GAA vs.

The Honorable CA, December 3, 1985 so as to ensure the cleanliness, maintenance and orderliness of all guest rooms,
function rooms, public areas, and the surroundings of the hotel. Considering the
Facts importance of petitioner's function in El Grande Hotel, it is undeniable that
petitioner is occupying a position equivalent to that of a managerial or supervisory
Respondent Europhil Industries Corporation was formerly one of the tenants in position.
Trinity Building at T.M. Kalaw Street, Manila, while petitioner Rosario A. Gaa was
then the building administrator. Europhil Industries commenced an action for Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it
damages against petitioner "for having perpetrated certain acts that Europhil declared what are to be exempted from attachment and execution. The term "wages"
Industries considered a trespass upon its rights, namely, cutting of its electricity, and as distinguished from "salary", applies to the compensation for manual labor, skilled
removing its name from the building directory and gate passes of its officials and or unskilled, paid at stated times, and measured by the day, week, month, or season,
employees.” while "salary" denotes a higher degree of employment, or a superior grade of
services, and implies a position of office: by contrast, the term wages " indicates
The court rendered judgment in favor of respondent Europhil Industries, ordering considerable pay for a lower and less responsible character of employment, while
petitioner to pay the former damages. The said decision having become final and "salary" is suggestive of a larger and more important service. (See Songco vs.
executory, a writ of garnishment was issued pursuant to which Deputy Sheriff served NLRC, case decided in 1990, that holds pay, wages, and salary synonymous.)
a Notice of Garnishment upon El Grande Hotel, where petitioner was then
employed, garnishing her "salary, commission and/or remuneration." The distinction between wages and salary was adverted to in Bell vs. Indian
Livestock Co. (Tex. Sup.), 11 S.W. 344, wherein it was said: "'Wages' are the
Petitioner then filed a motion to lift said garnishment on the ground that her compensation given to a hired person for service, and the same is true of 'salary'.
"salaries, commission and, or remuneration are exempted from execution under The words seem to be synonymous, convertible terms, though we believe that use
Article 1708 of the New Civil Code. and general acceptation have given to the word 'salary' a significance somewhat
different from the word 'wages' in this: that the former is understood to relate to
Issue position of office, to be the compensation given for official or other service, as
distinguished from 'wages', the compensation for labor."
Whether or not petitioner’s salary is exempt from garnishment under Article 1708.
We do not think that the legislature intended the exemption in Article 1708 of the
Held New Civil Code to operate in favor of any but those who are laboring men or
women in the sense that their work is manual. Persons belonging to this class
We find, therefore, and so hold that the Trial Court did not err in denying in its order usually look to the reward of a day's labor for immediate or present support, and
of November 7, 1975 the motion of petitioner to lift the notice of garnishment such persons are more in need of the exemption than any others. Petitioner Rosario
against her salaries, commission and other remuneration from El Grande Hotel since A. GAA is definitely not within that class.
said salaries, Commission and other remuneration due her from the El Grande Hotel
do not constitute wages due a laborer which, under Article 1708 of the Civil Code,
are not subject to execution or attachment.

ART. 1708. The laborer's wage shall not be subject to execution or attachment,
except for debts incurred for food, shelter, clothing and medical attendance.

It is beyond dispute that petitioner is not an ordinary or rank and file laborer but "a
responsibly place employee," of El Grande Hotel, "responsible for planning,
directing, controlling, and coordinating the activities of all housekeeping personnel"

