Chapter 9 Maintaining Labor Management Relations F Chuaco, Shirley

Bataan Peninsula State University
GRADUATE SCHOOL
Human Resource Management

MBA 108
WRITTEN REPORT
Chapter 9 Labor Management Relations
Submitted by:
Shirley C. Chuaco
MBA Program
Submitted to:
Mr. Rolando P. Manaligod, Ph.D.

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
Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 2 of 31

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:
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 hour 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 Incentive 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.
.
3.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,
4. 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:
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
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.
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 ay 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.
5. 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
6. 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 External Support Mgt Strategy Solidarity & Commitment
Resources
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
20. BARGAINING IMPASSE/ DEADLOCK
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.


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Bataan Peninsula State University

Human Resource Management

Chapter 9 Labor Management Relations

Mr. Rolando P. Manaligod, Ph.D.

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

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

19.Contents of Contract Agreement

21.Labor Management Council

22.International Labor Organization

Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 2 of 31

Importance of Employment and Collective Labor Law?

Labor Code of the Philippines

2. THE LABOR MOVEMENT

 Definition: organization of employee that uses collective action to advance its

Philosophy: Strength can be found in joining together

 Impact of unionization on productivity, profitability and employee attitudes can

Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 3 of 31

3.STATUS OF EARLY PHILIPPINE LABOR

 Trade unions in the Philippines can be traced back in Spanish regime.

August 8, 1963- passage of Congress of RA No.3844

Agricultural Land Reform Code

Act No.1874-passed on June 19, 1908, Employers Liability Act- compensation of

Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 4 of 31

Act No.4123-passed on Aug.26, 1935 establishing an 8 hour workday

 Provision of 1935 Constitution on social justice and on the promotion of welfare

Gradually, wage earners secured sanction for the right to organize

4. EARLY POLICIES ADOPTED BY THE GOVERNMENT IN SETTLING LABOR

 Commonwealth Period (1936-1953)

Commonwealth Act No.103

Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 5 of 31

Commonwealth Period (1936-1953)

REPUBLIC ACT No. 875 June 17, 1953

An Act to Promote Industrial Peace and Other Purposes (repealed by PD No.442)

Industrial Act Period

Martial Law Period

 During this period, voluntary arbitration become an integral part of labor

Post Martial Law Period

Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 6 of 31

5. THE PHILIPINE LABOR CODE

 Promulgation of Labor Code as Presidential Decree 442 on May 1974

Labor Code was divided into 7 books

Labor Code of the Philippines

a. Preliminary Title, Chapter II- Emancipation of Tenants

Book II- Human Resource Development Program

 Covers two main subjects

Book III-Conditions of Employment

Book IV-Health, Safety and Social Welfare Benefits

Chapter 9 Labor Management Relations / Report / Shirley C. Chuaco Page 7 of 31

Book V- Labor Relations