MORALES, MARIVIC A. Case No.

56 [C1, Book III, Part II ]

Labor Law I Block A

Metropolitan Bank and Trust Company Employees Union-ALU-TUCP vs. NLRC

G.R. No. 102636, September 10, 1993

FACTS:

Metrobank entered into a CBA with the petitioner union, granting a monthly wage increases:
Php900.00 in the first year, Php600.00 in the second, and Php200.00 in the third year. Only the
regular employees were given the Php900.00 increase, excluding the probationary employees.
RA 6727 then was enacted, mandating an increase of Php25.00 per day in the statutory minimum
wage rates of all workers in the private sector. The law also provided that a stipulation in the
CBA entered three months prior to the laws enactment which provides for an increase in the
daily basic wage shall be credited as compliance with the prescribed wage increases. With this,
the other groups of employees were given the mandated increase, excluding those regular
employees and others who were already receiving the Php900.00 monthly increase. The NLRC
rendered a decision in favor of the Bank, stating that no wage distortion was present in the case.

ISSUE:

Was a distortion created when a law mandating an increase in pay of Php25.00 for certain
employees was implemented, thus requiring the employer an adjustment in the wages of other
various groups of employees in the company?

RULING:

YES. With the adjustments in the salaries of the employees, the Court concluded that there was
a severe contraction of intentional quantitative differences in the rates of the employees wages.
The intentional quantitative differences in the wages has been set by the CBA to about
Php900.00 a month; it was intentional because it has been arrived through the CBA entered by
the employer and the union. The law did not require that there be an elimination or total
abrogation of quantitative wage or salary differences; a severe contraction is enough.

The Court applied the formula suggested by the dissenting Commissioner in computing for the
distortion, which is

MinimumWage
= % x Prescribed Increase = Distortion Adjustment
ActualSalary

In the case, it was aptly observed that the contraction between personnel groupings came close to
83%, which cannot be considered as less than severe.