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Municipality Must Pay Minimum Wage

The document is a court case from 1968 regarding a claim filed by Juana T. Vda. de Racho against the Municipality of Ilagan for unpaid wage differentials owed to her late husband. The court ruled that a lack of funds is not a valid excuse for a municipality to not pay its employees the statutory minimum wages as required by law. The payment of minimum wages is a mandatory obligation of municipalities that cannot be avoided due to budgetary constraints. The municipality's remedy is to improve its tax collection efforts or cut non-essential spending in order to comply with the Minimum Wage Law.

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353 views1 page

Municipality Must Pay Minimum Wage

The document is a court case from 1968 regarding a claim filed by Juana T. Vda. de Racho against the Municipality of Ilagan for unpaid wage differentials owed to her late husband. The court ruled that a lack of funds is not a valid excuse for a municipality to not pay its employees the statutory minimum wages as required by law. The payment of minimum wages is a mandatory obligation of municipalities that cannot be avoided due to budgetary constraints. The municipality's remedy is to improve its tax collection efforts or cut non-essential spending in order to comply with the Minimum Wage Law.

Uploaded by

Janex Tolinero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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G.R. No. L-23542.

January 2, 1968
JUANA T. VDA. DE RACHO, Plaintiff-Appellee, v. MUNICIPALITY OF ILAGAN, Defendant-Appellant

DOCTRINE:

MINIMUM WAGE LAW; DUTY OF MUNICIPALITIES TO PAY THE STATUTORY MINIMUM WAGES; LACK
OF FUNDS NOT AN EXCUSE FOR NON-PAYMENT. — Lack of funds of a municipality does not excuse it
from paying the statutory minimum wages to its employees, because the payment of such wages is a
mandatory statutory obligation of the municipality.

FACTS:
Plaintiff Juana T. Vda. de Racho and the decedent, Manuel Racho, were spouses and had five
minor children. On July 1, 1954 the decedent was appointed as market cleaner in the Municipality of
Ilagan, Isabela, at the rate of P660.00 per annum (P55.00 monthly) which amount he received up to
June 30, 1958. On July 1, 1958, decedent's salary was increased to P720.00 per annum (P60.00
monthly) by virtue of a promotional appointment extended to him by the Municipal Mayor.
Decedent was then paid the money value of his accumulated leaves. Decedent died intestate at
Ilagan. Plaintiff then filed on December 9, 1960 a claim for salary differentials with the Regional
Office of the Department of Labor, which dropped the case later for lack of jurisdiction. Based on the
foregoing facts, the Court of First Instance of Isabela ruled that defendant Municipality of Ilagan
must pay P1,766.00 to plaintiff representing the wage differentials and adjusted terminal leave of
the decedent from December 9, 1957 to May 23, 1960, based on the monthly wage rate of P120.00
pursuant to the Minimum Wage Law.

ISSUE:

Whether or not the shortage and lack of available funds and expected revenue of a
municipality validly exempt from complying with the Minimum Wage Law.

RULING:

No. Lack of funds of a municipality does not excuse it from paying the statutory minimum
wages to its employees, which, after all, is a mandatory statutory obligation of the municipality. To
uphold such defense of lack of available funds would render the Minimum Wage Law futile and
defeat its purpose. This also disposes of the implication appellant is trying to make that its duty to
pay minimum wages is not a statutory obligation which would command preference in the municipal
budget and appropriation ordinance. Defendant's remedy, therefore, is not to seek an excuse from
implementing the law but, as the lower court suggested, to upgrade and improve its tax collection
machinery with a view towards realizing more revenues. Or, it could for the present forego all non-
essential expenditures.

The appealed judgment is affirmed.

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