ADR and Related Laws Part 1 - Introduction and Labor

ADR and Related
Laws: Part I
jos aguila grapilon
Dean, Philippine Law School
National President, Integrated Bar of the Philippines (19971999)
References
Lizares, E., Arbitration in the Philippines and the
Alternative Dispute Resolution Act of 2004 R.A. 9285
[2004]
PNP Legal Services, Legal Advisories, Katarungang
Pambarangay [July 2012]
Philippines-Canada Local Government Support Program
(LGSP), Katarungang Pambarangay: A Handbook
[2004]
Melencio-Herrera, A., Court Annexed Mediation - Making
it Work The Philippine Experience
Ponferrada, B., Court-Annexed Mediation in the First and
Second Level Trial Courts
U.P. Law Center, Answers to Bar Examination Questions
Sources
Philippine Mediation Center,
Frequently Asked Questions <
http://www.pmc.org.ph/faq-the-case-for-mediation.htm> [2014]
Mediation in the Court of Appeals
http://www.pmc.org.ph/mediation-in-the-court-of-appeals.htm
[2014]
Calimon, D.J., Philippine Dispute Resolution Center, Inc., The

Revised Rules on Court-Annexed Mediation and Judicial
Dispute
Resolution
<
http://www.pdrci.org/2011/09/18/the-revised-rules-on-courtannexed-mediation-and-judicial-dispute-resolution/
> [2011]
National Conciliation and Mediation Board,
Mediation <http://ncmb.ph/FAQ/CMFAQ.HTM >
Conciliation-
Introduction
Pertinent Laws
Alternative Dispute Resolution Act of 2004 (R.A.
No. 9285) and the Model Law on International
Commercial Arbitration adopted by the UNCITRAL
on 21 June 1985
The Arbitration Law (R.A. No. 876)
Construction Industry Arbitration Law (Executive
Order No. 1008)
Civil Code of the Philippines (R.A. No. 386), Arts.
2042 to 2046, in rel. to Arts. 2028 to 2041; Family
Code of the Philippines (E.O. No. 209), Art. 151
Introduction
Pertinent Laws
Labor Code of the Philippines (P.D. No. 442, as
amended), Arts. 260-263
Convention
on
the
Recognition
and
Enforcement of Foreign Arbitral Awards (New
York Convention of 1958)
World
Bank
Convention
creating
the
International Center for the Settlement of
Investment Disputes
Special Rules of Court on Alternative Dispute
Resolution (A.M. No. 07-11-08-SC)
Introduction
Pertinent Laws
Local Government Code of 1991 (R.A. No.
7160), Katarungang Pambarangay or Barangay
Justice System, Secs. 399-422
Second
Revised
Guidelines
for
the
Implementation of Mediation Proceedings (A.M.
No. 01-10-5-SC-PHILJA dated 16 October 2001)
Introduction
Methods or Forms of Alternative Dispute
Resolution
Arbitration
Mediation
Conciliation
Early-Neutral Evaluation
Mini-trial
Negotiation
Compromise
Any combination thereof
Introduction
Arbitration
A voluntary dispute resolution process in which
one or more arbitrators, appointed in accordance
with the agreement of the parties, or the Special
Rules of Court for Alternative Dispute Resolution,
resolve a dispute by rendering an award
Mediation
A voluntary process in which a mediator, selected
by the disputing parties, facilitates communication
and negotiation, and assist the parties in reaching
a voluntary agreement regarding a dispute
Introduction
Conciliation
A mild form of intervention by a neutral third
party who, relying on his persuasive expertise,
takes an active role in assisting parties by
trying to keep disputants talking, facilitating
other procedural niceties, carrying messages
back and forth between the parties, and
generally being a good fellow who tries to keep
things calm and forward-looking in a tense
situation
Introduction
Early Neutral Evaluation
An ADR process wherein parties and their
lawyers are brought together early in a pre-trial
phase to present summaries of their cases and
receive a nonbinding assessment by an
experienced, neutral person, with expertise in
the subject in the substance of the dispute
Introduction
Mini-Trial
A structured dispute resolution method in which
the merits of a case are argued before a panel
comprising senior decision makers with or
without the presence of a neutral third person
after which the parties seek a negotiated
settlement
Mediation-Arbitration or Med-Arb
A step dispute resolution process involving both
mediation and arbitration
Introduction
Negotiation
A process of submission and consideration of
offers until an acceptable offer is made and
accepted
The deliberation, discussion, or conference
upon the terms of a proposed agreement
Compromise
A contract whereby the parties, by making
reciprocal concessions, avoid a litigation or put
an end to one already commenced
Introduction
Why Arbitration?
Speedier
Less tedious and time-consuming
Less costly
Less painfully adversarial and confrontational
Accords parties a choice in the individuals who are to
decide their dispute
Individuals who have earned the communitys respect
and who need not be lawyers or judges
Any adverse decision ought to be more easily accepted
by the losing party
Confidentiality
Introduction
Drawbacks of Litigation
Costs, including filling and
(sometimes on a time-rate basis)
Delay
attorneys
fees
Not enough courts to handle growing number of cases

Summonses not speedily served
Infrequent resort to discovery procedures
Loose implementation of pre-trial rules
Continuous trials an exception rather than the rule
Limited period for rendering a decision more honored
in the breach than in compliance
Introduction
Drawbacks of Litigation
Animosity
Confronting witnesses face-to-face
Lack of Confidentiality
Court records are public documents to which the
public and the press have free access
Question
Decision
of
Acceptability
of
an
Adverse
Evokes skepticism when issued by a judge or a

collegial tribunal in which the losing party had no
hand in choosing
LaborManagement
Disputes
Construction
Contracts
Check-Clearing
Disputes
Barangay Justice
System
Court Diversion
http://www.barrattorneys.com/wp-content/uploads/2013/11/arbitration1.jpg
Areas of
Operation
Labor-Management
Disputes
Labor-Mgmt. Disputes
2010 Bar Examinations, Question II(A), Labor
Law (3%)
Q: Distinguish the terms conciliation, mediation
and arbitration.
