METROPOLITAN BANK & TRUST COMPANY EMPLOYEES UNION- ALU-TUCP and

ANTONIO V. BALINANG, petitioners, vs. NATIONAL LABOR RELATIONS

COMMISSION (2nd Division) and METROPOLITAN BANK & TRUST COMPANY,
respondents.

Facts
 The bank entered into a CBA with the MBTCEU:
o Granting a monthly P900 wage increase effective 01 Jan. 1989 covering
all regular employees to the exclusion of probationary employees.

 On 01 July 1989, the Wage Rationalization Act was implemented increasing

the minimum wage by P25 per day covering:
o Minimum wage earners; and
o Those receiving wages above the minimum wage up to P100.00
 Thus, the bank gave the P25.00 increase (amounting to P750.00 per month)
to its: (SC ruled that this was inequitable)
a) Probationary employees; and
b) Employees regularized before the implementation of the WRA but whose
daily rate was P100 and below.
o EXCLUDED: regular employees who were receiving more than P100 per
day and recipients of the P900 CBA increase
 UNION contended: bank’s implementation of the WRA resulted in the
categorization of the employees into two groups creating a substantially
reduced salary gap:
a) Probationary employees before the WRA and regularized employees
receiving P100 or less a day (given P25 increase)
b) Regular employees as of the date of the CBA, whose pay was over P100
a day (not given P25 increase)

LA Ruling
 There was wage distortion
 The increase resulted in the severe contraction of an intentional quantitative
difference. In this case, the quantitative difference was not based on skill or
length of service but on “other logical bases of differentiation” – i.e., the P900.00
wage gap intentionally provided by the CBA between those
o Those who WERE regular employees as of the time of the P900.00 CBA
increase; and
o Those who WERE NOT as of the time of the P900.00 CBA increase
 LA rules that the company must restore the P900.00 CBA wage gap enjoyed
by regular employees over non-regular employees
 HOWEVER, NLRC 2nd Division reversed the ruling of the LA and held that there
existed no significant reduction of intentional quantitative differences

Presiding Commissioner Bonto-Perez dissent

 There may not be an obliteration nor elimination of said quantitative
distinction/difference but there clearly was a contraction.
 o The contraction between the personnel groupings comes close to eighty-
three (83%). This cannot be considered as less than severe
 The P25.00 increase made by the Company is not the most equitable remedy for
the same would be an across-the-board increase which is not the intention of the
WRA.
 Thus, he prescribed formula:

Held:
 There was wage distortion: such distortion can so exist when, as a result of an
increase in the prescribed wage rate, an "elimination or severe contraction of
intentional quantitative differences in wage or salary rates" would occur "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."
 In mandating an adjustment, the law did not require that there be an elimination
or total abrogation of quantitative wage or salary differences; a severe
contraction thereof is enough: Here, it came close to 83%

 The "intentional quantitative differences" in wage among employees of the bank

has been set by the CBA to about P900 per month as of 01 January 1989. It is
intentional as it has been arrived at through the collective bargaining process to
which the parties are thereby concluded.
 The intention of the parties, whether the benefits were granted under a CBA or
not, should be equated with those granted by law unless there are compelling
reasons otherwise, must prevail and be given effect.
o Thus, the SC ruled that the across-the-board increase of the company by
P25.00 (amounting to P750 per month) was not the most conducive to
the policy of the WRA, which is to grant wage and allowance increase to
employees higher than the minimum rates prescribed by statute.