Title
Metropolitan Bank and Trust Company Employees Union-ALU-TUCP vs. National Labor Relations Commission
Case
G.R. No. 102636
Decision Date
Sep 10, 1993
A wage distortion arose when a bank's implementation of RA 6727 significantly reduced salary gaps between regular and probationary employees, prompting a Supreme Court ruling favoring equitable correction.

Case Digest (G.R. No. 102636)

Facts:

  • Background and Collective Bargaining Agreement (CBA)
    • The Metropolitan Bank & Trust Company Employees Union-ALU-TUCP (MBTCEU) and its president, Antonio V. Balinang, entered into a dispute with the bank.
    • On May 25, 1989, the bank executed a CBA with the MBTCEU granting wage increases in stages:
      • A monthly increase of P900 effective January 1, 1989.
      • A monthly increase of P600 effective January 1, 1990.
      • A monthly increase of P200 effective January 1, 1991.
    • During bargaining, the union also sought inclusion of probationary employees in the P900 increase; however, the bank refused such inclusion.
    • Consequently, only regular employees as of January 1, 1989, received the P900 increase, while probationary employees were excluded.
  • Implementation of Republic Act No. 6727
    • Republic Act No. 6727 mandated an across-the-board increase in the minimum wage:
      • All workers in the private sector were to receive an increase of P25 per day.
      • Employees already earning above the minimum wage, up to P100, were also to benefit from a P25 per day increase.
    • On July 1, 1989, the bank implemented RA 6727 by awarding:
      • A P25 daily increase (amounting to P750 monthly) to its probationary employees.
      • The same increase to employees promoted to regular or permanent status before July 1, 1989, but only if their daily wage did not exceed P100.
    • The bank refused to extend the P25 daily increase to:
      • Regular employees already earning over P100 per day.
      • Those who had received the P900 increase under the CBA.
  • Emergence of the Wage Distortion Issue
    • The MBTCEU contended that the bank’s selective application of the P25 increase resulted in:
      • A categorization of employees into two groups:
        • Group (a): Probationary employees and regular employees earning P100 or less.
        • Group (b): Regular employees who had already enjoyed the P900 increase.
      • A severe reduction of the originally intentional wage gap from P900 to approximately P150.
    • The union sought the restoration of the original wage gap by demanding the bank correct the distortion and grant an across-the-board adjustment.
  • Referral to Compulsory Arbitration and Labor Arbiter’s Decision
    • To avert an impending strike, the bank petitioned the Secretary of Labor to refer the issue for compulsory arbitration under Article 263(g) of the Labor Code.
    • The case was assigned to Labor Arbiter Eduardo J. Carpio.
    • On February 5, 1991, the labor arbiter ruled:
      • The bank’s implementation of RA 6727 did indeed create a wage distortion.
      • The reduction in the wage gap constituted a severe contraction of the originally intended quantitative wage difference.
      • The corrective measure ordered was an additional monthly wage increase of P750 (thus restoring the intentional P900 gap).
  • Appeal to the NLRC and Divergent Opinions
    • The bank appealed the labor arbiter’s decision to the National Labor Relations Commission (NLRC).
    • On May 31, 1991, the NLRC Second Division, by a vote of 2 to 1, reversed the labor arbiter’s ruling:
      • Majority opinion held that the reduction in wage gaps was not significant enough to constitute a wage distortion.
      • The NLRC found that an across-the-board adjustment of P750 was not justified by the evidence.
    • In dissent, Presiding Commissioner Edna Bonto-Perez opined:
      • A contraction of up to eighty-three (83%) had occurred, clearly evidencing a severe wage distortion.
      • Although she did not favor the labor arbiter’s remedy of a flat increase, she advocated for a formula-based adjustment as prescribed in Wage Order No. IV-02.
  • Petition for Certiorari and Supreme Court Involvement
    • The MBTCEU and its president filed a petition for certiorari challenging the NLRC decision.
    • They charged the NLRC with grave abuse of discretion for:
      • Failing to acknowledge the existence of a wage distortion due to partial implementation of RA 6727.
      • Not granting an across-the-board P25 increase to rectify the distortion.
    • The Solicitor General supported the petition, emphasizing the need to give effect to the parties’ intentions as shaped by collective bargaining and the statutory scheme.

Issues:

  • Whether the selective application of the statutory P25 daily wage increase by the bank resulted in a wage distortion.
    • Did the partial implementation of RA 6727 narrow the intentional wage gap created by the CBA?
    • Is the reduction from a P900 difference to an approximately P150 difference significant enough to trigger correction?
  • Whether the corrective measure for the wage distortion should be an across-the-board P750 monthly increase.
    • Is a flat increase for affected employees justified under the law?
    • Can or should the remedy be computed based on a formula as suggested by the dissenting opinion?
  • Whether the NLRC’s reversal of the labor arbiter’s decision constitutes an abuse of discretion.
    • Were the factual findings regarding wage distortion sufficiently supported by substantial evidence?
    • Did the NLRC err in not giving due recognition to the intentionality of the original wage gap as established through the CBA?

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
Unlock Full Case Digest

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms