees beyond the terms of the CBA resulted in unjust enrichment of the employees.