Primer On Grievance

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Machineryand
VoluntaryArbitration
INTRODUCTION
ThePrimeranswersthenumerousquestionsbeingasked
about voluntary arbitration by parties to labormanagement
disputesandtheirarbitrators.
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 relations system and
explains the meaning of Grievances and importance of Grievance
Procedureaspreludetoarbitration.
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 cases decided by wellknown Arbitrators in
theUnitedStates.Ininstanceswherelocalcasesareavailable,the
decisions of the Philippine Supreme Court are also included. The
approach provided a more realistic and practical picture of how
voluntaryarbitrationworks.
The topic on Arbitration Cost and Special Voluntary

ArbitrationFundisincludedtoprovideanswerstobasicquestions
relative to expenses involved in arbitration proceedings and
entitlementtogovernmentsubsidy.
With the continued support from government, labor and

management advocates, voluntary arbitrators and non
governmentalorganizations,thePrimerendswithaveryoptimistic
noteonthefutureofgrievancesettlementandvoluntaryarbitration
inthecountry.
POLICYANDLEGALFRAMEWORK
1. Whatisthepresentnationalpolicyonlabor
disputesettlement?
The present national policy on labor dispute settlement is

enunciatedinthefollowinginstruments:
A.1987Constitution
Sec.3,ArticleXIIIprovides:
The State shall promote the principle of shared

responsibility between workers and employers and the
preferentialuseofvoluntarymodesinsettlingdisputes,
including conciliation, and shall enforce their mutual
compliancetherewithtofosterindustrialpeace.
B. LaborCode,asamendedbyRepublicAct
6715
Article211oftheCodeprovides,amongothers:
(a)ItisthepolicyoftheStatetopromoteand
emphasize the primacy of free collective bargaining
and negotiations, including voluntary arbitration,
mediationandconciliation,asmodesofsettlinglabor
orindustrialdisputes.
(b) To provide an adequate administrative

machinery for the expeditious settlement of labor or
industrialdisputes.
2. Whatweretheearlypoliciesadoptedbythe
governmentonsettlinglabordisputes?
Philippine labor policy may be said to have evolved over

fourperiods:
A.CommonwealthPeriod(19361953)
http://ncmb.ph/VAP/Publications/Voluntary_Arbitration/PrimerGMVA.htm
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CommonwealthActNo.103establishedourfirstlabor
dispute settlement system by creating the Court of
Industrial Relations and vesting it with compulsory
arbitration powers over labor disputes involving both
workers in the private sector and in government
owned or controlled corporations. The enactment of
CA 103 was pursuant to a provision in the 1935
Constitution, Section 6, Article XIV, which
categorically provided the basis for compulsory
arbitration.
On the enactment of CA 103, the highly respected

Dr.CiceroCalderonhad this to say: The adoption
ofcompulsoryarbitrationwasnottheproductof
mere impulse or sudden inspiration. It was a
deliberateresponseofthepolicymakerstothesocial
scene characterized by acute agrarian and industrial
unrest of disturbing proportions. Strong measures
were necessary to check the surging tide of strikes
and uprisings by the tenants and laborers,
particularlyinricehaciendasandsugarplantationsin
the country. Other factors contributing to the
adoption of compulsory arbitration were the poor
state or organization 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
experiment with compulsory arbitration, which had
been rejected at least three times under American
rule the apparent inadequacy or ineffectiveness of
the Government policy of nonintervention in the
area of labormanagement relations, and the strong
influence of the then President Manuel L. Quezon,
who advocated its adoption before the National
Assembly.
B.IndustrialPeaceActPeriod(19531972)
In 1953, Republic Act No. 875 was enacted

fundamentally changing the framework of labor relations
policies from that of compulsory arbitration to collective
bargaining. The Act severely restricted the compulsory
arbitrationpowersoftheCIR.Thelatterwasdivestedofthe
power to set wages, rates of pay, hours of employment,
other terms or conditions of employment, or otherwise
regulatetherelationbetweenemployersandemployees,as
a compulsory arbitration body, except in labor disputes
involvingindustriesindispensabletothenationalinterest.
C.MartialLawPeriod(19721986)
Itwasduringtheperiodofmartiallawthatvoluntary
arbitration became an integral part of the Philippine labor
relations policy. This period also marked by the banning of
strikes in the socalled vital industries. To cushion the
impact of the strike ban, Presidential Decree No. 21 was
issued creating the National Labor Relations Commission,
whichexercisedoriginaljurisdictionoverpracticallyalllabor
disputes.AsidefromcreatingtheNLRC,PresidentialDecree
No.21hadfourotherveryimportantprovisions:
1.Itimposedtheclearancerequirement
for dismissals and terminations of employees
withatleastoneyearofservice
2. It made grievance procedure a

mandatory initial stage in the settlement of
labordisputes
3. It provided that before assuming

jurisdiction over any issue, dispute or
grievance, the Commission shall give the
parties a chance to submit their problem for
voluntaryarbitration
4.Toensuretheavailabilityofvoluntary
arbitrators, the Decree provided that all
collective bargaining agreements shall contain
aprovisiondesignatingavoluntaryarbitrator
to decide all disputes and grievances arising
out of the implementation of the collective
bargainingagreements.
D.PostMartialLawPeriod(1986present)
What 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
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settlement. By virtue of Executive Order No. 126 which

reorganized the Department of Labor and Employment, the
National Conciliation and Mediation Board (NCMB) was
created to oversee the implementation of the Constitutional
policy of promoting the preferential use of the voluntary
modes of dispute settlement, including conciliation.
Executive Order 251 which amended Executive Order No.
126 likewise created the Tripartite Voluntary Arbitration
Advisory Council (TVAAC) to advise the NCMB on the
promotionofthevoluntaryarbitrationprogram.
Republic Act 6715 introduced amendments to the

Labor Code with farreaching effects on the labor dispute
settlement system. One of these is the injunction against
theNLRCandtheDOLERegionalDirectorsfromentertaining
disputesthatareundertheoriginalandexclusivejurisdiction
of voluntary arbitrators. Republic Act 6715 also introduced
amendments to the Labor Code which strengthened trade
unionism and collective bargaining as essential elements of
aneffectivelabordisputesettlementsystem.
3. Hasthenewlaborrelationslawstrengthened
thelegalbasisoftheuseofgrievancemachineryandvoluntary
arbitrationinsettlinglabordisputes?
Definitely. Republic Act 6715 now provides for the

mandatory use of the grievance machinery as a prerequisite
step to voluntary arbitration of disputes arising from CBA
interpretation and implementation, as well as those disputes
arising from the interpretation and enforcement of company
personnel policies. Article 262 of the Labor Code, before it was
amended by Republic Act 6715, merely provided that
(whenever) a grievance 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.
Secondly, it is now the policy of the State to encourage

voluntary arbitration of all labormanagement disputes other
than those arising from the interpretation and implementation of
collective bargaining agreement and company personnel policies.
Thispolicyisoperationalizedbythefollowingprovisions:
A.Article260oftheLaborCode,asamendedby
Republic Act 6715, which provides that: All
grievances submitted to the grievance machinery
which are not settled within seven (7) calendar days
from the date of its submission shall automatically
be referred to voluntary arbitration prescribed in
theCBA.The seven calendar days shall be reckoned
from the date the grievance machinery is submitted
to the last step in the grievance machinery
immediatelypriortovoluntaryarbitration.
B.Article 261, which provides for the original

and exclusive jurisdiction of voluntary arbitrators
over unresolved grievances arising from the
interpretation or implementation of the CBA arising
from the interpretation or enforcement of company
personnel policies. With this amendment, the
original and exclusive jurisdiction of voluntary
arbitratorshasbeentremendouslyexpanded.
C.Article261providesthatCBAviolationsareto
be treated as grievances instead of unfair labor
practice acts except when the violation is gross,
meaningitinvolvesflagrantand/ormaliciousrefusal
tocomplywiththeeconomicprovisionsoftheCBA.
D. The same article enjoins the NLRC, its

Regional Arbitration Branches, and the Regional
Directors of the Department of Labor and
Employment from entertaining disputes, grievances
or matters under the exclusive and original
jurisdictionofthevoluntaryarbitrator.Ifanyofsuch
cases is filed before them, they have to immediately
dispose and refer the same to the grievance
machinery or voluntary arbitrator provided in the
CBA.
E. Moreover, under Article 262, upon

agreement of the parties, voluntary arbitrators may
alsohearanddecideallotherlabordisputesincluding
unfairlaborpracticesandbargainingdeadlocks.
F. Lastly, in case issues arising from the CBA

interpretation and implementation or those arising
from the interpretation or enforcement of company
personnelpoliciesaremadeasgroundsfornoticesof
strikes or lockouts or requests for preventive
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mediation, the NCMB shall advise the parties to
submittheissue/stovoluntaryarbitration(RuleXI,
Section2,ImplementingRules,LaborCode).
GRIEVANCES
4.Whatisgrievance?
A grievance is defined as any question by either the

employerortheunionregardingtheinterpretationorapplicationof
the collective bargaining agreement or company personnel policies
or any claim by either party that the other party is in violation of
anyprovisionoftheCBAorcompanypersonnelpolicies.
5.WhatisthegrievancereferredtoinTitleVIIAof
theLaborCode?
The grievance referred to in the technical or restricted

sense, is a dispute or controversy between the employer and the
collective bargaining agent arising from the interpretation or
implementation of their CBA and/or those arising from the
interpretation or enforcement of company personnel policies, for
the adjustment and resolution of which the parties have agreed to
establish a machinery or a series of steps commencing from the
lowest level of decisionmaking in the management hierarchy
(usually between the shop steward of the employee or employees
aggrieved and the supervisor/ foreman/ manager which exercises
controlandsupervisionoverthegrievantsorwhoisresponsiblefor
executing the management action that have given rise to the
grievance) and usually terminating at the highest official of the
Company.If such dispute remains unresolved after exhausting the
grievance machinery or procedure, it shall automatically be
referredtovoluntaryarbitrationprescribedintheCBA.
6.Whenisthereagrievance?
In the technical or restricted sense, there is a grievance

when a dispute or controversy arises over the implementation or
interpretation of a collective bargaining agreement or from the
implementationorenforcementofcompanypersonnelpolicies,and
either the union or the employer invokes the grievance machinery
provision for the adjustment or resolution of such dispute or
controversy.
7.Couldtherebeagrievancewithoutaunionora
CBA?
Ifthetermgrievanceistobeappliedinthelooseorgeneric
sense,any dispute or controversy respecting terms and conditions
of employment which an employee or group of employees may
presenttotheemployercanbeagrievance, even without a union
or CBA. Under this interpretation, any complaint, question or
problemthatanemployeeorgroupofemployeesmaywishtotake
upordiscusswiththeemployerrespectingtermsandconditionsof
employment for the purpose of resolving or satisfying the same,
constitutes a grievance. The expansion of the original and
exclusive jurisdiction of voluntary arbitrators to include questions
arising from the interpretation and enforcement of company
personnel policies has the effect of widening the meaning and
interpretationofagrievancetoincludeasituationwherethereisno
collectivebargainingagentandnoCBA.
8. Are all grievances arising from the

implementation or interpretation of the collective
bargaining agreement and/or interpretation and
enforcementofcompanypersonnelpoliciescompulsory
subjecttothegrievancemachinery?
Yes.ThisisclearfromArticle260andArt.261oftheLabor
Code,asamendedbyRepublicAct6715.
Art.260isemphaticonthedutyofthepartiestoacollective
bargaining agreement to establish a machinery for the adjustment
and resolution of grievances arising from the interpretation and
enforcementoftheCBAand/orcompanypersonnelpolicies,andfor
themandatoryuseofthesaidmachinery.
Art.261,on the other hand, directs the NLRC, its Regional

