Case Summary (G.R. No. 74156)
Applicable Law and Wage Order Context
This case involves the implementation of Wage Order No. 6, effective October 30, 1984, which provided an increased COLA for non-agricultural workers in the private sector. Petitioner Corporation complied with the order by paying a COLA of P3.00 per day; however, the manner of computation led to legal challenges. The union argued that the COLA should be calculated over 30 days rather than the 22 days for which the company paid its employees, leading to allegations of illegal deductions and underpayment.
Labor Arbiter's Initial Ruling
Labor Arbiter Adelaido F. Martinez initially sided with the petitioners, ruling that the computation based on 22 days was correct and justified based on the company's payroll practices. The Arbiter opined that compelling the company to compute the COLA based on a 30-day month would result in inconsistencies regarding other benefits, making such a mandate unjust. This decision underscored the importance of existing salary practices under the collective bargaining agreement (CBA) between the parties.
NLRC's Reversal of the Labor Arbiter's Decision
In contrast to the Arbiter’s ruling, the NLRC reversed the decision, asserting that the computation of COLA should indeed be based on a 30-day month. The NLRC concluded that even unworked days (like weekends and holidays) count for COLA entitlements under Wage Order No. 6. Furthermore, the NLRC regarded the company’s past practices as constituting a voluntary employer obligation that couldn’t be withdrawn unilaterally.
Legal Interpretation of Wage Computation
This summary underscores that under the provisions that govern wage orders, entitlement to COLA is primarily tied to the payment of basic wages. The law establishes a principle that compensation is owed for every day employees are considered to have been paid, regardless of actual work performed. Consequently, it implies that monthly-paid employees entailed a COLA for every day of the month by virtue of their salary structure.
Specific CBA Terms and Payroll Practices
Particular provisions of the CBA acknowledged a five-day workweek, which was critical in analyzing the extent of compensation owed based on the number of working days. The Labor Arbiter noted that salary computations for overtime and leave were consistently anchored on 22 actual working days, thereby affirming that the COLA should equally reflect this practice. The CBA’s stipulations clarified that the salary structure was not aligned to a traditional 30-day count necessary for COLA calculations.
Assessment of Employer Practices and Legal Precedents
Further analysis revealed that the petitioners did not establish a consistent past practice for a 30-day COLA computation as required for it to rise to the level of an unwithdrawable voluntary employer practice. The absence of any clear guidelines prior to the issuance of relevant wage orders weakened the
...continue readingCase Syllabus (G.R. No. 74156)
Overview of the Case
- This case involves a petition for Certiorari with a request for a Temporary Restraining Order (TRO) to prevent the enforcement of a decision made by the National Labor Relations Commission (NLRC) dated 10 March 1986.
- The case stems from NCR Case No. 1-168-85, titled "FFW-Globe Mackay Employees Union, et al. vs. Globe Mackay Cable & Radio Corporation, et al."
- The NLRC's decision set aside the earlier ruling of the Labor Arbiter, declaring the petitioners guilty of illegal deductions of the Cost-of-Living Allowance (COLA) and ordering them to pay back allowances and cease further illegal deductions.
Background Facts
- Wage Order No. 6 was enacted on 30 October 1984, increasing the COLA for non-agricultural workers in the private sector.
- Globe Mackay Cable and Radio Corporation complied by paying its employees P3.00 per day as COLA but based the monthly calculation on 22 working days instead of 30.
- The Respondent Union claimed that the COLA should be calculated using 30 days, arguing that prior to Wage Order No. 6, the corporation also computed COLA using 30 days, establishing this as an employer practice that should not be unilaterally changed.
Legal Proceedings
- After unsuccessful grievance proceedings, the Union filed a complaint against the corporation and its officers, Frederick White and Jesus Santiago, for illegal deductions and underpayment.
- Labor Arbiter Adelaido F. Martinez initially sided with the corporation, stating that the individual officers should not be impleaded since they acted in corporate capacity and that COLA should be