CHAPTER ONE

1.1 Introduction

Filipinos had long been suffering in trying to invoke its right since time
immemorial. When it comes to election whether in the form of political or industrial, they
become active in exercising its right to suffrage and in terms of their right to self-
organization, their joining of union including its right to disaffiliate. In the past decades
industrial elections attained comparable importance and its significance in every society
were already recognized. Compared to political elections, industrial elections such as
certification election, consent elections run-off elections or re-run elections often affects
an individual more deeply than the former do since these relates to the different aspects
of the voters life or his life as worker.

However, before these industrial elections became an important issue on the

part of the Filipino workers, the passing of labor laws particularly on labor relations was
the major problem in the past because there was no such law that exists even in the
early days of American occupation in the Philippines. The relations between labor and
capital wee governed more by existing provisions of the Civil and Penal Code in the
country. There were no laws prohibiting the birth and growth of labor unions.
Nevertheless, the American Administration discouraged the formation of labor unions
thinking them to be the breeding grounds for subversion and crimes against national
security.

1.2 Background of the Study

Based on History of Labor Union in the Philippines1, an unmistakable sign of the

forthcoming birth of the labor groupings in our country was already evident even before
the Philippines was overwhelmed by the Spaniards in 1565.

The system of work among natives at the time could be considered an important
and meaningful basis for the subsequent birth, organization and development of labor
groupings in the country.

The intense protest against the reactionary administration of Izquierdo (Rafael

de Izquierdo is the one who replaced Carlos Ma. Dela Torre, Governor-General 1869-
1871) was first demonstrated by the peasants in Cavite in the evening of January 20,
1872. The stirring and the threat of the workers in the fort were a blunt objection to the
very strict policy, the cruel administration, the heavy taxes imposed on the workers, and
the revocation of the liberal reforms of Dela Torre.

Chaos marked the succeeding uprising when, responding to Izquierdos orders,

Spanish soldier barged through the gates of the fort. The alignment of the strikers was
easily dismantled because of the unrestrained shooting by the guardias civiles. The
peasants fought back, but their lack of combat know-how resulted in the abrupt
cessation of the strike. Many peasants were killed and many others seriously injured in
the encounter. Nonetheless, the bloody incident in the fort all the more heightened the
spirit of nationalism among the indios. That bitter incident in the fort became a
meaningful lesson to the katipuneros when the Filipino-Spanish Revolt of 1896 broke
out.

1 Guevarra, Dante G., History of the Philippine Labor Movement, Rex Book Store, First edition,
1995
1
 As a result of this incident, the gremios were demolished. (The gremios were
mutual and benefit associations that played a major role in the development of trade
unions.)

Izquierdos suspicion towards the mutiny of the workers grew so intense that the
strengthened the espionage system of the guardias civiles.

After the Cavite mutiny of 1872, the activism of the peasants slowed down until
1899 when the Americans came. Until then, their organizations remain civic, religious
and fraternal.

These organizations served as the foundation of the labor unions as we know

them today. They could justifiably said furthermore, to be the first groups to hold strikes
in the history of unions in the Philippines.

Birth of Labor Unions

While mild agitation and indoctrination continued to generate enlightened

intellectuals through the press and fora, the increasing trade unionists among the rank-
and file of workers were winning their battles within the confines of the few industrial
establishments in which they are employed. And it was not unexpected that another
vigorous protest in the form of a tike was declared on March 6, 1899 by the workers of
the Revolutionary Governments printing press in Malolos, Bulacan. It was I this very
press where the organ of the Revolution, La Independencia, was being printed.

The immediate cause of the strike was said to be the abuses omitted by the
press superintendent, Zacarias Fajardo, apart from the printers previous demand for
increase in wages.

The leaders of this strike were Herminigildo Cruz, Felipe Mendoza and Arturo
Soriano.

General Antonio Luna immediately stepped in to settle the strike. The workers
subsequently got their demand for a 25% raise in pay.

The incident was followed by the increase in the number of organization, like
civic aggrupation, guild, or mutual aid societies in the different factories. These
organizations, in the beginning were used only during difficult tomes. They were not
really labor unions in thee true sense of the term. Later, however the experiences of the
Malolos printers in their strike led many workers in manila to start forming unions.

First Attempt to Unify Labor

When the composition of the new united labor front became known, everyone
pledged support to the movement. Quezon, for his part, announced that a government
subsidy was to be extended to the confederation. But the matter of leadership came up
as a serious problem.

For one thing, the great majority of the workers-affiliated with the union
supposed to be integrated under Quezons plan did not have confidence in the
handpicked leaders whose conduct as labor leaders had been, to them questionable.
The fight for personal leadership appeared distasteful, especially when those interested
in becoming officials of the federation did not represent the majority.

2
 In 1940, or a year after the break-up of the NFL, Jose Avelino then Secretary of
Labor revived Quezons efforts by calling the disparate labor leaders to a conference.
He proposed that a National Commission of Peasants to be formed. There was
unanimous approval of the ideas, with the conservative labor leaders wanting Avelino
to be chairman. So far as organization is concerned, the commission functioned.
However, when Quezon named Avelino Secretary of Public Works and Communication,
the Commission faded into thin air.

Invasion and Protest

A day after Manila was invaded, General Masaharu, Homma immediately

proclaimed that the American regime is over, and it is the aim of the Japanese to free
the Philippines and make it a member of the Greater Asia Co-prosperity Sphere. The
Japanese abolished the independent associations among the ranks of the bourgeois
and intellectual. Many of those suspected as communists and socialists were arrested
and killed. The only organization that was allowed and even sponsored by the Japanese
was the Kapisanan sa Paglilingkod sa Bagong Piipino or KALIBAPI. This was the
organization that served as a stepping stone for the Japanese to impose on the citizen
military rules and obedience to the dictates of the Japanese Propaganda.

In sum, ideologically and politically, the trade union movement in the Philippines
had strange beginnings, namely: Isolated or regional uprisings, revolts, mutinies and
other forms of resistance during the second half of almost four centuries of Spanish
colonial rule in the country. These antedated the workers movement, including walkouts
and strikes. It may be said, Craig contends, that its formation began only on the
opening of the Suez Canal, which was inaugurated in November 1869.2

Labor Relations History in the Philippines

In 1953 the Policy of Free Collective Bargaining replaced Compulsory

Arbitration- (a) It was at this that RA 875 otherwise known as the Magna Carta of Labor
the Industrial Peace Act was enacted; (b) Labor unions were encouraged to be formed.
Likewise, managements also formed their own associations; (c) Right of workers were
recognized. 3

Through united action, labor made significant gains among the first being the
creation of Bureau of Labor, and later of the Department of Labor, and the reenactment
of legislation providing for the prosecution of the usurer, the protection of domestic help,
the payment of compensation to workers injured in line of duty, and the protection of
women and children working in factories. A special tribunal, the Court of Industrial
Relations, has been established to facilitate the disputes between implementation of law
governing the relationship between capital and labor, such as the Eight Hour Labor Law,
the Social Security Act, and others.

