Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 163419 February 13, 2!
TSPIC CORPOR"TION, petitioner,
vs.
TSPIC EMP#O$EES UNION %FF&', re(re)e*+,*- M"RI" FE F#ORES, FE C"PISTR"NO, "M$
DURI"S,
1
C#"IRE EVE#$N VE#E., /"NICE O#"GUIR, /ERICO "#IPIT, G#EN 0"TU#", SER
/O1N 1ERN"NDE., R"C1E# NOVI##"S, NIMF" "NI#"O, ROSE SU0"RDI"G", V"#ERIE
C"R0ON, O#IVI" EDROSO, M"RICRIS DON"IRE, "N"#$N "."RCON, ROS"#IE R"MIRE.,
/U#IET" ROSETE, /"NICE NE0RE, NI" "NDR"DE, C"T1ERINE $"0", DIOMEDIS"
ERNI,
2
M"RIO S"#MORIN, #OID" COMU##O,
3
M"RIE "NN DE#OS S"NTOS,
4
/U"NIT" $"N",
a*2 SU.ETTE DU#"$, respondents.
D E C I S I O N
VE#"SCO, /R., J.3
The path towards industrial peace is a two-way street. unda!ental fairness and protection to labor
should always "overn dealin"s between labor and !ana"e!ent. #ee!in"ly conflictin" provisions
should be har!oni$ed to arrive at an interpretation that is within the para!eters of the law,
co!passionate to labor, yet, fair to !ana"e!ent.
%n this Petition for Review on &ertiorari under Rule 4', petitioner T#P%& &orporation (T#P%&) see*s
to annul and set aside the +ctober 22, 2,,3 -ecision
'
and .pril 23, 2,,4 Resolution
/
of the &ourt of
.ppeals (&.) in &.-0.R. #P 1o. /2/1/, which affir!ed the #epte!ber 13, 2,,1 -ecision
3
of
.ccredited 4oluntary .rbitrator 5osephus 6. 5i!ene$ in 1ational &onciliation and Mediation 6oard
&ase 1o. 565-.4.-2,,1-,3-'3.
T#P%& is en"a"ed in the business of desi"nin", !anufacturin", and !ar*etin" inte"rated circuits to
serve the co!!unication, auto!otive, data processin", and aerospace industries. Respondent
T#P%& 7!ployees 8nion (9) (8nion), on the other hand, is the re"istered bar"ainin" a"ent of the
ran*-and-file e!ployees of T#P%&. The respondents, Maria e lores, e &apistrano, .!y -urias,
&laire 7velyn 4ele$, 5anice +la"uir, 5erico .lipit, 0len 6atula, #er 5ohn :ernande$, Rachel 1ovillas,
1i!fa .nilao, Rose #ubardia"a, 4alerie &arbon, +livia 7droso, Maricris -onaire, .nalyn .$arcon,
Rosalie Ra!ire$, 5ulieta Rosete, 5anice 1ebre, 1ia .ndrade, &atherine ;aba, -io!edisa 7rni,
Mario #al!orin, <oida &o!ullo, Marie .nn -elos #antos, 5uanita ;ana, and #u$ette -ulay, are all
!e!bers of the 8nion.
%n 1===, T#P%& and the 8nion entered into a &ollective 6ar"ainin" ."ree!ent (&6.)
2
for the years
2,,, to 2,,4. The &6. included a provision on yearly salary increases startin" 5anuary 2,,, until
5anuary 2,,2. #ection 1, .rticle > of the &6. provides, as follows?
#ection 1. #alary@ 9a"e %ncreases.AA7!ployees covered by this ."ree!ent shall be
"ranted salary@wa"e increases as follows?
a) 7ffective 5anuary 1, 2,,,, all e!ployees on re"ular status and within the
bar"ainin" unit on or before said date shall be "ranted a salary increase eBuivalent
to ten percent (1,C) of their basic !onthly salary as of -ece!ber 31, 1===.
b) 7ffective 5anuary 1, 2,,1, all e!ployees on re"ular status and within the
bar"ainin" unit on or before said date shall be "ranted a salary increase eBuivalent
to twelve (12C) of their basic !onthly salary as of -ece!ber 31, 2,,,.
c) 7ffective 5anuary 1, 2,,2, all e!ployees on re"ular status and within the
bar"ainin" unit on or before said date shall be "ranted a salary increase eBuivalent
to eleven percent (11C) of their basic !onthly salary as of -ece!ber 31, 2,,1.
The wa"e salary increase of the first year of this ."ree!ent shall be over and above the
wa"e@salary increase, includin" the wa"e distortion adDust!ent, "ranted by the &+MP.1;
on 1ove!ber 1, 1=== as per 9a"e +rder 1o. 1&R-,3.
