Globe Mackay Cable and Radio Corporation v. National Labor Relations Commission
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the proper computation of the cost-of-living allowance (COLA) for monthly-paid employees of Globe Mackay Cable and Radio Corporation (Petitioner Corporation) following Wage Order No. 6. The Wage Order mandated a P3.00 daily COLA. Petitioner Corporation calculated the monthly COLA by multiplying the daily rate by 22 days, representing the number of working days in the company. The respondent union contended that the COLA should be computed based on 30 days a month, arguing that this was the prior employer practice and that monthly-paid employees are entitled to COLA for all days, including unworked Saturdays, Sundays, and holidays. 2. Procedural History: The respondent union, FFW-Globe Mackay Employees Union, filed a complaint against Petitioner Corporation and its officers for illegal deduction, underpayment, and violation of Wage Order No. 6. The Labor Arbiter ruled in favor of Petitioner Corporation, holding that the COLA should be computed on a 22-day basis and that the individual officers should not have been impleaded. On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter's decision, finding Petitioner Corporation guilty of illegal deductions and ordering payment of back allowances. The NLRC's decision was based on the interpretation that the daily COLA should be applied to 30 days and that the prior payment practice constituted a voluntary employer practice that could not be unilaterally withdrawn. This Court issued a Temporary Restraining Order upon the filing of the petition for certiorari. 3. The Petition: This case comes before the Supreme Court via a special civil action for certiorari, challenging the NLRC's decision as having been rendered with grave abuse of discretion. Petitioners argue that the NLRC erred in reversing the Labor Arbiter's findings. Specifically, they contend that the COLA should be computed based on the 22 working days stipulated in the Collective Bargaining Agreement (CBA), as this reflects the period for which employees are paid their basic wage. They also argue that prior payments do not constitute a voluntary employer practice that cannot be withdrawn, especially in the absence of clear administrative guidelines for COLA computation prior to Wage Order No. 4, and that any past error was a result of a mistake in the construction or application of a difficult question of law.
Issue(s)
Whether the National Labor Relations Commission committed grave abuse of discretion in reversing the Labor Arbiter's decision. Whether the Cost-of-Living Allowance (COLA) for monthly-paid employees should be computed on the basis of 30 days or 22 days, considering the provisions of Wage Order No. 6 and the Collective Bargaining Agreement (CBA). Whether the prior practice of the Petitioner Corporation in computing COLA on a 30-day basis constituted a vested employer practice that could not be unilaterally withdrawn. Whether the individual officers of the Petitioner Corporation were properly impleaded as respondents.
Ruling
The petition is granted. The Decision of the National Labor Relations Commission dated March 10, 1986, is SET ASIDE, and the Decision of the Labor Arbiter dated May 9, 1985, is REINSTATED. The Temporary Restraining Order is made permanent.
Ratio Decidendi
On the issue of grave abuse of discretion by the NLRC: The Court found no further need to discuss this issue, given its conclusions on the computation of COLA and the nature of the employer practice. The primary issues revolved around the corporate act of computation and deduction, not the NLRC's discretion. On the computation of COLA: The Court held that the primordial consideration for entitlement to COLA is that basic wage is being paid. Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5 and 6 states that employees are entitled to their daily living allowance during the days that they are paid their basic wage, even if unworked. In this case, the Collective Bargaining Agreement (CBA) between Petitioner Corporation and Respondent Union stipulated a 5-day work week, or 22 days a month, for monthly-paid employees. Therefore, the basic wage was paid for 22 days a month. Consequently, the COLA should be computed on the basis of these 22 days, as this is the period during which the monthly-paid employees receive their basic wage, even if some of these days are unworked. The principle of 'No Pay, No ECOLA' applies, meaning COLA is mandated only for days basic wage is paid. On the employer practice: The Court ruled that the alleged full payment of COLA before the execution of the CBA in 1982 did not constitute a voluntary employer practice that could not be unilaterally withdrawn. To be considered a vested practice, it must have been practiced over a long period of time and must be shown to have been consistent and deliberate. The Court found that adequate proof was wanting in this respect. Furthermore, before Wage Order No. 4, there was a lack of clear administrative guidelines for the implementation of the Wage Orders, and the formula for converting daily allowance to its monthly equivalent was only laid down in May 1984. Thus, Petitioner Corporation could not be faulted for erroneous application of the law, as payment may have been made by reason of a mistake in the construction or application of a doubtful or difficult question of law, as provided under Article 2155 of the Civil Code. On the impleading of individual officers: The Court found no further need to discuss the liability of the officers of Petitioner Corporation, given its conclusions on the computation of COLA and the nature of the employer practice. The primary issue revolved around the corporate act of computation and deduction, not the personal liability of the officers for such acts in this specific context.
Main Doctrine
The computation of the Cost-of-Living Allowance (COLA) for monthly-paid employees, under Wage Order No. 6, should be based on the number of days for which basic wage is paid, as stipulated in the Collective Bargaining Agreement (CBA), even if these days are unworked, provided that the CBA establishes a fixed number of paid days per month.