Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

FIFTEENTH CONGRESS
First Regular Session

72
House BiLLwo. 4072

INTRODUCED BY

REPRESENTATIVE EMIL L. ONG

EXPLANATORY NOTE

Voluntary arbitration as a preferred mode of dispute settlement is a
Constitutional mandate.

In practice, however, voluntary arbitration even in organized establishments is
rarely resorted to even if there are sufficient competent. regularly retooled and duly
accredited voluntary arbitrators all over the country under the Philippine Association of
Voluntary Arbitration (PAV).

The paucity of cases referred to voluntary arbitration is mainly due to a lacuna in
the law as to the jurisdiction of the voluntary arbitrator especially visavis the Labor
Arbiter of the National Labor Relations Commission. This bill will cure that defect.

More powers for the effective discharge of his duties are given to the voluntary
arbitrator while at the same time providing for sanctions for certain infractions like not
deciding the case within twenty (20) calendar days from the date of the submission of the
dispute for decision.

This bill seeks to amend the following provisions of the labor code. Articles 260,
261, 262, 262-A, 263 and Article 277 (F) will be renumbered as 262-C referring to “The
Special Voluntary Arbitration Fund.” The Article provides for the allocation of P75
Million Pesos in the National Conciliation and Mediation Board’s (NCMB) annual
general appropriations which allocated 80% for the case subsidy for the unions which do
not have the capacity to pay the voluntary arbitrator's fees. The 20% of the fund shall be
allocated to operations of the Tripartite Voluntary Arbitration Advisory Council
(TPAAC) and the promotion of the voluntary arbitration program including the regular
and special retooling for arbitrators nationwide.

A new provision, Article 262-D, is proposed to be inserted to provide for the
accreditation and delisting of voluntary arbitrators. This confers express power to the
NCMB to accredit or delist voluntary arbitrators. Under the existing provision of the
Labor Code, the authority of the Board to accredit is implied only from Art. 260. The
same provision also requires attendance of voluntary arbitrators in continuing retooling
programs in order to remain in the active list of voluntary arbitrators. The same provision
also provides for the authority of the Board to delist and remove voluntary arbitrators
from the roster of active voluntary arbitrators. Ea

Another new provision, Article 262-E is also proposed to be inserted providing
for the composition of the Tripartite Voluntary Arbitration Advisory Council. It proposes.
for the inclusion of two from the PAVA as regular members of the TVAAC to represent


the voluntary arbitrators to correct the present set-up where the PAVA is only an ex-
oficio member with no voting rights. This, however, shall be without any compensation.

In view thereof, the urgent approval of this Bill, which is a companion identical
Bill with Senate Bill No. 793, authored by Senator Jinggoy Ejercito Estrada, Chairman
Senate Committee on Labor and Employment, is eamestly sought.

MIL L.@
Chairman
Committee on Labor and Employment


Republic of the Philippines
HOUSE OF REPRESENTATIVE
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO._40'72

INTRODUCED BY

Representative EMIL L. ONG

AN ACT.
FURTHER STRENGTHENING VOLUNTARY ARBITRATION AS THE
RENTIAL MODE OF LABOR DISPUTE SETTLEMENT, AMENDING
PURPOSE ARTICLES 217, 260, 261, 262-A, 262-B, 263(G) AND
ARTICLE 277(F), AND INCORPORATING A NEW ARTICLE 262-D OF
PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS ‘THE LABOR
CODE OF THE PHILIPPINES, AS AMENDED

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

SECTION |. Article 217 of PD 442, otherwise known as the Labor Code of
the Philippines, as amended, is hereby further amended to read as:

“1. Unfair labor practice cases;

2. Termination disputes EXCEPT THOSE INVOLVING WORKERS COVERED
BY COLLECTIVE BARGAINING AGREEMENTS WHICH SHALL BE
SUBJECT TO THE GRIEVANCE MACHINERY AND VOLUNTARY
ARBITRATION;

Out Ee

SEC. 2. Article 260 of the same Code, otherwise known as the Labor Code of
the Philippines, as amended, is hereby further amended to read as:

“Article 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 1) arising from the implementation and
interpretation of the collective bargaining agreements and 2) those arising from the
interpretation and enforcement of company personnel policies which remain unresolved
after exhaustion of the grievance procedure INCLUDING ALL TERMINATION CASES
INVOLVING WORKERS COVERED BY COLLECTIVE BARGAINING
AGREEMENTS. FOR THIS PURPOSE, THE PARTIES AND THE BOARD SHALL,-
ENSURE THAT GRIEVANCE MECHANISMS ARE IN PLACE IN ALL
ORGANIZED ESTABLISHMENTS AND SHALL CONTINUOUSLY WORK TO
ENHANCE AND STRENGTHEN THIS GRIEVANCE MACHINERY.”


