GLOBE MACKAY CABLE AND RADIO CORPORATION, FREDERICK WHITE and JESUS SANTIAGO vs. NATIONAL LABOR RELATIONS COMMISSION, FFW-GLOBE MACKAY EMPLOYEES UNION and EDA CONCEPCION

G.R. No. 74156 June 29, 1988

Facts:

On October 30, 1984 Wage Order No. 6 mandated an increased in the cost-of-living allowance of non-agricultural workers in the private sector for P3.00. The order was complied by the petitioner Corporation by multiplying the same by 22 days, equivalent to the number of working days in the company.

Respondent union alleges that instead of multiplying the COLA by 22 it should be multiplied by 30 representing the number of days in a month, as what the corporation's normal practice prior to the said Wage Order. Thus the union filed a complaint against the Corporation for for illegal deduction, underpayment, unpaid allowances, and violation of Wage Order No. 6.

Issue:

Whether or not COLA under Wage Order No. 6 should be multiplied by 22 or 30 representing the number of working days in a month.

Held:

Labor Arbiter Adelaido F. Martinez sustained the position of Petitioner Corporation by holding that since the individual petitioners acted in their corporate capacity they should not have been impleaded; and that the monthly COLA should be computed on the basis of twenty two (22) days, since the evidence showed that there are only 22 paid days in a month for monthly-paid employees in the company. His reasoning, inter alia, was as follows:

To compel the respondent company to use 30 days in a month to compute the allowance and retain 22 days for vacation and sick leave, overtime pay and other benefits is inconsistent and palpably unjust. If 30 days is used as divisor, then it must be used for the computation of all benefits, not just the allowance. But this is not fair to complainants, not to mention that it will contravene the provision of the parties' CBA.

Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5 and 6 uniformly read as follows:

Section 5. Allowance for Unworked Days.

All covered employees shall be entitled to their daily living allowance during the days that they are paid their basic wage, even if unworked. (Emphasis supplied)

... it is evident that the intention of the law is to grant ECOLA upon the payment of basic wages. Hence, we have the principle of 'No Pay, No ECOLA.