The wa"e@salary increases for the years 2,,1 and 2,,2 shall be dee!ed inclusive of the
!andated !ini!u! wa"e increases under future 9a"e +rders, that !ay be issued after
9a"e +rder 1o. 1&R-,3, and shall be considered as correction of any wa"e distortion that
!ay have been brou"ht about by the said future 9a"e +rders. Thus the wa"e@salary
increases in 2,,1 and 2,,2 shall be dee!ed as co!pliance to future wa"e orders after
9a"e +rder 1o. 1&R-,3.
&onseBuently, on 5anuary 1, 2,,,, all the re"ular ran*-and-file e!ployees of T#P%& received a 1,C
increase in their salary. .ccordin"ly, the followin" nine (=) respondents (first "roup) who were
already re"ular e!ployees received the said increase in their salary? Maria e lores, e
&apistrano, .!y -urias, &laire 7velyn 4ele$, 5anice +la"uir, 5erico .lipit, 0len 6atula, #er 5ohn
:ernande$, and Rachel 1ovillas.
=
The &6. also provided that e!ployees who acBuire re"ular e!ploy!ent status within the year but
after the effectivity of a particular salary increase shall receive a proportionate part of the increase
upon attain!ent of their re"ular status. #ec. 2 of the &6. provides?
#7&T%+1 2. Re"ulari$ation %ncrease.AA. covered daily paid e!ployee who acBuires re"ular
status within the year subseBuent to the effectivity of a particular salary@wa"e increase
!entioned in #ection 1 above shall be "ranted a salary@wa"e increase in proportionate basis
as follows?
Re"ulari$ation Period 7Buivalent %ncrease
- 1
st
Euarter 1,,C
- 2
nd
Euarter 3'C
- 3
rd
Euarter ',C
- 4
th
Euarter 2'C
Thus, a daily paid e!ployee who beco!es a re"ular e!ployee covered by this ."ree!ent
only on May 1, 2,,,, i.e., durin" the second Buarter and subseBuent to the 5anuary 1, 2,,,
wa"e increase under this ."ree!ent, will be entitled to a wa"e increase eBuivalent to
seventy-five percent (3'C) of ten percent (1,C) of his basic pay. %n the sa!e !anner, an
e!ployee who acBuires re"ular status on -ece!ber 1, 2,,, will be entitled to a salary
increase eBuivalent to twenty-five percent (2'C) of ten percent (1,C) of his last basic pay.
+n the other hand, any !onthly-paid e!ployee who acBuires re"ular status within the ter!
of the ."ree!ent shall be "ranted re"ulari$ation increase eBuivalent to 1,C of his re"ular
basic salary.
Then on +ctober /, 2,,,, the Re"ional Tripartite 9a"e and Productivity 6oard, 1ational &apital
Re"ion, issued 9a"e +rder 1o. 1&R-,2
1,
(9+ 1o. 2) which raised the daily !ini!u! wa"e fro!
PhP 223.', to PhP 2', effective 1ove!ber 1, 2,,,. &onfor!ably, the wa"es of 13 probationary
e!ployees, na!ely? 1i!fa .nilao, Rose #ubardia"a, 4alerie &arbon, +livia 7droso, Maricris
-onaire, .nalyn .$arcon, Rosalie Ra!ire$, 5ulieta Rosete, 5anice 1ebre, 1ia .ndrade, &atherine
;aba, -io!edisa 7rni, Mario #al!orin, <oida &o!ullo, Marie .nn -elos #antos, 5uanita ;ana, and
#u$ette -ulay (second "roup), were increased to PhP 2',.,, effective 1ove!ber 1, 2,,,.
+n various dates durin" the last Buarter of 2,,,, the above na!ed 13 e!ployees attained re"ular
e!ploy!ent
11
and received 2'C of 1,C of their salaries as "ranted under the provision on
re"ulari$ation increase under .rticle >, #ec. 2 of the &6..
%n 5anuary 2,,1, T#P%& i!ple!ented the new wa"e rates as !andated by the &6.. .s a result, the
nine e!ployees (first "roup), who were senior to the above-listed recently re"ulari$ed e!ployees,
received less wa"es.
+n 5anuary 1=, 2,,1, a few wee*s after the salary increase for the year 2,,1 beca!e effective,
T#P%&Fs :u!an Resources -epart!ent notified 24 e!ployees,
12
na!ely? Maria e lores, 5anice
+la"uir, Rachel 1ovillas, e &apistrano, 5erico .lipit, .!y -urias, 0len 6atula, &laire 7velyn 4ele$,
#er 5ohn :ernande$, 1i!fa .nilao, Rose #ubardia"a, 4alerie &arbon, +livia 7droso, Maricris
-onaire, .nalyn .$arcon, Rosalie Ra!ire$, 5ulieta Rosete, 5anice 1ebre, 1ia .ndrade, &atherine
;aba, -io!edisa 7rni, Mario #al!orin, <oida &o!ullo, and Marie .nn -elos #antos, that due to an
error in the auto!ated payroll syste!, they were overpaid and the overpay!ent would be deducted
fro! their salaries in a sta""ered basis, startin" ebruary 2,,1. T#P%& eGplained that the correction
of the erroneous co!putation was based on the creditin" provision of #ec. 1, .rt. > of the &6..
