primer on grievance machinery and voluntary arbitration

8/13/2019 Primer on Grievance Machinery and Voluntary Arbitration

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Primer on GrievanceMachinery and

Voluntary Arbitration

I N T R O D U C T I O NThe Primer answers the numerous questions being asked about voluntary

arbitration by parties to labor-management disputes and their arbitrators.For better appreciation of the subject, the Primer traces first the development of

voluntary arbitration within the policy and legal framework of the Philippine labor relationssystem and eplains the meaning of !rievances and importance of !rievance Procedure as

prelude to arbitration.The various topics on the main subject of voluntary arbitration starting from the

selection of voluntary arbitrators, scope of voluntary arbitration, arbitrability

issues, arbitration procedures and techniques, evidence, and voluntary awards and

decisions, combine both the law and procedures and their application in various casesdecided by well-known "rbitrators in the #nited $tates. %n instances where local cases are

available, the decisions of the Philippine $upreme &ourt are also included. The approachprovided a more realistic and practical picture of how voluntary arbitration works.

The topic on "rbitration &ost and $pecial 'oluntary "rbitration Fund is included toprovide answers to basic questionsrelative to epenses involved in arbitration proceedings and entitlement to governmentsubsidy.

(ith the continued support from government, labor and management

advocates, voluntary arbitrators and non-governmental organi)ations, the Primer ends

with a very optimistic note on the future of grievance settlement and voluntary arbitration in

the country.POLIC AND L!GAL "RAM!#OR$%& #hat i' the (re'ent national (olicy on labor di'(ute 'ettlement )

The present national policy on labor dispute settlement is enunciated in the following

instruments*A& %*+, Con'titution$ec. +, "rticle %%% provides*

The $tate shall promote the principle of shared responsibility between

workers and employers and the (re-erential u'e o- voluntary mode' in 'ettlin.


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di'(ute'/ includin. conciliation, and shall enforce their mutual compliancetherewith to foster industrial peace.0& Labor Code/ a' amended by Re(ublic Act 1,%2

"rticle /00 of the &ode provides, among others*1a2 3%t is the policy of the $tate3to promote and emphasi)e the primacy

of free collective bargaining and negotiations, including voluntaryarbitration, mediation and conciliation, as modes of settling labor or industrial

disputes.1b2 To provide an adequate administrative machinery for the epeditious

settlement of labor or industrial disputes.3& #hat 4ere the early (olicie' ado(ted by the .overnment on 'ettlin.

labor di'(ute')Philippine labor policy may be said to have evolved over four periods*A& Common4ealth Period 5%*617%*268

&ommonwealth "ct 4o. 05+ established our first labor dispute settlement

system by creating the &ourt of %ndustrial 6elations and vesting it with

compulsory arbitration powers over labor disputes involving both workers inthe private sector and in government owned or controlled corporations. The

enactment of &" 05+ was pursuant to a provision in the 07+8

&onstitution, $ection 9, "rticle %', which categorically provided the basis

for compulsory arbitration.:n the enactment of &" 05+, the highly respectedDr& Cicero Calderon hadthis to say* The adoption of compulsory arbitration was not the product ofmere impulse or sudden inspiration. %t was a deliberate response of the

policy-makers to the social scene characteri)ed by acute agrarian andindustrial unrest of disturbing proportions. $trong measures were necessary

to check the surging tide of strikes and uprisings by the tenants and

laborers, particularly in rice haciendas and sugar plantations in thecountry. :ther factors contributing to the adoption of compulsory arbitration

were the poor state or organi)ation of the workers and farm workers and the

resultant lack of effective collective bargaining; the customary reliance of the

Filipino upon courts of justice in the adjudication of controversies of whatever

nature; the desire to eperiment with compulsory arbitration, which had beenrejected at least three times under "merican rule; the apparent inadequacy or

ineffectiveness of the !overnment policy of non-intervention in the area oflabor-management relations, and the strong influence of the then Presidentue)on, who advocated its adoption before the 4ational "ssembly.

0& Indu'trial Peace Act Period 5%*267%*,38%n 078+, 6epublic "ct 4o. ?@8 was enacted fundamentally changing the

framework of labor relations policies from that of compulsory arbitration to collective


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bargaining. The "ct severely restricted the compulsory arbitration powers of the&%6. The latter was divested of the power to set wages, rates of pay, hours of

employment, other terms or conditions of employment, or otherwise regulate the

relation between employers and employees, as a compulsory arbitration body,ecept in labor disputes involving industries indispensable to the national interest.C& Martial La4 Period 5%*,37%*+18

%t was during the period of martial law that voluntary arbitration became anintegral part of the Philippine labor relations policy. This period also marked by the

banning of strikes in the so-called vital industries. To cushion the impact of thestrike ban, Presidential Aecree 4o. /0 was issued creating the 4ational =abor6elations &ommission, which eercised original jurisdiction over practically all labor

disputes. "side from creating the 4=6&, Presidential Aecree 4o. /0 had four othervery important provisions*

0. %t imposed the clearance requirement for dismissals and

terminations of employees with at least one year of service;/. %t made grievance procedure a mandatory initial stage in the

settlement of labor disputes;+. %t provided that before assuming jurisdiction over any

issue, dispute or grievance, the &ommission shall give the parties a

chance to submit their problem for voluntary arbitration;B. To ensure the availability of voluntary arbitrators, the Aecree

provided that all collective bargaining agreements shall contain a

provision designating a voluntary arbitrator3 to decide all disputes andgrievances arising out of the implementation of the collective

bargaining agreements.D& Po't7Martial La4 Period 5 %*+17(re'ent8

(hat appears to be the hallmark of this period in so far as labor relations

policy is concerned is the government emphasis on the promotion of voluntary

modes of dispute settlement. Cy virtue of Decutive :rder 4o. 0/9 which reorgani)edthe Aepartment of =abor and Dmployment, the 4ational &onciliation and


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6& 9a' the ne4 labor relation' la4 'tren.thened the le.al ba'i' o- theu'e o- .rievance machinery and voluntary arbitration in 'ettlin. labor di'(ute' )

Aefinitely. 6epublic "ct 9@08 now provides for the mandatory u'e o- the.rievance machineryas a prerequisite step to voluntary arbitration of disputes arisingfrom &C" interpretation and implementation, as well as those disputes arising from the

interpretation and enforcement of company personnel policies. "rticle /9/ of the =abor&ode, before it was amended by 6epublic "ct 9@08, merely provided that 3 1whenever2 agrievance arises from the interpretation or implementation of a collective agreement,including disciplinary actions imposed on members of the bargaining unit, the employer and

the bargaining representative shall meet to adjust the grievance.$econdly, it is now the policy of the $tate to encoura.e voluntary arbitration o-

all labor7mana.ement di'(ute'other than those arising from the interpretation andimplementation of collective bargaining agreement and company personnel policies. This

policy is operationali)ed by the following provisions*". "rticle /95 of the =abor &ode, as amended by 6epublic "ct

9@08, which provides that* "ll grievances submitted to the grievancemachinery which are not settled within seven 1@2 calendar days from the date

of its submission 'hall automatically be re-erred to voluntaryarbitrationprescribed in the &C". The seven calendar days shall bereckoned from the date the grievance machinery is submitted to the last step

in the grievance machinery immediately prior to voluntary arbitration.C. "rticle /90, which provides for the original and eclusive jurisdiction of

voluntary arbitrators over unresolved grievances arising from the

interpretation or implementation of the &C" arising from the interpretation or

enforcement of company personnel policies. (ith this amendment, theoriginal and eclusive jurisdiction of voluntary arbitrators has been

tremendously epanded.&. "rticle /90 provides that &C" violations are to be treated

as.rievance'instead of unfair labor practice acts ecept when the violationis gross, meaning it involves flagrant and Eor malicious refusal to comply with

the economic provisions of the &C".A. The same article en:oin'the 4=6&, its 6egional "rbitration

Cranches, and the 6egional Airectors of the Aepartment of =abor and

Dmployment from entertaining disputes, grievances or matters under the

eclusive and original jurisdiction of the voluntary arbitrator. %f any of such

cases is filed before them, they have to immediately dispose and refer thesame to the grievance machinery or voluntary arbitrator provided in the &C".

D.


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parties to submit the issueEs to voluntary arbitration 1 6ule %, $ection /,%mplementing 6ules, =abor &ode2.

