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P.I. Manufacturing Incorporated, vs., P.I. Manufacturing Supervisors and Foreman Association G.R. No. 167217
Facts:
RA 6640 was signed into law on 10 December 1987, providing, among others, an increase in the statutory minimum
wage and salary rates of employees and workers in the private sector. It provides that the minimum wage of workers
and employees in the private sector shall be increased by P10, except those outside Manila who shall receive an
increase of P11, provided those that are already receiving above the minimum wage shall receive an increase of
P10. PI Manufacturing Supervisors and Foremen Association (PIMASUFA) entered into a new CBA whereby the
supervisors were granted an increase of P625 per month and the foremen, P475 per month. The increases were
made to retroact to 12 May 1987, or prior to the passage of RA 6640. The application of said CBA resulted in a wage
distortion, which prompted the PIMASUFA together with the National Labor Union to file a case against PIMA for
violation of RA 6640. PIMA asseverates that the The Company and Supervisors and Foremen Contract absolves,
quitclaims, and releases the company for any monetary claim that the supervisors and the foremen may have
previous to the signing of the agreement on 17 December 1987
The Labor Arbiter ruled in favor of PIMASUFA and ordered PIMA to give the PIMASUFA members wage increases
equivalent to 13.5% of their basic pay. The CA affirmed, but raised the wage increase to 18.5%.
Issues:
1 W/N the PIMASUFA, by signing The Company and Supervisors and Foremen Contract, has waived any benefit it
may have under RA 6640.

2 W/N the 13.5% increase in the supervisors and foremens basic salary should be increased to 18.5% to correct the
wage distortion brought about by the implementation of RA 6640.
Ruling:
1 NO. The increase resulting from any wage distortion brought about by the implementation of the new minimum
wage law is not waivable.

2 NO. Although there was a wage distortion, the same was cured or remedied when PIMASUFA entered into the
1987 CBA with PIMA after the effectivity of RA 6640. The 1987 CBA increased the monthly salaries of the
supervisors by P626 and P475, which re-establishes the gap not only between supervisors and foremen but also
between them and the rank-and-file employees. Such gap as re-established by virtue of the CBA is more than a
substantial compliance with RA 6640. Moreover, requiring PIMA to pay 18.5%, over and above the negotiated wage
increases provided under the 1987 CBA, is highly unfair and oppressive to the former.

A CBA constitutes the law between the parties when freely and voluntarily entered into. It was not shown that
PIMASUFA was coerced or forced by PIMA to sign the 1987 CBA. All of its 13 officers signed the CBA with the
assistance of NLU. They signed it fully aware of the passage of RA 6640. The duty to bargain requires that the
parties deal with each other with open and fair minds. PIMASUFA cannot invoke the beneficial provisions of the 1987
CBA but disregard the concessions it voluntarily extends to PIMA.
Doctrine: Quitclaims by laborers are generally frowned upon as contrary to public policy and are held to be ineffective
to bar recovery for the full measure of the workers rights. The reason for the rule is that the employer and the
employee do not stand on the same footing.

Article 1149 of the Civil Code states that: When the law sets, or authorizes the setting of a minimum wage for
laborers, and a contract is agreed upon by which a laborer accepts a lower wage, he shall be entitled to recover the
deficiency.
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According to RA 6727, wage distortion is a situation where an increase in prescribed wage 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. Otherwise stated, 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.

The goal of collective bargaining is the making of agreements that will stabilize business conditions and fix fair
standards of working conditions.