The Supreme Court ruled that Wage Order No. RXIII-02 only applies to employees earning the minimum wage, not to those already earning above it. The Court emphasized that wage orders are intended to address minimum wage levels, not to provide across-the-board increases. The decision clarifies the scope of regional wage orders, protecting employers from unintended financial burdens and maintaining the stability of wage regulations, while ensuring that minimum wage earners receive the mandated cost of living allowance, underscoring the principle of ‘Expressio unius est exclusio alterius’.

The Caraga Wage Quandary: Who Benefits from the PHP 12 Increase?

This case arose from a dispute between Nasipit Integrated Arrastre and Stevedoring Services, Inc. (NIASSI) and the Nasipit Employees Labor Union (NELU) regarding the implementation of Wage Order (WO) RXIII-02. The Union argued that WO RXIII-02, which granted an additional PhP 12 per day cost of living allowance, should apply to all NIASSI employees, regardless of their current wage rates. NIASSI, however, contended that the wage order only covered minimum wage earners, as its employees already received wages above the prescribed minimum.

The dispute began when NIASSI allegedly failed to implement WO RXIII-02. The Union filed a complaint, leading to inspections and eventual referral to voluntary arbitration. The Voluntary Arbitrator ruled in favor of the Union, stating that WO RXIII-02 did not explicitly prohibit granting wage increases to those earning above minimum wage. NIASSI appealed, leading to a Court of Appeals decision affirming the arbitrator’s ruling. This prompted NIASSI to elevate the case to the Supreme Court.

At the heart of the matter lies the interpretation of WO RXIII-02’s coverage. Section 1 of the Wage Order states that the rates apply to “minimum wage earners” in the private sector. Its Implementing Rules and Regulations (IRR) further clarify this point. Rule II, Section 1(a) reiterates that the minimum wage rates apply to “minimum wage earners,” while Section 1(c) mentions that workers receiving more than the prescribed minimum wage may receive wage increases through the correction of wage distortions. This principle, known as expressio unius est exclusio alterius, dictates that the express mention of one thing excludes all others, thus limiting the coverage to minimum wage earners.

The Supreme Court referenced its previous ruling in Metropolitan Bank and Trust Company, Inc., v. National Wages and Productivity Commission. In that case, the Court stated that Regional Tripartite Wages and Productivity Boards (RTWPB) are authorized to determine and fix minimum wage rates but cannot issue wage increases that cut across all employment levels. This principle safeguards against RTWPBs overstepping their authority and prevents the imposition of potentially burdensome wage increases on employers who already compensate their employees above the minimum wage.

R.A. No. 6727 declared it a policy of the State to rationalize the fixing of minimum wages and to promote productivity improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families…

Pursuant to its wage fixing authority, the RTWPB may issue wage orders which set the daily minimum wage rates, based on the standards or criteria set by Article 124 of the Labor Code.

In this light, NIASSI was not legally obliged to grant a wage increase to employees already receiving above-minimum wages, absent wage distortions requiring correction. The Union’s argument relied heavily on a Collective Bargaining Agreement (CBA) provision stating that wage increases granted by the company would not be creditable to future mandated wage increases. The arbitrator favored the Union because NIASSI failed to provide evidence that the employee’s wages were due to pay increases by the company within the one-year period. In so doing, the arbitrator overstepped. By focusing on whether NIASSI proved its payments instead of applying the correct provision of law, the Voluntary Arbitrator incorrectly extended the reach of WO RXIII-02.

Ultimately, the Supreme Court underscored its commitment to protecting workers’ rights while also acknowledging the need for fairness and adherence to legal principles. Every case must be assessed based on established facts, applicable laws, and relevant legal doctrines.

FAQs

What was the key issue in this case?	The central issue was whether Wage Order No. RXIII-02, which granted a cost of living allowance, applied only to minimum wage earners or also to employees already earning above the minimum wage. The court determined the wage order was only for minimum wage earners.
What is the principle of expressio unius est exclusio alterius?	This legal principle means that the express mention of one thing excludes all others. In this case, the explicit reference to minimum wage earners in WO RXIII-02 implies that those earning above the minimum wage are excluded from its coverage.
What did the Regional Tripartite Wages and Productivity Board do?	The RTWPB issued Wage Order No. RXIII-02, granting an additional PhP 12 per day cost of living allowance to minimum wage earners in the Caraga Region. It is authorized to fix the minimum wage rates, but not to enforce wage increases across all levels.
What was the Union’s argument?	The Union argued that WO RXIII-02 should apply to all NIASSI employees, regardless of their current wage rates, because the wage order did not explicitly prohibit granting wage increases to those earning above the minimum wage. The Voluntary Arbitrator wrongly agreed with this assertion.
Why did the Supreme Court reverse the Court of Appeals’ decision?	The Supreme Court reversed the CA because WO RXIII-02 expressly applied only to minimum wage earners. Extending the wage order’s coverage to employees already earning above the minimum wage would contradict the wage order’s explicit terms and the authority of the RTWPB.
What does this ruling mean for employers?	This ruling clarifies that employers are only obligated to provide wage increases mandated by wage orders to employees earning the minimum wage. They are not required to grant additional increases to employees already earning above the minimum wage, absent specific requirements for wage distortion corrections.
What does this mean for employees?	The main takeaway is the the employee will need to fall into the express class covered by the wage order in order to be covered by the mandate. They would need to be considered a minimum wage earner in the region in order for the benefits to be enjoyed.
What is the significance of the CBA provision in this case?	The Collective Bargaining Agreement between the parties had a provision discussing company-granted wage increases and how they are applied to legislative increases. However, that was not directly in question. The issue at hand was an employee’s wage as it applied to the new order, which had nothing to do with the CBA between the parties.

This ruling ensures that wage orders serve their intended purpose of protecting minimum wage earners without imposing undue financial burdens on employers. It underscores the importance of adhering to the specific terms of wage orders and recognizing the limits of regulatory authority in wage-setting. Further guidance is welcome in any matter of labor concerns to make sure the rights of individuals are protected and advanced.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC. vs. NASIPIT EMPLOYEES LABOR UNION, G.R. No. 162411, June 27, 2008