par. Surigao del Norte. not regularly. Section Manager. and continuously receive the 3 allowances mentioned as to form part of their wages. the privilege is discontinued. the definition of "facilities" in Art. lodging or other facilities. month basic pay for every year of service. restrictive government regulations on logging and the economic crisis. disputed allowances was based on contingencies the occurrence of which wrote finis . the employee concerned transfers to the 2. whenever a vacancy occurs in the company's housing facilities."customarily furnished. PICOP suffered a major financial setback allegedly brought about by the joint impact of Irregularly received by petitioners and doesn’t form part of their wages. "board. 97. 1999 Issue Facts Whether or not petitioners regularly. But the allowance ceases received by petitioners." The allowances in question pertained to the following – 1. report with a detailed enumeration of expenses incurred. petitioners received separation pay computed at the rate of one (1) monthly basis was characterized by permanency. in Bislig. The subject allowances were temporarily." we divide the discussion on the following . Furthermore they claim that their availment of the monetary equivalent of those "facilities" on a Accordingly. NLRC. Department Manager. Once the officer is transferred outside Bislig." and. Transportation Allowance – company premises and his housing allowance is discontinued On the other hand. Believing however that the allowances they allegedly regularly received on a monthly basis during their employment In order to ascertain whether the subject allowances form part of petitioner's should have been included in the computation thereof they lodged a complaint for "wages. Staff/Manager's Allowance – "Customary" is founded on long-established and constant practice connoting Respondent PICOP provides free housing facilities to supervisory and regularity. grants transportation allowance to key officers and Managers assigned in the mill site who use their own vehicles in the performance of their duties. The former grantee is then directed to fill the vacancy. the The recipients of this kind of allowance are required to liquidate it by submitting a allowance stops. respondent PICOP set 3. "fair and reasonable value as determined by the Secretary of Labor. To avert further losses. once a vacancy occurs in the company -provided housing accommodations. allowance reached the cutoff point. Unit Manager. Bislig Allowance – another requirement that the personal cars be used by the employees in the The Bislig Allowance is given to Division Managers and corporate performance of their duties. It is a conditional The Bislig allowance is given to Division Managers and corporate officers assigned grant such that when the conditions no longer obtain. The petitioners' continuous enjoyment of the But once the recipient is transferred elsewhere outside Bislig. In the case of the housing allowance. the allowance ceases. March 29. When the conditions for availment ceased to exist.Millares vs. regularity and customariness. (f). Owing however to shortage of such characterize it as regular and forming part of salary because the nature of the grant is facilities. petitioners submit that their allowances are included in petitioners. The receipt of an allowance on a monthly basis does not ipso facto managerial employees assigned in Bislig. rented houses outside but near the vicinity of the mill site. permanently. We add that in the availment of the transportation allowance. the transportation allowance is in the form of advances for actual To relieve respondent PICOP's motor pool in Bislig from a barrage of transportation expenses subject to liquidation x x x given only to employees who requests for company vehicles and to stabilize company vehicle requirements it have personal cars. Division Manager and Vice President in the mill site Held of respondent Paper Industries Corporation of the Philippines (PICOP). it undertook a retrenchment program and terminated the services of In this petition for certiorari. of the Labor Code." separation pay differentials. it was constrained to grant Staff allowance instead to those who live in a factor worth considering. the officers assigned in Bislig on account of the hostile environment prevailing therein. Petitioners occupied the positions of Technical Staff.

to such enjoyment. Petitioners' allowances do not represent such fair and reasonable value as determined by the proper authority simply because the Staff/Manager's allowance and transportation allowance were amounts given by respondent company in lieu of actual provisions for housing and transportation needs whereas the Bislig allowance was given in consideration of being assigned to the hostile environment then prevailing in Bislig." it is not so with "facilities. the criterion is not so much its kind but its purpose." The Staff /Manager's allowance may fall under "lodging" but the transportation and Bislig allowances are not embraced in "facilities" on the main consideration that they are granted as well as the Staff/Manager's allowance for respondent PICOP's benefit and convenience. In determining whether a privilege is a facility.. i. The inevitable conclusion is that.e. as reached by the NLRC. . Although it is quite easy to comprehend "board" and "lodging. subject allowances did not form part of petitioners' wages. to insure that petitioners render quality performance. That the assailed allowances were for the benefit and convenience of respondent company was supported by the circumstance that they were not subjected to withholding tax.

