National Federation v. NLRC Digest

National Federation of Labor v. NLRC

GR No. 103586 

Facts:

1. Wage orders 3, 4, 5 & 6 were implemented for a year which effectively icnreased the statutory minimum wages of workers. In the private respondent's company (Franklin Baker Corp.) the wage rates of the regular employees and casuals were such that there wasa positive differential between 2 in the amount of P4.56. After Wage Order No. 5, this differential is not zero. As a result, grievance meetings were held between the parties. It resulted to the following action on the part of the employer: a) regularization of casual employees, b) increase in the wages of the regular employees, and the c) grant of across the board increase of P2 to all the regular employees.

2. The company experienced output slowdown resulting to the dismissal of 205 employees. The petitioner union went on strike and demand the rectification of the wage distortion. The NLRC in its decision found the existence of a wage distortion and ordered the respondent company to increase wage by P1.00. However, the NLRC Fifth division held (after an MR) that the wage distortion only existed for 15 days and has ceased.

Issue: W/N it is within management prerogative or discretion to implement a new classification of its employees 

RULING:

Yes. It is a decision that lies outside the concept of 'wage distortion.' It is a decision that the company must make either in conjuction with employee negotiation. It is not therefore within the power of the NLRC to impose unilaterally a new scheme for the classification of employees under the guise of rectifying a wage distortion when none has been established either by CBA or by management decision.

 The court held that wage increases given by employers either unilaterally or as a result of collective bargaining negotiations should be validated as an action on the part of the employer to correct the wage distortion caused by the implementation of the wage orders.

Moreover, the regularization of the casual employees with the increases in the wages of the regulars made the issue on wage distortion academic