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PRUBANKERS ASSOCIATION v. PRUDENTIAL BANK

FACTS:

The Regional Tripartite Wages and Productivity Board of Region V issued Wage Order No. RB 05-03, providing for a Cost of Living Allowance (COLA) to workers in the private sector. On the other hand, the Regional Tripartite Wages and Productivity Board of Region VII issued Wage Order No. RB VII-03, which directed the integration of the COLA mandated pursuant to Wage Order No. RO VII-02-A into the basic pay of all workers. The petitioner, a bank, granted a COLA to its employees in its Naga Branch in accordance with Wage Order No. RB 5-03 and integrated the COLA into the basic pay of its rank-and-file employees in its Cebu, Mabolo, and P. del Rosario branches in accordance with Wage Order No. RB VII-03. The petitioner refused to extend the application of the wage orders to its employees outside Regions V and VII, leading to a dispute on wage distortion. The matter was elevated to the voluntary arbitration committee, which ruled that the bank's separate and regional implementation of the wage orders created a wage distortion nationwide. The court of appeals, however, reversed the decision of the voluntary arbitration committee, holding that there was no wage distortion.

ISSUES:

  1. Did the petitioner engage in forum-shopping?

  2. What is the main issue in this case?

  3. Whether a wage distortion exists in the implementation of the Wage Orders in the covered branches.

  4. Whether a disparity in wages between employees holding similar positions but in different regions constitutes wage distortion.

  5. Whether the implementation of different wage rates in different regions is a violation of the principle of equal pay for equal work.

  6. Whether the term "establishment" includes all branches and offices in different regions for purposes of wage distortion.

  7. Whether the Bank is estopped from implementing a wage order for a specific region only due to its nationwide uniform wage policy.

RULING:

  1. Yes, the petitioner engaged in forum-shopping. The Court found that there is an identity of parties and issues between the present case and the voluntary arbitration case. The relief being sought in both cases is the same, which is the maintenance of the Bank's national wage structure. Thus, the Court deemed that forum-shopping exists and warranted the summary dismissal of both actions.

  2. The main issue in this case is the existence of a wage distortion arising from the Bank's separate and regional implementation of the two Wage Orders in the affected branches.

  3. No wage distortion resulted when the Wage Orders were implemented in the covered branches. The hierarchy of positions was preserved and there was an increase in the salary rates of all pay classes. The distinction between pay classes remained the same in all branches in the affected region, thus, there was no elimination of the distinction between the different ranks in the same region. Therefore, there was no wage distortion.

  4. A disparity in wages between employees holding similar positions but in different regions does not constitute wage distortion as contemplated by law. Wage distortion only arises when a wage order engenders wage parity between employees in different rungs of the organizational ladder of the same establishment. The difference in wages between employees in the same pay scale in different regions is recognized under the Wage Rationalization Act to account for existing regional disparities in the cost of living and other socio-economic factors.

  5. The implementation of different wage rates in different regions is not a violation of the principle of equal pay for equal work. Wage rates in each region are set based on the prevailing situation in that particular region. The law recognizes that there are different needs and considerations for different regions, such as the cost of living, supply and demand, and purchasing power of the peso. A uniform national wage structure would be antithetical to the purpose of the law, which is to regionalize wage rates.

  6. The term "establishment" does not include all branches and offices in different regions for purposes of wage distortion. The statutory provision and NWPC Guideline clarify that "establishment" refers to an economic unit engaged in one or predominantly one kind of economic activity with a single fixed location.

  7. The Bank is not estopped from implementing a wage order for a specific region only. While the Bank had a nationwide uniform wage policy prior to the enactment of the law, it was mandated to regionalize its wage structure after the law took effect. The Bank's previous implementation of nationwide wage orders was due to uncertainty regarding the new law and does not establish a management practice.

PRINCIPLES:

  • Forum-shopping exists when there is an identity of parties, rights asserted, and relief prayed for in two different cases, and a final judgment in one case will amount to res judicata in the other.

  • 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, effectively obliterating the distinctions embodied in the wage structure based on skills, length of service, or other logical bases of differentiation.

  • Wage distortion involves an existing hierarchy of positions with corresponding salary rates, a significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one, the elimination of the distinction between the two levels, and the existence of the distortion in the same region of the country.

  • Disparity in wages between employees holding similar positions but in different regions does not constitute wage distortion as it is recognized under the Wage Rationalization Act to account for existing regional disparities in the cost of living and other socio-economic factors.

  • Regionalizing wage rates is necessary due to varying factors such as cost of living, supply and demand, and purchasing power of the peso in different regions.

  • A uniform national wage structure is antithetical to the purpose of regionalizing wage rates.

  • Minimum wage rates in different regions may vary due to different socioeconomic conditions.

  • The term "establishment" refers to an economic unit engaged in one or predominantly one kind of economic activity with a single fixed location.

  • The implementation of a nationwide uniform wage policy prior to the enactment of RA 6727 does not constitute a management practice.