The 8nion, on the other hand, asserted that there was no error and the deduction of the alle"ed
overpay!ent fro! e!ployees constituted di!inution of pay. The issue was brou"ht to the "rievance
!achinery, but T#P%& and the 8nion failed to reach an a"ree!ent.
&onseBuently, T#P%& and the 8nion a"reed to under"o voluntary arbitration on the solitary issue of
whether or not the acts of the !ana"e!ent in !a*in" deductions fro! the salaries of the affected
e!ployees constituted di!inution of pay.
+n #epte!ber 13, 2,,1, .rbitrator 5i!ene$ rendered a -ecision, holdin" that the unilateral
deduction !ade by T#P%& violated .rt. 1,,
13
of the <abor &ode. The fallo reads?
9:7R7+R7, in the li"ht of the law on the !atter and on the facts adduced in evidence,
Dud"!ent is hereby rendered in favor of the 8nion and the na!ed individual e!ployees and
a"ainst the co!pany, thereby orderin" the HT#P%&I to pay as follows?
1) to the siGteen (1/) newly re"ulari$ed e!ployees na!ed above, the a!ount of
P12,/42.24 a !onth or a total of P113,32,.1/ for nine (=) !onths or P3,111.2/ for
each of the! as well as an additional P12,/42.24 (for all), or P3=,.14 (for each), for
every !onth after 3, #epte!ber 2,,1, until full pay!ent, with le"al interests for
every !onth of delayJ
2) to the nine (=) who were hired earlier than the siGteen (1/)J also na!ed above,
their respective a!ount of entitle!ents, accordin" to the 8nionFs correct
co!putation, ran"in" fro! P11,.22 per !onth (or P==1.=2 for nine !onths) to
P4',.'2 a !onth (or P4,,''.22 for nine !onths), as well as correspondin" !onthly
entitle!ents after 3, #epte!ber 2,,1, plus le"al interests until full pay!ent,
3) to #u$ette -ulay, the a!ount of P/,2.14 a !onth (or P',433.2/), as well as
correspondin" !onthly entitle!ents after 3, #epte!ber 2,,1, plus le"al interest until
full pay!ent,
4) .ttorneyFs fees eBual to 1,C of all the above !onetary awards.
The clai! for eGe!plary da!a"es is denied for want of factual basis.
The parties are hereby directed to co!ply with their Doint voluntary co!!it!ent to abide by
this .ward and thus, sub!it to this +ffice Dointly, a written proof of voluntary co!pliance with
this -7&%#%+1 within ten (1,) days after the finality hereof.
#+ +R-7R7-.
14
T#P%& filed a Motion for Reconsideration which was denied in a Resolution dated 1ove!ber 21,
2,,1.
.""rieved, T#P%& filed before the &. a petition for review under Rule 43 doc*eted as &.-0.R. #P
1o. /2/1/. The appellate court, throu"h its +ctober 22, 2,,3 -ecision, dis!issed the petition and
affir!ed in toto the decision of the voluntary arbitrator. The &. declared T#P%&Fs co!putation
allowin" PhP 223 as daily wa"es to the newly re"ulari$ed e!ployees to be correct, notin" that the
co!putation confor!ed to 9+ 1o. 2 and the provisions of the &6.. .ccordin" to the &., T#P%&
failed to convince the appellate court that the deduction was a result of a syste! error in the
auto!ated payroll syste!. The &. eGplained that when 9+ 1o. 2 too* effect on 1ove!ber 1, 2,,,,
the concerned e!ployees were still probationary e!ployees who were receivin" the !ini!u! wa"e
of PhP 223.',. The &. said that effective 1ove!ber 1, 2,,,, said e!ployees should have received
the !ini!u! wa"e of PhP 2',. The &. held that when respondents beca!e re"ular e!ployees on
1ove!ber 2=, 2,,,, they should be allowed the salary increase "ranted the! under the &6. at the
rate of 2'C of 1,C of their basic salary for the year 2,,,J thereafter, the 12C increase for the year
2,,1 and the 1,C increase for the year 2,,2 should also be !ade applicable to the!.
1'
T#P%& filed a Motion for Reconsideration which was denied by the &. in its .pril 23, 2,,4
Resolution.
T#P%& filed the instant petition which raises this sole issue for our resolution? -oes the T#P%&Fs
decision to deduct the alle"ed overpay!ent fro! the salaries of the affected !e!bers of the 8nion
constitute di!inution of benefits in violation of the <abor &odeK
T#P%& !aintains that the for!ula proposed by the 8nion, adopted by the arbitrator and affir!ed by
the &., was flawed, inas!uch as it co!pletely disre"arded the Lcreditin" provisionL contained in the
last para"raph of #ec. 1, .rt. > of the &6..
