Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

13" Congress
First Regular Session

1417

HOUSE BILL

Introduced by Representative Roseller L. Barinaga

EXPLANATORY NOTE

Many disputes between labor and management can be resolved more efficiently and
satisfactorily through arbitration. This system refers to an informal process in which two or more
persons agree to let an impartial third person or panel make a final decision in a dispute between
them. Because it offers many advantages, arbitration is highly recommended by experts as a
means to effectively settle labor disputes.

As a state policy the preferential use of voluntary arbitration in all labor-management disputes,
other than those arising from the interpretation and implementation of collective bargaining
agreements and company personnel policies, is highly encouraged. This is because lasting
industrial peace can be achieved only through the sincere desire and mutual effort of labor and
management to resolve their differences. Specifically, Sec. 3, Article XII of the 1987
Constitution provides that “The State shall promote the principle of shared responsibility

between workers and employers and the preferential use of voluntary modes in settling disputes,

including conciliation, and shall enforce their mutual compliance therewith to foster industrial
peace.”

To put substance into the policy set by the Constitution, the Labor Code, as amended by
Republic Act 6715, provides for the following:

1. Promotion of voluntary arbitration as one of the desirable arbitration machineries
for the expeditious settlement of labor disputes (Article 21 1)

2. Automatic referral of unsettled grievances within seven (7) days from submission
to the grievance machinery to voluntary arbitration prescribed in the collective
bargaining agreement or CBA (Article 260).

3. Expansion of the original and exclusive jurisdiction of voluntary
arbitrators over unresolved grievances arising from the interpretation or
implementation of the CBA arising from the interpretation or enforcement of
company personnel policies (Article 261),


4. Enjoining the National Labor Relations Commission (NLRC), its Regional
Arbitration Branches, and the Regional Directors of the Department of Labor and
Employment (DOLE) from entertaining disputes, grievances or matters under the
exclusive and original jurisdiction of the voluntary arbitrator (Article 261),

5. Allowing voluntary arbitrators, upon agreement of the parties, to also hear and
decide all other labor disputes including unfair labor practices and bargaining
deadlocks (Article 262).

6. Enjoining the National Conciliation and Mediation Board (NCMB), in case issues
arising from the CBA interpretation and implementation or those arising from the
interpretation or enforcement of company personnel policies are made as grounds
for notices of strikes or lockouts or requests for preventive mediation, to advise
the parties to submit the issue/s to voluntary arbitration ( Rule XI, Section 2,
Implementing Rules)

While the Labor Code contains ample provisions to encourage the use of voluntary arbitration
as the preferred mode of settling labor disputes, experience point to the need to further strengthen
particular sections of the law. It is to this end that this bill is being introduced, seeking to amend
P.D. 442 in the following areas:

1, Selection of the voluntary arbitrators or a panel of voluntary arbitrators.

2. Jurisdiction of voluntary arbitrators or panel of voluntary arbitrators,
3 Provision of sanctions against erring arbitrators.

4. Determination of the fees of voluntary arbitrators.

5. Provision of subsidy for unions that cannot shoulder the fees of arbitrators.

With the approval of this bill, it is hoped that the advantages of using voluntary arbitration as a
‘means to improve labor-management relations in the country can be maximized.

ROSELLER L. BARINAGA.


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

13 Congress
First Regular Session

nouse piLNo__1 417

Introduced by Representative Roseller L. Barinaga.

AN ACT
FURTHER STRENGTHENING VOLUNTARY ARBITRATION AS A
PREFERENTIAL MODE OF LABOR DISPUTE SETTELMENT,
AMENDING FOR THE PURPOSE ARTICLES 260, 261, 262-A, 262-B
AND 227 (F) OF PRESIDENTIAL DECREE NO. 422, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES, AS AMENDED

Be_itenacted_by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Article 260 of Presidential Decree No. 442, otherwise known as the
Labor Code of the Philippines, as amended, is hereby further amended to read 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
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


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automatically be referred to voluntary arbitration prescribed in the Collective
Bargaining Agreement

“For this purpose, parties to a Collective Bargaining Agreement shall
name and designate in advance a Voluntary Arbitrator or panel of Voluntary
Arbitrators, [or include in the agreement a procedure for the selection of such
voluntary arbitrator or panel of voluntary arbitrators,] preferably from the listing
of qualified Voluntary Arbitrators duly accredited by the Board. In case the
patties fail to NAME AND DESIGNATE IN ADVANCE [select] a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the Board shall, UPON REQUEST
BY ANY OF THE PARTIES, 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 it the Arbitrator or panel of Arbitrators has been SO
NAMED AND DESIGNATED [selected by the parties as described above].”

SEC 2. Art 261 of the same Code, as amended, is hereby further amended to read

as follows

“ART.261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary
Arbitrators. ~ The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have original and exclusive jurisdiction 10 hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies referred to in the immediately preceding article [.].
INCLUDING CASES OF TERMINATION OF WORKERS COVERED BY

COLLECTIVE BARGAINING AGREEMENTS, PRODUCTIVITY


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

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

SEC 3. Article 262 — A of the same Code as amended, is hereby further amended

to read as follows:

“ART 262 -A. Procedures. — The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have the power to hold hearings, receive evidences
and take whatever action is necessary to resolve the issue or issues subject to the
dispute, including efforts to effect a voluntary settlement between the parties.

