Presented to the ​College of Law

De La Salle University - Manila

1st Semester​,​ ​A.Y. ​2018-2019
In partial fulfillment
of the course
Labor Law 1 - G02

DEPARTMENT OF LABOR AND EMPLOYMENT

POLICY RESEARCH

Submitted by:
Apolinario, Janice Rae S.
Carandang, Rene Anton R.
Foronda, Constante Emmannuel S. III
Lauredo, Caleb
Monfort, Miguel
Omar, Nur Ameen T.
Sallador, Louie John
Tan, Louis
Vega, Alec Daniel Sandy J.
Yason, Isabelle Alexis P.
Zalameda, Jasper Rodil A

Submitted to:
Atty. Pura Calleja
September 7, 2018
I. Existing policy on Contractualization

Basic Definition of Contractualization

Contractualization has not been defined in any provision of the Labor Code nor in the
rules and regulations issued by the Department of Labor and Employment. However, it is a labor
problem that many Filipino workers have been facing. It has been termed in news reports as
“endo” or the end of contract”. The problem on contractualization has been an issue that affects
the security of tenure of mostly blue-collared jobs. Security of tenure1 refers to the rights of
employees not to be dismissed or removed without just and authorized cause. It has not been
deemed prohibited by any law but it was mentioned to be one that is “contrary to public policy”
by a Supreme Court ruling.

According to the DOLE Department Order No. 18-02, “contracting” or “subcontracting”

refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work or service within a definite
or pre-determined period, regardless of whether such job, work or service is to be performed or
completed within or outside the premises of the principal2.

A “contractor” may refer to any person or entity engaged in a legitimate contracting or

subcontracting agreement and a “contractual employee” refers to a person who is employed by a
contractor or subcontractor to perform or complete a job, work or service pursuant to an
arrangement between the latter and a principal. It may also refer to the hiring of employees from
a contracting agency that does not have substantial capital or investments in tools and
supervision.3

Contractualization is a concept that aims to lower the production costs of companies

especially for seasonal jobs and project-based work. In the 1990s, companies started taking
advantage of this loophole in the Labor Code, especially warranting Article 281.

Art. 281. Probationary employment shall not exceed six (6) months from the
date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the

1
Art. 279, Labor Code of the Philippines
2
Department of Labor and Employment Department Order No. 18-02 (Series of 2002)
3
​Department of Labor and Employment Department Order No. 18-02 (Series of 2002)

1
 time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee4.

Jurisprudence further elaborates the definition of probationary employees as one who is

on trial by an employer during which the employer determines whether or not he is qualified for
permanent employment. It is made to afford the employer an opportunity to observe the fitness
of a probationer while at work, and to ascertain whether he will become a proper and efficient
employee5. In any case that an employer is not satisfied with the worker’s performance, the
employer may terminate his or her employment under any of the just causes:

Art. 282. An employer may terminate an employment for any of the

following just causes:
1. Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative in connection with his
work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;
4. Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly
authorized representatives; and
5. Other causes analogous to the foregoing.

Probationary employees must be terminated according to the legal procedure. The

Supreme Court held in ​Mercado vs. AMA Computer College-Paranaque City ​that the standards
given to probationary employees should be made known to them at the start of their probationary
period, xxx the employer should also show as a matter of due process how these standards have
been applied6”

Regular employees are entitled to benefits and bonuses such as the right to holiday pay
and the right to service incentive leave. These benefits include the following: PhilHealth, SSS,
Pag-IBIG, Home Development and Mutual Fund (HDMF), Paid sick leaves, Paid vacation
leaves, Service incentive leaves, Meal and rest periods, Housing and housing plans, Expense
account, Company-sponsored vehicle, and Educational assistance. However due to the practice
of contractualization, these bonuses and benefits, are being avoided by the companies by

4
Art. 281, Labor Code of the Philippines
5
​International Catholic Migration Commission v. NLRC, ​G.R. No. 72222, January 30, 1989, 168 SCRA 606.
6
​Mercado v. AMA Computer College-Paranaque City, Inc., G ​ .R. No. 183572, April 13, 2010, 618 SCRA 218.

2
terminating their employees before the reach the regularized status as stipulated in the provisions
of the Labor Code.