“All grievances submitted to the grievance machinery which are not settled
within seven (7) calendar days from the date of its submission TO THE LAST
STEP PRIOR TO VOLUNTARY ARBITRATION shail automatically be referred to
voluntary arbitration prescribed in the Collective Bargaining Agreement.”

“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
NAME AND DESIGNATE IN ADVANCE [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 Agreoment] which shall act
with the same force and effect as if the Arbitrator or pane! of Arbitrators has been
SO NAMED AND DESIGNATED [selected by the parties as described abovel.”

“IF THE COLLECTIVE BARGAINING AGREEMENT DOES NOT
SPECIFY THE NUMBER OF ARBITRATORS, THE CASE SHALL BE
SUBMITTED, HEARD AND RESOLVED BY A SOLE ARBITRATOR, UNLESS
THE PARTIES AGREE OTHERWISE.”

“IF ONE OF THE PARTIES REFUSES TO SUBMIT THE UNRESOLVED
GRIEVANCES TO VOLUNTARY ARBITRATION, THE WILLING PARTY SHALL
INITIATE SUBMISSION TO ARBITRATION BY SERVING A NOTICE TO
ARBITRATE UPON THE OTHER PARTY TO A COLLECTIVE BARGAINING
AGREEMENT. THE NOTICE SHALL STATE THE ISSUE OR ISSUES TO BE
ARBITRATED, COPY THEREOF FURNISHED THE BOARD AND/OR THE
VOLUNTARY ARBITRATOR OR PANEL OF ARBITRATORS DESIGNATED IN
THE COLLECTIVE BARGAINING AGREEMENT.”

“IF THE PARTY UPON WHOM THE NOTICE IS SERVED FAILS OR
REFUSES TO RESPOND FAVORABLY WITHIN SEVEN (7) DAYS FROM
RECEIPT THEREOF, THE VOLUNTARY ARBITRATOR OR PANEL OF
VOLUNTARY ARBITRATORS DESIGNATED IN THE COLLECTIVE
BARGAINING AGREEMENT SHALL COMMENCE VOLUNTARY ARBITRATION
PROCEEDINGS. WHERE THE COLLECTIVE BARGAINING AGREEMENT
DOES NOT SO DESIGNATE, THE BOARD SHALL CALL THE PARTIES AND
APPOINT A VOLUNTARY ARBITRATOR OR PANEL OF VOLUNTARY
ARBITRATORS, WHO SHALL THEREAFTER COMMENCE ARBITRATION
PROCEEDINGS IN ACCORDANCE WITH THE PRECEEDING PARAGRAPH."

"IN INSTANCES WHERE PARTIES FAIL TO SELECT A VOLUNTARY
ARBITRATOR OR PANEL OF VOLUNTARY ARBITRATORS, THE REGIONAL
BRANCH DIRECTOR OF THE BOARD SHALL DESIGNATE THE VOLUNTARY
ARBITRATOR OR PANEL OF VOLUNTARY ARBITRATORS, AS MAY BE
NECESSARY, WHICH SHALL HAVE THE SAME FORCE AND EFFECT AS IF
THE PARTIES HAVE SELECTED THE ARBITRATOR.”

SEC. 3. Article 261 of the same Code, as amended, is hereby further
amended to read a:

“Article 261. Jurisdiction ‘of Voluntary Arbitrators or Panel of Voluntary
Arbitrators. - The Voluntary Arbitrator or Panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide ALL unresolved grievances:

1. Arising from the implementation or interpretation of the collective bargaining
agreements; [and]


2. [those] Arising from the interpretation or enforcement of company personnel
policies referred to in the immediately preceding article, INCLUDING CASES.
OF TERMINATION OF WORKERS COVERED BY COLLECTIVE
BARGAINING AGREEMENTS;

3. RELATING TO WAGE DISTORTION ISSUES UNDER RA 6727; AND
4.ARISING FROM PRODUCTIVITY INCENTIVE PROGRAMS UNDER RA 6971."

“Accordingly, violation of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice
and shall be resolved as grievances under the Collective Bargaining Agreement,
For purposes of this article, gross violation of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.”

“The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes, grievances or
matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or
Panel of Voluntary Arbitrators and shail immediately dispose and refer the same
to the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement.”