The most significant labor legislation safeguarding the rights of labor in Republic
Act 875,popularly known as the Magna Carta of Labor. This law encourages laborers
freely to form unions and recognizes the right of labor to bargain collectively and to
declare strikes. There are however, safeguards against possible abuse of power by the
labor unions. Under the Magna Carta of Labor, a union could be guilty of unfair labor
practices if it intimidates or prevents laborers from joining unions of their own choice, or

2 Austin, Craig. The Filipinos Fight for Freedom, Manila, p. 299

3 Cagaanan, Jovito C., A Compedium on Labor Relations, Mindanao Editorial & Printing
Services, 1992 Edition
3
if the union refuses to bargain collectively despite the fact that it represents the majority
of the workers or if it demands from the employers for work not done.

Bad Features of Philippine Labor

On paper, it would seem that labor is united and, therefore, strong. Actually,
however, Philippine labor is divided against itself owing mainly, to first, differences in
principles and second, personal ambitions of some leaders. Mergers of union have
failed in the past because of the insistence of some labor leaders on certain degree of
autonomy from the parent organization, a demand that was not taken seriously by those
in power. On the other hand, labor leaders seldom agree, personally and in principles,
with one another. Instead of unity there is rivalry which, at times takes the form of
busting each other's head.4

1.2 Statement of the Problem

The study aims to answer whether or not run-off election, re-run election and
consent election including the matters on affiliation and disaffiliation of the local union
from the mother union are consistent with the right of workers to self-organization as
provided in the Section 3, Article XIII of the 1987 Constitution.

1.3 Objectives and Significance of the Study

The object of this study is to show a way in which the machinery of industrial
elections such a run-off election, re-run election, consent election can be improved
including its relevant subjects such as affiliation and disaffiliation of local union and
mother union and substitutionary doctrine. In order to emphasized the importance of the
same for better appreciation of the public, particularly Filipino workers, the union and its
members.

1.4 Definition of Terms

1. Run-off election - refers to an election between the labor unions receiving the
two (2) highest number of votes in a certification election or consent election with
three (3) or more choices, where such a certification election or consent election
results in none of the three (3) or more choices receiving the majority of the valid
votes cast, provided that the total number of votes for all contending unions is at
least fifty percent (50%) of the number of votes cast.5

2. Re-run election - refers to an election conducted to break a tie between

contending unions, including between no union and one of the unions. It shall
likewise refer to an election conducted after a failure of election has been
declared by the election officer and/or affirmed by the mediator arbiter.6

3. Consent election is the process of determining through secret ballot the sole
and exclusive representative of the employees in an appropriate bargaining unit

4
Pagoso, Cristobal M. Labor Economics, Rex Book Store, 1993
5 Sec. 1[ss], Rule I, Department Order No. 40-03, Series of 2003
6 Sec. 1[tt], Rule I Department Order No. 40-I-15, Series of 2015

4
 for purposes of collective bargaining or negotiation. It is voluntary agreed upon
by the parties with or without the intervention by the Department.7

4. Affiliate refers to an independent union affiliated with a federation, national

union or a chartered local which was subsequently granted independent
registration but did not disaffiliate from its federation, reported to the Regional
Office and the Bureau.8

5. Disaffiliation The right of an independent union or local union, to disaffiliate

from its mother union is well-recognized. The independent or local union, being a
separate and voluntary association, is free to serve the interests of its members
including the freedom to disaffiliate when circumstances warrant. This right is
consistent with the constitutional guarantee of freedom of association.9

6. Local Union A union that serves as the local bargaining unit for a national or
international union.10

7. Mother Union the term used to describe a federation or a national union.

8. Substitutionary Doctrine states that even during the effectivity of a collective

bargaining agreement executed between employer and employees thru their
agent, the employees can change said agent but the contract continues to bind
them up to its expiration date.11

7 Sec.1 [h], Rule I, Department Order No. 40-03, Series of 2003

8 Sec. 1[a], Rule I, Department Order No. 40-03, Series of 2003
9 Volkschel Labor Union vs. Bureau of Labor Relations,G.R. No.

L-45824, June 19, 1985

10 Black's Law Dictionary, 8th edition, 2004
11 Benguet Consolidated Inc. vs. BCI Employees and Workers

Union- PAFLU, G.R. No. L-24711, April 30, 1968

5
1.5 Conceptual Framework

Run-off
election

Re-run
election
Workers Right to
Self-organization
Consent
election

Affiliation and
Disaffiliation of
the local union
from the
mother union

Substitutionary
Doctrine

Figure 1. The diagram shows the direct and one-way relation of 1) Run-off election; 2) Re-run
election; 3) Consent election; 4) Affiliation and Disaffiliation of the local union from the mother
union which has an attached subtopic Substitutionary Doctrine to the Workers Right to Self-
organization.

6
 CHAPTER TWO

Review of Related Literature

2.1 Introduction

In the case of Philippine Association of Free Labor Unions v. Secretary of

Labor12 the Supreme Court, speaking through then Chief Justice Roberto Concepcion,
held that cases involving any of the internal labor organization procedures enumerated
in Section 17 of the Industrial Peace Act are cognizable by the Court of Industrial
Relations. Although the Supreme Court did not state the nature of this jurisdiction of the
Court of Industrial Relations, it has already ruled in several cases, that the jurisdiction of
the Court of Industrial Relations under of the Industrial Peace Act is exclusive in nature.

Section 17 of the Industrial Peace Act requires that the intra-union remedies
provided in the constitution of by-laws of the labor organization should first be
exhausted before reporting any violation of the internal labor organization procedures to
the Court of Industrial Relations. It is also provided in said section that a minimum 10%
of the member of a labor organization may file a complaint in the Court of Industrial
Relations. Whether this requirement applies also to internal labor organization
procedures which are personal to union members may well become another problem
area for the Supreme Court. Suffice it to say for the present that the Supreme Court
has already expressed itself on this matter in contrasting ways. The particular problem
was not involved in any of the labor law decisions of the Supreme Court in 1966.13

2.2 Run-off election

When an election which provides for three (3) or more choices results in none of
the contending unions receiving a majority of the valid votes cast, and there are no
objections or challenges which if sustained can materially alter the results, the Election
Officer shall motu proprio conduct a run-off election within ten (10) days from the close
of the election proceedings between the labor unions receiving the two highest number
of votes; provided, that the total number of votes for all contending unions is at least fifty
(50%) percent of the number of votes cast. "No Union" shall not be a choice in the run-
off election.14

Notice of run-off elections shall be posted by the Election Officer at least five (5)
days before the actual date of run-off election.

