FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second ~
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Introduced by: 
CIT 
In 1989, R.A. 6715 amended PD 442, otherwise known as the Labor Code 
of the Philippines , establishing the National Labor Relations Commission (NLRC) 
as a ~ ~ ~ ~ i " i ~ ~ i ~ i a l  
bodt exclusively tasked with adjudicating labor disputes. In 
the exercise of its quasi-judicial functions, the NLRC generates incorne from the 
legal/service fees collected and interest earnings on its deposits with the 
government authorized depository banks. 
Thus, in the discharge of its functions and duties, the NLKC can generate 
its own funds and resources not only to implement the benefits already granted 
to the Chairman, Commissioners and Labor Arbiters pursuant to R.A. 9347 
Consequently, the National government will not anymore be burdened by 
providing recurring allocations for this purpose in the annual General 
Appropriations Act since the funding can now be sourced from the legal/service 
fees collected by and the interest earnings on deposits of the NLRC. This will also 
serve as a welcome incentive for the NLRC to religiously collect the service fees 
from the party-litigants. 
It rnust be emphasized that this measure is primarily intended to 
implement the very recent provision of R.A. 9347 which grants the NLRC 
Chairman, Commissioners and Labor Arbiters not only 
but 
eaualitv in ~IIQwan~e 
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b e n e ~ t ~  
with that of the .Justices of the 
Court of Appeals and Judges of the Regional Trial Courts, respectively. 
Unfortunately, there was 
for the implementation o 
"a ~ead-fe~er 
~rowi§jo~. 
Associate Jusiices of the 
he said NLRC officials 
This same budgetary problem was previously faced by 
~ r ~ ~ j ~ ~ y i ~ j a l  
Decree NQ. ~~4~ was 
" ~ § ~ ~ ~ l j § h i n ~  
A ~ ~ d j ~ i a ~  
' (JDF) wherein the Justices of 
the Court of Appeals and the Regional Trial Court Judges were granted special 
allowances but without providing for a specific funding source. It was only on 
October 23. 
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when Congress passed 
whereby the 
"Soecial Allowance§" equivalent to one hundred percent (IOOYO) of the basic 
ent" 


salary of the CA Justices and KrC Judges were finally allowed to be sourced from 
the legal fees collected by the courts. The implementation of this law was also 
for a period of four (4) years. 
More importantly, it must be pointed out that the creation OF a "s 
Fatnd" is not new in the 
was created/established " 
by the National Conciliation and Mediation Board (NCMB) with an annual 
pursuant to R.A. 6715. It must be 
an average of 600 cases per year 
year. Moreover importantly, the NCMR merely conduct " 
mediation" of cases involving the unionized sector. The 
Labor Arbiters and the Commissioners " 
filed before thern. 
by the NLRC for the last tranche on the Fourth (4th) Year of im~leffl~~tation 
is 
insufficient that the remaining balance thereof shall be funded by the National 
Government. Hence, the ~~n~ sought to be established by this Bill is in fact self- 
generating and self-sustaining. 
Most significantly, the entitlement by the Commissioners and Labor 
Arbiters to their Special Allowance was recognized by the Department of Budget 
and Management when the Executive Department submitted to Congress the 
wherein the Special Provision on the "- 
8fSncorne" by the NLRC was already a ~ t ~ 7 o ~ i ~ ~ ~  
as follows: 
'1. Use sf Inc me: I n  addition to the amounts 
appropriated herein, Ten Million Two Hundred Fifty 
Thousand Pesos (P10,2S0,000.00) shall be charged against 
the Special Fund to be constituted from fees collected by 
the National Labor Relations Commission (NLRC) for the 
grant of  cia^ ~ l l o w ~ n ~ e  
to 
Labor Arbiters of the the NLR 
9347, subject to a Special Budget in accordance with 
Section 35, Chapter 5, Book V I  of E.O. No. 292. 
Such special allowance shall be considered as an 
advanced implementation of any salary increase as may be 
W.A. 9227" (underscoring supplied). 
It must be further noted that in allo 
the special allowance of the Chairman, Corn 
specifically made reference to 
allowances to the CA Justices and RTC Judges. 
which grants special 


However, while the grant of Special Allowance is now included in the 
2009 GAB, there is still a need for a law to establish a 
for the 
management of the Special Allowance for the NLRC officials similar to the 
specific laws establishing a ~
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for following Offices/Agencies: 
a) 
~ a ~ ~ f f ~  
tho Chief 
Justice under R.A. 
c) 
Offic 
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enacted on 
Thus, the urgent passage of this bill is earnestly sought. 
L.+J Senator 