Related laws

Throughout the years, the Department of Labor and Employment has been intensifying
its own efforts to abolish unlawful contractual arrangements through a Labor Advisories and
Department Orders that provide guidelines for employers in voluntarily regularizing their
workers or assuring them with a decent and humane place of work.

Section 7 of the DOLE Department Order No. 18-12 (series 2002) introduces the concept of
rights of a contractual employee stating,

Consistent with Section 7 of these Rules, the contractual employee shall be entitled
to all the rights and privileges due a regular employee as provided for in the Labor
Code, as amended, to include the following:
(a) Safe and healthful working conditions;
(b) Labor standards such as service incentive leave, rest days, overtime pay, holiday
pay, 13th month pay and separation pay;
(c) Social security and welfare benefits;
(d) Self-organization, collective bargaining and peaceful concerted action; and
(e) Security of tenure.

Such provision further implies that with regard to rights and privileges, a contractual
worker may have reason to expect that he or she would share the same rights as of a regular
worker covered by the Labor Code.7

Labor Advisory No. 06, series of 2017 states that employers in their respective regions
must submit a Letter of Voluntary Commitment to DOLE Regional Offices for a Joint
Assessment, which will be conducted by the assigned Labor Law Compliance Officer (LLCO)8.

DOLE’s Department Order No. 174 took effect last April 3, 2017 covered the
department’s prohibition against labor-only contracting based on the Labor Code. The order lays
down its new regulations governing contracting and subcontracting arrangements. The

7
​ Department of Labor and Employment Department Order No. 18-02 (Series of 2002).
8
Labor Advisory No. 06, series of 2017.

3
Department Order superseded DOLE Do No.18-A, which had been the governing rule on labor
contractualization since 20119.

It expanded illicit forms of employment arrangements such as (1) contracting out of work
to an in-house cooperative, (2) requiring employees to become members of a cooperative; and
(3) other schemes, practices, or arrangement designed to circumvent the worker’s right to
security of tenure. It also removed the provision for an employment contract to be co-terminus
with the service agreement and in case of termination due to the expiration of a service
agreement, the contractor is required to provide new employment to the employee within three
months and pay the latter his or her separation benefits. The order further adds that any violation
of any of the provisions of the Labor Code are grounds for the cancellation of the certificate of
registration of the company. Any contractor and officer who is found to be guilty will have its
registration cancelled and will blacklist such officers to operate or apply for new registration as a
contractor under either the same or different name10. However, by the signing of the Department
Order, ​Labor Secretary Silvestre Bello gives an ominous announcement, that is, that he really
cannot abolish contractualization. Department Order No. 174 was not well taken within labor
groups. The order was seen as a betrayal as it introduces “legal” contractualization contrary to
talks and demands on labor unions for the full abolishment of contractualization.

Similarly, ​Rodrigo Roa Duterte announced ​in May of 2017 his signing of an Executive
Order putting an end to illegal contractualization or “endo”. The Executive Order explicitly bans
illegal contracting or subcontracting or undertaking to circumvent the workers' right to security
of tenure11. However, like Department Order No. 175, with the announcement came a disclaimer
from the Senior Deputy Executive Secretary stating, “an executive order is meant only to
supplement or to give the implementing details of what the law provides” effectively putting
pressure to repeal or amend the Labor Code of the Philippines if the government really seeks to
completely ban contractualization12

Present State of Contractualization in the Philippines

“Endo” or “5-5-5-” is the short-term employment practice in the Philippines that refers to
the hiring of employees in 5-month-long cycles at a time to avoid grating them the regular status

9
Suyat, K. (2017). ​Do 174: Better deals for Labor but still no end to endo.
http://www.gmanetwork.com/news/opinion/content/605413/do-174-better-deals-for-labor-but-still-no-end-to-endo/stor
y/
10
Department of Labor and Employment’s Department Order No. 174, April 3, 2017.
11
https://www.philstar.com/headlines/2018/05/01/1811192/duterte-signs-eo-prohibiting-illegal-contractualiz
ation
12
https://www.philstar.com/headlines/2018/05/01/1811192/duterte-signs-eo-prohibiting-illegal-contractualiz
ation

4
on the sixth month of employment, as required by law13. By doing this, the companies get to
reduce expenses that come with being a regular employee, as well as receiving work from its
workers at a lower than expected rate. This practice, however, is still part of contractualization.
In other words, it is a loophole in our current laws that is being abused by a number of
corporations.

