Bankard Employees Union vs.

NLRC
Bankard Employees Union vs. NLRC
G.R. No.140689
February 17, 2004

Facts: Bankard, Inc. classifies its employees by levels: Level I, Level II, Level III, Level IV, and Level V. On May 1993, its Board
of Directors approved a New Salary Scale, made retroactive to April 1, 1993, for the purpose of making its hiring rate competitive
in the industry’s labor market. The New Salary Scale increased the hiring rates of new employees, to wit: Levels I and V by one
thousand pesos (P1,000.00), and Levels II, III and IV by nine hundred pesos (P900.00). Accordingly, the salaries of employees
who fell below the new minimum rates were also adjusted to reach such rates under their levels.

This made Bankard Employees Union-WATU (petitioner), the duly certified exclusive bargaining agent of the regular rank and
file employees of Bankard, to request for the increase in the salary of its old, regular employees. Bankard insisted that there was
no obligation on the part of the management to grant to all its employees the same increase in an across-the-board manner.

Petioner filed a notice of strike. The strike was averted when the dispute was certified by the Secretary of Labor and
Employment for compulsory arbitration. NLRC finding no wage distortion dismissed the case for lack of merit. Petitioner’s
motion for reconsideration of the dismissal of the case was denied.

Issue: Whether the unilateral adoption by an employer of an upgraded salary scale that increased the hiring rates of new
employees without increasing the salary rates of old employees resulted in wage distortion within the contemplation of Article
124 of the Labor Code.

Ruling:The Court will not interfere in the management prerogative of the petitioner. The employees are not precluded to
negotiate through the provisions of the CBA.

Upon the enactment of R.A. No. 6727 (WAGE RATIONALIZATION ACT, amending, among others, Article 124 of the Labor
Code), the term "wage distortion" was explicitly defined as... a situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.

Normally, a company has a wage structure or method of determining the wages of its employees. In a problem dealing with "wage
distortion," the basic assumption is that there exists a grouping or classification of employees that establishes distinctions among
them on some relevant or legitimate bases. Involved in the classification of employees are various factors such as the degrees of
responsibility, the skills and knowledge required, the complexity of the job, or other logical basis of differentiation. The differing
wage rate for each of the existing classes of employees reflects this classification.
Put differently, the entry of new employees to the company ipso facto places them under any of the levels mentioned in the new
salary scale which private respondent adopted retroactive to April 1, 1993. While seniority may be a factor in determining the
wages of employees, it cannot be made the sole basis in cases where the nature of their work differs.
Moreover, for purposes of determining the existence of wage distortion, employees cannot create their own independent
classification and use it as a basis to demand an across-the-board increase in salary.
The wordings of Article 124 are clear. If it was the intention of the legislators to cover all kinds of wage adjustments, then the
language of the law should have been broad, not restrictive as it is currently phrased:
Article 124. Standards/Criteria for Minimum Wage Fixing. Where the application of any prescribed wage increase by virtue of a
law or Wage Order issued by any Regional Board results in distortions of the wage structure within an establishment, the
employer and the union shall negotiate to correct the distortions. Any dispute arising from the wage distortions shall be resolved
through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary
arbitration.

Article 124 is entitled "Standards/Criteria for Minimum Wage Fixing." It is found in CHAPTER V on "WAGE STUDIES, WAGE
AGREEMENTS AND WAGE DETERMINATION" which principally deals with the fixing of minimum wage. Article 124 should
thus be construed and correlated in relation to minimum wage fixing, the intention of the law being that in the event of an
increase in minimum wage, the distinctions embodied in the wage structure based on skills, length of service, or other logical
bases of differentiation will be preserved.

PHILIPPINE DIAMOND HOTEL AND RESORT, INC. (MANILA DIAMOND HOTEL) VS. MANILA DIAMOND HOTEL
EMPLOYEES UNION G.R. NO. 158075, June 30, 2006
FACTS:
Respondent union filed a Petition for Certification Election seeking certification as the exclusive bargaining representative of its
members.

The DOLE-NCR denied the union's petition as it failed to comply with legal requirements and was seen to fragment the
employees of petitioner. Through its president Kimpo, the union later notified petitioner of its intention to negotiate a Collective
Bargaining Agreement for its members. Acting on the notice, the Hotel advised the union that since it was not certified by the
DOLE as the exclusive bargaining agent, it could not be recognized as such.
By Notice to its members, the union announced that its executive officers as well as its directors decided to go on strike in view of
the management's refusal to bargain collectively, and thus called for the taking of strike vote. The union went on to file a Notice
of Strike due to unfair labor practice in that the Hotel refused to bargain with it and the rank-and-file employees were being
harassed and prevented from joining it. Conciliation conferences were immediately conducted. In the early morning of November
29, 1997, however, the union suddenly went on strike. The following day, the National Union of Workers in the Hotel, Restaurant
and Allied Industries joined the strike and openly extended its support to the union. At about this time, Hotel supervisors
Agustin and Rowena failed to report for work and were, along with another supervisor, Mary Grace, seen participating in and
supporting the strike.

Petitioner thus filed a petition for injunction before the National Labor Relations Commission to enjoin further commission of
illegal acts by the strikers.

Despite the efforts of the NCMB to conciliate the parties, the same proved futile. The DOLE Acting Secretary by Order directed
the Hotel to just reinstate the strikers to its payroll, and ordering that all cases between the parties arising out of the labor
disputes which were pending before different Labor Arbiters be consolidated with the case earlier certified to the NLRC for
compulsory arbitration. It appears that the said order of the Acting Secretary was carried out. The NLRC declared that the strike
was illegal and that the union officers and members who were reinstated to the Hotel's payroll were deemed to have lost their
employment status. On appeal by the union, the Court of Appeals affirmed the NLRC Resolution
ISSUE:
Whether the union members are entitled to their backwages.
RULING:
NO. For the general rule is that backwages shall not be awarded in an economic strike on the principle that "a fair day's wage"
accrues only for a "fair day's labor."

This Court must thus hearken to its policy that "when employees voluntarily go on strike, even if in protest against unfair labor
practices," no backwages during the strike is awarded. Jurisprudential law, however, recognizes several exceptions to the "no
backwages rule," to wit: when the employees were illegally locked to thus compel them to stage a strike; when the employer is
guilty of the grossest form of ULP; when the employer committed discrimination in the rehiring of strikers refusing to readmit
those against whom there were pending criminal cases while admitting nonstrikers who were also criminally charged in court; or
when the workers who staged a voluntary ULP strike offered to return to work unconditionally but the employer refused to
reinstate them. Not any of these or analogous instances is, however, present in the instant case.