Arbitration Branches and the Regional Directors of the Department
of Labor and Employment not to entertain disputes, grievances or
matters under the exclusive and original jurisdiction of the
voluntary arbitrator or panel of voluntary arbitrators and to
immediately dispose of and refer the same to the grievance
machinery or voluntary arbitration provided in the collective
bargaining agreement. Moreover, in Rule XI of the Implementing
Rules of the Code, the Regional Branches of the National
ConciliationandMediationBoardareenjoined,incaseissuesarising
from the interpretation or implementation of the collective
bargaining agreements or those arising from the interpretation or
enforcement of company personnel policies are raised in notices of
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strikesorlockoutsorrequestsforpreventivemediation, to advise
thepartiestosubmittheissue/stovoluntaryarbitration.
9.Whatusualprovisionsofacollectivebargaining
agreement whose violation/s arising from interpretation and
implementation, may constitute grievance/s or the socalled
rightsdisputes?
Every collective agreement usually contains noneconomic

andeconomicprovisions.Noneconomicprovisionsarethosewhose
monetary cost can not be directly computed such as nostrikeno
lockout, union security, management security, checkoff clauses,
grievanceprocedures,etc.Economicprovisions,ontheotherhand,
are those which have direct and measurable monetary cost
consequences such as wage rates, paid vacations, pensions, health
andwelfareplans,penaltypremiumsandotherfringebenefits.Any
violation arising from rights established under collective
agreements, laws, rules and regulations and customary practices
may constitute as grievance and is often referred to as rights
dispute.
10.Whatarethepersonnelpoliciesandwhatarethe
matters usually covered by such policies, whose wrong from
enforcementandinterpretationmayconstitutegrievance/sor
othersourcesofrightsdisputes?
Personnel policies are guiding principles stated in broad,

longrange terms that express the philosophy or beliefs of an
organizations top authority regarding personnel matter. They deal
with matters affecting efficiency and well being of employees and
include, among others, the procedures in the administration of
wages, benefits, promotions, transfers and other personnel
movements which are usually not spelled out in the collective
agreement. The usual source of grievances, however, is the rules
andregulationsgoverningdisciplinaryactions.
11.Whatviolationsoftheusualnormsofpersonnelconduct
or behavior of employees may constitute grievances often
referredtoasdisciplinecases?
Rules and regulations governing personnel discipline may

containthefollowinginfractionscoveringthefollowingsubjects:
1.AGAINSTPERSON
PHYSICAL INJURY, ASSAULT, HOMICIDE,
MURDER
2.AGAINSTPROPERTY
MISUSEOFPROPERTY
DAMAGETOPROPERTY
THEFTANDROBBERY
NEGLIGENCEINTHEUSEOFPROPERTY
3.ORDERLINESS/GOODCONDUCT
FIGHTING/QUARRELING
VIOLATIONOFRULES
DISCOURTESY/DISRESPECT
INTOXICATIONWHILEATWORK
POSSESSIONOFDRUGS/NARCOTICS/ALCOHOLIC
DRINKS
ILLEGALSTRIKE
STRIKEVIOLATIONS/SABOTAGE
FAILURETOCOOPERATEININVESTIGATIONS
HYGIENE
SAFETY
UNIONACTIVITY
MOONLIGHTING
DEPORTMENT
FINANCIALINTEREST
UNAUTHORIZEDOUTSIDEWORK
PERSONALAFFAIRS
ENTERTAINMENTOFVISITORS
DISORDERLINESS,HORSEPLAY
USEOFFOULLANGUAGE
4.ATTENDANCEANDPUNCTUALITY
TIMEKEEPINGVIOLATIONS
ABSENTEEISM
TARDINESS
UNDERTIME
AWOL
5.MORALITY
IMMORALITY
SEXUALHARASSMENT
6.CONFLICTOFINTEREST
CONFLICTOFINTEREST
7.NONPERFORMANCE
INSUBORDINATION
NEGLIGENCEOFDUTY
INEFFICIENCY
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MALINGERING
CARELESSNESS
POORQUALITY
8.HONESTY/INTEGRITY
FALSITY/FALSIFICATION
FRAUD
DISHONESTY
BREACHOFTRUST
UNFAITHFULNESS
LOSSOFCONFIDENCE
USURIOUSTRANSACTION
DISCLOSUREOFINFORMATION
DISLOYALTY
NONPAYMENTOFDEBT
THEGRIEVANCEPROCEDURE
12.WhatistheGrievanceProcedure?
The grievanceprocedure is the series of formal steps that

parties to a collective bargaining agreement agreed to take for the
adjustment of grievances or questions arising out of the
interpretation or implementation of the CBA or company personnel
policies including voluntary arbitration as the terminal step. The
grievanceprocedureprovidesthepartiesafirstcrackinaddressing
problems in the CBA administration and its use is an essential
requisite before a voluntary arbitrator can take cognizance of the
unresolved grievance. It usually consists of a multistep procedure
startingfromordiscussionofthegrievancebetweentheemployee
and/or the Union Steward on the onehand and the foreman and
supervisorontheotherhand,andendingwiththehighestdecision
making officials of the company, reflecting the hierarchy of
commandorresponsibility.
Legally speaking, the grievance procedure is an appeal

procedureandisamustprovisionineverycollectiveagreement.
It is that part of the agreement which provides for a peaceful way
ofsettlingdifferencesandmisunderstandingbetweentheparties.
13. Are there minimum legal requirements for the

establishment of the grievance procedure referred to in Title
VIIAoftheLaborCode?
Yes.Thefollowingaretheminimumlegalrequirements:
1.Thegrievancemachineryestablishedbythe
parties should be sufficient to ensure mutual
observanceoftheCBAstermsandconditions,forthe
resolution and adjustment of grievances arising from
the CBA interpretation or implementation and those
arising from the interpretation or enforcement of
companypersonnelpolicies
2.Thepartiesshouldincludeintheagreementa
procedure for the selection of voluntary arbitrator or
panel of voluntary arbitrators or name and designate
in advance a voluntary arbitrator or panel of
voluntaryarbitrators.
In most collective agreements, the provision of

Grievance Procedure contains: 1) definition of grievance, 2)
statement of guiding principles in the resolution of
grievances, and 3) procedural steps in the settlement and
resolutionofgrievances.
14. Can there be a collective bargaining agreement

enteredintobythepartiesandlaterondulyregisteredwiththe
DOLEwhichdoesnotprovideforagrievanceprocedure?
Legally,none.Agrievanceprocedureisamustprovisionin
any CBA and no collective agreement can be registered in the
absence of such procedure. In the event that a CBA without such
provision is submitted for registration, the registrar shall advise the
parties to include a grievance procedure the CBA is considered duly
registered.
15.Whatstandardsmayusedasguidesinformulating
aneffectivegrievanceprocedure?
The following standards are suggested in the formulation of

effectivegrievanceprocedure:
1. Collective bargaining agreements should

contain provisions that grievances and disputes
involvingtheinterpretationorapplicationoftheterms
of the agreement are to be settled without resort to
strikes, lockouts, or other interruptions to normal
operations by an effective grievance procedure with
arbitrationasitsfinalstep.
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2.Tobeeffective,theprocedureestablishedfor
thesettlementofsuchgrievancesanddisputesshould
meetatleastthefollowingstandards:
a.Thesuccessivestepsintheprocedure,
the method of presenting grievances or
disputes, and the method of taking an appeal
from one step to another should be so clearly
stated in the agreement as to be readily
understood by all employees, union officials,
andmanagementrepresentatives.
b.Theprocedureshouldbeadaptableto
the handling of various types of grievance and
disputes which come under the terms of the
agreement.
c.Theprocedureshouldbedesignedto
facilitate the settlement of grievances and
disputes as soon as possible after they arise.
Tothisend:
1.The agreement should provide

adequate stated time limits for the
presentationofgrievancesanddisputes,
the rendering of decisions, and the
takingofappeals.
2. Issues should be clearly

formulated at the earliest possible
moment. In all cases which cannot be
settled in the first informal discussions,
the positions of both sides should be
reducedtowriting.
3.Management and union should

encouragetheirrepresentativestosettle
at the lower steps grievances which do
not involve broad questions of policy or
of contract interpretation and should
delegate sufficient authority to them to
accomplishthisend.
4. Provision should be made for

priority handling of grievances involving
discharge,
suspension,
or
other
disciplinaryaction.
d.The procedure should be open to the

submission of grievances by all parties to the
agreement.
3. Management and unions should inform and

traintheirrepresentativesintheproperfunctioningof
the grievance procedure and in their responsibilities
underit.Insuchaprogram,itshouldbeemphasized:
a. That the basic objective of the

grievance procedure is the achievement of
sound and fair settlements and not the
winningofcases
b.Thatthefilingofgrievancesshouldbe
considered by foreman or supervisors as aids
in discovering and removing causes of
discontentintheirdepartments
c.Thatanytendencybyeitherpartyto
support the earlier decisions of its
representativeswhensuchdecisionsarewrong
shouldbediscouraged
d. That the willingness of management

and union officials to give adequate time and
attention to the handling and disposition of
grievances and dispute is necessary to the
effectivefunctioningoftheprocedure
e.Thatforsoundhandlingofgrievances
and disputes both management and union
representatives should be thoroughly familiar
with
the
entire
collective
bargaining
agreement.
16. What are the usual steps in the Grievance

Procedure?
Agrievanceprocedureusuallyconsistsofaseriesofstepsto
be taken within the specified time limits. The nature of the
procedurewilldependuponthestructureofthecompanyandonthe
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needsanddesiresoftheparties,butthereisatendencytofollowa
fairly definite pattern. Small companies can be expected to have
short, simple grievance procedures, sometimes with only one or
two steps. Larger companies usually have multistep procedures.
Threestepandfourstepproceduresprobablyaremostcommon.
Commissioner Jesus B. Diamonon of the Tripartite Voluntary

