Title VII-A the exclusive and original jurisdiction of the Voluntary
GRIEVANCE MACHINERY Arbitrator or panel of Voluntary Arbitrators and shall
AND VOLUNTARY ARBITRATION
Article. 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 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 parties fail to select a Voluntary Arbitrator or
panel of Voluntary Arbitrators, the Board shall designate
the Voluntary Arbitrator or panel of Voluntary
Arbitrators, as may be necessary, pursuant to the
selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same
force and effect as if the Arbitrator or panel of
Arbitrators has been selected by the parties as described
above.
Article. 261. Jurisdiction of Voluntary Arbitrators or
panel of Voluntary Arbitrators. - The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to 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. 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 mean 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
immediately dispose and refer the same to the
Grievance Machinery or Voluntary Arbitration provided
in the Collective Bargaining Agreement.
Article. 262. Jurisdiction over other labor disputes. -
The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including unfair
labor practices and bargaining deadlocks.
Article. 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
of the dispute, including efforts to effect a voluntary
settlement between parties.
All parties 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.
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.
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 after 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 either the sheriff of
the Commission or regular courts or any public official
whom the parties may designate in the submission
agreement to execute the final decision, order or award.
Article. 262-B. Cost of voluntary arbitration and
Voluntary Arbitrator’s fee. - The parties to a Collective
Bargaining Agreement shall provide therein a
proportionate sharing scheme on the cost of voluntary
arbitration including the Voluntary Arbitrator’s fee. The
fixing of fee of Voluntary Arbitrators, whether
shouldered wholly by the parties or subsidized by the
Special Voluntary Arbitration Fund, shall take into
account the following factors:
(a) Nature of the case;
(b) Time consumed in hearing the case;
(c) Professional standing of the Voluntary Arbitrator;
(d) Capacity to pay of the parties; and
(e) Fees provided for in the Revised Rules of Court.
*** *** ***
Title I
POLICY AND DEFINITIONS
Chapter I
POLICY
Article. 211. Declaration of Policy. - A. It is the policy
of the State: xxx xxx xxx
(g) 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. (As amended by
Section 3, Republic Act No. 6715, March 21, 1989).
ARTICLE XIII
LABOR
Section 3. The State shall afford full protection to labor,
local and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.
It shall guarantee 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. They shall be entitled to
security of tenure, humane conditions of work, and a
living wage. They shall also participate in policy and
decision-making processes affecting their rights and
benefits as may be provided by law.
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.
The State shall regulate the relations between workers
and employers, recognizing the right of labor to its just
share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to
expansion and growth.
Article 255. Exclusive bargaining representation and
workers’ participation in policy and decision-making. –
The labor organization designated or selected by the
majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of
the employees in such unit for the purpose of collective
bargaining. However, an individual employee or group
of employees shall have the right at any time to present
grievances to their employer.
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decision-
making processes of the establishment where they are
employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose,
workers and employers may form labor-management
councils: Provided, That the representatives of the
workers in such labor-management councils shall be
elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic
Act No. 6715, March 21, 1989).
Article. 277. Miscellaneous provisions. - xxx
xxx xxx
(g) The Ministry shall help promote and gradually
develop, with the agreement of labor organizations and
employers, labor-management cooperation programs at
appropriate levels of the enterprise based on the shared
responsibility and mutual respect in order to ensure
industrial peace and improvement in productivity,
working conditions and the quality of working life.
(Incorporated by Batas Pambansa Bilang 130, August
21, 1981).
(h) In establishments where no legitimate labor
organization exists, labor-management committees may
be formed voluntarily by workers and employers for the
purpose of promoting industrial peace. The Department
of Labor and Employment shall endeavor to enlighten
and educate the workers and employers on their rights
and responsibilities through labor education with
emphasis on the policy thrusts of this Code. (As
amended by Section 33, Republic Act No. 6715, March
21, 1989).
Voluntary Arbitration
Article. 262. Jurisdiction over other labor disputes. -
The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including unfair
labor practices and bargaining deadlocks.
Compulsory Arbitration
Article. 217. Jurisdiction of the Labor Arbiters and the
Commission. - (a) Except as otherwise provided under
this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by
the parties for decision without extension, even in the
absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-
agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms
of damages arising from the employer-employee
relations;
5. Cases arising from any violation of Article 264 of
this Code, including questions involving the legality of
strikes and lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration
as may be provided in said agreements. (As
amended by Section 9, Republic Act No. 6715,
March 21, 1989).
Assumption of Jurisdiction
Article. 263. Strikes, picketing and lockouts. - xxx
xxx xxx
(g) 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, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of
automatically enjoining the intended or impending
strike or lockout as specified in the assumption or
certification order. If one has already taken place at the
time of assumption or certification, all striking or
locked out employees shall immediately return-to-work
and the employer shall immediately resume operations
and readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission
may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with
such orders as he may issue to enforce the same.