GRI!VANC!;


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es. This is clear from "rticle /95 and "rt. /90 of the =abor &ode, as amended by

6epublic "ct 9@08."rt. /95 is emphatic on the duty of the parties to a collective bargaining

agreement to establish a machinery for the adjustment and resolution of grievances arising

from the interpretation and enforcement of the &C" andEor company personnel policies, andfor the mandatory use of the said machinery.

"rt. /90, on the other hand, directs the 4=6&, its 6egional "rbitration Cranches and

the 6egional Airectors of the Aepartment of =abor and Dmployment not to entertaindisputes, grievances or matters under the eclusive and original jurisdiction of thevoluntary arbitrator or panel of voluntary arbitrators and to immediately dispose of and

refer the same to the .rievance machineryor voluntary arbitration provided in thecollective bargaining agreement.


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=egally, none. " grievance procedure is a must provision in any &C" and nocollective agreement can be registered in the absence of such procedure. %n the event that a

&C" without such provision is submitted for registration, the registrar shall advise the parties

to include a grievance procedure the &C" is considered duly registered.%2& #hat 'tandard' may u'ed a' .uide' in -ormulatin. an e--ective

.rievance (rocedure)The following standards are suggested in the formulation of effective grievance

procedure*0. &ollective bargaining agreements should contain provisions that

grievances and disputes involving the interpretation or application of the terms

of the agreement are to be settled without resort to strikes, lockouts, or otherinterruptions to normal operations by an effective grievance procedure with

arbitration as its final step./. To be effective, the procedure established for the settlement of such

grievances and disputes should meet at least the following standards*a. The successive steps in the procedure, the method of

presenting grievances or disputes, and the method of taking an appealfrom one step to another should be so clearly stated in the agreement

as to be readily understood by all employees, union officials, and

management representatives .b. The procedure should be adaptable to the handling of various

types of grievance and disputes which come under the terms of the

agreement .c. The procedure should be designed to facilitate the settlement of

grievances and disputes as soon as possible after they arise. To thisend*0. The agreement should provide adequate stated time

limits for the presentation of grievances and disputes, the

rendering of decisions, and the taking of appeals./. %ssues should be clearly formulated at the

earliest possible moment. %n all cases which cannot be settled

in the first informal discussions, the positions of both sides

should be reduced to writing.+.


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d. The procedure should be open to the submission of grievancesby all parties to the agreement.

+.


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%,& #hat i' the interrelation'hi( bet4een the .rievance (rocedure andvoluntary arbitration )

Professor Fernande) quotes Cernstein *%t is of vital importance that the interrelationship of the two procedures-grievance

and arbitration-be borne in mind by those who study and practice arbitration. " grievanceprocedure in which few disputes are settled inevitably overloads arbitral machinery."rbitration procedures and awards that undermine the grievance machinery by permittingserious disregard of its prescribed procedures can invite more arbitration and fewer

settlements by negotiation. :r arbitration that encourages overemphasis on technicalprocedural requirements will thwart settlement on the merits so that pressure buildsfor resort to self-help. :bviously the balance to be struck requires judgment, preeminently

on the part of the representatives of unions and management, who have initial and primaryresponsibility. How they discharge their functions may be affected by what arbitrators do.

"rbitration is a powerful tool that can, on occasion, send reverberations through the larger

organism, the grievance procedure and shop office relationsG0?. #hat are the advanta.e' and di'advanta.e' o- -e4er 'ta.e' in the.rievance (rocedure)

The advantages of fewer stages in the grievance procedure are 102 greater speed inprocessing, and 1/2 savings in personnel time. %ts disadvantages are 102vulnerability

to grievance overload; 1/2 ecessive involvement of senior officials and 1+2

inadequate consideration of the merits by lower level supervisors who are in a muchbetter position to make an effective adjustment.

%*& #hat are the advanta.e' and di'advanta.e' o- a multi7'ta.e

(rocedure)The multi-stage procedure has the following advantages* 102 it enables the

management-supervisory personnel at all levels to contribute their know-how to theadjustment of grievances; 1/2 a more adequate consideration of the grievance is likely; 1+2

involvement of senior officials in grievance processing, is greatly reduced, thereby freeingthem for other managerial tasks.

%ts disadvantages are* 102 it is wasteful of personnel time and effort and 1/2 it is lessepeditious.3>& #hat 'hould be the (ro(er attitude o- (artie' to the Grievance

Procedure)The partiesG attitude in handling grievances, probably more than in any other aspect

of the labor-management relationship, indicates their good faith. 4owhere in thatrelationship is mutual good faith more important. The attitude of the parties is even more

important than the type of grievance provisions contained in the agreement. This view hasbeen shared by unions and management alike in most cases in which the grievanceprocedure has been considered successful and in the majority of cases in which the

procedure has broken down. !ood grievance machinery is important, but such machinery

alone will not insure success. The attitude, judgment, eperience and training of the

individuals involved are of prime importance. Moreover/ a de'ire to 'ettle .rievance'/rather than to 4in them/ i' e''ential&


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3%& #hat i' the re'(on'ibility o- the union 'te4ard' and -oreman in

handlin. .rievance')#nion stewards and foreman must see to it that grievances are presented only when

there is a real basis for complaint or there is a need for a decision. %f stewards are convinced

that the worker does not have a real case, it is better to tell him so right from the beginning.%n borderline cases where it is felt that the worker has considerable justice on his side, heshould be told of the uncertainty of the decision before the case is processed to get a definiteruling through the grievance procedure.

Foreman, on the other hand, should be trained in the human relations aspects oftheir jobs. They should be ready to listen first before they start debating with the employee.

They should note what is being said rather than how the matter is said. This way, gripes areseparated from grievances, or gripes are prevented from becoming grievances.

Coth stewards and foreman should make every effort to settle grievances at the

lowest step.


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(ith the epansion of the scope of the original and eclusive jurisdiction of voluntaryarbitrators to include questions arising out of the interpretation or implementation of

company personnel policies, the answer to the above is decidedly yes.Cut even before this epansion of jurisdiction brought about by 6" 9@08, under the

theory of implied incorporation, eisting terms and conditions, though not dealt with in

specific provisions, were already deemed part of the agreement and thus, grievable.Fernande) quotes &o and Aunlop in eplaining the so-called theory of implied

incorporation*" collective bargaining agreement should be deemed, unless an intention is manifest,

to carry forward for its term the major terms and conditions of employment not covered by

the agreement, which prevailed when the agreement was eecuted./B. 9o4 i' .rievance (re'ented )

!rievances ordinarily are brought by the aggrieved employee, usually with the unionrepresentative called the shop steward or grievance officer, to the foreman either orally or inwriting. #sually a !rievance Form is provided for the purpose. %f no settlement is reached

at first level, the aggrieved employee or the grievance officer may bring the grievancethrough the successive steps in the grievance procedure provided for in the &C".

"s mandated by the =abor &ode, as amended by 6epublic "ct 9@08, all grievances

that remain unresolved after ehausting all the internal procedures shall automaticallybereferred to voluntary arbitration prescribed in the &C" if they are not settled within seven 1@2

days from the date of its submission to the last step in the internal grievance machinery.32& #ho can -ile a .rievance )

!enerally, em(loyee' initiate a grievance. This is recogni)ed by "rticle /88 of the=abor &ode which provides, among others, that 3 an individual employee or group ofemployees shall have the right at any time to present grievances to their employer.

$econdly, the grievance procedure being part and parcel of the continuous collective

bargaining process and the union designated or selected by the majority of the employees

being their eclusive bargaining representative, union'are generally recogni)ed as havingthe right to initiate, file or present a grievance, either with regard to their rights as unions

under the contract, or with regard to the rights of employees, whether collective or

individual.Thirdly, while em(loyer' do not as a general rule initiate a grievance, it would be

prudent to include a provision in the &C" granting the employer such right, especially in

cases where the employer may wish to use the grievance machinery to resolve a questionover a vague or indefinite provision of a &C".31& 9o4 are .rievance (roce''ed )

Professor Fernande) suggests the following approach in the processing and

adjustment of grievances*Processing of grievances involves a joint effort on 102 identification of the issue or

issues involved 1/2 developing its factual basis or background 1+2 determining the contract


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provisions involved 1B2 evaluating the merits of the grievance in the light of the factualbackground and applicable rules and 182 working out a fair and just settlement.3,& #hat (re(aration' 'hould be undertaen in order that the .rievance cane--ectively be (re'ented by the .rievant)

The Trade #nion &ongress of the Philippines in its Manual -or ;ho(;te4ard'recommends the following steps in preparing for the presentation of a grievance*

0. Determine -ir't i- there i' a .enuine .rievance and i- there i'/4hether the 'ame i' :u'ti-ied or not&Has the contract been violatedL Hasthe worker been treated unfairly by some action of the companyL %s theemployer responsibleL %s the problem covered by the contract or personnel

policies in any wayL/. ;tudy the C0A and com(any (er'onnel (olicie'&" $teward or a

grievant who is not familiar with the &C" and company personnel policies is

like a navigator without a compass.


