MARCOPPER MINING CORPORATION (petitioner) vs.

NLRC and NAMAWU-MIF (repondents)

FACTS
Marcopper Mining Corporation and NAMAWU-MIF (a labor federation registered under
NLRC) entered into a Collective Bargaining Agreement (CBA) effecting from May 1, 1984 until
April 30, 1987. It was agreed under Section 1 Article 5 that Petitioner will grant a general wage
increase to its employees in the following manner: 5% Increase per day on the Basic Wage
effective May 1, 1985 and an 5% increase again on May 1, 1986. It was expressed that the wage
shall be exclusive of any increase in the minimum wage and/or mandatory living allowance that
may be promulgated during the life of the CBA.
On July 25, 1986, petitioner and private respondent modified the CBA through
Memorandum of agreement, which states that the petitioner grants a 10% wage increase of
the basic rate to employees effective May 1, 1986 and a 5% increase in effective May 1, 1987.
However, Executive Order No. 178 was promulgated on June 1, 1987 mandating the integration
of the cost of living allowance (COLA) into the basic wage of workers effective May 1 1987. On
this same day, the Petitioner implemented the second 5% wage increase pursuant to the MOA.
Private Respondent, however, contested that the COLA should be added as part of the
basic wage before implementing the 5% increase. On the December 15 1988, the union filed a
complaint for underpayment of wages before the Regional Arbitration Branch IV. Consequently,
the Labor Arbiter decided in favor of the union, which directed company to pay the wage
differentials due its rank-and-file workers citing that the date of effectivity of Executive Order
No. 178 should be taken into account. The Company appealed to the NLRC but the NLRC
affirmed the decision of the Labor Arbiter. The Petitioner further challenged the NLRC and the
private respondents on the following grounds: That the ruling of the Labor Arbiter was a grave
abuse of discretion because the Executive Order did not exist at the time of the agreement.
Furthermore, it was expressly stated that the wage increase is exclusive of any increase in the
minimum wage and/or mandatory living allowance.

ISSUE
Whether of not the COLA or Cost of Living Allowance should be computed as part of the
basic wage.

DECISION
The Doctrine of Liberal interpretation in favor of labor in case of doubt is not applicable
to the instant case. It was clearly not the intention of the parties to include the COLA during the
time of agreement. The principle that the CBA is the law between the contracting parties stand
strong and true.