Arbitration Advisory Council elaborated that the reason for having a
numberofstepsistoprovideamethodofappealtohigherauthority
from the decision of a lower supervisory official. Each step is as
important as the other. The intermediate steps are not merely a
transmission belt for passing grievances along to the top
authorities. The representatives therein as in any other steps must
haveadequateauthorityeithertoupholdorreversedecisionsmade
atthelowerlevel.
According to him, the grievance procedure has two (2)

periods:theperiodofpersuasion,fromthefirststeptothelaststep
immediatelypriortoarbitration,wherelaborandmanagement,with
theuseofargumentsandevidence,persuadeoneanothertogivein
to ones position or agree to a compromise, and the period of
arbitration which begins when the act of persuasion has been
exhaustivelyusedandnosettlementhasbeenreached.Onceandfor
all, the dispute must be resolved and the parties will have to
persuadethearbitratorforafavorabledecisionoraward.
17. What is the interrelationship between the

grievanceprocedureandvoluntaryarbitration?
ProfessorFernandezquotesBernstein:
It is of vital importance that the interrelationship of the two

proceduresgrievanceandarbitrationbeborneinmindbythosewho
study and practice arbitration. A grievance procedure in which few
disputes are settled inevitably overloads arbitral machinery.
Arbitration procedures and awards that undermine the grievance
machinery by permitting serious disregard of its prescribed
procedures can invite more arbitration and fewer settlements by
negotiation. Or arbitration that encourages overemphasis on
technical procedural requirements will thwart settlement on the
meritssothatpressurebuildsforresort to selfhelp. Obviously the
balancetobestruckrequiresjudgment,preeminentlyonthepartof
therepresentativesofunionsandmanagement,whohaveinitialand
primary responsibility. How they discharge their functions may be
affected by what arbitrators do. Arbitration is a powerful tool that
can,onoccasion,send reverberations through the larger organism,
thegrievanceprocedureandshopofficerelations
18. Whataretheadvantagesanddisadvantagesof
fewerstagesinthegrievanceprocedure?
Theadvantages of fewer stages in the grievance procedure

are (1) greater speed in processing, and (2) savings in
personnel time. Its disadvantages are (1)vulnerability to
grievance overload (2) excessive involvement of senior
officials and (3) inadequate consideration of the merits by
lower level supervisors who are in a much better position to
makeaneffectiveadjustment.
19.Whataretheadvantagesanddisadvantagesofa
multistageprocedure?
The multistage procedure has the following advantages: (1)

it enables the managementsupervisory personnel at all levels to
contribute their knowhow to the adjustment of grievances (2) a
more adequate consideration of the grievance is likely (3)
involvement of senior officials in grievance processing, is greatly
reduced,therebyfreeingthemforothermanagerialtasks.
Its disadvantages are: (1) it is wasteful of personnel time

andeffortand(2)itislessexpeditious.
20. Whatshouldbetheproperattitudeofpartiesto
theGrievanceProcedure?
The parties attitude in handling grievances, probably more

than in any other aspect of the labormanagement relationship,
indicates their good faith. Nowhere in that relationship 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 has been shared by unions and management
alike in most cases in which the grievance procedure has been
considered successful and in the majority of cases in which the
procedurehasbrokendown.Goodgrievancemachineryisimportant,
but such machinery alone will not insure success. The attitude,
judgment, experience and training of the individuals involved are of
primeimportance.Moreover,adesiretosettlegrievances,rather
thantowinthem,isessential.
21. Whatistheresponsibilityoftheunionstewards
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andforemaninhandlinggrievances?
Unionstewardsandforemanmustseetoitthatgrievances
arepresentedonlywhenthereisarealbasisforcomplaintorthere
is a need for a decision. If stewards are convinced that the worker
does not have a real case, it is better to tell him so right from the
beginning. In borderline cases where it is felt that the worker has
considerablejusticeonhisside,heshouldbetoldoftheuncertainty
of the decision before the case is processed to get a definite ruling
throughthegrievanceprocedure.
Foreman,ontheotherhand,shouldbetrainedinthehuman
relations aspects of their jobs. They should be ready to listen first
beforetheystartdebatingwiththeemployee.Theyshouldnotewhat
is being said rather than how the matter is said. This way, gripes
are separated from grievances, or gripes are prevented from
becominggrievances.
Both stewards and foreman should make every effort to

settlegrievancesattheloweststep.Managementhasalegaldutyto
provideallinformationthatwillexplainthespecificdetailsandbasis
ot its action to enable the shop steward to determine whether to
proceedwiththegrievance.
22. Maypartiestoacollectivebargainingagreement
stipulatethatcertainmattersorquestionsarisingunder
thecontractbeexemptfromthegrievanceprocedure?
The Labor Code fixes the scope or coverage of the grievance

procedureandvoluntaryarbitrationinArticle261,towit:
The voluntary arbitrator or panel of voluntary arbitrators

shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or
implementation of the collective bargaining agreement and those
arisingfromtheinterpretationorenforcementofcompanypersonnel
policies referred to in the immediately preceding Article.
Accordingly, violations of a collective bargaining agreement, except
those which are gross in character, shall no longer be treated as
unfair labor practice and shall be resolved as grievances under the
collective bargaining agreement. For purposes of this Article, gross
violations of a collective bargaining agreement shall mean flagrant
and/or malicious refusal to comply with the economic provisions of
suchagreement.
The Commission, its Regional Offices and the Regional

Directors of the Department of Labor and Employment shall not
entertain disputes, grievances or matters under the exclusive and
original jurisdiction of the voluntary arbitrator or panel of voluntary
arbitrator or panel of voluntary arbitrators and shall immediately
disposeandreferthesametothegrievancemachineryorvoluntary
arbitrationprovidedinthecollectivebargainingagreement.
It is the law which confers to voluntary arbitrators their

original and exclusive jurisdiction and the parties cannot diminish
their jurisdiction by stipulation as this would conflict with the basic
directiveoftheLaborCode.
23. Mayquestionsconcerningtermsandconditions
actually obtaining but not referred to in the CBA, although
provided for in company manuals or policy statements, be
subjecttothegrievanceprocedure?
Withtheexpansionofthescopeoftheoriginalandexclusive
jurisdiction of voluntary arbitrators to include questions arising out
of the interpretation or implementation of company personnel
policies,theanswertotheaboveisdecidedlyyes.
But even before this expansion of jurisdiction brought about

by RA 6715, under the theory of implied incorporation, existing
terms and conditions, though not dealt with in specific provisions,
werealreadydeemedpartoftheagreementandthus,grievable.
Fernandez quotes Cox and Dunlop in explaining the socalled

theoryofimpliedincorporation:
Acollectivebargainingagreementshouldbedeemed,unless
an intention is manifest, to carry forward for its term the major
termsandconditionsofemploymentnotcoveredbytheagreement,
whichprevailedwhentheagreementwasexecuted.
24.Howisgrievancepresented?
Grievances ordinarily are brought by the aggrieved

employee, usually with the union representative called the shop
steward or grievance officer, to the foreman either orally or in
writing.UsuallyaGrievanceFormisprovidedforthepurpose.Ifno
settlement is reached at first level, the aggrieved employee or the
grievance officer may bring the grievance through the successive
stepsinthegrievanceprocedureprovidedforintheCBA.
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AsmandatedbytheLaborCode,asamendedbyRepublicAct
6715,allgrievancesthatremainunresolvedafterexhaustingallthe
internal procedures shall automatically be referred to voluntary
arbitrationprescribedintheCBAiftheyarenotsettledwithinseven
(7) days from the date of its submission to the last step in the
internalgrievancemachinery.
25.Whocanfileagrievance?
Generally, employees initiate a grievance. This is

recognized by Article 255 of the Labor Code which provides, among
others,thatanindividualemployeeorgroupofemployeesshall
havetherightatanytimetopresentgrievancestotheiremployer.
Secondly, 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
exclusive bargaining representative, unions are generally
recognizedashavingtherighttoinitiate,fileorpresentagrievance,
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 employers do not as a general rule initiate a

grievance, it would be prudent to include a provision in the CBA
granting the employer such right, especially in cases where the
employer may wish to use the grievance machinery to resolve a
questionoveravagueorindefiniteprovisionofaCBA.
26.Howaregrievanceprocessed?
ProfessorFernandezsuggeststhefollowingapproachinthe
processingandadjustmentofgrievances:
Processing of grievances involves a joint effort on (1)

identification of the issue or issues involved (2) developing its
factual basis or background (3) determining the contract provisions
involved(4)evaluatingthemeritsofthegrievanceinthelightofthe
factual background and applicable rules and (5) working out a fair
andjustsettlement.
27.Whatpreparationsshouldbeundertakeninorderthat
thegrievancecaneffectivelybepresentedbythegrievant?
TheTradeUnionCongressofthePhilippinesinitsManualfor
Shop Stewards recommends the following steps in preparing for
thepresentationofagrievance:
1. Determine first if there is a genuine

grievance and if there is, whether the same is
justifiedornot. Has the contract been violated? Has
theworkerbeentreatedunfairlybysomeactionofthe
company?Istheemployerresponsible?Istheproblem
covered by the contract or personnel policies in any
way?
2. StudytheCBAandcompanypersonnel
policies. A Steward or a grievant who is not familiar
withtheCBAandcompanypersonnelpoliciesislikea
navigator without a compass. Most grievances are
contract violations and if the steward or the grievant
does not know the contract or the company personnel
polices,hewillnotrecognizeaviolationwhenhesees
one.
3. Get all facts of the case. Be sure to

investigate the five Ws the WHO, WHEN, WHERE,
WHYandWHAT.
WHO, refers to that part of the form that clearly

identifies the worker with the grievance. On
this form is included: 1)employees name, 2)
clock number (or chapa number) 3)
department,4)shift,5)classification.
WHEN, refers to the time element. Often, information

regarding more than one date is needed to
properly complete the form: 1) the date on
which the grievance is officially written, 2) the
time and date on which the grievance actually
happened, 3) the date on which the grievance
wasfiledinthefirststepwiththeforeman,and
4) the date on which the foreman gave his
decision. It is particularly important in matters
involving back pay that all dates be clearly
stated.
WHERE, refers to the exact place where the grievance took

placethedepartmentaisle,ormiracle.
WHY,refers to the reasons why the complaint is
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consideredagrievance.Thisistheheartofthe
grievance and should be written under the
section that carries the heading "Nature of
Grievance.Itisimportanttorememberthatit
is possible to have a legitimate grievance
without being able to point to a violation of a
specificclauseofthecontract.
WHAT, refers to what should be done about the

grievance the settlement desired. Many
grievanceformsdonothaveaseparatesection
headed, Settlement Desired. In those cases,,
it is customary for the Steward to list his
settlement request at the end of the section
NatureofGrievance.Itisextremelyimportant
that this be done since an arbitrator will often
basehisawardsolelyontheoriginalrequest.
4.DiscussthegrievancewiththeUnionorother
stewardsinordertolearnhowthecontractshould
beinterpretedandwhatkindofsettlementoradjustmentwill
bedemanded.
5. It may be important to know about past grievance

settlements of similar nature as the grievance to be
presented.
28. Whatpreparationsshouldbeundertakenbythe
respondent and his advocates in a grievance to
effectively present his action such that they may be
understoodandappreciated?
In 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 also prepare by getting all the facts. If it was a
disciplinary action , what has the grievant done to deserve the
disciplinary action? When? Where? It is the employer who will have
theburdenofproofinjustifyingitsactionafterthegrievantand/or
theUnionhaspresentedthegrievance.
The employer or respondent has to be thoroughly familiar

with the CBA and its own personnel policies. Although the
administrationoftheCBAisajointeffortbetweentheUnionandthe
employer, the primary source or the originator of these policies is
the employer and he is therefore expected to be more wellversed
withtheprovisionsoftheCBAanditsownpersonnelpolicies.
Theemployermustbereadytojustifyitsactionandconvince
the union or grievant of its reasonableness and fairness. He may
point to a clear CBA 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 that were resolved or adjusted in
favoroftheemployer.
Thebottomlineis:ifbothpartiesagreetothefacts,theroad
aheadismuchclearerandwider.
29.Whatremedyisavailabletoapartyiftheotherrefuses
toattendorappearinthegrievancehearing?
Art.252oftheLaborCodeprescribesattendanceingrievance
hearingsaspartofthepartiesdutytobargaincollectively,towit:
Thedutytobargaincollectivelymeanstheperformanceofa
mutualobligationtomeetandconvenepromptlyandexpeditiouslyin
good faith for the purpose of negotiating an agreement 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 such agreement and executing a contract
incorporatingsuchagreementsifrequestedbyeitherparty,butsuch
duty does not compel any party to agree to a proposal or to make
anyconcession.
Anypartyguiltyofnonattendancemaythereforebecharged
of unfair labor practice, pursuant to Art. 248 (g) or Art. 249 . The
other party may, as a matter of choice, file request for preventive
mediation or a notice of strike with the NCMB, or file a ULP charge
with the NLRC but not simultaneously. Art. 264 enjoins a strike or
lockout over a dispute that has been certified or submitted to
compulsoryorvoluntaryarbitrationorduringthependencyofcases
involvingthesamegroundsforthestrikeorlockout.
Theotherschoolofthoughtpresentsthisproposition:Non
attendance in grievance hearings implies that the nonattending
partyisnotconvincedthatthegrievancemachinerywillbeusefulor
effective in adjusting or resolving the grievance and that, therefore,
he is deemed to have dispensed with the preliminary step to
voluntary arbitration. Under this theory,, the parties may then be
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deemedtohavesubmittedthegrievancetovoluntaryarbitration.
30.Mayauniongoonstrikeoveranunfairlaborpracticeact
despiteanostrike/nolockoutprovisionintheCBAprovidingfor
theresolutionofsuchdisputethroughthegrievanceprocedure
andvoluntaryarbitration?IssuchaCBAprovisionprovidingfor
arbitrationincaseofULPbyeitherpartyvalid?
There are two conflicting decisions of the Supreme Court on

thismatter.
One,promulgatedonMay15,1979,inthecaseofPhilippine
Metal Foundries, Inc., vs. CIR, et. al, declared that a no strike
prohibition in a Collective Bargaining Agreement is applicable only
to economic strikes. In other words, ULP is not covered and
workers may go on strike based on ULP despite the no strike
provision.
The other, issued on September 10, 1979, in the case of

