Case Summary (G.R. No. 103525)
Background of the Case
The present case concerns the validity of a decision made by the National Labor Relations Commission (NLRC) regarding wage differentials owed by Marcopper Mining Corporation to its rank-and-file employees represented by the National Mines and Allied Workers Union. The dispute arose from the interpretation and implementation of a Collective Bargaining Agreement (CBA) and a subsequent Memorandum of Agreement (MOA) modifying wage increase provisions.
Facts of the Case
On August 23, 1984, Marcopper Mining Corporation and NAMAWU-MIF entered into a CBA that provided for structured wage increases. Specifically, the CBA stipulated a 5% wage increase effective May 1 for 1985 and 1986. Subsequently, a MOA was signed on July 25, 1986, that granted an additional 10% increase to employees—5% backdated to May 1, 1986 and another 5% effective May 1, 1987, alongside an increase in facilities allowance.
Issue of Wage Computation
The central issue revolved around how the second wage increase should be calculated—whether it should be based on the “unintegrated” basic wage, which excludes the cost of living allowance (COLA), or the “integrated” wage that includes COLA following the issuance of Executive Order No. 178 on May 1, 1987. The petitioner's argument was that the basic wage referred to in the CBA meant the unintegrated wage from which the COLA was to be added subsequently, while the private respondent claimed the opposite.
Labor Arbiter and NLRC Decisions
The Labor Arbiter sided with the union in its December 24, 1989 ruling, which concluded that the employer had underpaid employees by not integrating the COLA into the basic wage before calculating wage increases. The NLRC upheld this decision, specifying that employee benefits must be construed to protect labor interests and that the employer could not lessen its contractual obligations due to legislative changes.
Petitioner's Arguments
Marcopper Mining Corporation's petition challenged the NLRC's ruling on multiple grounds:
- The NLRC allegedly abused its discretion by affirming a decision that misinterpreted the terms of the CBA regarding the definition of the basic wage.
- The company contended it faithfully complied with the agreements by calculating wage increases on the unintegrated basic wage.
- Marcopper also argued that the interpretation allowing for COLA to be included in wage calculations violated the exclusivity of the benefits as stipulated in the agreements.
Supreme Court Decision
In ruling against the petitioner, the Supreme Court elucidated upon the interaction between the CBA and E.O. No. 178. It emphasized that compliance with the law necessitated the inclusion of COLA into the calculation of the basic wage per the executive order
...continue readingCase Syllabus (G.R. No. 103525)
Background of the Case
- The case revolves around a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court filed by Marcopper Mining Corporation against the National Labor Relations Commission (NLRC) and the labor federation NAMAWU-MIF.
- The NLRC had previously dismissed Marcopper's appeal against a decision made by the Labor Arbiter concerning wage increases for employees.
Facts of the Case
- On August 23, 1984, Marcopper and NAMAWU-MIF entered into a Collective Bargaining Agreement (CBA) effective from May 1, 1984, to April 30, 1987, which included provisions for wage increases.
- The CBA stipulated a 5% wage increase on May 1, 1985, and another 5% on May 1, 1986, explicitly stating that these increases were exclusive of any minimum wage increases or mandatory living allowance promulgated during the agreement.
- A Memorandum of Agreement (MOA) was executed on July 25, 1986, modifying the terms of the CBA, granting an additional 10% wage increase scheduled over two years, along with an increase in facilities allowance.
- Following the implementation of the initial 5% increase on May 1, 1986, Executive Order (E.O.) No. 178 was issued on June 1, 1987, integrating the cost of living allowance (COLA) into the basic wage effective May 1, 1987.
Dispute Over Wage Calculation
- The dispute arose when the union contended that the COLA should be integrated into the basic wage before computing the second 5% wage increase due on May 1, 1987.
- The union filed a complaint fo