9e find T#P%&Fs contention !eritorious.
" Co44e5+,6e 0ar-a,*,*- "-ree7e*+ ,) +8e 4a9 be+9ee* +8e (ar+,e)
%t is fa!iliar and funda!ental doctrine in labor law that the &6. is the law between the parties and
they are obli"ed to co!ply with its provisions.
1/
9e said so in Honda Phils., Inc. v. Samahan ng
Malayang Manggagawa sa Honda?
. collective bar"ainin" a"ree!ent or &6. refers to the ne"otiated contract between a
le"iti!ate labor or"ani$ation and the e!ployer concernin" wa"es, hours of wor* and all
other ter!s and conditions of e!ploy!ent in a bar"ainin" unit. .s in all contracts, the parties
in a &6. !ay establish such stipulations, clauses, ter!s and conditions as they !ay dee!
convenient provided these are not contrary to law, !orals, "ood custo!s, public order or
public policy. Thus, where the &6. is clear and una!bi"uous, it beco!es the law between
the parties and co!pliance therewith is !andated by the eGpress policy of the law.
13
Moreover, if the ter!s of a contract, as in a &6., are clear and leave no doubt upon the intention of
the contractin" parties, the literal !eanin" of their stipulations shall control.
12
:owever, so!eti!es,
as in this case, thou"h the provisions of the &6. see! clear and una!bi"uous, the parties
so!eti!es arrive at conflictin" interpretations. :ere, T#P%& wants to credit the increase "ranted by
9+ 1o. 2 to the increase "ranted under the &6.. .ccordin" to T#P%&, it is specifically provided in
the &6. that Lthe salary@wa"e increase for the year 2,,1 shall be dee!ed inclusive of the !andated
!ini!u! wa"e increases under future wa"e orders that !ay be issued after 9a"e +rder 1o. 3.L
The 8nion, on the other hand, insists that the Lcreditin"L provision of the &6. finds no application in
the present case, since at the ti!e 9+ 1o. 2 was issued, the probationary e!ployees (second
"roup) were not yet covered by the &6., particularly by its creditin" provision.
.s a "eneral rule, in the interpretation of a contract, the intention of the parties is to be
pursued.
1=
Littera necat spiritus vivificat. .n instru!ent !ust be interpreted accordin" to the intention
of the parties. %t is the duty of the courts to place a practical and realistic construction upon it, "ivin"
due consideration to the conteGt in which it is ne"otiated and the purpose which it is intended to
serve.
2,
.bsurd and illo"ical interpretations should also be avoided. &onsiderin" that the parties
have uneBuivocally a"reed to substitute the benefits "ranted under the &6. with those "ranted
under wa"e orders, the a"ree!ent !ust prevail and be "iven full effect.
Para"raph (b) of #ec. 1 of .rt. > of the &6. provides for the "eneral a"ree!ent that, effective
5anuary 1, 2,,1, all e!ployees on re"ular status and within the bar"ainin" unit on or before said
date shall be "ranted a salary increase eBuivalent to twelve (12C) of their basic !onthly salary as of
-ece!ber 31, 2,,,. The 12C salary increase is "ranted to all e!ployees who (1) are re"ular
e!ployees and (2) are within the bar"ainin" unit.
#econd para"raph of (c) provides that the salary increase for the year 2,,, shall not include the
increase in salary "ranted under 9+ 1o. 3 and the correction of the wa"e distortion for 1ove!ber
1===.
The last para"raph, on the other hand, states the specific condition that the wa"e@salary increases
for the years 2,,1 and 2,,2 shall be dee!ed inclusive of the !andated !ini!u! wa"e increases
under future wa"e orders, that !ay be issued after 9+ 1o. 3, and shall be considered as correction
of the wa"e distortions that !ay be brou"ht about by the said future wa"e orders. Thus, the
wa"e@salary increases in 2,,1 and 2,,2 shall be dee!ed as co!pliance to future wa"e orders after
9+ 1o. 3.
Para"raph (b) is a "eneral provision which allows a salary increase to all those who are Bualified. %t,
however, clashes with the last para"raph which specifically states that the salary increases for the
years 2,,1 and 2,,2 shall be dee!ed inclusive of wa"e increases subseBuent to those "ranted
under 9+ 1o. 3. %t is a fa!iliar rule in interpretation of contracts that conflictin" provisions should be
har!oni$ed to "ive effect to all.
21
<i*ewise, when "eneral and specific provisions are inconsistent,
the specific provision shall be para!ount to and "overn the "eneral provision.
22
Thus, it !ay be
reasonably concluded that T#P%& "ranted the salary increases under the condition that any wa"e
order that !ay be subseBuently issued shall be credited a"ainst the previously "ranted increase.
The intention of the parties is clear? .s lon" as an e!ployee is Bualified to receive the 12C increase
in salary, the e!ployee shall be "ranted the increaseJ and as lon" as an e!ployee is "ranted the
12C increase, the a!ount shall be credited a"ainst any wa"e order issued after 9+ 1o. 3.
