Chapter 9 Maintaining Labor

Management Relations
Chapter Outline
1. Labor Law for Leaders
2. Labor Law Movement
3. Status of the Early Philippine Labor
4.Early Policies Adopted by the Government in
Settling Labor Disputes
5.The Philippine Labor Code
6.Basic Rights of Workers
7.Labor Organizations
8.Why Employees Join Unions
9.How to Avoid the Formation of Labor Union
10.Role of the Union Steward
11.Union’s Contribution and Effects
12.Kinds of Labor Organization
13.Requirements in the Registration of Labor
Union
14.Rights of Legitimate Labor Organization
15.Who May Join Unions
16.Union Security and its Forms
17.Collective Bargaining and its Process
18.Importance of CB to Workers
19.Contents of Contract Agreement
20.Bargaining Impasses/Deadlock
21.Labor Management Council
22.International Labor Organization
1. Labor Law for Leaders
There is a need for the leaders of the organization to
get a solid background and knowledge of
employment and collective labor law, and how to
use the labor law in their daily handling of
employment matters.

Importance of Employment and Collective Labor

Law?
This is because mistakes can be very costly, both
financially and in loss of management authority.
There is a need for them to find their way through
the maze of legal rules, because labor law forms an
inseparable part of industrial relations.
 There is also a need for these leaders to learn
their legal rights, and duties, and those of
employees and even job seekers, to discover the
protection employees now enjoy, the law on union,
and collective bargaining agreements.
 They are also adviced to find out everything
about strikes, lock outs, protect actions and
pickets, issues for negotiations to handle the
people in the organization
Labor Code of the Philippines
 deals with the fairness of organizational
practices that dictate the day-to-day treatment of
employees.
 Organizations comply with these laws by
instituting policies that recognize and protect
individual rights and guarantee employee
protection from any arbitrary treatment from
management
 A company can gain competitive advantage by
willingly complying with labor laws
 Competitive advantage can come from lower
litigation cost, positive employee attitudes and
behavior and excellent company image
2. THE LABOR MOVEMENT
Labor Union
 Definition: organization of employee that uses
collective action to advance its members interest
in regards to wages, benefits, working conditions
and other terms and conditions of employment
Philosophy: Strength can be found in joining
together
 Impact of unionization on productivity,
profitability and employee attitudes can either
be positive or negative depending on the
circumstances.
 The presence of union significantly alters human
resources activities
 Union try to extend their influences in other
areas of management aside from wages, benefits
such as establishment of work standards,
 Scheduling of work, subcontracting, and the
introduction of new equipment and methods
with management claims, are exclusive
management prerogatives
 Whether an employer succeeds in maintaining
exclusive control, over these prerogatives
depends on the relative strength of each side in
collective bargaining, and on the resolution of
other conflicts such as grievances and strikes
3.STATUS OF EARLY PHILIPPINE LABOR
 Trade unions in the Philippines can be traced
back in Spanish regime.
 Philippine trade unionism begins its healthy
roots and development until 1901
 1901- Isabelo delos Reyes formed the Union de
Litografos e Empressories de Filipinas after his exile
in Spain (Father of Philippine Trade Unionism)
 1901- workers were not protected by any labor
law or accorded protection from the government
as there hardly any labor law regulating labor
and employment in the Philippines
  Filipinos suffered a lot of injustices from the
hands of Spanish employers
 Without state legislation to protect their rights
laborers and farmers often worked in extremely
difficult situations
 Filipinos were forced to give free labors to their
Spanish masters
 Up to 1960, due to the oppression and excesses
of landowners, farm laborers were burdened with
debt and were compelled to till the land of their
masters
August 8, 1963- passage of Congress of RA No.3844

