Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
First Regular Session
THIRTEENTH CONGRESS

House Bill No. 4200

Introduced by Representative Henedina Razon Abad

EXPLANATORY NOTE

The evolution of mechanisms designed to resolve industrial and labor
disputes from the Court of industrial Relations established under CA No. 103
(1936) to the current system under the Labor Code (P.D. No. 442 as
amended) has resulted in a web of intricate and often overlapping
jurisdictions which is continuously plagued by perceptions of inefficiency,
ineffectiveness and corruption. The present proposal argues in favor of a
holistic and comprehensive approach to the problems besetting our industrial
and labor dispute resolution system. In essence, the following are the key
issues which the proposed new system of industrial and labor dispute
resolution addresses:

1. As the system of resolving industrial and labor disputes developed, we
observe a gradual shift from court-situated adjudication to the introduction of
mediation and voluntary arbitration as means to bring the outcome of
industrial and labor disputes closer to the desires and needs of the parties
involved. And yet, as it stands, industrial and labor disputes are still resolved
by compulsory arbitration either at the National Labor Relations Commission
(NLRC), by the Secretary of Labor and Employment, and even by the
inappropriately named system of voluntary arbitration. Methods of alternative
dispute resolution (ADR) remain footnetes to the whole dispute resolution
process, particularly as they are given merely a token significance at the
labor arbiters level. This, notwithstanding that industrial and labor disputes
are arguably the most fertile ground in which ADR may bear fruit.

Hence, even if ADR is more thought out and emphasized in agencies
such as the National Conciliation And Mediation Board (NCMB), ADR
remains at the fringes of the Philippine industrial and labor dispute resolution
system. Hence, there is a need to bring ADR processes into the



forefront of and embed it at the core of the State mechanism designed
to address industrial and labor disputes. Corollarily, there is a need to
formulate and implement ADR processes intelligently and
comprehensively, thus maximizing its benefits to the stakeholders in
particular and to the State in particular.

2. Through the introduction of piecemeal amendments to the industrial and
labor dispute resolution process, our current system is now characterized by
multiple venues, a large bureaucracy and often confusing rules regarding
jurisdiction and procedure. The Department of Labor and Employment
classifies labor disputes into disputes between:

1.) the employer and its employees or employee's organizations’
2.) two associations of employees; and
3.) members of employees’ organizations

Further, the Department categorizes these disputes into three:

* Labor Standard Disputes include non-payment or under-payment
of wages and wage-related benefits and violations of health and
safety standards.

* Labor Relations Dispute include employee. discipline or
dismissals, unfair labor practices, disputes arising from the right of
unions to represent employees for purposes of bargaining,
bargaining deadlocks, strikes and lockouts, contract administration,
and personnel policy disputes.

« Welfare and Social Legislations Disputes refer to claims arising
from failure of the employer to comply with its social and welfare
obligations under the law, such as remittance of SSS premiums
and ECC contributions, or failure to pay social benefits including
maternity pay, medicare and disability compensation.

Persons intending to file a claim regarding any of the issues above must sort
through a virtual maze of agencies to which she may be directed. According
to the Department:

* Labor Standards Disputes, ‘including simple money claims not
exceeding P5,000.00, which arises out of employee-employer
relations are referred to the Regional Office (RO) of the DOLE.

«Labor Relations Disputes, particularly illegal dismissals with or
without claim for reinstatement, unfair labor practices, strikes
and lockouts and claims of damages are referred to the labor
Arbiter in the Regional Arbitration Branches of NLRC.


« Union Representation are referred to the Med-Arbiter of the
DOLE-RO.

¢  Intra-Union Disputes and Cancellation of Union Registration are
referred to the DOLE-RO or the Bureau of Labor Relations.

* Bargaining Deadlocks Needing Conciliation and Mediation are
referred to the Regional Branches of NCMB.

* CBA Administration Disputes Involving Personnel Policies are
referred to the Grievance Machinery at the establishment, if
any, then with the regional branches of the NCMB.

* Social Legislation Disputes are referred to the Regional
Branches of the ECC or the SSS.

It is observed that the multiplicity of venue which marks our current system is
not by design nor was intentional in any way. On the contrary, the intricate
system we have is the result of a lack of design and need of a well-
considered plan. In essence, we have failed to ask why we have such a
system and more basic, can we not have a single entry point for all industrial
and labor disputes? Hence, there is a need to rethink the current system
of resolving industrial and labor disputes in order to promote simplicity
and minimize the bureaucracy which néeds to support it. This will
address the pervading confusion in jurisdictions of the present system.
There is a need to create a system where stakeholders can take their
issues to a single agency which has the requisite expertise to address
the distinct dynamics and characteristics of industrial and labor
disputes.

3. The speed (or lack thereof) by which industrial and labor disputes are
resolved is a function of the efficiency of our dispute resolution mechanism.
Currently, simple labor cases may take five to seven years to go through the
present system from the plant level to the Supreme Court and to execution.
Hence, there is a need to expedite the manner by which industrial and
labor disputes are resolved. Opportunities for delay and hence,
corruption, should be minimized and appeals, while necessary, should
be limited to petitions for certiorari before the Supreme Court.
Needless to say, the matter of delay could also be addressed by a
system of mediation designed to reduce the number of claims reaching
arbitration. +

For these reasons, a new system of resolving industrial and labor disputes is
proposed. Building on concepts already in place, the proposed scheme is
characterized by the following changes:

1. Single entry. All industrial and labor disputes are to be brought to a
single agency, the newly created National Mediation and Arbitration
Board (NMAB).


