5 
FEE 21 P4:09 
OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
Senate Bill No. 
Introduced by Senator Juan M. Flavier 
L 
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 tb bring the outcome of industrial 
and labor disputes closer to the desires and needs of the patties 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 
procedure. The Department of Labor and Employment classifies labor disputes 
into disputes between: 
venues, a large bureaucracy and often confusing rules regarding jurisdiction and 
1 
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 
the Department: 
through a virtual maze of agencies to which she may be directed. According to 
I i 
Labor Standards Disputes, including simple money claims not 
exceeding P5,000.00, which arises out of employeeemployer 
relations are referred to the Regional Office (RO) of the DOLE. 
Labor Relations Disputes, particularly illegal dismissals with or 
without claim for reinstatement, unfair labor practices, strikes and 
lockouts and claims of damages are referred to the labor Arbiter in 
the Regional Arbitration Branches of NLRC. 
Union Representation are referred to the Med-Arbiter of the DOLE- 
RO. 
Intra-Union Disputes and Cancellation of Union Registration are 
referred to the DOLE-RO or the Bureau of Labor Relations. 
Bargaining Deadlocks Needing Conciliation and Mediation are 
referred to the Regional Branches of NCMB. 
CBA Administration Disputes Involving Personnel Policies are 
referred to the Grievance Machinery at the establishment, if any, 
then with the regional branches of the NCMB. 
Social Legislation Disputes are referred to the Regional Branches 
of the ECC or the SSS. 
It is observed that the multiplicity of venue which marks our current system is not 
by design nor was intentional n any way. On the contrary, the intricate system 
we have is the result of a lack i of design and need of a well-considered plan. In 
essence, we have failed to asqwhy 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 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 
2 


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 Couh 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 arbiiers 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 arbiiration. 
employee issues though they need not be lawyers. Arbiirators 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. 
1 
3. Professional Arbitration. Arbitrators should be familiar with employer - 
i 
. 
3 
i 


THIRTEENTH CONGRESS OF THE REPUBLI~ 
5 FE3,21 P4:04 
OF THE PHILIPPINES 
A 
First Regular Session 
ch 
2 ,  
RECESVED BY : - 
i 
' S E N A T E  1 
Senate Bill No. 
Introduced by Senator Juan M. Flavier 
AN ACT TO ENHANCE THE PHILIPPINE INDUSTRIAL AND LABOR DISPUTE 
SEITLEMENT 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 I. Short Title. This Act shall be known as the INDUSTRIAL AND LABOR 
DISPUTE SElTLEMENT ACT of 2005. 
Section 2. Declaration of Policy. Article 211 of the Labor Code shall be repealed and 
replaced as follows: 
I 
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; 
(9 To ensure a stable but dynamic and just industrial peace; and 
(9) To ensure the participation of workers in decision and policy-making 
processes affecting their rights, duties and welfare. 
B. To encourage a truly democratic method of regulating the relations between the 
employers and employees by means of agreements freely entered into through 
collective bargaining, no court or administrative agency or official shall have the 
power to set or fix wages, rates of pay, hours of work or other terms and conditions 
of employment, except as otherwise provided under this Code. 
Section 3. Definitions. Article 212 of the Labor Code shall be repealed and replaced as 
follows: 
4 


Chapter II 
DEFINITIONS 
Article 212. Definitions. 
"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. 
"ArbitratoP 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 andlor 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. 
'Contempr 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, 
"Employer" includes any person acting in the interest of an employer, 
directly or indirectly. The term shall not include any labor organization 
or any of its officers or agents except when acting as employer. 
"Employee" includes any person in the employ of an employer. The 
term shall not be limited to the employees of a particular employer, 
unless the Code so explicitly states. It shall include any individual 
whose work has ceased as a result of or in connection with any 
current industrial or labor dispute or because of any unfair labor 
practice. 
"Industrial and labor dispute" includes any controversy or matter 
concerning terms and conditions of employment or the association or 
representation of persons in negotiating, fixing, maintaining, changing 
or arranging the terms and conditions of employment, regardless of 
whether the disputants stand in the proximate relation of employer 
and employee. 
"Internal union dispute" includes all disputes or grievances arising 
from any violation of or disagreement over any provision of the 
constitution and by laws of a union, including any violation of the 
rights and conditions of union membership provided for in this Code. 
"Labor organization" means any union or association of employees 
which exists in whole or in part for the purpose of collective bargaining 
series of 1999. 
1 
5 


or of dealing with employers concerning terms and conditions of 
employment. 
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 andlor 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 
peaceful picketing affecting wages, hours or conditions of work or in 
the exercise of the right of self-organization or collective bargaining. 
"Unfair labor practice" means any unfair labor practice as expressly 
defined by the Code. 
"Legitimate labor organization" means any labor organization duly 
i 
Section 4. Dispute Resolution System. Article 213 of the Labor Code shall be 
repealed and replaced as follows: 
Title I1 
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. 
i 
6 