SEC. 4. Article 262, of the same Code, as amended, is hereby further
amended to read as:

“Art, 262. Jurisdiction over other labor disputes - The Voluntary Arbitrator
‘or Panel of Voluntary Arbitrators [, upon agreement of the parties] shall also hear
and decide all other labor disputes [including unfair labor practices and
bargaining deadiocks.] IN ANY OF THE FOLLOWING SITUATIONS:”

‘A. UPON AGREEMENT OF THE PARTIES.

B, IF THE PARTIES ARE NOT COVERED BY A COLLECTIVE
BARGAINING AGREEMENT, THE PARTY-COMPLAINANT, MAY AT
HIS/HER OPTION, SUBMIT THE CLAIM OR DISPUTE TO EITHER
THE VOLUNTARY ARBITRATOR OR PANEL OF VOLUNTARY
ARBITRATORS, OR TO THE NATIONAL LABOR RELATIONS.
COMMISSION AND ITS LABOR ARBITERS.

IF THERE |S NEITHER A PROVISION NOR AGREEMENT AS TO
‘THE VOLUNTARY ARBITRATOR TO BE APPOINTED BY THE
PARTIES, THE SAME SHALL BE APPOINTED BY THE BOARD
FROM THE LIST OF ACTIVE AND ACCREDITED VOLUNTARY
ARBITRATORS.

C. WHEN THE DISPUTE IS CERTIFIED BY THE SECRETARY OF
LABOR AND EMPLOYMENT TO THE BOARD FOR VOLUNTARY
ARBITRATION IN ACCORDANCE WITH ARTICLE 263 (G) OF THIS
CODE.

SEC. 5. Article 262-A of the same Code, as amended, is hereby further
amended to read as:

“Article 262-A. Procedures - The Voluntary Arbitrator or Panel of Voluntary
Arbitrators shall have the power to ADMINISTER OATHS, hold hearings, receive


evidences, SUBPOENA WITNESSES TO APPEAR IN HEARINGS AND TO
PRODUCE DOCUMENTS, TO CITE FOR DIRECT AND INDIRECT CONTEMPT
AND IMPOSE APPROPRIATE, PENALTIES THEREFOR IN ACCORDANCE
WITH LAW and take whatever action is necessary to resolve the issue or issues
subject of the dispute, including efforts to effect a voluntary settlement between
parties.”

“All parties to the dispute shall be entitled to attend the arbitration
proceedings. The attendance of any third party or the exclusion of any witness
from the proceedings shalll be determined by the voluntary arbitrator or Panel of
Voluntary Arbitrators, Hearings may be adjourned for a cause or upon agreement
by the parties.”

“Unless the parties agree otherwise, it shall be mandatory for the voluntary
arbitrator or Panel of Voluntary Arbitrators to render an award or decision within
twenty (20) calendar days from the date of submission of the dispute FOR
DECISION [to voluntary arbitration]. “FAILURE ON HIS/HER OR THEIR PART
TO RENDER AN AWARD OR A DECISION WITHIN SUCH PRESCRIBED
PERIOD SHALL BE SUFFICIENT CAUSE FOR THE BOARD TO DELIST OR
REMOVE THEIR NAMES FROM THE LIST OF ACCREDITED VOLUNTARY
ARBITRATORS AND BAR THEM FROM PRACTICE OF THE VOLUNTARY
ARBITRATION PROFESSION; PROVIDED, HOWEVER, THAT DUE PROCESS
|S OBSERVED. IN SUCH CASES, IT SHALL BE UNLAWFUL FOR THE
VOLUNTARY ABITRATOR OR PANEL OF VOLUNTARY ARBITRATORS TO
REFUSE OR FAIL TO TURN OVER TO THE BOARD THE RECORD OF THE
CASES WITHIN TEN (10) CALENDAR DAYS AFTER ITS DEMAND FOR THE
SAME FOR FURTHER DISPOSITION IN ACCORDANCE WITH THE
PRECEEDING PARAGRAPHS.”"

“The award or decision of the voluntary arbitrator or Panel of Voluntary
Arbitrators shalll contain the facts and the law on which it is based. It shall be final
and executory after ten (IO) calendar days from receipt of the copy of the award
‘or decision by the parties. THE FINAL DECISION OF THE VOLUNTARY
ARBITRATOR OR PANEL OF VOLUNTARY ARBITRATORS SHALL BE
IMMEDIATELY EXECUTORY UNLESS RESTRAINED BY THE SUPREME
COURT WHICH ALONE SHALL REVIEW THE AWARD OR DECISION IN A
PETITION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF COURT.