Qualification of voters in the run-off election

The same voters' list used in the certification election shall be used in the run-off
election. The ballots in the run-off election shall provide as choices the unions receiving
the highest and second highest number of the votes cast. The labor union receiving the

12 G.R. No. 21321, April 2, 1966

13 Romero, Flerida Ruth P., Aspects of Philippine Labor Relations Law, Proceedings of 1967,
Lectures and Discussions, U.P. LAW CENTER, 1967, pp.29.
14
Azucena, C.A Jr., The Labor Code with Annotations, Volume II, Rex Bookstore Publishing,
2014

7
greater number of valid votes cast shall be certified as the winner, subject to Section 20,
Rule IX of D.O. No. 40-03.

To summarize, a run-off election is proper if five concurrent conditions exist,

namely:

1. A valid election took place because majority of the CBU members voted.

2. The election presented at least three choices, e.g., Union One, Union Two,
and No Union, meaning there are at least two union "candidates."

3. Not one of the unions obtained the majority of the valid votes.

4. The total number of votes for all the unions is at least 50% of the votes cast.

5. There is no unresolved challenge of voter or election protest.

Examples:

1.) The CBU has 100 members, fifty voted: "Union One" received 30
votes; "Union Two," 15 and "No Union, 5." Is a run-off election
proper?

No, because in the first place there is no valid election since the
votes cast are less than 51 (majority of the CBU voters). There is
failure of election. The status quo is maintained, that is, the
company is ununionized. But another C.E. may be called within
six (6) months.

2.) The CBU has 100 members and everyone voted: 25 for "Union One,"
20 for "Union Two," and 55 for "No Union." No invalid votes. Is run-off
election proper?

No, because although there is valid election the 45 votes for the
unions are less than 50% of the votes cast. Status quo is
maintained.

3.) The CBU has 100 members. Eighty voted: 30 for "Union One," 15 for
"Union Two," 15 for "Union Three," and 20 for "No Union." No invalid
votes. Which union won?

None,because not one got the majority of the 80 valid votes.

Is run-off election proper?

Yes, because the contending unions obtained 60 votes which

even exceeds one-half of the votes cast. The run-off will be between the
labor unions receiving "the two highest number of votes." In this
example, "Union One" will face both "Union Two" and "Union Three"
because these two tied for the second highest number of union votes.
The rematch is not between two "unions" but between "two highest
8
 votes." If they did not de, only the union that received the higher vote will
have a rematch with "Union One." The No-Union choice is eliminated
from the run-off.15

2.3 Re-run election

Re-run election takes place in two (2) instances: (a) if one choice receives a
plurality of votes and the remaining choices results in a tie; or (b) if all choices received
the same number of votes.

Rule on Re-run Election, not found in the

Labor Code

This mode of choosing the sole and exclusive bargaining unit is not expressly
provided in the Labor Code or in its implementing rules. The circumstances which would
justify the holding of a re-run election are not set out in the law.

Justifications for holding of Re-Run Election

A re-run election may be justified if certain irregularities have been committed

during the conduct of the certification election such as, inter alia, disenfranchisement of
the voters, lack of secrecy in the voting, fraud or bribery, in which case, the certification
election should be invalidated. Such invalidation would necessitate the conduct of a re-
run election among the contending unions to determine the true will and desire of the
employee-electorates.

Relevant Jurisprudence

Philippine jurisprudence has not exactly referred to the holding of another

certification election as re-run election but the situations for such re-holding of the
certification election as described in some cases, may be deemed descriptive of this
term.

In Confederation of Citizens Labor Unions v. Noriel16 - In ordering, inter alia, the

conduct of another run-off certification election inside the premises of the company, the
Supreme Court disposed as follows:

We hold that the certification election is invalid because of certain

irregularities such as that (1) the workers on the night shift (ten p.m. to
six a.m.) and some of those in the afternoon shift were not able to
vote, so much so that out of 1,010 voters only 692 voted and about
318 failed to vote (p. 88, Rollo) ; (2) the secrecy of the ballot was not
safeguarded; (3) the election supervisors were remiss in their duties
and were apparently "intimidated" by a union representative and (4)
the participating unions were overzealous in wooing the employees to
vote in their favor by resorting to such tactics as giving free tricycle
rides and T-shirts.

15 Azucena, C.A Jr., The Labor Code with Annotations, Volume II, Rex Bookstore Publishing,
2014
16 G.R. No . L-56902. Sept. 21, 1982, 116 SCRA 694

9
 The purpose of a certification election is to give the employees "true
representation in their collective bargaining with an employer" (51
C.J.S. 969) . That purpose was not achieved in the run-off election
because many employees or union members were not able to vote
and the employer, through apathy or deliberate intent, did not render
assistance in the holding of the election.

In the case of National Federation of Labor v.The Secretary of Labor17 This

involves a certification election among the rank-and-file employees of the Hijo
Plantation, Inc. resulting in the choice of no union. In ordering a re-run election, the
Supreme Court declared:

xxx As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians

Guild,18 it is essential that the employees must be accorded an
opportunity to freely and intelligently determine which labor
organization shall act in their behalf. The workers in this case were
denied this opportunity. Not only were a substantial number of them
disfranchised, there were, in addition, allegations of fraud and other
irregularities which put in question the integrity of the election.
Workers wrote letters and made complaints protesting the conduct of
the election. The Report of Med-Arbiter Pura who investigated these
allegations found the allegations of fraud and irregularities to be true.

In one case19 this Court invalidated a certification election upon a showing of

disfranchisement, lack of secrecy in the voting and bribery. We hold the same in this
case. The workers right to self-organization as enshrined in both the Constitution and
Labor Code would be rendered nugatory if their right to choose their collective
bargaining representative were denied. Indeed, the policy of the Labor Code favors the
holding of a certification election as the most conclusive way of choosing the labor
organization to represent workers in a collective bargaining unit. In case of doubt, the
doubt should be resolved in favor of the holding of a certification election.

Re-run Election vs. Failure of Election

Re-run election should be distinguished from a failure of election. In re-run

election, there is a valid certification election but because of certain circumstances, the
election is nullified and another one is ordered to truly reflect the will and sentiment of
the electorate-employees in the choice of their bargaining representative.