In 2016, the Associated Labor Unions of the Philippines estimated that there are around
20-25 million Filipino contractual laborers in a workforce of 67 million. According to the
Department of Labor and Employment, there are more than 850 companies across the country
that have been flagged, mainly due to ​non-compliance with minimum wage orders, proper
computation of overtime pay and remittance of social benefits.

In May 2018, President Rodrigo R. Duterte signed Executive Order No. 51 that bans
labor contracting and subcontracting. However, the nature of an executive order is merely to
execute and implement existing laws, rules and regulations, thus it cannot amend or supplement
existing provisions of law, as mentioned by Director Benjo M. Benavidez of DOLE’s Bureau of
Labor Relations14. During his 3rd State of the Nation Address, Duterte urged Congress to end
contractualization since he reiterated that it is them, and not the President’s mandate, to pass
such law15.

Following the pronouncement of President Duterte against illegal contractualization,

various pro-labor groups staged movements and rallies against corporations that are alleged to
have been practicing illegal contractualization.

Last May 1st, members of ​Kilusang Mayo Uno and Nagkaisa Labor coalition staged a
large rally against the current president for allegedly turning his back on his promise to end ​endo​.
In another separate mass rally, led by ​Nagkakaisang Manggagawa ng NutriAsia Inc, protested
against condiments manufacturer NutriAsia, for allegedly, among others, refusing to regularize
its workers, hostility towards labor unions, as well as subjecting its workers under inhumane
conditions. Unfortunately, the rally turned violent when one riot police swatted away a rallyist’s
video recording of the event. This eventually escalated to heated exchanges from both sides,
which eventually led to a violent dispersal by the authorities present. More than a dozen workers
and rallyists were detained by the riot police.

Currently, big companies such as PLDT, Jollibee and Nutriasia have received orders from
the labor department to regularize thousands of their workers. The companies have been tagged
13
http://news.abs-cbn.com/business/05/01/18/some-labor-law-provisions-obsolete-employers-say
14
​Understanding Executive Order 51. ​http://www.bworldonline.com/understanding-executive-order-51/
15
Rey, A. (2018, July 23). ​Duterte urges Congress to pass law ending contractualization.​
https://www.rappler.com/nation/208016-duterte-urges-congress-pass-law-ending-contractualization-sona-2018

5
as some of the top companies in the Philippines who engage in labor-only contracting16. In 2017,
the agency ordered PLDT to pay P77.5 million in overtime, holiday, 13th month and other
incentives to 2,500 employees17. Up until this day, even after the President’s crusade against
illegal contractualization, it still a practice that is prevalent in most companies and corporation,
especially who undertake projects that are temporary in nature.

In the case of Bankard v. NLRC, the Court stated that:

“Contracting out of services is an exercise of business judgment or

management prerogative. Absent any proof that management acted in a
malicious or arbitrary manner, the Court will not interfere with the exercise
of judgment by an employer.”18

And in the recent case of Arabit, et. al. v. Jardine Pacific Finance, the Court expounded further
by saying:

“The employer’s exercise of its management prerogative, however, is

not an unbridled right that cannot be subjected to this Court’s scrutiny. The
exercise of management prerogative is subject to the caveat that it should not
performed in violation of any law and that it is not tainted by any arbitrary or
malicious motive on the part of the employer. This Court, in several cases,
sufficiently explained that the employer must follow certain guidelines to
dismiss employees due to redundancy. These guidelines aim to ensure that
the dismissal is not implemented arbitrarily and is not tainted with bad faith
against the dismissed employees.”19

As it appears, the Court maintain that contractualization in itself is not an evil that should
be abolished. But the Court also maintains that proper guidelines must be followed in order to
assure that there is no malice or arbitrariness in the execution of such. What matters to the Court
is the proper execution of such contracts. As it is not viewed as inherently evil, it is up to the
claimants to prove that there is something wrong with the system of contractualization before
Courts may properly act on such claims.

