Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 5014

Introduced by CIBAC Party-List Representatives
Eduardo “Bro. Eddie” C. Villanueva and Domingo C. Rivera

AN ACT RATIONALIZING GOVERNMENT INTERVENTIONS IN
LABOR DISPUTES BY ADOPTING THE ESSENTIAL SERVICES
CRITERIA IN THE EXERCISE OF THE ASSUMPTION OR
CERTIFICATION POWER OF THE SECRETARY OF LABOR AND
EMPLOYMENT, AND DECRIMINALIZING VIOLATIONS THEREOF,
AMENDING FOR THE PURPOSE ARTICLES 278[263], 279[264] and
287[272] OF PRESIDENTIAL DECREE 442, OTHERWISE KNOWN AS
THE LABOR CODE OF THE PHILIPPINES, AS AMENDED AND FOR
OTHER PURPOSES

EXPLANATORY NOTE

Articles 278[263], 279[264] and 287[272] of the 1974 Labor Code of the
Philippines, as amended, are remnants of Martial Rule, which over the years have
been rendered inconsistent with the country's democratic principles and governance,
and increasing use of “labor rights’ clauses” in trade agreements, multilateral or
otherwise.

The country has long departed from strong-arm rule and from fiercely
adversarial industrial relations. Article XIII of the 1987 Philippine Constitution
promotes the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and
enforces mutual compliance to foster industrial peace. The Constitution also
guarantees the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in
accordance with law, and regulates the relations between workers and employers,


labor justice administration since decisions by the Secretary of Labor to assume
jurisdiction over a labor dispute have been seen as largely favoring employers, who at
the same time, are the very first ones to ignore or resist return-to-work orders by filing
numerous motions for reconsideration and appeals to higher courts. This is borne by
the approximately ten (10) cases of trade union rights violations against the Philippine
government before the International Labour Organization (ILO) and the US Trade
Representatives.

State interventions in labor disputes under paragraph (g) of Article 278[263] of
the Labor Code have been largely viewed as intrusive and an arbitrary exercise of
police power. The Secretary of Labor and Employment is provided with very wide
latitude of discretion to prevent an impending strike or lockout or to stop an ongoing
‘strike or lockout by assuming jurisdiction over a labor dispute, which according to
his/her own opinion, involve an “industry indispensable to national interest.” This
overbroad discretion has seen labor disputes in an undergarment factory, match sticks
manufacturing, hotdog, chicha-corn and fish sauce factory being assumed by the
Secretary of Labor after his determination that these industries are indispensable to
the national interest.

Under paragraph (g) of Article 278[263], the State restrains the exercise of the
right to strike or lockout and direct workers to return to work and the management to
accept the striking workers under the same terms and conditions. Defiance of a return
to work order or non-compliance with the procedural requirement for the conduct of a
strike/lockout is a prohibited act under paragraph (a) of Article 279[264] that may result
in loss of employment for union officers who knowingly participate in an illegal strike,
including any worker who knowingly participate in the commission of illegal acts.
Additionally, paragraph (a) of Article 287[272] imposes a fine of not less than Php1,000
nor more than Php10,000 and/or imprisonment of not less than three months nor more
than three years, or both fine and imprisonment, at the discretion of the Court, for
violation of any of the provisions of Article 264.

In this regard, both the ILO and the US Trade Representatives have observed
that the penalties of loss of employment, fine and imprisonment for administrative non-
compliance is disproportionate to the procedures laid down for notices of strike and on
cooling-off periods, the absence of which would make the strike illegal

Beginning July 2010, the Department of Labor and Employment (DOLE)
implemented clear procedures and criteria for the exercise of the Secretary's
assumption of jurisdiction power through a tripartite-supported department orders
(Department Order No. 40-G-10, Series of 2010 and Department Order No. 40-H-13,
Series of 2013). Under these issuances, the “indispensable to the national interest”
criteria for assumption of jurisdiction was aligned with the ILO criteria of “essential
services.” Through this, the Constitutional mandate to use voluntary modes in dispute
settlement through conciliation-mediation was expansively used and the institution of
collective bargaining was strengthened. This has resulted in annual single digit actual
strikes from July 2010 to June 2016 ushering relative industrial peace in the
workplaces. According to the National Conciliation and Mediation Board (NCMB), from
July 2010 to June 2016, there were 20 actual strikes, 22 assumed cases and 43
certified to the NLRC while the July 2004 to June 2010 labor relations data showed 69


actual strikes, 140 assumed cases and 145 certified to the NLRC for compulsory
arbitration.

