By Mark Joseph M. Sanchez
A PROLONGED legal dispute over Metro Manila’s approved minimum wage increase could deprive workers of additional income while undermining confidence in the country’s wage-setting system, analysts said.
“The biggest problem with the National Capital Region (NCR) wage dispute triggered by belligerent companies is that they’re preventing millions of workers and family members from already benefiting from a wage hike that they so urgently need and that employers can afford, even the ones challenging the wage order,” IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa told BusinessWorld via Viber.
The Supreme Court en banc on Aug. 26 ordered Readycon Trading and Construction Corp., R-II Builders, Inc. and Alliance of Philippine Fishing Federations, Inc. to submit within 10 days their comments on a petition filed by Kamanggagawa Party-list and other labor groups.
The high court also directed the Regional Tripartite Wages and Productivity Board-National Capital Region and the National Wages and Productivity Commission (NWPC) to comment on the lawsuit.
The petition seeks to nullify orders issued by regional trial courts in Pasig and Navotas in separate cases challenging Wage Order No. NCR-27, which grants a P60 daily wage increase effective July 25 and an additional P25 daily increase starting Jan. 20, 2027.
The Pasig court issued a status quo ante order, a temporary restraining order and a writ of preliminary injunction against the wage order, while the Navotas court conducted a clarificatory hearing on a request for a status quo ante order filed by the fishing federation.
Mr. Africa said the broader concern is the possibility that wage orders could remain in limbo for extended periods despite having completed the legally required tripartite wage-setting process.
“Minimum wage-setting is supposed to establish predictable minimum labor standards after considering economic conditions and consulting labor, employers and the government,” he said.
“A bad precedent is in the making of wage orders remaining indeterminate for extended periods even after issuance because of employer belligerence and court challenges, which undermine statutory wage-setting processes that will always hit workers and their families the worst,” he added.
Mr. Africa said it is too early to determine whether delayed implementation has created significant wage disparities among employers in Metro Manila because it is still unclear how many firms have implemented the increase and how many have deferred compliance.
“Not only is it still unclear whether the number of firms adjusting is a significant number already and causing fragmentation in the labor market; a favorable resolution towards full implementation in the coming weeks or months should quickly remove any momentary differentials,” he said.
University of the Philippines Diliman School of Labor and Industrial Relations assistant professor Benjamin B. Velasco said differing employer responses to the wage order could create distortions in the labor market.
“Different employer practices with regard to implementation of the P85 wage order will create an uneven playing field,” he told BusinessWorld via Facebook Messenger.
He said employers that have implemented the increase face higher labor costs than firms that have deferred compliance, potentially affecting competition and workers’ employment decisions.
He added that minimum wages help remove labor costs from direct competition, encouraging companies to compete through product improvements and technological innovation instead of suppressing wages.
Mr. Africa said delayed implementation also means minimum-wage households lose additional purchasing power that could have been spent on food, transportation, rent, utilities and other basic needs.
“The wage floor is already so low as it is, and it shouldn’t be weakened further by giving employers more undue disruptive power,” he said. “Foregone worker income is foregone family welfare, foregone consumer demand, and foregone economic growth.”
Federation of Free Workers President and labor lawyer Jose Sonny G. Matula said the Supreme Court’s action could provide a definitive ruling on a dispute that risks turning enforcement of a single wage order into a “courtroom-by-courtroom contest.”
Mr. Matula said the petition raises the issue of whether regular trial courts could restrain implementation of regional wage orders despite the specialized review mechanism provided under the Labor Code.
Under Article 123 of the Labor Code, parties aggrieved by a regional wage order may appeal to the NWPC. Article 126 bars courts and other entities from issuing injunctions or restraining orders against proceedings before the commission or regional wage boards, he said.
“In brief, it can be said that the issue is not whether employers can question a wage order,” Mr. Matula said. “They can. The question is whether they may change lanes and bypass the legal route Congress provided.”
Mr. Matula said labor groups welcomed the high court’s action and remain hopeful it will resolve the jurisdictional issues surrounding the challenges to Wage Order No. NCR-27.
“For workers, P85 is not an abstraction,” he said. “It means food, transportation, medicine, rent and support for their families.”