“All panties to the dispute shall be entitled to attend the arbitration
proceedings. The attendance of any third party or the exclusion of any witness
from the proceedings shall be determined by the Voluntary Arbitrator or panel of
Voluntary Arbitrators. Hearing may be adjourned for cause or upon agreement by

the parties.


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“Unless the parties agree otherwise, it shall be mandatory for the
Voluntary Arbitrator or panel of Voluntary Arbitrators to render an award or
decision within twenty (20) calendar days from the date of submission of the
dispute to voluntary arbitration. FAILURE ON HIS/HER OR THEIR PART
TO RENDER AN AWARD OR DECISION WHITHIN SUCH
PRESCRIBED PERIOD SHALL BE SUFFICIENT CAUSE FOR THE
BOARD TO DELIST OR REMOVE THEIR NAMES FROM THE LIST OF
ACCREDITED VOLUNTARY ARBITRATORS AND BAR THEM FROM
THE PRACTICE OF THE PROFESSION; MOREOVER, IN SUCH
CASES. IT SHALL BE UNLAWFUL FOR THE VOLUNTARY
ARBITRATOR OR PANEL OF VOLUNTARY ARBITRATORS TO
REFUSE OR FAIL TO TURN OVER TO THE BOARD THE RECORDS
OF THE CASE WITHIN TEN (10) CALEDAR DAYS AFTER ITS
DEMAND FOR THE SAME FOR FURTHER DISPOSITION IN
ACCORDANCE WITH THE PROVISIONS OF THE PRECEDING
PARAGRAPH.

“The award or decision of the Voluntary Arbitrator or panel of Voluntary
Arbitrators shall contain the facts and the law on which it is based. It shall be final
and executory afier ten (10) calendar days from receipt of the copy of the award
or decision by the parties.

“Upon motion of any interested party, the Voluntary Arbitrator or panel of
Voluntary Arbitrators or the Labor Arbiter in the region where the movant
resides. in case of the absence or incapacity of the Voluntary Arbitrator or panel

of Voluntary Arbitrators for any reason, may issue a writ of execution requiring


: ether the sheriff of the Commission or regular courts or any public official whom

2 the parties may designate in the submission agreement to execute the final
3 decision. order or award.”
4 SEC 4. Article 262 — B of the same Code as amended, is hereby further

5S amended to read as follows

6 “ART 262 ~ B. Cost of voluntary arbitration and Voluntary Arbitrator’s
7 fee. - The parties to a Collective Bargaining Agreement shall provide therein a
8 proportionate sharing scheme on the cost of voluntary arbitration including
9 PAYMENT OF the Voluntary Arbitrator’s fee. The fixing of fees of Voluntary

10 Arbitrators, whether shouldered wholly by the parties or TO BE subsidized by the

W Special Voluntary Action Fund, SHALL BE MADE IN ACCORDANCE

12 WITH THE GUIDELINES ISSUED BY THE BOARD UPON

3 RECOMMENDATION OF THE COUNCIL AND APPROVED BY THE

14 SECRETARY OF LABOR AND EMPLOYMENT AND shal! take into

15 account the following factors:

16 (a) Nature of the case:

17 (b) Time consumed in hearing the case;

18 (©) Professional standing of the Voluntary Arbitrator,

19 (4) Capacity to pay of the parties: and

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

a SEC 5. Paragraph (f) of Article 277 of the same Code, as amended, is hereby

22 further amended to read as follows
23 “() A special Voluntary Arbitration Fund is hereby established in the Board to

oxy subsidize the cost of voluntary arbitration [in cases involving the interpretation of


the Collective Bargaining Agreement] including the Arbitrator’s fees, and for

2 such other related purposes to promote and develop voluntary arbitration. The
3 Board shall administer the Special Voluntary Arbitration Fund in accordance with
4 the guidelines it may adopt upon the recommendation of the Council, which
5 guidelines shall be subject to the approval of the Secretary of Labor and
6 Employment; PROVIDED, THAT EIGHTY PERCENT (80%) OF THE
7 FUND SHALL BE ALLOCATED FOR SUBSIDY FOR UNIONS WHICH
8 DO NOT HAVE THE CAPACITY TO PAY THEIR AGREED SHARE OF
9 THE VOLUNTARY ARBITRATOR’S FEE AS PROVIDED FOR IN THE

10 COLLECTIVE BARGAINING AGREEMENT. Continuing funds needed for

W this purpose in the [initial] yearly amount of SEVENTY-FIVE MILLION

2 PESOS (P75,000,000) (Fifteen million pesos} shall be provided in the [1989]

3 annual general appropriations ct.

4 “The amount of subsidy in appropriate cases shall be determined by the

15 Board in accordance with the established guidelines issued by it upon the
16 recommendation of the Council
17 “The REMAINING TWENTY PERCENT (20%) OF THE Fund shal!
18 {also] be utilized for the operation of the Council, the training and education of

19 Voluntary Arbitrators, and the Voluntary Arbitration Program”

20 SEC 6. All laws, orders, issuances, rules and regulations or parts thereof

21 inconsistent with provisions of this Act are hereby repealed, amended or modified
22 accordingly.
23 SEC 7. The Secretary of Labor and Employment shall promulgate the necessary

24 rules and regulations to implement the provisions of this Act


SEC 8. If any provision of this Act or the application thereof to any person or
circumstance is held invalid or unconstitutional, the same shall not affect the remaining
provisions of this Act.

SEC 9. This Act shall take effect fifteen (15) days after its complete publication

in the Official Gazette or in at least two (2) newspaper of national circulation

Approved,