In line with the national concern for and the highest
respect accorded to the right of patients to life and
health, strikes and lockouts in hospitals, clinics and
similar medical institutions shall, to every extent
possible, be avoided, and all serious efforts, not only by
labor and management but government as well, be
exhausted to substantially minimize, if not prevent,
their adverse effects on such life and health, through the
exercise, however legitimate, by labor of its right to
strike and by management to lockout. In labor disputes
adversely affecting the continued operation of such
hospitals, clinics or medical institutions, it shall be the
duty of the striking union or locking-out employer to
provide and maintain an effective skeletal workforce of
medical and other health personnel, whose movement
and services shall be unhampered and unrestricted, as
are necessary to insure the proper and adequate
protection of the life and health of its patients, most
especially emergency cases, for the duration of the
strike or lockout. In such cases, therefore, the Secretary
of Labor and Employment may immediately assume,
within twenty four (24) hours from knowledge of the
occurrence of such a strike or lockout, jurisdiction over
the same or certify it to the Commission for compulsory
arbitration. For this purpose, the contending parties are
strictly enjoined to comply with such orders,
prohibitions and/or injunctions as are issued by the
Secretary of Labor and Employment or the
Commission, under pain of immediate disciplinary
action, including dismissal or loss of employment status
or payment by the locking-out employer of backwages,
damages and other affirmative relief, even criminal
prosecution against either or both of them.
The foregoing notwithstanding, the President of the
Philippines shall not be precluded from determining the
industries that, in his opinion, are indispensable to the
national interest, and from intervening at any time and
assuming jurisdiction over any such labor dispute in
order to settle or terminate the same.
*** *** ***
Republic of the Philippines
Congress of the Philippines
Metro Manila
Eighth Congress
Republic Act No. 6971 November 22, 1990
AN ACT TO ENCOURAGE PRODUCTIVITY AND
MAINTAIN INDUSTRIAL PEACE BY
PROVIDING INCENTIVES TO BOTH LABOR
AND CAPITAL
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled::
Section 1. Short Title. - This Act shall be known as the
"Productivity Incentives Act of 1990".
Section 2. Declaration of Policy. - It is the declared
policy of the State to encourage higher levels of
productivity, maintain industrial peace and harmony and
promote the principle of shared responsibility in the
relations between workers and employers, recognizing
the right of labor to its just share in the fruits of
production and the right of business enterprises to
reasonable returns on investments and to expansion and
growth, and accordingly to provide corresponding
incentives to both labor and capital for undertaking
voluntary programs to ensure greater sharing by the
workers in the fruits of their labor.
Section 3. Coverage. - This Act shall apply to all
business enterprises with or without existing and duly
recognized or certified labor organizations, including
government-owned and controlled corporations
performing proprietary functions. It shall cover all
employees and workers including casual, regular,
supervisory and managerial employees.
Section 4. Definition of Terms. - As used in this Act:
a) "Business Enterprise" refers to industrial,
agricultural, or agro-industrial establishments
engaged in the production manufacturing,
processing, repacking, or assembly of goods,
including service-oriented enterprises, duly
certified as such by appropriate government
agencies.
b) "Labor-Management Committee" refers to a
negotiating body in a business enterprise
composed of the representatives of labor and
management created to establish a productivity
incentives program, and to settle disputes
arising therefrom in accordance with Section 9
hereof.
c) "Productivity Incentives Program" refers to a
formal agreement established by the labor-
management committee containing a process
that will promote gainful employment, improve
working conditions and result in increased
productivity, including cost savings, whereby
the employees are granted salary bonuses
proportionate to increases in current
productivity over the average for the preceding
three (3) consecutive years. The agreement shall
be ratified by at least a majority of the
employees who have rendered at least six (6)
months of continuous service.
Section 5. Labor-Management Committee. - a) A
business enterprise or its employees, through their
authorized representatives, may initiate the formation of
a labor-management committee that shall be composed
of an equal number of representatives from the
management and from the rank-and-file employees:
Provided, That both management and labor shall have
equal voting rights: Provided, further, That at the
request of any party to the negotiation, the National
Wages and Productivity Commission of the Department
of Labor and Employment shall provide the necessary
studies, technical information and assistance, and expert
advice to enable the parties to conclude productivity
agreements.
b) In business enterprises with duly recognized or
certified labor organizations, the representatives of
labor shall be those designated by the collective
bargaining agent(s) of the bargaining unit(s).
c) In business enterprises without duly recognized or
certified labor organizations, the representatives of
labor shall be elected by at least a majority of all rank-
and-file employees who have rendered at least six (6)
months of continuous service.
