BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS, vs. NLRC and BANKARD, INC., [Case Digest]

BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS, vs. NLRC and BANKARD, INC., 

G.R. No. 140689, February 17, 2004

 

Facts:

Bankard, Inc. (Bankard) classifies its employees by levels, to wit: Level I, Level II, Level III, Level IV, and Level V. On May 28, 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 industrys 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.

Bankards move drew the Bankard Employees Union-WATU (petitioner), the duly certified exclusive bargaining agent of the regular rank and file employees of Bankard, to press for the increase in the salary of its old, regular employees.

Bankard took the position, however, 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.

As the continued request of petitioner for increase in the wages and salaries of Bankards regular employees remained unheeded, it filed a Notice of Strike on August 26, 1993 on the ground of discrimination and other acts of Unfair Labor Practice (ULP).

Petitioner filed another Notice of Strike on the grounds of refusal to bargain, discrimination, and other acts of ULP - union busting. The strike was averted, however, when the dispute was certified by the Secretary of Labor and Employment for compulsory arbitration.

NLRC held that there is not wage distortion and dismissed the case for lack of merit. CA also denied the petition for certiorari filed by Petitioner.

 

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.

 

Held:

No.

 

Ratio:

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.

To determine the existence of wage distortion, the historical classification of the employees prior to the wage increase must be established. Likewise, it must be shown that as between the different classification of employees, there exists a historical gap or difference.

Thus the employees of private respondent have been historically classified into levels, i.e. I to V, and not on the basis of their length of service. Put differently, the entry of new employees to the company ipso facto place[s] them under any of the levels mentioned in the new salary scale which private respondent adopted retroactive [to] April 1, 1993. Petitioner cannot make a contrary classification of private respondents employees without encroaching upon recognized management prerogative of formulating a wage structure, in this case, one based on level .

[W]hether or not a new additional scheme of classification of employees for compensation purposes should be established by the Company (and the legitimacy or viability of the bases of distinction there embodied) is properly a matter of management judgment and discretion, and ultimately, perhaps, a subject matter for bargaining negotiations between employer and employees. It is assuredly something that falls outside the concept of wage distortion.