Agricultural Land Reform Code

  There was a slight improvement in the on the
living conditions of the tenants
 This condition was stregthened by the passage
of Labor Code
 Even the industrial workers were not spared
from the hands of the Spanish oppressors
 No regulation of working hours
 They work with meager wages and under poor
working conditions
 And no laborer could raise a voice in protest for
fear of losing the job
Philippine Legislature passed a few laws affecting the
relationship between labor and employer, to name a
few:
A.Act No.1874-passed on June 19, 1908, Employers
Liability Act- compensation of employees who were
injured or killed while working
Act No. 2549- declaring unlawful the act of employer,
compelling workers to purchase merchandise, from
them and paying their wages in form of tokens
Act No.3071-passed on March 16, 1923 regulating
the employment of women and children in shops and
factories
Act No.4123-passed on Aug.26, 1935 establishing an
8 hr workday
1935 Constitution
Acticle XIV Section 6-The State shall afford to
protection to labor especially to working women and
minors and shall regulate the relationship between
landowner, tenant,worker, and employer in industry
and agriculture. The State may provide may
compulsary arbitration
Acticle 2 Section 5-The promotion of social justice to
improve the well being and economic security of all
the people should be the concern of the State
 Provision of 1935 Constitution on social justice
and on the promotion of welfare were inadequate
Jan.17, 1973 plebiscite- provision of the 1973
Constitution on the protection of labor were made
more implicit and broader
After the Edsa Revolution-a new constitution was
drafted wherein a full section was devoted to the
protection of labor
It enjoins the workers and employees to observed the
principle of shared responsibility in running the
enterprise
From then on, the fundamental law of the land sets
the broad policies, regarding labor protection and
employment
There has been amendments in the Labor Code and
its implementing rules and guidelines
Gradually, wage earners secured sanction for the
right to organize
4.EARLY POLICIES ADOPTED BY THE
GOVERNMENT IN SETTLING LABOR DISPUTES
 Commonwealth Period (1936-1953)
 Industrial Peace Act Period ( 1953-1972)
 Martial Law Period (1972-1986)
 Post Martial Law Period (1986-present)
Commonwealth Act No.103
AN ACT TO AFFORD PROTECTION OF LABOR BY
CREATING A COURT OF INDUSTRIAL RELATIONS
EMPOWERED TO FIX MINIMUM WAGES FOR
LABORERS AND MAXIMUM RENTALS TO BE PAID BY
TENANTS, AND TO ENFORCE COMPULSORY
ARBITRATION BETWEEN EMPLOYEES OR
LANDLORDS, AND EMPLOYEES OR TENANTS,
RESPECTIVELY; AND BY PRESCRIBING PENALTIES
FOR THE VIOLATION OF ITS ORDERS
Commonwealth Period (1936-1953)
Commonwealth Act No.103- established the first
labor dispute settlement system by the creating the
Court of Industrial Relations (CIR) and vesting it with
compulsary arbitration powers over labor disputes
involving both workers in the private sector and
government owned and controlled corporation
.
Industrial Peace Act Period ( 1953-1972)
Republic Act No.875- was enacted fundamentally
changing the framework of labor relations policies
from that of compulsary arbitration to collective
bargaining.

REPUBLIC ACT No. 875 June 17, 1953

An Act to Promote Industrial Peace and Other
Purposes (repealed by PD No.442)
Industrial Act Period
 Republic Act no.875- divested of the power to set
wages, rates of pay, hours of employment, other
terms and conditions of employment and
otherwise regulate the relation between employers
and employees as compulsory arbitration body,
except in labor disputes involving industries
indispensable to the national interest

Martial Law Period

  During this period, voluntary arbitration become
an integral part of labor relations policy
 Strikes were banned
 To cushion the impact of strike ban, issued
Presidental Decree No.21creating the National
Labor Relations Commission (exercise original
jurisdiction over all labor disputes)

Post Martial Law Period

 Emphasis is on promotion of voluntary modes of
dispute settlement
 Executive Order No.26 , reorganized DOLE, the
National Conciliation and Mediation Board
( NCMB) was created to oversee the
 implementation of the constitutional policy of
promoting the preferential use of the voluntary
modes of dispute settlement including conciliation
 RA 6715 introduced amendments to the Labor
Code which strengthened trade unionism and
colelctive bargaining as essential elements of
effective labor dispute management system
5. THE PHILIPINE LABOR CODE
 Promulgation of Labor Code as Presidential
Decree 442 on May 1974
 Enacted by then Pres. Ferdinand Marcos
 Major breakthrough in the field of labor
management relations
Labor Code was divided into 7 books
Labor Code of the Philippines
a. Preliminary Title, Chapter II- Emancipation of
Tenants
Labor has been integrated in both agricultural and
non agricultural sectors by protecting the tenants
through agrarian reform and related laws
b. Book I Pre employment- deals with the
recruitment and placement of workers
 it updated two old laws about about recruitment
and placement
A. Act No. 3486-fixed a tax upon every person or
entity enganed in recruiting or contracting laborers
I nthe country
 B. Act No. 3957- the Private Employment Agency
Law
Book II- Human Resource Development Program
 Covers two main subjects
1. National Manpower Development Program- RA
5462 (National Manpower Out of School Youth
Developmetn Act)
2. Training and employement of special workers
such as apprentices, learners and handicapped
workers
Book III-Conditions of Employment
 Deals with hours of work, weekly rest period,
holidays, and I ncentive leaves
  It also discusses wages and working conditions for
special groups of employees such as women,
minors, house helpers and home workers
Book IV-Health, Safety and Social Welfare Benefits
 Covers medical, dental ,occupational health and
safety,employees compensation, State Insurance
Fund, Medicare,
Book V- Labor Relations
 Talks about the major labor laws, the role and
functions of the National Labor Relation
Commission (NLRC) and the Bureau of Labor
Relations (BLR)
  It gives a comprehensive discussion on labor
organization, collective bargaining
agreements,grievance machinery, and voluntary
arbitration, conciliation and mediation, strikes and
lock out
 It includes act of unfair labor practices, that both
the employer and labor organizations may commit

Book VI-Post Employment

 A security of tenure law updating RA 1052 and RA
1787 known as the Termination Pay Law
 It deals with the different labor laws pertaining to
resignation, lay off and retirement from service
Book VII- Penal Provisions, Liabilities, Prescription of
Offenses, Claims and Transitory Provisions

6. BASIC RIGHTS OF WORKERS

1. Equal work opportunities for All (DOLE)
 The State shall protect labor, promote full
employment, provide equal work opportunity
 regardless of gender, race, or creed; and regulate
employee-employer relations.
 Male and female employees are entitled to equal
compensation for work of equal value and to equal
access to promotion and training opportunities.
 Discrimination against female employees is
unlawful. It is also unlawful for an employer to
require a condition of employment that a woman
employee shall not get married or to stipulate
expressly or tacitly that a woman employee shall be
deemed dismissed upon marriage.
 The minimum age of employment is 18 years for
hazardous jobs, and 15 years for non-hazardous
jobs.
 But a child below 15 maybe employed by
parents or guardians in a non-hazardous job if the
 employment does not interfere with the child's
schooling.