Section 6. Productivity Incentives Program. -
a) The productivity incentives program shall
contain provisions for the manner of sharing
and the factors in determining productivity
bonuses: Provided, That the productivity
bonuses granted to labor under this program
shall not be less than half of the percentage
increase in the productivity of the business
enterprise.
b) Productivity agreements reached by the
parties as provided in this Act supplement
existing collective bargaining agreements.
c) If, during the existence of the productivity
incentives program or agreement, the
employees will join or form a union, such
program or agreement may, in addition to the
terms and conditions agreed upon by labor and
management, be integrated in the collective
bargaining agreement that may be entered into
between them.
Section 7. Benefits and Tax Incentives. - (a) Subject to
the provisions of Section 6 hereof, a business enterprise
which adopts a productivity incentives program, duly
and mutually agreed upon by parties to the labor-
management committee, shall be granted a special
deduction from gross income equivalent to fifty percent
(50%) of the total productivity bonuses given to
employees under the program over and above the total
allowable ordinary and necessary business deductions
for said bonuses under the National Internal Revenue
Code, as amended.
b) Grants for manpower training and special studies
given to rank-and-file employees pursuant to a program
prepared by the labor-management committee for the
development of skills identified as necessary by the
appropriate government agencies shall also entitle the
business enterprise to a special deduction from gross
income equivalent to fifty per cent (50%) of the total
grants over and above the allowable ordinary and
necessary business deductions for said grants under the
National Internal Revenue Code, as amended.
c) Any strike or lockout arising from any violation of
the productivity incentives program shall suspend the
effectivity thereof pending settlement of such strike or
lockout: Provided, That the business enterprise shall not
be deemed to have forfeited any tax incentives accrued
prior to the date of occurrence of such strike or lockout,
and the workers shall not be required to reimburse the
productivity bonuses already granted to them under the
productivity incentives program. Likewise, bonuses
which have already accrued before the strike or lockout
shall be paid the workers within six (6) months from
their accrual.
d) Bonuses provided for under the productivity
incentives program shall be given to the employees not
later than every six (6) months from the start of such
program over and above existing bonuses granted by
the business enterprise and by law: Provided, That the
said bonuses shall not be deemed as salary increases
due the employees and workers.
e) The special deductions from gross income provided
for herein shall be allowed starting the next taxable year
after the effectivity of this Act.
Section 8. Notification. - A business enterprise which
adopts a productivity incentives program shall submit
copies of the same to the National Wages and
Productivity Commission and to the Bureau of Internal
Revenue for their information and record.
Section 9. Disputes and Grievances. - Whenever
disputes, grievances, or other matters arise from the
interpretation or implementation of the productivity
incentives program, the labor-management committee
shall meet to resolve the dispute, and may seek the
assistance of the National Conciliation and Mediation
Board of the Department of Labor and Employment for
such purpose. Any dispute which remains unresolved
within twenty (20) days from the time of its submission
to the labor-management committee shall be submitted
for voluntary arbitration in line with the pertinent of the
Labor Code, as amended.
The productivity incentives program shall include the
name(s) of the voluntary arbitrator or panel of voluntary
arbitrators previously chosen and agreed upon by the
labor-management committee.
Section 10. Rule Making Power. - The Secretary of
Labor and Employment and the Secretary of Finance,
after due notice and hearing, shall jointly promulgate
and issue within six (6) months from the effectivity of
this Act such rules and regulations as are necessary to
carry out the provisions hereof.
Section 11. Penalty. - Any person who shall make any
fraudulent claim under this Act, regardless of whether
or not a tax benefit has been granted, shall upon
conviction be punished with imprisonment of not less
than six (6) months but not more than one (1) year or a
fine of not less than two thousand pesos (P2,000.00) but
not more than six thousand pesos (P6,000.00), or both,
at the discretion of the Court, without prejudice to
prosecution for any other acts punishable under existing
laws.
In case of partnerships or corporations, the penalty shall
be imposed upon the officer(s) or employee(s) who
knowingly approved, authorized or ratified the filing of
the fraudulent claim, and other persons responsible
therefor.
Section 12. Non-Diminution of Benefits. - Nothing in
this Act shall be construed to diminish or reduced any
benefits and other privileges enjoyed by the workers
under existing laws, decrees, executive orders, company
policy or practice, or any agreement or contract between
the employer and employees.
Section 13. Separability Clause. - If any provision of
this Act is held invalid, any other provision not so
affected shall continue to be valid and effective.
Section 14. Repealing Clause. - Any law, presidential
decree, executive order, and letter of instruction, or any
part thereof, which is inconsistent with any of the
provisions of this Act is hereby repealed or amended
accordingly.
Section 15. Effectivity Clause. - This Act shall take
effect fifteen (15) days after its publication in the
Official Gazette or in at least two (2) national
newspapers of general circulation.
Approved: November 22, 1990