Thus, the proposed bill seeks to amend Article 278[263], 279[264] and 287[272]
of the Labor Code to rationalize government interventions in labor disputes by: (a)
adopting the essential services criteria, i.e., functions or services which if interrupted
would endanger the life, personal safety or health of whole or part of the population,
in the exercise of the assumption or certification power of the Secretary of Labor and
Employment, (b) providing clear conditions in its exercise, (c) requiring minimum
service or operation in case an assumption order will issue, (d) decriminalizing non-
compliance with the procedural requirements in the exercise of the right to strike, (e)
providing fines for violation by employer, labor organization, or corporation, and (f)
providing a procedure for prosecution of criminal acts committed during a strike or
lockout.

The immediate passage of this bill is earnestly sought.

w/e

HON. EDUARDO “BRO. EDDIE” C. VILLANUEVA



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. eeu

Introduced by CIBAC Party-List Representatives
Eduardo “Bro. Eddie” C. Villanueva and Domingo C. Rivera

AN ACT RATIONALIZING GOVERNMENT INTERVENTIONS IN
LABOR DISPUTES BY ADOPTING THE ESSENTIAL SERVICES
CRITERIA IN THE EXERCISE OF THE ASSUMPTION OR
CERTIFICATION POWER OF THE SECRETARY OF LABOR AND
EMPLOYMENT, AND DECRIMINALIZING VIOLATIONS THEREOF,
AMENDING FOR THE PURPOSE ARTICLES 278[263], 279[264] and
287[272] OF PRESIDENTIAL DECREE 442, OTHERWISE KNOWN AS
THE LABOR CODE OF THE PHILIPPINES, AS AMENDED AND FOR
OTHER PURPOSES

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

SECTION 1. Article 278 [263] of the Labor Code is hereby amended to read as follows:
“Article 278 [263]. Strikes, picketing and lockouts. —

a) It is the policy of the State to encourage free trade unionism and free collecting
bargaining.

b)

Workers shall have the right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection. The right of
legitimate labor organizations to strike and picket and of employers to lockout
[, consistent with the national interest,] shall continue to be recognized and
respected. However, no labor union may strike and no employer may declare
a lockout on grounds involving inter-union and intra-union disputes.


c) In case of bargaining deadlocks, the duly certified or recognized bargaining
agent may file a notice of strike or the employer may file a notice of lockout with
the [Ministry] DEPARTMENT OF LABOR AND EMPLOYMENT at least 30 days
before the intended date thereof. In cases of unfair labor practice, the period of
notice shall be 15 days and in the absence of a duly certified or recognized
bargaining agent, the notice of strike may be filed by any legitimate labor
organization in behalf of its members. However, in case of dismissal from
employment of union officers duly elected in accordance with the union
constitution and by-laws, which may constitute union busting where the
existence of the union is threatened, the 15 day cooling-off period shall not
apply and the union may take action immediately.

d) The notice must be in accordance with such implementing rules and regulations
as the [Minister] SECRETARY of Labor and Employment may promulgate.

e)

During the cooling-off period, it shall be the duty of the [Ministry] DEPARTMENT
OF LABOR AND EMPLOYMENT to exert all efforts at the mediation and
conciliation to effect a voluntary settlement. Should the dispute remain
unsettled until the lapse of the requisite number of days from the mandatory
filing of notice, the labor union may strike or the employer may declare a
lockout.

f) Adecision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned, obtained by secret ballot in
meetings or referenda called for that purpose. A decision to declare a lockout
must be approved by a majority of the board of directors of the corporation or
association or of the partners in a partnership obtained by secret ballot in a
meeting called for that purpose. The decision shall be valid for the duration of
the dispute based on substantially the same grounds considered when the
strike or lockout vote was taken. The [Ministry] DEPARTMENT OF LABOR
AND EMPLOYMENT may its own initiative or upon the request of any affected
party, supervise the conduct of the secret balloting. In every case, the union or
the employer shall furnish the [Ministry] DOLE the results of the voting at least
seven days before the intended strike or lockout, subject to the cooling-off
period herein provided