A1: There is a DOLE official called a Conciliation
Mediator. He is an officer of the NCMB whose
principal function is to assist in the settlement and
disposition of labor-management disputes through
conciliation and preventive mediation. However, he
does
not
promulgate
decisions
that
settle
controversies about rights, which are demandable and
enforceable. The latter is called arbitration and is the
function of a labor arbiter or a voluntary arbitrator
Law (3%)
and arbitration
A2: CONCILIATION is the process of dispute
management whereby parties in dispute are brought
together for the purpose of:
Amicably settling the case upon a fair compromise
Determining the real parties in interest
Defining and simplifying the issues in the case
Entering into admissions or stipulations of facts and
Threshing out all other preliminary maters
2010 Bar Examinations, Question II(A),
Labor Law (3%)
Q: Distinguish the terms conciliation,
A2: In resolving labor disputes, this comes
before arbitration, as a mandatory process (i.e.,
mandatory
conciliation
and
mediation
conference in two settings after issuance and
service of summons)
See Sec. 8, Rule V, 2011 NLRC Rules of Procedure
2010 Bar Examinations, Question II(A),
Labor Law (3%)
Q: Distinguish the terms conciliation,
A2: MEDIATION is a voluntary process of
settling disputes whereby the parties elect a
mediator to facilitate the communication and
negotiation between the parties in dispute for
the purpose of assisting them in reaching a
compromise
Law (3%)
and arbitration
A2: ARBITRATION is a system of dispute settlement
that may be compulsory or voluntary, whereby the
parties are compelled by the government, or agree to
submit their dispute before an arbiter, with the
intention to accept the resolution of said arbiter over
the dispute as final and binding on them (Luzon
Development
Bank
v.
Association
of
Luzon
Development Bank Employees, 249 SCRA 162 [1995])
Law (3%)
and arbitration
A2: In this jurisdiction, compulsory arbitration in labor
disputes are submitted to a labor arbiter, whose
powers and functions are clearly defined under Article
217(a) of the Labor Code; whereas in voluntary
arbitration, the powers and functions of the voluntary
arbitrators elected to resolve the parties dispute
involve the interpretation and implementation of the
parties collective bargaining agreement, pursuant to
Articles 260-262 of the Labor Code
Legal Bases
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 mutual compliance therewith
to foster industrial peace (Sec. 3, Art.
XIII, 1987 Constitution)
Labor-Management
Disputes
Legal Bases
It is the policy of the State to promote the
primacy of free collective bargaining
and negotiations, including voluntary
arbitration,
mediation
and
conciliation, as modes of settling labor or
industrial disputes (Art. 211, par. (a), Labor
Code of the Philippines, as amended)
Grievance Machinery and Voluntary
Arbitration
The parties to a Collective Bargaining Agreement
(CBA) 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 CBA and those arising from the
interpretation or enforcement of company
personnel policies
Arbitration
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
CBA
Arbitration
For this purpose, parties to a CBA shall
name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators (PVA), or include in the
agreement a procedure for the selection
of such PVA, preferably from the listing of
qualified
Voluntary
Arbitrators
duly
accredited by the National Conciliation and
Mediation Board (NCMB)
Arbitration
In case the parties fail to select a PVA, the
NCMB shall designate the PVA, as may be
necessary, pursuant to the selection
procedure agreed upon in the CBA, which
shall act with the same force and effect as
if the P/VA has been selected by the parties
as described above (Art. 260, LCP, as
amended)
Jurisdiction of PVA
The PVA shall have original and exclusive
jurisdiction to hear and decide all
unresolved grievances arising from the
interpretation or implementation of the CBA
and those arising from the interpretation or
enforcement of company personnel policies
referred to in the immediately preceding
article
Jurisdiction of PVA
Accordingly, violations of a CBA, except
those which are gross in character, shall no
longer be treated as unfair labor practice
and shall be resolved as grievances under
the CBA
For purposes of this article, gross violations
of a CBA shall mean flagrant and/or
malicious refusal to comply with the
economic provisions of such agreement
In
diagram:
Jurisdiction of PVA
The National Labor Relations Commission
(NLRC), its Regional Offices and the
Regional Directors of the Department of
Labor and Employment (DOLE) shall not
entertain disputes, grievances or matters
under the exclusive and original jurisdiction
of the PVA and shall immediately dispose
and refer the same to the Grievance
Machinery or Voluntary Arbitration provided
in the CBA (Art. 261, LCP, as amended)
Jurisdiction of PVA over other Labor
Disputes
The PVA, upon agreement of the parties,
shall also hear and decide all other labor
disputes including unfair labor practices
and bargaining deadlocks (Art. 262, LCP, as
amended)
Procedures before the PVA
The PVA shall have the power to hold hearings, receive
evidence 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 PVA
Hearing may be adjourned for cause or upon agreement
by the parties
Procedures
Unless the parties agree otherwise, it shall be
mandatory for the PVA 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 PVA 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
Procedures
Upon motion of any interested party, the PVA or
the Labor Arbiter in the region where the
movant resides, in case of the absence or
incapacity of the PVA, for any reason, may issue
a writ of execution requiring either the sheriff of
the NLRC or regular courts or any public official
whom the parties may designate in the
submission agreement to execute the final
decision, order or award (Art. 262-A, LCP, as
amended)
Again, PVA have original and exclusive
jurisdiction to hear and decide:
All unresolved grievances arising from the
interpretation
and
implementation
or
enforcement of the CBA and company
personnel policies
All other labor disputes, upon agreement of the
parties, including unfair labor practice and
bargaining deadlocks
Even those over which the Labor Arbiter (LA) has
original and exclusive jurisdiction
Violations of a CBA, except those which are
gross in character, are no longer treated as
unfair labor practices
A gross violation of the CBA shall mean flagrant
and/or malicious refusal to comply with the
economic provisions of such agreement
Violation of a CBA are to be resolved instead

as grievances under it
Compulsory Arbitration: Assumption of
Jurisdiction or Certification
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 (SOLE) may
assume jurisdiction over the dispute and
decide it or certify the same to the NLRC
for compulsory arbitration
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-towork and the employer shall immediately
resume operations and readmit all workers under
the same terms and conditions prevailing before
the strike or lockout
The SOLE or the NLRC 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
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
Before or at any stage of the compulsory
arbitration process, the parties may opt to
submit
their
dispute
to
voluntary
arbitration
The SOLE, the NLRC or the PVA shall decide
or resolve the dispute, as the case may be
The decision of the President, the SOLE, the
NLRC or the PVA shall be final and
executory ten (10) calendar days after
receipt thereof by the parties (Art. 263,
LCP, as amended)
No strike or lockout may be declared on
issues brought to voluntary or compulsory
arbitration (Omnibus Rules Implementing
the Labor Code, Book V, Rule XXII, Sec. 1)
A notice of strike, or the strike itself, is
illegal if it fails to exhaust all steps in the
grievance
machinery
and
arbitration
proceedings in the CBA
Jurisdiction over Termination Disputes
Except as otherwise provided in the LCP,
Labor Arbiters (LA) have original and
exclusive jurisdiction to hear and decide
termination disputes (Art. 217, LCP)
What is the exception?