The guidelines pertinently provides: On November 22. The BWC wage multiplied by their length of service within a given calendar year. An employee is entitled to a pay in proportion to the length of time he worked during the year. Honda shall pay the amount deducted. Thereafter. As per the company’s new considered or integrated as part of the regular or basic salary. exclude from the computation of “basic salary” payments for sick.rata payment of the 13th month pay as proposed by Honda. Section 6. computed on the same basis as A cursory reading of the provisions will show that they did not state categorically computation of 13th Month Pay. of resolved the ambiguity in favor of labor as mandated by Article 1702 of the Civil not less than 100% of basic pay. The COMPANY agrees to continue the practice of granting. financial assistance to covered employees in December of each year. The case stems from the Collective Bargaining Agreement (CBA) forged between Honda wanted to implement a pro-rated computation of the benefits based on the petitioner Honda and respondent union Samahan ng Malayang Manggagawa sa “no work. In the latter part of 1998.e.Honda vs. When the talks between provided that the minimum 13 th month pay required by law shall not be less than the parties bogged down. Code. night deducted from these bonuses. the management of Honda issued a memorandum The “basic salary” of an employee for the purpose of computing the 13 th month pay announcing its new computation of the 13th and 14th month pay to be granted to all shall include all remunerations or earnings paid by his employer for services its employees whereby the thirty-one (31)-day long strike shall be considered rendered but does not include allowances and monetary benefits which are not unworked days for purposes of computing said benefits. 50% to be given in May and the other 50% in December of each year. we have interpreted “basic salary” to mean. This CBA is effective until year 2000. For employees receiving regular wage. we agreed with the pro. with a commitment however that in the event that the differential and holiday pay. in its rated based on the compensation actually received. Honda sought not the amount actually received by an employee. and cost-of-living allowances. 2005 Held Facts Such computation is invalid. The revised guidelines also provided for a pro-ration of this benefit only in cases of resignation or separation from work. reckoned from the time he started . regular holiday pay and premiums for work Issue done on rest days and special holidays. but 1/12 of their standard monthly the opinion of the Bureau of Working Conditions (BWC) on the issue. 13th Month Pay payment of the bonuses. Samahang Mangagawa. or pro- Section 7. June 15. however. vacation and maternity leaves. overtime premium. such as the cash formula. no pay” rule.. the phrase “present practice” as Honda (respondent union) which contained the following provisions: mentioned in the CBA refers to the manner and requisites with respect to the Section 3. The COMPANY shall grant a 14 th Month Pay. the parties started Under the Revised Guidelines on the Implementation of the 13 th month pay it re-negotiations for the fourth and fifth years of their CBA. night differentials. Whether or not the pro-rated computation of the bonuses is valid. insists that the CBA provisions The COMPANY shall maintain the present practice in the implementation [of] relating to the implementation of the 13 th month pay necessarily relate to the the 13th month pay. Respondent union opposed the pro-rated computation of the bonuses. respondent union filed a Notice of Strike on the ground of one-twelfth (1/12) of the total basic salary earned by an employee within a calendar bargaining deadlock. year. strike is declared legal. the amount equivalent to 1/12 of the employees’ basic salary shall be equivalent of unused vacation and sick leave credits. The arbitrator thus properly discretion. 14th month pay and the financial assistance would be based on one full month’s basic salary of the employees. 14th Month Pay computation of the same. i. whether the computation of the 13 th month pay. Honda filed a Notice of Lockout. Thus. Respondent union. According to the company. 1999.

it has not been refuted that Honda has not implemented any pro- rating of the 13th month pay before the instant case. Considering the foregoing. the computation of the 13th month pay should not be pro-rated but should be given in full.working during the calendar year. Honda did not adduce evidence to show that the 13th month. A full month payment of the 13 th month pay is the established practice at Honda. . More importantly. the computation of the 13 th month pay should be based on the length of service and not on the actual wage earned by the worker. there being no gap in the service of the workers during the calendar year in question. 14th month and financial assistance benefits were previously subject to deductions or pro-rating or that these were dependent upon the company’s financial standing. In the present case.