II. Existing policy on Overseas Employment.

16
Yee, J. (May 29, 2018). ​20 endo firms tagged.​ ​http://newsinfo.inquirer.net/995151/20-endo-firms-tagged​. Retrieved
on September 7, 2018.
17
​PLDT ordered to regularize nearly 9,000 employees.
“https://news.abs-cbn.com/business/07/20/17/pldt-ordered-to-regularize-nearly-9000-employees”
18
Bankard vs. National Labor Relations Commission – First Division, G.R. No. 140689, 17 February 2004
19
Arabit, et. al. v. Jardine Pacific Finance - Second Division, G.R. No. 181719, 21 April 2014

6
 Overseas Filipinos is the term encompassing all Filipino migrants, whether permanent or
temporary, legal or unauthorized. Overseas Filipino Workers, or OFWs, represent a subset of
Overseas Filipinos, and are temporary migrants. The term is commonly used, a further sign of
the pervasive role that labor migration occupies in Philippine society.

The Commission on Filipinos Overseas includes the following categories of migrants in

its stock estimates:
1. Permanent Migrants - Filipino immigrants and legal permanent residents abroad,
Filipino spouses of foreign nationals, Filipinos naturalized in their host country, Filipino dual
citizens, and their descendants.

2. Temporary Migrants – Filipinos whose stay overseas, while regular and properly
documented, is temporary, owing to the employment-related nature of their status in their host
country. Include land-based and sea-based Filipino workers, intracompany transferees, students,
trainees, entrepreneurs, businessmen, traders, and others whose stay abroad is six month or more,
and their accompanying dependents.

3. Irregular Migrants - Filipinos who are not properly documented or without valid
residence or work permits, or who may be overstaying their visa.20

As of now the Department of Labor prioritizes OFW workers if there are vacancies in
certain companies. They can be easily identified by the I.Ds given to them by the DOLE.21 ​The
OFW Electron Card (E-card) is an identification card issued by the Department of Labor and
Employment (DoLE) through its attached agencies, the Overseas Workers Welfare
Administration (OWWA) and the Philippine Overseas Employment Administration (POEA).
The card is a multi-function card containing information about the OFW which he will need in
dealing with government institutions, locally and abroad.

The law states than the information of the OFW in the ID will be used if he or she aims to
work under government institutions and also private ones. The skills they have learned abroad
will be also be taken into consideration upon applying in the entity they wish to enter.

Filipinos have a adopted a deeply rooted and pervasive culture of migration; having made
moving abroad common, acceptable—even desirable—as an option or strategy for a better life.
For decades, sizeable numbers of Filipinos have left home in search of permanent settlement or

20
​Commission on Filipinos Overseas (CFO). 2017. ​CFO Statistics on Philippine International Migration. ​Manila: CFO.
http://www.cfo.gov.ph/images/pdf/2017/2015compendiumstats-insidepages-2017-06-29.pdf
21
https://www.dole.gov.ph/pages/view/29

7
temporary work overseas, trends long attributed to the fragile economy (and exacerbated by
frequent natural disasters). Today, more than 10 million Filipinos—or about 10 percent of the
population—are working and/or living abroad. While a markedly improved economic situation
in recent years has not diminished the outflows, it has allowed the country to move beyond its
longstanding labor migration policy to incorporate migration into long-term development
planning and strengthen the return and reintegration of overseas Filipino workers (OFWs).22

Over the years, institutional and policy development in the Philippines was geared toward
worker protection. The 1995 Migrant Workers and Overseas Filipinos Act, a landmark law,
aimed to provide protection to OFWs from pre-departure through arrival and return. The focus
on protection shifted during the presidency of Gloria Macapagal-Arroyo (2001-10), when the
government for the only time to date set a target for the deployment of workers. The
Medium-Term Philippine Development Plan 2004-2010 set a goal of sending 1 million workers
overseas every year.

The subsequent administration of Benigno Aquino III (2010-16) reversed this policy. The
approach taken was moving “from a government that treats its people as an export commodity
and as a means to foreign exchange, disregarding the social cost to Filipino families, to a
government that creates jobs at home, so that working abroad will be a choice rather than a
necessity; and when its citizens do choose to become OFWs, their welfare and protection will
still be the government’s priority.”