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B. Di'cu'' the .rievance 4ith the Union or other 'te4ard' inorder to learn how the contract should be interpreted and what kind of settlement or

adjustment will be demanded.8. %t may be important to know about past grievance settlements of similarnature as the grievance to be presented.

3+& #hat (re(aration' 'hould be undertaen by the re'(ondent and hi'advocate' in a .rievance to e--ectively (re'ent hi' action 'uch that they maybe under'tood and a((reciated)%n the same manner that a grievant or a steward has to prepare for the presentation

of a grievance, the employer and his advocates down the line in the management hierarchy,

has to prepare its defense of its action which gave rise to the grievance. They must alsoprepare by getting all the facts. %f it was a disciplinary action , what has the grievant done to

deserve the disciplinary actionL (henL (hereL %t is the employer who will have the burden

of proof in justifying its action after the grievant and Eor the #nion has presented the

grievance.The employer or respondent has to be thoroughly familiar with the &C" and its own

personnel policies. "lthough the administration of the &C" is a joint effort between the #nionand the employer, the primary source or the originator of these policies is the employer andhe is therefore epected to be more well-versed with the provisions of the &C" and its own

personnel policies.The employer must be ready to justify its action and convince the union or grievant of

its reasonableness and fairness. He may point to a clear &C" provision as the legal basis of

its action. He may refer to a known company policy or practice that has been clearly and

manifestly violated by the grievant or he may point to precedents of similar grievances thatwere resolved or adjusted in favor of the employer.

The bottom line is* if both parties agree to the facts, the road ahead is much clearerand wider.3*& #hat remedy i' available to a (arty i- the other re-u'e' to attend or a((earin the .rievance hearin.)

"rt. /8/ of the =abor &ode prescribes attendance in grievance hearings as part of the

partiesG duty to bargain collectively, to wit*The duty to bargain collectively means the performance of a mutual obligation to

meet and convene promptly and epeditiously in good faith for the purpose of negotiating anagreement with respect to wages, hours of work and all other terms and conditions of

employment including proposals for adjusting any grievances or questions arising under suchagreement and eecuting a contract incorporating such agreements if requested by eitherparty, but such duty does not compel any party to agree to a proposal or to make any

concession."ny party guilty of non-attendance may therefore be charged of unfair labor practice,

pursuant to "rt. /B? 1g2 or "rt. /B7 O. The other party may, as a matter of choice, file

request for preventive mediation or a notice of strike with the 4&


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has been certified or submitted to compulsory or voluntary arbitration or during thependency of cases involving the same grounds for the strike or lockout.

The other school of thought presents this proposition* 4on-attendance in grievancehearings implies that the non-attending party is not convinced that the grievance machinerywill be useful or effective in adjusting or resolving the grievance and that, therefore, he is

deemed to have dispensed with the preliminary step to voluntary arbitration. #nder thistheory,, the parties may then be deemed to have submitted the grievance to voluntaryarbitration.6>& May a union .o on 'trie over an un-air labor (ractice act de'(ite a no'trie=no locout (rovi'ion in the C0A (rovidin. -or the re'olution o- 'uch di'(utethrou.h the .rievance (rocedure and voluntary arbitration) I' 'uch a C0A (rovi'ion(rovidin. -or arbitration in ca'e o- ULP by either (arty valid)

There are two conflicting decisions of the $upreme &ourt on this matter.:ne, promulgated on


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66& #hat are 'ome e'tabli'hed indicator' o- acce(tability o- an arbitrator to the(artie')6eferring to $eit). P. $o you (ant To Ce an "rbitrator, quoted Professor Fernande)

listed the following indices of acceptabilities*0. highly knowledgeable and has had significant eperience in the field of

labor law, labor relations, personnel management and union problems;/. has the capacity to run a hearing fairly and competently and command

respect in his role;+. is sensitive to and understands the needs of the parties insofar as a

decision is concerned and the articulation of the reasons upon which it isbased;

B. has a reputation in the industrial and union community for fairness and

impartiality and,8. because of character, can be depended upon not to depart from the

ethical standards which arbitrators impose upon themselves.:ther salient attributes based on survey of management and union attitudes were

also listed*02 decisions are based on the facts of the specific case/2 highly consistent rulings+2 broad viewpointB2 submits a detailed justification of the decision82 develops pertinent information through questioning in the hearing

1Jing C.,


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those organi)ations automatically for accreditation. :thers are individual applicants whomeet the following minimum criteria for accreditation*

0.


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9. 4ames of three 1+2 character references who can attest to applicantGs

character, stature and eperience in the field of labor-management relations."fter the screening of his qualifications by the 4&


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Temporary or ad hoc arbitrator is selected after dispute arises. He is named toarbitrate a specific dispute or a specific group of disputes, and there is no commitment to

select him again. Permanent arbitrator on the other hand, is one who is selected to serve for

a period of time usually during the life of the &C", rather than for just one case or specificgroup of cases.6+& #hat are the advanta.e' and di'advanta.e' in the de'i.nation o- tem(orary

arbitrator') Permanent arbitrator)%t is conceded that possibility of easy change of arbitrators is one of the chief

advantages of the use of temporary arbitrators. %f parties are satisfied and the arbitrator isavailable, he can be selected again and again. For parties with relatively few disputes,appointment of ad hoc arbitrators answer for economy and likewise permits selection of

arbitrators possessed of special qualification and technical epertise needed in each case.


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names on the list in the order of preference. %f the parties fail to agree on any of the namessubmitted, they may request for additional lists. %f they still cannot agree, the 4&


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6epublic "ct 4os. 9@/@ and 97@0 enacted on @ Iuly 07?7 and // 4ovember 0775,respectively, also epanded the jurisdiction of voluntary arbitration to include* 02 all

unresolved wage distortion cases as a result of the application of wage orders issued by any

6egional Tripartite (ages and Productivity Coard in establishments where there is collectivebargaining agreement or recogni)ed labor union, and /2 all unresolved disputes, grievancesor other matters arising from the interpretation and implementation of a productivity

incentives program which remains unresolved within twenty 1/52 calendar days from thetime of the submission to labor-management committee.


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such a document which confines and limits the authority of arbitrators to a determination ofwhat the parties had agreed to when they drew up their basic agreement, our task is to

search for what would be, in the light of all the relevant factors and circumstances, a fair and

equitable answer to a problem which the parties have been able to resolve by themselves.%nterest arbitrator supplements the collective bargaining process by doing the

bargaining for both parties after they have failed to reach agreement through their ownbargaining efforts. %n carrying out this function as legislator or bargainer for the parties,interest arbitrator must strive to achieve a workable solution. >uoting $oule, (age"rbitration, 9-@ 107/?2, Dlkouri states* 1The arbitrator is2 not a superior sort of dictator,

dispensing justice from on high, but an agent of the two sides to the collective bargaining.His job is to reach a solution that will be satisfactory enough to be workable. He has to takeinto consideration their relative strength and their relative necessities. He has to remember

not to depart so far from a possible compromise, consistent with the respective power anddesires of the parties, that one or the other of them will be likely net time to prefer open

hostility to peaceful settlement. He has also to remember that a decision is useless if it

cannot be enforced and that the power and ability of the respective parties to administer a

decision successfully is an integral part of the decision itself." decision which cannot be carried into effect or which will create lasting

dissatisfaction is not really a decision at all. :n this account a wage arbitration is not aneercise in pure reason and a summary of merely logical arguments, accompanied by theopinion accompanying the decision, does not tell the whole story. "rbitrators frequently do

not, of course, fully understand these limitations the more successful ones do so."6C%T6"C%=%T %$$#D$*


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issue not previously resolved and the resolution of the latter is necessary to the finaldetermination of the grievance.& #ho decide' the i''ue o- arbitrability)

The determination of arbitrability is often left by the parties to the arbitrator or to the

administrative agency like the 4&


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agreement of the parties 1&C" and relevant agreements2, directives of the arbitrator, andprocedural rules of appropriate agencies like the 4&


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B. %n arbitration under a law, to complete any statutory requirements not met by

the arbitration clause of the collective agreement8. To confirm the arbitrability of the particular dispute 1Jraft Foods &o., 0B8 ="