When [in his opinion] there exists a labor dispute causing or likely to cause a
strike or lockout in an industry [indispensable to the national interest,)
ENGAGED IN ESSENTIAL SERVICES, the Secretary of Labor and
Employment may assume jurisdiction over the dispute, PROVIDED, THAT ANY
OF THE FOLLOWING CONDITIONS IS PRESENT:

9)

14. BOTH PARTIES HAVE REQUESTED THE SECRETARY OF LABOR
AND EMPLOYMENT TO ASSUME JURISDICTION OVER THE LABOR
DISPUTE; OR

2. UPON REQUEST OR PETITION BY EITHER PARTY, OR MOTU
PROPRIO ON THE PART OF THE SECRETARY OF LABOR AND
EMPLOYMENT, PROVIDED, THAT A CONFERENCE CALLED BY


h)

THE OFFICE OF THE SECRETARY ON THE PROPRIETY OF ITS
ISSUANCE HAS BEEN CONDUCTED.

IN SUCH CASE, THE SECRETARY OF LABOR AND EMPLOYMENT MAY
DECIDE OR CERTIFY THE LABOR DISPUTE TO THE NATIONAL LABOR
RELATIONS COMMISSION FOR COMPULSORY ARBITRATION, OR TO A
VOLUNTARY ARBITRATOR OR PANEL OF VOLUNTARY ARBITRATORS.

SAID ASSUMPTION SHALL HAVE THE EFFECT OF AUTOMATICALLY
ENJOINING AN IMPENDING STRIKE OR LOCKOUT. IF A
STRIKE/LOCKOUT HAS ALREADY TAKEN PLACE AT THE TIME OF
ASSUMPTION, ALL STRIKING OR LOCKED OUT EMPLOYEES AND OTHER
EMPLOYEES SUBJECT OF THE NOTICE OF STRIKE OR LOCKOUT SHALL.
IMMEDIATELY RETURN TO WORK AND THE EMPLOYER SHALL
IMMEDIATELY RESUME OPERATIONS AND READMIT ALL EMPLOYEES
UNDER THE SAME TERMS AND CONDITIONS PREVAILING BEFORE THE
STRIKE OR LOCKOUT.

ESSENTIAL SERVICES REFER TO FUNCTIONS OR _ SERVICES
RENDERED BY AN ESTABLISHMENT, WHICH IF INTERRUPTED, WOULD
ENDANGER THE LIFE, PERSONAL SAFETY OR HEALTH OF WHOLE OR
PART OF THE POPULATION. FOR THIS PURPOSE, THE SECRETARY OF
LABOR AND EMPLOYMENT, BY APPROPRIATE REGULATIONS, SHALL
DETERMINE THE INDUSTRIES ENGAGED IN ESSENTIAL SERVICES
AFTER CONSULTATIONS WITH THE NATIONAL TRIPARTITE INDUSTRIAL
PEACE COUNCIL.

IN LABOR DISPUTES AFFECTING INDUSTRIES ENGAGED IN ESSENTIAL
SERVICES, IT SHALL BE THE DUTY OF THE UNION AND EMPLOYER TO.
PROVIDE AND MAINTAIN THE OPERATION OR DELIVERY OF SERVICES.
IN CASE OF HOSPITALS, CLINICS OR MEDICAL INSTITUTIONS, THE
UNION AND EMPLOYER SHALL PROVIDE AND MAINTAIN AN EFFECTIVE
AND FUNCTIONAL WORKFORCE, WHOSE MOVEMENT AND SERVICES
SHALL BE UNHAMPERED AND UNRESTRICTED, AS ARE NECESSARY TO
ENSURE THE PROPER AND ADEQUATE PROTECTION OF THE LIFE,
PERSONAL SAFETY AND HEALTH OF THEIR PATIENTS, MOST
ESPECIALLY EMERGENCY CASES, FOR THE DURATION OF THE LABOR
DISPUTE.