negating as a result thereof the distinction between one Facts level of position from the next higher level. the Regional Tripartite Wages and Productivity Board of Region VII concomitant increase in the salary rate of a higher one issued Wage Order 2. Respondent Association then demanded in the Labor have higher compensation than their counterparts of the same level in other regions. there was an increase in the salary rates of all pay classes. Petitioner’s claim of wage distortion must also be denied for one other reason. A wage distortion involves a parity in the salary rates of different pay classes which. Respondent Prubankers Association wrote the petitioner requesting that the Labor Petitioner argues that a wage distortion exists because the implementation of the two Management Committee be immediately convened to discuss and resolve the Wage Orders has resulted in the discrepancy in the compensation of employees of alleged wage distortion created in the salary structure upon the implementation of similar pay classification in different regions. a disparity in wages between employees holding similar positions but in different regions does not constitute wage distortion as Issue contemplated by law. its Naga Branch and Wage Order 2 at its Cebu. the quantitative difference in COLA into the basic pay of its rank-and -file employees at its Cebu. the the only branch covered by Wage Order 1. Mabolo and P. affected region. Where a significant change occurs at the lowest level . Employees in the affected regions the said wage orders. 1999 of positions in terms of basic wage without a corresponding change in the other level in the hierarchy of positions. del Rosario branches. A significant change in the salary rate of a lower pay class without a Subsequently. which directed the integration of the COLA mandated 3. In the said branches. Prudential Bank. It also established an 4. as a result.50 to its employees at its Naga Branch. In the present case. eliminates the distinction between the Whether or not the bank’s separate and regional implementation of Wage Order 1 at different ranks in the same region. Mabolo and P. wages and other emoluments. insisting that the employees of the same pay class in different regions should receive the same compensation. 1. claiming that the regional The Court is not persuaded. petitioner has apparently misunderstood both the meaning Wage distortion presupposes a hierarchy of positions at various levels in terms of of wage distortion and the intent of the law to regionalize wage rates. Contrary to petitioner’s postulation. implementation of the said orders created a wage distortion in the wage rates of petitioner’s employees nationwide. The elimination of the distinction between the two levels pursuant to Wage Order 1 into the basic pay of all workers. Order 1 which provided for a Cost of Living Allowance (COLA) to workers in the private sector who had rendered service for at least three (3) months before its Wage distortion involves four elements: effectivity. and integrated the P150. it is clear that no wage distortion resulted when respondent implemented the subject Wage Orders in the covered branches. the branches covered by Wage Order 2.Prubankers vs. compensation between different pay classes remained the same in all branches in the del Rosario branches. The Regional Tripartite Wages and Productivity Board of Region V issued Wage there exists a wage distortion. The existence of the distortion in the same region of the country.00 per month hierarchy of positions was preserved. January 25. between new entrants and old hires. The difference in wages between employees in the same pay scale in different regions is Held not the mischief sought to be banished by the law. An existing hierarchy of positions with corresponding salary rates 2. created a wage distortion in the bank nationwide. In other words. Furthermore. A disparity in wages between employees with similar positions in different regions is necessarily expected. increase in the minimum wage rates for all workers and employees in the private sector. and resulting in a parity between the lowest level and the next higher level or rank. In No wage distortion. and for the same period thereafter. Management Committee meetings that the petitioner extend the application of the wage orders to its employees outside Regions V and VII. The petitioner then granted a COLA of P17.

Petitioner also avers that the implementation of the Wage Order in only one region violates the equal-pay-for-equal-work principle. supply and demand of basic goods. Other considerations underscore the necessity of the law. services and necessities. hence. . to decongest the metropolis. what the petitioner herein bewails is precisely what the law provides in order to achieve its purpose.It must be understood that varying in each region of the country are controlling factors such as the cost of living. and the purchasing power of the peso. Wages in some areas may be increased in order to prevent migration to the National Capital Region and. Therefore.

however. hence. petitioner cannot legally obligate Bankard to correct the alleged “wage . of new employees. However. and Level V. A significant change in the salary rate of a lower pay class without a employees and the newly hired employees. III and IV by nine hundred pesos (P900. Prubankers Association v. Put differently. the classification is not one employees who fell below the new minimum rates were also adjusted to reach such based on “levels” or “ranks” but on two groups of employees.e. the old. in each and every level. it filed a Notice of Strike. It is thus clear that there is no hierarchy of positions between the newly hired and regular employees of Bankard. its employees. In a problem dealing with “wage distortion. to wit: Level I. Even assuming that there is a decrease in the wage gap between the pay of the old 2. the first element of wage distortion provided Issue in Prubankers is wanting.00).00). Normally. that there was no obligation on the part of the private respondent adopted retroactive. Accordingly. February 17. and Further. or result in severe contraction of the intentional quantitative differences in the salary rates between the employee group. board increase in salary. Level II. The “New Salary Scale” increased the hiring rates rate for each of the existing classes of employees reflects this classification.Bankard vs. Level IV.” the basic assumption is Level III. Whether or not the new Salary Scale resulted in a wage distortion. Petitioner cannot make a contrary management to grant to all its employees the same increase in an across-the-board classification of private respondent’s employees without encroaching upon manner. for Held purposes of determining the existence of wage distortion. to wit: matter of management judgment and discretion. regular employees. The differing wage market to be applied retroactively. one based on level. This Court finds that the third element provided in Prubankers is also wanting. The elimination of the distinction between the two levels. a company has a wage structure or method of determining the wages of Bankard. The existence of the distortion in the same region of the country. I to V. and Levels II. 2004 Facts 4. (Bankard) classifies its employees by levels. Inc. facto place[s] them under any of the levels mentioned in the new salary scale which Bankard took the position. to press for the increase in the salary of its old. the duly been “historically” classified into levels. While seniority may be a factor in determining the wages of employees. Its Board of Directors approved a “New Salary that there exists a grouping or classification of employees that establishes Scale” for the purpose of making its hiring rate competitive in the industry’s labor distinctions among them on some relevant or legitimate bases. in this case. 1. i. employees cannot create their own independent classification and use it as a basis to demand an across-the- Didn’t result in a wage distortion. said gap is not significant as to obliterate concomitant increase in the salary rate of a higher one. Moreover. NLRC. the entry of new employees to the company ipso Bankard. the employees of private respondent have Bankard’s move drew the Bankard Employees Union-WATU (petitioner). Prudential Bank and Trust Company laid down the four The formulation of a wage structure through the classification of employees is a elements of wage distortion.000. the newly hired and rates under their levels. 3. As the continued request of petitioner for increase in the wages and salaries of Bankard’s regular employees remained unheeded. and not between and among the different levels or ranks in the salary structure. An existing hierarchy of positions with corresponding salary rates. and not on the basis of their certified exclusive bargaining agent of the regular rank and file employees of length of service. recognized management prerogative of formulating a wage structure. to wit: Levels I and V by one thousand pesos (P1. it cannot be made the sole basis in cases where the nature of their work differs. the salaries of Petitioner maintains that for purposes of wage distortion.