Respondents should not be allowed to receive benefits fro! the &6. while avoidin" the counterpart
creditin" provision. They have received their re"ulari$ation increases under .rt. >, #ec. 2 of the &6.
and the yearly increase for the year 2,,1. They should not then be allowed to avoid the creditin"
provision which is an acco!panyin" condition.
Respondents attained re"ular e!ploy!ent status before 5anuary 1, 2,,1. 9+ 1o. 2, increasin" the
!ini!u! wa"e, was issued after 9+ 1o. 3. Thus, respondents ri"htfully received the 12C salary
increase for the year 2,,1 "ranted in the &6.J and conseBuently, T#P%& ri"htfully credited that 12C
increase a"ainst the increase "ranted by 9+ 1o. 2.
Pro(er :or7u4a :or 5o7(u+,*- +8e )a4ar,e) :or +8e year 21
Thus, the proper co!putation of the salaries of individual respondents is as follows?
(1) 9ith re"ard to the first "roup of respondents who attained re"ular e!ploy!ent status before the
effectivity of 9+ 1o. 2, the co!putation is as follows?
For respondents Jerico lipit and !len "atula?
23
9a"e rate before 9+ 1o. 2MMMMMMMMMM PhP 234.6;
%ncrease due to 9+ 1o. 2
settin" the !ini!u! wa"e at PhP 2',.MMMMM... 1<.33
Total #alary upon effectivity of 9+ 1o. 2MMMM. P8P 2<.
%ncrease for 2,,1 (12C of 2,,, salary)MM.....MM. P8P 3.
<ess the wa"e increase under 9+ 1o. 2MMMMM. 1<.33
Total difference between the wa"e increase
for 2,,1 and the increase "ranted under 9+ 1o. 2.. PhP 14.6;
9a"e rate by -ece!ber 2,,,MMMMMMMMM. PhP 2<.
Plus total difference between the wa"e increase for
2,,1 and the increase "ranted under 9+ 1o. 2MM.. 14.6;
To+a4 (9a"e rate ran"e be"innin" 5anuary 1, 2,,1) P8P 264.6;
For respondents Ser John Hernande# and $achel %ovillas?
24
9a"e rate ran"e before 9+ 1o. 2MMMMMMM.. PhP 234./2
%ncrease due to 9+ 1o. 2
settin" the !ini!u! wa"e at PhP 2',MMMMMM 1<.32
Total #alary upon effectivity of 9+ 1o. 2.MMMM P8P 2<.
%ncrease for 2,,1 (12C of 2,,, salary)MMMMM.. P8P 3.
<ess the wa"e increase under 9+ 1o. 2MMMMM 1<.32
Total difference between the wa"e increase
for 2,,1 and the increase "ranted under 9+ 1o. 2M PhP 14./2
9a"e rate by -ece!ber 2,,,MMMMMMMMM. PhP 2<.
Plus total difference between the wa"e increase for
2,,1 and the increase "ranted under 9+ 1o. 2MM 14.6!
To+a4 (9a"e rate ran"e be"innin" 5anuary 1, 2,,1) P8P 264.6!
For respondents my &urias, 'laire (velyn )ele#, and Janice *laguir?
2'
9a"e rate ran"e before 9+ 1o. 2MMMM.. PhP 24,.2/
%ncrease due to 9+ 1o. 2
settin" the !ini!u! wa"e at PhP 2',MMM 9.;4
Total #alary upon effectivity of 9+ 1o. 2M. P8P 2<.
%ncrease for 2,,1 (12C of 2,,, salary)MMMMM P8P 3.
<ess the wa"e increase under 9+ 1o. 2MMMMM =.34
Total difference between the wa"e increase for 2,,1
and the increase "ranted under 9+ 1o. 2MMMM P8P 2.26
9a"e rate by -ece!ber 2,,,MMMMMMMMM PhP 2<.
Plus total difference between the wa"e increase for
2,,1 and the increase "ranted under 9+ 1o. 2MM 2.26
To+a4 (9a"e rate ran"e be"innin" 5anuary 1, 2,,1) P8P 2;.26
For respondents Ma. Fe Flores and Fe 'apistrano?
2/
9a"e rate ran"e before 9+ 1o. 2MMMMM PhP 24<.!<
%ncrease due to 9+ 1o. 2
settin" the !ini!u! wa"e at PhP 2',MMM.. 4.1'
Total #alary upon effectivity of 9+ 1o. 2M... P8P 2<.
%ncrease for 2,,1 (12C of 2,,, salary)MMMMM P8P 3.
<ess the wa"e increase under 9+ 1o. 2MMM......... 4.1<
Total difference between the wa"e increase for 2,,1
and the increase "ranted under 9+ 1o. 2MMMM PhP 2<.!<
9a"e rate by -ece!ber 2,,,MMMMMMMMM PhP 2<.