Parties can provide that termination
disputes shall be resolved through the
grievance machinery established in their
CBA
Even then, despite the existence of a grievance
machinery in a CBA that covers employment
termination disputes, the parties may further
refer a termination dispute to voluntary
arbitration implicitly:
By actively participating in the voluntary
arbitration proceeding or
By failing to insist that the dispute be resolved
under the grievance machinery
Are Labor Arbiters ousted of their jurisdiction
over termination disputes if parties to a
CBA provide that the same shall be
resolved through the grievance machinery?
In San Miguel Corp. v. NLRC, 255 SCRA 133
(1996), a provision in the CBA stated that:
wages, hours of work, conditions of
employment
and/or
employeremployee relations shall be settled
by arbitration
The Court held that this was not sufficient
to remove termination disputes and unfair
labor practice disputes from the jurisdiction
of labor arbiters, and transfer them to
voluntary arbitrators
Rather, the CBA must state in unequivocal
language that [the parties] conform to the
submission of termination disputes and
unfair
labor
practices
to
voluntary
arbitration
Without such express language the parties
cannot arrogate unto the powers of the
voluntary arbitrators the original and
exclusive jurisdiction of Labor Arbiters over
unfair labor practices, termination disputes,
and claims for damages
In a subsequent case, also involving SMC, the
CBA provided more explicitly that:
Any and all disputes, disagreements
and controversies of any kind between
the COMPANY and the UNION and/or the
workers involving or relating to wages,
hours
of
work,
conditions
of
employment and/or employer/employee
relations arising during the effectivity
of this Agreement or any renewal
thereof, shall be settled by arbitration
The Court ruled that it will not sanction
the disregard of the legal requirements
imposed purposely to carry out the state
policy of promoting voluntary modes of
settling disputes
The Court also ruled that any strike
without a prior recourse to arbitration is
illegal and may be enjoined by injunction
For comparison:
Ergo, it is not sufficient to merely say that
the parties to the CBA agree on principle
that all disputes should first be submitted
to a Voluntary Arbitrator
There is need for an express stipulation
that illegal termination disputes should be
resolved by a PVA, since the same fall
within a special class of disputes that are
generally within the exclusive original
jurisdiction of Labor Arbiters by express
provision of law
Absent such express stipulation, the phrase
all disputes should be construed as
limited to the areas of conflict traditionally
within
the
jurisdiction
of
Voluntary
Arbitrators (Vivero v. CA, 344 SCRA 268
[2000])
Note, therefore, that the rule, that jurisdiction is
conferred by law and not subject to the will of the
parties, applies with less rigor in labor cases
In Atlas Farms, Inc. v. NLRC, 392 SCRA 128
(2002), the Court ruled that only
[termination] disputes involving the union
and the company shall be referred to the
grievance
machinery
or
voluntary
arbitrators
Atlas Farms is good authority for the
proposition that since the employees
concerned sought without success to avail
of the grievance procedure because the
employer failed to take steps to convene the
grievance machinery and there was already
actual termination, with alleged violation of
the employees rights, then their suit for
illegal
dismissal
was
properly
cognizable by the labor arbiter
What is the remedy of the employer if the
Labor Arbiter refuses to dismiss an illegal
dismissal case filed by an employee
against the employer that under the
explicit terms of their CBA should be
referred to voluntary arbitration?