2. Security of Tenure
Just Cause refers to any wrongdoing committed by an
employee including:
1. serious misconduct
2. willful disobedience of employers' lawful orders
connected with work
3. gross and habitual neglect of duty
4. fraud or willful breach of trust
5. commission of crime or offense against the
employer, employer's family member/s or
representative
6. other analogous cases
Authorized Cause refers to an economic circumstance
not due to the employee's fault, including:
 the introduction of labor-saving devices
 redundancy
 retrenchment to prevent losses
 closure or cessation of business

Due Process in cases of just cause involves:

1. notice to employee of intent to dismiss and
grounds for dismissal
2. opportunity for employee to explain his or her
side
 3. notice of decision to dismiss
In authorized causes, due process means written
notice of dismissal to the employee specifying the
grounds, at least 30 days before the date of
termination.
The inability of a probationary employee to meet
the employer's prescribed standards of performance
made known to him or her at the time of hiring is also
a just cause for dismissal.

4. Work Days and work hours

Work Day refers to any day during which an employee
is regularly required to work.
Hours of Work refer to all the time an employee
renders actual work, or is required to be on duty or to
be at a prescribed workplace.
 The normal hours of work in a day is 8 hours.
This includes breaks or rest period of less than one
hour, but excludes meal periods, which shall not be
less than one hour.
 An employee must be paid his or her wages for
all hours worked. If all or any part of his or her
regular work hours falls between 10:00 p.m. to 6:00
a.m., a covered employee shall be entitled to a night
shift pay in addition to his or her pay for regular
work hours If he or she works for more than 8
 hours in one day, he or she shall be entitled to
overtime pay.
 An employee may not be compelled to work
overtime except during war, emergencies, disasters
or calamities, when urgent repairs need to be
undertaken, when work is necessary to preserve
perishable goods, avoid serious obstruction, or
prejudice to the employers business, or take
advantage of favorable weather conditions,

5. Wage and wage related benefits

Wage is the amount paid to an employee in exchange
for a task, piece of work, or service rendered to an
employer.
 This includes overtime, night differential, rest
day, holiday and 13th month pay.
 It also includes the fair and reasonable value of
board, lodging and other facilities customarily
furnished by the employer.
 Wage may be fixed for a given period, as when it
is computed hourly, daily or monthly. It may also
be fixed for a specified task or result.
 If wage is for a fixed period, the minimum wage
for a regular 8-hour workday shall not be lower
than the minimum daily wage applicable to the
place of work as determined by the Regional
Tripartite Wage and Productivity Board having
jurisdiction over workplace.
 If wage is paid by result, the worker shall receive
at least the prescribed minimum wage for 8 hours
 of work. The amount may be increased or reduced
proportionately if work is rendered for more or
less than 8 hours a day.
 An employer cannot make any deduction from
an employee's wage except for insurance
premiums with the consent of the employee, for
union dues, or for withholding taxes, SSS
premiums and other deductions expressly
authorized by law.

Computation of wages
Computation of wages is governed by the following
rules:
Computing overtime:
1. On ordinary days-
Number of hours in excess of 8 hrs-125% x hourly rate
Computing pay for word done on:
On a rest day, special holiday or regular holiday
A special day – (130% x basic pay)
A special day- which is also a scheduled rest day
(150% x basic pay)
A regular holiday -200% x basic pay
A regular holiday- which is also a scheduled day
(260% x basic pay)
Computing night shift premium where night shift is a
regular work
On ordinary day- 110% x basic hourly rate
On a rest day , special day, regular holiday (110% of
regularly hour rate for a rest day,special day, regular
holiday)

Computing overtime on night shift

An ordinary day (110% x overtime hourly rate)
On rest day, special day or special holiday- (110% x
overtime hourly rate for rest days, special day or
special holiday)
Computing 13th Month Pay
Total basic salary earned for the year exclusive of
overtime, holiday, night shift, differential pay divided
by 12= 13 month pay

Safe working conditions

  Employers must provide workers with every kind
of on-the-job protection against injury, sickness or
death through safe and healthful working
conditions.
Protection includes provision of :
 Appropriate seats, lighting and ventilation
 Adequate passageways, exits and firefighting
equipment
 Separate facilities for men and women
 Appropriate safety device like protective gears,
masks, helmets, safety shoes, boots, coats or
uniforms
 Medicine , medical supplies, or first aid kits
  Free medical and dental services and facilities,
the kind of which depends on the number of
employees, and the nature of the work
Jobs may be hazardous nor non- hazardous
Hazardous jobs- are those which expose the employee
to dangerous environment elements, including
contaminants, radiation, fire, poisonous substances,
biological agents and explosives,or dangerous
processes or equipments including
construction,mining, quarrying, blasting, stevedoring,
mechanized farming, operating heavy requipment

