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22 AT13NEO LAW JOURNAL VOL. 19, NO. 1

tions itself, in actuality the institution that will emerge would be ra-dically different from anything now being und.erta.l!;en in the UN sys-ttlm, and so perha.ps, new approaches are in order.

Thus, many vital · issues on tl:.e law Of the !!€a have come out as it were ·from Pandora's box as a result of the debates on the SIJ.bject of the sea-bed and ocean floor. However, the SearBed Committee takes heart from the fact that a consensus more or less .has emerged on the folloWing:

a; that (as already stated above) there> is an area of thP- sea-bed ·and ocean floor the limits of naticma.l jurisdiction; '

b. · that this area is the common heritage of and c. that there is a need for an international regime and machinery

to govern this area." The success of the forthcoming Conference on the Law of the Sea

could mean a new in international cooperation heretofore unknown in the annals of international relations. A new law of the sea would have· far-reaching influence on international peace-· and security and the development of equitable political, economic and technical inter-course between developed and developing countries. On the other hand, the failure of the Conference could result in endleas instabildty, dis-order, tension; and cOlilflict, in an area which covers 70.% of the planet in which we live. The stakes ar.e high and as is voiced quJite often in the halls of the United Nations and elsewhere, it i!S hoped that sanity, goodWilD and the true spirit of international cooperation would prevail.

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Voluntary Arbitration of Labor Disputes: Proposed Guidelines

Jose K. Manguiat, Jr.

Problems in industrial relations become meaningful with the acceler-ated pace of industrialization in the Philippines. Before the Pacific War, our people were more or less anchored to. the soil and led comparatively simp1e lives. The latest census report, however, shows that some four million Filipinos are members of the complex industrial society,l The dependence of these. people upon industry mulltiplies in geometric propor-tions when we consider their families and dependents who are e'ntirely dependent for their survival on a job and a wage. Industrial ·Relations problems involve the economic welll-being of the industrial worker and his iamily, so much so that suqh problems are generally bitter, colored :with prejudice, and oftentimes attended by innumerable side issues.

As a resultt of the gradual shift from agriculture to industry, labor assumed greater importance to the nation, and complemented by protec-tive labor laws, it acquired addtitional strength to enable it to stand side by side with capital on an equal footing. However, the rights of labor are generaUy denied due recognition by management or abused by labor itself, and as a result, disputes between the two invariably break out

· and develop in:if;o costly strikes. The statistics shown in the table at the end of this article indicates the alarming increase in the number of work stoppages caused by the situation referred to above.

The number of la.bor disputes shown in the tablle is not an accurate ind·ex of the amount of disputes between la:bor and capital in the Philip- · pines. Nor can any statistical representation be relied upon to adequately reflect labor prohl'ems.

It i!S not always saf.e to say that the absence of strikes or ·lockouts implies an ideal labor-management relationship in a firm. It may be possible that one of the parties is so weak that it is forced to accept whatever the other dictates, or a union may have signoo a "No strike" pledge, and is observing it. ·

Whenever labor problems ari!Se, they must be settled at the earliest possible time to avoid serious trouble to either party. Unfortunately, the parties, in most cases, solve their problems by travelring through the rough road of ill-will and open conflict, and as a result, both sides suffer mis-erably.

Efforts to adjust disputes are either peaceful or belligerent, with the 1atter being apparently favored in most cases. The basic me-thods of amicable settlement are direct negotiation, mediation or con-ciliation, arbitration, and· litigation. On the other hand, the instruments of open combat most frequ·ent)y used by labor are boycott, strike, and picket. Employers on the other hand may resort to lockout or shutdown, or discharge or blackkisting of em;ployeea.

• BSBA (U.P.), LL.B. (Ateneo), LL.M. (Yale), D.C.L. (Cand., UST). Prof.,.sor - Ateneo dp Manila, College of Law; Professorial Lecturer - De La Salle Colege; Chief Legal and Research Attorney, Court of Industrial Relations. ·

1 Martm, Philippine Labor and Social Legislation, Vol. I, 1970 edition).

23

24 ATENEO LAW JOURNAL VOL. 19, NO. 1

One of the most ·effective ways of peacefully settling industrial dis-putes is through volluntary arbitration. "Arbitration is a mode of set-tling differences by one or more unofficial persons selected for the pur-pas<!, on some disputed matter submitted to them by the contending par-ties for decision and award in _lieu of judicial proceedings."2 Arbitration, . the author suggests, is the answer to slow and costly litigations. It is a tool of peace. Its purpose is to obtain a final disposition of the . differences betwoon the· parties in a less expensive, fast-tel", and more expeditious manner. Its adoption by labor and management as a terminal point in their grievance procedure has eliminated industrial warfare. It provides a way of settling disputes without work stoppages,

is theretore a substitute for the "strike" and the "lockouts."3 . Because of the usefulness of arbitration in labor disputes,

almost all countries have a provis.ion of law requiring vo1l!ntary arbitra-tion.'

Pursuant to the the:ory that voluntary arbitration of labor disputes is a good substitute for strikes and lockouts, Presidential Decree No. 21. dated October 14, 1972, has required that before the National Labor Relations: Commission may assume jurisdiction over a labor dispute, it shall give the parties a chance to submit their problem to voluntary ar-bitration. Corolllary to this. provision, the decree also requires that all collective bargaining agreements shall contain a provision designating a volunt.uy arbitrator. Even prior to the said Presidential Decree, the In-dustrial Peace Act (R.A. 875) has encouraged voluntary arbitration, and so also has R.A. 876.&

The first two laws cited above merely provide, though inadequately and hazily, the substantive aspects of the process. They do not provide for the procedural aspects, and neither do they give definite guidelines to make the process effective and attractive. The third law, on the other hand, has been subjected to two interpretations as far as its ap-plicability to volluntary arbitration is concerned. One school of thought thinks that the law may be applied to voluntary arbitration.6 On the other hand, another schooll qf thought conside,rs R.A. 876 as dead laJW in the field of labor· relations because of its legalistic and cumbersome na-ture.7 Most arbitrators, however, have relied upon the Arbitration Law becnuse of the absence of definite guidelines on the subject. The author wholeheartedly subscribes to such reliance.

In trying to fashion and shape such guidelines, the writer desisted from adopting an alien system of arbitration be1cause such a system will not generaHy be adaptable to the particular needs and problems of our country. As much as possible, therecfore, he tried to rely on theories suited to the facts of our soci:1l existence. The foreign material used in this paper se.rved only as a guide and modei in arriving at the desired goal. Heavy reliance was made on American jurisprudence and writings

2 Omaha .vs. Omaha Water Co. 218 U.S. 180. 3 Aece:ptability as a Factor in Arbitration, 1952. 4 Labor Disputes, p, 28 International Labor Office, Geneva, 1970. 6 An Act to Authorize the Making of Arbitration a12d Submi.ssion Agreement, to Provide

for the Appointment of Arbitrators, and the Procedure for Arbitration in Civil Controversies and for other purposes:. Approved June 13, 1953.