GOPCCPWorkersUnionvs.CIR, which pronounced as not illegal
the stipulation in the collective bargaining agreement that in case
ofanyallegedunfairlaborpracticeonthepartofeitherparty,there
willbenostrikes,lockouts,orprejudicialactionuntilthequestion
orgrievanceisresolvedbytheepropercourtifnotsettledthrougha
grievanceprocedurethereinoutlined.
Inthelightofthefactthatthelattercaseismorerecentand
inviewofthepresentstatepolicyofpreferenceforvoluntarymodes
ofdisputesettlement,itissubmittedthatthelatterdecisionismore
conducive to industrial stability, unless the Unfair Labor Practice act
of the company is so gross and so patent as to threaten the
existenceoftheunion.
SELECTIONOFVOLUNTARYARBITRATOR
31.Whatgeneralconsiderationsshouldguidetheparties
intheirchoiceofavoluntaryarbitrator?
The choice of an arbitrator must take into account the

following general considerations: 1) field of choice, or the problem
of availability of desired persons 2) legal qualification 3) legal
disqualification and 4) criteria and attributes of a suitable
arbitrator.
32.Whatattributesorcriteriashouldavoluntaryarbitrator
possess?
Every arbitrator must possess certain attributes that make

himacceptabletothepartiesinterestedinnaminghimasarbitrator:
1)hemustbewithoutprejudiceorbias,2)hemustbeintelligent,3)
he must be capable of exercising sound judgment, 4) he must be
immunetopressuresfrompartiestothedisputeandfromothers,5)
hemustbeexperiencedinthefieldoflaborrelations.
33.Whataresomeestablishedindicatorsofacceptabilityof
anarbitratortotheparties?
Referring to Seitz. P. So you Want To Be an Arbitrator,

quoted Professor Fernandez listed the following indices of
acceptabilities:
1.highlyknowledgeableandhashadsignificant
experience in the field of labor law, labor relations,
personnelmanagementandunionproblems
2. has the capacity to run a hearing fairly and

competentlyandcommandrespectinhisrole
3.issensitivetoandunderstandstheneedsof
the parties insofar as a decision is concerned and the
articulationofthereasonsuponwhichitisbased
4. has a reputation in the industrial and union

communityforfairnessandimpartialityand,
5.becauseofcharacter,canbedependedupon
not to depart from the ethical standards which
arbitratorsimposeuponthemselves.
Other salient attributes based on survey of management and

unionattitudeswerealsolisted:
1) decisions are based on the facts of the

specificcase
2)highlyconsistentrulings
3)broadviewpoint
4)submitsadetailedjustificationofthedecision
5) develops pertinent information through
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questioning in the hearing (King B., Management and
Union Attitude Affecting the Employment of the
InexperiencedLaborArbitrator)
Inanotherstudy,Davey.H..HowArbitratorsDecideCases.
Thelistconsistedofthefollowing:
1)personalintegrity
2)judicialselfdetachment
3)someknowledgeoflaborrelations
4) reasonably high level of intelligence,
combinedwithanalyticalability,humor,patience,and
allothergoodthings.
34.Whoareavailableforappointment/selectionasvoluntary
arbitratorinthePhilippines?
While in most industrial countries, there are three types of

arbitrators available: 1) the professional arbitrators 2) persons
who, without being professional, often serve as arbitrators, and 3)
amateurs,
in
the
Philippines,
those
available
for
selection/appointment are those who belong to the second and third
categories. The list of accredited voluntary arbitrators of the
National Conciliation and Mediation Board available for appointment
consists of persons engaged in full time work as employees and
officials in the Government. Educational, civic and religious
institutions, trade union organizations and private enterprises. They
are either members of the Arbitration Association of the Philippines
(AAP) or the Philippine Academy of Professional Arbitrators (PAPA),
whosebonafidemembershipinthoseorganizationsautomaticallyfor
accreditation. Others are individual applicants who meet the
followingminimumcriteriaforaccreditation:
1. Must be a Filipino citizen residing in the

Philippines.
2.MustbeholderofaBachelorsdegreeinany
field of behavioral or applied sciences or equivalent
educationaltrainingsshortofaBachelorsDegree
3.Musthaveatleastfive(5)yearsexperience
inlabormanagementrelations
4. Must have completed a training course on

voluntaryarbitrationconductedbytheBoard
5. Must be a person of good moral character,

noted for impartiality, probity, and has not been
civilly, criminally and administratively adjudged guilty
of any offense involving moral turpitude as evidenced
byadulyswornaffidavit
6.Proficientinoral/writtencommunicationboth
inEnglishandTagalog.
Under the Professional Development Plan for Accredited

Voluntary Arbitrators, the following minimum requirements for
accreditationwereset:
1.MustbeaFilipinocitizen,residinginthePhilippines
2.MustbeaholderofaBachelorsdegreeinanyfieldof
behavioral or applied sciences or equivalent
educationaltrainingshortofaBachelorsdegree
3. Must have at least five (5) years experience in the

fieldoflabormanagementrelationsand
4. Has not been convicted of any crime involving moral

turpitude.
35. If individual applicant, how does one apply for

accreditationwiththeNCMB?
UndertheVoluntaryArbitrationAccreditationSystem(VAAS),
theapplicantshallsubmitanapplicationletterwiththeNCMBorany
ofitsRegionalBranches,togetherwith:
1.Anupdatedbiodata
2.Two(2)copies)of2x2blackandwhitepicture
3.Schoolrecords(transcriptofrecordswithSpecialOrder
No. or equivalent certification from school), certifying
that applicant has satisfactorily complied the degree
indicatedinthebiodata
4. Certificate of Employment from present employer(if

applicable)
5. Affidavit stating that Applicant has not been convicted

ofanycrimeinvolvingmoralturpitudeand
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6. Names of three (3) character references who can

attest to applicants character, stature and experience
inthefieldoflabormanagementrelations.
After the screening of his qualifications by the NCMB and

after completion of the backgroundreference check with regard his
stature and experience in the field of labormanagement relations,
the applicant will be informed accordingly whether he satisfies the
minimumrequirementsornot.
Applicantswhomeettheminimumrequirementswillundergo
a panel interview to be conducted by the Accreditation Committee.
After passing the panel interview, he will be advised to attend a
PreAccreditation Training program to equip him with the basic
knowledge, skills and orientation necessary for him to dispatch the
responsibilitiesandfunctionsofanaccreditedvoluntaryarbitrator.
After the completion of the PreAccreditation Training

Program,theapplicantwillundergoapprenticeshiptoexposehimto
actual arbitration proceedings as conducted by a seasoned
Accredited Voluntary Arbitrator and to enable him to exercise the
knowledge, skills and orientation he acquired from the Program in
anactualarbitrationsession,underthesupervisionofthesaidAVA.
Upon satisfactory completion of all the phases of the VAAS,

thenewAVAwillbegivenhisCertificateofAccreditationbearinghis
Accreditation Number, and hereafter will formally take his Oath of
OfficeandsigntheRollofAccreditedVoluntaryArbitrators.
36.Whyshouldvoluntaryarbitratorsseekaccreditationwith
theNCMB?
By seeking accreditation with the NCMB, accredited

voluntary arbitrators are given more opportunity to be selected by
the parties who have not named permanent arbitrator in their CBA,
especially if those parties seek the assistance of the NCMB in the
selection or appointment of an arbitrator. In cases like this, the
NCMB will utilize the list of accredited voluntary arbitrators for
purposesofselectionandappointment.
Moreover, accredited arbitrators are primary beneficiaries of

training programs conducted by the Board and recipients of all
information,educationandcommunication(IEC)materialswhichare
availablewithoutcost.
37. How are voluntary arbitrators chosen? What are the

varietyofmethodsintheselectionofarbitrator?
Parties in general may choose between the use of a

temporary or permanent arbitrator. They have also a choice as to
the number of arbitrators to be used, either single or panel of
arbitratorsorthesocalledArbitrationBoard.
The most highly desirable method of selection is by mutual

agreement of the parties. Other alternative methods include the
electionorappointmentbyanadministrativeagencyliketheNCMB.
38.How is a temporary or ad hoc arbitrator distinguished

frompermanentarbitrator?
Temporary or ad hoc arbitrator is selected after dispute

arises.Heisnamedtoarbitrateaspecificdisputeoraspecificgroup
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 CBA, rather
thanforjustonecaseorspecificgroupofcases.
38. What are the advantages and disadvantages in the

designation of temporary arbitrators? Permanent
arbitrator?
Itisconcededthatpossibilityofeasychangeofarbitratorsis
one of the chief advantages of the use of temporary arbitrators. If
parties are satisfied and the arbitrator is available, he can be
selected again and again. For parties with relatively few disputes,
appointment of ad hoc arbitrators answer for economy and likewise
permitsselectionofarbitratorspossessedofspecialqualificationand
technical expertise needed in each case. Moreover, the temporary
nature of his appointment lessens the bias that is likely to result
fromhispersonalacquaintancewithbothparties.
Appointment of permanent arbitrator augers well for

continuing stability in relationship, consistency in policy and
development of established jurisprudence and mutually acceptable
procedures, that can save on time and naturally, on cost. Being
named in advance, no time is lost in selecting a permanent
arbitrator after the dispute arises and difficulty in selection is
avoidedthroughthehighlydesirablemethodofmutualchoicebythe
parties.
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40. How is a Tripartite Arbitration Board constituted and

whatareitsadvantagesanddisadvantages?
TheBoard,whichmayeitherbetemporaryorpermanent,
is made up of one or more members selected by management and
equal number selected by labor, and a neutral member who serves
aschairman.Theimpartialmemberactslikeasinglearbitratorand
partisanmembersserveaspartiesrepresentatives.
Tripartiteboardsdonotoftenreachunanimousdecisionsand
inmostCBAs,amajorityawardbecomesfinalandbinding.Theside
whosepositionisfavoredbytheneutralmembergenerallyjoinsthe
neutralinamajorityaward,withtherighttodissentreservedtothe
otherpartyrepresentatives.
In a tripartite board, the neutral member is provided with