2. Mediation as the backbone. All claims brought to the NMAB shall be
subject to mediation efforts conducted by persons hired and trained
specifically for that purpose. This is a great departure from the present
system where mediation is perfunctorily performed by arbiters and
even untrained assistants. Mediation proceedings are, as they should
be, kept confidential. This is a far cry from the present system where
mediation is entrusted to the person who is subsequently to decide the
same case. Only where mediation fails to help the parties reach an
agreeable settlement are claims brought before arbitration.

3. Professional Arbitration. Arbitrators should be familiar with
employer - employee issues though they need not be lawyers.
Arbitrators shall be accredited and named in a list kept by the
Department of Labor and Employment. A selection process allows
parties to entrust their cases to arbitrators who have shown
competence and probity over time.

4. Direct recourse to the Supreme Court. Arbitral Awards shall be final
and executory except by petition for certiorari before the Supreme
Court.

While each of the above features is in itself a big step forward beyond the
present system, the strength of the present proposal lies in the integration of
all these features into a single and united whole, with each part designed to
complement the others as well as the sum.

Hence, the support of this bill is earnestly sought. -

hue Ob
Henedina Rqzo Abad
Representative, Lone District of Batanes


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
First Regular Session
THIRTEENTH CONGRESS

House Bill No. 4250

Introduced by Representative Henedina Razon Abad

AN ACT TO ENHANCE THE PHILIPPINE INDUSTRIAL AND LABOR DISPUTE
SETTLEMENT SYSTEM

Bo it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

Section 1. Short Title. This Act shall be known as the INDUSTRIAL AND LABOR
DISPUTE SETTLEMENT ACT of 2004.

Section 2. Declaration of Policy. Article 211 of the Labor Code shall be repealed
and replaced as follows:

Article 211. Declaration of Policy. A. It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining and
negotiations AND THE USE OF ALTERNATIVE MODES OF DISPUTE
RESOLUTION, INCLUDING MEDIATION, as modes of settling industrial
or labor disputes;

(b) To promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of sacial justice and development;

(c) To foster the free and voluntary organization of a strong and united labor
movement;

(d) To promote the enlightenment of workers concerning their rights and
obligations as union members and as employees;

(e) To provide an adequate administrative machinery for the expeditious
settlement of industrial and labor disputes;

(f) To ensure a stable but dynamic and just industrial peace; and


(g) To ensure the participation of workers in decision and policy-making
processes affecting their rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between
the employers and employees by means of agreements freely entered into
through collective bargaining, no court or administrative agency or official shall
have the power to set or fix wages, rates of pay, hours of work or other terms
and conditions of employment, except as otherwise provided under this Code.

Section 3. Definitions. Article 212 of the Labor Code shall be repealed and
replaced as follows:

Chapter It
DEFINITIONS

Article 212. Definitions.

(a)

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(c)

(a)
(e)
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(9)
(h)

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“Alternative Dispute Resolution” and “ADR” refer to any process
or procedure used to resolve a dispute or controversy other than
by adjudication of a judge of a court or tribunal in which a neutral
third party participates to assist in the resolution of issues, which
includes arbitration, mediation, early neutral evaluation, mini-trial,
or any combination thereof.

“Arbitral Award” means any final decision by an arbitrator in
resolving the issue in an industrial or labor controversy.

“Arbitration” means a voluntary dispute resolution process in
which one or three arbitrators, appointed in accordance with this
Code, resolve an industrial or labor dispute, consistent with the
Code, by rendering an award.

“Arbitrator” refers to the person chosen according to this Code to
render an award in an appropriate industrial or labor dispute

“Bargaining representative" means a legitimate labor organization
whether or not employed by the employer.

"Bureau" means the Bureau of Labor Relations and/or the Labor
Relations Divisions in the regional offices.

“Board” refers to the National Mediation and Arbitration Board.

“Claimant” or “Complainant” refers to any party who files a claim
with the Board in. accordance with the Code.

“Contempt” refers to either direct or indirect contempt and, as
used in this Act, may call for the suppletory application of the
pertinent provisions of the Rules of Court.

“Company union" means any labor organization whose formation,
function or administration has been assisted by any act defined as
unfair labor practice by this Code.


(k)

0)

(m)

(n)

(0)

()

(a)

)

(s)

(tb)

“Council” refers to the Tripartite Industrial Peace Council under
Executive Order No. 49 series of 1998, and Executive Order No.
97, series of 1999.

"Employer" includes any person acting in the interest of an
employer, directly or indirectly. The term shall not include any
labor organization or any of its officers or agents except when
acting as employer.

"Employee" includes any person in the employ of an employer.
The term shall not be limited to the employees of a particular
employer, unless the Code so explicitly states. It shall include any
individual whose work has ceased as a result of or in connection
with any current industrial or labor dispute or because of any
unfair labor practice.

“Industrial and labor dispute" includes any controversy or matter
concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the
proximate relation of employer and employee.