6 Guevarra and de. Leon, The System of Prevention and Settlement of Labor Disputes in the Philippines. Labor Management Relations Series No. 15. p. 166, ILO Geneva.

7 Diamonon, Study Manual, Arbitration of Labor Disputes, Asian-American Free Labor Institute. Manila, July 17, 1973.

VOLUNTARY ARBITRATION: PROPOSED. GUIDELINES 25

for a number of reason)9. One is the fact that RA 876 was bodily lifted from the New York Arbitration Law. The same is true with the Rules and Regulations of the NLRC on Voluntary Arbitration 'of Labor Disputes. A cursory reading of the Rules on Voluntary Arbitration observed by the Arbitration Association of the Philippines will sometimes · make us be:lieve that we are reading the same Jocument.s of the Arbitration As-sociation of America. Another reason is the fact that PhHippine mate-rials on the subje.ct are almost nil; to date, there are only three decided cases on arbitration. · Two refer to civil arbitration, and the third refers to commercial arbitration. The third reason for the reliance on the for-eign to earlier is the Supreme Court pronouncement that where labor 1a.ws are based upon or patterned after statutes of for-eign jurisdiction, decisions of the high courts in those jurisdictions cons·-truing1 and interpreting the law should receive a careful attention of the Supreme Court in the application of our law.s

MECHANICS OF VOLUNTARY ARBITRATION Voluntary arbitration is relatively new in the Philippines. A few

years ago, there was a. trend of its increasing acceptance, as can be gleaned from a good number of collective bargaining contracts which provide for voluntary arbitration as a terminal step in the griev-ance procedure of a collective bargaining agreement. With the promul-gation of Presidentiab Decree No. ·21, voluntary arbitration is now required as an integral part of a collective bargaining agre:ement, and was instantly incorporated as part of our industrial relations system.

While the system is widely practiced and accepted in many countries, particularltv in the United States and Canada where it has grown into an art and a profession, the same has not gained such a stature in the Phil-ippines. However, in the light of. existing conditions, the institution is gradually going towards that direction.

VOLUNTARY AND COMPULSORY ARBITRATION IndustriaE arbitration may be voluntary or compulsory. Under a sys-

tem of voluntary arbitration, the duty to arbitrate is established by a voluntary agreement by which .the parties, in the exercise of their free-dom to contract, place themselves under the obligation to refer contrc-versies to an arbitrator or an arbitration board, and to comply with the award of the same. The parties may agree to submit to arbitration an existing dispute, or certain types of disputes only, or future dis· putes which may arise during the life of the agreement. Sometimes, only the first type of arrangement is called "arbitration agreement", while a contractual provision prescribing arbitration of future disputes is termed "arbitration clause". An arbitration agreement is a contract, ··and therefore, must be valid. and binding under the llaw on contracts. The consequence, therefore, of non-compliance with the arbitration agreement is a breach of contract.

DISTINGUISHED FROM MEDIATION AND CONCILIATION Oftentimes, there is confusion as to the meaning of arbitration, con-

ciliation and mediation. In order to avoid such a confusion, the terms

3 Cerezo vs. AG & P, 3G PhiL 425; U.S. Lines vs. Associated Watchmen's Security. Union, L-12208-11, May 21, 1958; Democratic Labor Association vs. Araos, L-10321, February 28, 1958: Boy Scouts of the Phil. vs. Araos, L-10091, July 20, 1966,

26 ATENEO LAW JOURNAL VOL.l9, NO. 1

should be clearly Mediation and conciliation are distinguished froi:n arbitration in that the former is an act of a third person in encourag-ing voluntacy adjustment of a dispute.11 Strictly speaking, the term mediation, as used in the field of industrial refers to an attempt by a third party to help settle· amicably a liabor dispute between an em-ployer. and his employeeR. The term "conciliation" has come to mean the same thing as mediation.1o

Mediation (or conciLiation) is an attempt to. settle disputes with the help Of an outsider who assists the parties in their negotiations; If the mediation is volluntary, it ta;kes place at the request or with the consent of at least one party. Its sole objective is t.he settlement· of controversy by bringing the parties to a voluntary agreement. In rare cases, however, mediation may be used to work out a severance of relations in an amic-able manner. ·

ARBITRATION AGREEMENTS Types of Arbitration Agreements:

An arbitration agreement is a contract by which the parties consent to refer the dispute to an or arbitrators, and agree to be bo.und by the arbitrator's decision. There are two types of arbitration agree-ments:

1. An agreement to submit to arbitration :which is an to submit to arbitration some future dispute, usually ·made in connection with some contract.

2. The submission agreement - an agreement submitting an exist-ing matter of difference to arbitrators.n

Both agreements are contractual in nature, and therefore, must. com-p]Jy with the requisites of a valid contract inorder to make them binding between the parties.12 They are also subject to the same rules especially when, as sometimes happens, the agreement to submit to arbitration also serves, in whole or in part, as the submission agreement.18 In practice, the two contracts are different. The contract to submit to arbitration is usually found as a provision of the collective bargaining agreement, where-as, the submission agreement, although_ it may spring ·from a provision of the CBA, is a separate contract. It iiS generally l.'eSorted to, pursuant to a provision of the CBA to submit to arbitration when the parties have fruitlessly exhausted the provision in the CBA for the settlement of the dispute among themselves, and they have decided to submit the case to an arbitrator.

Th€1 Arbitration Lawl4 acknowledges the validity of both kinds of arbitration contracts, and requires that they be in writing and subscribed by the party sought to be charged, or by his lawful agent. The making of a contract, the same law provides, shall also be deemed a consent of the parties to submit themselives to the jurisdiction of the CFI of the province or city where any of the parties resides, to enforce such con-tract or submission•

9 4 .PLRJ No. 7, p. 149 (July 71). 10 A Guide to State Mediation Laws & Agencies, BuJletin No. 176 (Revised). U.S. Dept.

of Labor, Dec. 1968, page 1. 11 Smith vs. Morse, 9 Wall U.S. 76; 19 L ed. 697. 12 See. 2, RA 876. 13 3 Am. Jur. 846. 14 Sec. 4, RA 876.

VOLUNTARY ARBITRATrON: PROPOSED GUIDELINES 27

Labor arbitration ·agreements are contractual in nature. Because of their contractuaL character, the parties thereto must have general capa-city with respect to the in dispute.16 One can enter into an arc bitration agreement either personally, or in a representative or fidu-ciary capacity,16 Since the arbitration agreements are contractual in na-ture, it is also subject to the same rules on the interpretation and cons· truction of contracts17.

MODIFICATION AND REVOCATION

The Arbitration. Law is very explicit against revocation and amend-ment of an agreement once the same has been ::nade.18 Thus, our Arbi-tration Law provides: ··

"Such submission or contract shall be valid, enforceable and irrevo-cable, save upon such grounds as exist at law for the revocation of any contract."