“Upon motion of any interested party, the Voluntary Arbitrator or Panel of
Voluntary Arbitrators SHALL ISSUE THE WRIT OF EXECUTION. [or the Labor
Arbiter in the region where the movant resides, i] In case of the absence or
incapacity of the Voluntary Arbitrator or Panel of Voluntary Arbitrators, for any
reason, THE BOARD SHALL DESIGNATE, UPON CONSULTATION WITH THE
PARTIES, ANOTHER VOLUNTARY ARBITRATOR TO issue a writ of execution
requiring either the sheriff of the NATIONAL CONCILIATION AND MEDIATION
BOARD, DEPARTMENT OF LABOR AND EMPLOYMENT, NATIONAL LABOR
RELATIONS COMMISSION, [Cémmission or regular courts] or any public official
whom the parties may designate in the submission agreement to execute the
final decision {, order or award}. IN ORDER TO FACILITATE THIS FUNCTION,
THE POSITION OF SHERIFF IS HEREBY CREATED IN ALL REGIONAL
BRANCHES OF THE BOARD.”

“FOR THIS MATTER, THE BOARD MAY DEPUTIZE ANY LAW
ENFORCEMENT AGENCY TO ASSIST IN THE EFFECTIVE ENFORCEMENT
OF DECISIONS[, AWARDS, RESOLUTIONS OR ORDERS] OF VOLUNTARY
ARBITRATORS OR PANEL OF ARBITRATORS.”


SEC. 6, Article 262-B of the same Code, as amended, is hereby further
amended to read as:

“Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrator's fee. -
‘The parties to a Collective Bargaining Agreement shail provide therein a

proportionate sharing scheme on the cost of voluntary arbitration including
PAYMENT OF VOLUNTARY ARBITRATOR'S FEES. The fixing of fees of
Voluntary Arbitrators, whether shouldered wholly by the parties or TO BE
subsidized by the Special Voluntary Action Fund SHALL BE MADE IN
ACCORDANCE WITH THE GUIDELINES ISSUED BY THE BOARD
UPON RECOMMENDATION OF THE TRIPARTITE VOLUNTARY
ARBITRATION ADVISORY COUNCIL AND APPROVED BY THE
SECRETARY OF LABOR AND EMPLOYMENT and shall take into
account the following factors:

(a) Nature of the case;

(b) Time consumed in hearing the case;

(c) Professional standing of the Voluntary Arbitrator,
(4) Capacity to pay of the parties; and

{e) Fees provided for in the Revised Rules of Court.”

SEC. 7. Article 277, paragraph (f) of the same Code, as amended, is
hereby renumbered as Article 262-C, to read as:

“ARTICLE 262-C. THE SPECIAL VOLUNTARY ARBITRATION FUND.
{(] A special Voluntary Arbitration Fund is hereby established in the Board to
subsidize the cost of voluntary arbitration [in cases involving the interpretation of
the Collective Bargaining Agreement.) including the arbitrator's fees, and for such
other related purposes to promote and develop voluntary arbitration. The Board
shall administer the Special Voluntary Arbitration Fund in accordance with the
guidelines it may adopt upon the recommendation of the Council, which
guidelines shall be subject to the approval of the Secretary of Labor and
Employment, PROVIDED, THAT EIGHTY PERCENT 80% OF THE FUND
SHALL BE ALLOCATED FOR SUBSIDY FOR UNIONS WHICH DO NOT HAVE
THE CAPACITY TO PAY THEIR AGREED SHARE OF THE VOLUNTARY
ARBITRATOR'S FEE AS PROVIDED FOR IN THE CBA. CONTINUING FUNDS
NEEDED FOR THIS PURPOSE IN THE INITIAL YEARLY AMOUNT OF
SEVENTY-FIVE MILLION PESOS (Php75,000,000.00) fifteen million pesos)
shall be provided in the 1989 annual general appropriations act.’

“The amount of subsidy in appropriate cases shall be determined by the
Board in accordance with the established guidelines issued by it upon the
recommendation of the Council.”

“THE REMAINING TWENTY PERCENT (20%) OF THE FUND shall {also}
be utilized for the operation of the council, the training and education of Voluntary
Arbitrators and the Voluntary Arbitration Program."

SEC. 8. A new provision is hereby proposed to be inserted as Article 262-
D, to read as:

“ARTICLE 262-D. ACCREDITATION AND DE-ACCREDITATION OF
VOLUNTARY ARBITRATORS".

“THE BOARD SHALL HAVE THE POWER TO ACCREDIT VOLUNTARY
ARBITRATORS AND MAINTAIN A ROLL OF ACCREDITED VOLUNTARY
ARBITRATORS IN ACCORDANCE WITH THE CRITERIA AND GUIDELINES IT


SHALL ESTABLISH.”