Before, while Sec. 3 of Rule III (now Sec. 5, Rule
V) of the NLRC Rules of Procedure allows the
employer to file a motion to dismiss the
complaint for lack of jurisdiction, it prohibits a
petition for certiorari, mandamus or prohibition
The employers only remedy is to raise the lack
of jurisdiction in the preliminary conference and
in its position papers and, in the event of an
adverse decision by the LA, raise this issue
before the NLRC on appeal of the main case
This is unlike the rule in regular courts,
where a Regional Trial Courts erroneous
refusal to refer a case to arbitration may be
contested and set aside in a petition for
certiorari before the Court of Appeals
Nonetheless, Rule XII of the 2011 NLRC
Rules of Procedure now allow a party
aggrieved by any order or resolution of the
LA to file a verified petition to annul or
modify such order or resolution
The moment the SOLE assumes jurisdiction
over a labor dispute in an industry
indispensable to national interest, such
assumption shall have the effect of
automatically enjoining the intended
strike or lockout
It is not necessary for the SOLE to issue
another order directing the striking
employees to return to work
The mere issuance of an assumption
order by the SOLE automatically carries
with it a return-to-work order, even if
the directive to return to work is not
expressly stated in the assumption order
(Telefunken Semiconductors Employees
Union-FFW, et al. v. CA, et al., 348 SCRA
565 [2000])
When the SOLE assumes jurisdiction over a
dispute in the contemplation of Art. 263 (g) or
certifies such dispute to the NLRC for compulsory
arbitration, not only the SOLE but also the
arbitrators of the NLRC to whom the matter has
been certified are under Art. 263 (g) empowered
to resolve all questions and controversies arising
therefrom including cases otherwise belonging
originally and exclusively to the Labor Arbiter
See Rule VIII of the 2011 NLRC Rules of Procedure on
Certified Cases
The judicial inquiry into the arbitral award
of the SOLE is limited to determining
whether it was reasonable in the light of
the parties positions and the evidence they
presented, or whether or not the SOLE
committed grave abuse of discretion
(MERALCO v. Quisumbing, 302 SCRA 173
[1999])
Preventive Mediation
Aside from compulsory arbitration, the LCP
provides
the
remedy
of
preventive
mediation through the NCMB, which is
mandated to:
Undertake all efforts at mediation and
conciliation to enable the parties to settle
the dispute amicably
Encourage the parties to submit the
dispute to voluntary arbitration
The NCMB may recommend to the parties
that the notice of strike be treated as a
preventive mediation case, in which
case, the NCMB converts the notice of
strike into one for preventive mediation
This is especially true if the NCMB finds
that the real issues are non-strikeable
This conversion of the strike notice to one
of preventive mediation (conversion
order) has the effect of dismissing the
notice of strike, and renders any strike
undertaken in disregard of such conversion
order illegal at least during the pendency of
the preventive mediation proceedings
Although the NCMB has no coercive power
of injunction, any aggrieved party, such as
an employer faced with a strike made in
disregard of the conversion order, may
apply for an injunction with the National
Labor Relations Commission (NLRC) to stop
such illegal strike
Questions and Answers
What is the role of the NCMB in case a notice of
strike or lockout is filed?
Upon receipt of a valid notice of strike or
lockout, the NCMB, through its ConciliatorMediators, shall call the parties to a
conference the soonest possible time in order
to actively assist them to explore all
possibilities for amicable settlement
What is the role of the NCMB in case a notice of
strike or lockout is filed?
To this end, the Conciliator-Mediator may
suggest/offer proposals as an alternative
avenue
for
the
resolution
of
their
disagreement/conflict
which
may
not
necessarily bind the parties
In
the
event
of
failure
in
conciliation/mediation the parties shall be
encouraged to submit their dispute for
Who can avail of the services of the NCMB?

Any party to a labor dispute, either the union or
management, may seek the assistance of NCMB or
any of its Regional Branches by means of formal
request
for
conciliation
and
preventive
mediation
Depending on the nature of the problem, a request
may be filed in the form of consultation, notice of
preventive mediation or notice of strike/lockout
What are the valid issues for a Notice of
Strike/Lockout or Preventive Mediation Case?
A notice of strike or lockout maybe filed on
ground of unfair labor practice acts, gross
violation of the CBA, or deadlock in collective
bargaining
A complaint on any of the above ground must be
specified in the NCMB Form or the proper form
used in the filing of complaint
What are the valid issues for a Notice of Strike/Lockout
or Preventive Mediation Case?
In case of preventive mediation, any issue may be
brought before the NCMB Central Office or its regional
offices for conciliation and possible settlement
through a letter
This method is more preferable than a notice of
strike/lockout
because
of
the
non-adversarial
atmosphere that pervades during the conciliation
conferences
Is conciliation and mediation still possible
during actual strike or lockout?
It is possible to subject an actual strike or
actual lockout to continuing conciliation and
mediation services
When the dispute has already been assumed or
certified to the NLRC, is it also possible to
remand the same to conciliation and
mediation services?
Yes, the parties are not precluded from
availing the services of an NCMB ConciliatorMediator as the duty to bargain collectively
subsists until the final resolution of all issues
involved in the dispute
When the dispute has already been assumed or
certified to the NLRC, is it also possible to
remand the same to conciliation and
mediation services?
Conciliation is so pervasive in application
that, prior to a compulsory arbitration award,
the parties are encouraged to continue
to exhaust all possible avenues of
mutually
resolving
their
dispute,
especially through conciliation and mediation
What is the role of the conciliator-mediator?
To facilitate the negotiation of the conflicting
parties in order to bring about an amicable
settlement
The presence of this neutral third party is
crucial as it can serve to prevent breakdowns
in communication, outbursts of hostility
between the negotiators, and may even
encourage concentration on the substantive
issues in dispute
When a dispute subject of a Notice of Strike is
forthwith treated as a preventive mediation
case, may the union later on stage a strike on
account of the same dispute?
No. Once the dispute has been converted
into a preventive mediation case, the notice
of strike is deemed dropped from the dockets
as if no notice of strike has been filed
When a dispute subject of a Notice of Strike is
forthwith treated as a preventive mediation
case, may the union later on stage a strike on
account of the same dispute?
Since there is no more notice of strike to
speak of, any strike subsequently staged by
the union is deemed not to have complied
with the requirements of a valid strike
The same rule applies in the case of lockout
by an employer (PAL vs. SOLE)
Who has the duty to declare that the Notice of
Strike/Lockout has been converted into a
preventive mediation case?
Upon
the
recommendation
of
the
Conciliator/Mediator
handling
the
labor
dispute, the Director of the Regional Branch
of the NCMB which has jurisdiction over the
labor dispute has the duty:
Who has the duty to declare that the Notice of
Strike/Lockout has been converted into a
preventive mediation case?
To declare and inform the parties that the
issues raised or the actual issues involved are
not proper subjects of a Notice of Strike or
Lockout and
That the Notice of Strike or Lockout has been
converted into a Preventive Mediation Case
without prejudice to further conciliation or upon
the request of either or both parties
May a labor dispute subject of a Notice of Strike
or Lockout, mature into a voluntary
arbitration case?