The theory behind this injunction is that both parties to an arbitration agreement are under a legal duty to act in good faith. Each to the other a fair effort t<;> carry out its provisions and its object, and if either party acts in bad faith to defeat that object, conduct releases the other from the agreement. The only exceptions to the rule of irre-vocability are those causes for which the laws aLlow annulment of void-able contracts1g and rescission of . -

This provision of our existing law is not a good one. Qur Courts should not force parties to an arbitration contract if both or anyone of the parties should change their minds. It is better for us to adopt the American theory· which allows modification and revocation of the agree-ment. The rationale behind the theory is· that in an arbitration agreement, as in any other contract, the rights and liabilities of the parties thereunder may be affected by subsequent events or the acts and coriduct of the parties. There may also be a waiver or estoppel with respect to its provisions21 or it may be rescinded or revoked by the parties by reason of the surrounding circumstances,22 and in certain cases, it may be subject to modification or amendment.23 Under certain cir-cumstances, the acts of an arbitrato.r may have the eff-ret of absolving a party from compliance with the arbitration clause in a contract, like where the arbitrator fraudulently refuses to make an award, or makell one as a resul!t of collusion with the adverse party.24

I have ·subscribed to the American approach on the, matter becausl! of the logic in the reasoning of the jurisprudence on the· matter.

16 3 Am .• Jur. 844

16 Ibid.

17 16 CJS 166. 18 See. 2, RA 876.

19 Article 1390, New Civil Code.

20 1380, Ibid.

21 Manchester F. Assurance vs. 13 Ind. App. 372; 40 NE 1110.

22 Ins. Co. of N.A. vs. Kempner, 132 Ark. 215; 200 SW 986.

23 Wilkinson vs. Prichard, 146 Iowa 66; 123 NW 694.

24 Chism vs. Schipper, 61 NJL; 16 A 316).

28 ATENEO lAW JOURNAl VOL 19, NO.

THE LABOR ARBITRATOR

Arbitrators are persons who act as private judges of domestic tri-bunals, chosen by the parties by whose .agreement they are invested with quasi-judicial power to decide finally and without appeal, matters of dis-pute between such parties.26 They are considered sometimes as substi-

of the parties and sometimes as judges of the rights of the parties to the submission, and it has been said that they are both judges and jurors.26

It is essential to a arbitration proceeding that there be a pro-per appointment of arbitrators, either in the arbitration agreement or in th<:l submission itself, or in accordance with the method prescribed therein or by some special statute the matter.27 There may be only one artitrator, or two or more arbitrators in an arbitration proceeding. The set is determined by the parties in the arbitration agreement. Generally, an arbitrator's authority is fixed and determined by the provisions of the agreement. In some instances, however, he may derive his authority to act from statutes.

QUALIFICATIONS: Our arbitration law28 prescribes the qualifications for an arbitrator

as follows: 1. of legal age.

2. in full possession of hi•s ci''il rights.

3. must know how to read and write. The same law prohibits any person from serving as an arbitrator

if he is related to either party by affinity or consanguinity within the sixth degree, or should the arbitrator have financial, fiduciary, or other interest in the controversy, or personal bias. If the arbitrator is dis-qualified, his appointment might be challenged in the Court where the arbitrator or the challenging party resides.29

The thing that makes a man an arbitrator is not the degrees he received in the course of his educational career, or his practice as a l!aw-yer, mediator or consuLtant, or his popularity in the business and public sector, but his acceptability to the parties as an arbitrator. His accept-ability may be based on the following criteria: (a) one who is know-ledgeable and has significant experience in the field of labor law, labor relations personnel ma;nagement and union problems (b)' one who has the capacity to conduct a hearing fair1y and competently,· and can command respect in his role, (c) one who is sensitive to, and understands the needS! of the parties in so far as a decision is concerned, and the articulation of the reasons upon which the decision is based, (d) one who has a reputation in the industrial and union community for fairness and impartiality, and (e) one who, because of character can be depended upon not to depart from the e.thical standards which arbitrators impose upon themselves.

26 Martin v. Vansant, 99 Wash 106. 26 Holinsworth v. Leiper, 1 Dnll. p. 161. 27 4 CJS 182. 28 Supra, Sec. 10. 29 Ibid, Sec. 11.

VOLUNTARY ARBITRATION: PROPOSED GUIDELINES 29

PROCEEDINGS

The parties· to an arbitration case have an absolute right to appear. before an arbitrator and present all their evidence.2o An arbitration is judicial in nature, and like all judicial proceedings, persons whose rights and obligations are affected have an unqualified right to be heard by an · arbitrator.s1

The essence of most labor arbitrations is an oral hearing before the arbitrator in person. Oral hearings can, however, be waived if the par-ties agree to submit their case to the arbitrator in writing, and such stipulation will be the basis of the arbitrator's

Failure to receive a full and impartial hearing is a ground for inva-lidating an award. Refusal by an arbitrator to hear witnesses or to receive competent evidence raises the presumption of partiality. The aggrieved party has the right to sue to have the award set aside. In this case it is not even necessary to show that the reaected testimonv or evidence would ha,ve affected the result.32 Refusal of the arbitrator to postpone the hearing may be grounds for setting aside the award where the party requesting it showed suffici1mt cause.sg

EVIDENCE An arbitration proceeding is not an ex parte hearing: both sides

are en'tirtled to present their evidence. Unlike the complex rules of evidence invoked during a court trial, however, there should be only one comprehensive rule which should be applied to the evidence submitted in an informal arbitration hearing. · This rule is that any evidence, in-formation, or testimony which is pertinent to the case (helps the arbitrator understand and decide the issue before him) is admissible. Obviously, this is the broadest kind of rule and the fact that it does not conform to le:gab concepts of evidence re-emphasize.s the fact that the arbitration hearing is not a judicial process in the strict legal sense. Evidence, however, may be restricted by the terms of the arbitration agreement, or by nature of the evidence, as when it has nothing to do with the issues that have been defined.

THE ARBITRATION AWARn In a typical arbitration case, the proceedings close with thP. pro-

nouncement of a decision ca1led an award. An award is a final and bind-ing decision, decree or judgment of arbitrators rendered in the exercise of their quasi-judicial functions to determine the disputed matters refer-red to them by the parties to the arbitration agreement.34 The award conBtitutes the e'Xecution of the arbitration or submission agree!'Qent, so that they can, thereafter, no longer be regarded as executory.36 In certain respects, an award partakes of the attributes of a contract,36 and the findings or judgment of a court.a7

30 Twin Lakes Reservoir & Canal o. vs. Platt Regerd, Inc. 147 P. (2d) 828. 31 Puget Sound Bridge & Dredging Co. vs. Lake Washington Shipyards 96 P. (2d) 257. 32 McLaughlin, 215 F. 346. 33 Stefano Berrizi Co. Inc. vs. Kranz, 239 NY 315. 34 Millsaps v. Bates, 137 NC 636. 35 Dugan vs. Philipps, 246 P. 666; 77 Cal. App. 268. 36 Smith-Sohktz-Hedo Realty Co. vs. Henley-Spurgeon Realty, 140 So. 443; 224 Ala. 331. 37 Ibid.

