PT&T vs. NLRC

Where a collective bargaining agreement expressly provides that CBA wage increases shall become the total remuneration in lieu of all other increases in the event of mandatory statutory wage increases, the CBA increases are creditable against the statutory wage increases, and the employer is obligated to pay only the difference where the contractual increase falls short of the statutory amount.

PT&T and the PT&T Employees Union-ALU were parties to collective bargaining agreements executed in 1984 and 1986, both containing provisions addressing the interplay between contractual wage increases and any wage increases subsequently mandated by law. The relevant Wage Orders (No. 3, 4, 5, and 6) likewise contained crediting clauses stipulating that increases granted by employers shall be credited as compliance with the minimum wage adjustments prescribed, with the employer paying only the difference where such increases fall short. The dispute arose from the union's claim that PT&T failed to comply with both the statutory wage orders and the CBA wage provisions.

On November 25, 1986, PT&T Employees Union-ALU filed a complaint against Philippine Telegraph and Telephone Corporation before the Labor Arbiter, charging the company with unfair labor practice acts and underpayment of statutory and contractual benefits claimed to be due pursuant to Wage Orders No. 3, 4, 5, and 6, as well as under Sections 2 and 3, Article IX of the 1984 Collective Bargaining Agreement and Section 2, Article XII of the 1986 CBA. PT&T denied the charges.

The Labor Arbiter, after evaluating the parties' respective submissions, found that PT&T had failed to substantiate its claim of compliance with the Wage Orders and the CBA provisions. Specifically, PT&T submitted only sample payrolls for January and February 1985, purportedly showing compliance with Wage Order No. 6, but failed to present payrolls for the period of at least two months prior to and after November 1, 1983, when Wage Order No. 3 took effect, which would have been necessary to determine compliance starting with that order. On April 27, 1989, the Labor Arbiter ordered PT&T to pay the individual complainants their corresponding salary differentials in accordance with Wage Orders No. 3 to 6 and the relevant CBA provisions, while dismissing the unfair labor practice charge for lack of merit.

PT&T appealed to the NLRC, assailing the Labor Arbiter's decision on two grounds: first, that the Labor Arbiter erred in concluding that the failure to present certain payrolls established a violation of the Wage Orders; and second, that the Labor Arbiter erred in interpreting the Wage Orders as requiring payment of both the CBA and statutory wage increases. On October 31, 1989, the NLRC dismissed the appeal for lack of merit. PT&T moved for reconsideration, stressing that only the higher remuneration from either the statutorily mandated increase or the CBA increase should be given and paid to the employees. The motion and its supplement were denied, leading to the present petition for certiorari.

• Grave Abuse of Discretion in Factual Finding: Petitioner contended that the NLRC committed grave abuse of discretion amounting to lack of jurisdiction in finding that PT&T failed to comply with the increases mandated by Wage Orders No. 3, 4, 5, and 6, as well as the 1984 and 1986 CBAs, based on the absence of certain payroll records.
• Erroneous Interpretation of Wage Orders: Petitioner argued that only the higher remuneration from either the statutorily mandated increase or the CBA increase should be given and paid to the employees, and that it should not be obligated to pay both the CBA and statutory wage increases simultaneously.

• Factual Finding of Non-Compliance: Whether the NLRC committed grave abuse of discretion in affirming the Labor Arbiter's finding that PT&T failed to comply with the wage increases mandated by Wage Orders No. 3, 4, 5, and 6 and the 1984 and 1986 CBAs.
• Crediting of CBA Increases Against Statutory Wage Increases: Whether an employer may be obligated to pay both the CBA wage increases and the statutory wage increases, or whether the CBA increases may be credited against the statutory increases pursuant to the crediting clauses of the Wage Orders and the CBA provisions.

• Factual Finding of Non-Compliance: No. The NLRC's factual finding of non-compliance was not without basis, PT&T having failed to present the payrolls necessary to establish compliance starting with Wage Order No. 3.
• Crediting of CBA Increases Against Statutory Wage Increases: Yes, in favor of petitioner. The CBA provisions expressly made CBA wage increases creditable against statutory wage increases, creating an equivalence between the two obligations such that only the difference need be paid where the contractual increase falls short of the statutory amount.