++929. To provide additional opportunity to settle the dispute@. To agree to a remedy

%n negotiating on a submission, the parties may find that they are not too far apartfor negotiated settlement of the basic dispute.2,& #hat (re(aration' 'hould the (artie' and their advocate' undertae in

order that they 4ill be able to (re'ent their re'(ective ca'e' and (o'ition'mo't e--ectively)To facilitate the hearing of the case, parties shall ensure the effective presentation of

the facts and arguments of their respective cases by undertaking the following preparations*0. $tudy the original statement of the grievances and review its history

through every step of the grievance machinery./. Damine carefully the initiating document whether it is the Aemand for

"rbitration or the $ubmission "greement, to help determine with certainty the

scope of the arbitratorGs jurisdiction+. 6eview the collective bargaining agreement particularly the specific

provisions involved and other related provisions including any pertinent

company policy, rules and regulations.B. &ompile all documents needed at the hearing make available photocopies

for the arbitrator and the other party. (here some of the documents neededare in the possession of the other party, make arrangements to ensure

availability during the hearing. :therwise, motions for the issuance of

subpoenas may be availed of prior to or during the hearing.8. %f ocular inspection is material to the case, make advance arrangements

with the arbitrator. Auring on-the-spot investigations, the arbitrator must be

accompanied by the representatives of both parties.9. %nterview all witnesses and ensure that they understand the whole case

and their particular relevance and importance of their testimony to the

case.


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?. 6eview articles, references and published awardsEdecisions and

jurisprudence on the general subject matter in disputeAR0ITRATION 9!ARING2+& In .eneral/ 4hat are the (rocedural 'te(' in the conduct o- arbitrationhearin.)

"rbitration hearing normally involves many, if not all, of the following steps*0. The taking of the oath by the arbitrator and his opening statement/. Crief statement of the issues in controversy by the parties+. $tipulation of the factsB. Presentation of evidence by the grievant. The voluntary arbitrator shall have

a wide latitude of discretion in determining the order of presentation. %ndisciplinary cases, it is the party who disturbed the status quo in therelationship who will present the case. %n cases of contract interpretation, the

statement shall be presented first by the initiating party.8. Presentation of evidence by the other party9. $upplementary fact-finding procedures, such as ocular inspections@. Hearings and judgment of Aefault?. Formal offer of evidence7. Filing of briefs and reply briefs.05. &losing of Hearing

2*& #ho may re(re'ent (artie' in arbitration (roceedin.')%t is generally agreed that each party has the right to be represented in arbitration

proceedings by persons of their own choosing. He can be the spokesman in the prearbitral

stages of the grievance procedures like the shop stewards and foremen, top union andcompany officials, or company or union attorney.1>& #ho are entitled to attend arbitration hearin.')

"s a rule, arbitration hearing is not open to the public. :nly persons having directinterest in the case, that is, the parties and their authori)ed representatives areentitled to attend the hearing. :ther persons may be permitted to attend the

hearing only with the permission of the arbitrator or the parties.1%& #ho i' re'(on'ible in 'ettin. the time and (lace o- hearin. and the 'endin.o- the notice o- hearin.)


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:rdinarily, the arbitrator will meet at any time and place agreed to by the parties, if

he is available. :therwise, he fies the time and place in consultation with the parties and

gives timely and written notice of such date, time and place of the hearing.13& I' the tain. o- the oath by the arbitrator o- the NCM0 and 4itne''e'nece''ary in arbitration (roceedin.')

"ll "ccredited 'oluntary "rbitrators of the 4&


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simultaneously serves to inform the arbitrator fully regarding all material aspects of thedisputes. Dven when the parties agree to submit their case on the basis of stipulated facts,

written briefs and affidavits, the arbitrator may not always agree that the case be properly

resolved without a hearing.%n the case of 4atividad vs. (orkmenGs &ompensation &ommission, cited in the

paper presented by "tty. 6osa & #hat are e@hibit' and ho4 are they o--ered in evidence)

They are evidence presented and preserved in written form. Dach party may use a

witness to identify the ehibit and to show its accuracy if the other party does not accept the

same for what it purports to be. &opies of the ehibit should be prepared in advance andcopies given to the other party and the arbitrator


30/66

,%& #hen may a voluntary arbitrator conduct e@ (arte (roceedin.' and render

de-ault a4ard'):nly an uneplained failure to appear due notice, not a delay in appearance, can

justify an e parte proceeding. The "rbitrator must proceed to hear the testimony and

receive all the evidences submitted by the other party including those that he may requirefor the making of an award.,3& #hen may (lant vi'it' by arbitrator nece''ary in arbitration (roceedin.')

" plant visit may be indispensable if the conduct thereof helps the arbitrator secure abetter understanding of the case and in some cases, avoid voluminous testimony. Plant visit

may be done at the initiative of the arbitrator or at the request of any party to the dispute.,6& #hat i' the im(ortance o- o(enin. and clo'in. 'tatement' in arbitration

(roceedin.'):pening statements provide the arbitrator in brief and clear language about each

partyGs view of what the dispute is all about and what each epects to prove by its evidence.

Through closing statements, parties render a real service to the arbitrator and to themselvesby careful analysis and synthesis of the important aspects of the cases, the facts proven andplacing them in proper relation to the ultimate conclusion they seek the arbitrator to arrive.,


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$ection ?, 6ule '% of the 4&& Are voluntary arbitrator' authoried to i''ue 'ub(oena)

6epublic act 9@08 and its implementing rules empower the voluntary arbitrator to

hold hearings, receive and take whatever action is necessary to resolve the issue or

issues subject of the dispute, #sing the foregoing statement conferring broad and general powers on the

arbitrator, the 4&


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+%& #hat 'hould be the a((roach o- the arbitrator in .ivin. 4ei.ht and credibility

to the evidence (re'ented)4oted "rbitrator !eorge &heney pointed out that, in arriving at the truth in such case,

an "rbitrator must consider whether conflicting statements run true or false; what he willnote is the witnessesG demeanor while on the stand; and that he will credit or discredittestimony according to his impression of the witnesses veracity.

He also pointed out that in determining where the preponderance of evidence lies withrespect to any material point, the arbitrator will into consideration whether the witnessspeaks from first-hand information to whether the testimony is largely based in hearsay or

gossip.%n summari)ing, "rbitrator &heney stated that the duty of the "rbitrator is simply to

determine the truth respecting material matters in controversy as he believes it to be, based

upon a full and fair consideration of the entire evidence, the weight, if any, to which hehonestly believes it to be entitled.+3& In .ivin. 4ei.ht and credibility to te'timony in di'char.e and di'ci(line

ca'e'/ 4hat '(ecial con'ideration' 'hould be taen into account by thearbitrator)%n discharge and discipline cases, if there is evidence of will on the part of the accuser

against the accused, the testimony of the former will be subject to doubt and careful scrutiny

by the arbitrator.%n one case, "rbitrator $hulman recogni)ed that an accused employee has an

incentive for denying the charge against him in that he stands immediately to gain or lose in

the case, and that normally there is no reason to suppose that a plant protection man, for

eample, would unjustifiably pick one employee out of the hundreds and accuse him of anoffense, although in particular cases the plant protection man may be mistaken or in some

cases even malicious. "rbitrator $hulman declared that, if there is no evidence of ill willtoward the accused on the part of t he accuser and if there are no conclusion that the charge

is true can hardly be deemed improper.%n several decided "merican cases, one other factor to be considered by the arbitrator

in weighing testimony in discharge and discipline cases is the so-called code which inhibits

one member of the organi)ation and frequently one member of an unorgani)ed working force

from testifying against another.+6& #hat i' the value o- hear'ay evidence in arbitration hearin.')

"rbitrators generally admit such evidence, but qualify its reception by informing theparties that it is admitted only -or 4hat it i' 4orth.

%n (alden vs. Teamasters case, the &ourt held that a unionGs failure to object tohearsay evidence in arbitration did not constitute a breach of its duty of fair representation

the court declared that* "n arbitration hearing is not a court of law and need not be

conducted like one. 4either lawyers nor strict adherence to judicial rules of evidence

are necessary complaints of industrial peace and stability M the ultimate goals of arbitration.


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%n many decided "merican cases, very little weight is given to hearsay evidence, andit is eceedingly unlikely that an arbitrator will render a decision supported by hearsay

evidence alone. Then, too hearsay evidence will be given little weight if contradicted by

evidence which has been subjected to cross-eamination.The rule on hearsay evidence likewise applies to affidavits. :bjections to

its admission must be considered and the other party should be given the opportunity tocross-eamine the persons making the affidavits.+


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mean what they want it to mean. The arbitrator brings a certain amount ofobjectivity to the process.

