Case Summary (G.R. No. 91787)
Facts of the Case
The dispute arose when ALU filed a complaint with the NLRC on September 5, 1985, alleging that TEFASCO underpaid its employees’ cost of living allowance as mandated by Wage Order No. 6, which set the monthly allowance at P517.08. The employees were receiving only P455.00, prompting the claim for a differential. TEFASCO contended that its employees fell under Group II of the wage computation categories, in which rest days are considered unworked and unpaid, rather than Group III where they are compensated.
Initial Labor Arbiter's Decision
Labor Arbiter Jose O. Libron ruled in favor of ALU on April 29, 1986, affirming that the employees indeed belonged to Group III due to their basic salary of P1,095.00. The Arbiter determined that the employees were entitled to a higher living allowance and ordered TEFASCO to pay a monthly differential of P62.08 from November 1, 1984, until the allowance amount reached P517.08.
NLRC's Affirmation with Modification
The NLRC modified the Labor Arbiter's decision on March 20, 1989, agreeing that the majority of union members fell under Group III. However, it specified that entitlement to the allowance began only for those who were earning P1,095.00 on or before November 1, 1984. TEFASCO's subsequent motion for reconsideration was denied, leading to the current petition.
Legal Issues Raised
The petitioner's principal arguments hinge on two errors attributed to the NLRC: first, that the NLRC strayed from precedents set forth by the Supreme Court in prior labor cases, specifically the Chartered Bank Employees Association v. Ople ruling, which related to the criteria for classification under salary groups; and second, that the NLRC's findings lacked substantial evidence.
Analysis of Salary Computation Methodology
TEFASCO argued that the use of a 26-day divisor to compute their employees' salaries was appropriate, as it aligns with the company practice of considering rest days as unpaid days. The petitioner highlighted discrepancies in pay slips to support its stance, suggesting that its treatment of wages relative to absences is consistent with their classification and fee structure under the law.
Comparison with Precedent Case
While TEFASCO cited the Chartered Bank case to support its computation method, the court clarified that the issues at hand differ significantly. The Chartered Bank case involved holiday pay and overtime, which had established practices in both the collective bargaining agreement and the law. Conversely, the current case hinges on cost of living allowances, with no similar precedents to justify a distinct divisor.
Court's Rationale and Constituti
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Case Overview
- This case involves a petition by Terminal Facilities and Services Corporation (TEFASCO) seeking to annul the resolutions of the National Labor Relations Commission (NLRC) dated March 20, 1989, and October 31, 1989.
- The NLRC resolutions affirmed with modifications a decision by Labor Arbiter Jose O. Libron, which ordered TEFASCO to pay its employees, represented by the Associated Labor Unions (ALU), monthly living allowance differentials as mandated by Wage Order No. 6.
- The dispute revolves around the classification of employees and the computation of their cost of living allowances.
Parties Involved
- Petitioner: Terminal Facilities and Services Corporation (TEFASCO)
- A domestic corporation engaged in wharf services and facilities in Davao City.
- Respondents: The National Labor Relations Commission (NLRC) and Associated Labor Unions (ALU)
- ALU serves as the exclusive bargaining agent for TEFASCO’s rank-and-file and monthly-paid employees.
Background of the Case
- The ALU filed a complaint against TEFASCO on September 5, 1985, alleging underpayment of the mandated emergency cost of living allowance for its monthly-paid employees.
- TEFASCO was accused of paying only P455.00, which was less than the prescribed P517.08 under Wage Order No. 6.
Legal Arguments
Petitioner’s Position:
- TEFASCO argued that its employees fell under Group II of the wage computation table, which does not consider unworked rest days as paid.
- The company maintained that the