In failure of election, the number of votes cast in the certification or consent

election is less than the majority of the number of eligible voters and there are no
challenged votes that could materially change the results thereof.20 Consequently, a
motion for the immediate holding of another certification or consent election within six
(6) months from the date of declaration of the failure of election may be filed. Within

17 G.R. No. 104556, March 9, 1998, 287 SCRA 599

18 607 SCRA 132 (1961)
19 Citing Confederation of Citizens Labor Unions v. Noriel, G.R. No. L-56902. September 21,

1982, 116 SCRA 694

20 Section 16 [formerly Section 17], Rule IX, Book V, Rules to Implement the Labor Code, as

amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as re-
numbered by Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008]
10
twenty-four (24) hours from receipt of such motion, the Election Officer should
immediately schedule the conduct of such election within fifteen (15) days from receipt
of the motion and cause the posting of the notice of certification election at least ten (10)
days prior to the scheduled date of election in two (2) most conspicuous places in the
establishment. The same guidelines and list of voters shall be used in the election.21

2.4 Consent election

Consent Election vs. Certification Election

A consent election is one mutually agreed upon by the parties, with or without
the intervention of the DOLE, its purpose being merely to determine the issue of
majority representation of all the workers in an appropriate collective bargaining unit;
while a certification election is one which is ordered by the DOLE. The purpose for both
electoral exercise is the same, i.e., to determine the sole and exclusive bargaining agent
of all the employees in an appropriate bargaining unit for the purpose of collective
bargaining. From the very nature of consent election, it is a separate and distinct
process from certification election and has nothing to do with the import and effect of the
latter.22

By law, as a result of the consent election, the right to be the exclusive

representative of all the employees in an appropriate collective bargaining unit is vested
in the labor union designated or selected for such purpose by the majority of the
employees in the unit concerned.23

Consent Election may be agreed upon by

the parties to a pending Certification
Election case

During the preliminary conference that the Med-Arbiter is required to conduct in

a certification election proceeding, he is required to determine if the contending labor
unions are willing to submit themselves to a consent election. In case the contending
unions agree to a consent election, the Med-Arbiter is not allowed to issue a formal
order calling for the conduct of a certification election. Instead, he should enter the fact
of the agreement on the conduct of the consent election in the minutes of the hearing
which should then be signed by the parties and attested to by the Med-Arbiter.24

Holding of a Consent Election during the

pendency of a Petition for Certification
Election

21 Sections 17 and 18 [formerly Sections 18 and 19], Rule IX, Book V, Ibid
22 Section 1 [h], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17, 2003; Algire v. De Mesa, G.R. No. 97622, Oct. 19,
1994, 237 SCRA 647], the Supreme Court had occasion to reiterate its earlier holding in
Warren Manufacturing Workers Union [WMWU] v. Bureau of Labor Relations, G.R. No. L-
76185, March 30, 1988, 159 SCRA 387]
23 United Restaurors Employees and Labor Union-PAFLU v. Torres, G.R. No. L-24993, Dec. 18,

1968, 26 SCRA 435.

24 Sections 9 and 10, Rule VIII, Book V, Ibid.

11
 Where a petition for certification election has been filed and upon the
intercession of the Med-Arbiter, the parties mutually agree to hold a consent election,
the results thereof shall constitute a bar to the holding of a certification election for one
(1) year from the holding of such consent election. Where an appeal has been filed from
the results of the consent election, the running of the one-year period is suspended until
the decision on appeal has become final and executory.25

Holding of a Consent Election where there

is no Petition for Certification Election filed

Where no petition for certification election is filed but the parties themselves
agree to hold a consent election with the intercession of the DOLE Regional Office, the
results thereof shall constitute a bar to the filing of a petition for certification election.26

2.5 Affiliation and disaffiliation of the

local union from the mother union

A local union may affiliate with a national union or federation. The question
would be - what are the rules on union affiliation? When is union disaffiliation possible?
How is case of union disaffiliation possible? And how is a case of union disaffiliation
dealt with?

An affiliate of a labor federation or national union may be a local or chapter

thereof or an independently registered union.

a) The labor federation or national union concerned shall issue a charter

certificate indicating the creation or establishment of a local or chapter, copy
of which shall be submitted to the Bureau of Labor Relations within 30 days
from issuance of such charter certificate.

b) An independently registered union shall be considered an affiliate of a labor

federation or national union after submission to the bureau of the contract or
agreement of affiliation within 30 days after its execution.

c) All existing labor federations or national unions are required to submit a list of
all their affiliates, their addresses and including the name and addresses of
their respective officials to the bureau within 30 days from effectivity of these
rules.

d) All existing labor federations or national unions with direct members are
required to organize said members into locals or chapters in their respective
companies or establishments within 60 days from effectivity of these rules.

e) The local or chapter of a labor federation or national union shall have and
maintain a constitution and by laws, set of officers and books of account. For

25 Section 23, Rule VIII, Book V, Ibid.

26
Section 23, Rule VIII, Book V, Ibid
12
 reporting purposes, the procedure governing the reporting of independently
registered unions shall be observed. 27

A local or chapter of a labor federation or national union may disaffiliate only

within 60 day freedom period immediately preceding the expiry date of a certified
bargaining agreement.28

Upon receipt of a case involving union disaffiliation, the Regional Director shall
immediately assign the same to a Med Arbiter. The Med Arbiter shall have twenty days
within which to settle or decide the case. (Sec. 6, Rule III, Rules implementing P.D. No.
1391)

Legality of Mass Disaffiliation

Mass disaffiliation is a phenomenon which is not new in the labor movement.

Nor it is open to any legal objection. It is implicit in the freedom of association explicitly
ordained by the constitution. There is then inconvertible right of any individual to join an
organization of his choice. That option belongs to him. A working man is not to be
denied that liberty. He may be, as matter of fact, more in need of it if the institution of
collective bargaining as an aspect of industrial democracy is to succeed. No obstacle
that may possibly thwart the desirable objective of military in labors struggle for better
terms and conditions is then to be placed on his way. Once the face of disaffiliation has
been demonstrated beyond doubt, a certification election is the most expeditious way of
determining which labor organization is to be exclusive bargaining representative.29

Right of Local Union to Disaffiliate; Effect of

Disaffiliation on Right on Union Dues

The right of a local union to disaffiliate from its mother union is well settled. It has
been repeatedly held that a local union, being a separate and voluntary association, is
free to serve the interest of all its members including freedom to disaffiliate when
circumstances warrant; this is consistent with the constitutional guarantee of freedom of
association. Once the local union disaffiliates from the parent organization, the right of
the latter to union dues ceases. And even the contract between the employer and the
parent organization as bargaining agent for the employees is terminated by the
disaffiliation of the local of which the employees are members.30

When the local union withdrew from the old federation to join a new federation, it
was merely exercising its primary right to labor organization for the effective
enhancement of common interests. In the absence of enforceable provisions in the
federations constitution preventing disaffiliation of a local union, a local may sever its
relationship with its parent.