the able advice and assistance the partisan members, keeping him
adequately informed of the parties real positions which may not be
exactly the same as their formal positions. The use of a tripartite
board is most advisable in the arbitration of interest disputes. But
because of the possible delay in the appointment of partisan
members, in the hearing of the case, in writing of majority and
dissenting opinions, many parties prefer not to use tripartite boards
forrightsdisputes.
41.HowmaytheNCMBassistthepartiesintheselectionof
arbitrators?
Tofacilitateselection,theBoardwillsend/providetheparties
withalistofnamesofaccreditedvoluntaryarbitratorsfromitsRoll.
The parties will have the privilege to cross off names objected to
andtoindicatepreferencefromtheremainingnamesinthelist.The
Board then makes the appointment upon the request of the parties
from the remaining names on the list in the order of preference. If
the parties fail to agree on any of the names submitted, they may
requestforadditionallists.Iftheystillcannotagree,theNCMBshall
appointanarbitratornotappearingonthelist.
42. Do existing laws, rules and regulations in the Philippines

provide for the qualifications, attributes, functions, role and
extentofauthorityofvoluntaryarbitrators?
YES. Republic Act 6715 and its Implementing Rules and the
NCMB Procedural Guidelines in The Conduct of Voluntary Arbitration
Proceedings provide the basic legal and procedural requirements in
handlingvoluntaryarbitrationcases.TheNCMBCodeofProfessional
Responsibility for Accredited Voluntary Arbitrators of Labor
ManagementDisputeslikewisedefinesthearbitratorsqualifications,
their responsibilities to the profession, to the parties and to the
administrativeagencyintheperformanceoftheirfunctions.
43. Can any of the parties request the replacement of a

voluntary arbitrator on such grounds as patent partiality or
grossignoranceofthelaw?
The matter of inhibiting a voluntary arbitrator or requesting

his replacement is better addressed to the sound discretion of the
voluntary arbitrator himself. Unless the arbitrator is someone
chosen for the parties by the NCMB precisely because they have
disagreed on the choice earlier, the question of lack of trust and
confidence in the impartiality of the voluntary arbitrator is rarely
brought at issue because the parties have presumably thoroughly
screened the educational and ethical background of the arbitrator
beforeappointinghimastheirarbitrator.
Whether chosen by the parties or appointed for them by the

NCMB, it would be well for the arbitrator to disclose any possible
conflict of interest due to pecuniary ties or those arising out of ties
ofconsanguinityoraffinitywithanyofthepartiesbeforehearingthe
meritsofthecase.
SCOPEOFVOLUNTARYARBITRATION
44. What are the types of labor disputes that may be

submittedtovoluntaryarbitration?
Under Article 261 of the Labor Code, as amended, the

following disputes are subject to the original and exclusive
jurisdiction of voluntary arbitrator or panel of voluntary arbitrators:
1) unresolved grievances arising from CBA interpretation or
implementation.TheseincludeCBAviolationswhicharenotgrossin
character,meaning,flagrantand/ormaliciousrefusaltocomplywith
the economic provisions of the CBA 2) unresolved grievances
arising from personnel policy enforcement and interpretation
including disciplinary cases. These disputes are often referred to as
rightsdisputes.
Under Article 262 of the same Code, all other labor disputes
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including unfair labor practices and bargaining deadlocks may also

besubmittedtovoluntaryarbitrationuponagreementoftheparties.
Bargainingdeadlocksareoftenreferredtoasinterestdisputes.
Article263(h)likewiseallowsthepartiesuponagreement,to
submit even the socalled national interest cases to voluntary
arbitration, before or any stage of the compulsory arbitration
processpriortothesubmissionoftheresolution.
Republic Act Nos. 6727 and 6971 enacted on 7 July 1989 and
22 November 1990, respectively, also expanded the jurisdiction of
voluntary arbitration to include: 1) all unresolved wage distortion
cases as a result of the application of wage orders issued by any
Regional Tripartite Wages and Productivity Board in establishments
where there is collective bargaining agreement or recognized labor
union, and 2) all unresolved disputes, grievances or other matters
arising from the interpretation and implementation of a productivity
incentives program which remains unresolved within twenty (20)
calendardaysfromthetimeofthesubmissiontolabormanagement
committee.
45. How are interest disputes distinguished from rights

disputes?
The US Supreme Court has explained the fundamental

distinctionasfollows:
The first relates to disputes over the formation of collective

agreements or efforts to secure them. They arise where there is no
such agreement or where it is sought to change the terms of one,
and therefore the issue is not whether an existing agreement
controls the controversy. They look to the acquisition of rights for
the future, not to assertion of rights claimed to have vested in the
past.
The second class, however, contemplates the existence

collective agreement already concluded or, at any rate, situation in
which no effort is made to bring about a formal change in terms or
to create a new one. The dispute relates either t o the meaning or
proper application of a particular provision with reference to a
specificsituationortoanomittedcase.Inthelattereventtheclaim
is founded upon some incident of the employment relation, or
asserted one, independent of those covered by the collective
agreement ***. In either case the claim is to rights accrued, not
merelytohavenewonescreatedforthefuture.
46.Whatisarbitratorsfunctioninrightsdisputes?Ininterest
disputes?
Ingeneral,thefunctionoftherightsarbitratorisquitesimilar
to that of court in construing contract. The function is basically that
of adjudication rather than legislation. The parties very frequently
provide that the arbitrator shall have no power to add to, subtract
from,ormodifyanyprovisionoftheagreement.
InUnitedSteelworkersv.EnterpriseWheelandCarCorp.,80
Ct.1358,1361,theSupremeCourtbluntlyconfinedarbitratorstothe
functionspecifiedbytheparties:
When an arbitrator is commissioned to interpret and apply

the collective bargaining agreement, he is to bring his informed
judgmenttobearinordertoreachafairsolutionofaproblem.
This is especially true when it comes to formulating

remedies. *** Nevertheless, an arbitrator is confined to
interpretation and application of the collective bargaining
agreement he does not sit to dispense his own brand of industrial
justice. He may of course look for guidance from many sources yet
hisawardislegitimateonlysolongasitdrawsitsessencefromthe
collective bargaining agreement. When the arbitrators words
manifestaninfidelitytothisobligation,courtshavenochoicebutto
refuseenforcementoftheaward.
Ininterestdisputes,thearbitratorsroleisthatoflegislator
or bargainer for the parties. As explained by Arbitrator Emanuel
Stein,thetaskismorenearlylegislativethanjudicial.Theanswers
are not to be found within the four corners of a preexisting
document which the parties have agreed shall govern their
relationship. Lacking guidance of such a document which confines
andlimitstheauthorityofarbitratorstoadeterminationofwhatthe
partieshadagreedtowhentheydrewuptheirbasicagreement,our
task is to search for what would be, in the light of all the relevant
factorsandcircumstances,afairandequitableanswertoaproblem
whichthepartieshavebeenabletoresolvebythemselves.
Interest arbitrator supplements the collective bargaining

process by doing the bargaining for both parties after they have
failed to reach agreement through their own bargaining efforts. In
carrying out this function as legislator or bargainer for the parties,
interest arbitrator must strive to achieve a workable solution.
Quoting Soule, Wage Arbitration, 67 (1928), Elkouri states: (The
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arbitrator is) 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 take into 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 and desires of the parties, that one or the other of them will
be likely next 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.
A decision which cannot be carried into effect or which will

create lasting dissatisfaction is not really a decision at all. On this
account a wage arbitration is not an exercise in pure reason and a
summary of merely logical arguments, accompanied by the opinion
accompanyingthedecision,doesnottellthewholestory.Arbitrators
frequently do not, of course, fully understand these limitations the
moresuccessfulonesdoso.
ARBITRABILITYISSUES:
47.Canagrievancebebroughttovoluntaryarbitration
withoutpassingthroughthegrievanceprocedureunderthe
CBA?
This appears to be prescribed by the Labor Code which

directs the parties to a CBA to establish a grievance machinery for
the adjustment and resolution of grievances arising from the
interpretation or implementation of their CBA and those arising
from the interpretation or enforcement of company personnel
policies.
Inview,however,oftheStatepolicytoencouragevoluntary
arbitration of all other labormanagement disputes, it is submitted
that a grievance may be brought directly to voluntary arbitration
without passing through the grievance machinery, especially when
thelatterhasbeenproventobeineffectiveinthepast,orwhenthe
parties inadvertently railed to include a grievance machinery
provisionintheirCBA.
48.Ifagrievanceisbroughttoarbitration,couldanyparty
addissuesotherthanthegrievanceitself?
Since the labor policy encourages the settlement or

resolution of all issues or irritants in the labormanagement
relationship as a means of promoting industrial stability, it is
submitted that a party to a voluntary arbitration case can add
issues other than the grievance, provided it does not give undue
advantage to one and cause prejudice to the other. The party
wishing to add other issues must inform the other party and seek
hisconformity.
Theothersituationwhichcouldallowanissuetobeaddedis
when after the grievance has been presented, it was discovered
that it was linked or interrelated to another issue not previously
resolved and the resolution of the latter is necessary to the final
determinationofthegrievance.
49. What are arbitrability issues and when may they

arise?
Issuesofarbitrabilityarethosethatmayberaisedbyanyof
thepartiestoanarbitrationcaseonanyofthefollowinggrounds:
1. that the case does not involve any of the

disputesthatarecoveredbythearbitrationclause
2.thatwhilecoveredbythearbitrationclause,
some conditions precedent such as the exhaustion of
thegrievanceprocedure,ortimelynoticeofintentto
arbitratehasnotbeenmet.
When an existing dispute is taken to arbitration by a joint

submission of the parties, ordinarily there is no problem of
arbitrabilitysincethesubmissionbythepartiesidentifythedispute
and agree to its arbitrability. However, when only one party
initiatesarbitrationbyfilinganoticeofintenttoarbitrateunderthe
arbitration clause he agreement, the other party may raise issues
ofarbitrability.
50.Whodecidestheissueofarbitrability?
The determination of arbitrability is often left by the parties

to the arbitrator or to the administrative agency like the NCMB in
lieu of the court. The parties can specifically provide in the
agreementtheproperauthoritytodecidetheissueofarbitrability.
Even in the absence of such provision, it is an accepted principle
that a preliminary decision relating to arbitrability by an arbitrator
isaninherentpartsofhisduty.
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ARBITRATIONPROCEDURESANDTECHNIQUES
51. Ingeneral,whatistheextentoftheauthorityofan
arbitrator?
As a general rule, the authority of an arbitrator embraces or

coversthefollowing:
1.Generalauthoritytoinvestigateandhearthe
case upon notice of the parties and to render an
awardbasedonthecontractandrecordofthecase
2. Incidental authority to perform all acts

necessary to an adequate discharge of his duties and
responsibilities like setting and conduct of hearing,
attendance of witnesses and proof documents and
other evidences, factfinding and other modes of
discovery,reopeningofhearing,etc.
3. Special power in aid of his general

contractual authority like the authority to determine
arbitrability of any particular dispute and to modify
any provision of existing agreement upon which a
proposedchangeissubmittedforarbitration.
52. Who determines the arbitration procedures that may

applyinagivencase?
Inpractice,itfrequentlyhappensthatinagivencase,some
of the procedures used are based upon the legal requirements
(Republic Act 6715 and Implementing Rules), agreement of the
parties(CBAandrelevantagreements),directivesofthearbitrator,
and procedural rules of appropriate agencies like the NCMB
Procedural Guidelines in Conduct of Voluntary Arbitration
Proceeding.
53.Whocontrolsthearbitrationproceedings?
It is generally accepted that the conduct of arbitration
proceedings is under the jurisdiction and control of the arbitrator
subject to such rules of procedures that the parties may jointly
prescribe or those which appropriate agencies like the NCMB may
legallyrequire.
54.Howmayarbitrationbeinitiated?
Arbitrationmaybeinitiatedeitherby1)aSubmissionor2)bya
demand or Notice invoking a collective agreement arbitration
clause. Sometimes both instruments are used in a case. (Elkouri
andElkouri).
55.HowdowedistinguishSubmissionfromDemand
orNoticetoArbitrate?
Submission is sometimes called a Stipulation or an