If the compulsory mandate under Article 124 to correct “wage distortion” is applied to voluntary and unilateral increases by the employer in fixing hiring rates. supervisory employees were.distortion” as the increase in the wages and salaries of the newly -hired was not due to a prescribed law or wage order.file employees were paid a statutorily mandated salary increase. . Inc. as the obligation therein to rectify the wage distortion was not by virtue of Article 124 of the Labor Code. or other logical bases of differentiation will be preserved. also paid the same amount plus an added premium. but on account of a then existing “company practice” that whenever rank-and. Reliance on Metro Transit is however misplaced. Petitioner cites Metro Transit Organization. the distinctions embodied in the wage structure based on skills. as a matter of practice. Unlike in Metro Transit then where there existed a “company practice.” no such management practice is herein alleged to obligate Bankard to provide an across-the- board increase to all its regular employees. the intention of the law being that in the event of an increase in minimum wage. ipso facto result to an obligation to rectify it. absent a law or other source of obligation which requires its rectification. length of service. especially if the financial conditions of the business cannot address an across-the-board increase. NLRC to support its claim that the obligation to rectify wage distortion is not confined to wage distortion resulting from government decreed law or wage order. Thus this Court held in said case: The mere factual existence of wage distortion does not. Article 124 should be construed and correlated in relation to minimum wage fixing. v. an employer would be discouraged from adjusting the salary rates of a particular group of employees for fear that it would result to a demand by all employees for a similar increase. however.

