University of the Philippines 89 Metropolitan Bank vs NWPC

College of Law Evening 2021

Law 113 (Labor Law) Wage Orders may not grant benefits not Austria-Martinez, J.
provided by

Brief Summary
Metropolitan Bank is assailing the validity of the Wage Order issued by the RTWPB in Region 2 granting an
across-the-board wage increase of ₱15.00 to all employees and workers in the private sector throughout Region
2 by filing a petition for certiorari and prohibition with the Court of Appeals, praying that the Wage Order be
declared void and null for being an unreasonable intrusion into the property rights of Metropolitan Bank and for
undermining the very essence of collective bargaining. The Court of Appeals denied the petition.

Facts
(1) In October 1995, the Regional Tripartite Wages and Productivity Board (RTWPB) of Region 2, by virtue
of the Wage Rationalization Act, issued Wage Order R02-03 (“Wage Order”). Section 1 of the Wage
Order grants an across-the-board wage increase of ₱15.00 to all employees and workers in the private
sector throughout Region 2.
(2) The Wage Order took effect on January 1, 1996 while its IRR was approved on February 14, 1996. Under
Section 13 of the Wage Order, any aggrieved party may file an appeal before the National Wages and
Productivity Commission (NWPC) through the RTWPB within ten (10) calendar days from the publication
of the Wage Order.
(3) The Banker’s Council for Personnel Management (BCMP) sent a letter inquiry to NWPC seeking an
exemption from the coverage of the Wage Order on behalf of its member banks with head offices outside
of Region 2; this request was grounded on the fact that such member banks were already paying more
than the prevailing minimum wage rate in the National Capital Region (NCR) which was the principal
place of business of such member banks.
(4) A second letter was sent by Metropolitan Bank & Trust Company (Metropolitan Bank) to NWPC seeking
an interpretation of the Wage Order.
(5) In replying to the letters sent by BCMP and Metropolitan Bank, NWPC stated that the Wage Order covers
all establishments situated in Region 2, regardless of their voluntary adoption of wage order applicable
in NCR and irrespective of the amounts they are already paying their employees.
(6) Metropolitan Bank filed a petition for certiorari with the Court of Appeals (CA) alleging that RTWPB, in
issuing the Wage Order, acted beyond its authority. Hence, it is praying for the nullification of the Wage
Order contending that its implementation would cause financial losses and labor unrest. The Office of the
Solicitor General (OSG) filed a manifestation siding with Metropolitan Bank.
(7) CA denied the petition on three (3) primary grounds: First, the writ of prohibition could no longer be issued
since the Wage Order and its IRR have already become fait accompli. Second, the writ of certiorari is an
improper remedy since such may only be issued in relation to the exercise of judicial or quasi-judicial
functions and not administrative functions. Lastly, Metropolitan Bank did not avail of the right to appeal
under Section 13 of the Wage Order.

Issues
Issue Resolution
W/N Section 1 of the Wage Order is valid Partly yes.

In furtherance of the State’s policy to rationalize the fixing of

minimum wages, the Wage Rationalization Act created the NWPC
and vested it with the power to prescribe guidelines for the
determination of appropriate minimum wages and authorized
Regional Boards to fix the minimum wage rates in their respective
regions, provinces or industries.

In the case of Employers’ Confederation of the Philippines vs

NWPC, the Court declared that there are two (2) ways of fixing the
minimum wage: floor wage method and salary ceiling method.
Under the floor wage method, a fixed amount is added to the
 prevailing statutory minimum wage rates. For example, add
₱15.00 to the current minimum wage, if the employee is earning
more than the minimum wage, there is no need to add the ₱15.00
to his current wage. Under the salary ceiling method, a salary
ceiling would be set, in such a way that only those below the
ceiling would be entitled to an increase that would allow their
current wages to reach the ceiling. For example, if the ceiling is
₱250.00, those earning ₱200.00 will get ₱50.00 increase while
those already earning ₱250.00 will not get an increase.

In the present case, RTWPB did not fix the minimum wage using
any of the two (2) methods. Instead, it granted an across-the-
board wage increase of ₱15.00 to all employees and workers of
Region 2, whether earning minimum wage or not. In so doing, it
exceeded its authority. The Wage Order effectively granted
additional benefits not contemplated by the Wage Rationalization
Act.

It has been said that when the application of an administrative

issuance modifies existing laws or exceeds the intended scope,
as in this case, the issuance becomes void, not only for being ultra
vires, but also for being unreasonable. Thus, SC finds that Section
1 of the Wage Order is void insofar as it grants a wage increase
to employees earning more than the minimum wage rate and
pursuant to the separability clause of the Wage Order, Section 1
is declared valid with respect to employees earning the prevailing
minimum wage rate.

Be that as it may, the SC no longer ordered the employees who

W/N Metropolitan Bank’s recourse to a No.
petition for certiorari and prohibition was
proper
wrongly received the increase mandated by the Wage Order to
refund the amounts received by them since they received such
increase in good faith and in the honest belief that they were
entitled to it.
The issuance of the Wage Order was done in pursuance of the
Board’s quasi-legislative power as delegated by the Wage
Rationalization Act. Thus, it is not the proper subject of a petition
for certiorari or prohibition because both special civil actions may
only be resorted to if the disputed acts were performed in the
exercise of judicial or quasi-judicial power.

In addition, Metropolitan Bank should have availed of the remedy

provided by Section 13 of the Wage Order. To make matters
worse, Metropolitan Bank failed to invoke the power of NWPC to
review the wage levels set by the Board. Instead, it filed a petition
directly with CA, wrongly impleading NWPC, thus failing to
exhaust the administrative remedies available to it.

Ruling
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated July 19, 2000
in CA-G.R. SP No. 42240 is MODIFIED. Section 1 of Wage Order No. R02-03 issued on October 17, 1995 by
the Regional Tripartite Wages and Productivity Board for Region II, Tuguegarao, Cagayan is declared VALID
insofar as the mandated increase applies to employees earning the prevailing minimum wage rate at the time of
the passage of the Wage Order and VOID with respect to its application to employees receiving more than the
prevailing minimum wage rate at the time of the passage of the Wage Order.
No costs.

SO ORDERED.. The Decision of the Court of Appeals