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 
sewe 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 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 
I 
7 


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. 
I 
b 
Section 5. Functions and powers of the Board. Article 214 of the Labor Code shall 
be repealed and replaced as follows: 
ART. 214. Functions and Powers of the Board. - The Board shall have the 
power and authority: 
(a) To promulgate rules and regulations governing the mediation and arbitration 
of disputes before it and its regional branches. as well as those pertaining to its 
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 sewed 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. 
(9 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 
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: 
as follows: 
b 
8 


‘: 
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 employer- 
employee relations; 
5. Claims under Section I O  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 partie’s; 
8. Claims arising from bargaining deadlock; 
9. Claims of unfair labor practice; 
IO. 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 wles, including disputes which are not 
resolved even after going through the appropriate grievance procedure; 
I 
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. 
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 tiled, 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 patties. 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 
6 
9 


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. 
I. 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 oftice 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 patties 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 testifcandurn 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. 
Mema/ 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 andlor 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 andfor 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. 
10 
i 


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: 
Without prejudice to the following paragraph, administrative action or 
proceeding to be conducted by the Board, with proper notice and 
arbitrator, counsel or representative for any party in any case before 
the Board for a period to be determined by the Board; 
if the violator is a professional, administrativeldisciplinary action 
before the appropriate authority, including the Supreme Court and 
Professional Regulation Commission (PRC), at the instance of any 
party or of the Board. 
I 
(1) 
hearing, for inhibition or prohibition from appearing as mediator, 
i 
(2) 
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: 
(I) Where parties fail to reach an amicable settlement after the lapse of 
sixty (60) calendar days from the date of the initial mediation 
conference; 
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 
(2) 
11 


i 
(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. 
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 
I 
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: 
experience and their business or professional connections. The list shall be 
b 
1. 
2. 
3. 
4. 
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. 
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. Multjp/e 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. 
12 


4. Mu I tip/e Respondents. In case there is more than one respondent against 
whom kommon claims are made, they must choose a person among them who 
will redresent them in determining the arbitrator. 
D. Ac eptance 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 t ereof provided to each party. 
The statement shall include a sworn 
accept I 
nce 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 (IO) 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 (IO) 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 andlor 
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 
13 


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. 
I 
I 
I 
I 
Unless all parties expressly agree in writing to do othetwise, 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 produdion 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 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 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 
I 
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 (IO) 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. 
~ 
~ollows: 
1 
I 
I 
14 


Article 12. Execution. Article 221 of the Labor Code shall be amended to read as 
follows: 
Article 221. Execution. Settlement agreements or Arbitral awards resulting 
from mediation or arbitration proceedings in this Title may be enforced by any 
interested party by motion directed to the Board. Upon such motion, the Board, 
through the Executive Director or his authorized representative, may issue a writ 
of execution on a settlement agreement or arbitral award within five (5) years 
from the date it was reached or becomes final and executory, requiring the sheriff 
or authorized person of the Board to execute the settlement agreement or arbitral 
award. In any case, it shall be the duty of the responsible officer to immediately 
furnish the counsels of record and the parties with copies of said settlement 
agreement or arbitral award. Failure to comply with the duty prescribed herein 
shall subject such responsible officer to appropriate administrative sanctions. 
Article 13. Representation. Article 222 of the Labor Code shall be amended to read 
k 
as follows: 
Article 222. Representation. Parties should personally appear before the Board 
and any of its mediators or arbitrators provided that juridical persons may be 
represented by any person specially authorized in writing to do so. 
At any 
proceeding before the Board or any of its mediators or arbitrators, non-lawyers shall 
be allowed to represent any party in the following cases: 
1) he is representing himself; 
2) he is representing a 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. 
Article 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 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 
15 


temporary restraining order shall be effective for no longer than ten (IO) days 
and shall become void at the expiration of said ten (IO) 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 
to any panel consisting of three (3) Arbitrators chosen according to Article 218 
who shall conduct such hearings in such places as he may determine to be 
accessible to the parties and their witnesses and shall submit thereafter his 
recommendation to the Board. 
Article 15. Grievance machinery. Article 260 of the Labor Code shall be amended as 
follows: 
evidence for the application of a writ of injunction may be delegated by the Board 
b 
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 Arbiitrator or panel of Voluntary Arbitrators, as may be 
necessary, pursuant to the selection procedure agreed upon in the Collective 
Bargaining Agreement, which shall act with the same force and effect as if the 
Arbitrator or panel of Arbitrators has been selected by the parties as described 
above.] 
Article 16. 
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. 
Abolition of the National Labor Relations Commission and 
I i 
16