LABOR
ART. 124 – Standards/Criteria for minimum
wage fixing
FACTORS (10):
A. The demand for living wages;
B. Wage adjustments vis-à-vis the
consumer price index;
C. The cost of living and changes or
increases therein;
D. The needs of workers and their
families;
E. The needs to induce industries to
invest in the countryside;
F. Improvements in standards of living;
G. The prevailing wage levels;
H. Fair return of the capital invested and
capacity to pay of employers;
I. Effects on employment generation
and family income; and
J. The equitable distribution of income
and wealth along the imperatives of
economic and social development.
PAG MAY WAGE DISTORTION:
1. In case there is a Collective
Bargaining Agreement:
- Any dispute arising from wage
distortions shall be resolved
through the grievance procedure
under the CBA, and
- If it remains unsolved, through
voluntary arbitration.
● Shall be resolved within 10
days
2. Pag walang CBA or recognized labor
unions
- The employers and workers shall
endeavor to correct such
distortions.
-
Any dispute arising therefrom
shall be settled through the
National
Conciliation
and
Mediation
Board,
and
if
remained unsolved after 10
calendar days of conciliation,
shall be referred to the
appropriate branch of the NLRC.
DEFINITION:
 Wage
distortion
means
the
disappearance
or
virtual
disappearance of pay differentials
between lower and higher positions
in an enterprise because of
compliance with a wage order.
 There may not be an obliteration nor
elimination of said quantitative
distinction/difference aforecited but
clearly there is a contraction.
 ELEMENTS:
- An existing hierarchy of positions
with corresponding salary rates
- A significant change in the salary
rate of a lower pay class without
a concomitant increase in the
salary rate of a higher one.
- The elimination of the distinction
between the two levels.
- The existence of the distortion in
the same region of the country.
CORRECTION OF WAGE DISTORTION:
- May be done by re-establishing a
substantial or significant gap (as
distinguished from the historical
gap) between the wage rates of
the
differing
classes
of
employees.
- No wage increase shall be
credited as compliance with the
increase prescribed herein unless
expressly provided under valid
individual
written/collective
agreements;
and
provided
further that such wage increase
was granted in anticipation of the
legislated wage increase under
the act.
TWO METHODS OF ADJUSTING THE
MINIMUM WAGE:
1. Floor Wage
- Involves the fixing of a
determinate amount to be added
to the prevailing statutory
minimum.
2. Salary-ceiling
- The wage adjustment was to be
applied to employees receiving a
certain denominated salary
ceiling.
● In other words, workers
already being paid more than
the existing minimum wage
are also to be given a wage
increase.
** National Federation of Labor VS NLRC
 Recognition and validation of wage
increases given by employers either
unilaterally or as a result of collective
bargaining negotiations for the
purpose
of
correcting
wage
distortions are in keeping with the
public policy of encouraging
employers to grant wage and
allowance increases to their
employees which are higher than the
minimum rates of increases
prescribed
by
statute
or
administrative regulation.
 To compel employers simply to add
on legislated increases in salary or
allowances without regard to what is
already paid, would be to penalize
employers who grant their workers
more than the statutorily prescribed
minimum rates of increases. Clearly,
this would be counterproductive so
far as securing the interest of labor is
concerned.
NO WAGE DISTORTION WHEN:
- Salary adjustments in terms of
restructuring of benefits and
allowances by employer or
increase pursuant to CBA.
FORMULA FOR CORRECTION OF PAY SCALE
STRUCTURE:
 MW / AS = % x Prescribed = DIA
- Minimum Wage
- Actual Salary
- Distortion Increased Adjustment
GENERAL
PRINCIPLES
DISTORTION:
ON
WAGE
A. The concept of wage distortion assumes
an existing grouping or classification of
employees which establishes distinctions
among such employees on some relevant or
legitimate basis. This classification is
reflected in a differing wage rate for each of
the existing classes of employees.
B. Wage distortions have often been the
result of government- decreed increases in
minimum wages.
There are, however, other causes of wage
distortions, like the merger of two (2)
companies (with differing classification of
employees and different wage rates) where
the surviving company absorbs all the
employees of the dissolved corporation. (In
the present Metro case, as already noted,
the wage distortion arose because the
effectivity dates of wage increases given to
each of the two (2) classes of employees
(rank-and-file and supervisory) had not been
synchronized in their respective CBAs.).
C. Should a wage distortion exist, there is no
legal requirement that, in the rectification of
that distortion by re-adjustment of the wage
rates of the differing classes of employees,
the gap which had previously or historically
existed be restored in precisely the same
amount. In other words, correction of a
wage distortion may be done by reestablishing a substantial or significant
gap (as distinguished from the historical
gap) between the wage rates of the differing
classes of employees.
D. The re-establishment of a significant
difference in wage rates may be the result of
resort to grievance procedures or collective
bargaining negotiations.