“Internal union dispute” includes all disputes or grievances arising
from any violation of or disagreement over any provision of the
constitution and by laws of a union, including any violation of the
rights and conditions of union membership provided for in this
Code. -

“Labor organization" means any union or association of
employees which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers concerning
terms and conditions of employment.

“Legitimate labor organization” means any labor organization duly
registered with the Department of Labor and Employment, and
includes any branch or local thereof.

“Lockout” means any temporary refusal of an employer to furnish
work as a result of an industrial or labor dispute.

"Managerial employee" is one who is vested with the powers or
prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign
or discipline employees. Supervisory employees are those who, in
the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent
judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of
this Book.

“Mediation” refers to the process defined by the Code in which a
mediator, selected according to the Code, facilitates


communication and negotiation, and assist parties in reaching a
voluntary agreement regarding an industrial or labor dispute.

(u) “Mediators” refers to a person who conducts mediation.

(v) _ “Respondent" refers to any party against whom a claim has been
filed in accordance with this Code.

(w) “Strike” means any temporary stoppage of work by the concerted
action of employees as a result of an industrial or industrial and
labor.

() “Strike area" means the establishment, warehouses, depots,
plants or offices, including the sites or premises used as runaway
shops, of the employer struck against, as well as the immediate
vicinity actually used by picketing strikers in moving to and fro
before all points of entrance to and exit from said establishment.

(y) "Strike-breaker" means any person who obstructs, impedes, or
interferes with by force, violence, coercion, threats, or intimidation
any peaceful picketing affecting wages, hours or conditions of
work or in the exercise of the right of self-organization or collective
bargaining.

(z) “Unfair labor practice" means any unfair labor practice as
expressly defined by the Code.

Section 4. Dispute Resolution System. Article 213 of the Labor Code shall be
repealed and replaced as follows: -

Title Hl
RESOLUTION OF INDUSTRIAL AND LABOR DISPUTES

Article 213. A. The National Mediation and Arbitration Board. There
Shall be a National Mediation and Arbitration Board which shall be attached
to, administered, and supervised by the Department of Labor and
Employment, composed of an Executive Director and four (4) Deputy
Executive Directors. The Executive Director shall exercise supervision over
all personnel of the Board, including mediators and arbitrators. The Board
shall also be composed of as many mediators, sheriffs, and staff members
as shall be necessary for its effective operations.

The Board shall have its main office in Metropolitan Manila and shall
establish as many branches as there are administrative regions in the
country, with as many mediators foreach branch as shall be necessary for
their effective operations. Each branch of the Board shall be headed by an
Executive Mediator who shall be appointed by the Executive Director.

B. The Executive Director and Deputy Directors. The Executive Director
shall be appointed by the President for a term of three (3) years upon
recommendation of the Secretary of Labor and Employment. Workers’
groups represented in the Tripartite Industrial Peace Council shall submit a
iist of six (6) names to the President who shall choose two persons from the


list to serve as Deputy Executive Directors of the Board. Likewise,
employers’ groups represented in the Tripartite Industrial Peace Council shall
submit a list of six (6) names to the President who shall choose two persons
from the list to serve as Deputy Executive Directors of the Board. Each
Deputy Executive Director shall serve for a term of three (3) years.

The Executive Director shall receive an annual salary at least equivalent to,
and be entitled to the same allowances and benefits to that of a Justice of the
Court of Appeals. Each Deputy Executive Director shall receive an annual
salary at least equivalent to, and be entitled to the same allowances and
benefits to that of an Assistant Secretary of the Department of Labor and
Employment. In no case, however, shall the provision of this article result in
the diminution of existing salaries, allowances and benefits of the
aforementioned officials.

C. Mediators. Each Mediator shall be appointed by the Secretary of Labor
and Employment, provided that each mediator should:

1) have at least five (5) years of experience in handling industrial or
labor matters and

2) have at least one hundred twenty (120) hours of relevant training
on alternative dispute resolution given by an institution accredited
by the Board or by the Office for Alternative Dispute Resolution
created under Republic Act No. 9285;

3) after being appointed, undergo regular training on alternative
dispute resolution given by an accredited institution of the Board
or by the Office for Alternative Dispute Resoltition created under
Republic Act No. 9285.

Mediators shalll hold office during good behavior until they reach 65 years of
age or unless sooner removed for violation of their duties under law or rules
or become incapacitated to discharge the duties of their office.

The Secretary of Labor and Employment shall formulate and issue a Code of
Conduct for Mediators in Industrial and Labor Disputes which shall provide
for the standard of conduct expected of all Mediators of the Board in
discharging their duties. Violation of said Code of Conduct shall be ground to
dismiss a Mediator from office.

D. Arbitrators. Arbitrators shall not be permanently employed by the Board
and shall render service and receive compensation only in case of actual
arbitration of an industrial‘er labor dispute. Arbitrators may be called upon by
the Board to arbitrate an industrial of !abor dispute provided that they are
listed in the Department's official list of Arbitrators. For this purpose, the
Board shall maintain a list of accredited arbitrators which shall be reviewed
annually by the Board.

In addition to procedures and requirements determined by the Secretary,
accreditation shall ensure that arbitrators are persons of distinction in whom
employers, employees, employees’ groups and the government can have
confidence. Arbitrators should have at least five (5) years of experience in


handling industrial or labor matters. They shall have no personal or financial
interest in the results of the proceedings in which they are appointed and
shall have no relation to the underlying dispute or to the parties or their
counsel that may create an appearance of bias.

