Title
Metropolitan Bank and Trust Company, Inc. vs. National Wages and Productivity Commission
Case
G.R. No. 144322
Decision Date
Feb 6, 2007
A wage order granting a P15 daily increase to all private employees in Region II was partially invalidated as it exceeded authority by applying to those earning above the minimum wage. The petitioner’s certiorari was improper due to unexhausted remedies.

Case Summary (G.R. No. 144322)

Administrative inquiries and positions

The Bankers’ Council for Personnel Management sought clarification from the NWPC concerning establishments with head offices outside Region II; the NWPC replied that member banks were covered by the Wage Order. Petitioner separately sought interpretation of applicability; the NWPC referred the inquiry to the RTWPB, which replied that the Wage Order covered all private establishments situated in Region II regardless of unified wage systems or amounts already paid.

Procedural posture in the courts below

Petitioner filed a petition for certiorari and prohibition with the Court of Appeals (CA) on October 15, 1996 seeking nullification of the Wage Order on multiple grounds (ultra vires issuance, intrusion on property rights, undermining collective bargaining, failure to account for unified wage structures and salary ceilings). The Office of the Solicitor General (OSG) filed a manifestation supporting petitioner’s contention that the RTWPB acted beyond its authority in granting an across‑the‑board increase to non‑minimum wage earners. Respondents moved to dismiss based on procedural lapses, the availability of appeal mechanisms, and the administrative nature of the Wage Order. The CA denied the petition on July 19, 2000.

Issues presented to the Supreme Court

Petitioner raised two principal issues: (1) whether Wage Order No. R02‑03 is void and of no legal effect because RTWPB exceeded authority under RA 6727; and (2) whether resort to certiorari and prohibition was proper despite alleged failure to exhaust administrative remedies.

Standards for certiorari and prohibition and initial procedural ruling

The Court summarized requisites for certiorari and prohibition: (1) target must be a body exercising judicial or quasi‑judicial / judicial, quasi‑judicial or ministerial functions respectively; (2) respondent must have acted without or in excess of jurisdiction or with grave abuse of discretion; and (3) there must be no other plain, speedy, and adequate remedy in the ordinary course of law. The Court concluded the RTWPB acted in a quasi‑legislative (rule‑making) capacity in issuing the Wage Order, not in a judicial, quasi‑judicial or ministerial capacity. Thus the special civil actions at issue were not of right but discretionary. The Court also observed that Section 13 of the Wage Order provided an administrative appeal to the NWPC within ten days from publication — a plain, speedy and adequate remedy which petitioner failed to pursue. Petitioner’s July 1996 letter‑inquiry was not an appeal; petitioner did not appeal the RTWPB’s August 12, 1996 reply to the NWPC. Under Article 121 of the Labor Code and the doctrine of primary jurisdiction, the NWPC has primary authority to review regional wage levels and related matters; courts ordinarily defer to administrative remedies and expertise in such technical matters.

Discretion to proceed and justiciability despite alleged fait accompli

Although the Court noted petitioner’s failure to exhaust administrative remedies and the discretionary nature of extraordinary writs, it exercised discretion to entertain the petition. The Court rejected respondents’ contention that the Wage Order’s implementation rendered judicial review moot, applying the “capable of repetition yet evading review” rationale and reaffirming that courts must not permit an administrative fait accompli to preclude judicial review where legal rights remain at issue.

Substantive analysis — statutory framework and limits of RTWPB authority

RA 6727 (incorporating amendments to the Labor Code) establishes the NWPC and authorizes RTWPBs to determine and fix minimum wage rates within their territorial jurisdiction, subject to NWPC guidelines and the standards in Article 124 (factors such as cost of living, prevailing wage levels, capacity to pay, etc.). The Court identified two recognized methods of wage adjustment under prior jurisprudence: (a) the “floor‑wage” method (a determinate amount added to prevailing statutory minimum wages) and (b) the “salary‑ceiling” method (applying adjustment to employees earning below a specified denominated salary ceiling). Both methods, as previously authorized, operate to set or adjust minimum wages or to extend increases up to a stated ceiling.

Application to Wage Order No. R02‑03 and finding of ultra vires

Wage Order No. R02‑03 did not adopt either the floor‑wage method (i.e., fixing a minimum wage level to which an increment is added) nor the salary‑ceiling method (i.e., specifying a denominated ceiling below which employees qualify). Instead, it granted a categorical across‑the‑board P15.00 increase to all employees of Region II, including those paid above prevailing minimum wages, without any salary ceiling. The Court concluded the RTWPB thereby exceeded the delegation of authority granted by Congress under RA 6727: administrative rule‑making cannot extend or amend the statute, and a regulation that modifies existing law or extends beyond its intended scope is ultra vires and unreasonable.

Ruling on validity and separability

Applying the Wage Order’s separability clause, the Court declared Section 1 of Wage Order No. R02‑03 vali

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