• 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE. , 
S.No. 1848 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
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aCT 14 P 5 :31 
The Constitution, Article 3, Section 16 states that: "All persons shall have the right to a 
speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies." 
Unfortunately, labor disputes are being resolved at an agonizingly slow pace, particularly at the 
level of the National Labor Relations Commission. The delay at the Labor Arbiters' level is due 
to the fact that of the present 155 incumbent Labor Arbiters, 53 are assigned as "Reviewers" in 
the Office of the Commissioners. Thus, with only half of the incumbent Labor Arbiters bearing 
the brunt of hearing and resolving the average? 1,000 cases filed per year in the Arbitration 
Branches, it is not surprising that backlogs are incurred. By law and by the very nature of their 
original appointments, these Labor Arbiter-"Reviewers" are supposed to be performing their 
official function as hearing Labor Arbit~rs in the Arbitration Branches. W Qrse, there are Labor 
Arbiters who are detailed in the Office of the Secretary of Labor arid other DOLE agencies. If all 
these Labor Arbiters will be returned back to their respective sala, there would be no more 
backlogs at the Arbitration level. 
As to the delay in the resolution of appealed cases in the Commission, it must be recalled 
that the Five (5) Divisions were created way back on 2 March 1989 by virtue of Republic Act 
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No. 6715. The number of appealed cases was still manageable at that time. However, after barely 
ten years later, the influx of appealed cases started to pile up. This was mainly triggered by the 
economic situation in the country resulting to more labor complaints filed by the affected 
workers. More than one-half of these cases' were filed at the National Capital Region of the' 
NLRC. Realizing this inadequacy, Congress enacted into law Republic Act No. 9347, creating 
another three divisions in the NCR. However, the problem of backlogs in the Commission 
remained unsolved. 
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This delay in the disposition of labor disputes was further exacerbated when the Supreme 
Court came out with a ruling in the St. Martin Funeral Homes case in 1998 wherein it was 
ordered that all petition for certiorari from the decisions or final orders of the. Commission must 
first be filed at the Court of Appeals instead of directly with the Supreme Court. This proved to 
be a double-whammy for the litigants in a labor dispute. While there was already a delay in the 
disposition of appealed cases at the COJ1:lmission, yet another delay was added by allowing the 
Court of Appeals to review the decisions of the Commission. It is apparent that there are now 
two layers of appellate review of the decisions of the Labor Arbiters. Resultantly, the gestation 
period in the final resolution of labor cases was drastically increased to the frustration of both the 
workers and employers alike. While the cases are pending, the labor unrest is not addressed and 
there is no industrial peace in the workplace. 
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This condition has contributed to a negativ~ and crippling effect on our economy as 
shown by several companies pulling out their investments from our country after their labor 
disputes remained unresolved for years. This is a clear violation of the Constitutional mandate to 
afford litigants with speedy disposition of their cases. Thus, in order' to comply with· this' 
mandate, this Bill now seeks to abolish one layer of appellate body, the National Labor Relations 
Commission, and thereby establishing the Regional Court of Labor Relations under the 
supervision of the Supreme Court. The incumbent Labor Arbiters shall be deemed appointed as 
Judges of the Regional Court of Labor Relations and their decisions shall be appealable directly 
to the Court of Appeals. 
Moreover, with the herein proposal to convert the Regional Arbitration Branches into 
Regional Court of Labor Relations branches, this set-up will be fully complemented by the 
existing branches of the Court of Appeals in the Visayas and Mindanao regions. Thus, appealed 
cases from the Judges of the Regional Court Labor Relations will be filed at the branches of the 
Court of Appeals in said regions. This will further hasten the resolution of labor cases in the 
Visayas and Mindanao regions. Historically, all decisions and ord<;rs of the Labor Arbiters were 
appealable to the Commission proper. In turn, all decisions and final orders of the Commission 
are reviewed directly by the Supreme Court through a petition for certiorari. This was the 
procedural set-up when the COUli of Industrial Relations (CIR) was established on 29 October 
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1936 through Commonwealth Act No. 103. The same procedure was implemented when the CIR 
was replaced by the Interim National Labor Relations on October 14, 1972 through Presidential 
Decree No. 21. After two years of existence, the Interim Commission, was abolished by 
Presidential Decree No. 442, establishing the National Labor Relations Coinmission (NLRC) on . 