WITHIN FIVE (5) DAYS FROM THE ISSUANCE OF THE ASSUMPTION OR
CERTIFICATION ORDER, A PRELIMINARY CONFERENCE OR HEARING
SHALL IMMEDIATELY BE CONDUCTED BY THE OFFICE OF THE
SECRETARY OF LABOR AND EMPLOYMENT, THE NATIONAL LABOR
RELATIONS COMMISSION, OR THE VOLUNTARY ARBITRATOR OR
PANEL OF VOLUNTARY ARBITRATORS AS THE CASE MAY BE.

IN CASE OF ACTUAL OR IMPENDING STRIKE OR LOCKOUT IN
INDUSTRIES THAT ARE NOT ENGAGED IN ESSENTIAL SERVICES, THE
SECRETARY OF LABOR AND EMPLOYMENT MAY ASSUME
JURISDICTION UPON JOINT REQUEST OF BOTH PARTIES IN THE LABOR
DISPUTE AFTER EXHAUSTION OF MANDATORY CONCILIATION. EITHER


OR BOTH PARTIES MAY ALSO OPT TO SUBMIT TO COMPULSORY OR
VOLUNTARY ARBITRATION.

THE FOREGOING NOTWITHSTANDING, THE PRESIDENT OF THE
PHILIPPINES SHALL NOT BE PRECLUDED FROM DETERMINING
INDUSTRIES THAT ARE ENGAGED IN ESSENTIAL SERVICES, AND FROM
INTERVENING AT ANY TIME AND ASSUMING JURISDICTION OVER ANY
LABOR DISPUTE IN ORDER TO SETTLE OR TERMINATE THE SAME
DURING SEVERE NATIONAL EMERGENCIES.

SECTION 2. Article 279 [264] of the Labor Code is hereby amended to read as follows:

“Article 279 [264]. Prohibited Activities.-

a) No labor organization or employer shall declare a strike or lockout without first
having bargained collectively in accordance with Title VII of this Book or
without first having filed the notice required in the preceding Article or
without the necessary strike or lockout vote first having been obtained and
reported to the [Ministry] DEPARTMENT OF LABOR AND EMPLOYMENT.

No strike or lockout shall be declared after assumption of jurisdiction by the
President or the [Minister] SECRETARY or after certification or submission of
‘the dispute to compulsory or voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or lockout.

Any worker whose employment has been terminated as a consequence of
[any unlawful] AN ILLEGAL lockout shall be entitled to reinstatement with full
backwages. Any WORKER OR union officer who knowingly participates [in
an illegal strike and any worker or union officer who knowingly participates] in
the commission of [illegal] UNLAWFUL acts during a strike may be declared
to have lost his/HER employment AFTER DUE PROCESS. [Provided, That]
Mere participation of a worker OR UNION OFFICER in a [lawful] strike
DECLARED ILLEGAL FOR FAILURE OF THE UNION TO COMPLY WITH
PROCEDURAL REQUIREMENTS UNDER PARAGRAPH (A) OF THIS
ARTICLE, shall not [constitute sufficient] BE A ground for termination of his
OR HER employment, even if a replacement had been hired by the employer
during such [lawful] ILLEGAL strike.

b) No person shall obstruct, impede, or interfere with, by force, violence,
coercion, threats or intimidation, any peaceful CONCERTED ACTION
INCLUDING picketing by employees during any labor controversy or in the
exercise of the right of self-organization or collective bargaining, or shalll aid
or abet such obstruction or interference.

°)

No employer shall use or employ any strike-breaker, nor shall any person be
employed as a strike-breaker.

c)

No public official or employee, including officers and personnel of the [New]
Armed Forces of the Philippines or the [Integrated] PHILIPPINE National
Police, or armed person, PRIVATE SECURITY GUARDS AND SIMILAR


PERSONNEL IN THE PRIVATE SECURITY AGENCY shall bring in,
introduce or escort in any manner, [any individual who seeks to replace
strikers in entering or leaving the premises of a strike area, or work in the
place of the strikers) REPLACEMENT WORKERS. The police force shall
keep out of the picket lines unless actual violence or other criminal acts occur
therein[: Provided, That nothing herein shall be interpreted to prevent any
public officer from taking any measure necessary ] HOWEVER, THE
SECRETARY OF LABOR AND EMPLOYMENT OR THE NATIONAL LABOR
RELATIONS COMMISSION MAY SEEK THE ASSISTANCE OF LAW
ENFORCEMENT AGENCIES to maintain peace and order, protect life and
property, and/or enforce the law and legal orders.

e) No person engaged in picketing shall commit any act of violence, coercion or
intimidation or obstruct the free ingress to or egress from the employer's
premises for lawful purposes, or obstruct public thoroughfares.