This stated desire to a return to welfare and protection was accompanied by legislative
and executive actions to further regulate labor migration and expand services for OFWs. Soon
after Aquino took office, he signed Republic Act (RA) 10022 into law, aiming to further
strengthen measures to protect migrant workers, their families, and other overseas Filipinos in
distress. Among the law’s key provisions is the restriction of deployment only to countries that
have been certified as safe and offering protection. Implementation-wise, certifying a country as
safe or unsafe can be politically and diplomatically sensitive, and deployment bans (even for
good reasons) have not proven effective in stopping migration. The law also mandates
recruitment agencies or employers to provide OFWs with compulsory insurance to cover
accidental death or disability, among other protections.

The Philippines Overseas Employment Administration (POEA) also amended

recruitment industry regulations, resulting in the 2016 Revised POEA Rules and Regulations
Governing the Recruitment and Employment of Seafarers, and a separate set of rules and
regulations applying to land-based workers. These measures were aimed at curbing the illegal

22
​ he Philippines: Beyond Labor Migration, Toward Development and (Possibly) Return, M
T ​ . Asis, July 12, 2017

8
practices of recruitment agencies, such as exorbitant placement fees and contract substitution,
which negatively impact migrants.

The welfare and protection of OFWs received another boost in 2016 with RA 10801,
which launched a new charter bolstering the Overseas Workers Welfare Administration
(OWWA). This agency’s mandate is to provide programs and services for the welfare of OFWs
and their families, and to manage the funds from member contributions and interest from
investments. The contributions come from the OWWA membership fee of US $25 per contract
(which employers or recruitment agencies are supposed to cover but instead pass on to OFWs).
A number of nongovernmental organizations has criticized the government for not financially
contributing to OWWA operations. The 2016 OWWA charter changed this, stating that the
national government would allocate a regular budget for the operations and personnel expenses
of the agency, which would free up more funds for programs and services. The law also
identified the reintegration program as a core function for OWWA, shifting responsibility from
the Department of Labor and Employment. Also known as OWWA Loan or OFW Loan in the
Philippines, this program is a loan facility and an enterprise development intervention of OWWA
in partnership with Land Bank of the Philippines and Development Bank of the Philippines. It
aims to support enterprise development among migrant workers and their families as an
alternative to overseas employment.

The current administration is taking a similar approach as its predecessor- basically

waging a “war” against illegal recruiters and traffickers. The Duterte administration has shown
its intentions to deviate from multi-agency approach that the Philippines has fashioned over the
years. Proponents argue that the proposal is intended to fulfill Duterte’s campaign promise to
better serve OFWs, suggesting a single department would be more efficient. Civil-society
organizations are divided on this proposal. Opponents argue that the various agencies that cater
to different types of overseas Filipinos and/or have different mandates have already developed
competencies to perform their functions. Rather than create another bureaucracy whose
components will be carved out from existing departments or divisions, opponents argue it would
be more constructive to improve coordination among agencies.

Militant migrant labor group Migrante described Duterte’s first year as a year of “big
talk” and “band-aid solutions.” Currently, There is ban on the deployment of overseas Filipino
workers (OFWs) to Kuwait in light of the probe on the case of Joanna Demafelis, an OFW
whose body was found dead in a freezer in Kuwait. The approach taken by the current
administration is criticized as extremely reckless, shortsighted, and uncaring as OFWs are being
urged to come home in light of the diplomatic row with Kuwait.23

23
​Hontiveros hits 'reckless' Duterte appeal for OFWs to leave Kuwait, R
​ appler.com,​Published 5:55 PM, April 29, 2018

9
III. Status of unionization in the country

Unions in the Philippines

The right to union is provided for in the fundamental law of the land of our country.
According to Art. III, Sec. 8 of the 1987 Constitution “The right of the people, including those
employed in the public and private sectors, to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.24 Hence, it cannot be denied that labor unions perform
an integral role in our society.