The Secretary of Labor and Employment shall formulate and issue a Code of
Conduct for Arbitrators in Industrial and Labor Disputes which shall provide
for the standard of conduct expected of all Arbitrators of the Board in
discharging their duties. Violation of the Code of Conduct for Arbitrators,
including failure to issue an award within the mandatory period, shall
constitute sufficient ground to revoke his accreditation as an arbitrator. The
Code shall identify that conduct which may be grounds to remove and
replace an arbitrator from a particular dispute which he has already accepted
to arbitrate.

E. Staff. The Secretary of Labor and Employment shall, in consultation with
the Executive Director, appoint the staff and employees of the Board and its
regional branches, including sherrifs, as the needs of the service may
require, subject to the civil service law, rules, and regulations.

Section 5. Functions and powers of the Board. Article 214 of the Labor Code
shall be repealed and replaced as follows:

ART. 214. Functions and Powers of the Board. - The Board shall have the
power and authority:

(a) To promulgate rules and regulations governing the’ mediation and
arbitration of disputes before it and its regional branches, as well as those
pertaining to its intemal functions and such rules and regulations as may be
necessary to carry out the purposes of this Code;

(b) To administer oaths, summon the parties to a controversy, issue
Subpoenas requiring the attendance and testimony of witnesses or the
production of such books, papers, contracts, records, statement of accounts,
agreements, and others as may be material to the matter under investigation,
and to testify in any investigation or hearing conducted in pursuance of this
Code;

(c) In arbitration, to proceed to hear and determine the disputes in the
absence of any party thereto who has been summoned or served with notice
to appear, and in mediation and arbitration, to conduct investigation for the
determination of a question, matter or controversy within its jurisdiction,
conduct its proceedings or ary part théféof in public or in private, adjourn its
hearings to any time and place, refer technical matters or accounts to an
expert and to accept his report as evidence after hearing of the parties upon
due notice, direct parties to be joined in or excluded from the proceedings,
correct, amend, or waive any error, defect or irregularity whether in
substance or in form, and give all such directions as it may deem necessary
or expedient in the determination of the dispute before it; and

(d) To hold any person in contempt directly or indirectly and impose
appropriate penalties therefor in accordance with law and the Rules of Court.


(e) In appropriate cases and according to this Code, to enjoin or restrain any
actual or threatened commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any industrial or labor dispute.
(f) At any time during working hours, conduct an ocular inspection on any
establishment, building, ship or vessel, place or premises, including any
work, material, implement, machinery, appliance or any object therein, and
ask any employee, laborer, or any person, as the case may be, for any
information or data concerning any matter or question relative to the object of
the investigation.

Section 6. J urisdiction. A rticle 215 of the Labor Code shall be repealed and
replaced as follows:

Article 215 . Claims cognizable by the Board. The Board shall have original
and exclusive jurisdiction to mediate and arbitrate all industrial or labor disputes
including the following:

1. Claims involving wages, rates of pay, hours of work and other terms and
conditions of employment;
Claims for any sum of money, regardless of amount;
Claims of illegal or ineffectual termination or suspension;

4, Claims for actual, moral, exemplary and other forms of damages arising
from employer-employee relations;

5. Claims under Section 10 of Republic Act No. 8042; >
6. Claims of legitimate labor organizations against other labor organizations;
7. Claims against labor organizations made by their members or other
interested parties;
8. Claims arising from bargaining deadlock;
Claims of unfair labor practice;

10. Claims arising from any violation of Article 264 of this Code, including
claims involving the legality of strikes and lockouts;

11. Claims of any violation of a collective bargaining agreement including
those arising from the interpretation or implementation of the collective
bargaining agreement;

12. Claims arising from the interpretation, implementation, or enforcement of
company personnel polfcies or similar rules, including disputes which are
not resolved even after going through the appropriate grievance
procedure;

13. Any other claims arising from an employee-employee relationship;

14. Claims involving injunction and temporary restraining orders arising from
the disputes enumerated herein.


No dispute, claim, complaint, or petition, including those for restraining orders or
injunctive relief, arising out of, related to, or involving the above disputes shall be
heard or decided by any other court or tribunal, except by the Supreme Court
which may give due course to a petition for certiorari involving an arbitral award.

However, claims within the exclusive jurisdiction of the Employee's
Compensation Commission (ECC) or the Social Security System (SSS). are
excluded from the coverage of this Article. Likewise, registration of labor
organizations and proceedings to determine majority representation among
employees shall continue to be filed with the appropriate Regional Office and
shall not be within the jurisdiction of the Board as herein defined.

Section 7. Mediation. Article 216 of the Labor Code shall be repealed and
replaced as follows:

Article 216. A. Immediate referral to Mediation. All disputes filed with the
Board shall immediately be referred to a mediator who shall mediate
between the parties for a period not exceeding sixty (60) calendar days from
the date of the initial conference without extension. After a claim is filed, the
Board shall set the case for preliminary conference and a notice to the
parties thereof shall be sent not later than five (5) days after referral to a
mediator.

The mediator shall be chosen by the Board upon considering the nature and
complexity of the claims as well as the preferences of the parties, if known.
One (1) mediator will be appointed unless the Board determines otherwise.