A local union owes its creation and continued existence to the will of its
members and not to the federation to which it belongs. And then the non-compliance of

27 Bacungan, Froilan M., LABOR AND SOCIAL LEGISLATION, An Updated Systematic

Presentation, University of the Philippines College of Law, 2011, pp. 282-283
28
Sec. 5, Rule III, Rules Implementing P.D. No. 1391
29 Vazzar Industries Employees Union vs Hon. Francisco Estrella et.al, G.R. No. L-46562,

March 31, 1978; PLAC vs Bureau of Labor Relations et.al, G.R. No. L-41288, January 31,
1977
30 Volkschel Labor Union vs Bureau of Labor Relations et.al, G.R. No. L-45824, June 19, 1985

13
the local union with the provision in the constitution of the mother federation requiring
the service of three months notice of intention to withdraw did not produce the effect of
nullifying the disaffiliation; this is purely a technical ground which cannot rise above the
fundamental right of self-organization.

But while it is true that a local union, being an entity separate and distinct from
the mother federation, is free to serve the interest of all its members and enjoy the
freedom to disaffiliate, such right may be exercised, and is thus considered a protected
labor activity, only when warranted by circumstances. Generally, a labor union may
disaffiliate from the mother union to form a local or independent union only during the 60
day freedom period immediately preceding the expiration of the CBA. Even before the
onset of the freedom period (despite the closed-shop provision in the CBA between the
mother union and management) disaffiliation may still be carried out, but such
disaffiliation must be effected by a majority of the members of the union. In such a case,
however, the CBA continues to bind the members of the new or disaffiliated and
independent union up to the CBAs expiration date.31

Affiliation Gives Rise to Binding Contract

When a labor union affiliates with a parent organization or mother union, or

accepts a charter from a superior body, it becomes subject to the laws of the superior
body under whose authority the local union functions. The constitution, by-laws and
rules of the parent body, together with the charter it issues pursuant thereto to the
subordinate union, constitute an enforceable contract between the parent body and the
subordinate union, and between the members of the subordinate union.32

The locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their employee
members in the economic struggle for the fruits of the joint productive effort of labor and
capital; and the association of the locals into the national union was in furtherance of the
same end. These associations are consensual entities capable of entering into such
legal relations with their members. The essential purpose was the affiliation of the local
units into a common enterprise to increase by collective action the common bargaining
power in respect of the terms and conditions of labor. Yet the locals remained the basic
units of association, free to serve their own and the common interest of all, subject to
the restraints imposed by the constitution and by-laws of the association, and free also
to renounce the affiliation for mutual welfare upon the terms laid down in the agreement
which brought it into existence.33

Union Loyalty

While an employee is given the right to join a labor organization, such right
should only be asserted in a manner that will not spell the destruction of the same
organization. Loyalty is necessary to obtain to the full extent the unions cohesion and
integrity. And as an act of loyalty a union may certainly require its members not to
affiliate with any other labor union and to consider its infringement as a reasonable
cause for separation.34

31 Associated Workers Union PTGWO vs NLRC et.al, G.R. No. 87266-69, July 30, 1990
32 Labor Union, Dangel and Shriber, pp. 279-280
33 Liberty Cotton Mills Workers Union et.al., vs Liberty Cotton Mills, Inc. et.al, G.R. No. L-33987,

September 4, 1975, citing Harker et.al, vs McKissok et.al, 91A 2nd 480
34 Ang Malayang Mangagawa sa ang Tibay Enterprises et.al, vs Ang Tibay et.al, 102 Phil 669

14
 Inherent in every labor union, or any organization for that matter, is the right of
self-preservation. When members of labor union, therefore, sow seeds of dissension
and strife within the union; when they seek the disintegration and destruction of the very
union to which they belong; they thereby forfeit their rights to remain as members of the
union which they seek to destroy.35

2.6 Substitutionary Doctrine

2.6.1 Change of Bargaining representative during the life of a CBA

Based on Philippine jurisprudence, the substitutionary doctrine was conceived

during the time when the law has not fixed the lifetime of the CBA as is now provided in
Article 253-A of the Labor Code. The uncertainty on when and how should the majority
status of the bargaining agent may be challenged by way of a certification election was
thus the lingering problem hounding the labor front.

Thus, in General Maritime Stevedores Union of the Philippines v. South Sea

Shipping Line,36 the July 28, 1957 CBA between respondent company and the United
Seamens Union of the Philippines (USUP) , has been continuously automatically
renewed after every two years so much so that at the time of the writing of the High
Courts decision in this case, it would appear that the CBA will still be effective up to July
28, 1961, that is to say, about a year therefrom. According to the claim of the
petitioners, the bargaining agreement of July 28, 1957 was but a renewal of the same or
similar agreement of July 1955, so that the bargaining agreement has been in existence
for about five years, which is too long a period within which a certification election has
not been held. And because of the automatic renewal clause provided in the CBA, the
time when the challenge should be made continues to pose a problem. This led the
Supreme Court to analyze cases decided by the National Labor Relations Board
(NLRB) of the United States, which was the equivalent at that time of the Court of
Industrial Relations (CIR) and the present-day National Labor Relations Commission
(NLRC). It thus concluded:

After reviewing the cases decided by the NLRB of the United States
and our own cases, we have arrived at the conclusion that it is
reasonable and proper that when there is a bargaining contract for
more than a year, it is too early to hold a certification election within a
year from the effectivity of said bargaining agreement; also that a two-
year bargaining contract is not too long for the purpose of barring a
certification election. For this purpose, a bargaining agreement may
run for three, even four years, but in such case, it is equally advisable
that to decide whether or not within those three or four years, a
certification election should not be held, may well be left to the sound
discretion of the CIR, considering the conditions involved in the case,
particularly, the terms and conditions of the bargaining contract.

We also hold that where the bargaining contract is to run for more
than two years, the principle of substitution may well be adopted and
enforced by the CIR to the effect that after two years of the life of

35
Villar et.al, vs Inciong et.al, G.R. Nos. L-50283-84, April 20, 1983
36 G.R. No. L-14689, July 26, 1960
15
 bargaining agreement, a certification election may be allowed by the
CIR; that if a bargaining agent other than the union or organization
that executed the contract, is elected, said new agent would have to
respect said contract, but that it may bargain with the management for
the shortening of the life of the contract if it considers it too long, or
refuse to renew the contract pursuant to an automatic renewal
clause.

In Benguet Consolidated, Inc. v. BCI Employees & Workers Union, (PAFLU),37 a

CBA was concluded on June 23, 1959 between petitioner company and Benguet-
Balatoc Workers Union (BBWU) , effective for a period of 4-1/2 years, or from June 23,
1959 to December 23, 1963. It likewise embodied a No-Strike, No-Lockout clause.
About three years later, or on April 6, 1962, before the expiration of the CBA, a
certification election was conducted by the Department of Labor among all the rank-and-
file employees of petitioner in the same collective bargaining units. Another union,
herein respondent BCI Employees & Workers Union-PAFLU (UNION-PAFLU) obtained
more than 50% of the total number of votes, defeating BBWU, and accordingly, the CIR,
on August 18, 1962, certified UNION-PAFLU as the sole and exclusive collective
bargaining agent of all employees of petitioner company. One of the issues raised in the
instant case is whether the CBA executed between Benguet and BBWU on June 23,
1959 and effective until December 23, 1963 automatically binds UNION-PAFLU upon its
certification, on August 18, 1962, as sole bargaining representative of all employees of
petitioner.

