Lups-Central Textile Mills Vs National Wage
Lups-Central Textile Mills Vs National Wage
Lups-Central Textile Mills Vs National Wage
FACTS:
Petitioner filed its application for exemption from compliance with WO No.
NCR-02 due to financial losses.
The Board also noted that petitioner did not file with the SEC resolution of
its Board of Directors, concurred in by its stockholders representing at least
two-thirds of its outstanding capital stock, approving an increase in
petitioner's authorized capital stock from P128,000,000.00 to
P640,000,000.00. Neither did it file any petition to amend its Articles of
Incorporation brought about by such increase in its capitalization.
Petitioner maintains in the instant action that its authorized capital stock,
not its unauthorized paid-up capital, should be used in arriving at its capital
impairment for 1990. It claims that "the capital stock of a corporation
stand(s) increased or decreased only from and after approval and the
issuance of the certificate of filing of increase of capital stock."
ISSUE:
RULING: YES.
The Court observes that the subject wage order exempts from its coverage
employers whose capital has been impaired by at least 25% because if
impairment is less than this percentage, the employer can still absorb the
wage increase. In the case at hand, petitioner's capital held answerable for
the additional wages would include funds it only holds in trust, which to
reiterate may not be deemed part of its paid-up capital, the losses of which
shall be the basis of the 25% referred to above. To include such funds in
the paid-up capital would be prejudicial to the corporation as an employer
considering that the records clearly show that it is entitled to exemption,
even as the anomaly was brought about by an auditing error.