In all disputes, no person shall serve as a mediator in any dispute in which
that person has any financial or personal interest in the result of the
mediation, except by the written consent of all parties. Prior to accepting an
appointment, the prospective mediator shall disclose any circumstance likely
to create a presumption of bias. Upon receipt of such information, the Board
shall either replace the mediator or immediately communicate the information
to the parties for their comments. In the event that the parties disagree as to
whether the mediator shall serve, the Board will appoint another mediator.
The Board is authorized to appoint another mediator if the appointed
mediator is unable to serve promptly.

B. Process of Mediation.

4. Representation. Any party may be. represented by a person of the party's
choice. The names and addresses of such persons shall be communicated
by the respective parties in writing to all parties and to the Board.

2. Date, Time, and Place of Mediation. The mediator shall fix the date and
the time of each mediation session. The mediation shall be held at the
appropriate regional office of the Board, or at any other convenient location
agreeable to the mediator and the parties, as the mediator shall determine.

3. Identification of Matters in Dispute. The mediator shall exercise
complete control over all mediation proceedings in pursuit of a just,


adequate, and speedy agreement between the parties. During the first
hearing, the mediator shall identify the issues involved and the respective
opinions of the parties thereto. The parties will be expected to produce all
information reasonably required for the mediator to understand the issues
presented. For this purpose, the mediator may issue subpoenas duces
tecum and subpoenas ad testificandum to require the production of
necessary documents, property, or persons and may cite persons in violation
of such orders in contempt.

4. Authority of Mediator. The mediator does not have the authority to
impose a settlement on the parties but will attempt to help them reach a
satisfactory resolution of their dispute. The mediator is authorized to conduct
joint and separate meetings with the parties and to make oral and written
recommendations for settiement. Whenever necessary, the mediator may
also obtain expert advice concerning technical aspects of the dispute,
provided that the parties agree. Arrangements for obtaining such advice
shall be made by the mediator or the parties, as the mediator shall
determine.

The mediator may seek the agreement of the parties to resort to various
methods of ADR including the following

Open Door Policy: Employees are encouraged to meet with their
immediate supervisor or manager to discuss problems arising out of
the workplace environment. In this case, the mediator may request
the presence of any person necessary to the resolution of the dispute.

Ombuds: A neutral third party (either from within or outside the
company) is designated to confidentially investigate and propose
settlement of employment complaints brought by employees. In this
case, the mediator may engage a neutral third party to investigate the
claims and render a non-binding finding thereon.

Internal Mediation: A process for resolving disputes in which a
neutral third person from within the company, helps the disputing
parties negotiate a mutually acceptable settlement. For this purpose,
the mediator may request employees and/or managers from within
the same company to help mediate the dispute.

Peer Review. A panel of employees (or employees and managers)
works together to resolve employment complaints. In this regard,
mediators may request employees and/or managers from other
companies to investigate the’ dispute and render non-binding findings
thereon. Mediators shall endeavour to involve employees and
managers who are from the same or similar industry. In all cases,
mediators shall take all necessary steps to preserve the
confidentiality of the dispute.

The mediator is authorized to end the mediation upon the execution of a
settlement agreement by the parties which shall be duly attested by the
mediator. Any settlement reached by the parties duly attested by the


mediator shall be binding between the parties and may be executed as
provided in Article 221.

The mediator is authorized to end the mediation by a written declaration of a
party or parties to the effect that the mediation proceedings are terminated or
whenever, in the judgment of the mediator, further efforts at mediation would
not contribute to a resolution of the dispute between the parties.

5. Privacy. Mediation sessions are private. The parties and their
representatives may attend mediation sessions but other persons may attend
only with the permission of the parties and with the consent of the mediator.

6. Confidentiality. Mediation proceedings shall be considered confidential
and information obtained therein shall not be published or disclosed to third
parties except (i) with the consent of the parties, or (ji) when necessary in
cases where resort to the court is made under the Rules Of Court.

The confidentiality of the proceedings shall include communications to or
from the mediator and all records, reports, or other documents received by a
mediator while serving in that capacity. Confidential information disclosed to
‘a mediator by the parties or by witnesses in the course of the mediation shall
not be divulged by the mediator. The mediator shall not be compelled to
divulge such records or to testify in regard to the mediation in any adversary
proceeding or judicial forum.

Any violation of the confidentiality of the proceedings shalt be subject to the
following sanctions:

(1) Without prejudice to the following paragraph, administrative action
or proceeding to be conducted by the Board, with proper notice
and hearing, for inhibition or prohibition from appearing as
mediator, arbitrator, counsel or representative for any party in any
case before the Board for a period to be determined by the Board;

(2) _ ifthe violator is a professional, administrative/disciplinary action
before the appropriate authority, including the Supreme Court and
Professional Regulation Commission (PRC), at the instance of
any party or of the Board.

Section 8. Referral to Arbitration. Article 217 of the Labor Code shalll be repealed

and replaced as follows:
Article 217. Referral to Arbitration: In case of failure of mediation, the
mediator shall accomplish a report to this effect and automatically refer the
case to Arbitration, except if all parties express in writing their refusal to
arbitrate. In case any of the parties fail or refuse to participate in the
mediation, the participating parties can choose to declare a failure of
mediation, in which case such participating parties can decide either to
refuse or proceed to arbitration.