30 ATENEO LAW JOURNAL VOL. 19, NO .. 1

Once a valid awurd is made,. it becomes the sole basis for any fur-ther determination of the rights of the parties with respect to any de-mand embraced in the agreement, for the latter is merged and extin-guished with the a wardJBB

Ap arbitration proceeding need not result in an award. The same may be cor;cluded by an amicable agreement between the parties. They may also be terminated without any positive result if a majority of the men1rers of the board cannot agree upon a decision, and the arbitratio.n agreement does not provide for the possibility ·of rendering an award without a· majority vote. ·

CONSTRUCTION OF ARBITRATION DECISIONS

As a general nle, an award will be given a. liberal construction. Everything consistent with law will be construed in its favor as far ·as is equitable under the premises, for the courts favor arbitration proceed-ings as being a quick, amicable, and inexpensive method of settling private controversies, arid will make all fair presumptions inorder to sustain an award.39 . So strong is the rule of l!iberal construction that an award void in part may ne'Vertheless be sustained as to the residue if the case permits.40 An ambiguity in the words of an award should be settled in the manner which will best effectuate the apparent intention of the ar-bitrators, and the court shoulid construe general terms in an award in a way that they wiN apply to particular words in the submission s.o a$ to connect the particuEar thing awarded with the general words of the submission.4t Prima facie, an award v.=!ll be considered regular if, on its face, it is unimpeachable.42 This is t.rue even though the submission in-cludes . matters not decided in the award, for it will be presumed that such matters were not presented to the arbitrators, or were. withdrawn, or waived,4a in which case, it was not their. duty to pass upon them.4--t. A failure to mention one of the items claimed by one of the parties will be taken to be a finding disallowing . such items even if the submission included the item as disputed;415 If an award professes to be made on all matters covered by the submission, it wil!l be presumed that all matters submitted were considered passed upon by the arbitrators.46

An award has a precedent value. With the growth of arbitration in the Philippines, there will be a discernible beginning of what may be termed as a common law of labor relations. From the opinions being handed down by labor arbitrators will eventually come a body of concepts and principles to guide arbitrators in making their opinions. Basic principles will tend to be more uniformliy applied in the settlement of the grie·vances.

38 W.H. Bledgett Co. vs. Uebe Co. 190 Cal. 665; 214 P. 28.

39 Reedy vs. Scott, 23 Wall (U.S.) 165; 8 L ed. 109; see also Chan Linte vs. Law Union, 42 Phil. 548.

40 Waisner vs. Waisner, 15 Wyoming 420; 89 P. 580; 123 Am. St. Rep. 1081.

41 Clark Millinery Co. vs. National Union F. Ins. Co. 160 NC 130; 75 SEl 944; Ann. Cas. l914C 367.

42 Lutz vs. Linthicum, 8 Pet. (U.S.) 165; 8 L ed. 904.

43 Karthaus vs. Yllas y Ferrer, l Pet. (U.S.) 222.

44 Ibid.

45 Annotation: Ann. Cas. 1916A. 354.

46 Annotation: 18 L ed. (U.S.) 700 Ann. Cas. 191A, 363.

VOLUNTARY ARBITRATION: PROPOSED GUIDELINES 3i

ENFORCEMENT OF AWARDS

The entire arbitration proceedings and the award merely constitute a contract between the parties. At the time of the arbitration agreement, they agree to what shall be awarded; and when award is made it is read into the original agreement.47 The successful party, therefore, can enforce the award in the same manner as he can enforce an ordinary contract, with the added advantage that the award may be introduced in evidence and is conclusive as to matters therein decided in so far as they are the terms of the submi!•sion agreement.4B All claims .of the parties in the SJlbmission. as to such matters are G:>risidered. to be merged · ai:J.d extinguished in the award which thus becomes the only basis for the determination of the rights of the parties.49 . Once the par-ties, however, have mutually abandoned an award then it cannot been-forced.50 The right to enforce an award may also . be lost thru waivP.r or estoppel51.

MODIFICATION AND IMPEACHMENT

An award should be regarded as the judgment of a court of liasti resort52 so that all reasonable persumptions should be ascertained in its favor and none to overthrow it.58 Otherwise, arbitration proceedings instead of being a quick and easy mode of obtaining justice would be merely an unnecessary step in the course of litigation, causing; delay and expenses, • but settling nothing finally.54 Notwithstanding the natural reluctance of the courts to interfere with matters determined by the arbitrators, they wiLl do· so in proper cases, where the law 'ordains them to do so.

Unde·r the Arbitration Law the Court· must make an award modi-fying or correcting the ward if any of the following cases appear:

1. Where there was an evident miscalculation of figures, or an evid-ent mistake in tlie description of any person, thing or property;

2. Where the arbitrators have awarded upon a matter not subiDit. ted to them, not ·affecting the . merits of the decision upon the matter submitted; · .

3. Where the award is imperfect in a matter of form not affecting the merits of the controversy.

The· order may modify and correct the award so as to effect the intent thereof and promote justice between the parties.

An award will be impeached only for a grave cause. Our law has established the criteria for the impeachment of an award. Thus the law provides that the c?urt must make an order an award upon

47 Black vs. Wooclraff, 193 Ala. 327: 69 So. 97; Ann. Cas. l918C, 959.

48 J.N. Coe vs. First Ren1ty 8· Loans Co. ln? NC GR9: 150 S.E. See atso Chan Linte v. Law Union, BU.pra.

49 US vs. Gleason, 17G US 588; See niRo Robinson Fleming & Co. vs. Cruz, 49 Phil. 42. 50 Annotation, 32 ALR 13666. 61 Ibid.

62 US vs. Gleason, supra.

63 Reedy vs. Scott, 24 Wall (U.S.) 352; 23 L ed. 109. 54 Yo:rk vs. Ware, 4 Cranch (U.S.) 347; 2. L ed. 643.


petition of any party to the controversy when such party proves affirm-lltively that in the arbitration proceedings:

1. The award was procured by corruption, fraud, and other undue means;

2- That there was evident partiality or corruption in the arbitrators or any one of them;

3. That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown;· or in refusing to hear evidence partinent anq mate•rial to the co;1trovcrsy; that one or more of the arbitrators were disqualified to act as such and willfully refrained from disclosing such disqualification, or any other misbehavior by which the rights of any party may have been materially prejudiced;

4. That the arbitrators exceeded their powers, or so imperfectLY exe-cuted them, that a mutual, final and definite award upon the subject matter submitted to them was not made.