Yes. By mutual agreement, the parties may
decide to bring the matter for resolution
before an accredited voluntary arbitrator of
their own choice, in which case the Notice is
deemed automatically withdrawn and
dropped from the dockets
Who has jurisdiction to determine the legality of
a strike or lockout?
In general, the LA in the appropriate
Arbitration Branch of the NLRC has the power
to determine questions involving the legality
or illegality of a strike or lockout upon the
filing of a proper complaint and after due
hearing
Who has jurisdiction to determine the legality of
a strike or lockout?
Where the matter of legality or illegality of
strike is raised in the dispute over which the
SOLE assumed jurisdiction or in disputes
certified by the SOLE to the NLRC for
compulsory arbitration, the same may be
resolved by the SOLE or the NLRC,
respectively (International Pharmaceuticals,
Inc. vs. Secretary of Labor and Associated
Labor Union, GR. No. 92981-83, Jan. 9, 1992)
May a PVA determine the legality of a strike or
lockout?
If the issue is voluntarily and jointly
submitted by the parties to voluntary
arbitration, the question may be resolved by
the voluntary arbitrator or panel of voluntary
arbitrators
May a strike or lockout be enjoined/prevented
by legal process?
As a general rule, strikes and lockouts validly
declared enjoy the protection of law and
cannot be enjoined unless illegal acts are
committed or threatened to be committed in
the course of such strikes or lockouts
Ordinarily, the law vests in the NLRC the
authority to issue injunctions to restrain the
commission of illegal acts during strikes and
pickets
May a strike or lockout be enjoined/prevented
by legal process?
In national interest cases, the certification or
assumption of jurisdiction by the SOLE over
the dispute under Art. 263(g) of the LCP, has
the effect of automatically enjoining the
intended strike or lockout whether or not a
corresponding return to work order has been
issued
What is the extend of the power of the
President or the SOLE to issue Assumption or
Certification Orders?
The power to issue assumption and
certification orders is an extraordinary
authority strictly limited to national interest
cases and granted to the President or to the
SOLE, which can justifiably rest on his own
consideration of the exigency of the situation
in relation to the national interest
Pursuant to the provisions of Art. 263(g) of
the LCP, the SOLE is vested with the
discretionary power to decide not only the
question of whether to assume jurisdiction
over a given labor dispute or certify the same
to the NLRC, but also the determination of
the industry indispensable to national
interest
Under Art. 277(b) of the LCP, the SOLE may
suspend the effects of the termination
pending resolution of the dispute in the event
of a prima facie finding by the appropriate
official of the DOLE before whom such dispute
is pending that the termination may cause a
serious labor dispute or is in the
implementation of a mass lay-off
Under Art. 277(b) of the LCP, the SOLE may
suspend the effects of the termination
pending resolution of the dispute in the event
of a prima facie finding by the appropriate
official of the DOLE before whom such dispute
is pending that the termination may cause a
serious labor dispute or is in the
implementation of a mass lay-off
What is the nature of a Return-to-Work Order?
The return-to-work-order is a valid statutory
part and parcel of the assumption and
certification orders given the predictable
prejudice the strike could cause not only to
the
parties but more especially to the
national interest
The assumption of jurisdiction and the
certification to the NLRC has the effect of
automatically enjoining the strike or lockout,
whether actual or intended, even if the
same has not been categorically stated
or does not appear in the assumption or
certification order
It is not a matter of option or voluntariness
but of obligation
It must be discharged as a duty even against
the workers will
The worker must return to his job together
with his co-workers so that the operation of
the company can be resumed and it can
continue serving the public and promoting its
interest
It is executory in character and shall be
strictly complied with by the parties even
during the pendency of any petition
questioning their validity precisely to
maintain
the
status
quo
while
the
determination is being made (Union of Filipro
Employees vs. Nestle Philippines, Inc., GR No.
88710-13, December 19, 1990)
In sum, all labor

disputes may be
referred to voluntary
arbitration at any time
upon the agreement of
the parties!
Employment Disputes in Private Schools
The Education Act of 1982 (B.P. Blg. 232)
provides in Sec. 32 that every private
school shall establish and implement an
appropriate system within the school for
the prompt and orderly settlement of
provisions of Arts. 262 and 263, LCP
It is reinforced by Sec. 97 of the Manual of
Regulations for Private Schools, which
provides that every private school shall
provide for amicable internal procedures
or remedies, including provisions for
voluntary arbitration, as a preferred
measure in the settlement of any issue,
dispute
or
grievance
arising
from
employment relations
Even in the absence of a CBA, therefore,
the grievance machinery prescribed in the
school manual is binding on school
employees, including teachers
If the school has entered into a CBA with its
employees, the CBA supersedes the
school manual:
In matters that are specifically covered by the
CBA or
In instances where the school manual is
inconsistent with the CBA
There is nothing that will prevent the
parties to a CBA from making disciplinary
actions taken by the school against its
employees, including termination disputes,
subject to the grievance machinery and, if
unresolved,
to
voluntary
arbitration,
thereby
taking
it
out
of
the
jurisdiction of the LA
It is important, however, that the parties use the
word shall and not merely the permissive
may which may not be enough to remove the
Labor Arbiters jurisdiction over such types of
cases (See Vivero v. CA, supra)
Subjects that may be considered within the
scope
of
the
grievance
machinery/procedure:
1. Unsatisfactory working conditions
2. Improper, tedious or laborious work
assignments
3. Faculty tools or equipment
4. Unsatisfactory personnel and/or work
processes
5. Improper placement and selection of
personnel
6. Arbitrary exercise of discretion
7. Inter-personal relationships
8. Policies, practices and procedure which
affect employees
9. Any and all matters giving rise to
employee dissatisfaction (Sarmiento,
Education Law and the Private Schools
[2002 ed.], citing the DECS Service Manual
2000)
Unless covered by the CBA or school
manual, it has been observed that disputes
arising from a disciplinary action imposed
by the school on its employees are not
considered
a
grievance
but
an
administrative disciplinary case
Pertinent Bar Examinations Questions and
Suggested Answers from 1994 to 2010
2007 Bar Examinations Question I, (a)
and (b) (5 pts.)