FOURTEENTH CONGRESS OF THE 
REPlJBLIC OF THE PHILIPPINES 
Second ~
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Be it enacted by tl?e Sei?&? 
and the House of Representatives of the 
Phihppines in Congress assembled: 
Section 1. D~clara~jon 
of ~ o l ~ ~ ~ .  
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I t  is the declared policy of the state to 
ensure the administrative independence of the National Labor Relations 
Commission as a quasi-judicial body in the speedy and impartial administration of 
labor justice. For this purpose, there is hereby established a National Labor 
Relations Development Fund , hereinafter referred to as the FUND, to provide 
the Chairman, Commissioners and Labor Arbiters with incentives comniensurate 
to their positions and functions. 
Section 2. Grant of ~ ~ l o w a ~ ~ ~ .  
- The Chairman, Commissioners and Labor 
Arbiters shall be granted special allowances as provided for under Republic Act 
No. 9347, in relation to K.A. 910, as amended by R.A. 9227, in an amount 
equivalent to not more than One Hundred Percent (100%) of the basic monthly 
salary specified for their respective Salary Grades under Republic Act No. 6758, 
as amended, otherwise known as the Salary Standardization Law, to be 
implcmer-tted within a period of four (4) years. 
The grant of Special Allowances shall be implemented uniformly in such 
sumis or amounts equivalent to Twenty-Five Percent (25%) of the basic salaries 
of the positions covered hereof. subsequent implementation shall be in such 
sums and amounts and up to the extent only that can be supported by the 
funding source specified herein. 
Section 3. Funding 
ource. - The amount necessary to implement the 
additional compensation in the form of special allowances granted under this act 
shall be saurced from and charged against, the legal fees prescribed, imposed 
and collected by the nlrc as well as from the increases in current fees and new 


Fees which may be imposed as well as from the interests on deposits by the said 
agency. 
I n  the event that the said amounts are insufficient to cover the grant of 
allowances on the last year of implementation of this Act, the National 
Government shall subsidize the Special Allowance granted to the Chairman, 
Commissioners and Labor Arbiters. 
The NLRC Chairman shall administer and allocate the FUND and shall have 
the exclusive power and duty to approve and authorize the disbursements and 
expenditure of the FUND in accordance with the Implementing Rules and 
Regulations to be promulgated by the Commission En Banc within the 
parameters set forth in the immediately preceding paragraph. 
The amounts accruing to the FUND shall be deposited in a 
Fund by the NLRC Chairman or his duly authorized representative, in an 
authorized government depository bank or private bank owned or controlled by 
the government. The Commission on Audit, through the Auditor of the NLRC or 
his duly authorized representative, shall quarterly audit the receipts, revenues, 
uses, disbursements and expenditures of the FUND, and submit the appropriate 
report in writing to the Chairman of the Commission on Audit and to the 
Chairman of the NLRC, copy furnished the members of the Cornrnission fic-il Eanc. 
Section 4. Inclusion in the $
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purposes of retirement, only allowances actually received and the tranche or 
tranches of the Special Allowance already implemented and received pursuant to 
this Act by the Chairman, Commissioners and Labor Arbiters as authorized under 
existing laws shall, at the date of their retirement, be included in the 
computation of their respective five (5) years lumpsum retirement gratuity 
R.A. 9347 in relations to R.A. 910, as mended, 
that the retiree shall be entitled to the tranche or t 
special allowance not included in the computation of the five (5) years lumpsum 
retirement gratuity if funds therefor a 
within five (5) years from 
the date of his retirement; PWBVI 
that when a Chairman, 
Commissioner or Labor Arbiter has retired after the effectivity of this Act but the 
funds for the Special Allowance are not yet available at the time he retired, the 
retiree shall be entitled to the payment of the Special Allowance implemented 
within the period of five (5) years from the date of his retirement; 
FINALLY, that when funds for the tranche or tranches of the Spec 
are made available after five (5) years from the date of his retirement, the 
tranche or tranches of the special allowance not included in the lumpsum 
retirement gratuity shall form part of and be included in his retirement pension. 
Section 5. € f f ~ c ~ ~  
of Su 
alary ~
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- Upon implementation of 
any subsequent increase in the salary rates provided under Republic Act No. 
6758, as amended, all Special Allowances granted under this Act to the 
Chairman, Commissioners and Labor Arbiters of the NLRC, shall be considered as 
an implementation of the said salary increases as may be provided by law. The 
Special Allowances equivalent to the increase in the basic salary as may be 
provided by law shall be converted as part of the basic salary: 
i 
That, any excess in the amount of Special Allowance not converted as part of the 
basic salary shall continue to be granted as such. The portion of the Special 
Allowance which has been integrated into the basic salary whenever there is an 


authorized salary increase shall be funded from the regular appropriations of the 
NLKC. 
Section 6. Issuance of Implementing Guidelines. - The National Labor Relations 
Commission (NLRC) and the Department of Budget and Management (DBM) 
shall issue the necessary guidelines for the proper implementation of this act in 
respect to funds coming from the national treasury within ninety (90) days from 
approval hereof. 
Section 7. Repealing Clause. - All laws, decrees, executive or administrative 
orders, rules and regulations, or parts thereof, inconsistent with this Law are 
hereby deemed modified, amended or repealed. 
Section 8. $
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Clause. - If any provision of this Act is declared to 
invalid or unconstitutional, the provision not affected thereby shall continue to be 
in full Force and effect. 
Section 9. Effectivity Clause, - This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in two (2) national newspapers of 
general circulation, whichever comes first. 
Approved.