claiming that on several occasions Any benefit and supplement being enjoyed by employees cannot be reduced. in several instances. the employer has the burden of length of service to the company does not constitute voluntary employer practice. Jurisprudence has not laid down any rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary Held company practice. May 14. We disagree. prolonged absences and the error was corrected by implementing the pro-rata Experientially. Thus. This of one employee concerned (per year) vis à vis the 170 employees of the company. Thus. 2003. Petitioner claims that its full payment of benefits regardless of the In cases involving money claims of employees. violates the rule against diminution of benefits under Article 100 of the Labor Code. 1993. The parties submitted the case for voluntary arbitration. but it was an established practice nonetheless. petitioner did not prorate the payment of the same benefits to seven (7) employees diminished. if petitioner wants to prove that it merely erred in giving full benefits. voluntarily and consistently granting full benefits to its employees regardless of the length of service rendered. 1994. whereas happened in this case. 1999. could have easily bolstered petitioner’s theory of mistake/error. supported only by an affidavit of its manufacturing group head Petitioner granted. According to respondent. there were only a total of seven Issue employees who benefited from such a practice. . bonus. it should have been practiced over a long period of time and must be shown to be consistent. Respondent protested the prorated scheme. Sometime in not been modified to incorporate the giving of full benefits regardless of the length December 2003. as a consequence received only prorated benefits. claiming that it was a mistake or an error. Jurisprudence is replete who had not served for the full 12 months. of freely. a perfect attendance in the workplace is always the goal but it is payment of benefits pursuant to law and their existing CBA. True. Petitioner cannot shirk away from its responsibility by merely Violates the rule. such as the names of other employees who discovered the error “when there were already three (3) employees involved with did not fully serve for one year and thus were given prorated benefits. three (3) years. and leave encashment of of service. petitioner argues that for a grant of a benefit to Facts be considered a practice. petitioner had adopted a policy (NCMB). 1999. and 2004. 2002 and 2003. 2008 Petitioner describes the situation as a “clear oversight” which should not be taken against it. To further bolster its case. isolated cases. full benefits to employees who have not served a full year. or even as short as two (2) years.Arco Metal vs. Whether or not the prorated payment scheme violates the rule against diminution of benefits. they filed a complaint before the National Conciliation and Mediation Board In the years 1992. 1996. 1993. it can be six (6) years. Samahan.” It adds that the seven seldom achieved. it According to petitioner. The payments were made in 1992. but sadly. Indeed. it was only in 2003 that the accounting department could have easily presented other proofs. Petitioner tries to make a case out of the fact that the CBA has respondent is the labor union of petitioner’s rank and file employees. no evidence to that effect was presented. discontinued or eliminated by the employer. There must have been other employees who had reported for work earlier cases of full payment of benefits went unnoticed considering the proportion less than a full year and who. deliberate and intentional. It proving that the employees did receive the wages and benefits and that the same points out that the payments had been erroneously made and they occurred in were paid in accordance with law. the prorated payment given by the employer and which ripened into company practice. proof that the grant has not ripened into company practice. which is not what Petitioner is a company engaged in the manufacture of metal products. which is less than a full twelve (12) months. three union members in amounts proportional to the service they actually rendered in a year. with cases which recognize the right of employees to benefits which were voluntarily 1994. petitioner paid the 13 th month pay.

Thus. on behalf of its member. otherwise known as the Wage Rationalization Act. increase shall be added. R02-03 is void insofar as it grants a wage increase to employees earning more than the minimum wage rate. No. who received the wage increase the other hand. Also. 6727). When all the The Wage Order is void and of no legal effect. As correctly pointed out by the OSG. R02.00 as the amount to be added to the prevailing statutory minimum wage rates. No. 6727. basis for the same. February 6. such as P250. which amounts the petitioners have already received believing they were There are two ways of fixing the minimum wage: the "floor.A. all employees/workers in the private the "floor-wage method" or the "salary. it granted an across. On Employees. Upon effectivity of this Wage Order.ceiling" method. regardless of the status of employment are granted an The RTWPB did not set a wage level nor a range to which a wage adjustment or across-the-board increase of P15. the prevailing minimum wage rate in the National Capital Region (NCR). the Court finds that Section 1.ceiling method" in issuing the Wage Order. R02-03 is void and of no legal effect In regard to the refund of the disallowed benefits.00 in Region II. Only the RTWPB clarified that the Wage Order covers all private establishments situated employees earning the above -stated minimum wage rates are entitled to the P15. other than minimum wage earners. the RTWPB did not determine or fix the minimum wage rate by Section 1.Metropolitan Bank vs. Wage Order No. as follows: In the present case. this Court holds that petitioners need not refund the benefits received by them based on our rulings in Blaquera v. Section 1 is declared valid and do not fall under the exemptible categories listed under the Wage Order.banks are already paying more than additional benefits not contemplated by R. Wage Order No. Whether or not Wage Order No. this Court shall make Issue a definite pronouncement thereon to finally put this case to rest.00 to all employees and workers of Region 2. sector throughout Region II. The "floor-wage" method involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates. the Bankers' Council for Personnel Management exceeded its authority by extending the coverage of the Wage Order to wage earners (BCPM). orders established in Metro Manila and irrespective of the amounts already paid by the petitioner. regardless of the voluntary adoption by said establishments of the wage mandated increase under the Wage Order. parties acted in good faith.wage" method and the legally entitled to the same. which is their principal place of business. it would have been sufficient if the Facts Wage Order simply set P15. NWPC. the RTWPB In a letter .03 (Wage Order). by virtue of Republic Act sufficient if the Wage Order states a specific salary. the Wage Order granted coverage of the Wage Order since its member.A.inquiry to the NWPC. "salary. the wage adjustment was to be mandated by the Wage Order need not refund the wage increase received by them applied to employees receiving a certain denominated salary ceiling.banks. In doing so. Although the concomitant effect of the nullity of the Wage Order to those employees who have received the mandated increase was not put in issue. without a denominated establishments with head offices outside Region II to seek exemption from the salary ceiling. In other words. and The NWPC stated that the member-banks of BCPM are covered by the Wage Order pursuant to the separability clause of the Wage Order. we cannot countenance the refund of subject incentive benefits. since they received the wage increase in good faith. . with respect to employees earning the prevailing minimum wage rate. issued earning below it shall be entitled to the salary increase. while in the "salary-ceiling method". in the "salary-ceiling" method. 6727 (R. De Jesus v.the -board wage increase of P15. in the honest belief that they are workers already being paid more than the existing minimum wage (up to a certain entitled to such wage increase and without any knowledge that there was no legal amount stated in the Wage Order) are also to be given a wage increase. 2007 To illustrate: under the "floor wage method". Commission on Audit. Instead.00 daily. and only those No. it would have been The Regional Tripartite Wages and Productivity Board. requested for a ruling on the eligibility of receiving more than the prevailing minimum wage rate. Held Alcala.00. Commission on Audit and Kapisanan ng mga Manggagawa sa Government Service Insurance System (KMG) v.