Agreement to Arbitrate. It is used where there is no previous
agreement to arbitrate. The Submission which must be signed by
both parties, describes an existing dispute often names the
arbitrator, procedures in the hearing and it sometimes contains
considerable details of the arbitrators authority and other matters
which the parties wish to control. Submission is more appropriate
in interest disputes since collective agreement generally do not
provide for the arbitration of such disputes that may arise in the
future. Submission is often entered into after the dispute has
materializedandtheissuescanalreadybedefined.
However, Demand or Notice of Intent to Arbitrate is more

applicable to rights dispute because collective agreements are
required under Republic Act 6715 to provide for a grievance
procedure and a voluntary arbitration clause with respect to
disputes arising from the application or interpretation of the
agreement. Thus, there is an agreement to arbitrate future
dispute that may arise under and during the term of the CBA. If a
dispute is covered by such an arbitration clause, arbitration maybe
initiated unilaterally by one party by serving upon the other a
writtendemandornoticeofintenttoarbitrate.
56. What are some of the reasons why parties to a case

maystillchoosetoexecuteasubmissionevenifthereis
already an arbitration clause in the CBA? In various
decided American cases, some reasons were given for
doingso:
1.Toexpandordiminishtheauthorityofthearbitrator
provided by the collective agreement (International
Shoe Co., 21 LA 550, 550551, Roder, 1953 E.K.
Porter Co. vs. United Saw, File and Steel Production
Workers, 406 F.2d 643 and District Council vs.
Anderson,104LRRM2188,2189)
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2. To state precisely the issue to be decided by the

arbitrator, and indicate the scope of is jurisdiction
more precisely (E.I du Pont de Nemours and Co., 39
LA1083,1084)
3.Tostateproceduraldetailswherethepartiesdesireto
control them and the collective agreement contains
littleornodetailinregardthereto.
4. In arbitration under a law, to complete any statutory

requirementsnotmetbythearbitrationclauseofthe
collectiveagreement
5. To confirm the arbitrability of the particular dispute

(KraftFoodsCo.,145LA336)
6.Toprovideadditionalopportunitytosettlethedispute
7.Toagreetoaremedy
In negotiating on a submission, the parties may find that

they are not too far apart for negotiated settlement of the basic
dispute.
57. Whatpreparationsshouldthepartiesandtheir
advocates undertake in order that they will be able to
present their respective cases and positions most
effectively?
Tofacilitatethehearingofthecase,partiesshallensurethe
effectivepresentationofthefactsandargumentsoftheirrespective
casesbyundertakingthefollowingpreparations:
1.Studytheoriginalstatementofthegrievancesand
reviewitshistorythrougheverystepofthegrievance
machinery.
2.Examinecarefullytheinitiatingdocumentwhether
it is the Demand for Arbitration or the Submission
Agreement, to help determine with certainty the
scopeofthearbitratorsjurisdiction
3. Review the collective bargaining agreement

particularlythespecificprovisionsinvolvedandother
related provisions including any pertinent company
policy,rulesandregulations.
4. Compile all documents needed at the hearing

makeavailablephotocopiesforthearbitratorandthe
other party. Where some of the documents needed
are in the possession of the other party, make
arrangements to ensure availability during the
hearing. Otherwise, motions for the issuance of
subpoenas may be availed of prior to or during the
hearing.
5. If ocular inspection is material to the case, make

advance arrangements with the arbitrator. During
onthespot investigations, the arbitrator must be
accompaniedbytherepresentativesofbothparties.
6. Interview all witnesses and ensure that they

understand the whole case and their particular
relevance and importance of their testimony to the
case. Make a written summary or checklist of the
points upon which each witness will testify to ensure
thatnothingisoverlookedduringthehearing.
7. Study the case from the other partys point of

view. Anticipate rebuttal questions and prepare to
respondtotheevidenceandargumentspresentedby
theotherparty.
8. Review articles, references and published

awards/decisions and jurisprudence on the general
subjectmatterindispute
ARBITRATIONHEARING
58. In general, what are the procedural steps in the

conductofarbitrationhearing?
Arbitrationhearingnormallyinvolvesmany,ifnotall,ofthe
followingsteps:
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1. The taking of the oath by the arbitrator and his
openingstatement
2. Brief statement of the issues in controversy by the

parties
3.Stipulationofthefacts
4. Presentation of evidence by the grievant. The

voluntary arbitrator shall have a wide latitude of
discretion in determining the order of presentation.
Indisciplinarycases,itisthepartywhodisturbedthe
status quo in the relationship who will present the
case. In cases of contract interpretation, the
statement shall be presented first by the initiating
party.
5.Presentationofevidencebytheotherparty
6.Supplementaryfactfindingprocedures,suchasocular
inspections
7.HearingsandjudgmentofDefault
8.Formalofferofevidence
9.Filingofbriefsandreplybriefs.
10.ClosingofHearing
59.Whomayrepresentpartiesinarbitrationproceedings?
It is generally agreed that each party has the right to be

represented in arbitration proceedings by persons of their own
choosing.Hecanbethespokesmanintheprearbitralstagesofthe
grievance procedures like the shop stewards and foremen, top
unionandcompanyofficials,orcompanyorunionattorney.
60.Whoareentitledtoattendarbitrationhearings?
Asarule,arbitrationhearingisnotopentothepublic.Only
persons having direct interest in the case, that is, the
parties and their authorized representatives are entitled to
attend the hearing. Other persons may be permitted to
attendthehearingonlywiththepermissionofthearbitrator
ortheparties.
61. Who is responsible in setting the time and place of

hearingandthesendingofthenoticeofhearing?
Ordinarily, the arbitrator will meet at any time and place

agreedtobytheparties,ifheisavailable.Otherwise,hefixesthe
timeandplaceinconsultationwiththepartiesandgivestimelyand
writtennoticeofsuchdate,timeandplaceofthehearing.
62.IsthetakingoftheoathbythearbitratoroftheNCMB
andwitnessesnecessaryinarbitrationproceedings?
All Accredited Voluntary Arbitrators of the NCMB take their

oath of office to complete their accreditation and are no longer
required to do so before proceeding with the first hearing of the
case.
The swearing in of witnesses is often preferred whether

requiredbylawornot.ButthisdependsontheArbitrator.
63.WhatistheimportanceofStipulationofFacts?When
maypartiesenterintosuchstipulation?
An agreed statement of facts expedites the arbitration

hearing by reducing the number of necessary witnesses and
focusing attention on disputes on disputed issues or facts of the
case. The parties at their own initiative or upon the suggestion of
the arbitrator, may enter into Stipulation of Facts before or during
thehearing.
64. To what extent should arbitrator participate in the

hearing?
Arbitrators must feel free to participate personally in the

hearing by asking questions, seeking information, and exploring all
angles which he deems necessary for a full understanding of the
case. He must take the initiative in reconciling apparent
contradictions or in seeking insights into the motives of those
whosetestimonyisatodds.
65.Shouldsettlementbythepartiesonsomeorallofthe
issues be encouraged or allowed after arbitration has been
initiatedorhearinghasalreadycommenced?
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Arbitrators are encouraged under the law to conciliate or

mediate to aid the parties in reaching voluntary settlement even
after arbitration has been initiated and an arbitration hearing
alreadycommenced.
66. Is the arbitrator compelled to set forth the terms of

settlementinanaward?
Generally, when parties settle their dispute during the

courseofarbitrationtheyoftenrequestthatthearbitratorsetforth
thetermsofthesettlementintheaward.Ifthearbitratorbelieves
thattheagreementisproper,fair,soundandlawful,itbecomeshis
responsibilitytoadoptthesame.
67. Is the need for a hearing a basic requirement in all

arbitrationproceedings?
A hearing in the presence of the arbitrator is deemed

imperative in virtually all cases. In giving each party full and fair
opportunity to be heard, the arbitration hearing simultaneously
serves to inform the arbitrator fully regarding all material aspects
of the disputes. Even when the parties agree to submit their case
on the basis of stipulated facts, written briefs and affidavits, the
arbitratormaynotalwaysagreethatthecasebeproperlyresolved
withoutahearing.
In the case of Natividad vs. Workmens Compensation

Commission, cited in the paper presented by Atty. Rosa Maria
BautistaduringtheInstituteonGrievanceSettlementandVoluntary
Arbitration, where the Department of Labor held no hearing to
enableittodisposeoforterminateatthequickestpossibletimeall
workmens cases filed on or before March 31, 1975, the Supreme
CourtthroughJusticeCeciliaMunozPalmastated:
Such an argument does violence to the principle of due

process which the Court must uphold at all times especially where
substantialrightsofalitigationareatstake.Expediencycannotbe
invokedatthesacrificeofproceduraldueprocess.
Thedueprocessrequirementisnotamereformalitythat
maybedispensedwithatwill.Its disregard is a matter of serious
concern.Itisaconstitutionalsafeguardofthehighestorder. It is
a response to mans intimate sense of justice. It demands that
governmentacts,moreespeciallysointhecaseofthejudiciary,be
not infected with arbitrariness. It cannot be satisfied unless the
elementaryrequirementsoffairnessaremet.
Generally, the arbitrator must inform the parties that

relevant and material evidences must be presented regardless of
theformwithminimaluseoftechnicalities.
68. When may an arbitrator grant continuances or

adjournmentofhearing?
An arbitrator may grant continuances or adjourn the hearing

from time to time upon joint request of the parties or at the
initiativeofonlyonepartyforgoodcauseshown.
Continuances are often due to the absence of witnesses or

evidence and the request, even if opposed by the other party, may
be granted if such absence was not due to the fault of the
requestingparty.
69. Are transcripts of hearing always necessary in arbitration

proceedings?Whopaysforthecost?
A formal written record of the hearing is not always

necessary. In simple cases, the arbitrator can take adequate notes.
On contract interpretation cases, there being no disputed facts,, the
arbitrators notes, the parties exhibits and briefs ordinarily makes a
transcriptunnecessary.Incomplicatedcases,however,stenographic
recordswillbeveryhelpifnotindispensable.Thetranscriptwillaid
the arbitrator in studying the case, the parties in preparing the
briefs,andthecourtinreviewingthecaseonappeal.
The cost of the transcript is usually shared equally by the

partieswitheachpartypayingforextracopiesitorders.
70.Whatareexhibitsandhowaretheyofferedinevidence?
They are evidence presented and preserved in written form.

