PAG-ASA STEEL WORKS VS. CA GR NO. 166647, MARCH 31, 2006 

FACTS:

Petitioner Pag-Asa Steel Works, Inc. is a corporation duly organized and existing under Philippine laws and is engaged in the manufacture of steel bars and wire rods. Pag-Asa Steel Workers Union is the duly authorized bargaining agent of the rank-and-file employees of petitioner.

After several Wage Order issuances by NCR Wage Board which were all complied by the petitioner including the CBA-mandated wage increases There is another Wage Order No. NCR-08 issued. Section 1 thereof provides:

Section 1. Upon the effectivity of this Wage Order, private sector workers and employees in the National Capital Region receiving the prescribed daily minimum wage rate of P223.50 shall receive an increase of TWENTY SIX PESOS and FIFTY CENTAVOS (P26.50) per day, thereby setting the new minimum wage rate in the National Capital Region at TWO HUNDRED FIFTY PESOS (P250.00) per day.

Petitioner avers that respondent Union is not entitled to the wage increase provided under Wage Order No. NCR-08 as a matter of practice. There is no company practice of granting a wage-order-mandated increase in addition to the CBA-mandated wage increase. It points out that, as admitted by respondent Union, the previous wage orders were not automatically implemented and were made applicable only after negotiations. Petitioner argues that the previous wage orders were implemented because at that time, some employees were receiving salaries below the minimum wage and the resulting wage distortion had to be remedied.

For its part, respondent Union avers that the provision "[a]ny Wage Order to be implemented by the Regional Tripartite Wage and Productivity Board shall be in addition to the wage increase adverted to above" referred to a company practice of paying a wage increase whenever the government issues a wage order even if the employees’ salaries were above the minimum wage and there is no resulting wage distortion. According to respondent, the CBA contemplated all the salary increases that may be mandated by wage orders to be issued in the future. Since the wage order was only a device to determine exactly how much and when the increase would be given, these increases are, in effect, CBA-mandated and not wage order increases.  Respondent further avers that the ambiguity in the wage adjustment provision of the CBA can be clarified by resorting to parol evidence, that is, Atty. Yambot’s version of said provision.

 

ISSUE:

Whether or not the wage increase of P26.50 under Wage Order No. NCR-08 must be paid by the petitioner to the union members as a matter of practice.

 

RULING:

No. Petitioner is not obliged to grant the wage increase under Wage Order No. NCR-08 either by virtue of the CBA, or as a matter of company practice.

It is submitted that employers (unless exempt) in Metro Manila (including the [petitioner]) are mandated to implement the said wage order but limited to those entitled thereto. There is no legal basis to implement the same across-the-board. A perusal of the record shows that the lowest paid employee before the implementation of Wage Order #8 is P250.00/day and none was receiving below P223.50 minimum. This could only mean that the union can no longer demand for any wage distortion adjustment. Neither could they insist for an adjustment of P26.50 increase under Wage Order #8. The provision of wage order #8 and its implementing rules are very clear as to who are entitled to the P26.50/day increase, i.e., "private sector workers and employees in the National Capital Region receiving the prescribed daily minimum wage rate of P223.50 shall receive an increase of Twenty-Six Pesos and Fifty Centavos (P26.50) per day," and since the lowest paid is P250.00/day the company is not obliged to adjust the wages of the workers.

With it there is no merit to the respondent’s assertion of such a company practice in the grant of wage order increase applied across-the-board. The fact that it was shown the increases granted under the Wage Orders were obtained thru request and negotiations because of the existence of wage distortion and not as company practice as what the union would want. Wage Order No. NCR-08 clearly states that only those employees receiving salaries below the prescribed minimum wage are entitled to the wage increase provided therein, and not all employees across-the-board as respondent Union would want petitioner to do. Considering therefore that none of the members of respondent Union are receiving salaries below the P250.00 minimum wage, petitioner is not obliged to grant the wage increase to them.