For purposes of this Title, there is a failure of mediation in any of the
following cases:


(1) Where parties fail to reach an amicable settlement after the lapse
of sixty (60) calendar days from the date of the initial mediation
conference;

(2) Regardless of paragraph (1), where any party necessary to reach
a complete settlement of the claim fails or refuses to participate in
the mediation; or

(3) Regardless of paragraph (1), where the mediator reaches the
conclusion that the parties will not reach an amicable settlement
or that further efforts at mediation are no longer worthwhile.

In all cases, there may be a failure of mediation with regard only some or not
all of the claims brought to mediation. In this case, failure of mediation may
be declared only with regard the unresolved claims.

Section 9. Arbitration. Article 218 of the Labor Code shall be repealed and
replaced as follows:

Article 248. A. S tart of Arbitration. Arbitration is deemed commenced
from the time that the Board issues a report declaring a failure of mediation,
except in cases where all parties or, in appropriate cases, participating
parties decide not to proceed to arbitration.

B. Number of Arbitrators. The parties may agree on the number of
arbitrators which shall be one (1) or three (3). If the parties cannot agree on
the number of arbitrators or in case any party fails or refuses to participate in
the proceedings, the Board shall consider the nature and complexity of the
case in determining whether to assign one or three arbitrators to the dispute.

C. Selection of Arbitrator.

4. Arbitrator of Choice. If there is to be only one (1) arbitrator, the person
freely chosen by all the parties shall arbitrate the claims, provided that such
person remains in good standing in the Department's official list of
arbitrators.

If the claim is to be referred to three (3) arbitrators, the claimant shall name
one (1) arbitrator and the respondent shall name one (1) arbitrator. The third
arbitrator who shall serve as the Chairperson shall be chosen according to
the procedure pertaining ta no arbitrator of choice. Alll three (3) arbitrators
should remain in good standing in the Bepartment's official list of arbitrators.

2. No Arbitrator of Choice. If the parties cannot agree on an Arbitrator within
five (5) days after the mediator determines a failure of mediation, the Board
shall send to the parties a list of not less than nine (9) names of arbitrators in
{good standing in the Department's official list of arbitrators. Each name shall
be accompanied by a brief statement of their respective qualifications and
experience and their business or professional connections. The list shall be
accompanied by a summons from the Board to appear at a meeting at which


the parties shall be given an opportunity to select one (1) arbitrator of choice.
in cases where a temporary or permanent injunction is prayed for, the Board
shall immediately call the parties to a meeting at which the parties shall be
given an opportunity to select three (3) arbitrators of choice.

‘At that meeting, if the parties still cannot identify a common choice, each
party shall proceed to select the arbitrator in the following manner:

The claimant shall strike out one name from the list.

Then, the respondent shall strike out one name from the list.

The process is repeated until only one name is left in the list.
Such remaining person shall be the appointed Arbitrator of the
claim.

PENS

‘Any party who has been duly summoned to the meeting for the selection of
arbitrators but fails to attend the meeting for any reason shall be bound by
the choice of arbitrator made during that meeting.

3. Multiple Claimants with Common Claims. If there are more than one
claimant but with similar or common claims, the claimants must choose one
person among them to represent them in determining the arbitrator. For this
purpose, the claimants may choose to be represented by counsel.

4, Multiple Respondents. In case there is more than one respondent against
whom common claims are made, they must choose a person among them
who will represent them in determining the arbitrator.

D. Acceptance of Appointment. The Arbitrator shall, before entering upon
the duties of the office, sign a Statement which shall be filed with the Board
and a copy thereof provided to each party. The statement shall include a
sworn acceptance by the arbitrator of the particular case assigned to him and
an oath to decide it according to the Constitution and the law.

E. Challenge of Arbitrators. (1) No later than ten (10) days after the
identification of the arbitrator, all parties may jointly challenge the
qualifications of the arbitrator by communicating their challenge to the Board
in writing. Upon receipt of a joint challenge, the Board shall replace the
arbitrator and a new one chosen in accordance with Article 218.

(2) Any party may challenge the qualifications of an arbitrator by
communicating his challenge to the. Board in writing no later than ten (10)
days after the identificatiott of the arbitrator. Within ten (10) days of receiving
the challenge, the Board shall replace the arbitrator or communicate the
challenge to the other parties. Any of the other parties may oppose the
challenge by written opposition addressed to the Board within ten (10) days
from receipt of the communication regarding the challenge. Thereafter, the
Board shall decide whether to replace the arbitrator. This decision shall be
interlocutory and not appealable. If the arbitrator is retained, the arbitrator
shail proceed with arbitration proceedings. If the arbitrator is replaced, the
parties shall choose another arbitrator according to Article 218.


Section 10. Arbitration Procedure. Article 219 of the Labor Code shall be
repealed and replaced as follows:

Article 219. Procedure of Arbitration.

A. Disclosure. At the first hearing, the arbitrator shall disclose all
information that might be relevant to preserving neutrality, including but not
limited to service as an arbitrator in any past or pending case involving any of
the parties and/or their representatives. The arbitrator shall also disclose
how long he will take to decide the case at hand.

