SECOND
DIVISION
JOY
BROTHERS, INC.,
Petitioner,
G. R. No. 122932
June 17, 1997
-versus-
NATIONAL
WAGES AND PRODUCTIVITY COMMISSION,
Respondent.
R
E S O L U T I O N
ROMERO, J.:
The instant
Petition for
Certiorari
requires an
interpretation of the exemption provisions pertinent to Wage Order No.
NCR-03 and a determination of whether or not petitioner corporation
falls
within the exemption for distressed establishments. The assailed
decision
is that of the National Wages and Productivity Commission promulgated
on
August 29, 1995 in NWPC Case No. E-95-065, "In Re: Application for
Exemption
from Wage Order No. NCR-03, Joy Brothers Inc., Applicant, Joy Brothers
Inc. Monthly Employees Chapter, Oppositor."
Wage Order No.
NCR-03, providing for a twenty-seven
peso wage increase for all private sector workers and employees in the
National Capital Region receiving one hundred fifty-four pesos
[P154.00]
and below daily, was approved November 29, 1993.[1]
On February 14, 1994, petitioner applied for exemption from said wage
order
on the ground that it was a distressed establishment. On June 7,
1994, the Regional Tripartite Wages and Productivity Board [hereinafter
referred to as the Board] denied petitioner's application for exemption
after holding that the corporation accumulated profits amounting to
P38,381.80
for the period under review.[2]
Petitioner's motion for reconsideration was likewise denied by the
Wages
and Productivity Board on January 5, 1995.[3]
On appeal to the
National Wages and Productivity
Commission, [the NWPC or respondent Commission], petitioner was again
denied
relief. In its decision dated August 29, 1995 the Commission held that
"a careful evaluation of the financial statements and other pertinent
documents
submitted on record revealed that the appellant registered accumulated
profits of P38,381.80 for the years ending 31 December 1991 and 1992
and
interim period January to September 1993."[4]
Consequently, the earlier Orders of the Board were affirmed.cralaw:red
Hence, this
petition for certiorari where an exemption
as a distressed establishment is insisted upon. More specifically,
petitioner
contends that the interim period to be reckoned with is from January 1,
1993 to December 15, 1993 and not merely up to September 30, 1993 as
held
by respondent Commission. Significantly, the period up to December 31,
1993 will reflect losses in petitioner corporation's books, but not if
the covered interim period is only up to September 30, 1993.cralaw:red
Under Section 5
of Wage Order No. NCR-03, distressed
firms, as defined in the NWPC Revised Guidelines on Exemption, may be
exempted
from the provisions of the Order upon application with and due
determination
of the Board.[5]
NWPC Guidelines No. 01, Series of 1992, providing for the Revised
Guidelines
on Exemption, indicate the criteria to qualify for exemption as follows:
3. For Distressed Establishments:
a. In the case of a stock corporation,
partnership,
single proprietorship, non-stock, non-profit organization or
cooperative
engaged in a business activity or charging fees for its services
a.1 When accumulated losses for the
last 2
full
accounting periods and interim period, if any, immediately preceding
the
effectivity of the Order have impaired by at least 25 percent the:
Paid-up capital at the end of the
last
full accounting
period preceding the effectivity of the Order, in the case of
corporations:
Total invested capital at the
beginning
of the
last full accounting period preceding the effectivity of the Order in
the
case of partnerships and single proprietorships.
a.1.1 Establishments operating
for
less
than two [2] years may be granted exemption when accumulated losses for
said period have impaired by at least 25% the paid-up capital or total
invested capital, as the case may be.[6]
Section 8,
paragraph a, of the Rules Implementing
Wage Order No. NCR-03 provides that exemption from compliance with the
wage increase may be granted to distressed establishments whose paid-up
capital has been impaired by at least twenty-five percent (25%) or
which
registers capital deficiency or negative net worth.