Plus total difference between the wa"e increase for
2,,1 and the increase "ranted under 9+ 1o. 2MM 2'.2'
To+a4 (9a"e rate ran"e be"innin" 5anuary 1, 2,,1) P8P 2;<.!<
(2) 9ith re"ard to the second "roup of e!ployees, who attained re"ular e!ploy!ent status after the
i!ple!entation of 9+ 1o. 2, na!ely? 1i!fa .nilao, Rose #ubardia"a, 4alerie &arbon, +livia
7droso, Maricris -onaire, .nalyn .$arcon, Rosalie Ra!ire$, 5ulieta Rosete, 5anice 1ebre, 1ia
.ndrade, &atherine ;aba, -io!edisa 7rni, Mario #al!orin, <oida &o!ullo, Marie .nn -elos #antos,
5uanita ;ana, and #u$ette -ulay, the proper co!putation of the salaries for the year 2,,1, in
accordance with the &6., is as follows?
&o!pute the increase in salary after the i!ple!entation of 9+ 1o. 2 by subtractin" the !ini!u!
wa"e before 9+ 1o. 2 fro! the !ini!u! wa"e per the wa"e order to arrive at the wa"e increase,
thus?
Mini!u! 9a"e per 9a"e +rderMMMM.. P8P 2<.
9a"e rate before 9a"e +rderMMMMM.. 223.<
9a"e %ncreaseMMMMMMMMMMMM. P8P 26.<
8pon attain!ent of re"ular e!ploy!ent status, the e!ployeesF salaries were increased by 2'C of
1,C of their basic salaries, as provided for in #ec. 2, .rt. > of the &6., thus resultin" in a further
increase of PhP /.2', for a total of PhP 2'/.2', co!puted as follows?
9a"e rate after 9+ 1o. 2MMMMMMMMMMMM. P8P 2<.
Re"ulari$ation increase (2' C of 1,C of basic salary) 6.2<
Total (#alary for the end of year 2,,,)MMMMMMM. P8P 2<6.2<
To co!pute for the increase in wa"e rates for the year 2,,1, "et the increase of 12C of the
e!ployeesF salaries as of -ece!ber 31, 2,,,J then subtract fro! that a!ount, the a!ount
increased in salaries as "ranted under 9+ 1o. 2 in accordance with the creditin" provision of the
&6., to arrive at the increase in salaries for the year 2,,1 of the recently re"ulari$ed e!ployees.
.dd the result to their salaries as of -ece!ber 31, 2,,, to "et the proper salary be"innin" 5anuary
1, 2,,1, thus?
%ncrease for 2,,1 (12C of 2,,, salary)MMMMMM... P8P 3.;<
<ess the wa"e increase under 9+ 1o. 2MMMMMM. 26.<
-ifference between the wa"e increase
for 2,,1 and the increase "ranted under 9+ 1o. 2MM P8P 4.2<
9a"e rate after re"ulari$ation increaseMMMMMM... P8P 2<6.2<
Plus total difference between the wa"e increase and
the increase "ranted under 9+ 1o. 2MMMMMMM. 4.2<
To+a4 (9a"e rate be"innin" 5anuary 1, 2,,1)MMMM. P8P 26.<
9ith these co!putations, the creditin" provision of the &6. is put in effect, and the wa"e distortion
between the first and second "roup of e!ployees is cured. The first "roup of e!ployees who
attained re"ular e!ploy!ent status before the i!ple!entation of 9+ 1o. 2 is entitled to receive,
startin" 5anuary 1, 2,,1, a daily wa"e rate within the ran"e of PhP 2/4./3 to PhP 23'.2',
dependin" on their wa"e rate before the i!ple!entation of 9+ 1o. 2. The second "roup that
attained re"ular e!ploy!ent status after the i!ple!entation of 9+ 1o. 2 is entitled to receive a
daily wa"e rate of PhP 2/,.', startin" 5anuary 1, 2,,1.
D,7,*u+,o* o: be*e:,+)
T#P%& also !aintains that char"in" the overpay!ents !ade to the 1/ respondents throu"h
sta""ered deductions fro! their salaries does not constitute di!inution of benefits.
9e a"ree with T#P%&.
-i!inution of benefits is the unilateral withdrawal by the e!ployer of benefits already enDoyed by the
e!ployees. There is di!inution of benefits when it is shown that? (1) the "rant or benefit is founded
on a policy or has ripened into a practice over a lon" periodJ (2) the practice is consistent and
deliberateJ (3) the practice is not due to error in the construction or application of a doubtful or
difficult Buestion of lawJ and (4) the di!inution or discontinuance is done unilaterally by the
e!ployer.
23
.s correctly pointed out by T#P%&, the overpay!ent of its e!ployees was a result of an error. This
error was i!!ediately rectified by T#P%& upon its discovery. 9e have ruled before that an
erroneously "ranted benefit !ay be withdrawn without violatin" the prohibition a"ainst non-
di!inution of benefits. 9e ruled in !lo+e,Mac-ay 'a+le and $adio 'orp. v. %L$'?