FRAUD AND OTHER UNDUE MEANS Even if the courts look with favor on arbitration proceedings and

make every presumption in favor of the validity of the awards, such is done on the assumption that the:3e awards constitute the honest judg-ment of the arbitrators, rendered in a fair hearing. In cases wh,ere there are positive evidence of fraud or other undue means on the arbi-trators, courts will not apply that presumption. The reason for the in-terference of courts in 'these. cases :is that the arbitrators have not real-ly acted within the line of duty !add out for th.em. They have not. in fact, carried out the agreement under which they obtained the authority to act.66

PARTIALITY It is not necessary that the partiality of the arbitrator be evidenced

by an unjust award. It is sufficient that the relationshiP! between onie of the parties and the arbitrators is of such nature as to give clear grounds for suspicion of their proceedings and render it unlikely that they con-stituted the fair and impartial tribunal to which the other party is en-

Examples of partiality are where an arbitrator is directly in-terested in the outcome of the arbitl-ation,67 or where, before his ap-pointment, he has expressed an avowedly adverse opinion,68 or where he makes an! award as a result of a private conversation with one of the parties.6ll

MISCONDUCT Corruption under number two, as wen as · all the enumerated acts

in numbers three and four of the law, is misconduct. Under number three, however, the i:aw mentions a general form of misconduct when it states "Any other misbehaviour by which the rights of any party have

66 Brush v. Fisher, 70 Mich. 469; 38 N.W. 466. 66 American Guaranty Co. vs. Caldwell, (CCA) 72 (2d) 209. 67 Pool vs. Hennessy, 39 Iowa 192. 68 Annotation Am. Rep. 46. 69 18 Hartford Fire Ins. C9. v. Bonner Merchantile Co. (CCA) H F. 161, 11 LRA 623.


been prejudice." This catch-all provision is pregnant with meaning: it refers to a misconduct which is plainly indicative of un-fairness and bias, although not, perhaps, sufficient to establish actual fraud or bad faith,60

Misconduct also includes conduct inconsistent with the duties im-posed upon those se·lected as arbitrators, either at the bearing, which affects the right of the parties to be heard,61 or in reaching a conclusion;Gll the adoption of some chance or gambLing method in reaching a decision ;6s or if the arbitrator is intoxicated when testimony is being taken.64 More-ove.r, an award may also be impeached under the law if it does not coDr-for.n to the submi&Sion, or is lacking in certainty, finality and consist-ency. Awards may also be impeached for gross inadequacy but thP- in-adequacy must be so strong and so manifest that it would be to inform a man of common sense of such award without producing an exclamation at the inequaLity of it.66

Mistake of the parties in making a submission is a ground for im-peachment, inasmuch as the binding force of an award is predicated upon mutual agreement and meeting of the minds of the parties.s6 Generally, the courts will not impeach an award based on mistake. However, mis-takes apparent on the face of the awards concerning a material matter and not a trifling one,67 or mistakes thwarting the intention of the arbi-trator, wiU also be grounds for impeaehment of the award, like mistaken assumptions of a material fact which is outside the judgment of the ar· bitrator.&S If the mistake is only accidental or inadvertent or otherwise not going into the merits of an award, then the award will just be cor-rected rather than impeached.&s

PROBLEMS IN VOLUNTARY ARBITRATION:

One of the most pressing faced by voluntary arbitration stems from the demands made by changing economic, technological and social conditions, and the response of the management to these changes during the lifetime of the collective bargaining agreement. The spe-cific substantive problem of what to do about industrial change while an agreement is in effect is hei.lrhtened in importance by the fact that it is a point of confldct between two significant values: on the one hand, because of the substantial gains and security and stability in a collective bargaining relationship, there is an impetus in the direction of long-term agreements. On the other hand, it is becoming increasingly recog-nized that it is impossible to foresee in advance all industrial relations problems inherent in changing industrial conditions and that it is un-desirable to delay agr.eement in order to pin down, by specific language. the contractual consequences of changes foreseen from afar and · only in the abstract. Hence, there are important reasons why the fact of agreement on industrial change must be ambiguous.

60 Annotation, 47 LRA (N.S.) 446. 61 Roberts vo. Consumers Can Company, 102 Md. 362; 62 A. 685. 62 Annotation, 50 Am. St. Rep. 753. 63 Luther vs. Medbury 18 R.I. 141; 26 Am. St. Rep. 753. 64 Annotation: 26 Am. St. Rep. 46. 66 Second Society of Universalists vs. Royal Ins. Co. 221-618; 100 N.E. 384. 66 Peach vs. Ware, 4 Cranch (U.S.) 2 L ed. 643. 67 Ross vs. Overton, 8 Call. (Va.) 309; 2 Am. Dec. 764. 68 Alken vs. Bolan, 3 SOL (1 Brev.) 230; 2 Am. Dec. 660. 69 Guilbert vs, Burnstine, 286 NY 348; 174 NE 706; 73 ALR 1461.


Another problem brought about by the arbitration process is its growth. In the Philii.ppines, the requirement that collective bargaining aa-reements should contain a provision on arbitration will present to us a problem of growth lUI far as arbitration is concerned. benchmark of

requirement is the submission of more arbitration ciU!es as well as the_ submission of many complicated and crucial issues to the process. A question might be posed: Is it possible to have success in the short run?

· Another .problem that is brought about by arbitration is the delay in a case. Although pursuant to the implementing rules on voluntary arbitration promulgated by the NLRC,70 arbitration ciU!es should be decided within 20 days from filing, delay is still possible if we \':ere to add the seve·ral months frequently required to exhaust the grievance procedure before the case is brought to arbitration.

Another factor which looms as large as the problem is the growing r:ost of arbitration. The enormity of the expenses of arblitration can sometimes be attributed to the arbitrators. In some cases, basic fees, expenses and· other costs which stem from legal fees incidental costs such as hearing transcript, and post-hearing briefs constitute the bulk of the expenses.

Inspite of a tradition of informality, there is an· appreciable increase in the use of arbitration.

. Problems of evidence are real questions which arbitrators are strug-gling with ev€·l'Y day •. An eX!lllll.ple is: "May evidence of past conduct of an ·accused be used against hini?"

Arbitrators are also baffled by the extent of their jurisdiction. Should they act within the confines of the submission agreement or should. they be given a little leeway to read between the !Jines?

Another problem about the arbitrators is the problem of attrition. Certainly, old arbitrators are fast retiring; what then should be the basis of the choice of the new arbitrators and how should they be chosen?

. CONCLUSION AND RECOMMENDATIONS Labor arbitration is being criticized because it is costly. CoDlateral

and related problems involv.e the availability of new and acceptable ar-bitrators, due process and its· application to. an area of private jurispru-dence, tricky problems in the handling of evidence and the difficult ques·-tion' of individual .rights in the grievance process.

