Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 96169 September 24, 1991
EMPLOYERS CONFEDERATON OF T!E P!LPPNES, petitioner,
vs.
NATONAL "AGES AND PRODUCT#TY COMMSSON AND REGONAL TRPARTTE
"AGES AND PRODUCT#TY $OARD%NCR, TRADE UNON CONGRESS OF T!E
P!LPPNES, respondents.
Sycip Salazar, Hernandez & Gatmaitan for petitioner.
Gilbert P. Lorenzo for private respondent.

SARMENTO, J.:p
he petition is !iven due course and the various pleadin!s sub"itted bein! sufficient to aid
the Court in the proper resolution of the basic issues raised in this case, #e decide it #ithout
further ado.
he E"plo$ers Confederation of the Philippines %ECOP& is 'uestionin! the validit$ of (a!e
Order No. NCR)*+), dated October -., +//* of the Re!ional ripartite (a!es and
Productivit$ 0oard, National Capital Re!ion, pro"ul!ated pursuant to the authorit$ of
Republic ,ct No. 12-2, 3,N ,C O R,ION,4I5E (,6E PO4IC7 DEERMIN,ION 07
ES,04IS8IN6 8E MEC8,NISM ,ND PROPER S,ND,RDS 8ERE9ORE,
,MENDIN6 9OR 8E P:RPOSE ,RIC4E // O9, ,ND INCORPOR,IN6 ,RIC4ES
+-*, +-+, +--, +-., +-;, +-1, ,ND +-2 INO, PRESIDENI,4 DECREE NO. ;;- ,S
,MENDED, O8ER(ISE <NO(N ,S 8E 4,0OR CODE O9 8E P8I4IPPINES, 9I=IN6
NE( (,6E R,ES, PROVIDIN6 (,6E INCENIVES 9OR IND:SRI,4 DISPERS,4
O 8E CO:NR7SIDE, ,ND 9OR O8ER P:RPOSES,3 #as approved b$ the President
on >une /, +/?/. ,side fro" providin! ne# #a!e rates,
1
the 3(a!e Rationali@ation ,ct3 also
provides, a"on! other thin!s, for various Re!ional ripartite (a!es and Productivit$ 0oards
in char!e of prescribin! "ini"u" #a!e rates for all #orAers in the various re!ions
2
and for
a National (a!es and Productivit$ Co""ission to revie#, a"on! other functions, #a!e
levels deter"ined b$ the boards.
&
On October +B, +//*, the Re!ional 0oard of the National Capital Re!ion issued (a!e
Order No. NCR)*+, increasin! the "ini"u" #a!e b$ P+2.** dail$ in the National Capital
Re!ion.
4
he rade :nion Con!ress of the Philippines %:CP& "oved for reconsiderationC
so did the Personnel Mana!e"ent ,ssociation of the Philippines %PM,P&.
'
ECOP opposed.
On October -., +//*, the 0oard issued (a!e Order No. NCR)*+), a"endin! (a!e Order
No. NCR)*+, as follo#sD
Section +. :pon the effectivit$ of this (a!e Order, all #orAers and e"plo$ees
in the private sector in the National Capital Re!ion alread$ receivin! #a!es
above the statutor$ "ini"u" #a!e rates up to one hundred and t#ent$)five
pesos %P+-B.**& per da$ shall also receive an increase of seventeen pesos
%P+2.**& per da$.
ECOP appealed to the National (a!es and Productivit$ Co""ission. On Nove"ber 1,
+//*, the Co""ission pro"ul!ated an Order, dis"issin! the appeal for lacA of "erit. On
Nove"ber +;, +//*, the Co""ission denied reconsideration.
he Orders of the Co""ission %as #ell as (a!e Order No. NCR)*+),& are the subEect of
this petition, in #hich. ECOP assails the boardFs !rant of an 3across)the)board3 #a!e
increase to #orAers alread$ bein! paid "ore than eGistin! "ini"u" #a!e rates %up to
P+-B. ** a da$& as an alle!ed eGcess of authorit$, and alle!es that under the Republic ,ct
No. 12-2, the boards "a$ onl$ prescribe 3"ini"u" #a!es,3 not deter"ine 3salar$ ceilin!s.3
ECOP liAe#ise clai"s that Republic ,ct No. 12-2 is "eant to pro"ote collective bar!ainin!