/. ;(eci-ic ver'u' .eneral lan.ua.eF(here contract language is specific insome respects, it will normally be held to supersede another more generalclause. $pecific means constituting or falling into a named category.

+. To e@(re'' one thin. i' to e@clude anotherF To mention one item of a groupor class of items, and not to mention others, may be construed to mean that

others were meant to be ecluded.B. #ord' 4ill be :ud.ed by their conte@tF The meaning of the words or

phrases will be judged by the contet in which they appear.8. A.reement to be con'trued a' a 4holeF"rbitrators normally will hold that

all parts of the contract have some meaning or the parties would not have

included them in the agreement.9. Normal and technical u'a.eF(ords and phrases will be given their

popularly-accepted meaning in preference to some special meaning which oneof the parties may try to give them. "rbitrators will take the meaningcustomary in labor relations.

,& Intent o- the (artie'F(here the contract is not a sufficient guide, thearbitrator will look beyond it to see if he can determine the intent of the

parties.?. Li't o- union or com(any demand' 'ubmitted at ne.otiation'&7. Contract ne.otiation'FThe history of negotiations, as evidenced by minutes

or records, is important. The arbitrator may rely on oral evidence, if he is

convinced of its accuracy.%>& ;ettlement memoranda&00. No con'ideration to com(romi'e o--er'F:ffers made in negotiation leading

up to arbitration will normally no be considered in arbitration. %t is recogni)ed

that parties will make offers,, looking towards a settlement, that might be less

than they consider to be their strict contractual rights. 1Here, however, it must

be determined that it is a compromise offer and not an admission that the caseis really based on considerations other than those put forward in negotiations2.

0/. Cu'tom and (a't (racticeF(hat the parties do under a collectiveagreement might be even more important than what they say in it.

0+. The 'alient contract ver'u' e@(re''ed (rovi'ion'F" salient contract isone which contains no epress obligations to continue in force practices or

working conditions which eisted at the time that collective agreements is

signed.


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%t is recogni)ed that there is practical inability of the parties to deal fully andconclusively with all aspects of local working conditions. The following sets forth general

principles and procedures which eplain the status of these matters and furnish necessary

guideposts to the parties and the board of arbitrators*0. There is recognition that an employee does not have the right to have a

working condition established where it has not previously eisted or to have aneisting condition changed or eliminated ecept to the etent that theeistence of the local working condition thwarts application of a specificagreementGs provision.

/. That no local working condition shall be effective to deprive any employee ofrights under the agreement.

+. That local working conditions providing benefits in ecess of or in addition to

those in effect for its term ecept as changed or eliminated by mutual

agreement or in accordance with the fourth guidepost.B. That the company has the right to change or eliminate a local working condition

if managementGs actions under the management clause change or eliminate

the basis for the eistence of the local working condition, thereby making itscontinuance unnecessary. Cut it has been held that in the eercise of itsmanagement rights, the company must observe the provisions of the contract,

including the local working conditions section. Hence an action of management

taken pursuant tot he management clause which does not change or eliminatethe basis for the eistence of the local working condition cannot result in its

change or elimination.8. That the establishment of or agreement on any local working condition

hereafter which changes or modifies any provisions of the agreement, ecept

to the etent approved by top management and union officials, is barred.9. That attempts to thwart the development of a practice, even if unsuccessful,

may prevent it from attaining the status of a local working condition. "s aneample, it was held that persistent, though largely unsuccessful efforts by

supervisor to prevent employees from taking wash-up time prior to shift end

did not establish a viable practice protected by a local working conditionclause. =aity in enforcing a reasonable rule is not tantamount to the

establishment of a local working condition.0B. %n interpreting the working intent and application of contractual provisions,

arbitrators may be guided by past practice under the contract. " practice is areasonable uniform response to a recurring situation over a substantial period

of time, which has been recogni)ed by the parties implicitly or eplicitly as theproper response.

The term practices usually refer to local practices and working conditions which canvary considerably at different plants of the same company. They are often a customary way,not necessarily the best way of handling a given problem. " method of handling a problem

cannot be considered a practice if it is only one of several ways of doing it.The practice must be recurring and deal with the same type of situation. %t must have

eisted over a substantial period of time. The la enforcement of a rule may not constitute a


36/66

valid practice since there may not be acceptance, either implicit or eplicit. =a enforcementmight nonetheless be used in some cases to build proof of discriminatory or inequitable

treatment.!enerally, the burden of proof is on the union to show that the practice in fact does

eist. This is frequently difficult to do, since the union may not have very complete records

and the company is able to give evidence of a different practice.%f the practice is unclear or conflicting, the arbitrator is not likely to place much

weight on either way.+1& 9o4 im(ortant are (a't (ractice' in collective bar.ainin.)

Past practices have made the following contributions to the development of industrialself-government*

0. They can be an aid to the interpretation of ambiguous contract

language./. Dven where contract language is clear an agreed practice may modify

it.+. Past practice is important in defining jobs and classification lines which

may affect layoffs, wages and promotions.B. #nder some circumstances a long history of a practice indicates

a mutual agreement even though the contract is silent.8. " past practice is not binding and cannot be enforced when it is clearly

contrary to the contract.The validity of a past practice argument can only be determined by complete

knowledge of the details of the individual agreement in effect in the plant or industry.+,& #hat are the other '(ecial con'ideration' that mu't .uide arbitrator' in

inter(retin. contract lan.ua.e)%& Inter(retation in the li.ht o- the la4F(hen two interpretations are

possible, one making the agreement lawful and the other making it lawful, the

former may be used on the presumption that the parties intended to have a

valid judgment of a reasonable man./. Rea'on and e?uityF(here language is ambiguous arbitrators usually

will strive to apply it in a manner that is reasonable and equitable to bothparties. "s one arbitrator put it* the arbitrator should look at the language inthe light of eperience and choose that course which does the least violence to

the judgment of a reasonable man.+. Avoidin. har'h/ ab'urd or non'en'ical re'ult'F(hen one

interpretation would bring just and reasonable results and another would lead

to harsh, absurd or non-sensical results, the former will be used.


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B. "or-eiture' or (enaltie'FCoth arbitrators and courts are reluctant toassess a penalty or forfeiture if another interpretation is reasonably possible.

:n the other hand, many arbitrators are inclined to rule that some remedy

1including back pay and even interest in some cases2, is appropriate in certaintypes of cases. The question of remedies is one of the most controversial forarbitrators, unions and employers.

8. !@(erience and trainin. o- ne.otiator'F"rbitrators are less inclinedto apply a strict construction of language where the negotiatorsare ineperienced. The assumption is that the rules and practices were better

understood by the parties than the words by which they tried to epress suchpractices. This liberal attitude would not be taken with eperienced negotiatorswho were known to have scrutini)ed the language closely.

9. Inter(retation a.ain't 'electin. the lan.ua.eF(hen no other ruleor standard applies, arbitrators sometimes will rule against the party which

drafted the language. The reason is that the drafting party can more easily

prevent doubts as to its meaning.The party whose interpretation of ambiguous language is contracted by an established

practice has the obligation in negotiations of clarifying the ambiguity in its favor if thepractice is to be discontinued or changed.AR0ITRATION ;TANDARD; IN DI;CIPLIN! CA;!;++& #hat 'tandard' may 'erve a' .uide' to arbitrator in arbitratin.

di'ci(line or di'char.e ca'e')The following standards in the arbitration of discipline cases have been suggested*%& Prior no4led.e by the em(loyee o- the rule' and (enaltie' -or

violation0. foreknowledge or forewarning properly have been given orally

by management or in writing through the medium of typed or printedsheets or books of shop rules and penalties for violation thereof

/. there must have been actual oral or written communication ofthe rules and penalties to the employees. There are, however, certain

offenses such as insubordination, coming to work intoicated, drinking

intoicating beverages on the job, theft of property of the company or

of fellow employees which are so serious that any employee in the

industrial society may properly be epected to know already that suchconduct is offensive and heavily punishable

+. %n the absence of any contractual prohibition or restriction,, thecompany has the right unilaterally to promulgate reasonable rules and

give reasonable orders, and same need not have been negotiated withthe union.

/. 6easonableness of the company rules in relation to the orderly,

efficient and safe operation of companyGs business.