November 1, 1974. On 21 March 1989, Republic Act No. 6715 further strengthened the NLRC 
by granting said agency its quasi-judicial independence from the Department of Labor and 
Employment (DOLE). However, on 16 September 1998, the Supreme Court came out with a 
decision in St. Martin Funeral Homes decreeing that: "Petitions (for certiorari) should henceforth 
be initially filed in the Court of Appeals in strict obserVance of the doctrine on the hierarchy of 
courts." 
This, in effect, added another layer of appellate re,:,iew of the decisions and orders of the 
NLRC. Instead of being reviewed only by the Supreme Court as was the practice since 1989, 
decisions of the NLRC after 16 September 1998, are all elevated first to the Court of Appeals 
upon petition for certiorari. The period to resolve labor disputes with finality was extended 
because of this decision by the Supreme Court. The average gestation period before the Labor 
Arbiters is one year, the appeal to the Commission is resolved within an average of three years, 
and the Court of Appeals takes an average of another three years to resolve petitions for 
certiorari. 
Consequently, even the execution of decisions won by the workers at the level of the 
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Labor Arbiters are also delayed because even the Court of Appeals has ruled time and again that 
in observance of the doctrine on the hierarchy of courts, no execution of the decision of the 
Labor Arbiter or the Commission shall be enforced during the pendency of a petition for 
certiorari at their level. Apparently. this run~ counter with the provision .of Article 223 of the. 
Labor Code which provides that "the decision of the Commission shall be final and executory 
after ten (10) calendar days from receipt thereof by the parties." 
The rationale behind this legislative measure is simply to harmonize our existing laws 
with actual realities in the field of labor relations, taking into consideration the paramount 
welfare of the working class as well as affording equal protection to the employers for they are 
the affected players in the field oflabor-management conflicts. 
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Given the situation and legal constraints which patently defeats the Constitutional 
mandate to resolve labor cases with dispatch, the most appropriate and practical legislative 
solution would be to eliminate one layer of appellate review. By simply abolishing the 
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Commission, workers are assured of their Constitutional right to speedy disposition of their 
complaints, and the employers will be spared of the unusually long and costly litigation. In 
effect, we avoid protracted labor disputes and therefore enhance the preservation of industrial 
peace conducive to the economic growth of the country.' 
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"w4~ 
. MIRIAM DE ~OR Sh ~ 
()!II ... 
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• This was originally filed during the 141h Congress 1'1 Regular Session. 
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SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. N,o. 1848 
Introduced by Senator Miriam Defensor Santiago 
I 
AN ACT 
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OCT 14 P5 :31 
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ESTABLISHING THE REGIONAL COURT OF LABOR RELATIONS (RCLR) UNDER THE 
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SUPERVISION OF THE SUPREME COURT, THEREBY ABOLISHING THE NATIONAL 
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LABOR RELATIONS COMMISSION (NLRC) 
Be it enacted by the Senate and the House of RepresentatiVes of the Philippines in 
Congress assembled: 
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SECTION I. Establishing the Regional Court of Labor Relations; Abolishing the 
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National Labor Relations Commission. - There is hereby established the Regional Courts of 
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Labor Relations (RCLR) under the supervision of the Supreme Court, thereby abolishing the 
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National Labor Relations Commission (NLRC). All unexpended funds, properties, equipment, 
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and records of the NLRC and such of its personnel as may be necessary are hereby transferred to 
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the Regional Courts of Labor Relations under the administrative and fiscal supervision of the 
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Supreme Court. 
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SECTION 2. Incumbent Labor Arbiters Deemed AppOinted as Judges of the Regional 
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Courts of Labor Relations. - The incumbent Labor Arbiters shall be deemed appointed as Judges 
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of the Regional Court of Labor Relations in the regions where they are residing and holding 
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office at the date of the effectivity of this Act, without need for reappointment. 