Thus the Court, in enunciating the policy behind the Industrial Peace Act of 195325,
where a large portion of Title V of the Labor Code on “Labor Organizations” was lifted from,
declared: “The plain and unqualified constitutional command of protection to labor should not be
lost sight of. The State is thus under obligation to lend its aid and its succor to the efforts of its
labor elements to improve their economic condition. It is now generally accepted that
unionization is a means to such an end. It should be encouraged. Thereby, labor's strength, what
there is of it, becomes solidified. It can bargain as a collectivity.”26||

In this jurisdiction, the law recognizes two kinds of unions: ​PUBLIC ​and ​PRIVATE
unions. Public union sectors are organizations composed of government employees while Private
union sectors are organizations composed of employees in the private sectors both of which with
the same goals of collective negotiations and mutual aid.

Such organizations are further classified into ​FORMAL and INFORMAL ​sectors.
Formal sectors are those organizations with a definite employee-employer relationships and are
also known as Enterprise-Based Unions. The informal sectors are those organizations with no
definite employer.

In order to be recognized as a legitimate labor organization, which comes with it

entitlement to rights and privileges granted by law, the union must first be issued a certificate of
registration by the Bureau of Labor Relations. The requisites for the issuance of such are
provided for in Art. 240 of the Labor Code: (1) payment of a Fifty pesos (P50.00) registration
fee; (b) The names of its officers, their addresses, the principal address of the labor organization
the minutes of the organizational meetings and the list of the workers who participated in such
24
Art. III, Sec. 8, 1987 Constitution
25
Republic Act 875, June 17, 1953
26
​Shell Oil Workers' Union v. Shell Company of the Phils., Ltd., G.R. No. L-28607, [May 31, 1971], 148-A PHIL
229-254

10
meetings; (c) In case the applicant is an independent union, the names of all its member
comprising at least twenty percent (20%) of all the employees in the bargaining unit where it
seeks to operate; (d) If the applicant union has been in existence for one or more years, copies of
its annual financial reports; and (e) Four copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the members who participated in it.
Furthermore, Art 244 of the same Code provides for additional requirements for federations or
national unions: (a) Proof of the affiliation of at least ten (10) locals or chapters, each of which
must be a duly recognized collective bargaining agent in the establishment or industry in which it
operates, supporting the registration of such applicant federation or national union; and (b) The
names and addresses of the companies where the locals or chapters operate and the list of all the
members in each company involved. Finally, all requisite documents and papers shall be
certified under oath by the secretary or the treasurer of the organization, as the case may be, and
attested to by its president.27

According to a survey by DOLE, as of September 2013, there are 52,126 active unions in
the country with more than 3.2 million members comprising thereof. In addition, a study
published by the National Statistics Office shows that as of 2015, there were 1,148 Collective
Bargaining Agreements in force with around 64,300 people being covered by such CBAs.28

In general, these Labor Unions represent the group of laborers of which they are
comprised of. However, these unions do not just confine themselves with the issues surrounding
the particular group of laborers they represent, usually also voicing out concerns over the issues
surrounding the country and its policies as a whole. In the year 2018 alone, Labor Unions such as
the ​Associated Labor Unions-Trade Union Congress of the Philippines and the Kilusang Mayo
Uno has expressed their views, criticisms, and concerns over the continued rise of inflation in the
country.29

Labor Unions have also taken steps to fight for the advancement of social justice in the
country. In the case of ​Kilusang Mayo Uno v. The Director-General, National Economic
Development Authority,​ the Labor Union fought for the nullification of Executive Order 420 or
the Adoption of a unified multi-purpose identification (ID) system for government.

This right to represent its members is one of the statutory rights granted by the Labor
30
Code , also included herein is their right to be certified as the exclusive representative of all the
27
Art. 242, Labor Code of the Philippines
28

https://psa.gov.ph/philippine-industry-yls/table/Unionism%20and%20Collective%20Bargaining/Part%20C%20-%20Da
ta%20Based%20on%202009%20PSIC
29
Labor groups lament continued rise in inflation, Manila Bulletin, available at
https://news.mb.com.ph/2018/09/05/labor-groups-lament-continued-rise-in-inflation/
30
​Art. 251, Labor Code of the Philippines

11
employees in the appropriate bargaining unit for purposes of collective bargaining. Another right
granted is to be furnished by the employer, upon written request, with its annual audited financial
statements, including the balance sheet and the profit and loss statement within thirty (30)
calendar days from the date of receipt of the request, after the union has been duly recognized by
the employer or certified as the sole and exclusive bargaining representative of the employees in
the bargaining unit, or within sixty (60) calendar days before the expiration of the existing
collective bargaining agreement, or during the collective bargaining negotiation; Further, the also
have the right to own property, real or personal, for the use and benefit of the labor organization
and its members. Penultimately, they have the right to sue and be sued in its registered name.
And finally, the right to undertake all other activities designed to benefit the organization and its
members, including cooperative, housing, welfare and other projects not contrary to law.