Rest days and Holidays

Rest days refer to any period of not less than 24
consecutive hours,after not more than 6 consecutive
work days
Holidays or special days-refers to days classified as
such by law,or declared by competent public
authority,whether or not it falls, on an employee’s
work day or rest day
Regular Holidays
New Years Day- January 1
Maundy Thursday- movable dates
Good Friday- movable dates
Araw ng Kagitingan- April 9
Labor Day- May 1
Independence Day – June 12
National Heroes Day- Last Sunday of August
Bonifacio Day- November 30
Christmas Day- December 25
Rizal Day- December 30
Special Days
All Saint’s Day- Nov. 1
Last day of the year- December 31

Leaves
The 3 types of leaves which an employer which an
employer is obliged to extend to its employees are:
B. Service Incentive Leave (SIL)
 this refers to 5 day leave with pay to which an
employee is entitled after one year of service.
 Unused SIL may be converted to cash at the
end of each year of service, and the
computation shall be the salary rate at the
time of conversion
C.Maternity Leave (ML)
 Leave granted to the occasion of childbirth,
abortion, or miscarriage of a female member of SSS
who has paid at least three monthly contributions
 in the 12-month period immediately preceding her
childbirth or miscarriage.
 During her maternity leave, the female employee
shall be paid an allowance equivalent to her
average monthly credit for 30 days in case of
normal childbirth, abortion or miscarriage, or for 78
days in case of caesarian delivery. This allowance
shall be given in advance by the employer and
subject to the reimbursement by the SSS.
C. Paternity Leave (PL)
 Allows a male employee a leave of seven days
with full pay when his legitimate spouse gives
birth or suffer miscarriage
 It shall be granted to the employee for the first
four deliveries of his legitimate spouse
8.Administration and Enforcement
Labor Standards
 Minimum terms and conditions of employment
fixed through the Labor Code including wages and
wage-related benefits and leaves.
 No employer is allowed to extend to its
employees terms and conditions of employment
below these standards
 Secretary of Labor and Employment (Visitorial
power) – through the Regional Director or an
authorized representative can inspect or investigate
the premises or records of the employer at any time
whenever work is being undertaken
The power is intended to determine whether the
employer is complying with labor standards or other
obligations to its workers as prescribed by the Labor
Code
Enforcement Power
The secretary or Regional Director can:
1.order an employer, after due notice and hearing, to
comply with labor standards,
2. issue a writ of execution, in case the employer, does
not honor the order of compliance,or
3. stop work or suspend operations if the violation
poses an imminent danger to the health and safety of
workers.
If worked is stopped or suspended due to immenent
danger, the employer has the right to a hearing, to be
conducted within 24 hrs. from the time of work, or
when operation is stopped. The hearing is determine
whether or not it is safe for work operations to resume
Right to Self Organization and Collective Bargaining
 The right to self-organization is the right of every
worker free of any interference from the employer or
from government, to form or join any legitimate
worker’s organization, association, or union or his
or her own choice.
 Except those classified, as managerial or
confidential, all employees may form or join unions
 for purposes of collective bargaining, and other
legitimated concerted activities.
 An employee is eligible for membership in an
appropriate union on the first day of his or her
employment

Collective bargaining involves two parties:

1. the representative of the employer
2. union duly authorized by the majority of the
employees within a bargaining unit called exclusive
bargaining agent.
It is the process where the parties agree:
1. To fix and administer terms and conditions of
employment which must not be below theminimum
standards fixed by law
2. To set a mechanism for resolving their
grievances

Collective Bargaining Agreement (CBA)- result of

collective bargaining
 It has a term of 5 years
  Provisions of CBA maybe classified as political
and economic.
Political Provisions –refer to those which define the
coverage of the CBA and recognize the collective
bargaining agreement as the exclusive representative
of the employees for the term of the CBA
Economic Provisions- refer to all terms and conditions
of employment with monetary value
Economic Provisions has a term of 5 years but may be
renegotiated before the end of the third year of
affectivity for the CBA

Workers Participation and Tripartism

  Social partnership-ideal relationship of employee
and employer
 Expected to share primary responsibility in
regulating their relations and settling their
differences
 They are encourage to set up labor management
councils and other mechanism for postering
communications, consulation, cooperation, and join
decision making in the workplace
 Employees have a right to a just share in the
fruits of production.
 Employers are entitled to reasonable return on
their investment and to expansion and growth.
 Both parties are encourage to develop schemes
to improve efficiency, competitiveness and
 productivity, which result in increased outcomes for
employees and long term sustainability for
employers
 Workers have a right to participate in policy and
decision making processes in matters directly
affecting them
 They have a right to take part in tripartite
activities with government and employers
organizations.
 Through their organizations, workers are
entitled to representation, in tripartite decision
making. Functions as defined by law including
fixing of wages, and resolution of labor disputes
11. Social Legislations
Are laws which provide social security benefits to
workers generally through:
1. Income substitute in case they suffer
contingencies resulting in temporary or permanent
loss of earning capacity
2. Rehabilitation assistance for work related
disability
3. Financial assistance or allowance for death or
sickness
4. Old age pension in case of retirement
5.Credit access for social needs

Social Security Benefits- are sources from a common

fund sustained by contributions from employers or
employees or both.
Main Social Security Programs
1.Employee’s Compensation Program-provides
employees and dependents with tax exempt income
and medical benefits in case of work connected
disability or death
2.Social Security Program- which provides tax
exempt benefits for employees and their families in
case of disability, sickness, old age or death,
3. Housing Program- which provides employees who
are members of SSS Housing Loans
 Part of the social legislation is the retirement law
which provides retirement benefits equivalent to
22.5 days salary for every year of service for
optional retirement at 60 under RA 7641 or under
applicable agreement or for compulsory
retirement at age 65,
  For underground mine employees, optional
retirement at 50 under RA 7641 as amended by
RA 8558 compulsory at 60.