Petitioner invoked the afore-quoted ruling in General Maritime38 in support of its

contention that the CBA then existing was binding on the new bargaining agent
UNION PAFLU. The Supreme Court, however, ruled that such invocation is not
persuasive because the above-quoted pronouncement in General Maritime was obiter
dictum. The only issue in said case was whether a CBA which had practically run for
five (5) years constituted a bar to certification proceedings. It was held that it did not and
accordingly directed the court a quo to order certification election. With that, nothing
more was necessary for the disposition of the case. Moreover, the pronouncement
adverted to was rather premature. The possible certification of a union different from
that which signed the bargaining contract was a mere contingency then since the
elections were still to be held. Clearly, the Court was not called upon to rule on the
possible effects of such proceedings on the bargaining agreement. It further held:

But worse, BENGUETs reliance upon the Principle of Substitution is

totally misplaced. This principle, formulated by the NLRB as its initial
compromise solution to the problem facing it when there occurs a shift
in employees union allegiance after the execution of a bargaining
contract with their employer, merely states that even during the
effectivity of a collective bargaining agreement executed between
employer and employees thru their agent, the employees can change
said agent but the contract continues to bind them up to its expiration
date. They may bargain however for the shortening of said expiration
date.

37 G.R. No. L-24711, April 30, 1968, 23 SCRA 465

38
G.R. No. L-14689, July 26, 1960

16
 In formulating the substitutionary doctrine, the only consideration
involved was the employees interest in the existing bargaining
agreement. The agents interest never entered the picture. In fact, the
justification for said doctrine was:
. . .that the majority of the employees, as an entity under the statute,
is the true party in interest to the contract, holding rights through the
agency of the union representative. Thus, any exclusive interest
claimed by the agent is defeasible at the will of the principal. . .

Stated otherwise, the substitutionary doctrine only provides that the

employees cannot revoke the validly executed collective bargaining
contract with their employer by the simple expedient of changing their
bargaining agent. And it is in the light of this that the phrase said new
agent would have to respect said contract must be understood. It only
means that the employees, thru their new bargaining agent, cannot
renege on their collective bargaining contract, except of course to
negotiate with management for the shortening thereof.39

Effect of Substitutionary Doctrine on the Deposed Unions Personal Undertakings

In case of change of bargaining agent under the substitutionary doctrine, the

new bargaining agent is not bound by the personal undertakings of the deposed union
like the no strike, no lockout clause in a CBA which is the personal undertaking of the
bargaining agent which negotiated it. Thus in Benguet, it was pronounced:

The substitutionary doctrine, therefore, cannot be invoked to support the

contention that a newly certified collective bargaining agent automatically assumes all
the personal undertakings like the no-strike stipulation here in the collective
bargaining agreement made by the deposed union. When BBWU bound itself and its
officers not to strike, it could not have validly bound also all the other rival unions
existing in the bargaining units in question. BBWU was the agent of the employees, not
of the other unions which possess distinct personalities. To consider UNION
contractually bound to the no-strike stipulation would therefore violate the legal maxim
that res inter alios acta alios nec prodest nec nocet.

Of course, UNION, as the newly certified bargaining agent, could always

voluntarily assume all the personal undertakings made by the displaced agent. But as
the lower court found, there was no showing at all that, prior to the strike, UNION
formally adopted the existing CONTRACT as its own and assumed all the liabilities
imposed by the same upon BBWU.

Some Principles on Substitutionary Doctrine

The substitutionary doctrine cannot be invoked to subvert an existing CBA, in

derogation of the principle of freedom of contract. The substitution of a bargaining agent
cannot be allowed if the purpose is to subvert an existing CBA freely entered into by the
parties. Such act cannot be sanctioned in law or in equity as it is in derogation of the
principle underlying the freedom of contract and good faith in contractual relations.40

39
Seno, v. Mendoza, G.R. No. L-20565, Nov. 29, 1967, 21 SCRA 1124
40
This principle was affirmed in the case of Manila Oriental Sawmill Co. v. National Labor Union,
G.R. No. L-4330, March 24, 1952, 91 Phil. 28.

17
 The substitutionary doctrine is applicable also to a situation where the local
union, which was created through the process of chartering41196 by the mother
union,19742 disaffiliates from the latter after it secured an independent registration. The
local union will thus be substituted to that of the federation which negotiated the CBA as
in Elisco-Elirol Labor Union [NAFLU] v. Noriel,43198 where petitioner union was created
through the mode of chartering by the National Federation of Labor Unions (NAFLU)
and later, it secured its independent registration with the BLR and disaffiliated with
NAFLU by virtue of a resolution by its general membership.

Substitutionary doctrine in cases of union schism or split

During the lifetime of the CBA, the majority status of the sole and exclusive
bargaining agent which negotiated it may be questioned as when there exist
extraordinary circumstances which affect its standing in terms of membership, structure
and others as may have been occasioned by union schism or split which completely
changes the situation of the employer and the bargaining agent. A petition for
certification election may thus be filed to determine which of the unions has the majority
status. The union certified as the new sole and exclusive bargaining agent will thus
substitute the previous one as a party to the existing CBA. This is allowed under the
same substitutionary doctrine.

41
Article 241 [234-A], Labor Code
42
Federation or national union
43
198 G.R. No. 41955, Dec. 29, 1977
18
 CHAPTER THREE

Methodology

3.1 Analysis of Related Laws, Jurisprudence and

Principles Observation and Recommendations

Any labor organization, federation or local union may file an application for
registration with the Bureau of Labor Relations or the DOLE Regional Office. The
Bureau or the Regional Office shall immediately process and either approve or deny the
application. In the case of approval, the Bureau or the Regional Office issues the
registration certificate within thirty calendar days from the date of filing.

An affiliate of a labor federation or national union may be a local branch or

chapter of a registered union. In this case, the labor federation or national union shall
issue a charter certificate indicating the creation or establishment of a local or chapter,
and a copy must be submitted to the Bureau of Labor Relations. An independently
registered union shall be considered an affiliate of a labor federation or national union
after submission to the Bureau of the contract or agreement of affiliation within thirty
days after its execution. This is important since federation official(s) may be asked by
the local union to represent them in the negotiations, even if they do not work for the
enterprise. All existing labor federations or national unions are required to submit a list
of all their affiliates and their addresses; and the names and addresses of their officials.
Labor federations or national unions with direct membership are required to organize
them into locals or chapters in their respective companies or establishments.