Q:
What
is
the
principle
of
codetermination?
A: The principle of codetermination is one
which grants to the workers the right to
participate in policy and decision-making
processes affecting their rights and benefits
(Art. 255, LC)
and (b) (5 pts.)
Q:
What
is
the
principle
of
codetermination?
1A: By the principle of codetermination, the
workers have a right to participate in the
decision-making process of employers on
matters affecting their rights and benefits,
through
collective
bargaining
agreements, grievance machineries,
voluntary modes of settling disputes
and conciliation proceedings mediated
by government
and (b) (5 pts.)
Q:
What
is
the
principle
of
codetermination?
2A: Codetermination is a term identified
with
workers
participation
in
the
determination of business policy. Under the
German model, the most common form of
codetermination, employees of some firms
are allocated control rights by law, in the
form of board seats
and (b) (5 pts.)
Q:
What
is
the
principle
of
codetermination?
2A: It is based on the conviction that
democratic legitimacy cannot be confined
to government but must apply to all sectors
of society. Besides corporate control rights,
the German system deals with dual
channels of representation of employees by
unions
(at
the
industry-wide,
and
macroeconomic
level)
and
workers
councils (at the firm level)
and (b) (5 pts.)
Q: What, if any, is the basis under the
Constitution for adopting it?
A: Art. XIII, Sec. 3 of the Constitution
guarantees labor their right to participate
in decision and policy-making processes
affecting their rights, duties and welfare
2007 Bar Examinations Question VII, (a)
and (b) (5 points)
Q: May the NLRC or the courts take
jurisdictional cognizance over compromise
agreements/settlements involving labor
matters?
A: No. Any compromise agreement,
including those involving labor standards
laws, voluntarily agreed upon by the
parties with the assistance of the Bureau or
the regional office of the DOLE, shall be
final and binding upon the parties...
and (b) (5 points)
Q: May the NLRC or the courts take
jurisdictional cognizance over compromise
agreements/settlements involving labor
matters?
A: The NLRC or any court shall not
assume jurisdiction over issues involved
therein except in case of non-compliance
thereof or if there is prima facie evidence
that the settlement was obtained through
fraud, misrepresentation, or coercion (Art.
227, LCP)
and (b) (5 points)
Q: How sacrosanct are statements/data
made at conciliation proceedings in the
DOLE? What is the philosophy behind your
answer?
A: It is sacrosanct as privileged
communication
information
and
statements at conciliation proceedings
cannot be used as evidence in the NLRC
and (b) (5 points)
Q: How sacrosanct are statements/data
made at conciliation proceedings in the
DOLE? What is the philosophy behind your
answer?
A: Conciliators and similar officials cannot
testify in any court or body regarding any
matter taken up at the conciliation
proceedings conducted by them (Art. 233,
LCP)
This is to enable the conciliator to ferret out all
the important facts of the controversy which the
parties may be afraid to divulge if the same can
and (b) (5 points)
Cf. Section 27, Rule 130 of the Revised
Rules on Evidence, that in civil cases, an
offer of compromise is not an admission of
any liability, and is not admissible in
evidence against the offeror. In criminal
cases or those allowed by law to be
compromised, an offer of compromise by
the accused may be received in evidence
as an implied admission of guilt
2007 Bar Examinations Question XIII (5
pts.)
Q: May a decision of the LA, which has
become final and executory be novated
through a compromise agreement of the
parties?
A: Yes. Although Art. 221 of the LCP
requires the LA to exert all efforts to
amicably settle the case before him on or
before the first hearing, it must be noted
that neither the LCP nor its IRR as well as
the NLRC Rules prohibit the amicable
settlement of cases during the pendency of
2007 Bar Examinations Question XIII (5
pts.)
Q: May a decision of the LA, which has
become final and executory be novated
through a compromise agreement of the
parties?
A: The established rule is that the
compromise agreements or amicable
settlement may still be made even after
the judgment has become final and
executory.
Settlement
of
cases
is
encouraged and authorized by law. Article
2040 of the Civil Code impliedly authorizes
2007 Bar Examinations Question XVII (5
pts.)
Q: P.D. No. 1508 requires the submission of
disputes before the Barangay Lupong
Tagapamayapa prior to the filing of cases
with the courts or other government
bodies. May this decree be used to defeat a
labor case filed directly with the Labor
Arbiter? Discuss fully.
A: No. Requiring conciliation of labor
disputes before the Barangay Lupong
Tagapamayapa would defeat the salutary
purposes of the law
2007 Bar Examinations Question XVII (5
pts.)
A:
Instead
of
simplifying
labor
proceedings
designed
at
expeditious
settlement or referral to the proper courts
or office to decide it finally, the conciliation
of the issues before the Barangay Lupong
Tagapamayapa would only duplicte the
conciliation proceedings and unduly delay
the disposition of labor cases. (Montoya v.
Escayo, 171 SCRA 446 [1989]). [See
Chapter VII, Articles 399 to 422 of the Local
Government Code of 1991 on Katarungang
Pambarangay]
2006 Bar Examinations Question VI, (2)
and (3) (10%)
Q: How should a wage distortion be
settled?
A: Any dispute arising from wage distortion
shall be resolved through the grievance
procedure as provided in the applicable
CBA and, if the dispute remains unresolved,
then through voluntary arbitration
and (3) (10%)
settled?
A: In cases where there are no CBAs or
recognized labor unions, the employers and
workers shall endeavor to correct such
wage distortions. Any dispute arising
therefrom shall be settled through the
NCMB and, if it remains unresolved after
ten (10) calendar days of conciliation, the
issue of wage distortion shall be referred to
the appropriate branch of the NLRC
and (3) (10%)
Q: Can the issue of wage distortion be
raised in a notice of strike? Explain.
