Plastic Town Center Corporation v. National Labor Relations Commission

Summary

This case involves interpretation of a Collective Bargaining Agreement between Plastic Town Center Corporation and union NLM-Katipunan regarding wage increases and gratuity pay computation. The union challenged the company's crediting of a P1.00 wage increase against CBA obligations and computation of gratuity pay based on 26 days instead of 30 days per month. The Labor Arbiter initially favored the company, but the NLRC reversed, ordering compliance with the July 1984 CBA increase and 30-day gratuity computation. The Supreme Court affirmed the NLRC, holding that CBA provisions must be interpreted literally, that wage increases cannot be credited retroactively against future obligations, and that gratuity pay represents a benefit to reward service rather than payment for actual days worked. The Court emphasized that labor contract ambiguities should be resolved in favor of workers, establishing important precedents for CBA interpretation and gratuity pay computation in Philippine labor law.