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SECTION 3. Existing Regional Arbitration Branches converted to Regional Courts of 
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Labor Relations Branches. - The existing Regional Arbitration Branches nationwide shall be 
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converted as regional branches of the Regional Courts of Labor Relations without increasing the 
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approved plantilla for Labor Arbiters nationwide. The number of seats for the Judges of the 
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Regional Courts of Labor Relations in each regional branch shall correspond to the number of 
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plantilla positions for Labor Arbiters thereat. Each regional brl}nch shall be headed by an 
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Executive Judge of the Regional Court of Labor Relations. 
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SECTION 4. Retirement or Separation of NLRC Commissioners. - Consequent to the 
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abolition of the NLRC, incumbent Commissioners who have attained sixty (60) years of age and 
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have rendered at least twenty (20) years in governrrient service, the last five (5) years of which 
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shall have been continuously rendered as Commissioner, shall be deemed compulsorily retired 
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with full retirement gratuity and pension pursuant to applicable laws, Those who lack anyone of 
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the above qualifications shall receive a separation pay equivalent to two (2) months salary for 
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every year of service in government. 
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SECTION 5. Optional Retirement'or Severance Pay for an Incumbent Labor Arbiter. -
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Incumbent Labor Arbiters who have attained the age of sixty (60) years and have rendered at 
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least twenty (20) years in government service, the last, five (5) years of which shall have been 
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continuously rendered as Labor Arbiter, shall be qualified for optional retirement. Those who 
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lack anyone of the above qualifications and have no intention to assume the position as Judges 
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of the Regional Courts of Labor Relations pursuant to Section 2 hereof, shall be entitled to a 
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severance pay equivalent to two (2) months salary for every year of government service. This 
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option for availment of severance pay shall be exercised within a period of sixty (60) calendar 
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days after the effectivity of this Act; otherwise, said option shall be deemed waived. 
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SECTION 6. Retirement Gratuity and Pension of Qualified Commissioners and Labor 
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Arbiters. - Commissioners who are qualified for compulsory retirement and incumbent Labor 
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Arbiters who are qualified for optional retirement pursuant to the immediately preceding Section 
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3 and Section 4 of this Act shall respectively be ,eptitled to the full retirement gratuity and 
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pension provided for under applicable laws. 
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SECTION 7. Subsequent Appointments to the Regional Courts of Labor Relations. -
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Subject to Section 2 of this Act, the President shall appoint Judges to the Regional Courts of 
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Labor Relations from a list of at least three (3) nominees prepared by the Judicial and Bar 
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Council for every vacant position; Provided, that said nominees shall meet the qualifications as 
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those ofthe Judges of the Regional Trial Courts, Such a~pointments need no confirmation. 
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SECTION 8. Parity in Rank, Salaries, Benefits, Other Etnoluments, and Retirement 
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Gratuity. - Judges of the Regional Courts of Labor Relations shall have the saine rank, receive an 
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annual salary equivalent to, and be entitled to the same allowances, retirement gratuity, and other 
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benefits and privileges as those of the Judges of the Regional Trial Courts pursuant to applicable 
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laws. They shall hold office during good: behavior until they reach the age or seventy (70) years, 
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unless sooner removed for cause as provided for by law or become i11lcapacitated to discharge the 
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duties of their office. 
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SECTION 9. Jurisdiction of the Regional Courts of Labor Relations. - The Regional 
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Courts of Labor Relations shall have original l.\nd exclusive jurisdiction over all cases 
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enumerated under Article 217 of the Labor Code, as 'amended, including complaints of Overseas 
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Filipino Workers pursuant to Republic Act No. 8042, otherwise known as the Migrant Workers 
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and Overseas Filipinos Act of 1995. Other provisions of the Labor Code not inconsistent with 
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this Act shall continue to be applied. 
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SECTION 10. Nature of Proceedings Before the Regional Courts of Labor Relations. -
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Technical rules of procedure shall not be strictly applied to proceedings before the Regional 
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Courts of Labor Relations. 