The application for registration of a local union shall be signed by at least twenty
percent of the employees in the appropriate bargaining unit which the applicant union
seeks to represent. Applicant unions may submit all the signatures and names of
employees in the bargaining unit in the enterprise for registration. An appropriate
bargaining unit is a group of all employees within the enterprise with collective interests,
through similarity in the nature of the work and duties, compensation, or working
conditions.

The requirements for union registration includes: a registration fee, names of the
officers, their addresses, the principal address of the labor organization, the minutes of
the organizational meetings and the list of workers who participated in such meetings,
the names of all its members and the number of employees in the bargaining unit. If the
union has been in existence for one or more years, copies of its annual financial reports
shall also be submitted, along with copies of its constitution and by-laws, minutes of its
adoption or ratification and the list of members who participated in those meetings. A
sworn statement by the applicant union shall indicate that there is no certified bargaining
agent in the enterprise. In case there is an existing collective bargaining agreement filed
with the Department of Labor and Employment, the sworn statement must state that the
application for registration is filed during the sixty days before the agreement expires.

It is possible that union registration will be denied due to non-compliance with

the requirements. The decision of the Regional Office or the Bureau denying the
application shall be in writing, stating in clear terms the reasons for the denial. A labor
organization at the enterprise, industry and national level becomes legitimate if it is
19
registered with the Bureau of Labor Relations. The Bureau of Labor Relations or the
DOLE Regional Office may also cancel the certificate of registration of any labor
organization which fails to submit the financial reports required by the Philippines Labor
Code. The Bureau of Labor Relations is the appropriate authority to decide union
deregistration cases. There have been petitions for some unions deregistration in the
past by employers and from rival unions, some of which were dismissed.

Responsibilities and rights of a union

The rights and conditions of membership in a labor organization are specified in

Article 241 of the Philippines Labor Code and the implementing rules which were
augmented in 2003 through Department Order 40-03. Among others, no arbitrary or
excessive initiation fees shall be required of the members of a legitimate labor
organization. Initiation fees refer to initial, one-off fees for processing the membership
application, before annual dues are deducted.

Union members are entitled to receive full and detailed reports from their officers
and representatives of all financial transactions of the union as provided in its
constitution and bylaws.

The local or chapter of a labor federation or national union shall maintain a

constitution and by-laws, set of officers and accounting books. Submissions or updates
of reports shall follow the rules of procedures of independently registered unions,
federations or national unions.

Officers shall be employees of the company or establishment where the

independently registered union, affiliate, local or chapter of a labor federation or national
union operates.

The union constitution and by-laws usually provide for the manner of election of
union officers, through secret ballot or other means. If there are no rules on this matter
within the union constitution, the guidelines from Department Order 40-03 (2003) by the
DOLEs Bureau of Labor Relations may be used. The Bureaus guidelines provide rules
on requirements for candidates and voters, officers to be elected, term of office,
settlement of disputes, determination of majority representation and the conduct of run-
off elections. Members directly elect their officers, including those of their affiliated
national union or federation, by secret ballot at intervals of every five years. No
qualification requirements for candidacy to any position shall be imposed other than that
their membership is in good standing. However, no person who has been convicted of a
crime involving moral turpitude shall be eligible for election as a union officer or for
appointment to any position in the union.

Union members shall also determine, by secret ballot after due deliberation, any
question of major policy affecting the entire membership of the organization. The law
also requires that

no labor organization shall knowingly admit as members or

continue in membership any individual who belongs to a
subversive organization or who is engaged directly or indirectly in
any subversive activity.

The Labor Code requires that the officers of any labor organization shall not be
paid any compensation other than their salaries and expenses, as specifically provided
20
for in its constitution and by-laws, or in a written resolution duly authorized by a majority
of participants at a general membership meeting. The minutes of the meeting and the
list of participants and ballots cast shall be subject to inspection by the Secretary of
Labor or their representative.

Any irregularities in the approval of resolutions shall be a ground for

impeachment or expulsion from the organization. The treasurer of the labor organization
and every officer responsible for the collection, management, disbursement, custody or
control of the funds, money and other properties of the organization, shall render to the
organization and its members a true and correct account of all moneys received and
paid since they assumed office or since the last day on which they rendered such
account, and of all bonds, securities and other properties of the organization entrusted
to their custody or under their control.

3.2 Limitations of the study

The study will be limited to the Philippine setting, relevant labor laws particularly
the Labor Code of the Philippines and its amendment, Department Orders of
Department of Labor and Employment specifically Department Order nos. 09 (Series of
1997), 40-03 (Series of 2003), 40-I-15 (Series of 2015) and related Jurisprudence in
relation to run-off election, re-run election, consent election.

Also the said study includes the laws and rulings of the Supreme Court
pertaining to affiliation and disaffiliation of local union from the mother union and its
related doctrine specifically, the substitutionary doctrine.

21
 CHAPTER FOUR

Findings, Discussions and Conclusions

6.1 Findings and Discussions

The Philippines is a signatory to the ILO conventions on Freedom of Association

and Right to Organize (C. 87 & C. 98) and the UN Declaration of Human Rights (1948),
which include trade union rights. The Philippine Constitution incorporated these
commitments to international norms, and the Labor Code provides for the
implementation of trade union rights of workers in the private sector. Executive Order
180 (1986) prescribes the rules pertaining to the exercise of freedom of association in
collective negotiations in the public sector, including public hospitals, educational
institutions and government-owned enterprises. The Philippines Constitution (Article
XIII, Section 3) guarantees the rights of all workers to self-organization, whether in the
public or private sector. In practice, the actual exercise of this right depends on the level
of workers awareness and knowledge of their rights, and the degree of resistance by
employers.

Unions at the enterprise level in the Philippines are generally organized into
federations and labor centers on a general basis, and not by sector or industry. There is
a relatively high level of freedom of association provided by numerous pieces of labor
legislation (see Table 1). The procedures for union registration and recognition generally
start at the enterprise or workplace unit level (Articles 234 to 240). There are specific
rules for workers federations or national unions which must provide proof of at least 10
local union affiliates which are duly recognized bargaining agents. Further regulations
mandate that no federation or national union shall be registered to engage in any
organizational activity in more than one industry in any area or region, and no federation
or national union shall be registered to engage in any organizational activity in more
than one industry all over the country. The governments Bureau of Labor Relations is
responsible for ensuring that federations and national unions shall only organize locals
or chapters within a specific industry (Article 237 & 238).

The Philippines Labor Code governs the exercise of trade union rights in the
private sector, in relation to registration, membership requirements, recognition, intra-
union disputes, cancellation and unfair labor practices (Book V on Labor Relations,
Articles 234 to 249).

Unions are defined as any labor organization in the private sector organized for
collective bargaining and for other legitimate purposes (Implementing Rules, Book V
Rule I (h)).