as the pri"ar$ "ode of settlin! #a!es, and in its opinion, the boards can not pree"pt
collective bar!ainin! a!ree"ents b$ establishin! ceilin!s. ECOP pra$s for the nullification of
(a!e Order No. NCR *+), and for the 3reinstate"ent3 of (a!e Order No. NCR)*+.
he Court directed the Solicitor 6eneral to co""ent on behalf of the 6overn"ent, and in
the Solicitor 6eneralFs opinion, the 0oard, in prescribin! an across)the)board hiAe did not, in
realit$, 3!rant additional or other benefits to #orAers and e"plo$ees, such as the eGtension
of #a!e increases to e"plo$ees and #orAers alread$ receivin! "ore than "ini"u"
#a!es ...3
6
but rather, fiGed "ini"u" #a!es accordin! to the 3salar$)ceilin! "ethod.3
ECOP insists, in its repl$, that #a!e is a le!islative function, and Republic ,ct No. 12-2
dele!ated to the re!ional boards no "ore 3than the po#er to !rant "ini"u" #a!e
adEust"ents3
(
and 3in the absence of clear statutor$ authorit$,3
)
the boards "a$ no "ore
than adEust 3floor #a!es.3
9
he Solicitor 6eneral, in his reEoinder, ar!ues that Republic ,ct No. 12-2 is intended to
correct 3#a!e distortions3 and the salar$)ceilin! "ethod %of deter"inin! #a!es& is "eant,
precisel$, to rectif$ #a!e distortions.
1*
he Court is inclined to a!ree #ith the 6overn"ent. In the National (a!es and Productivit$
Co""issionFs Order of Nove"ber 1, +//*, the Co""ission noted that the deter"ination of
#a!es has !enerall$ involved t#o "ethods, the 3floor)#a!e3 "ethod and the 3salar$)ceilin!3
"ethod. (e 'uoteD
8istoricall$, le!islation involvin! the adEust"ent of the "ini"u" #a!e "ade use of t#o
"ethods. he first "ethod involves the fiGin! of deter"inate a"ount that #ould be added
to the prevailin! statutor$ "ini"u" #a!e. he other involves 3the salar$)ceilin! "ethod3
#hereb$ the #a!e adEust"ent is applied to e"plo$ees receivin! a certain deno"inated
salar$ ceilin!. he first "ethod #as adopted in the earlier #a!e orders, #hile the latter
"ethod #as used in R.,. Nos. 11;* and 12-2. Prior to this, the salar$)ceilin! "ethod
#as also used in no less than eleven issuances "andatin! the !rant of cost)of)livin!
allo#ances %P.D. Nos. B-B, ++-., +1+;, +1.;, +12?, +2+. and (a!e Order Nos. +, -, ., B
and 1&. he shift fro" the first "ethod to the second "ethod #as brou!ht about b$ labor
disputes arisin! fro" #a!e distortions, a conse'uence of the i"ple"entation of the said
#a!e orders. ,pparentl$, the #a!e order provisions that #a!e distortions shall be
resolved throu!h the !rievance procedure #as perceived b$ le!islators as ineffective in
checAin! industrial unrest resultin! fro" #a!e order i"ple"entations. (ith the
establish"ent of the second "ethod as a practice in "ini"u" #a!e fiGin!, #a!e
distortion disputes #ere "ini"i@ed.
11
,s the Co""ission noted, the increasin! trend is to#ard the second "ode, the salar$)cap
"ethod, #hich has reduced disputes arisin! fro" #a!e distortions %brou!ht about,
apparentl$, b$ the floor)#a!e "ethod&. Of course, disputes are appropriate subEects of
collective bar!ainin! and !rievance procedures, but as the Co""ission observed and as
#e are ourselves a!reed, bar!ainin! has helped ver$ little in correctin! #a!e distortions.
