Labor Law: Book V; Title VII-A Grievance Machinery and Voluntary Arbitration (Arts. 273 - 277)

 Book V

Labor Relations

Title VII-A

Grievance Machinery and Voluntary Arbitration

Arts. 273 - 277

Q: What is "voluntary" about voluntary arbitration?
Q: What disputes have to be brought to voluntary arbitration?
Q: Who can be voluntary arbitrators?
Q: Can I appeal from a voluntary arbitrator's decision? To whom
and when should I appeal?


Art. 273. Grievance machinery and voluntary arbitration. 

The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies.

All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above.

Own Notes
  • Mandatory Provision
    • The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. 
    • They shall establish a machinery for the adjustment and resolution of grievances arising from the:
      • interpretation or implementation of their Collective Bargaining Agreement and
      • interpretation or enforcement of company personnel policies
  • Voluntary Arbitration
    • All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement.
  • Voluntary Arbitrator 
    • For this purpose, parties to a Collective Bargaining Agreement shall:
      • name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or 
      • include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. 
    • In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above.

Contract as Law
  • The provisions of the collective bargaining agreement must be respected since its terms and conditions constitute the "law between the parties." 
  • Those who are entitled to its benefits can demand fulfillment of an obligation imposed by the contract, otherwise, the aggrieved party has the right to seek redress. (See Roche [Philippines], et al. v. National Labor Relations Commission, G.R. No. 83335, October 1989)
  • The rule is that the law forms forms part of, and is read into, every contract, unless clearly excluded from it in those cases where such exclusion is allowed.
  • Thus, the fact that a CBA does not contain any provision on the payment of accumulated leaves does not bar the employees' claim for payment of unused leave. (Liberation Steamship Co., Inc. vs. CIR, et al, G.R. No. 125389, June 27, 1968)
Grievance
  • All grievances arising from the implementation or interpretation of the collective bargaining agreement and/or interpretation and enforcement of company personnel policies are compulsorily subject to the grievance machinery.
  • A grievance is defined as "any question by either the employer or the union regarding the interpretation or application of the collective bargaining agreement or company personnel policies or any claim by either party that the other party is violating any provision of the CBA or company personnel policies." 
  • A grievance procedure is a "must" provision in any CBA; without it the CBA is not registrable. 
  • Until the parties include a grievance procedure, the CBA registration is deferred. 
  • The procedure in handling grievances is detailed in the Implementing Rules. (Book V, Rule XIX) 
  • The procedure applies as well to grievance machinery that may be set up in ununionized employers. (Implementing Rules of Book V, Rule XIX, Sec. 3)
Voluntary Arbitration
  • The policy of the State is to encourage voluntary arbitration of any and all labor-management disputes. Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration. (Implementing Rules, Book V, Rule XIX, Sec. 5)
  • Voluntary arbitration is defined as a contractual proceedings where the parties to a dispute select a judge of their own choice and by consent submit their controversy to him for determination.
  • In Philippine context, the "judge" in:
    • voluntary arbitration = arbitrator
    • compulsory arbitration = labor arbiter. 
  • NCMB has list of "accredited" voluntary arbitrators, mostly independent industrial relations practitioners. 
  • The labor arbiters are government officials that hear and decide cases as NLRC representatives.
  • A voluntary arbitrator "is not a public tribunal imposed upon the parties by a superior authority which the parties are obliged to accept. He has no general character to administer justice for a community. He is rather part of a system of self-government created by and confined to the parties."
    • Voluntary arbitration, indeed, is a private judicial system. 
    • A VA is an impartial third person authorized by the parties to make a final and binding decision or award.
  • Arbitration may be initiated either by:
    1. a Submission Agreement or
    2. by a Demand or Notice invoking a collective agreement arbitration clause
    • Sometimes both instruments are used in a case.
  • Either instrument indicates the issues for arbitration and the arbitrator's extent of authority.
  • Although the CBA may establish the breadth of the arbitrator's power and the limits of his authority, his power may be more sharply defined in the submission agreement. The VA should confine his decision to the issues submitted by the parties. 
    • In one case, the VA was asked to rule whether or not the employees were entitled to a certain benefit. In addition to saying "yes," he specified the time the entitlement began. The court held that the VA did not exceed his authority; he had to decide the question so as to settle or end the dispute between the parties. (Ludo and Luym Corp. January 20, 2003)
  • It is not unusual and not illegal for the parties to first select the voluntary arbitrator and then, with his participation, define precisely the issues being submitted to him for decision. In the process, they may also agree on certain points of procedure such as no-postponement hearings or expeditious presentation of evidence. 
  • This freedom to devise the rules is one reason voluntary arbitration moves faster and is less acrimonious than most compulsory arbitration proceedings.

Art. 274. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. 

The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.

Own Notes
  • Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. 
    • Original and exclusive jurisdiction 
      • Hear and decide all unresolved grievances arising from the:
        • interpretation or implementation of the Collective Bargaining Agreement and
        • interpretation or enforcement of company personnel policies
  • Violations of a Collective Bargaining Agreement
      • except those which are gross in character
      • shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement
  • Gross violations of Collective Bargaining Agreement
    • shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.
  • Commission, Regional Offices, Regional Directors
    • Shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.

Art. 275. Jurisdiction over other labor disputes. 