SECTION 3. Article 287 [272] of the Labor Code is hereby amended to read as follows:

“Article 287 [272]. [Penalties] FINES.

a) Any person, EMPLOYER, LABOR ORGANIZATION OR CORPORATION
FOUND violating any of the provisions of Article 264 of this Code shall be
punished by a fine of not less than [one thousand pesos (P1,000.00] TEN
THOUSAND PESOS (P10,000.00) nor more than [ten thousand pesos
(P10,000.00)] ONE HUNDRED THOUSAND PESOS (P100,000.00) [and/or
imprisonment for not less than three months nor more than three (3) years,
or both such fine and imprisonment,] at the discretion of the [court]
NATIONAL LABOR RELATIONS COMMISSION. [Prosecution under this
provision shall preclude prosecution for the same act under the Revised Penal
Code, and vice versa}

b)

Upon the recommendation of the [Minister] SECRETARY of Labor and
Employment and the [Minister] Secretary of National Defense, foreigners who
violate the provisions of this Title shall be subject to immediate and summary
deportation by the [Commission on] BUREAU OF Immigration [and
Deportation] and shall be permanently barred from re-entering the country
without the special permission of the President of the Philippines.

°)

THE REGULAR COURTS SHALL HAVE JURISDICTION OVER ANY
CRIMINAL ACTION ARISING FROM VIOLATION OF ANY OF THE
PROVISIONS OF ARTICLE 264 OF THE LABOR CODE, AS AMENDED,
SUBJECT TO THE REQUIRED CLEARANCE FROM THE DEPARTMENT OF
LABOR AND EMPLOYMENT ON CASES ARISING OUT OF OR RELATED
TO ALABOR DISPUTE.

NO CRIMINAL PROSECUTION UNDER ARTICLE 264 MAY BE INSTITUTED
WITHOUT A FINAL JUDGMENT THAT AN ILLEGAL STRIKE OR LOCKOUT
HAS BEEN COMMITTED. THE PRESCRIPTIVE PERIOD OF THE CRIMINAL
OFFENSE SHALL BE CONSIDERED INTERRUPTED DURING THE
PENDENCY OF ADMINISTRATIVE PROCEEDINGS: PROVIDED,


©COVDHRON=

HOWEVER, THAT THE FINAL JUDGMENT IN THE SAID PROCEEDINGS
SHALL NOT BE BINDING IN THE CRIMINAL CASE NOR SHALL IT
CONSTITUTE AS AN EVIDENCE OF GUILT.
d) COMPLAINTS ON ACTS OR OMISSIONS OF THE PERSONNEL OF THE
PHILIPPINE NATIONAL POLICE OR THE ARMED FORCES OF THE
PHILIPPINES IN VIOLATION OF ARTICLE 264 OF THIS CODE SHALL BE
FILED WITH THE CONCERNED AGENCY, WITHOUT PREJUDICE TO THE
FILING OF THE APPROPRIATE CASES BEFORE THE OMBUDSMAN.

SECTION 4. Implementing Rules and Regulations. — Within sixty (60) days from
the effectivity of this Act, the Secretary of Labor and Employment, in consultation with
the relevant stakeholders, shall promulgate the necessary rules and regulations to
implement the provisions of this Act.

SECTION 5. Separability Clause. - If any part or provision of this Act is declared
unconstitutional or invalid, the remainder of this Act or the provisions not otherwise
affected shall remain valid and subsisting.

SECTION 6. Repealing Clause. - All laws, presidential decrees, proclamations,
executive orders, issuances, rules and regulations, or any part thereof, inconsistent
with the provisions of this Act are hereby repealed, amended or modified
accordingly.

SECTION 7. Effectivity. - This Act shall take effect fifteen (15) days after its complete

publication in the official gazette or in at least two (2) newspapers of national
circulation.

Approved,