Precisel$, Republic ,ct No. 12-2 #as intended to rationali@e #a!es, first, b$ providin! for
full)ti"e boards to police #a!es round)the)clocA, and second, b$ !ivin! the boards enou!h
po#ers to achieve this obEective. he Court is of the opinion that Con!ress "eant the
boards to be creative in resolvin! the annual 'uestion of #a!es #ithout labor and
"ana!e"ent AnocAin! on the le!islatureFs door at ever$ turn. he CourtFs opinion is that if
Republic No. 12-2 intended the boards alone to set floor #a!es, the ,ct #ould have no
need for a board but an accountant to Aeep tracA of the latest consu"er price indeG, or
better, #ould have Con!ress done it as the need arises, as the le!islature, prior to the ,ct,
has done so for $ears. he fact of the "atter is that the ,ct sou!ht a 3thinAin!3 !roup of "en
and #o"en bound b$ statutor$ standards. (e 'uoteD
,R. +-;. Standards / Criteria for Minimum a!e "i#in!. H he re!ional
"ini"u" #a!es to be established b$ the Re!ional 0oard shall be as nearl$
ade'uate as is econo"icall$ feasible to "aintain the "ini"u" standards of
livin! necessar$ for the health, efficienc$ and !eneral #ell)bein! of the
e"plo$ees #ithin the fra"e#orA of the national econo"ic and social
develop"ent pro!ra". In the deter"ination of such re!ional "ini"u" #a!es,
the Re!ional 0oard shall, a"on! other relevant factors, consider the
follo#in!D
%a& he de"and for livin! #a!esC
%b& (a!e adEust"ent vis)a)vis the consu"er price indeGC
%c& he cost of livin! and chan!es or increases thereinC
%d& he needs of #orAers and their fa"iliesC
%e& he need to induce industries to invest in the countr$sideC
%f& I"prove"ents in standards of livin!C
%!& he prevailin! #a!e levelsC
%h& 9air return of the capital invested and capacit$ to pa$ of e"phasis
e"plo$ersC
%i& Effects of e"plo$"ent !eneration and fa"il$ inco"eC and
%E& he e'uitable distribution of inco"e and #ealth alon! the i"peratives of econo"ic and
social develop"ent.
12
he Court is not convinced that the Re!ional 0oard of the National Capital Re!ion, in
decreein! an across)the)board hiAe, perfor"ed an unla#ful act of le!islation. It is true that
#a!e)fiGin!, liAe rate constitutes an act Con!ressC
1&
it is also true, ho#ever, that Con!ress
"a$ dele!ate the po#er to fiG rates
14
provided that, as in all dele!ations cases, Con!ress
leaves sufficient standards. ,s this Court has indicated, it is i"pressed that the above)
'uoted standards are sufficient, and in the li!ht of the floor)#a!e "ethodFs failure, the Court
believes that the Co""ission correctl$ upheld the Re!ional 0oard of the National Capital
Re!ion.
,pparentl$, ECOP is of the "istaAen i"pression that Republic ,ct No. 12-2 is "eant to 3!et
the 6overn"ent out of the industr$3 and leave labor and "ana!e"ent alone in decidin!
#a!es. he Court does not thinA that the la# intended to dere!ulate the relation bet#een
labor and capital for several reasonsD %+& he Constitution calls upon the State to protect the
ri!hts of #orAers and pro"ote their #elfareC
1'
%-& the Constitution also "aAes it a dut$ of the
State 3to intervene #hen the co""on !oal so de"ands3 in re!ulatin! propert$ and propert$
relationsC
16
%.& the Charter ur!es Con!ress to !ive priorit$ to the enact"ent of "easures,
a"on! other thin!s, to diffuse the #ealth of the nation and to re!ulate the use of
propert$C
1(
%;& the Charter reco!ni@es the 3Eust share of labor in the fruits of
productionC3
1)
%B& under the 4abor Code, the State shall re!ulate the relations bet#een
labor and "ana!e"entC
19
%1& under Republic ,ct No. 12-2 itself, the State is interested in
seein! that #orAers receive fair and e'uitable #a!esC
2*
and %2& the Constitution is pri"aril$
a docu"ent of social Eustice, and althou!h it has reco!ni@ed the i"portance of the private
sector,
21
it has not e"braced full$ the concept of laisse@ faire
22
or other#ise, relied on pure
"arAet forces to !overn the econo"$C (e can not !ive to the ,ct a "eanin! or intent that
#ill conflict #ith these basic principles.