“THE ACCREDITATION OF AN INDIVIDUAL AS VOLUNTARY
ARBITRATOR SHALL BE SUBJECT TO THE CONDITION THAT HE MEETS
ALL THE QUALIFICATIONS PRESCRIBED BY THE BOARD FOR
ACCREDITATION. IF FOUND QUALIFIED, ACCREDITATION AS
VOLUNTARY ARBITRATOR SHALL BE ON A LIFETIME BASIS, UNLESS
DELISTED PURSUANT TO THE DELISTING GUIDELINES APPROVED BY
THE TRIPARTITE VOLUNTARY ARBITRATION ADVISORY COUNCIL. TO
MAINTAIN THEIR ACTIVE STATUS, HOWEVER, VOLUNTARY ARBITRATORS
SHALL BE REQUIRED TO ATTEND THE ARBITRATORS' CONTINUING
RETOOLING PROGRAM (ACRP), SUBJECT TO THE GUIDELINES WHICH
THE COUNCIL AND THE BOARD SHALL ADOPT.”

“ONLY ARBITRATORS WITH ACTIVE STATUS SHALL BE INCLUDED
IN THE LIST OF ACTIVE ARBITRATORS BEING DISSEMINATED TO LABOR
AND MANAGEMENT FOR SELECTION AND APPOINTMENT PURPOSES. *

“THE BOARD SHALL ALSO HAVE THE POWER TO DELIST AND
REMOVE ACCREDITED VOLUNTARY ARBITRATORS FROM THE ROLL FOR
JUST CAUSE AND SUBJECT TO THE REQUIREMENTS OF DUE PROCESS;
PROVIDED, THAT THE DECISION OF THE BOARD TO DELIST OR REMOVE
IS FINAL AND EXECUTORY.

‘SEC. 9. A new provision taken from Executive Order No. 251 is hereby
proposed to be inserted as Article 262-E, to read as:

“ARTICLE 262-E. COMPOSITION OF THE TRIPARTITE VOLUNTARY
ARBITRATION ADVISORY COUNCIL".

“THE TRIPARTITE VOLUNTARY ARBITRATION ADVISORY COUNCIL
I$ HEREBY’ CREATED AND ATTACHED TO THE NATIONAL CONCILIATION
AND MEDIATION BOARD. THE COUNCIL SHALL ADVISE THE BOARD ON
MATTERS PERTAINING TO THE PROMOTION OF VOLUNTARY
ARBITRATION AS THE PREFERRED MODE OF DISPUTE SETTLEMENT.

“THE TRIPARTITE VOLUNTARY ARBITRATION ADVISORY COUNCIL
SHALL CONSIST OF THE EXECUTIVE DIRECTOR [ADMINISTRATOR] OF
THE NATIONAL CONCILIATION AND MEDIATION BOARD AS CHAIRMAN,
ONE (1) MEMBER FROM .THE GOVERNMENT, TWO (2) MEMBERS
REPRESENTING LABOR, AND TWO (2) OTHER MEMBERS REPRESENTING
MANAGEMENT. THE MEMBERS SHALL BE APPOINTED BY THE
PRESIDENT TO SERVE FOR A TERM OF THREE (3) YEARS, THE
CHAIRMAN AND MEMBERS THEREOF SHALL SERVE WITHOUT
COMPENSATION.”

“IN ORDER TO FURTHER STRENGTHEN VOLUNTARY
ARBITRATION, THE PRESIDENT AND EXECUTIVE VICE-PRESIDENT OF
THE PHILIPPINE ASSOCIATION ON VOLUNTARY ARBITRATION, INC.
SHALL ALSO BECOME MEMBERS OF THE TRIPARTITE VOLUNTARY
ARBITRATION ADVISORY COUNCIL.”

SEC. 10. Art. 263 (g) of.the same Code, as amended, is hereby further
amended to read as:

"ARTICLE 263 (g). Strikes, picketing and lockouts. -(a) xx x


(g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same TO THE BOARD FOR VOLUNTARY
ARBITRATION, OR to the Commission for compulsory arbitration.”

SEC. 11. All laws, orders, issuances, rules and regulations or parts thereof
inconsistent with the provisions of this Act are hereby repealed, amended or
modified accordingly.

SEC, 12. The Secretary of Labor and Employment shall promulgate the
necessary rules and regulations to implement the provisions of this Act.

SEC. 13. If any provision of this Act or the application thereof to any
person or circumstances is held Invalid or unconstitutional, the same shall not
affect the remaining provisions of this Act.

SEC. 14. This Act shall take effect fifteen (15) days after its complete

publication in the Official Gazette or in at least two (2) newspapers of national
circulation.

Approved,