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#nder this standard, if an employee believes that said rule or order isunreasonable, he must nevertheless obey the same, in which case, he may file a

grievance, unless he sincerely feels that to obey the rule or order would seriously and

immediately jeopardi)e his personal safety andEor integrity. !iven a firm finding tothe latter effect, the employee may be said to said to have had justification for hisdisobedience.

+. DmployeeGs Aay in &ourt Principle.#nder this standard, it becomes a duty on the part of management that before

administering discipline to an employee, there should be an honest effort to investigatewhether the employee did in fact violate or disobey a rule or order of the company.

The companyGs investigation must normally be made before its disciplinary decision ismade. %f the company fails to do so, its failure may not normally be ecused on the ground

that the employee will get his day in court through the grievance procedure after the

eaction of discipline. Cy that time has usually been too much hardening of positions.There may, of course, be circumstances under which management must react

immediately to the employeesGs behavior. %n such cases, the normally proper action is to

suspend the employee pending investigation, with the understanding that 1a2 the finaldisciplinary decision will be made after the investigation and 1b2 if the employee is foundinnocent after the investigation, he will be restored to his job with pay time lost.

The companyGs investigation must also include an inquiry into possible justification foralleged rule violation.B. 6equirement of fair and objective investigation.

"t such investigation, the management official may both prosecutor and judgebut he should not also be a witness against the employee. %t is essential for some higher,

detached management official to assume and conscientiously perform the judicial role,,

giving the commonly accepted meaning to that term in his attitude and conduct.8. 6equirement of substantial evidence or proof that the employee was guilty as

charged.%t is not required that the evidence be preponderant, conclusive or beyond

reasonable doubt. Cut evidence must be truly substantial and not flimsy. The management

judge should actively search out witnesses and evidence and not just passively take what

participants ot volunteer witnesses tell him.9. 6equirement of consistent and non-discriminatory application of rules.

" finding of discrimination warrants negotiation or modification of the disciplineimposed. %f the company has been laed in enforcing its rules and decides henceforth toapply them vigorously, the company may avoid a finding of discrimination by telling all

employees beforehand of its intent to enforce hereafter all written rules.,& Re?uirement o- rea'onablene'' and a((ro(riatene'' o- the (enaltyde(endin. on the 'eriou'ne'' o- the em(loyee'B (roven o--en'e and theem(loyment record o- the em(loyee&


39/66

" trivial offense does not merit harsh discipline unless the employee has properlybeen found guilty of the same or other offenses a number of times in the past. There is no

rule as to what number of previous offenses constitutes a good ,fair or a bad record.

6easonable judgment thereon must be used."n employeeGs record of various offense should not be used to discover whether he

was guilty of the immediate or latest offense. The only proper use of his record is to helpdetermine the severity of discipline once he has properly been found guilty of the immediateoffense.

+*& To 4hat e@tent may arbitrator' revie4 the (enaltie' im(o'ed bymana.ement):ne view maintains that the determination of the penalty for misconduct is properly

a function of management and that an arbitrator should hesitate to substitute his judgment

and discretion for that of management. Dlaborating this view, "rbitrator (hitley P.


40/66

ought to have done under similar circumstances and in the light to decide whether theconduct of the discharged employee was defensible and the disciplinary penalty just.

Finally, it should be recogni)ed that while arbitration do not lightly interfere withmanagement decisions in discharge and discipline matters, the arbitrators are epected toact firmly when management decisions are found to be unjust and unreasonable under all

the circumstances. "rbitrator &harles C. $paulding says*Three answers to this line of argument seem appropriate. The first is that arbitrators

very frequently do step in and upset the decisions of management. The second is that, if

arbitrators could not do so, arbitration would be of little import, since the judgment ofmanagement would in so many cases constitute the final verdict. Finally, the more carefulstatement of the principle would probably run to the effect that where the contract uses such

terms as discharge for cause or for good cause or for justifiable cause an arbitrator willnot lightly upset a decision reached by competent careful management which acts in the full

light of all the facts, and without any evidence of bias, haste, or lack of emotional balance.

Dven under these conditions, if the decision is such as to shock the sense of justice of

ordinary reasonable men, we suspect that arbitrators our have a duty to interfere. $ince theacts of management in this case do shock our sense of justice, and since they do seem tohave occurred in a situation of emotional tension, in haste, and without a very careful

weighing of the facts, we find ourselves inevitably driven to overthrow the decision of thismanagement.*>& #hat are the arbitral remedie' in di'char.e and di'ci(line ca'e')

The more common remedies utili)ed by arbitrators in setting aside managerial

actions in discharge and discipline cases include the following*a. if a penalty of discharge is upset through arbitration, the award often

will order reinstatement either with back pay, without back pay, or with partial

back pay, and often will further order that other rights and privileges shall

remain unimpaired; or the discharge maybe commuted to suspension for aspecific period, or even to a reduced penalty of only a reprimand or warning;

b. (here a penalty of suspension assessed management is upset through

arbitration, the award will either void the suspension completely 1sometimes

substituting a reprimand or warning2, or will simply reduce the length of thetime the employee is deemed suspended-in either event back pay will be

ordered consistent with the shortened or eliminated period of suspension .The remedy may, however, be provided in the $ubmission agreement of the parties

from the "rbitrator cannot dictate.*%& #hat are 'ome violation' in arbitral remedie' that are le'' -re?uently

u'ed)a. Lo'' o- 'eniority. $ome employees have been ordered reinstated on

the basis that they not be credited with any seniority for the period betweendischarge and reinstatement. =oss of some seniority that had accrued prior to

the discharge is also a possibility.b. Lo'' o- other bene-it' under the a.reement. %n denying seniority

credit for the period between discharge and reinstatement, arbitrators often


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prohibit the accumulation of the other agreement-provided benefits during saidperiod.

c. Probation or -inal 4arnin.. $ome discharged employees have beenreinstated on a probation basis 1the probation conditions varying from awardto award and the probationary periods often ranging from 0 to 0/ months2, or

with a final warning that any repetition of the offense will justify immediatedischarge.

d. Rein'tatement conditioned u(on 'ome '(ecial act or (romi'e byem(loyee. 6einstatement has been ordered on the condition that theemployee resigns his outside job, that he furnishes an indemnity bondrequired by the employer, that he signs an agreement by which he promises to

apply and comply conscientiously with company safety rules, that he acceptscounseling from his pastor or some competent social agency, or that the

employee complies with some other specified condition.e. #ritten 4aiver re?uired. (here the collective agreement arguably

might have required back in the event of reinstatement after discharge, acondition to reinstatement was imposed in the form of a requirement that the

employee agree in writing to waive back pay.$:


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%n many cases, strong reasons rest for the case of prevailing practice of the sameclass of employees within the locality or area. The responsibility of the arbitrator is to

determine the appropriate basis for the comparison from the facts and circumstances of the

case.*2& I- a (revailin. (ractice ha' already been determined/ ho4 'hould the

arbitrator a((ly the 'ame in a .iven ca'e)%t would be difficult to apply the standard if the issue does not involve the fiing of

the wage rates like the number of paid holidays. However, the application of prevailing

wage rates is not so simple and arbitrators often resort to minor standards to justify whythe employer should not pay the prevailing rates. These reasons include such matters asrelative general differentials of skill and training, responsibility, steadiness of employment,

ha)ards of the employment, fringe benefits, established geographical differentials and wageleadership.*1& #hen and ho4 do arbitrator' u'e co't o- livin. 'tandard' in arbitratin.

intere't di'(ute')Auring periods characteri)ed by pronounced changes in living costs, the use of the

standard measured in terms of the &onsumer Price %nde 1&P%2 makes it possible tomeasure changes in retail costs of services and commodities and the resulting effect uponthe purchasing power of the income of the workers. The &P% reflects the cost of living as of

a date about si weeks prior to its issuance or publication.*,& #hat i' the livin.74a.e 'tandard)

The living-wage standard is related to, but not the same as, the cost-of-living

standard. The living-wage standard is based upon the idea that the standard of living ofworkers should be raised to the highest level possible, but more realistic basis for it is the

belief that employees are entitled to wages and salaries sufficient to enable them, through

the eercise of thrift and reasonable economy, to maintain themselves and families indecency and comfort and to make reasonable provision for old age.*+& #hat i' the ability7to7(ay 'tandard) To 4hat e@tent 'hould it be

a((lied in the arbitration o- intere't di'(ute')"lthough it is a generally recogni)ed principle that large profits do not alone justify

demands for wages substantially higher than those which are standard within an industry

while small profits do not justify the payment of substandard wages, the ability-to-pay

criterion is of great importance in the determination of wage rates and other contract

benefits.Dmployers who have pleaded inability to pay have been held to have the burden ofproducing sufficient evidence to support the plea. %n a number of decided "merican cases,it has been held that the alleged inability must be more than speculative and factors to

produce sufficient evidence will result in a rejection of the plea. The payment of reasonabledividends to stockholders and of reasonable salaries to top management has been held torender invalid a plea of inability to pay. "rbitrators should provide any safeguards needed

to protect the confidential nature of such evidences.**& #hen i' the com(etitive nature o- the bu'ine'' 'tandard relevant in

arbitratin. intere't di'(ute')


