Juana T. Vda. de Racho vs Municipality of Ilagan

G.R. No. L-23542 – 22 SCRA 1 – Labor Law – Labor Standards; Wages – Minimum Wage Law – Minimum Wage Law is Mandatory

Manuel Racho was a market cleaner in the municipality of Ilagan, Isabela, from 1954 to January 1960. At the time of his retirement, he was earning per month. He died in October 1960. Later, his widow, Juana Racho, petitioned to claim salary differentials because supposedly, the minimum wage at the time when her husband was working was a month. The municipality of Ilagan appealed that they cannot comply with the Minimum Wage Law because it lacked funds.

ISSUE: Whether or not lack of funds of a local government unit excuses it from compliance with the Minimum Wage Law.

HELD: 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.

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