DECENA, Elias Rafael L.

Arbiter Melchisedek Guan

L2A, Juris Doctor Labor Law 1

MARCOPPER v NLRC
G.R. No. 103525

Facts:
Marcopper Mining Corporation entered into a Collective Bargaining Agreement with the Marcopper
Employees Union covering the general wage increase of the employees in two waves: 5% increase
effective May 1, 1986 and the other 5% increase effective May 1, 1987.

In compliance with the CBA, Marcopper implemented the initial 5% wage increase on May 1, 1986.
However, On June 1987, EO 178 was implemented integrating the cost of living allowance into the basic
wage of workers; notably, the EO had a retroactive effect which coincided to the date of the
implementation of the second wave of wage increase that Marcopper was supposed to implement.

Marcopper implemented the second 5% wage increase and added the COLA only thereafter. This
prompted the labor union to file a complaint for underpayment which the Labor Arbiter favored as well as
the NLRC upon appeal by Marcopper.

ISSUE/S:
Whether or not
1. The EO impinges, through retroactive effect, the obligations between the parties stipulated in the
collective bargaining agreement

2. The cost of living allowance should be computed within the second wave of the wage increase

HELD:

1. NO. As put by the NLRC and as reiterated by the Supreme Court “Increments to the laborers'
financial gratification, be they in the form of salary increases or changes in the salary scale are
aimed at one thing — improvement of the economic predicament of the laborers. As such, they
should be viewed in the light of the State's avowed policy to protect labor.” As a compelling state
interest, to retroact the effects of the EO is to promote social justice for laborers as envisioned by
the Constitution. As put by the court in Davao Integrated Port Stevedoring Services v
Abarquez: “While the terms and conditions of the CBA constitute the law between the parties, it
is not, however, an ordinary contract to which is applied the principles of law governing
ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the
 Civil Code of the Philippines which governs the relations between labor and capital, is not
merely contractual in nature but impressed with public interest, thus, it must yield to the common
good. As such it must be construed liberally rather than narrowly and technically, and the courts
must place a practical and realistic construction upon it, giving due consideration to the context
in which it is negotiated and purpose which it is intended to serve.”

2. YES. Compliance with the law is mandatory and beyond contractual stipulation by and between
the parties; consequently, whether or not Marcopper intended the basic wage to include the
COLA becomes immaterial. There is evidently nothing to construe and interpret because the law
is clear and unambiguous. Unfortunately for Marcopper, said law, by some uncanny coincidence,
retroactively took effect on the same date the CBA increase became effective. Therefore, there
cannot be any doubt that the computation of the CBA increase on the basis of the "integrated"
wage does not constitute a violation of the CBA. As also put by the Court in Philippine
Telegraph and Telephone Corporation v NLRC: “When conflicting interests of labor and
capital are to be weighed on the scales of social justice, the heavier influence of the latter should
be counter-balanced by sympathy and compassion the law must accord the underprivileged
worker.”