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>uoting a long line of decided cases, Dlkouri and Dlkouri eplains that a factor which

must be given consideration in interest arbitration is the competitive nature of the

employerGs business. %n some respect this is related to the ability-to-pay standard. %nother respect it is related to the prevailing-price standard. For these reasons it is generallynot considered as an independent standard. (here, however, an employer is engaged in a

highly competitive business or is faced with special competitive problems, the arbitratormay specifically point out the competitive nature of the employerGs business as a factor tobe given special consideration in setting contract terms 1sometimes even justifying a wagereduction2.%>>& #hat are 4a.e (attern' a' 'tandard' in arbitration o- intere't

di'(ute')The pattern may be defined as a particular kind of solution of collective bargaining

issues which has been used on a wide enough scale to be distinctly identified. The pattern

standard is obviously related to the prevailing-practice standard and could reasonably be

considered merely as one of its aspects. However, it is often spoken of as if it were adistinct criterion." pattern in wage arbitrations is often stated in terms of a specific number of cents perhour, or it may be stated as a percentage wage increase. For instance, the patternstandard would recogni)e that where companies or industries ", C, and & have granted

several wage increase of 05 cents per hour, related company or industry A should grant a

05 cent increase also. %n the application of this standard, stress is placed upon the grantingof the same number, amount or percentage of increase granted by others, rather than

granting of the same total wage that is paid by comparable employers.%>%& 9o4 do arbitrator' a((ly (roductivity 'tandard' in 4a.e di'(ute)

The application of productivity standards proceeds from the recognition that there isa close relationship between the general level of productivity and the general level of wagesand that both an increase in wage rates and a reduction in hours may be warranted by

increased productivity measured in terms of added output per man-hour.%ncreases in productivity can relatively result in decreased wages, decreased prices,

increased profits, or some combinations of the three. %f the increase in output per man-

hour is due to greater effort and to greater skill, there would appear to be no doubt that thegain should accrue to the benefit of the employees. Cut if the increase is the result of

technological progress or better management, several considerations must be taken into

account.

%>3& #hen i' (a't (ractice and bar.ainin. hi'tory o- '(ecial 'i.ni-icance inarbitration o- intere't di'(ute')"rbitrator &lark Jerr gave importance to the standard when the parties are

negotiating their contract for the first time. He said that the arbitrator considers past

practice a primary factor. %t is standard form to incorporate past conditions into collectivebargaining contracts, whether these contracts are developed by negotiation or

arbitration. The fact of unioni)ation creates no basis for the withdrawal of conditionspreviously in effect. %f they were justified before, they remain justified after the event of


44/66

union affiliation. %t is almost aiomatic that the eisting conditions should beperpetuated. $ome contracts even blanket them in through a general catch-all clause.AR0ITRATION A#ARD=D!CI;ION%>6& 9o4 i' A4ard di'tin.ui'hed -rom an O(inion)

The award is the arbitratorGs decision of the case. :ften the arbitrator accompanieshis award with a written opinion stating the reasons for the award. #nder eisting laws andprocedures, the award must state in clear, concise and definite terms the facts and the

basis upon which the award is rendered.%n cases involving monetary claim, the award must specify the amount granted and

the formula used in the computation.The award must be signed by the arbitrator. %f rendered by arbitration boards, it

must be signed by all the members where a unanimous decision is required, otherwise, it

must be signed by at least a majority unless the argument permits the issuance of theaward by the neutral alone.%>


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/. Dnumerate your facts chronologically based on the stipulation of thefacts by the parties. Ce objective in writing the facts. 4o opinion or

conclusion should appear as facts.+. 6efer to the $ubmission "greement and attach it as "nne " since

this is the basis of your authority.B. Have the $upreme &ourt in mind when you write your

award. 6emember that the Iustices are very busy and that if your award istwenty pages or more, they may not have the time to read your award fully.

8. %f you write in Dnglish, be sure that your grammar iscorrect. :therwise, you may go down in history 1seldom do you have a

chance to have your work elevated to the $upreme &ourt2 as the arbitratorwhose verbs and tenses do not agree with one another. &ontinue to improve

yourself. !row in the law, in Dnglish, and in style. #se short sentences. %f

you can still delete a sentence or a word, your award is still not tight and

concise.9. $tate the issueEs directly and simply. "void verbosity. Phrase and

rephrase the issueEs until an ordinary layman can read your statements andnot be confused. Formulate the issue or issues in the form of questions, ifpossible.

@. $tate your decision by answering the question or questions in eitheryes or no. Then tackle the reasons one by one. &ite the specific provisions of

the labor law, or the &C", or the rules and regulations of the company, or the

particular policy, or practice. 6emember that the intent of the parties 1not

your own2 is the one that matters.?. Ce sure that your award is specific enough to be understood and

enforced. %f your award or decision will just add to the conclusion, re-draft it,having in mind the justices of the $upreme &ourt who will read it. (hile your

award or decision may not be questioned on certiorari, write it in such amanner that it can survive a petition for certiorari. %t should be more than

one that you can defend through all the legal attacks of the learned justices,

and most important of all, the admonition of your own conscience.7. our award should promote not only industrial peace but your own peace of

mind. %t should achieve the highest ladder of impartiality and justice,

otherwise there is no use being a voluntary arbitrator because the parties will

never get you again as their arbitrator.05. The shorter your award, the less mistakes you commit. Cut be sure it

is complete and can stand alone and needs nothing else besides.%>1& #hat i' the (eriod re?uired -or a voluntary arbitrator or (anel o-

voluntary arbitrator' to render an a4ard or deci'ion)#nless the parties agree otherwise, it shall be mandatory for the 'oluntary "rbitrator

or panel of 'oluntary "rbitrators to render an award or decision within twenty 1/52 calendar

days from the date of submission of the dispute to voluntary arbitration 1"rt. /9/-", =abor&ode2.


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%n cases involving unresolved wage distortion issues, the period to render an award

or decision should be within ten 1052 calendar days from the time the case was referred to

voluntary arbitration, unless agreed otherwise by the parties in writing 1"rt. 0/B, =aborcode as amended by 6.". 9@/@2.%>,& May the voluntary arbitrator modi-y hi' a4ard/ by motion or motu

(ro(io)4o, the $upreme &ourt has categorically ruled on this issue in the case of

&onsolidated Cank and trust &ompany 1$olidbank2 %nc. vs. Cureau of =abor relations, et. al.,!.6. 4o. 9B79/, :ctober 08, 07??. %n this case, the voluntary arbitrator did more thanjustify the original award* he modified it. The High &ourt reminded the parties that the

arbitration law or jurisprudence on the matter is eplicit in its stand against revocation andamendment of the submission agreement and the arbitration award once such has been

made. The rationale behind this is that* "n award should be regarded as the judgment of

a court of last resort so that all reasonable presumption should be ascertained in its favor

and easy mode of obtaining justice, would be merely an unnecessary step in the course oflitigation, causing delay and epenses, but not finally settling anything. 4otwithstandingthe 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 1"rbitration,


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" voluntary arbitrator is neither legally normally bound by what another arbitratorhas ruled in a previous case. There is nothing in the =abor &ode that says so. Cut where

there is a similarity of the parties, the contract and the issues, the present arbitrator would

be well advised to take a long and careful look at the earlier decision. %f the latter is sound,it would not hurt to follow its precedent, as otherwise, chaos and confusion would resultfrom the conflicting rulings on the same issue between the same parties and arising out of

the same contract.:n this matter, an "merican "rbitrator, & #hat are the re'(on'ibilitie' o- the (artie' in the (ayment o- the co't

o- voluntary arbitration)The parties to a collective bargaining agreement shall provide therein a proportionate

sharing scheme to pay the cost of voluntary arbitration, including the voluntary arbitratorGs

fee.#nless the parties agree otherwise, the cost of voluntary arbitration proceedings and

voluntary arbitratorGs fees shall be shared equally by the parties out of the funds that they

may set aside for the purpose, under their collective agreement.%%%& #hat are the -actor' to be con'idered in determinin. the -ee o-

voluntaryarbitrator')The fiing of the fee of voluntary arbitrator or panel of voluntary arbitrators, whether

shouldered wholly by the parties or subsidi)ed by the $pecial 'oluntary "rbitration Fund,shall take into account the following factors*

a. 4ature of the caseb. Time consumed in hearing the casec. Profession standing of the voluntary arbitratord. &apacity to pay of the parties; ande. Fees provided for in the 6evised 6ules of &ourt