12. On LABOR Disputes

 Labor dispute –any controversy or matter
concerning the association or representation of
persons for purposes of collective bargaining or
concerning terms or conditions of employment,
including violations of labor standards, labor
relations, and welfare and social laws.
Types of Disputes
 A labor dispute maybe between:
1. The employer and its employees or employees’
organizations
2. Two associations of employees
3. Members of employees ‘ organizations
Labor Standard Disputes-includes nonpayment or
underpayment of wages and wage-related benefits and
violations of health and safety standards
Labor Relations Disputes-include employee discipline
or dismissals, unfair labor practices, disputes arising
from the right of unions to represent employees for
purposes of bargaining, bargaining deadlocks, strikes
and lockouts, contract administration, and personnel
policy disputes.
Welfare and Social Legislation Disputes-refers to
claims arising from the failure of the employer to
comply with its social and welfare obligations under
the law, such as remittance of SSS Premiums and
ECC contributions, or failure to pay social benefits
including maternity pay, PhilHealth, and disability
compensation.
Where to Seek Remedies?
Labor Standard Disputes including simple money
claims not exceeding Php5,000 which arises out of
employee-employer relations –the Regional Office of the
DOLE
Labor Relations Disputes-particularly illegal dismissals
with or without claim for reinstatement, unfair labor
practices, strikes and lockouts, and claims of
damages,-the Labor Arbiter in the Regional Arbitration
Branches of NLRC.
Union Representation-the Med-Arbiter of the DOLE-
RO
Intra-Union Disputes and Cancellation of Union
Registration –the DOLE-RO or the Bureau of Labor
Relations
Bargaining Deadlocks Needing Conciliation and
Mediation- the Regional Branches of NCMB
CBA Administration Disputes Involving Personnel
Policies-the Grieveance Machinery at the
establishment if any then with the regional branches
of the NCMB
Social Legislation Disputes-the regional branches of
the ECC or the SSS.
7.LABOR ORGANIZATIONS
Labor organization any union or association of
employees which exists in whole or in part for the
purpose of collective bargaining or of dealing with
employers concerning terms and conditions of
employment
(Art 212 of Labor Code Book 1 Rule 1 Sec.1)
Employees- any person in the employ of the employer.
The term shall not be limited to the employees of the
particular employer unless the Labor Code so explicitly
states.
Collective bargaining- principal purpose of labor
organization. This preferential mode of resolving
industrial disputes (Article XIII Sec.3 of the
Phil.Constitution) is corollary to the right of self
organization. It infers the existence of labor
organization and denotes it role in fostering industrial
peace.
 Without this right, a labor union will have no
voice or power to express the worker’s interest
before the employer, rendering it inutile.
With it workers, are able to negotiate,with the
employer on the same level,and with more
persuasiveness, than if they were to bargain,
individually, for their respective conditions.
The other purpose of labor organization,suggest that
this should be lawful.
8.WHY EMPLOYEES JOIN UNIONS?
  No single reason or answer why employees join
unions
 Employees join unions to satisfy needs that are
important to them
 Needs and their importance differ among
individuals , some of these are the following:
1.Job Security- union has a union shop clause in the
contract and workers must join to keep their jobs
2.Satisfy needs for affiliation- Unions provide social
interaction bringing people together,with similar
interest and goals
3.for safe and healthy place to work
4.Provides a communication link to management-this
link enables them to express dissatisfaction and
disagreements about the job, management, and other
issues
5.For economic advancement and elimination of unfair
conditions- most union members believe labor union
should be credited for having created many economic
benefits including higher wages, improved medical
benefits,longer vacations, and others,
Members also believe that labor unions protect them
against unfair and discriminatory treatment by
management.
6. Due to job dissatisfaction- indicates that the job
satisfaction is strongly associated with both the
level of union organizing activity in the firm and the
actual support of union representation among
employees. If workers are dissatisfied with issues
about pay, job security, and supervisory practices,
they are likely to unionize
7. Union instrumentality- perceived ability of the
union to provide important benefits to the workers
(eliminate sources of job dissatisfaction. The
decision to organize a union is thus based on
whether employees believe that they will be better
off with aunion than without one.
 9.HOW TO AVOID THE FORMATION OF LABOR
UNION
1. Practice preventive employee relations
2. Seek early detection
3.Work closely with the employees through executive
speeches during working hours, informal meetings,
newsletter, bulletin boards, and other tools to
facilitate or promote open lines of communication .