. the Court need not delve on the other arguments raised by the parties.Considering the foregoing.

In its position paper. Grave abuse of discretion implies whimsical and capricious exercise of power which. petitioner company granted its supervisory employees. expire. 1996 Held conciliation meeting. Petitioner further contends that respondent Secretary disregarded its evidence showing that for the first part of 1996. collated for the determination of its true financial condition.LMG Chemicals vs. respondent union pruned down the originally evidence on record lacks merit. the petitioner and the respondent started negotiation Hence. Moreover.500 per with national interest. holds that respondent Secretary did not gravely abuse his discretion in ordering the wage increase. Sometime in December 1995. petitioner’s assertion that respondent Secretary failed to consider the In the course of the negotiations. also settled. respondent union filed a Notice of Strike. by awarding wage increase without any basis. . Such incident does not justify the withholding of any salary increase as petitioner’s income from all sources are With the CBA negotiations at a deadlock. in the instant case. yet during the May 9. during the The Secretary of Labor and Employment. corporation that was sustaining losses. Petitioner justified this by saying that the said petitioner made a turn-around. but no agreement was reached on the issue of wage increase. the previous offer due to serious financial losses during the early months of 1996. therefore. Petitioner insists that public respondent Secretary whimsically presumed that the company can survive despite the losses being suffered by its Inorganic Petitioner has three divisions. while petitioner asserts that it sustained losses in the first part of 1996. Verily. April 17. namely: the Organic Division. Respondent rejected the offer. “the loss in one is usually offset by the gains in the others. finding the instant labor dispute impressed pendency of the negotiations between the parties. its Inorganic Division suffered serious losses. Issue Petitioner’s actuation is actually a discrimination against respondent union members. Significantly. respondent Secretary gravely for a new Collective Bargaining Agreement (CBA) as their old CBA was about to abused his discretion and violated petitioner’s right to due process. company had no choice but to abide by such agreement even if it was already sustaining losses as a result of the strike of the rank-and-file employees. is not obtaining. spread over the period of three years. They were able to agree on the political provisions of the new CBA. should deny the same to respondent union members. Inorganic Division and Division and its additional losses caused by the strike held by respondent union. stating that it could no longer afford to grant its increase was pursuant to its earlier agreement with the supervisors. there is no valid reason why it grave abuse of discretion. the Pinamucan Bulk Carriers. assumed jurisdiction over the same.” day. As correctly stated by In an attempt to end the strike early. The Secretary. The economic issues were not We are not persuaded. month or P166 per day. It was only the Inorganic Division of the petitioner proposed wage increase quoted above to P215 per day. more or less. made an improved offer of P135 per the Secretary. it made the offer of P135 daily wage to the said union members. a wage increase of P4. petitioner. Hence. Whether or not the Secretary of Labor’s order for a wage increase is tainted with If it could grant a wage increase to its supervisors.2001 Petitioner asserts that the decreed amount of P140 wage increase has no basis in fact Facts and in law. This Court.