B. Determinations. At the first hearing, the arbitrator shall exert all efforts
to explore and resolve matters that will expedite the arbitration proceedings.
In particular, the arbitrator must determine the following:

1. the issues to be arbitrated;

2. the date, time, place and estimated duration of the successive
hearings;

3. the law, standards, rules of evidence and burdens of proof that are to
apply to the proceeding;

4. the stipulations and declarations regarding facts, exhibits, witnesses
and other issues;

5. the names of witnesses (including expert witnesses), the scope of
witness testimony, and witness exclusion;

6. the need for a stenographic record;

7. the form of the award;

8. the allocation of attorney's fees and costs; ~

9. any other issues relating to the subject or conduct of the arbitration;

©. Technical rules not binding on proceedings. - The arbitrator shall
exercise complete control over all arbitration proceedings to ensure a
speedy, adequate, and just disposition of the disputes and cases submitted
to him for resolution. in any proceeding before the Board and any of its
arbitrators, the rules of evidence prevailing in courts of law or equity shall not
be controlling and arbitrators shall, consistent with due process and the
provisions of this Article, use every and all reasonable means to ascertain
the facts in each case speedily and with utmost neutrality.

Unless all parties expressly agree in writing to do otherwise, the arbitrator
shall require simultaneous submission of position papers to which shall be
attached the affidavits of the parties’, respective witnesses as well as such
relevant documents whici they shall identify to support their respective
declarations. Thereafter, the parties shall be allowed to submit their
respective replies accompanied by affidavits containing rebuttal testimony
and supporting documents,

In all cases, the affidavits submitted by the parties shall constitute the direct
testimonies of the persons who executed the same. All affiants may be
subjected to cross-examination, redirect, or re-cross examination by the
arbitrator motu proprio or by any appropriate party upon motion. The affidavit
of any affiant who fails to testify shall not be considered as competent


evidence for the party presenting the affidavit. However, the adverse party
may utilize the same for any admissible purpose.

The parties may offer such evidence as is relevant and material to the
dispute and shall produce such evidence as the arbitrator deems necessary
to an understanding and determination of the dispute. The arbitrator shall
have the authority to issue subpoenas duces tecum and subpoenas ad
testificandum to require the production of documents, evidence, or persons
to give testimony relevant to the dispute. He shall also have the authority to
administer oaths to witnesses.

All parties to the dispute must attend the arbitration proceedings on pain of
contempt. The attendance of any third party or the exclusion of any witness
from the proceedings shall be determined by the arbitrator.

D. Discovery. T hroughout the proceedings, the arbitrator shall have the
authority to order such discovery, by way of deposition, interrogatory,
document production, or otherwise, as the arbitrator considers necessary to
a full and fair exploration of the issues in dispute, consistent with the
expedited nature of arbitration and applying suppletorily the pertinent
provisions of the Rules of Court.

E. Inspection or Investigation. An arbitrator finding it necessary to make
an inspection or investigation in connection with the arbitration shall advise
the parties thereof. The arbitrator shall set the date and time of the inspection
and shall notify the parties accordingly. Any party who se desires may be
present during the inspection or investigation. In the event that one or all
parties are not present during the inspection or investigation, the arbitrator
shall make an oral or written report to the parties and afford them an
opportunity to comment.

Article 11. Award. Article 220 of the Labor Code shall be repealed and replaced
as follows:

Article 220. Award. Unless the parties expressly agree otherwise in writing,
it shall be mandatory for the arbitrator to render an award within ninety (90)
calendar days from the date of his acceptance of the arbitration. Failure on
the part of the arbitrator to issue an award or decision within the stipulated
period shall constitute sufficient ground to revoke his accreditation as an
arbitrator.

The award or decision of the arbitrator shall contain the facts and the law on
which it is based. It shall be final and executory after ten (10) calendar days
from receipt of the copy of the award or decision by the parties and may only
be brought before the Supreme Court through a special civil action for
certiorari. The arbitrator shall entertain no motion for reconsideration or
appeal

Article 12. Execution. Article 221 of the Labor Code shall be amended to read as
follows:


Article 221. Execution. Settlement agreements or Arbitral awards resulting
from mediation or arbitration proceedings in this Title may be enforced by
any interested party by motion directed to the Board. Upon such motion, the
Board through the Executive Director or his authorized representative may
issue a writ of execution on a settlement agreement or arbitral award within
five (5) years from the date it was reached or becomes final and executory,
requiring the sheriff or authorized person of the Board to execute the
settlement agreement or arbitral award. In any case, it shall be the duty of
the responsible officer to immediately furnish the counsels of record and the
parties with copies of said settlement agreement or arbitral award. Failure to
comply with the duty prescribed herein shall subject such responsible officer
to appropriate administrative sanctions.

Article 13. Representation. Article 222 of the Labor Code shall be amended to
read as follows:

Article 222. Representation. Parties should personally appear before the Board
and any of its mediators or arbitrators provided that juridical persons may be
represented by any person specially authorized in writing to do so. At any
proceeding before the Board or any of its mediators or arbitrators, non-lawyers
shall be allowed to represent any party in the following cases:

1) he is representing himself,

2) he is representing a corporation or belongs to a legitimate labor organization;
3) he is authorized under the student practice rule under Rule 138-A of the

Rules of Court.