WAGE DISTORTION IS NOT A GROUND FOR
STRIKE/LOCKOUT
 Ilaw at Buklod ng Manggagawa VS
NLRC
 The legislative intent that solution of
the problem of wage distortions shall
be sought by voluntary negotiation
or arbitration, and not by strikes,
lockouts, or other concerted
activities of the employees or
management. (RA 6727)
ART. 125 – Freedom to bargain
 Workers are allowed to bargain for
higher wages with their employers
consistent with the policy of
promoting the primacy of free
collective
bargaining
and
negotiations.
 Meycuayan Colleges VS Drilon –
Issue:
Whether
increases
in
employees’ salaries resulting from
the implementation of presidential
decrees and wage orders which are
over and above the agreed salary
scale contracted for between the E
and e in a CBA, preclude the
employees from claiming the
difference between their old salaries
and those provided for under said
salary scale. Court resolved the issue
and ruled that compliance with a CBA
is mandated by the expressed policy
to give protection to labor. Benefits
derived from either the law of a
contract should be treated as distinct
and separate from each other.
Intent of parties to treat legislated increases
equivalent to CBA stipulation:
 The manifest will and intent of the
parties to treat the legislated
increases as equivalent pro tanto to
those stipulated in their CBA must be
respected and given effect.
ART. 126 – Prohibition against injunction
 The proceedings before the National
Wages and Productivity Commission
and Regional Tripartite Wages and
Productivity Board is not subject to
preliminary or permanent injunction
or temporary restraining order by
any court, tribunal, or other entity.
ART. 127 – Non-diminution of benefits
 Wage rates must NOT be lower than
the statutory minimum wage rates
prescribed by Congress.
CHAPTER VI
Enforcement
–
Administration
and
ART. 128 – Visitorial and Enforcement
Power
 The Secretary of Labor and
Employment or his duly authorized
representatives, including labor
regulation officers shall have the
following powers:
a. Access to employer’s records
and premises at any time
b. (Where there exists an E-e
relationship) they shall have
the
power
to
issue
compliance orders to give
effect to the labor standards
and other labor legislation.
They can also issue writs of
execution
for
the
enforcement of their orders.
i. * an order issued may
be appealed to the
Sec.
c. May likewise order stoppage
of work or suspension of
operations of any unit or
department
of
an
establishment when noncompliance with the law or
IRRs poses grave and
imminent danger to the
health and safety of workers
in the workplace.
d. It is unlawful for any person
or entity to obstruct, impede,
delay, or otherwise render
ineffective the orders of the
Secretary of Labor and
Employment and their reps.
e. No abuse of authority
f. They may require employers
to keep and maintain such
employment records as may
be necessary in aid of his
visitorial and enforcement
powers.
 VISITORIAL POWER
o Access to employer’s records
and premises
o To question any employee;
and
o To investigate any fact,
condition, or matter relevant
to the enforcement of any
provision of the code and of
any labor law, wage order, or
R&R issued pursuant thereto.
o Implemented through the ff:
 Routine Inspection
 Complaint inspection
 Occupational safety
and health standards
investigation
 ENFORCEMENT POWER
o To issue compliance orders
o To issue writs of execution
 POWER OF APPELATE REVIEW
o Sec.
of
Labor
and
Employment may review the
order of the Regional Director
o In aid of his power of review,
the Sec. of Labor and
Employment may direct the
Bureau
of
Working
Conditions to evaluate the
findings or orders of the
Regional Director.
 Peoples Broadcasting VS. Sec. of
DOLE – The visitorial and
enforcement power comes into play
only in cases when the relationship
of E-e still exists.
 The power of the RD to hear and
decide the monetary claims is not
absolute
o The xpn clause provides an
instance when the regional
director of his reps may be
divested of jurisdiction over a
labor standards case.
o ELEMENTS:
 That the E contests
the findings of the
labor
regulations
officer and raises
issues thereon;
 That in order to
resolve such issues,
there is a need to
examine evidentiary
matters.
 That such matters are
not verifiable in the
normal course of
inspection.
 The DOLE can determine the
existence of an E-e relationship,
however, it cannot be co-extensive
with the visitorial and enforcement
power of the DOLE. The finding of the
DOLE is merely preliminary, and that
the determination is still primarily
lodged with the NLRC.
 Interference and Injunctions are
prohibited
o No inferior court or entity
shall issue temporary or
permanent injunction or
restraining
order
or
otherwise
assume
jurisdiction over any case
involving the enforcement
orders issued in accordance
with the Code.
 Work Stoppage Order (WSO)
o The Sec. of Labor and
Employment or his/her duly
authorized
representative
may direct to stop, wholly or
partly, the work or operation
of any unit or dept. when
non-compliance
with
occupational safety and
health standards poses
imminent danger to the
health and safety of the
employees in the workplace.
o WSO may be lifted upon
proof and certification from
the safety officer of the
employer or DOLE that the
cause of the imminent danger
has been abated.
 Compliance Order
o After
a
conference
mandatory