The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

Own Notes
  • Jurisdiction over other labor disputes.
    • upon agreement of the parties:
      • unfair labor practices and 
      • bargaining deadlocks
Notes
  • Article 273 gives the Voluntary Arbitrator (or panel of Voluntary Arbitrators) original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies.
  • Violations of a CBA are likewise cognizable by Voluntary Arbitrator if not resolved through the grievance machinery. 
  • If the violations, however, are "gross" in character, these are to be treated as unfair labor practice which, following Article 224(a-1), are to be heard and decided by a labor arbiter.
    • "Gross violations" refer to flagrant and/or malicious refusal to comply with the economic provisions of the CBA.
  • However, reference to the economic provisions of the CBA is not a necessary element of ULP where the employer in effect totally disregarded the subsisting CBA. 
    • Thus, an employer committed ULP when it unilaterally repudiated the existing CBA and proceeded to negotiate anew with a different union. Repudiating the whole CBA is worse than, and therefore includes violation of the CBA's economic provisions. 
    • Such ULP case falls within NLRC's jurisdiction.
  • Nonetheless, even in gross violation cases, Article 275 allows the parties to submit the ULP case to a voluntary arbitrator. 
  • In fact, even bargaining deadlocks and "all other disputes" may, by agreement of the parties, be considered proper subject of voluntary arbitration. 
  • Voluntary arbitration, indeed, is a master procedure to resolve labor-management dispute. 
    • But matters beyond the competence of voluntary arbitrator are beyond his jurisdiction, such as a question of taxation.
  • Regarding dismissal of employees, the notes to Article 224 are relevant here.
    • As ruled by the Supreme Court in San Miguel Corp. vs. NLRC, March 15, 1996, an employee dismissal dispute may be submitted by the parties to voluntary arbitration, but in the absence of such agreement in clear and unequivocal language, the dispute should be lodged with a labor arbiter in line with Article 224(a-2).

Art. 276. Procedures.

The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or issues subject of the dispute, including efforts to effect a voluntary settlement between parties.

All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing may be adjourned for cause or upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration.

The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award.

Own Notes:
  • Powers of the Voluntary Arbitrator
    • hold hearings
    • receive evidences 
    • take whatever action is necessary to resolve the issue or issues subject of the dispute, including efforts to effect a voluntary settlement between parties.
  • Attendance to the the arbitration proceedings
    • All parties to the dispute shall be entitled to attend the arbitration proceedings. 
    • The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. 
    • Hearing may be adjourned for cause or upon agreement by the parties.
  • Award or Decision
    • Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration.
  • Award or Decision Contents
    • The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is based. 
    • It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties.
  • Writ of Execution
    • Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award.
Notes:
  • A voluntary arbitrator is chosen by the disputants themselves and a disputant will naturally choose someone whose fair judgment he trusts. 
    • It is but logical that the parties must submit to the decision of the arbitrator. 
  • True to this rationale of voluntary arbitration, Article 276, fourth paragraph, declares that the arbitrator's decision is "final and executory" after ten days from receipt of such decision.
  • But the courts, ultimately the Supreme Court, possesses the power judicial review. 
    • This power may be exercised to review decisions of voluntary arbitrators. 
    • The power is invoked through a petition for certiorari (under Rule 65 of the Revised Rules of Court) which has to allege a grave abuse discretion or an act without or in excess of jurisdiction on the part of the voluntary arbitrator. Petitions of this nature are remanded to the Court of Appeals by the Supreme Court as a matter of policy. (Luzon Development Bank, October 6, 1995)

Art. 277. Cost of voluntary arbitration and Voluntary Arbitrator’s fee.

The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrator’s fee. The fixing of fee of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary Arbitration Fund, shall take into account the following factors:

    (a) Nature of the case;
 
    (b) Time consumed in hearing the case;
 
    (c) Professional standing of the Voluntary Arbitrator;
 
    (d) Capacity to pay of the parties; and
 
    (e) Fees provided for in the Revised Rules of Court.

Own Notes:
  • Cost of voluntary arbitration and Voluntary Arbitrator’s fee.
    • The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrator’s fee. 
    • The fixing of fee of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary Arbitration Fund, shall take into account the following factors:
      1. Nature of the case;
      2. Time consumed in hearing the case;
      3. Professional standing of the Voluntary Arbitrator;
      4. Capacity to pay of the parties; and
      5. Fees provided for in the Revised Rules of Court.

Notes:
  • If there is valid ground for filing a petition for certiorari, must a motion for reconsideration (M.R.) be filed first? No. 
  • Assuming that Section 7, Rule XIX of D.O. No. 40-03 is valid and binding. It states:
  • "The decision, order, resolution or award of the voluntary arbitrator or panel of voluntar y arbitrators shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties and it shall not be subject of a motion for reconsideration."
  • There is reason to doubt the validity of the last clause of the quoted Section. 
  • Disallowing an M.R. in this administrative rule has no basis in the Labor Code, and it overturns previous court rulings.
    • In any case, the Supreme Court in a recent decision emphasizes that filing a motion for reconsideration is an inherent requisite of a petition for a writ of certiorari. (Philtranco, February 26, 2014)
    • A motion for reconsideration is an opportunity for an office to correct itself.
    • Disallowing an MR is deprivation of such opportunity.
Questions:
What is a grievance?
  • Grievance is a question by either party regarding the interpretation or application of the collective bargaining agreement or company personnel policies or claim of either party on violations of such agreement or policies.
Explain the procedure in resolving a grievance from the employer to the Voluntary Arbitrator.  
  1. The Voluntary Arbitrator shall have the power to conduct hearings and receive evidence, or take necessary actions to resolve disputes. Any party to the dispute may attend the arbitration proceedings. However, attendance of third parties is at the discretion of the Arbitrator.
  2. Upon agreement, hearings may be adjourned.
  3. Within 20 calendar days from the submission to the arbitration, the Voluntary Arbitrator is mandated to render an award or decision, unless otherwise agreed by the parties. 
  4. After ten days from the receipt of the decision by the parties, the decision becomes final and executory. However, the Supreme Court may still exercise judicial review.
  5. Upon motion, the Arbitrator or Labor Arbiter may issue a writ of execution for the final decision. 

















































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