A: In Ilaw ng Manggagawa v. NLRC, 198
SCRA 586 (1991), the Supreme Court held
that any issue involving wage distortion
shall not be a ground for a strike or lockout.
The legislative intent is to solve wage
distortion problems through voluntary
negotiation or arbitration
2003 Bar
(8%)
Examinations
Question
VIII
Q: The employer company, in a directive to the

union president, ordered the transfer of some
of its employees, including a number of union
officials, to its plant offices. The order was
opposed by the union. Ultimately, the union
filed an unfair labor practice against the
company alleging that the purported transfer of
its union officials was unjust and in violation of
the CBA. Pursuant to the terms of the CBA, the
dispute was referred to a voluntary arbitrator
who later ruled on the issues raised by the
parties. Could it later be validly asserted that
the decision of the voluntary arbitrator would
2003 Bar
(8%)
Examinations
Question
VIII
A: No. A voluntary arbitrator chosen under the

Grievance Machinery of a CBA can exercise
jurisdiction not only on disputes involving
interpretation/implementation of a CBA and/or
company rules, personnel policies (Art. 261,
LCP) but also, upon agreement of the parties,
all other labor disputes including unfair
labor practice (Art. 262, LCP)
2003 Bar Examinations Question VIII
(8%)
A: As no objection was raised by any of
the parties when the dispute was referred
to a voluntary abritrator who later ruled on
the issues raised by the parties, it follows
that what we have is voluntary arbitration
agreed upon by the parties. His decision is
binding upon the parties and may be
enforced through any of the sheriffs,
including those of the NLRC, he may
deputize
(8%)
A1: No. The award of voluntary arbitrators
acting within the scope of their authority
determines the rights of the parties, and
their decisions have the same legal effects
as a judgment of the Court. Such decisions
on matters of fact or law are conclusive,
and all matters in the award are
thenceforth res judicata on the theory that
the matter has been adjudged by the
tribunal which the parties have agreed to
make final as a tribunal of last resort
(Volkschel Labor Union v. NLRC, 98 SCRA
(8%)
cf. Jurisdiction is fixed by law and is not
subject to the agreement of the parties. It
cannot be acquired through or waived,
enlarged or diminished by, any act or
omission of the parties, neither can it be
conferred by the acquiescence of the
court (Reynaldo M. Lozano v. Hon. Eliezer
R. Delos Santos, et al., G.R. No. 125221,
June 19, 1997)
2002 Bar Examinations Question XVII,
(A) (3%)
resolved (1) in case there is a collective
bargaining agreement and (2) in case there
is none? Explain briefly.
A: According to Art. 124 of the LCP, in case
there is a CBA, a dispute arising from wage
distortions shall be resolved through the
grievance machinery provided in the CBA,
and if it remains unresolved, through
2002 Bar Examinations Question XVII,
(A) (3%)
resolved (1) in case there is a collective
bargaining agreement and (2) in case there
is none? Explain briefly.
A: In case there is no CBA, the employers
and workers shall endeavor to correct such
distortions. Any dispute arising therefrom
shall be settled through the NCMB and if it
remains unresolved after ten (10) calendar
days of conciliations, then the dispute is
referred to the appropriate branch of the
2009 Bar Examinations Question IX, (B)
(2%)
Q: What procedural remedies are open to
workers who seek correction of wage
distortion?
A: The procedural remedies of wage
distortion disputes are provided in Art. 242
of the Labor Code as follows:
Organized establishment follow the grievance
procedure as provided for in CBA, ending in
Unorganized establishments employer and
workers, with the aid of the NCMB shall endeavor
to correct the wage distortion, and if they fail, to
(2%)
Q: Jenson & Jenson (J & J) is a domestic
corporation engaged in the manufacturing
of consumer products. Its rank-and-file
workers organized the Jenson Employees
Union (JEU), a duly registered local union
affiliated with PAFLU, a national union.
After having been certified as the exclusive
bargaining agent of the appropriate
bargaining unit, JEU-PAFLU submitted its
proposals for a CBA with the company
(2%)
Q: In the meantime, a power struggle
occurred within the national union PAFLU
between its National President and its
National
Secretary
General.
The
representation issue within PAFLU is
pending resolution before the Office of the
Secretary of Labor. By reason of this intraunion dispute within PAFLU, J & J
obstinately refused to offer any counterproposal and to bargain collectively with
JEU-PAFLU until the representation issue
(2%)
Q: JEU-PAFLU filed a Notice of Strike. The
Secretary of Labor subsequently assumed
jurisdiction over the labor dispute.
Can the Secretary of Labor decide the labor
dispute by awarding the JEU [Jenson
Employees Union] CBA proposals as the
Collective Bargaining Agreement of the
parties? Explain Briefly.
(2%)
A: Yes. The SOLE can decide the labor
dispute by awarding the JEU CBA proposals
as the CBA of the parties because when the
SOLE (under Article 263[g]) assumes
jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an
industry indispensable to the national
interest, the SOLE exercises the power of
compulsory arbitration over the labor
dispute, meaning
(2%)
A: that as an exception to the general
rule, the SOLE now has the power to set or
fix wages, rates of pay, hours of work or
terms and conditions of employment by
determining what should be the CBA of the
parties (See Divine Word University vs.
Secretary of Labor, 213 SCRA 759)
Cf. The parties freedom of contract, so much so
that courts cannot stipulate for the parties or
amend the latter's agreement (NRDC v. All Asia
Bank Corp., G.R. No. 162523, Nov. 25, 2009)
2010 Bar Examinations Question XIX, (A)
(2%) and (B) (3%)
Q: Several employees and members of
Union A were terminated by Western Phone
Co. on the ground of redundancy. After
complying
with
the
necessary
requirements, the Union staged a strike
and picketed the premises of the company.