Workers association on the other hand refers to an association of workers

organized for the mutual aid and protection of its members for any legitimate purpose
other than collective bargaining (Implementing Rules, Book V Rule I (j)). The Bureau of
Labor Relations provides separate forms for the registration of a workers association
based on the following groupings:

agricultural workers, farmers, fisheries workers;

artisans and craft workers;

22
 independent transport workers such as drivers of jeepneys,
vans, tricycles and pedicabs;

home-based workers;

construction workers;

market, ambulant and sidewalk vendors;

small scale mine workers; and

the self-employed.

Rules on the registration, certification election and settlement of disputes within

or between workers associations are the same as the rules governing unions (DOLE
Department Order 40-03, 2003). There is a lack of clarity as to whether or not workers
associations have the right to take concerted industrial action for legitimate purposes.
However, the media has reported that some workers associations, such as those for
jeepney drivers and market vendors, have successfully engaged in national concerted
industrial action to negotiate regulatory policies with government authorities.

In general, unions and workers associations are collectively referred to as labor

organizations. This term covers any association of employees in the private sector,
which exists in whole or in part for the purpose of collective bargaining, mutual aid,
interest, cooperation, protection or for other lawful purposes (Article 212(g)). On the
other hand, a legitimate labor organization means any organization registered with the
Department of Labor and Employment (Article 212(h)).

The Bureau of Labor Relations of the Philippines Department of Labor and

Employment is mandated by the law to keep a registry of legitimate labor
organizations (Article 231, PLC).

The Bureau maintains a record of all collective bargaining agreements and other
related agreements, records of settlement of labor disputes and orders and decisions of
voluntary arbitrators. These records can be accessed by the public, provided that no
specific information submitted in confidence would be disclosed, that the issue is not
undergoing judicial litigation, and that its disclosure would not detrimentally affect the
public interest or national security.

23
 Table 1. Labor laws on freedom of association, union, workers right

Challenges faced by unions

Given the maturity of the industrial relations system, there is little left for unions
to advocate at the enterprise level and on the political front. Legislation on specific labor
standards and benefits now encompasses all dimensions of the employment
relationship.

Even strikes based on bargaining deadlocks and unfair labor practices have
gone down, with the country almost strike-free in the last three years. It can thus be said
that unions have run out of products to sell. The question is: do unions have new
products that will make joining a union and being covered by a CBA attractive? Can
they re-invent themselves? To what extent should they innovate to revive unionism and
make collective bargaining a relevant device for promoting the welfare of members?

Unions must focus their efforts on areas where they are perceived to have
suffered major setbacks, mainly declining union membership and CBA coverage, and
the concomitant decrease in influence over policy decision-making and economic
growth. Unions must find ways to highlight their importance and effectively communicate
this to other workers.

Another area is in relation to the remaining unions with CBAs. Many CBAs have
terms and conditions of employment that are not much different from those granted to
workers in enterprises without CBAs. Unions in general should address the issue of
legislation and minimum wage-fixing crowding out traditional items of bargaining.

24
 Still another area relates to legislated or mandated benefits of workers. The
incidences of violation of basic labor standards remains significant. Unions should play
a major role in promoting compliance.

Further, unions must review their bargaining preferences and the strategic areas
in which bargaining can make a difference. In particular, they should develop the
capacity to address and make decisions on pay-for-performance and pay-for-
productivity issues at the bargaining table, whether at the enterprise level or at the
tripartite level (regional, industry or national).

Unions should also develop a new bargaining approach to flexibilization issues.

Union and job security clauses may be part of CBAs (in exchange for which unions
usually expend much of their political capital) but the effect of these clauses in attaining
their purported objectives is minimal. Thus in spite of restrictive CBA clauses, practices
such as subcontracting and outsourcing have flourished.

Finally, unions should review their position on Labor Code amendments. Labor
laws should always be underpinned by social justice and labor protection. Attention
should be paid to how amendments can strengthen the transformational role of
industrial relations and its institutions in the context of larger developmental objectives,
including creating a policy climate for employment generation and promoting inclusive
growth and decent work.

Having hit a low water mark in terms of union membership, CBA coverage and
political strength and influence, unions must now confront these issues. Visionary
leadership in pushing industrial relations institutions to participate more actively in the
transformation toward more inclusive growth is the biggest challenge facing unions
today.

6.2 Conclusion

New policies and institutions should be put in place to extend organizational and
collective bargaining rights to a greater number of workers, including those in the
informal sector. In this regard, the scope of negotiations should be expanded and the
process of determining representation in the light of the pluralist nature of unionism and
other worker organizations should be simplified.

On dispute settlement, the system should be simplified. Procedural reforms that

have been introduced at the administrative level over the years are definitely well
intentioned, but more procedures can have an opposite effect and can actually make
the system even more complicated. The binding nature of arbitration needs to be given
primacy, the layers of administrative and judicial appeals and review need to be
reduced, and the number of agencies in the system needs integration and streamlining.
It is time to consider greater involvement and responsibility of the social partners and
other stakeholders in resolving labor disputes. For this purpose, the principles and
various approaches of alternative dispute resolution need to be expressly assimilated
into the Labor Code. In particular, given the chronically limited resources and reach of
DOLE, particularly its inspectorate, it can shift its role in labor administration from direct
provision of services to setting standards, accreditation and supervision of a more
decentralized dispute settlement system that expands the role of private arbitration,
third-party neutrals and even community-based mediation in resolving all types of
disputes, but especially small money claims and basic labor standards. Such a
25
decentralized system can be patterned after the barangay justice system and the small
claims court under the judiciary, in which the Philippines has substantial historical
experience.

Certain provisions of the Labor Code which incentivize the filing of cases,
thereby perpetuating a highly adversarial and legalistic system, should be reviewed.
Among these are: the rules on full back-wages without limitations and deductions and
payroll reinstatement pending appeal; the situation where failure of the employer to
extend separation pay in the event of closure of the business due to economic reasons
is made the subject of litigation which could be protracted rather than a simple
administrative claim.

26
 References
PRIMARY SOURCES

The 1987 Constitution

Labor Code of the Philippines
DOLE Department Order No. 09 (Series of 1997)
DOLE Department Order No. 40-03 (Series of 2003)
DOLE Department Order No. 40-I-15 (Series of 2015)

SECONDARY SOURCES

Azucena, C.A Jr., The Labor Code with Annotations, Volume II, Rex Bookstore
Publishing, 2014
Chan, Joselito Guianan, The Labor Code of the Philipines Annotated (Law on Labor
Relations and Termination of Employment), Volume II, 2009 Revised Edition, Chan
Robles Publishing Company, 2009
Duka, Cecilio, The Labor Laws and Social Legislations: A Barristers Companion,
Rex Bookstore Publishing, 2016

27