Existing policy on contractualization - EO-51

According to Hon. Napiza, there is already an existing law as regards to the issue on
contractualization. E0-5131 implements article 106 of the Labor Code of the Philippines. Its
number one priority is to protect the right to security of tenure of all workers based on the
provisions of the Constitution.

The supreme law of the land mandates that the State shall afford full protection to labor,
whether it be local and overseas, to ensure the rights of all workers to self-organization. The
executive order implements this motherhood section to give our workers the proper treatment
they deserve.

Average Cases received per month of the Executive Arbiter

The average cases received per month is equivalent to 35 cases. The Arbiter stated that
surely there will be unfinished cases or unresolved because of the numerous work they receive.
They will try their best to resolve a few then there will be a few left for the quota for the
following month. Each case takes an average of 9 months before it becomes resolved by the
arbiters. The 6 months stated by law is usually observed, however it depends on the merits of the
case and the evidence presented during trial it will usually take 9 months. If it will be appealed
by the parties, it will add another 3-4 months to decide on the case. The average number of cases
heard is 15 cases/hearing per day, that's Monday to Friday except when it’s a holiday.

The usual nature of the cases heard and the phase of disposition

31
http://www.officialgazette.gov.ph/downloads/2018/05may/20180501-EO-51-RRD.pdf

12
 The usual cases heard by Arbiters are cases for illegal dismissal and money claims by the
employees thirty five cases each month are received by the arbiters. In the cases concerning
overseas filipino workers the general rule for the arbiters is to resolve the case within 90 days the
usual time for a labor case to be resolved is six months but due to the 90 day period for the ofw’s
their cases are resolved earlier and faster.

Insights on Unionization

For the department of Labor it is proper. Labor Undersecretary Joel Maglunsod said the
right to organize is among the fundamental rights of workers guaranteed by the Constitution that
the labor department seeks to protect and uphold along with the security of tenure.32 It is
provided by law that every worker deserves to join a union if he wants to.

The arbiters have different point of views. For Hon. Napiza it is a matter of case to case
basis. According to her, there are really some employers who abuse their staff or union.
Employers would be in the losing end if cases are to be handled in favor of the employees. It
requires a lot of jurisprudence and law to backup the claims of the parties. It is a matter of
discretion for every arbiter and for every case that is being handled. Their decisions must always
be respected because it is based on their own understanding of the case.

On the issue of Contractualization

According to Hon. Napiza contractualization here in the philippines is legal but only on
project based employees. Once the project or the contract of the employee is finished he or she
does not need to be absorbed by the company. If all laborers ask to be regularized companies
may shut down for they will not be able to sustain their regular employees if they only operate on
the projects or contracts they receive in a year.

Conciliation of an Arbiter

As the executive Arbiter one should be able to handle both parties of the case properly
and in a kind manner. One should not show any bias, prejudice or pressure to any of the parties
to the case. Arbiters receive 35 cases per month and should at least finish 15 cases in a month to
avoid backlogs that will cause delay in resolving other labor cases.

It is preferable for both parties to settle with the NLRC/DOLE. If out of court settlement
is done by the parties the complainant is not barred from filing with the NLRC or DOLE a

32
https://www.dole.gov.ph/news/view/3777

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complaint against the employer even though they already have settled the matter by settling the
matter directly with the DOLE or NLRC the employer has the protection from scheming
employees.

The cause of delay in resolving labor cases is due to the parties seeking the opinion of a
third doctor. If both doctors hired by the complainant and defendant could not come into an
understanding on how the injury was caused the opinion of a third doctor is needed this doctor
should be a government doctor in order for the findings be fair for both the complainant and
defendant. The common hospital the parties resort to is the Philippine General Hospital.

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Appendix A

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Hon. Jenneth B. Napiza
Executive Labor Arbiter

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