Much of the difficulty in sensibly discussing arbitration cost arise out of the failure, or unwillingness, to distinguish between a de luxe modeland an economy arbitration model. Because of this deliusion, econo'' my, which is one of the original virtues of arbitration, is fast disappear-ing so that small companies and unions find the process financially burdensome or even out of the range.

Some of the expenses which constitute the visible costs of arbitra-tion are the straight fees charged by the counsel for the parties, the arbitrators, and the stenographers.

In order to reduce cost and even avoid arbitration, the parties must scre€n and exhaust the grievance procedure very welK · Such a proce-

70 Section 17, Implementing Rules and Regulations of the NLRC.


dure may avoid arbitration, or at least limit the· issues of the arbitrable disputes. (The more complicated the issues in arbitration are,· the more money the process will cost.) Sometimes one or both parties cannot af-ford arbitration even if it is necessary for them to have one.·· In this instaniCe, it is :suggested that the. government provide free arbitration to those who cannot afford the same. '!'he Department ·of Labor ·or the Court of Industrial Relations should hav.e ·a corps of arbitrators to ren-der service for free. · ·· · · · · · · "

fees is another area of arbitration where. cost is prohibitive. Trained arbitration lawyers charge a lot. ·In these instances the com-pany can make use of their own respective legal ·counsels to act lUI their arbitration counsels. Moreover, some arbitration . cases like discipLine, discharge, and seniority case:; are very simple ones. In these an;\' employee of manaJ<ement · or any union membei" can act as c'ounsel for the parties. Moreover, if those parties could not still afford a legal counsel or employees with . the necessary business or. legal background, then, government agencies like the Department of _Labor or the Court of Industrial Relations should supply the parties with their laWYers to act as arbitrators upon request of the interested parties. ·

Stenographic records are not always necessary in arbitration· cases. They can be avoided by the parties by supplying. the arbitrator. with very clear briefs.

Another cost-saving device is for the arbitrator to hear the case in the company's conference rooms and not in plush eateries and hotels. The objection that the hearing i.,; not on a neutral ground in this instance wm not hoid water. This is only a fear- entertained by the employe·es or the union. The arbitrator in this case is a neutral person, and will not be affected· by the Dhysical environment on which he gravitates.

The problem of time lag has been one of the other objections to arbitration. In the Philippines, this has been remedi.ed to some ex-tent by the !€gal requirement that· arbitration cases be finished within (20) days from the submission. But the problem of time lag is not only limited to the hearing and post-hearing events of a case but it also embraces pre-hearing problems. It takes several months before the pare ties could agree on; the arbitrator. In a typical arbdtration case, the arbitrator does not know anything about the case untH he is notified of the same. In some instances, an actual grievance complaint may con-tain a charge without alleging a specific contract violation and the com-pany's answer may simply be that they are denying the grievance. Thes,o. facts will certainly result in a haphazard decision because the arbitrator wil\ try to catch up with the twenty-day deadline to make the decision.

The above situation could be remedied by: 1. The exha.ustion of the grievance procedure. Many cases go to

arbitration with complicated issues when t'he same could have been substantially reduced during the .,grievance procedure.

2. Pre-arbitration conference-The parties could sit down before actually bringing the case to arbitration. They can agree on the issues and the problems involved without necesarily agreeing on the solutions. Although at this stage they can also compromise by settling the case, this should be done before an impartial third person who should not be the arbitrator of the case. This system, besides its practicability for the

36 LAW JOURNAL VOL. 19, NO. 1

parties, could also be a training ground for arbitrators who might be needed la,ter on.;

Many problems on technicalities arise. These problems have to do with the handLing of evidence. These problems are aggravated by thP. fact that rules of evidence are not applicable illi arbitration. In arbitra-tion, any evidence, information, or testimony which is pertinent to the case and which helps the arbitrator unde·rstand and decide the issues before him is acceptable. This has caused a lot of problems because many arbitrators do not exclude many things that are irrelevant. In order to remedy this situation, reception of evidence should be limited only to those necessary to arrive at a valid conclusion.

Another major objection to arbitration is the stifling of individual rights in arbitration. Since the contract is between the company and the union, the grievance machinery is usually under their control. Oc· r-asionally, this leads to an unsatisfactory result from the standwint of an individual employee. A situation may arise in which the union may refuse to process the individuaVs grievance, or there may be cases where a settlement which is not satisfactory to the individual may be reached, or the union may refuse to present the grievance for action because the individual is not a member of the union, or because he has engaged in hostile activity in behalf of another union member, or be-cause he is a member of a political opposition. By the .same token, the result may be unsatisfactory to an individual because the same may· be an outcome of a "trade" for a more meritorious grievance, a judgment that the claim of an individual is inferior to that of another employee who has a confllicting interest, or a refusal due to past behavior which bas been obnoxious to the union leaders·hip.

The above-recited facts are contrary to the principle of fair repre-. sentation in collective bargaining agreements for the right of represent-ation for purposes of collecth'e bargaining covers all the employees in the appropriate collective bargaining unit, including non-union members and those on the minority labor union.71 Moreover, the act could be considered an unfair labor practice act on the part of the union because of the union's restraint of the empLoyee's right to self-organization as protected by the Industrial Peace Act.

PUBLIC REGULATION OF INDUSTRIAL RELATIONS The existing policy on industrial relations in modern industry is

a composite that includes the policies of the owners and managers, those of the employees and their pnion, as wen as that of a public policy laid dr·wn by the laws. As such, it is a trilaterat, and consequently, pyramidal, affair. This situation is exemplified by an industrial relations model shown below:

Government

Union (Employee) D Management

71 United Restauror's Employees and Labor Union vs. Torres, 25 SCRA 225; (1968). Sec. 12 (a) R.A •. 875.

'

/-

>.'· ,.


The industrial relations model means that the policies, rules and regulations on industrial relations, as wen as the settlement of disputes should conform to the above-stated norm. The government manifesta-tion of public policy of intervention in any area on industrial relations should be manifested in the form of law. This is partiC!Ularly true in the voluntary arbitration of labor disputes.

The best way, in the opinion of the author, to solve the problems attached to our present day need to solve labor disputes and problems wiseLy is by arbitration. Although we have the Arbitration Law, and Presidential Decree No. :n on arbitration, theBe two laws are inade-quate and full of pitfalls to cope with the present day exigencies of ar-bitration. Moreover, some i>f the provisions of the implementing rules on arbitration by the NLRC could -still be improved. An examplie of in-adequacy is the brevity of twenty-day period within which to finish the decision. 'fhe decree also loses sight of the fact that the decision. of the voluntary arbitrator is final, and therefore, not subject to appeal. In the othe·r law, on the other hand, there are objectionablie provisions like the confirmation of the awards by an arbitrator thru the courts. This again runs counter to the finality concept of ajrbitration. Besides the reasons adverted to, a new law on voluntary arbitration of labor dis-putes will be in consonance with the constitutionail mandate requiring the state to afford protection to labor.'l2 We will also get faster results if policies were made into a law, because of the mandatory nalture of\ laws. The Philippines is a civil law country and therefore a law is needed in order that well-known policies will have a binding effect.