10.ROLE OF THE UNION STEWARD

Union steward- represents the union on the job site
and is charged with handling grievances and
disciplinary matters
 It functions as a gatekeeper who can encourage
employees to file grievances (or even file on their
behalf) or the steward can seek to resolve problems
informally in consultation with management
11. UNION CONTRIBUTION’S AND ITS EFFECTS
A. To the employee
1. improvement of working rules, protection from the
employer and increase in job security
2. the grievance procedure negotiated by the union
assures employee full and just consideration of his
complaint
3. better terms and conditions of employment (higher
wages, more benefits, good working condition
bargaining collectively with management)
B. To the employer
1. lose the power to set wages without prior discussion
with the union
2.limited power to terminate or discipline employees
3.Union may provide management with useful
information about the status of employee morale
4. Cooperation in the grievance procedure can prevent
minor complaints from growing into major issues

12. KINDS OF LABOR ORGANIZATION

The Labor Code makes reference to several kinds of
labor organizations. These are:
1.Craft Union or Trade Union-consists of workers who
are all engaged in one particular craft such as wood
carvers, carpenter and the like. Homogenous in the
sense that all its members manifest one common trade
interest
2.Industrial Union-composed of workers in a given
industry without reference to the several crafts found
in the industry, membership disregard craft lines
3.Independent Labor Union- an active functioning
labor union without any direct or indirect affiliation
with any federation or national union. This is the basic
unit of organized labor
4.Legitimate Labor Organization-any legitimate labor
organization registered with the Bureau of Labor
Relations
5.Company Union-a labor organization whose
formation or organization is initiated, dominated or
assisted or otherwise interfered with by the employer
including the giving of financial or other support to it,
or its organizers and supporters. Such union is
unlawful, being the result of an unfair labor practice.
6.Federation and National Union-an alliance of group
of unions in one industry in any area, region or
country. Basically service units or agents whose
services can be dispense with at will by local unions.
This is a matter of right, independent of a contract, in
the absence of enforceable provisions, in the
federations constitution,preventing disafflication of a
local union.
7.Trade Associations- labor associations formed by
ambulant, intermittent,itinerant workers, self
employed people,rural workers, and those without any
definite employers, for their mutual aid and protection
13. REQUIREMENTS IN THE REGISTRATION OF
LABOR UNION
1. Payment of registration fee
2.Minutes of organizational meeting (together with the
name of officers, addresses, principal office address of
the labor union, and list of workers who participated
in the meetings
3.name of all the members it seek to represent,at least
20% of the employees,in the bargaining unit shall be
members of the applicant union
4.If it has been in existence, for one or more years, a
copy of its financial report
5. Four copies of the constitution and by laws,
minutes of its adoption or ratification and the list of its
members who participated in it.
Compliance with all the requirements- the labor
organization shall be issued a Certificate of
Registration (legal personality and become a legitimate
labor organization)
14. RIGHTS OF LEGITIMATE LABOR
ORGANIZATION
1. To act or be certified as the exclusive representative
of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining
2. To own property, real or personal, for the use and
benefit of the labor organization and its members
3. To sue and be sued in its registered name
4. To undertake all other activities, designed to benefit
the organization and its members, including
cooperative housing, welfare and other projects not
contrary to law.
15. WHO MAY JOIN UNIONS?
1. All persons employed in commercial, industrial and
agricultural enterprises, including religious, medical
and educational institutions operating for profit or not,
government employees shall have the right to self
organization and to form, join, or assist labor
organization for purposes of collective bargaining.
Exempted from this provision:
1. Security personnel
2. Managerial employees-those vested with powers of
prerogative to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off,
 recall, discharge, and assign or discipline
employees.
These are distinguished from supervisory
employees who in the interest of the employer
effectively recommend such managerial actions, if
the exercise of such authority, is not merely
routinary or clerical in nature, but requires the
use of independent judgment.
3. Subversives or members of subversives
organizations
4. Employees of cooperatives
5. Employees who may be excluded by a CBA
16. UNION SECURITY AND ITS FORMS
Union Security- this refers to the preservation of
membership or a term applied to the provision in a
CBA whereby an employer agrees with the recognized
union to maintain in his firm conditions of
employment design to protect the union against loss of
membership
Forms of Union Security
1. Open Shop- the employees shall have total
freedom to decide whether or not they want to
join the union. Those who will not join do not
pay dues.
2. Closed Shop- the company can only hire union
members. The union itself provide labor to the
organization
3. Agency Shop-All employees pay union dues
whether or not they are members of the union
based on the assumption that the union’s effort
benefit all the workers
4. Union Shop-the company can hire non-union
members but they must join after a prescribe
period or time, or else they will lose the job.
5. Maintenance of membership shop-employees do
not have to belong to the union, however, union
members employed by the firm must maintain
membership in the union for the contract period.
17. COLLECTIVE BARGAINING AND ITS PROCESS
Article 211 of the Labor Code as amended by RA
6715 provides among others…it is the policy of the
State to promote and emphasize the primacy of free
and collective bargaining and negotiation including
voluntary arbitration, mediation and conciliation , as
modes of settling labor or industrial disputes
Collective bargaining (CB) -is a system for governing
relations between representatives of employers and
employees through bilateral negotiations to reach
mutual agreement about employment terms.
 Consists of management and union
representatives coming together to reach an
 agreement that will be acceptable to their
constituents
 Process will be smooth and uncomplicated if
both parties are willing to negotiate cooperatively to
reach an agreement
 Process is extremely complex and time
consuming
Major Issues Surrounding Collective Bargaining
1. Who will represent the workers?
2. Which issues will be negotiated in the contract?
3. What strategies will be used in the bargaining?
4. How will bargaining impasses or deadlock be
resolved?
5. How will the contract be administered?
The Bargaining Process
 Both union and management do a lot of
preliminary work before actual negotiation
(Example: info must be gathered about contract
settlement that are relevant to the bargaining)
 Both parties must also established the cost of
their initial offer at the bargaining table
 Actual negotiations involves 2 teams (union
team and management team)
 Top management avoids participating directly in
the bargaining session to reduce the possibility of
rash and unwise compromises
Figure 16. The Process of Collective Bargaining
Third Party Referral:
  Conciliation and mediation
 Arbitration