.bsent clear ad!inistrative "uidelines, Petitioner &orporation cannot be faulted for
erroneous application of the law. Pay!ent !ay be said to have been !ade by reason of a
!ista*e in the construction or application of a Ldoubtful or difficult Buestion of lawL. (.rticle
21'', in relation to .rticle 21'4 of the &ivil &ode). #ince it is a past error that is bein"
corrected, no vested ri"ht !ay be said to have arisen nor any di!inution of benefit under
.rticle 1,, of the <abor &ode !ay be said to have resulted by virtue of the correction.
22
:ere, no vested ri"ht accrued to individual respondents when T#P%& corrected its error by creditin"
the salary increase for the year 2,,1 a"ainst the salary increase "ranted under 9+ 1o. 2, all in
accordance with the &6..
:ence, any a!ount "iven to the e!ployees in eGcess of what they were entitled to, as co!puted
above, !ay be le"ally deducted by T#P%& fro! the e!ployeesF salaries. %t was also co!passionate
and fair that T#P%& deducted the overpay!ent in install!ents over a period of 12 !onths startin"
fro! the date of the initial deduction to lessen the burden on the overpaid e!ployees. T#P%&, in
turn, !ust refund to individual respondents any a!ount deducted fro! their salaries which was in
eGcess of what T#P%& is le"ally allowed to deduct fro! the salaries based on the co!putations
discussed in this -ecision.
.s a last word, it should be reiterated that thou"h it is the stateFs responsibility to afford protection to
labor, this policy should not be used as an instru!ent to oppress !ana"e!ent and capital.
2=
%n
resolvin" disputes between labor and capital, fairness and Dustice should always prevail. 9e ruled
in %or-is .nion v. %or-is /rading that in the resolution of labor cases, we have always been "uided
by the #tate policy enshrined in the &onstitution? social Dustice and protection of the wor*in" class.
#ocial Dustice does not, however, !andate that e6ery dispute should be auto!atically decided in
favor of labor. %n any case, Dustice is to be "ranted to the deservin" and dispensed in the li"ht of the
established facts and the applicable law and doctrine.
3,
&1EREFORE, pre!ises considered, the #epte!ber 13, 2,,1 -ecision of the <abor .rbitrator in
1ational &onciliation and Mediation 6oard &ase 1o. 565-.4.-2,,1-,3-'3 and the +ctober 22, 2,,3
&. -ecision in &.-0.R. #P 1o. /2/1/ are hereby "FFIRMED with MODIFIC"TION. T#P%& is
hereby ORDERED to pay respondents their salary increases in accordance with this -ecision, as
follows?
Na7e o: E7(4oyee Da,4y &a-e
Ra+e
No. o: &or=,*-
Day) ,* a Mo*+8
No. o:
Mo*+8) ,* a
$ear
To+a4 Sa4ary :or
21
1i!fa .nilao 2/,.' 2/ 12 21,23/.,,
Rose #ubardia"a 2/,.' 2/ 12 21,23/.,,
4alerie &arbon 2/,.' 2/ 12 21,23/.,,
+livia 7droso 2/,.' 2/ 12 21,23/.,,
Maricris -onaire 2/,.' 2/ 12 21,23/.,,
.nalyn .$arcon 2/,.' 2/ 12 21,23/.,,
Rosalie Ra!ire$ 2/,.' 2/ 12 21,23/.,,
5ulieta Rosete 2/,.' 2/ 12 21,23/.,,
5anice 1ebre 2/,.' 2/ 12 21,23/.,,
1ia .ndrade 2/,.' 2/ 12 21,23/.,,
&atherine ;aba 2/,.' 2/ 12 21,23/.,,
-io!edisa 7rni 2/,.' 2/ 12 21,23/.,,
Mario #al!orin 2/,.' 2/ 12 21,23/.,,
<oida &a!ullo 2/,.' 2/ 12 21,23/.,,
Marie .nn -elos #antos 2/,.' 2/ 12 21,23/.,,
5uanita ;ana 2/,.' 2/ 12 21,23/.,,
#u$ette -ulay 2/,.' 2/ 12 21,23/.,,
5erico .lipit 2/4./3 2/ 12 22,'33.,4
0len 6atula 2/4./3 2/ 12 22,'33.,4
#er 5ohn :ernande$ 2/4./2 2/ 12 22,'2,.1/
Rachel 1ovillas 2/4./2 2/ 12 22,'2,.1/
.!y -urias 23,.2/ 2/ 12 24,321.12
&laire 7velyn 4ele$ 23,.2/ 2/ 12 24,321.12
5anice +la"uir 23,.2/ 2/ 12 24,321.12
Maria e lores 23'.2' 2/ 12 2/,,/'.2,
e &apistrano 23'.2' 2/ 12 2/,,/'.2,
The award for attorneyFs fees of ten percent (1,C) of the total award is M"INT"INED.