The last two full
accounting periods here are
1991 and 1992, for which years petitioner incurred net profits of
P53,607.00
and P60,188.00, respectively.[7]
If, as petitioner maintains, the unaudited financial figures for the
entire
1993 [up to December 31, 1993] are taken into consideration, all of a
sudden
petitioner incurs a net loss of P5,260,273.00. Said loss impairs its
paid-up
capital for the year 1993 [P15,142,531.00] by 34% or more than the 25%
required by the exemption provisions aforequoted. However, respondent
Commission
and the Board held that using September 30, 1993 as the cut-off date
for
the interim period, petitioner even realizes a profit amounting to
P38,381.80.cralaw:red
Since Wage Order
No. NCR-03 was published on December
1, 1993 and, thus, became effective on December 16, 1993,[8]
the coverage of the interim period for the year 1993 is the time frame
at issue herein. Petitioner suggests that since the wage order took
effect
on December 16, 1993, the interim period referred to by the
implementing
rules ends on December 15, 1993.[9]
Initially, however, petitioner contended that said interim period ends
on December 31, 1993.[10]
Petitioner adds that "interim period" has been misinterpreted to mean
"partial
accounting period," i.e., from January 1, 1993 to September 30,
1993.cralaw:red
The Revised
Guidelines on Exemption further provides
that the following documents shall be submitted in support of the
corporation's
application:
For Distressed Establishments:
b. Available audited financial
statements
[together
with the notes thereto] for the last 2 full accounting periods
preceding
the effectivity of the Order filed with and stamped "received" by the
BIR
and SEC.
Interim quarterly financial statements
[together
with the notes thereto] for the period immediately preceding the
effectivity
of the Order.
Income tax returns for the last 2
taxable
periods
filed with and stamped "received" by the BIR.[11]
The Guidelines
expressly require interim quarterly
financial statements for the period immediately preceding December 16,
1993. It is clear that the financial statements worthy of consideration
are those of the three quarters prior to December 16, 1993, the third
quarter
ending on September 30, 1993. Thus, petitioner manifestly errs in
claiming
that said interim period is up to December 15, 1993 or December 31,
1993.
Consequently,
respondent Commission did not commit
grave abuse of discretion in issuing the assailed Decision.cralaw:red
WHEREFORE, the
instant petition is hereby dismissed.
Costs against petitioner.cralaw:red
SO ORDERED.cralaw:red
Regalado, Puno,
Mendoza and Torres, Jr., JJ.,
concur.cralaw:red
________________________________
Endnotes
[1]
More particularly, a seventeen-peso wage increase was to be granted
fifteen
days after publication of the wage order and another ten-peso increase
was due on April 1, 1994.
[2]
Rollo, pp. 39-40.
[3]
Rollo, pp. 52-55.
[4]
Chairman Jose S. Brillantes, Vice-Chairman Cielito F. Habito, Carmelita
M. Pineda, Labor Sector Members Cedric R. Bagtas and Vicente S. Bate
voted
to dismiss petitioner's appeal while Employer Sector members Francisco
R. Floro and Eduardo T. Rondain dissented, with the following note "I
dissent.
I want to include the whole of 1993 where consequently the impairment
will
be 31.4%." Rollo, p. 21.
[5]
The Rules Implementing Wage Order No. NCR-03 define "Distressed
Establishment"
as referring to establishments which meet the criteria enumerated in
Section
3(3) of the NWPC Guidelines on Exemption as well.
[6]
Revised Guidelines on Exemption From Compliance with the Prescribed
Wage/Cost
of Living Allowance Increases Granted by the Regional Tripartite Wages
and Productivity Boards, September 15, 1992.
[7]
Audited Figures.
[8]
Published in the Philippine Daily Inquirer.
[9]
Petition, p. 8; Rollo, p. 10.
[10]
NWPC Decision, p. 2, Rollo, p. 19; Appeal Memorandum to NWPC, p. 3;
Rollo,
p. 25.
[11]Section 2, Number 1 B.
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