Eachpartymayuseawitnesstoidentifytheexhibitandtoshowits
accuracy if the other party does not accept the same for what it
purports to be. Copies of the exhibit should be prepared in advance
andcopiesgiventotheotherpartyandthearbitrator
71. When may a voluntary arbitrator conduct ex parte

proceedingsandrenderdefaultawards?
Onlyanunexplainedfailuretoappearduenotice,notadelay
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in appearance, can justify an ex parte proceeding. The Arbitrator

must proceed to hear the testimony and receive all the evidences
submittedbytheotherpartyincludingthosethathemayrequirefor
themakingofanaward.
72. When may plant visits by arbitrator necessary in

A plant visit may be indispensable if the conduct thereof

helpsthearbitratorsecureabetterunderstandingofthecaseandin
somecases,avoidvoluminoustestimony.Plantvisitmaybedoneat
the initiative of the arbitrator or at the request of any party to the
dispute.
73.Whatistheimportanceofopeningandclosingstatements
inarbitrationproceedings?
Opening statements provide the arbitrator in brief and clear

languageabouteachpartysviewofwhatthedisputeisallaboutand
what each expects to prove by its evidence. Through closing
statements, parties render a real service to the arbitrator and to
themselves by careful analysis and synthesis of the important
aspects of the cases, the facts proven and placing them in proper
relationtotheultimateconclusiontheyseekthearbitratortoarrive.
74. When is the hearing deemed closed for purposes of

renderinganaward?
Hearings are deemed closed when all evidence and

arguments of the parties have been received and final adjournment
is declared. However, if briefs and other documents are to be filed
after such adjournment, the hearing is deemed closed after receipt
ofsaiddocuments.
75.Whenmayreopeningthehearingbeallowed?
Under accepted practice the arbitrator on his own initiative,

or upon request of a party for good cause shown, may reopen the
hearing at any time before the award is rendered. If reopening
would prevent the issuance of the award within the mandatory time
limit, the hearing may not be reopened unless the parties agree to
extendthetimelimit.
Good cause shown include the introduction of new

evidences not available during the hearing, the admission of which
will probably affect the outcome of the case, and it is shown that
reason reasonable grounds exist for its nonproduction at the of
hearing.
76. When may withdrawal of cases from arbitration be

allowed?
Partiesmaywithdrawacasethroughagreement.Ithasbeen
suggested that the complaint usually may withdraw the case at any
point prior to arbitration hearing, but after the hearing has
commenced,hemaynotwithdrawthecaseovertheobjectionofthe
other party unless permitted by the arbitrator. Agreement provision
usually allows withdrawal of the case after arbitration hearing only
bymutualconsentoftheparties.
EVIDENCE
77. How is evidence appreciated in voluntary arbitration

proceedings?
Section 8, Rule VI of the NCMB Procedural Guidelines in the

Conduct of Voluntary Arbitration Proceedings states that the
relevancy and materiality of the evidence presented may be solely
determined by the arbitrator and he may allow or accept evidence,
the arbitrator shall not be bound by the Rules of Court pertaining to
evidence.
78. How should a voluntary arbitrator receive the evidence

presentedbytheparties?
Strict observance of legal rules of evidence usually is not

required but not the parties in all cases must be given adequate
opportunity to present all of their evidences and arguments.
Voluntary Arbitration are well advised to be very liberal in the
receptionofevidence.
79. What are the common types of evidence used in

Evidence introduced vary from case to case according to the

questioninvolved.Therearehowevermoreorlessspecifictypesof
evidencerequiredforeachgeneraltypeofcase:
1. In disputes over the setting of general wage rates

the most important type of evidence is documented
statistical and economic data on such matters as
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prevailing practice, cost of living, ability to pay and
thelike.
2. In discharge or discipline cases, the most important

evidence generally comes in the form of testimony of
witnesses that will establish the facts that led to the
disciplinary action. If the issue penalty determination,
the past record of performance of employee and
evidenceofpastdisciplinaryactionwillbematerial.
3. In contract interpretation cases, the history of pre

contract negotiations and the past practice of the
parties n applying the disputed provision will be
important
In some cases, visual or pictorial evidence is useful. Indeed,

as long as evidence fits and is relevant to the case the unusual
nature of the evidence should not bar its admission and
consideration.
80.Arevoluntaryarbitratorsauthorizedtoissuesubpoena?
Republicact6715anditsimplementingrulesempowerthe
voluntary arbitrator to hold hearings, receive and take whatever
action is necessary to resolve the issue or issues subject of the
dispute,xxx
Usingtheforegoingstatementconferringbroadandgeneral
powers on the arbitrator, the NCMB Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings specifically grant to
voluntary arbitrators the compulsory power to subpoena witnesses
and documents when the relevancy of the testimony and the
materialitythereofhavebeendemonstratedtothearbitrators.
AviewhasbeenexpressedthatEvenassumingitslegality,
the use of subpoena is not to be encouraged. Demands for relevant
information by either party should be honored without the formality
ofasubpoena.
81. What should be the approach of the arbitrator in giving

weightandcredibilitytotheevidencepresented?
Noted Arbitrator George Cheney pointed out that, in arriving

at the truth in such case, an Arbitrator must consider whether
conflicting statements run true or false what he will note is the
witnesses demeanor while on the stand and that he will credit or
discredit testimony according to his impression of the witnesses
veracity.
He also pointed out that in determining where the

preponderance of evidence lies with respect to any material point,
the arbitrator will into consideration whether the witness speaks
from firsthand information to whether the testimony is largely
basedinhearsayorgossip.
In summarizing, Arbitrator Cheney stated that the duty of

the Arbitrator is simply to determine the truth respecting material
mattersincontroversyashebelievesittobe,baseduponafulland
fairconsiderationoftheentireevidence,theweight,ifany,towhich
hehonestlybelievesittobeentitled.
82. Ingivingweightandcredibilitytotestimonyindischarge
anddisciplinecases,whatspecialconsiderationsshould
betakenintoaccountbythearbitrator?
In discharge and discipline cases, if there is evidence of will

onthepartoftheaccuseragainsttheaccused,thetestimonyofthe
formerwillbesubjecttodoubtandcarefulscrutinybythearbitrator.
In one case, Arbitrator Shulman recognized 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 example, would unjustifiably pick one employee out of the
hundredsandaccusehimofanoffense,althoughinparticularcases
the plant protection man may be mistaken or in some cases even
malicious. Arbitrator Shulman declared that, if there is no evidence
ofillwilltowardtheaccusedonthepartoftheaccuserandifthere
are no conclusion that the charge is true can hardly be deemed
improper.
In several decided American cases, one other factor to be

considered by the arbitrator in weighing testimony in discharge and
discipline cases is the socalled code which inhibits one member of
the organization and frequently one member of an unorganized
workingforcefromtestifyingagainstanother.
83. What is the value of hearsay evidence in arbitration
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hearings?
Arbitrators generally admit such evidence, but qualify its

receptionbyinformingthepartiesthatitisadmittedonlyforwhat
itisworth.
InWaldenvs.Teamasterscase,theCourtheldthataunions
failuretoobjecttohearsayevidenceinarbitrationdidnotconstitute
a breach of its duty of fair representation the court declared that:
An arbitration hearing is not a court of law and need not be
conducted like one. Neither lawyers nor strict adherence to judicial
rules of evidence are necessary complaints of industrial peace and
stabilitytheultimategoalsofarbitration.
In many decided American cases, very little weight is given

tohearsayevidence,anditisexceedinglyunlikelythatanarbitrator
will render a decision supported by hearsay evidence alone. Then,
too hearsay evidence will be given little weight if contradicted by
evidencewhichhasbeensubjectedtocrossexamination.
The rule on hearsay evidence likewise applies to affidavits.

Objectionstoits admission must be considered and the other party
should be given the opportunity to crossexamine the persons
makingtheaffidavits.
84.Whatisthevalueofcircumstantialevidenceinarbitration
hearing?
Therearetimeswhenarbitratorsdecidecasesonthebasisof
circumstantial evidence. Arbitrator Paul H. Herbert stated that the
use of circumstantial evidence does not eliminate in any sense the
requirement that there must be clear and convincing proof to
establish that the offense charged was committed. Certainly, mere
suspicionisnotenoughtoestablishwrongdoing.
Moreover, as basic safeguard, Arbitrator Claire V. Duff

emphasizedthatanarbitratorinusingcircumstantialevidencemust
exercise extreme care so that by due deliberation and careful
judgment he may avoid making hasty or false deductions. If the
evidence producing the chain of circumstances pointing to guilt is
weak and inconclusive, no probability of fact may be inferred from
thecombinedcircumstances.
Circumstantial evidence, according to Arbitrator Joseph A.

Jenkins is often far more persuasive than direct testimony,
particularlywhenactioninthenatureofaconspiracyisinvolved.In
Lone Star Steel Co. Case involving unauthorized work stoppage
foundthatcircumstantialevidencemadeoutaprimafaciecaseof
guilt,leavingaburdenoneachindividualemployeetoofferevidence
ofexcuse(suchasillness)fornotreportingforwork.
The following admissions, on the other hand, may be given

significantweight:
admission made by the grievant in the presence of

union representatives during prearbitral grievance
hearings.
Grievantsadmissionatthearbitration
Admissionsaskedonbyothersandthosethatappear
in the record of prior proceedings so as to partake of
thenatureofjudicialadmissions.
SOME
ARBITRATION
STANDARDS
IN
CONTRACT
INTERPRETATION
85.Whataresomeofthestandardswhichanarbitratormay
useasguideininterpretingcontractlanguage?
In a paper provided by Mr. Tom Riley, AsianAmerican Free

LaborInstitute(AAFLI)CountryProgramDirector,totheparticipants
of the Institute of Grievance Settlement and Voluntary Arbitration,
thefollowingstandardsincontractinterpretationbasedonaSection
ofHowArbitrationWorksbyElkouriandElkouri,weresummarized:
1.Languagewhichisclearandunambiguous: Even
when the parties themselves disagree on what
contract language means, the arbitrator may find kit
tobeclearanddefinite.Interestedpartiesareinclined
to make a clause mean what they want it to mean.
Thearbitratorbringsacertainamountofobjectivityto
theprocess.
2. Specificversusgenerallanguage: Where contract

language is specific in some respects, it will normally
be held to supersede another more general clause.
Specific means constituting or falling into a named
category.
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3. To express one thing is to exclude another: To

mentiononeitemofagrouporclassofitems,andnot
to mention others, may be construed to mean that
othersweremeanttobeexcluded.
4.Wordswillbejudgedbytheircontext:The meaning
of the words or phrases will be judged by the context
inwhichtheyappear.
5.Agreementtobeconstruedasawhole: Arbitrators
normally will hold that all parts of the contract have
some meaning or the parties would not have included
themintheagreement.
6.Normalandtechnicalusage:Wordsandphraseswill
be given their popularlyaccepted meaning in
preference to some special meaning which one of the
partiesmaytrytogivethem.Arbitratorswilltakethe
meaningcustomaryinlaborrelations.
7. Intent of the parties: Where the contract is not a

sufficient guide, the arbitrator will look beyond it to
seeifhecandeterminetheintentoftheparties.
8. List of union or company demands submitted at

negotiations.
9. Contractnegotiations: The history of negotiations,

asevidencedbyminutesorrecords,isimportant.The
arbitrator may rely on oral evidence, if he is
convincedofitsaccuracy.
10.Settlementmemoranda.
11.Noconsiderationtocompromiseoffers:Offersmade
in negotiation leading up to arbitration will normally
no be considered in arbitration. It is recognized that
parties will make offers,, looking towards a
settlement,thatmightbelessthantheyconsidertobe
theirstrictcontractualrights.(Here,however,itmust
be determined that it is a compromise offer and not
an admission that the case is really based on
considerations other than those put forward in
negotiations).
12. Custom and past practice: What the parties do

under a collective agreement might be even more
importantthanwhattheysayinit.
13.Thesalientcontractversusexpressedprovisions: A
salient contract is one which contains no express
obligations to continue in force practices or working
conditions which existed at the time that collective
agreementsissigned.
Itisrecognizedthatthereispracticalinabilityof the parties

to deal fully and conclusively with all aspects of local working
conditions. The following sets forth general principles and
procedures which explain the status of these matters and furnish
necessaryguidepoststothepartiesandtheboardofarbitrators:
1. There is recognition that an employee does not have

the right to have a working condition established
where it has not previously existed or to have an
existingconditionchangedoreliminatedexcepttothe
extentthattheexistenceofthelocalworkingcondition
thwarts application of a specific agreements
provision.
2. That no local working condition shall be effective to

depriveanyemployeeofrightsundertheagreement.
3. That local working conditions providing benefits in

