Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
Regular Session

wousesuno._ 2823

Introduced by AKBAYAN Representatives Walden F. Bello and Kaka J. Bag-a0

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
ular 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 employees’ 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 suchasystem 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
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.

Mis

WALDEN F. BELLO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

2823

HOUSE BILL NO. __

Introduced by AKBAYAN Representatives Walden F. Bello and Kaka J. Bag-ao

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 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 2010”.

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 Article 211 of the Labor Code shall be repealed and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

Article 211. Declaration of Policy. A. itis 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;

(o)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;

(@)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;

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

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

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.

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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 the members of which
may or may not be 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.

“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.

(mm) “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

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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.

“Mediators' refers to a person who conducts mediation.

“Respondent” refers to any party against whom a claim has been filed
in accordance with this Code.

“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.

“Strike-breaker” means any person who obstructs, impedes, or
interferes with by force, violence, coercion, threats, or intimidation any

3


peaceful picketing affecting wages, hours or conditions of work or in the
exercise of the right of self-organization or collective bargaining.

(2) “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
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.

8. 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.

©. 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 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, 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.

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:

(@) 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


(b)

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(d)

(e)

)

functions and such rules and regulations as may be necessary to carry out the
purposes of this Code;

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;

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

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

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.

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. 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:

di

3.

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;

Claims for actual, moral, exemplary and other forms of damages, as well as interest,
attorney's fees, and costs of litigation arising from employer-employee relations;

Claims under Section 10 of Republic Act No. 8042;
Claims of legitimate labor organizations against other labor organizations;

Claims against labor organizations made by their members or other interested parties;

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, junction 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.


1. 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 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.


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.

Section 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 confgfence;

(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 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.

© 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:

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.

BeNe

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.

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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 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 arbitrator is retained,
the arbitrator shall proceed with arbitration proceedings. If the 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.

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 subject to the limitations as to time under Article 220.

8. 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 ahd estimated duration of the successive hearings;

1


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 fortfn, of the award;

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

9. anyother 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 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 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 muet 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
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 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

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follows:

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

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 grovd 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:

follows:

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

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) heis representing himself;

2) _he is representing a legitimate or registered corporation or belongs to a legitimate labor
organization:

3) __heis 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.

Article 14. Injunctions. Article 223 of the Labor Code shall be repealed and replaced as

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

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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 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 fist fle 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,
Cf 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 thtee (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 arising from the interpretation or enforcement of company
personnel policies.

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Al 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.)

Artide 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
MedNion 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.

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 shall 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,

1S