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%%3& Are there .overnment .uideline' in -i@in. voluntary arbitratorB' -ee)

%n the absence of any agreement fiing the fee of the voluntary arbitrator or panel ofarbitrators, the parties and the voluntary arbitrator may use the following schedule of feesapproved by the T'""& for subsidy purposes, and reference guide*

a. %nterpretation or implementation of &C" P8,555.55b. %nterpretation or enforcement of

company personnel policiesEsuspension anddismissalEtermination P 8,555.55

c. %nterpretation or implementation ofproductivity incentive agreement P 05,555.55

%%6& May an arbitrator char.e -ee' i- the ca'e i' 4ithdra4n a-ter he ha' been'elected and a date -or hearin. i' 'et)

The arbitrator is permitted to charge not only per diem fee but also other fees like

cancellation, postponement, rescheduling or administrative fees.%%


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0. unresolved grievances involving the interpretation or implementationof the collective bargaining agreement and those arising from the

interpretation or enforcement of company personnel policies;/. productivity incentive program+. wage distortion cases and other issues related to wage and salary

administration including those resulting from the application of (age :rders

issued by regional Tripartite (ages and Productivity Coard;B. all other cases not falling within the original and eclusive jurisdiction

of voluntary arbitrators which are submitted for voluntary arbitration.%%%. "mount of $ubsidy - Coth parties shall be entitled to the following maimum fiedsubsidy per case submitted for voluntary arbitration*a. %nterpretation or implementation of &C"

P 05,555.55

b. %nterpretation or enforcement of companypersonnel policiesEsuspension anddismissalEtermination

P 05,555.55c. %nterpretation or implementation of

productivity incentive agreement

P 05,555.55d. (age distortion cases and other

issues related to wage and salaryadministration including those resultingfrom the application of wage orderissued by 6egional Tripartite (agesand Productivity Coard P 05,555.55

e. &ollective Cargaining Aeadlock

P 08,555.55f. The case is a rights dispute involving

two or more issuesP 08,555.55

g. The case is submitted under theDpedited 'oluntary "rbitrationProcedure as laid down in T'""&6esolution 4o. /, series of 0777.

P 08,5555.55h. The case is submitted under the

F="'"$ Program, which shall bepaid as follows* P0,555.55 to thelegal aid office, P855.55 to to theP"'" local chapter, P+,855.55to the voluntary arbitrator

P 8,555.55


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g. "ll other issues P 05,555.55

%'. Procedure for the Payment of $ubsidy0. Parties availing of the voluntary arbitration subsidy shall accomplish

the 6equest for $ubsidy Dntitlement Form and file the same with theappropriate regional Cranch of the Coard together with a copy of the award ordecision.

/. The 6egional Cranch concerned shall immediately act on the requestwithin two 1/2 days upon receipt thereof. %f the conditions for entitlement aresatisfied, the 6egional Airector shall forward the request together with all the

required supporting documents to the 4&


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!round Floor, A:=D Cuilding, %ntramuros,


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The subsidy shall be provided to all arbitration cases involving unioni)ed

establishments.0& UND!R T9! "R!! L!GAL AID AND VOLUNTAR

AR0ITRATION ;!RVIC!; 5"LAVA;8 PROGRAM/ the 'ub'idy 'hall beavailable to the -ollo4in.F

0. %ndividual workers in establishments with no unions or with nocollective bargaining agreements 1&C"s2;

/. #nions which are still in the organi)ational stage; and+.


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02 "i-teen thou'and (e'o' 5P%2/>>>&>>8shall be provided if*a2 The case is submitted under the Dpedited 'oluntary "rbitration

Procedure as laid down in T'""& 6esolution 4o. /, series of 0777.b2 The case is a rights dispute involving t4o or more i''ue'.c2 The case involves bar.ainin. deadlocregardless of the numberof issues.

/2 "ive thou'and (e'o' 5P2/>>>&>>8shall be provided if the case issubmitted under the F="'"$ program.

The amount shall be disposed of as follows*a2 P0,555 shall be paid to the office of the legal aid;b2 P855 shall be remitted to the pava regional chapter;c2 P+,855 shall be paid to the voluntary arbitrator

C. %n instances where the case is settled through a compromiseagreement entered into by the parties with the assistance of the 'oluntary

"rbitrator, full regular subsidy may be given to the parties should

it appear to the satisfaction of the Coard that the compromise agreementis not contrary to law, morals, good order and public policy and entered

into in good faith and not solely for the purpose of claiming the

subsidy. The subsidy under this provision can be availed of by the same

parties only once. "ny agreement which tantamounts to a merewithdrawal of the case is ecluded from coverage of this provision.

&. %f both parties avail of the subsidy, the applicable amount shall beapplied in accordance with the sharing scheme of the parties per &C"

provision. $hould the sharing scheme provide for 95-B5 or @5-+5 or anysharing other than 85-85, for purposes of subsidy, the amount to be

provided shall be reversed, the bigger amount will be applied to labor. %n

the absence of any scheme, the subsidy shall be appliedequally. However, in no case shall the subsidy be more than the share

of either party in the agreed fees of the arbitrator.IV& ;UP!R;!;;ION CLAU;!

6esolution 4o. /, $eries of 077@ Providing !uidelines on the Fees and in the

Processing of Payment of $ubsidy Dntitlement for 6egular 'oluntary "rbitration&ases is hereby amended. 6esolution 4o. +, series of 077@ providing !uidelines for$ubsidy #nder the Free =egal "id and 'oluntary "rbitration $ervices Program is

hereby incorporated by reference."ll other resolutions inconsistent with this are hereby superseded.

'. "PP6:'"= :F THD !#%AD=%4D$


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These guidelines shall be subject to the approval of the $ecretary of =aborand Dmployment.

NO#/ T9!R!"OR!, the Tripartite 'oluntary "rbitration "dvisory &ouncil has6D$:='DA, as it is hereby R!;OLV!D, that the 4ational &onciliation and


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6epublic of the Philippines

Aepartment of =abor and DmploymentNational Conciliation and Mediation 0oardTRIPARTIT! VOLUNTAR AR0ITRATION ADVI;OR COUNCIL

Ground "loor/ DOL! 0uildin./ Intramuro'/ ManilaTelephone 4umbers* 8/@-+B9+; 8/@-+B79; 8/@-+B@B

R!;OLUTION NO 3&;erie' o- %***

!;TA0LI;9ING T9! R!VI;!D !HP!DIT!D PROC!DUR!; "OR VOLUNTARAR0ITRATION O" LA0OR7MANAG!M!NT DI;PUT!;

#9!R!A;/ 6esolution 4o. 0 series of 077@ was passed by the &ouncil onIanuary, 077@ establishing the Dpedited Procedures for 'oluntary "rbitration of=abor and


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APPROV!D&>%


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#9!R!A;/ on 5@ Iune 0777, The 4ational &onciliation and


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5;GD&8 RO0!RTO A& PADILLA


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6epublic of the Philippines

Aepartment of =abor and DmploymentNATIONAL CONCILIATION AND M!DIATION 0OARD%ntramuros, #D$T F:6 $#C$%A D4T%T=D


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a2 Parties*

#nion*QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ


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Photocopy of &C" Provision on !rievance


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TO ;U0MITto arbitration the following issueEs*QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ

QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ

QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ

TO D!;IGNAT! AND APPOINTQQQQQQQQQQQQQQQQQQQQQQQQas the voluntary arbitrator

TO A0ID! 0 and comply with the AecisionE :rder E 6esolution E "ward ofthe "rbitrator on the issues submitted for arbitration and to accept the same as finaland biding upon the parties herein.

TO PA the arbitratorGs fees in accordance with the proportionate sharingscheme under the &C" and in the absence or insufficiency of funds, to avail of the

subsidy pursuant to eisting T'""& guidelines.!MPLO!RFQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ"ddress* QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQTelephone 4o. QQQQQQQQQQQQQQQQQQQQQQQQ

primer on grievance machinery and voluntary arbitration

Documents