It is the CourtFs thinAin!, reached after the CourtFs o#n stud$ of the ,ct, that the ,ct is
"eant to rationali@e #a!es, that is, b$ havin! per"anent boards to decide #a!es rather
than leavin! #a!e deter"ination to Con!ress $ear after $ear and la# after la#. he Court is
not of course sa$in! that the ,ct is an effort of Con!ress to pass the bucA, or #orse, to
abdicate its dut$, but si"pl$, to leave the 'uestion of #a!es to the eGpertise of eGperts. ,s
>ustice Cru@ observed, 3I#Jith the proliferation of speciali@ed activities and their attendant
peculiar proble"s, the national le!islature has found it "ore necessar$ to entrust to
ad"inistrative a!encies the po#er of subordinate le!islationF as it is caned.3
2&
he 4abor Code defines 3#a!e3 as follo#sD
3(a!e3 paid to an$ e"plo$ee shall "ean the re"uneration or earnin!s, ho#ever
desi!nated, capable of bein! eGpressed in ter"s of "one$, #hether fiGed or ascertained
on a ti"e, tasA, piece, or co""ission basis, or other "ethod of calculatin! the sa"e,
#hich is pa$able b$ an e"plo$er to an e"plo$ee under a #ritten or un#ritten contract of
e"plo$"ent for #orA done or to be done, or for services rendered or to be rendered and
includes the fair and reasonabl$ value, as deter"ined b$ the Secretar$ of 4abor, of
board, lod!in!, or other facilities custo"aril$ furnished b$ the e"plo$er to the e"plo$ee.
39air and reasonable value3 shall not include an$ profit to the e"plo$er or to an$ person
affiliated #ith the e"plo$er.
24
he concept of 3"ini"u" #a!e3 is, ho#ever, a different thin!, and certainl$, it "eans "ore
than settin! a floor #a!e to up!rade eGistin! #a!es, as ECOP taAes it to "ean. 3Mini"u"
#a!es3 underlies the effort of the State, as Republic ,ct No. 12-2 eGpresses it, 3to pro"ote
productivit$)i"prove"ent and !ain)sharin! "easures to ensure a decent standard of livin!
for the #orAers and their fa"iliesC to !uarantee the ri!hts of labor to its Eust share in the
fruits of productionC to enhance e"plo$"ent !eneration in the countr$side throu!h industr$
dispersalC and to allo# business and industr$ reasonable returns on invest"ent, eGpansion
and !ro#th,3
2'
and as the Constitution eGpresses it, to affir" 3labor as a pri"ar$ social
econo"ic force.3
26
,s the Court indicated, the statute #ould have no need for a board if the
'uestion #ere si"pl$ 3ho# "uch3. he State is concerned, in addition, that #a!es are not
distributed unevenl$, and "ore i"portant, that social Eustice is subserved.
It is another 'uestion, to be sure, had Con!ress created 3rovin!3 boards, and #ere that the
case, a proble" of undue dele!ation #ould have ensuedC but as #e said, #e do not see a
0oard %National Capital Re!ion& 3runnin! riot3 here, and (a!e Order No. NCR)*+), as an
eGcess of authorit$.
It is also another 'uestion #hether the salar$)cap "ethod utili@ed b$ the 0oard "a$ serve
the purposes of Republic ,ct No. 12-2 in future cases and #hether that "ethod is after all,
a lastin! polic$ of the 0oardC ho#ever, it is a 'uestion on #hich #e "a$ onl$ speculate at
the "o"ent. ,t the "o"ent, #e find it to be reasonable polic$ %apparentl$, it has since been
6overn"ent polic$&C and if in the future it #ould be perceptibl$ unfair to "ana!e"ent, #e
#ill taAe it up then.
(8ERE9ORE, pre"ises considered, the petition is DENIED. No pronounce"ent as to
costs.
I IS SO ORDERED.