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MANILA FASHIONS v. NLRC

## FACTS:

On March 15, 1993, respondent Nagkakaisang Manggagawa ng Manila Fashions, Inc. filed a complaint against petitioner Manila Fashions, Inc. for non-compliance with Wage Order No. NCR-02 and 02-A, which mandated a P12 increase in wages. The complainants alleged that their basic pay and other benefits were underpaid. Petitioner argued that the failure to comply with the Wage Order was due to the losses it suffered and the strike staged by the workers. Petitioner claimed that the strikers had agreed to condone the implementation of the increase through a provision in the Collective Bargaining Agreement (CBA). The Labor Arbiter ruled in favor of the complainants and awarded them a total of P900,012. Both parties appealed to the National Labor Relations Commission (NLRC). NLRC affirmed the decision, holding that the condonation provision in the CBA was invalid and that the computation of the award was not erroneous. Petitioner filed a petition for review with the Supreme Court, arguing that the condonation provision was valid and that the award computation was arbitrary. The Supreme Court upheld the decision of the Labor Arbiter and NLRC, declaring that the condonation provision did not exempt petitioner from complying with the Wage Order. It further held that the provision was void because it contradicted the mandate of the Wage Order. The Court also rejected petitioner’s argument regarding the award computation, as it was not raised before NLRC and was beyond the jurisdiction of the Court. The petition was dismissed, and the decision awarding P900,012 to the complainants was affirmed.

## ISSUES:

  1. Was the condonation of the implementation of Wage Order No. NCR-02 and 02-A contained in Section 3, Article VIII, of the Collective Bargaining Agreement (CBA) valid?

  2. Was the computation of the award for the claimants, as contended by the petitioner, erroneous and arbitrary?

## RULING:

  1. The Supreme Court affirmed the decision of the Labor Arbiter as upheld by the National Labor Relations Commission (NLRC) that the condonation stipulated in Section 3, Article VIII, of the CBA was invalid. It was ruled that the provision was void as it contravened the mandate of the Wage Order, which prescribed a P12.00 wage increase effective January 8, 1991. The Court emphasized that only the Tripartite Wage Productivity Board of the Department of Labor and Employment (DOLE) could approve an exemption from coverage of a Wage Order, and not the parties to a CBA by themselves.

  2. The Supreme Court dismissed the petitioner's claim regarding the erroneous and arbitrary computation of the award. It noted that this issue was never raised before the NLRC and could not be entertained for the first time at the Supreme Court level. The Court delineated that its jurisdiction under Rule 65 was limited to reviewing issues of jurisdiction or grave abuse of discretion, not the evaluation of evidence unless there are extenuating circumstances.

## PRINCIPLES:

  1. CBA Stipulations Contrary to Law: Clauses in a CBA that contravene mandatory statutory provisions, such as those governing minimum wage rates, are null and void.

  2. Tripartite Wage Productivity Board's Authority: Only the Tripartite Wage Productivity Board of the DOLE has the authority to grant exemptions from compliance with Wage Orders.

  3. Scope of Judicial Review in Labor Cases: The Supreme Court’s review in labor cases under Rule 65 is generally confined to questions of jurisdiction or grave abuse of discretion, not on the assessment of evidence.

  4. Introduction of New Issues on Appeal: Parties are precluded from raising issues at the appellate level that were not brought up before the lower tribunals, adhering to principles of fair play, justice, and due process.

  5. Legal Minimum Wages Cannot Be Waived: Any agreement to accept wages lower than the legal minimum, through a CBA or other means, is against public policy and therefore void.