Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _ 3270

INTRODUCED BY REP. JOSEPH VICTOR G. EJERCITO

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 footnotes to the whole dispute resolution
process, particularly as they are given merely a token significance at
the labor arbiter's 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
DOLERO

« 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 needs to support it. This will address the
pervading confusion in jurisdictions of the present system. There isa
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.

ss"

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

3270

HOUSE BILL NO.

INTRODUCED BY REP. JOSEPH VICTOR G. EJERCITO

AN ACT
TO ENHANCE THE PHILIPPINE INDUSTRIAL AND
LABOR DISPUTE
SETTLEMENT SYSTEM AND FOR THAT PURPOSE,
AMENDING CERTAIN
PROVISIONS OF PRESIDENTIAL DECREE NO. 442
OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES.

Be it enacted by the Senate and 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 2010.

SEC. 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 social 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.

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repealed and replaced as follows:

Chapter II
DEFINITIONS

Article 212. Definitions.

a) "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.

b) "Arbitral Award" means any final decision by an arbitrator in
resolving the issue in an industrial or labor controversy.

c) "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.

d) “Arbitrator" refers to the person chosen according to this
Code to render an award in an appropriate industrial or labor dispute.

e) "Bargaining representative’ means a legitimate labor
organization the members of which may or may not be employed by
the employer.

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

g) "Board" refers to the National Mediation and Arbitration
Board.


h) "Claimant" or "Complainant" refers to any party who files a
claim with the Board in accordance with the Code.

i) "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.

j) "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) "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.

m) "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.

n) "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.

0) "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.

p) “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.

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

r) "Lockout" means any temporary refusal of an employer to
furnish work as a result of an industrial or labor dispute.

s) "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 an of the above definitions are considered rank-and-file
employees for purposes of this Book.

t) "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.

x) "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.

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

Title II
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 for each 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 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. 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,
including retirement, 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,
including retirement, 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 the Secretary shall
ensure that at least thirty percent (30%) of all mediators females and
provided further, 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 Resolution created under Republic
Act No. 9285.

Mediators shall 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 or labor dispute.
Arbitrators may be called upon by the Board to arbitrate an industrial
or labor 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 patties 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.

—. 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, provided that the Secretary shall ensure
that at least thirty percent (30%) of the staff so appointed shall be
female.

The Secretary shall formulate and issue a Code of Conduct for
sheriffs and staff in Industrial and Labor Disputes which shall provide
for the standard of conduct expected of all sheriffs and staff of the
Board in discharging their duties.

SEC. 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 internal 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 any part
thereof 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.

SEC. 6. Jurisdiction. Article 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;

2. Claims for any sum of money, regardless of amount;

3. Claims of illegal or ineffectual termination or suspension;


4. Claims for actual, moral, exemplary and other forms of
damages, as well as interest, attorney's fees, and costs of litigation
arising from employee-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;
9. 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 policies or similar rules, including
disputes which are not resolved even after going through the
appropriate grievance procedure;

13. Any other claims arising from an employer-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.

SEC. 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.

Process of Mediation.

1. Representation. Any patty 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 settlement.
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. Employees are encouraged to meet with their

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 immediately binding between the
parties and may be enforced and executed as provided according to
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
(ii) when necessary in cases where the dispute is referred to
arbitration or where resort to the Supreme Court under Article 220.

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 shall 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) if the 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.

SEC. 8. Referral to Arbitration. Article 217 of the Labor Code
shall 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 (I), 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.

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

Article 218. A, Start 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.

1. 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 to no arbitrator of choice. All three (3) arbitrators
should remain in good standing in the Department'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:

1) The claimant shall strike out one name from the list.

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

3) The process is repeated until only one name is left in the list.

4) Such remaining person shall be the appointed Arbitrator of
the claim.

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. Multip/e 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 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) No later than ten (10) days after the arbitrator has been
identified, any party may challenge the arbitrator by communicating
his challenge to the Board in writing. Such challenge should be based
on the grounds for disqualification specified under the Code of Conduct
for Arbitrators formulated by the Secretary. 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. It shall be absolutely mandatory for the Board
to decide on the challenge within twenty five (25) days after receiving
the challenge.


This decision shall be interlocutory and not appealable. If the retained,
the arbitrator shall proceed with arbitration proceedings. If the
arbitrator is arbitrator is replaced, the parties shall choose another
arbitrator according to Article 218. In every case, any party may
exercise the privilege of challenge only once, provided that for this
purpose, multiple parties shall be considered as one party.

SEC. 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 subject to the limitations as to time under Article 220.

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;

C. 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 fo 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 which 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. Throughout 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 investi: ion in connection with
the arbitration shall advise the parties thereof. The arbitrator shall set
the date and time of the inspection and shall notifv the parties
accordingly. Any party who so 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.

SEC. 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.

SEC. 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.

SEC. 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 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 legitimate or registered 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.

Within one year from the effectivity of this Act, the Secretary
shall formulate the rules regarding the participation, representation,
and appearance of paralegals in labor and industrial disputes, including
the formulation of rules for the accreditation of such paralegals for
these and other purposes.

SEC. 14, Injunctions. Article 223 of the Labor Code shall 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 shall 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 complainant3 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 surety 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.

SEC. 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
arising from the interpretation or enforcement of company personnel
policies,

All grievances submitted 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.]

SEC. 16. Abolition of the National Labor Relations
Commission and the National Conciliation and Mediation Board.
The existing National Labor Relations Commission and National
Conciliation and Mediation Board are hereby abolished. 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.

SEC. 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.

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

SEC. 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.

SEC. 20. Repealing Clause. Articles 223,224, 225, 226, 227,
233, 261, 262, 262-A and 262-8 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.

SEC. 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,