[DEALING WITH DOUBT: LABOR CONTRACTS]
as embodied in the CBA?
10 MARCOPPER MINING VS. NLRC
1996 | KAPUNAN, J.
Petitioner/s: Marcopper Mining Corp
Respondents: NLRC, National Mines and Allied Workers Union (NAMAWU-MIF)
Doctrine: When the pendulum of judgment swings to and fro and the forces are equal
on both sides, the same must be stilled in favor of labor. This is in line with the
avowed policy of the state, enshrined in our constitution, to accord utmost protection
to labor.
Summary:
The CBA between the company and the union provides for an increase on the basic
wage, exclusive of any increase in the minimum wage which may be promulgated
during its lifetime. The controversy arose when EO 178 mandated the integration of
the COLA into the computation of the basic wage. The company implemented the
wage increase before incorporating the COLA, while the union argues that the COLA
should first be integrated before computing for the wage increase.
Facts:
 On Aug 23, 1984, Marcopper and the NAMAWU entered into a CBA wherein
the company agrees to grant general wage increase to its employees within
the bargaining unit (Sec 1, Art V, CBA):
- May 1, 1985: 5%; May 1, 1986: 5%
 The wage increase shall be exclusive of any increase in the minimum wage
and for mandatory living allowance that may be promulgated during the life
of this Agreement. (stop-lock gate / non-chargeability clause)
 Prior to its expiraton, the CBA was modified as follows:
- 10% wage increase: 5% on May 1, 1986, and 5 % on May 1, 1987.
- Increase of facilities allowance from P50 to P100 per month.
 On June 1, 1987, EO 178 mandated the integration of the cost of living
allowance (COLA) into the basic wage of workers – its effectivity retroactive
to May 1, 1987.
 In computing the wage increase, the company first implemented the 5%
increase under the CBA before adding the COLA.
 The union argues that the COLA should first be integrated into the basic
wage before the 5% increase is computed.
 It filed an action or underpayment.
 LA ruled in favor of the union. NLRC affirmed.
 Petitioner’s argument:
- EO 178 was not yet in effect when the CBA was executed. It is
expressly agreed upon that basic wage referred to in the CBA shall be
exclusive of any increase promulgated during its lifetime.
 Respondent’s argument:
- The nature and essence of CBIA negotiation is to obtain wage increases
and benefits over and above what the law provides.
Issues/Ruling:
Whether the computation based on EO 178 violates the intention of the parties
- NO. The CBA is not an ordinary contract but is one vested with public interest;
thus, it must yield to common good. Doubts as to its interpretation shall be resolved in
favor of labor.
 The principle that the CBA is the law between the contracting parties stands
strong and true. However, the present case involves not merely an
interpretation of CBA provisions. More importantly, it requires a
determination of the effect of an executive order on the terms and the
conditions of the CBA.
 Compliance with the law is mandatory and beyond contractual stipulation by
and between the parties; consequently, whether or not petitioner intended
the basic wage to include the COLA becomes immaterial. Since the law is
clear and unambiguous, 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.
 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 NCC 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.
 "When the pendulum of judgment swings to and fro and the forces are equal
on both sides, the same must be stilled in favor of labor." Petitioner has lost
sight of the avowed policy of the State, enshrined in our Constitution, to
accord utmost protection and justice to labor, a policy, we are, likewise,
sworn to uphold.
 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 (Philippine Telegraph & Telephone Corporation v. NLRC, 1990)
  Any doubt concerning the rights of labor should be resolved in its favor
pursuant to the social justice policy. The purpose of E.O. No. 178 is to
improve the lot of the workers covered by the said statute. We are bound to
ensure its fruition (Terminal Facilities and Services Corporation v. NLRC, 1991)
Dispositive
WHEREFORE, petition is hereby DISMISSED.