• Factual Finding of Non-Compliance: The Court found no merit in the contention that the NLRC committed grave abuse of discretion. The factual finding of non-compliance was supported by the Labor Arbiter's observation, adopted by the NLRC, that PT&T submitted only sample payrolls for January and February 1985 and failed to present payrolls for the period at least two months prior to and after November 1, 1983, when Wage Order No. 3 took effect. Without those payrolls, compliance with Wage Order No. 3 could not be established. The factual finding was deemed sufficient basis for the ruling.

• Crediting of CBA Increases Against Statutory Wage Increases: The Court found petitioner's position well taken and noted that the Solicitor General agreed. The common provisions of Wage Orders No. 3, 5, and 6 stated that all increases in wages and/or allowances granted by employers shall be credited as compliance with the minimum wage adjustments prescribed, provided that where the increases are less than the applicable amount, the employer shall pay the difference, and that such increases shall not include anniversary wage increases provided in CBAs unless the agreements expressly provide otherwise. The 1984 and 1986 CBAs contained stipulations providing that in the event of additional wage increases made mandatory by law, such wages shall ipso facto become the total remunerations under the agreement in lieu of all other remunerations and increases therein provided. These CBA provisions revealed the parties' intention to consider CBA salary increases creditable to wage increases mandated by law. Relying on Filipinas Golf and Country Club, Inc. vs. National Labor Relations Commission, the Court held that such agreements merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible to performance by compliance with either, subject only to the condition that where the increases given under the agreement fall short of those fixed by law, the difference must be made up by the employer.

• Crediting of CBA Wage Increases Against Statutory Wage Increases — Where a collective bargaining agreement expressly provides that CBA wage increases shall become the total remuneration in lieu of all other increases in the event of mandatory statutory wage increases, the CBA increases are creditable against the statutory increases. The employer is obligated to pay only the difference where the contractual increase falls short of the statutory amount. Such stipulations merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible to performance by compliance with either. This doctrine follows Filipinas Golf and Country Club, Inc. vs. National Labor Relations Commission, 176 SCRA 625.

• "The foregoing CBA provisions reveal quite sufficiently the parties' intention to consider salary increases provided in the CBA to be creditable to wage increases that are or may be mandated within the applicable period by law." — This passage articulates the ratio decidendi, explaining how the Court interpreted the CBA stipulations as establishing an equivalence between contractual and statutory wage obligations.

• "In Filipinas Golf and Country Club, Inc., vs. National Labor Relations Commission, 176 SCRA 625, we have said that such agreements merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible performance by compliance with either, subject only to the condition that where the increases given under agreement fall short in amount of those fixed by law, the difference must be made up by the employer." — This passage states the controlling doctrine on crediting, defining the canonical formulation of the equivalence principle between CBA and statutory wage increases.

• Filipinas Golf and Country Club, Inc. vs. National Labor Relations Commission, 176 SCRA 625 — Controlling precedent followed. The Court relied on this case to support the principle that CBA provisions creating an equivalence between legal and contractual wage imperatives render both obligations performable by compliance with either, with the employer paying only the difference where the contractual increase falls short.

• Wage Orders No. 3, 5, and 6 — Crediting Clause — These Wage Orders provided that all increases in wages and/or allowances granted by employers shall be credited as compliance with the minimum wage and allowance adjustments prescribed, provided that where the increases are less than the applicable amount, the employer shall pay the difference. The Court applied this provision to hold that CBA increases could be credited against statutory increases, except that anniversary increases in CBAs would not be credited unless the agreement expressly provided otherwise—which the CBAs here did.
• Sections 2 and 3, Article IX of the 1984 CBA; Section 2, Article XII of the 1986 CBA — These CBA provisions stipulated that in the event of additional wage increases made mandatory by law, such wages shall ipso facto become the total remunerations under the agreement in lieu of all other remunerations and increases provided therein. The Court found these provisions sufficient to manifest the parties' intention to make CBA increases creditable against statutory wage increases.

Feliciano, Romero, Melo, and Francisco, JJ., concurred.