The United States, being a common law country, can afford to let principles of arbitration grow, and apply them to spedfic cases sub-mitted before the courts. In a country like the United States which 'has a common law system, the cases decided become the law, and statute laws are just mere guidelines. Another pragmatic reason for a law on arbitra-tion is to conjsolidate the iaws on the subject into just one single law. This will certainly prevent confusion and law-hopping as far as the busi-ness, labor and legal sectors are concerned.

My model law on voluntary arbitration is as follows:

Manila

Presidential Decree No.

VOLUNTARY ARBITRATION OF LABOR DISPUTES To promote· industrial peace, maximize productivity, and secure

social justice for all the people, I, Ferdinand E. Marcos, President of the Philippines, by virtue ·of the power vested in me under the Consti-tution as Commander:-111!-Chief of the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081 dated Sept. 22, 1972, do hereby order and decree: Section 1: Definition and concept: Voluntary arbitration of labor disputes is a mode of settling differences, through the investigation and

72 Art. XI, Sec. 9, New Constitution.

38 ATENEO LAW JOURNAL VOL. 19, NO.

determination by one or more unofficial persons selected as a domestic tribunal for the purpose of deciding disputes after submission to them by·. the contending. pa.rf;ies for decision or award, in lieu of a pro-ceeding for judgment in an: established tribunal of justice. The labor dispute: subject to arbitration should concern the interpretation, applica-tion, or violation of the terms and conditions of a colilective bargaining agreement, if any, or the terms and conditions of employment. Section 2: Provision far arbitration: Upon the promulgation of this decree, all collective bargaining agreements shall contain a provision for voluntary arbifration as a termina} step in their grievance procedure. Section a:: ·ExluLustion of the grievance procedure: Before the arbi-trator may assume jurisdiction over arbitration cases, tha parties to the dispute shall first exhaust all the steps in the grievance procedure provided f01' in their collective bargaining agreement or in any other agreement. See<tion 4: Free arbitration: Arbitration will be provided free by the government thru the Department of Labor to those parties who cannot aff(lrd to hire arbitrators. Free arbitration counse!IS will also be provjded by. the government to indigent parties.

ARBITRATION AGREEMENT Sect!ion 5: Definition and concept: An arbitration agreement is a contract by which the parties consent to refer the dispute to an ar-bitrator or ·.arbitrators and agree to be bound by the arbitrators' decision which will be FINAL and EXECUTORY. agree-ments may refer to an agreement to submit future disputes to arbitration or an agreement to submit existing controversies to the same. The making of an arbitration contract shall be deemed a submission to the jurisdiction of any competent body that has jurisdiction over labor cases. Section 6: Excluded subjects: This decree shall not apply to contro-ve·rsies and. to cases wit.hin the exclusive jurisdiction of the Court of IndO.strial Relations, the National Labor Relations Commission or any other labor body that may be created by Jaw. Section 7: Form of arbitraJt'ion agreement: An arbitration contract shall be in writing and should be subscribed· and sworn to by the parties. Section 8: Modification: An arb_itration agreement may be modified by the parties provided both parties. agree thereto. Section 9: Breach of a.1·bit1·ation Any party who shaH, without any valid reason the-refor, fail or refuse to honor an arbitration agreement shaH be guilty of breach of contract. The guilty party shall indemnify the ag;rieved party for actual damages. Section Nature: Arbitration agreements are contractual in nature,· and they may be revoked for the same caus-es as those allowed by the .law on contracts. Section 11: Initiation of arbitration proceedings: Either party to an arbitration agreement may initiate the arbitration by giving to the other party the following documents:

a. A written notice to the other party of the intention to submit a .i dispute to· ·arbitration, which notice shall contain a statement setting forth the nature of the dispute and the, remedy sought; and

b. A request to appoint an arbitrator.

l

,.1:

-[--:;.:. L ..

}:'


LABOR ARBITRATORS 12: Quo.Uficat'ions: Any person appointed as arbitrator must

have the following qualifications: ·

1. At leaat 21 years old; 2. In fulE enjoyment of his civil rights;

8. Knows how to read and write. No person appointed to serve as an arbitrator shall be related by

blood or marriage within the sixth degr-ee of consanguinity or affinity to any party to the controversy. Nor shail such pet"son serve as an arbitrator in any proceeding in which· he has financial, fiduciary, or other interests, or has any personal bias which might prejudice the right of any party to a fair and impartial award.

No arbitrator may be chal1enged before or during the arbitration. If proven correct the-reafter, the position of the arbitrator shall .be de-clared by the parties, or the competent body as vacant. Section 13: Appointment: 'l'he Department of Labor shall appoint an arbitrator in the following eases:

1. If the to the arbitration agreement are unable to upon a single arbitrator;

2. If the arbitrator appointed by the parties is unwilling or un-able to serve, and his successor has not yet been appointed in same manne-r in which he was appointed;

3. If either party fails or refuses to name his· arbitrator within fifteen days after receipt of the demand for arbitration;

4. If the arbitrators appointed by the parties or by competent au-thority fails to agree upon or select the third arbitrator.

Section 14: Vacamcies: If any arbitrator should resign, die, withdraw, refuse, or be un.able, or he disqualified to perform the duties of his office, the poslition shall be filled in the same manner as an original vacancy. Section 15: Acceptance!: .Appointed arbitrators shall either accept or decline their appointments within· three days from receipt of notice· of appointment. Section 16: Notice of Notice of the selection of the· ar-bitrator shall be mailed to him by the parties and shall be returned to the parties within three days from receipt thereof. The notice shall contain the agreement, the nature of the disputes, and the issues involved. Section 17: Oath of arbitrators: Before hearing any testimony, arbi-trators must be sworn by any officer authorized by Jaw to administer_ an oath, to faithfully and fairly hear and examine the matters in contro-versy, and to make a just award to the best of their ability and under-standing_ Arbitrators shaH have the power to administer oaths to all wit-nesses requiring them to tell the whoLe truth and nothing but the truth in any testimony which they may give in any arbitration hearing. This oath shall be required of any witness before any part of his testimony is heard. ·

40 ATENEO lAW JOURNAl VOL 19, NO. 1

Section 18: Subpoena and subpoena duces tecum: Arbitrators shall have the power to subpoena witness and documents when the relevancy of the testimony and the materiality thereof has been demonstrated to the arbi-trators. Arbitrators may also discharge any witness. All of the arbi-trators appointed in any controversy must attend all the hearings regard-ing that dispute, and hear all the allegations and proofs of the parties; but an award by the majority of the arbitrators is valid, unless the con-sonance of all of them is expressly required in the arbitration agreement. Section 19: Jurisdiction: The arbitrators shall have the power to decide only those matters that have been submitted to them. The terms of the award should be confined to such disputes. He shall have no power to add, subtract from, modify or amend any term or provision of the collective bargaining agreement, any supplementary agreement, or rules and regulations.