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SECTION 11. Disposition of Pending Cases Before the Labor Arbiters. -All pending 
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cases before the incumbent Labor Arbiters shall be disposed of by thelI). as Judges of the 
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Regional Courts of Labor Relations, applying in the interim the provisions of the NLRC Rules of 
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Procedure pertaining to the proceedings before the Labor Arbiters. 
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SECTION 12. Applicability of the Alternative Dispute Resolution System Law (ADR) in 
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Labor Cases. -Any provision of law to the contrary notwithstanding, pertinent provisions of the 
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Alternative Dispute Resolution System (ADR) through the use of voluntary arbitration, 
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mediation, and conciliation process established under Republic Act No. 9285 and other 
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applicable laws currently being implemented in the Regional Trial Courts shall likewise be 
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applied in the resolution of labor cases before the Regional Courts of Labor Relations. 
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SECTION 13. Appeal from the Regional Courts of Labor Relations. - An appeal may be 
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taken from a judgment or final order that completely disposes of the case rendered by a Judge of 
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the Regional Court of Labor Relations to the Court of Appeals pursuant to the Rules of Court; 
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Provided, however, that the Supreme Court may promulgate rules ,and regulations specifically 
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suited to the proceedings before the Regional Court of Labor Relations as a court with 
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specialized jurisdiction. 
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SECTION 14. Personnel Retention or Movement; Position and Salary Grade 
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Reclassification. - Personnel assigned in the office of the Labor Arbiters shall be retained and 
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their position classification, salary grade,level, and benefits shall corresponc;iingly be adjusted to 
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conform with the staffing pattern of the Regional Courts of Labor Relations. Subject to the 
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personnel guidelines to be issued by the Supreme Court, personnel in the Commission with 
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permanent appointments shall either be transferred to the office of the Judges of the Regional 
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Courts of Labor Relations to augment their support staff or to the administrative offices in the 
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regional branches. 
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SECTION 15. Personnel Separated from Service. - Personnel separated from the service 
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as a result of the implementation of this Act shall enjoy the rights and protection provided them 
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under existing laws and such other pertinent rules and regulations. In anY' case, no lay-off shall -
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be effected until funds to cover the gratuity and/or retirement benefits of those laid off are duly 
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certified as available. 
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SECTION 16. Transitory Provision; Disposition of Pending Cases Before the 
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Commission - All pending cases before the Divisions of the Commission shall be disposed of by 
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them within the winding-up period of not more. than One Hundred Twenty (120) days. 
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Thereafter, all unresolved cases shall be deemed appealed to the Court of Appeals pursuant to the 
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Rules of Court and records thereof shall be forwarded by the Commission to the Court of 
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Appeals. 
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SECTION 17. Appropriations; Funding Source. - The amount necessary for the initial 
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implementation of this Act shall be taken from the unexpended funds as a result of the abolition 
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of the Commission. The fees collected and interests on deposits by the Regional Courts of Labor 
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Relations shall accrue to the funds provided for under Republic Act No. 9227, as part of the 
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funding source for special allowance of the Judges. of the Regional Court of Labor Relations 
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similar to that of that of the Judges ofihe Regional Trial Court. Any deficiency shall be sourced 
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out of any funds in the National Treasury not otherwise appropriated. Thereafter, such sums as 
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may be necessary for the continued implemeritation of this ACt shall be included in the budget of 
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the Supreme COUlt for the succeeding General Appropriations Acts. 
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SECTION 18. Issuance of Implementing Guidelines. - The Supreme Court and the 
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Secretary of Budget and Management shall issue the necessary guidelines for the proper 
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implementation of this Act with respect to funds coming from the National Treasury within 
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ninety (90) days from approval hereof: 
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SECTION 19. Separability Clause. - If any provision or portion of this Act shall be held 
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unconstitutional or invalid, all other parts or provisions not affected ihereby shall continue to 
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remain in full force and effect. 
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SECTION 20. Repealing Clause. - All provisions of existing laws, orders, decrees, rules 
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and regulations inconsistent with this Act are hereby repealed, modified, or amended 
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accordingly. 
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SECTION 21. Effectivity. - This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
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