SO ORDERED.
PRES0ITERO /. VE#"SCO, /R.
.ssociate 5ustice
97 &+1&8R?
#EON"RDO ". >UISUM0ING
.ssociate 5ustice
&hairperson
"NTONIO T. C"RPIO
.ssociate 5ustice
CONC1IT" C"RPIO MOR"#ES
.ssociate 5ustice
-.1T7 +. T%10.
.ssociate 5ustice
" T T E S T " T I O N
% attest that the conclusions in the above -ecision had been reached in consultation before the case
was assi"ned to the writer of the opinion of the &ourtFs -ivision.
<7+1.R-+ .. E8%#8M6%10
.ssociate 5ustice
&hairperson
C E R T I F I C " T I O N
Pursuant to #ection 13, .rticle 4%%% of the &onstitution, and the -ivision &hairpersonFs .ttestation, %
certify that the conclusions in the above -ecision had been reached in consultation before the case
was assi"ned to the writer of the opinion of the &ourtFs -ivision.
RE$N"TO S. PUNO
&hief 5ustice
Foo+*o+e)
1
.lso appears as .!ie -urias in so!e parts of the records.
2
.lso appears as -eo!edisa 7rne in so!e parts of the records.
3
.lso appears as <oida &a!ullo in so!e parts of the records.
4
.lso appears as Mary .nn delos #antos in so!e parts of the records.
'
$ollo, pp. 31-3=-.. Penned by .ssociate 5ustice &onrado M. 4asBue$, 5r., and concurred
in by .ssociate 5ustices 6ienvenido <. Reyes and .rsenio 5. Ma"pale.
/
%d. at 41-42.
3
%d. at 112-132.
2
%d. at 122-212.
=
%d. at 122.
1,
LProvidin" an %ncrease in the -aily Mini!u! 9a"e in the 1ational &apital Re"ion, and %ts
%!ple!entin" Rules? Rules %!ple!entin" 9a"e +rder 1o. 1&R-,2,L approved on +ctober
2', 2,,,.
11
$ollo, p. 32.
12
%d. at 43.
13
.rt. 1,,. Pro8,b,+,o* a-a,*)+ e4,7,*a+,o* or 2,7,*u+,o* o: be*e:,+). 1othin" in this 6oo*
shall be construed to eli!inate or in any way di!inish supple!ents, or other e!ployee
benefits bein" enDoyed at the ti!e of pro!ul"ation of this &ode.
14
$ollo, pp. 131-132.
1'
%d. at 33-32.
1/
'entro (scolar .niversity Faculty and llied 0or-ers .nion,Independent v. 'ourt of
ppeals, 0.R. 1o. 1/'42/, May 31, 2,,/, 4=, #&R. /1, 32.
13
0.R. 1o. 14''/1, 5une 1', 2,,', 4/, #&R. 123, 1=,-1=1.
12
&ivil &ode, .rt. 133,.
1=
See Rules of &ourt, Rule 13,, #ec. 11.
2,
Marcopper Mining 'orporation v. %L$', 0.R. 1o. 1,3'2', March 2=, 1==/, 2'' #&R.
322, 333J citin"&avao Integrated Port Stevedoring Services v. +ar1ue#, 0.R. 1o. 1,2132,
March 1=, 1==3, 22, #&R. 1=3.
21
&ivil &ode, .rt. 1334J Rules of &ourt, Rule 13,, #ec. 11.
22
See Rules of &ourt, Rule 13,, #ec. 12.
23
$ollo, p. '33. %t appears fro! the records that they attained re"ular e!ploy!ent status on
5uly 31, 2,,, with a basic wa"e rate of PhP 234./3.
24
%d. %t appears fro! the records that they attained re"ular e!ploy!ent status on .u"ust 21,
2,,, with a basic wa"e rate of PhP 234./2.
2'
%d. %t appears fro! the records that respondents .!y -urias and &laire 7velyn 4ele$
attained re"ular e!ploy!ent status on .pril 11, 2,,,, while 5anice +la"uir on .pril 12, 2,,,,
all with a basic wa"e rate of PhP 24,.2/.
2/
%d. %t appears fro! the records that respondent Maria e lores attained re"ular
e!ploy!ent status on ebruary 22, 2,,,, while e &apistrano on March 22, 2,,,, both with
a basic wa"e rate of PhP 24'.2'.
23
&... .$ucena, The <abor &ode with &o!!ents and &ases 222 (2,,4).
22
1o. <-341'/, 5une 2=, 1=22, 1/3 #&R. 31, 32.
2=
ga+on v. %L$', 0.R. 1o. 1'2/=3, 1ove!ber 13, 2,,4, 442 #&R. '33, /14.
3,
0.R. 1o. 1'3,=2, 5une 3,, 2,,', 4/2 #&R. 42', 4=3.