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Literal Interpretation: National Federation v. NLRC Digest

This document summarizes a case from the National Federation of Labor v. NLRC regarding a wage dispute between employees and Franklin Baker Corp. After new wage orders were implemented, the company increased wages for regular and casual employees but a small differential remained. The company then dismissed 205 employees and a strike occurred. The NLRC initially found a wage distortion but then ruled it only lasted 15 days. The court upheld that determining new employee classifications is a management prerogative, not under the NLRC's power, and that the company's wage increases validated correcting any wage distortion from the new orders.

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153 views1 page

Literal Interpretation: National Federation v. NLRC Digest

This document summarizes a case from the National Federation of Labor v. NLRC regarding a wage dispute between employees and Franklin Baker Corp. After new wage orders were implemented, the company increased wages for regular and casual employees but a small differential remained. The company then dismissed 205 employees and a strike occurred. The NLRC initially found a wage distortion but then ruled it only lasted 15 days. The court upheld that determining new employee classifications is a management prerogative, not under the NLRC's power, and that the company's wage increases validated correcting any wage distortion from the new orders.

Uploaded by

Ian
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Literal interpretation

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

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