Resolving Wage

Distortion in an
Organized
Establishment
Princess Venice Villegas
Jun Marx Marolina
James Batucan
Wage Distortion
•A Wage Distortion shall mean a situation where
an increase in prescribed wage rates results in
the elimination or severe contraction of
intentional quantitative differences in wage or
salary rates between and among employee
groups in an establishment as to effectively
obliterate the distinctions embodied in such wage
structure based on skills, length of service, or
other logical bases of differentiation. (Article
124 of the Labor Code)
Wage Distortion
• Thedistortion mentioned in Article 124
refers to one arising from compliance
with a wage order. It does not refer,
and the Article does not apply to a
distortion arising from a revision of
salary scale iniated by the employer.
Organized Establishment
• (def)
refers to a firm or company where
there is a recognized or certified
exclusive bargaining agreement.
Collective Bargaining Agreement
• (def)a contract executed upon a request
of either the employer or the exclusive
bargaining representative of the employees
incorporating the agreement reached
after negotiations with respect to wages,
hours of work and all other terms and
conditions of employment, including
proposals for adjusting any grievances or
questions under such agreement.
Methods of Resolving Wage Distortion
• The Court has pointed out that thru the
passage of Article 124, the law recognizes
the validity of negotiated increases to
correct wage distortion.
• The legislative intent is to encourage the
parties to seek solution to the problem of
wage distortions through voluntary
negotiation or arbitration, rather than
strikes, lockouts, or other concerted
activities of the employees or management.
The Procedure for
Resolving in an
Organized
Establishment
Resolving Wage Distortion in an Organized Establishment

1. Employer and the union shall

negotiate to correct the distortions.
Resolving Wage Distortion in an Organized Establishment

2. Dispute shall be resolved through

the grievance procedure.
Grievance Procedure
• (def)refers to internal rules of procedure
established by the parties intended to
resolve all issues arising from:
1. The implementation or interpretation of
their CBA; and
2. Those arising from the interpretation or
enforcement of company personnel
policies.
 Resolving Wage Distortion in an Organized Establishment

3. If still unresolved, voluntary arbitration.

GENERAL RULE: Such dispute shall be decided by
the voluntary arbitrator or panel of voluntary
arbitrators within 10 CALENDAR DAYS from the
time the dispite was referred, unless otherwise
agreed by the parties in WRITING.
Voluntary Arbitration
• (def)refers to the mode of settling labor-
management disputes by which the parties
select a competent, trained and impartial
third person who shall decide on the merits
of the case and whose decision is final and
executory.
 Voluntary Arbitrator
• Any person accredited by the Board as such; or
• Any person named or designated in the Collective Bargaining
Agreement by the parties to act as their Voluntary Arbitrator;
or
• One chosen with or without the assistance of the National
Conciliation and Mediation Board, pursuant to a selection
procedure agreed upon in the Collective Bargaining Agreement;
or
• Any official that may be authorized by the Secretary of Labor
and Employment to act as Voluntary Arbitrator upon the
written request and agreement of the parties to a labor dispute.
The Legal Remedy of
the Decision of the
Voluntary Arbitrator
Legal Remedies of the Decision of the Voluntary Arbitrator

1. File a Motion for Reconsideration

within 10 days from the receipt of
the copy of the decision by the
parties.
Legal Remedies of the Decision of the Voluntary Arbitrator

2. To the Court of Appeals by way of

Petition for Review under Rule 43
(Appeals From the Court of Tax
Appeals and Quasi-Judicial
Agencies) within 15 days from notice
of the award, judgment, final order
or resolution, or from the date of its
publication.
Legal Remedies of the Decision of the Voluntary Arbitrator

3. Then to the Supreme Court under

Rule 45 on questions of law (Appeal by
Certiorari) within 15 days from receipt
of the decision of the Court of Appeals
or receipt of the denial of the motion
for reconsideration.
TAKE NOTE:
• The pendency of a dispute arising from a
wage distortion SHALL NOT in any way
delay the applicability of any increase in
prescribed wage rates pursuant to the
provisions of law or Wage Order.
• Strikes, lockouts and other concerted
action due to disputes arising from wage
distortion made by either the union or
management are considered illegal.
Thank you! 