The management then filed a petition for
the Secretary of Labor and Employment to
assume jurisdiction over the dispute.
Without
the benefit of a hearing, the
Secretary issued an Order to assume
jurisdiction and for the parties to revert to
(2%) and (B) (3%)
A: YES. The Secretary of Labor and
Employment has plenary power to
assume jurisdiction under Article 263(g) of
the Labor Code. When in his opinion, there
exists a labor dispute causing or likely to
cause a strike or a lockout in an industry
indispensable to the national interest, the
Secretary of Labor may assume jurisdiction
over the dispute and decide it or certify it
to the NLRC for compulsory arbitration
(2%) and (B) (3%)
A: This extraordinary authority given to the
Secretary of Labor is aimed at arriving at a
peaceful and speedy solution to labor disputes,
without jeopardizing national interests (Steel
Corporation v. SCP Employees Union, 551 SCRA
594 [2008]) Such assumption shall have the
effect of automatically enjoining an impending
strike or lockout, or an order directing
immediate return to work and resume
operations, if a strike already took place, and
for the employer to re-admit all employees
under the same terms and conditions prevailing
(2%) and (B) (3%)
Q: Under the same set of facts the
Secretary instead issued an Order directing
all striking workers to return to work within
24 hours, except those who were
terminated due to redundancy. Was the
order legal? Explain
A: No. The Secretary of Labors order will be
inconsistent with the established policy of
the State of enjoining the parties from
performing acts that undermine the
underlying principles embodied in Article
(2%) and (B) (3%)
A: In this case, excepting the employees
terminated due to redundancy from those
who are required to return to work, which
was the very labor dispute that sparked the
union to strike, the Secretary of Labor
comes short of his duty under Article
263(g) to maintain status quo or the terms
and conditions prevailing before the strike.
In fact, the Secretary could be accused of
disposing of the parties labor dispute
without the benefit of a hearing, in clear
derogation of due process of law
2009 Bar Examinations Question VI, (A)
(2%)
Q: Management filed an action to declare the
strike illegal, contending that the union did not
observe the cooling-off period mandated by
the Labor Code. Rule on the contention.
A: The strike is illegal. The conduct of a strike
action without observing the cooling-off period
is a violation of the requirements of the law
The cooling-off periods required by Articles
263(c) and 263(f) of the Labor Code are to
enable the DOLE to exert efforts to amicably
settle the controversy But the Labor Code
also provides that if the dismissal constitutes
1999 Bar Examinations Question XII (3%)
Q: Can a final and executory judgment be
compromised under a Release and
Quitclaim for a lesser amount?
A: Yes, as long as the Release and
Quitclaim is signed by the very same
person entitled to receive whatever is to be
paid under the final and executory
judgment that was the subject of the
compromise agreement and that the
Release and Quitclaim was signed
voluntarily
Contra: In Alba Patio de Makati v. NLRC,
201 SCRA 355, a final and executory
judgment can no longer be altered, even if
the modification is meant to correct what is
perceived to be an erroneous conclusion of
fact or law, and regardless of whether the
modification is attempted to be made by
the court rendering it or by the highest
court of the land. Moreover, a final and
executory judgment cannot be negotiated,
hence,
any
act
to
subvert
it
is
contemptuous
Contra: A final and executory judgment
cannot be compromised under a Release
and Quitclaim if said Release and
Quitclaim is clearly to the grave
disadvantage of the affected employees by
paying them much lesser amounts than
what they were entitled to receive under
the judgment
1997 Bar Examinations Question 13
Q: State the cases when a labor dispute
would fall under the jurisdiction of
voluntary arbitrators or panel of voluntary
arbitrators.
A: A labor dispute falls under the
jurisdiction of a PVA if a labor dispute arises
from an unresolved grievance, which in
turn arises from the interpretation or
implementation of a CBA or of company
personnel policies. Upon agreement of
parties, a PVA may also hear and decide all
other labor disputes including unfair labor
1995 Bar Examinations Question 14, 1.
Q: What are the objectives of the SOLE in
certifying a labor dispute to the NLRC for
compulsory arbitration?
A: The objectives are to prevent a work
stoppage that may adversely affect the
national interest and to see to it that a
labor dispute is expeditiously settled
Q: Company X, a transportation company, and
Union Y were in the process of negotiating a
new CBA to replace the one which expired on
March 15, 1990. The negotiations reached an
impasse on economic issues on June 30, 1990.
The SOLE assumed jurisdiction over the dispute
and certified the same to the NLRC for proper
disposition. Proceedings before the NLRC ended
on December 15, 1990. The said decision made
retroactive to March 15, 1990 the new CBA
containing the issued resolved by the NLRC, as
well as those concluded and agreed upon by
the parties prior to their arriving at a deadlock
in their negotiations
Q:
Company
X
questioned
the
retroactivity of the CBA, alleging that the
same contravenes Art. 253-A of the Labor
Code, which provides for the automatic
retroactivity of the renewed CBA only if the
same is entered into within six (6) months
from its expiry date, and if not, the parties
must
agree
on
the
duration
of
retroactivity
Q: 1) Is Company Xs position correct?
A: 1) The Companys position is not correct.
In the absence of a specific provision of law
prohibiting retroactivity of the effectivity of
arbitral awards issued by the SOLE, the
same is deemed vested with plenary and
discretionary powers to determine the
effectivity thereof (St. Lukes Medical
Center, Inc. vs. Hon. Ruben O. Torres, et al.,
G.R. No. 99395, 29 June 1993, J. Melo, 222
SCRA 779)
Q: 2) Would your answer be different if the
assumption of jurisdiction by the Secretary
of Labor was at the request of Company X?
A: 2) No. Regardless of which party sought
the assumption by the SOLE, the effect
would be the same. An assumption case
gives the SOLE the plenary arbitration
powers to rule on the issues presented for
resolution, including the retroactivity of
the new CBA
End of Part I

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