Article 14. Injunctions. Article 223 of the Labor Code shail be repealed and
replaced as follows:

Article 223. Injunctions. To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts or to require the
performance of a particular act in any industrial or labor dispute which, if not
restrained or performed forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of such party, a petition
for injunction or petition for mandatory injunction may be filed with the Board
and the same shall automatically be referred for arbitration to a panel of three
(3) Arbitrators, chosen in accordance with Article 218, provided, that no
temporary or permanent injunction in any case involving or growing out of a
industrial or labor dispute as defined in this Code shall be issued except
upon a unanimous decision of the panel and only after the posting of the
necessary bond and hearing the testimony of witnesses, with opportunity for
cross-examination, in support of the allegations of a complaint made under
oath and testimony in opposition thereto, if offered.

Such hearing shail be held after due and personal notice thereof has
been served, in such manner as the Board shall direct, to all known persons
against whom relief is sought, and also to the Chief Executive and other
public officials of the province or city within which the unlawful acts have
been threatened or committed, charged with the duty to protect
complainant's property: provided, however, that if the party praying for a
restraining order or injunction shall also allege that, unless a temporary


restraining order shall be issued without notice, a substantial and irreparable
injury to complainant's property will be unavoidable, such a temporary
restraining order may be issued upon testimony under oath, sufficient, if
sustained, to justify the Board in issuing a temporary injunction upon hearing
after notice and only after both parties are given ample opportunity to cross
examine one another's witnesses. Such a temporary restraining order shall
be effective for no longer than ten (10) days and shall become void at the
expiration of said ten (10) days.

No such temporary restraining order or temporary injunction shall be
issued except on condition that the petitioning party shall first file an
undertaking with adequate security in an amount to be fixed by the Board
sufficient to recompense those enjoined for any loss, expense or damage
caused by the improvident or erroneous issuance of such order or injunction,
including all reasonable costs, together with a reasonable attorney's fee, and
expense of defense against the order or against the granting of any injunctive
relief sought in the same proceeding and subsequently denied by the Board.

The undertaking herein mentioned shall be understood to constitute
an agreement entered into by the party seeking an injunction and the surely
upon which an order may be rendered in the same suit or proceeding against
said party and surety, upon a hearing to assess damages, of which hearing,
the party seeking an injunction and surety, shall have reasonable notice, the
said party and surety submitting themselves to the jurisdiction of the Board
for that purpose. But nothing herein contained shall deprive any party having
a claim or cause of action under or upon such undertaking from electing to
pursue his ordinary remedy by suit at law or in equity: provided, further, that
the reception of evidence for the application of a writ of injunction may be
delegated by the Board to any panel consisting of three (3) Arbitrators
chosen according to Article 218 who shall conduct such hearings in such
places as he may determine to be accessible to the parties and their
witnesses and shall submit thereafter his recommendation to the Board.

Article 15. Grievance machinery. Article 260 of the Labor Code shall be amended
as follows:

ART. 260. Grievance machinery and voluntary arbitration. - The parties to a
Collective Bargaining Agreement shall include therein provisions that will
ensure the mutual observance of its terms and conditions. They shall
establish a machinery for the adjustment and resolution of grievances arising
from the interpretation or implementation of their Collective Bargaining
‘Agreement and those ariging from the interpretation or enforcement of
company personnel policies.

All grievances s ubmitted to the grievance machinery which are not settled
within seven (7) calendar days from the date of its submission shall
automatically be referred to THE BOARD FOR MEDIATION.

[For this purpose, parties to a Collective Bargaining Agreement shall name
and designate in advance a Voluntary Arbitrator or panel of Voluntary
‘Arbitrators, or include in the agreement a procedure for the selection of such


Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the
listing of qualified Voluntary Arbitrators duly accredited by the Board. In case
the parties fail to select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection
procedure agreed upon in the Collective Bargaining Agreement, which shall
act with the same force and effect as if the Arbitrator or panel of Arbitrators
has been selected by the parties as described above.]

Article 16. Reorganization of the National Labor Relations Commission and the
National Conciliation and Mediation Board. The National Mediation and
Arbitration Board shall replace the existing National Labor Relations Commission
and National Conciliation and Mediation Board in accordance with this Act. All
unexpended funds, properties, equipment and records of the NLRC and NCMB, and
such of its personnel as may be necessary, as determined by the Secretary of Labor
and Employment, are hereby transferred to the Board and to its regional branches.
Personnel not absorbed by or transferred to the Board shall enjoy benefits granted
under existing laws.

Article 17. Disposition of pending cases. All cases pending before the NLRC on
the date of effectivity of this code shall be transferred to and processed by the Board
created under this law having cognizance of the same in accordance with the
procedure laid down herein and its implementing rules and regulations.

Article 18. Personnel whose services are terminated. NLRC personnel whose
services are terminated as a result of the implementation of this law shalll enjoy the
rights and protection provided under civil service law, rules and regulations.

Article 19. Separability provisions. If any provision of this law or the application
thereof to any person or circumstance, is held invalid, the remainder of this law, or
the application of such provision or part to other persons or circumstances, shall not
be affected thereby.

Article 20. Repealing clause. Articles 223,224, 225, 226, 227, 233, 261, 262, 262-
A and 262-B of the Labor Code as amended are hereby expressly repealed. All
other provisions of existing laws, orders, decrees, rules and regulations inconsistent
herewith are hereby repealed.

Article 21. Effectivity. This Act shall take effect fifteen (15) days after its
Publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

Approved.