The Labor Code prescribes the procedure to be

observed in collective bargaining:
1.When a party desires to negotiate an agreement, it
shall serve a written notice to the other party with a
statement of its proposals
The other party will make a reply not later than 10
calendar days from the receipt of such notice
2.Should difference arise on the basis of such notice
and reply, either party may request for a conference
which shall begin not later than 10 days from the date
of request
3. If the dispute is not settled, the Board (National
Conciliations and Mediation Board) shall intervene
upon request of either or both parties or its own
initiative and immediately call the parties to
conciliation meetings.
The Board shall have the power to issue subpoenas
requiring the attendance of the parties to such meeting
4 .During conciliation meetings in the Board, the
parties are prohibited from doing any act which may
disrupt or impede the early settlements of disputes
5.The Board shall exert all efforts to settle dispute
amicably and encourage the parties to submit their
case to a voluntary arbitrator (Article 250 of Labor
Code)
18. IMPORTANCE OF COLLECTIVE BARGAINING
TO ITS WORKERS
1. By organizing and acting in concert, workers
achieve bargaining parity with their employers
2. Through CB, wages are taken out of competition
and employment conditions are standardized.
3. The source of collective bargaining power is their
credible threat of collective action against the employer
4.Collectively bargained wages and conditions,which
reflect the relative strength of the contending parties
are almost always more beneficial to the workers than
what an employer would offer in the absence of labor
union
5.Without union , employers are free to act as
dictators in the workplace and to set and change
conditions for employees as management alone
chooses to .
With a union, democracy is included in the workplace
and employers achieve more control over their work
lives
Figure 17. Factors Affecting the Bargaining Strength of
Unions
Company Economy Extenal Support Mgt
Strategy
Competitiveness
Resources Solidarity and
Commitment
Factors Affecting
Bargaining Strength

Union Organization Cost of Settlement/Dispute Labor

Market

19 . CONTENTS OF THE CONTRACT AGREEMENT

Main Sections of a Typical Contract Covers the
Following Subjects:
1. Management rights
2. Union security and automatic payroll dues
deduction
3. Grievance procedures
4. Arbitration of grievances
5. Disciplinary procedures
6. Compensation rates
7. Hours of work and overtime
8. Benefits provision
9. Health and safety provisions
10. Employee security and seniority provisions
11. Contract expiration date
Legal Implications of CBA
CBA- contractual obligations distinct from an
obligation imposed by law.
 Terms and conditions imposed of a CBA
constitute the law between parties
 CBA during its lifetime- embodies the law
between the parties and the same time contract
between them
 Its provision that monthly paid employees shall
be entitled to additional holiday authorized by law
cannot be impaired by a subsequent role of DOLE
that salaries of monthly paid employees as
previously stated are deemed to holiday pay
  To do otherwise, would violate the prescription
of the Constitution against impairment of
obligations and contract
Impasse Occurs, this might happen:
1.Strikes-when a group of employees refuses to work.
Principal aim: to achieve a total suspension of work
within the employer’s establishment
Labor union: maintain strike funds, used for financial
support of the strikers
Some cases: striking unions appeal to other unions
and to public for financial support
a. Economic strike-demand for better wages or benefits
than the employer wants to provide
b.Unfair labor practice strike- employees believe the
employer actions are inimical to the interest of the
employees or the union , falls under the category of
unfair labor practice
c.Jurisdictional strike-when 2 unions argue over who
has the right to represent the employees or why they
recruit members
d.Wildcat strike-an unapproved strike bec.one union
subgroup has been dissatisfied by a grievance
decision or some managerial action
  Contrary to the labor agreement , not authorized
by union members
e.Sit-down strike
 Employees strike but remain in the plant
 Refuses to leave the plant and machines and not
allowed them to be operated by others
f.Slow-down-form of work stoppage , employees
deliberately reduce their individual production
g.Recognition strike-force the employer to recognize and
deal with the union
h.Sympathy strike-strike to show their support of a
strike by another group of employees working
elsewhere
2. Injunction-of the chief measures adopted by
employers, obtain court orders enjoining the workers
from enganging in strikes
Injuction were issued on the ground that the strike
had resulted in damaged to the property rights of the
employer, or damaged was threatened and that the
employer was without any other legal remedy

