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MSCI-NACUSIP LOCAL CHAPTER v. NATIONAL WAGES

FACTS:

The case involves a petition for certiorari filed by MSCI-NACUSIP Local Chapter (Union), questioning the decision of the National Wages and Productivity Commission (Commission) in NWPC Case No. E-93-007. The Commission's decision reversed the decision of the Regional Tripartite Wages and Productivity Board VI (Board), which had denied the application for exemption of Monomer Sugar Central, Inc. (MSCI) from Wage Order No. RO VI-01.

MSCI is a corporation that was established on February 15, 1990, after acquiring the assets of Asturias Sugar Central, Inc. (ASCI) through a Memorandum of Agreement with Monomer Trading Industries, Inc. (MTII). On January 16, 1991, MSCI applied for exemption from the wage order, citing its status as a distressed employer. The Union opposed the application, disputing MSCI's claim of financial distress and asserting that MSCI's provided financial statements did not accurately reflect the true financial state of the company.

The Board conducted hearings and ultimately denied MSCI's application for exemption. The Board determined that MSCI's losses amounting to P3,400,738.00 for the period between February 15, 1990, and August 31, 1990, constituted only 5.25% impairment of its paid-up capital of P64,688,528.00. This fell short of the required 25% impairment necessary for exemption.

MSCI sought reconsideration of the Board's decision, but it was denied. MSCI then appealed to the Commission, which reversed the Board's decision and granted MSCI's application for exemption, valid for a period of one year. The Union, being dissatisfied with the Commission's decision, filed a petition for certiorari questioning its validity.

The main issue in the case is whether MSCI qualifies as a distressed employer and is entitled to exemption from compliance with the wage order.

ISSUES:

  1. Whether or not respondent MSCI can qualify as a distressed employer from February 15, 1990 to August 31, 1990 as well as during the interim period from September 1, 1990 to November 30, 1990 and thus be entitled to exemption from compliance with Wage Order No. RO VI-01.

  2. What is the correct paid-up capital of MSCI for the pertinent period covered by the application for exemption - P5 million or P64,688,528.00?

RULING:

  1. The National Wages and Productivity Commission (Commission) reversed and set aside the decision of the Regional Tripartite Wages and Productivity Board VI (Board), and granted MSCI's application for exemption from Wage Order No. RO VI-01 for the period of one (1) year from its effectivity or from November 27, 1990 to November 26, 1991. The Commission determined that MSCI qualified as a distressed employer during the relevant period.

PRINCIPLES:

  • To qualify for exemption from compliance with a wage order, a distressed establishment must show that its accumulated losses for the last two full accounting periods, including the interim period, have impaired by at least 25 percent the paid-up capital or total invested capital.

  • The correct determination of the paid-up capital is crucial in determining whether a distressed establishment meets the required impairment percentage for exemption.