PROCEDURE Section 20: Pre-arbitration conference: Before the hearing of an arbi-tration case, a pre-arbitration conference should be held before an im-partial third person who shall help the parties agree on the issues involved or agree on certain matters, or settle their case without the use of arbitration. Section 21: Hearing procedure: The arbitrators, within three days from their appointment, shall notify the parties of the time and place for the hearing of the case unless the parties have provided otherwise in the arbitration agreement.

A hearing shall be opened by the filing: of the oath of the a!1>itra-tors, by the recording of the place and time of the hearing, the state-ment of the presence of the arbitrator and the parties, as 1Wdl as their respecti¥e counsels if any, and by the receipt by the arbitrator of the statement of the claim and the answer thereto.

The arbitrator may, at the beginning of the hearing, ask for a statement clarifying the issues involved.

The complaining party shall then present his claim and his proof thereof, together with his witnesses who shall submit themselves for questioning by the adverse party. The defending party shall then pre-sent his defense and proof thereof, together with his witness who shall also submit to questioning by the complainant. The arbitrator may, in his discretion, vary this procedure, but he shalL afford full and equal opportunity to ali the parties for the presentation of any matter or relevant proof.

Exhibits, when offered by the parties, may be received in evidence by the arbitrator.

The names and addresses of all the witnesses shall be made part of the l"ecord. Section 22: Postponemetn-ts: The hearing can be postponed or adjourn-ed by the arbitrator only upon agreement of the parties; otherwise, all adjournments may be ordered by the arbitrators motu proprio only at the hearing and upon good and sufficient cause therefor. S action 23: DefatUlt: The hearing may proceed even in the ab-sence of any party who, after due notice, fails to obtain an adjournment


thereof. An award should not be based solely on the default of the party; the arbitrator shalL ·require the other party to submit such evidence a11 he may deem necessary for making an awa.rd.

Sev"t·ion 24: Evide/(Me: The parties may offer scch evidence as they desire and shall produce such additional evidence as the arbitrator may deem necessary. The arbitrator shall be the judge of the relevance and the materiality of the evidence offered, and strict conformity with the legaL rules on evidence is not necessary. ·

Section 25: Reoprning of hearing: The hearing may be reopened by the arbitmto!' on his own motion or upon application of a party before the award is made. Ii the re<>pening of the case would prevent the mak-ing of an awaru within the prescribed period of time, the matter may not be reopened unless the parties agree on the extension of such time limit.

Section 26: Waiver of hearing: The parties may waive the hearing of the case by written agreement.

Seetion 27: T'im,e of awards: The award shall be made promptly by the arbitrator within thirty days from the cLosing of the hearing, unless otherwise agreed upon by the parties. Section 28: Form: The award shall be in writing, and shall be sig'ned by the arbitrator or by at least the majority, if there be more than one. It must .represent the honest judgment of the arbitrator acting-reasonably and fairly. Each party shaH be furnished a copy of thP. award.

Section 29: Scope of the award: The arbitrator may grant any relief which he may deem just and equitable, provided it is within the scope of the agreement of the parties.

Section 30: Award upon settlement: Should the parties settle their disputes during the course of the arbitration, the arbitrator, upon their request, may set forth the terms of the settlement in an award.

Section 31: Finality: All arbitration awards shall be final and binding upon the parties. Section 32: Grounds for modification: In any of the following cases, the body having jurisdiction over labor contracts, upon application of any party to the controversy, must make an order modifying or correcting the award:

1. Where there was an evident mistake in the description of any person or thing referred to in an award;

2. Where the arbitrator awarded upon a thing not submitted for arbitration.

The order may modify or correct the award so as to effect the in-tent of the parties, and to promote justice and fairness.

Section 33: Grounds for vacating am, award: In any one of the follow-ing cases, the body adverted to in Section 32, must make an order vacat-ing the award upon petition of any party to the corutroversy when such party proves affirmatively that in the arbitration proceedings:


1. The award was procured by corruption, fraud, or other unlawful means;

2. That there was e.vident partiality or corruption on the part of the arbitrator, or any one of the members of a board;

3. That the arbitrator was guilty of misconduct in to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy;

4. That the arbitrator exceeded his powers or so imperfectly performed them that a mutual, final, and definite award upon the sub-ject matter submitted to him was not made; '

5. That the arbitrator was not qualified to act under this law, and willd'ully refrained from disclosing such disqualification, or was guilty of any other misbehavior by which the rights of the parties have been materially prejudiced.

Where an award is vacated, a new hearing may be directed either before the same arbitrator, or before a new one to be chosen in the manner provided in the agreement for the selection of the original ar-bitrator, and any provision of law limiting the time in which the ar-bitrator may make an award shall be deemed applicable to the new r.rbitration.

MISCELLANEOUS Section 34: Fees and costs: The fees of the arbitrator shall be fifty pe-sos a day, to be divided equally unless the parties agree other-wise in writing. Other costs shall be borne by the party incurring the same. Section 35: Cont"rol of aJrbitmtion: The Department of Labor shahl have dire·ct control and supervision over all arbitration cases and arbitration societies. Section 36: Publication of OJWards: The Department of Labor shall officially compil-e ap.d publish all labor arbitration awards. Section 37: Repealing clause: All provisions of existing laws, orders, regulations and decre.es, contrary to or inconsistent with this decree are hereby repealed.

Done in the City of Manila this 31st day of March 1974.

FERDINAND E. MARCOS President

Republic of the Philippines

The above model law was fashioned by the author out of our present Arbitration Law and Presidential Decree No. 21, and the implementing rules and regulations of the NLRC on voluntary arbitration. The author decided to retain the good portions of the said laws, modified the bad ones and entirely disregarded the very objectionable ones. The bases of the change and modifications are the New York Arbitration Law, the Federal Mediation and Conciliation Service Law of the United States, Rules on Arbitration of the American Association of Arbitration. Ideas


were also taken from the laws and literature on the subject of countries all over the world, particularly the United States, Canada, Australia, Bur-ma, Ceylon, Japan, China, India, Indonesia, Malaya, New Zealand, Pakistan, Singapore, Thailand, Vietnam, Austria, Belgium, Denmark, Finland, Ger-many, France, Greece, Ital'Y, the Netherlands Norway, Sweden, Swit-zE:tland, and the United Kingdom.

The model law, being a labor legislation, will require continuous revisions to keep it abreast with a changing environment, and it wiLl re-quire administrative arrangements adequate for its purpose. Otherwise, all the virtues attributable to his original intention will not prevent its distortion or decay.

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