3. Lockout-
Employee union-members locked out – replaced by
non-union substitute and the plant continues to
function
Shutdown- plan ceases to operate by the willful act of
the employer himself
Lockout-may affect all or less than all the employees
union members
Lockout-recognized as a valid weapon of the employer
in collective bargaining. Intent is to bring pressure upn
the union when a labor dispute has risen.
4. Picketing-when an union calls a strike, it
established picket lines to advertise the strike and
discourage the employer from continuing operations
Act of strikers, patrol back and forth, carry placards
and distribute literatures at the entrance of the
company
5. Boycotts-group of customers refuse to transact
business with a company to demand a change in the
organization
A union call for its members to boycott all employer’s
goods and services and can fine members who violate
the boycott
6.Third party intervention-both parties have to agree
to use any of the third party interventions
a. Mediation and conciliation-third party listen to both
sides, evaluate the conflicting issues, clarify
differences, propose new compromises and identify
common grounds for further negotiations
Mediator or Conciliator –receiver of facts, creative
facilitator and professional listener who relies on the
power of persuasion to get both parties to settle a
dispute
 Main role as a third party or neutral party is to
help remove an impasse to the contract negotiation
 Develop factual data if the 2 sides disagree,
setting up joint study committees on difficult points
or trying to help the 2 sides to determine common
ground for further bilateral negotiations
 Mediator has no power to compel 2 sides to
reach an agreement
 b. Fact-finding-a neutral third party who studies the
issues in a dispute and recommends a reasonable
settlement
Both mediation and fact-finding assist the union and
management in reaching their own agreement
c. Arbitration-the third party imposes a settlement on
the disputing parties or both parties have to accept the
arbitrator’s decision.
Process by which 2 parties to a dispute agree in
advance of the hearing to abide by the decision of an
independent quasi-judge called the arbitrator
Process that ends in direction, not a recommendations
Voluntary arbitration-parties agree to submit their
differences to arbitration
Involuntary arbitration-the law requires the parties’
impasses to be submitted to arbitration

Relevant factors in Strikes and Lockouts

1.Cause
Unlawful causes of strikes: bargaining deadlocks,
unfair labor practice (dismissal from employment of
union officers elected in accordance with the union
constitution)
No labor union may strike and no employer may
declare a lockout on grounds involving inter-union and
intra-union disputes
2.Party-any certified or duly recognized bargaining
representative may declare a lockout in the same
cases.
In the absence of certified/duly recognized
representative, any legitimate labor organization in the
establishment may declare a strike but on the grounds
of unfair labor practice
3.Notice-in the case of bargaining deadlocks, a notice
of strike or lockout should be filed within the regional
branch of the NCMB at least 30days before the
intended date thereof , with a copy served on the other
party.
Unfair labor practice- the period of notice shall be 15
days
Union bursting cases-15 days cooling off period shall
not apply and the union may take action immediately
after the strike vote is conducted and the results
submitted thereof to DOLE.
4.Strike/lockout vote-decision to declare a strike must
be approved by a majority (2/3) of the total union
membership in the bargaining unit concerned,
obtained by a secret ballot in a meeting or a
referendum called for the purpose.
Lockout-must be approved by a majority of the board
of directors of the employer , corporation or
association or the partners in a partnership obtained
by a secret ballot in a meeting called for a purpose.

21.LABOR MANAGEMENT COUNCIL

 Traditional relationship between labor and
management in the Philippines has ben adversarial.
 Organized labor believes that management never
has the needs of the worker in mind
 Management believes that labor is always out to
grasp more concessions
 Collecting bargaining rest on this premise with
the two sides facing off across the table
 Both sides must cooperate to some extent in
order to remain strong.
 Workers need jobs, good working conditions,
and fair wages and benefits
 Management wants to maximize profit while
supplying quality products
 Labor is strongest when the economy is strong
 Management can pass along the desired
outcome and recoup them with higher prices
 Both labor and management benefit from a
strong economy and healthy profitable organization
 Labor Management Councils- are instituted to
improve and promote better labor management
relations

22. INTERNATIONAL LABOR ORGANIZATION

(ILO)
 A specialized agency associated with the United
Nations (UN) whose worldwide objectives are to
improve labor conditions, promote productivity
employment and social progress, and raise living
standards
 Was established in 1919 as an autonomous part
of the League of Nations
 Brought into formal relationship with the Un in
1946
 Was awarded the Nobel Peace Prize in 1969
 Composed of 175 member nations and differs
from other UN agencies because representatives of
employers and workers as well as government
officials, take part in its work
 Each member nations send 4 delegates: 2 from
the government , one employer and one worker
 Principal organ- the International Labor
Conference (ILC) meets annually in Geneva,
Switzerland to define and ratify international labor
standards
Annual convention in Geneva , Switzerland- annual
meeting , do conventions, which are subject to
voluntary ratification by member nations and
recommendations that provide nations with detailed
guidelines for legislation
 Sets standards that cover child labor, disabled
workers, discrimination, equality of treatment,
freedom of association, human rights, maternity
protection, pensions and elimination of forced
labor.
 Supervises the application of ratified
conventions in national law and practice
 Employers and workers organizations and
member nations’ governments have the right to
lodge formal complaint against the ILO.