excessoforinadditiontothoseineffectforitsterm
exceptaschangedoreliminatedbymutualagreement
orinaccordancewiththefourthguidepost.
4.Thatthecompanyhastherighttochangeoreliminate
a local working condition if managements actions
underthemanagementclausechangeoreliminatethe
basis for the existence of the local working condition,
thereby making its continuance unnecessary. But it
has been held that in the exercise of its management
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 eliminate the basis for the existence of the
local working condition cannot result in its change or
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elimination.
5. That the establishment of or agreement on any local

workingconditionhereafterwhichchangesormodifies
any provisions of the agreement, except to the extent
approved by top management and union officials, is
barred.
6.Thatattemptstothwartthedevelopmentofapractice,
evenifunsuccessful,maypreventitfromattainingthe
status of a local working condition. As an example, it
was held that persistent, though largely unsuccessful
efforts by supervisor to prevent employees from
takingwashuptimepriortoshiftenddidnotestablish
a viable practice protected by a local working
conditionclause.Laxityinenforcingareasonablerule
is not tantamount to the establishment of a local
workingcondition.
14. In interpreting the working intent and application of

contractual provisions, arbitrators may be guided by
past practice under the contract. A practice is a
reasonable uniform response to a recurring situation
over a substantial period of time, which has been
recognizedbythepartiesimplicitlyorexplicitlyasthe
properresponse.
The term practices usually refer to local practices and

workingconditionswhichcanvaryconsiderablyatdifferentplantsof
thesamecompany.Theyareoftenacustomaryway,notnecessarily
the best way of handling a given problem. A method of handling a
problem cannot be considered a practice if it is only one of several
waysofdoingit.
The practice must be recurring and deal with the same type
of situation. It must have existed over a substantial period of time.
The lax enforcement of a rule may not constitute a valid practice
since there may not be acceptance, either implicit or explicit. Lax
enforcementmightnonethelessbeusedinsomecasestobuildproof
ofdiscriminatoryorinequitabletreatment.
Generally, the burden of proof is on the union to show that

thepracticeinfactdoesexist.Thisisfrequentlydifficulttodo,since
the union may not have very complete records and the company is
abletogiveevidenceofadifferentpractice.
If the practice is unclear or conflicting, the arbitrator is not

likelytoplacemuchweightoneitherway.
86. How important are past practices in collective

bargaining?
Past practices have made the following contributions to the

developmentofindustrialselfgovernment:
1. They can be an aid to the interpretation of

ambiguouscontractlanguage.
2. Even where contract language is clear an

agreedpracticemaymodifyit.
3.Pastpracticeisimportantindefiningjobsand
classification lines which may affect layoffs, wages
andpromotions.
4.Undersomecircumstancesalonghistoryofa
practice indicates a mutual agreement even though
thecontractissilent.
5.A past practice is not binding and cannot be

enforcedwhenitisclearlycontrarytothecontract.
The validity of a past practice argument can only be

determined by complete knowledge of the details of the individual
agreementineffectintheplantorindustry.
87. What are the other special considerations that

mustguidearbitratorsininterpretingcontractlanguage?
1.Interpretationinthelightofthelaw: When
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
reasonableman.
2. Reasonand equity: Where language is

ambiguous arbitrators usually will strive to apply it in
a manner that is reasonable and equitable to both
parties.Asonearbitratorputit:thearbitratorshould
look at the language in the light of experience and
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choose that course which does the least violence to
thejudgmentofareasonableman.
3. Avoiding harsh, absurd or nonsensical

results: When one interpretation would bring just and
reasonable results and another would lead to harsh,
absurd or nonsensical results, the former will be
used.
4.Forfeituresorpenalties:Botharbitratorsand
courtsarereluctanttoassessapenaltyorforfeitureif
another interpretation is reasonably possible. On the
other hand, many arbitrators are inclined to rule that
some remedy (including back pay and even interest
in some cases), is appropriate in certain types of
cases. The question of remedies is one of the most
controversialforarbitrators,unionsandemployers.
5. Experienceandtrainingofnegotiators:
Arbitrators are less inclined to apply a strict
construction of language where the negotiators are
inexperienced. The assumption is that the rules and
practices were better understood by the parties than
the words by which they tried to express such
practices.Thisliberalattitudewouldnotbetakenwith
experienced negotiators who were known to have
scrutinizedthelanguageclosely.
6. Interpretation against selecting the

language: When no other rule or standard applies,
arbitratorssometimeswillruleagainstthepartywhich
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 the practice is
tobediscontinuedorchanged.
ARBITRATIONSTANDARDSINDISCIPLINECASES
88.Whatstandardsmayserveasguidestoarbitrator
inarbitratingdisciplineordischargecases?
The following standards in the arbitration of discipline cases

havebeensuggested:
1. Priorknowledgebytheemployeeofthe
rulesandpenaltiesforviolation
1.foreknowledgeorforewarningproperly
have been given orally by management or in
writingthroughthemediumoftypedorprinted
sheetsorbooksofshoprulesandpenaltiesfor
violationthereof
2. there must have been actual oral or

written communication of the rules and
penalties to the employees. There are,
however,
certain
offenses
such
as
insubordination, coming to work intoxicated,
drinking intoxicating beverages on the job,
theft of property of the company or of fellow
employees which are so serious that any
employeeintheindustrialsocietymayproperly
beexpectedtoknowalreadythatsuchconduct
isoffensiveandheavilypunishable
3. In the absence of any contractual

prohibitionorrestriction,,thecompanyhasthe
right unilaterally to promulgate reasonable
rules and give reasonable orders, and same
neednothavebeennegotiatedwiththeunion.
2. Reasonableness of the company rules in

relation to the orderly, efficient and safe operation of
companysbusiness.
Underthisstandard,ifanemployeebelievesthatsaid
ruleororderisunreasonable,hemustneverthelessobeythe
same, in which case, he may file a grievance, unless he
sincerely feels that to obey the rule or order would seriously
and immediately jeopardize his personal safety and/or
integrity. Given a firm finding to the latter effect, the
employeemaybesaidtosaidtohavehadjustificationforhis
disobedience.
3.EmployeesDayinCourtPrinciple.
Under this standard, it becomes a duty on the part of

management that before administering discipline to an employee,
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there should be an honest effort to investigate whether the

employee did in fact violate or disobey a rule or order of the
company.
The companys investigation must normally be made before

its disciplinary decision is made. If the company fails to do so, its
failure may not normally be excused on the ground that the
employee will get his day in court through the grievance procedure
after the exaction of discipline. By that time has usually been too
muchhardeningofpositions.
There may, of course, be circumstances under which

management must react immediately to the employeess behavior.
In such cases, the normally proper action is to suspend the
employee pending investigation, with the understanding that (a) the
final disciplinary decision will be made after the investigation and
(b) if the employee is found innocent after the investigation, he will
berestoredtohisjobwithpaytimelost.
Thecompanysinvestigationmustalsoincludeaninquiryinto
possiblejustificationforallegedruleviolation.
4.Requirementoffairandobjectiveinvestigation.
At such investigation, the management official may both
prosecutorandjudgebutheshouldnotalsobeawitnessagainst
theemployee.Itisessentialforsomehigher,detachedmanagement
official to assume and conscientiously perform the judicial role,,
giving the commonly accepted meaning to that term in his attitude
andconduct.
5. Requirement of substantial evidence or proof that the

employeewasguiltyascharged.
It is not required that the evidence be preponderant,

conclusive or beyond reasonable doubt. But evidence must be truly
substantial and not flimsy. The management judge should actively
search out witnesses and evidence and not just passively take what
participantsotvolunteerwitnessestellhim.
6. Requirement of consistent and nondiscriminatory

applicationofrules.
A finding of discrimination warrants negotiation or

modification of the discipline imposed. If the company has been
laxed in enforcing its rules and decides henceforth to apply them
vigorously, the company may avoid a finding of discrimination by
tellingallemployeesbeforehandofitsintenttoenforcehereafterall
writtenrules.
7.Requirementofreasonablenessandappropriatenessof
the penalty depending on the seriousness of the employees
provenoffenseandtheemploymentrecordoftheemployee.
A trivial offense does not merit harsh discipline unless the

employee has properly been 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.Reasonablejudgmentthereonmustbeused.
An employees 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 help determine the
severity of discipline once he has properly been found guilty of the
immediateoffense.
89. To what extent may arbitrators review the

penaltiesimposedbymanagement?
One 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. Elaborating this view, Arbitrator Whitley P.
McCoystates:
Where an employee has violated a rule or engaged in

conduct meriting disciplinary action, it is primarily the function of
managementtodecideupontheproperpenalty.Ifmanagementacts
in good faith upon a fair investigation and fixes a penalty not
inconsistent with that imposed in other like cases, an arbitrator
shouldnotdisturbit.Themerefactthatmanagementhasimposeda
somewhat different penalty or a somewhat more severe penalty
than the arbitrator would have, if he had the decision to make
originally, is no justification for changing it. The minds of equally
reasonable men differ. A consideration which would weigh heavily
with one man seem of less importance to another. A circumstance
which highly aggravates an offense in one mans eyes may be only
slight aggravation another. If an arbitrator could substitute his
judgment and discretion for the judgment and discretion honestly
exercisedbymanagement,thenthefunctionsofmanagementwould
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have been abdicated, and unions would take every case to

arbitration. The result would be as intolerable to employees as to
management. The only circumstances under which a penalty
imposedbymanagementcanberightfullysetasidebyanarbitrator
are those where discrimination, unfairness, or capricious and
arbitrary action are proved in other words, where there has been
abuseofdiscretion.
Theunreasonable,capriciousorarbitraryactionstandard
of review has been repeatedly expressed by many other arbitrators
indecidedcasescitedintheElkouriandElkouri.
A less restricted role of the arbitrator in reviewing

discipline imposed under agreements requiring cause is expressed
byArbitratorHenryH.Platt:
ItisordinarilythefunctionofanArbitratorininterpretinga
contract provision which requires sufficient cause as a condition
precedent to discharge not only to determine whether the employee
involveisguiltyofwrongdoingand,ifso,toconfirmtheemployers
but also to safeguard the interests of the discharged employee by
making reasonably sure that the causes for discharge were just and
equitable and such as would appeal to reasonable and fairminded
persons as warranting discharge. To be sure, no standards exist to
aid an arbitrator in finding a conclusive answer to such a question
and, therefore, perhaps the best he can do is to decide what
reasonable man, mindful of the habits and custom of industrial life
and of the standards of justice and fair dealing prevalent in the
community, ought to have done under similar circumstances and in
the light to decide whether the conduct of the discharged employee
wasdefensibleandthedisciplinarypenaltyjust.
Finally,itshouldberecognizedthatwhilearbitrationdonot
lightly interfere with management decisions in discharge and
discipline matters, the arbitrators are expected to act firmly when
management decisions are found to be unjust and unreasonable
underallthecircumstances.ArbitratorCharlesB.Spauldingsays:
Three answers to this line of argument seem appropriate.

The first is that arbitrators very frequently do step in and upset the
decisionsofmanagement.Thesecondisthat,ifarbitratorscouldnot
do so, arbitration would be of little import, since the judgment of
management would in so many cases constitute the final verdict.
Finally, the more careful statement 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 will not lightly upset a decision reached by competent
carefulmanagementwhichactsinthefulllightof all the facts, and
without any evidence of bias, haste, or lack of emotional balance.
Even 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. Since the acts of
management in this case do shock our sense of justice, and since
theydoseemtohaveoccurredinasituationofemotionaltension,in
haste, and without a very careful weighing of the facts, we find
ourselves inevitably driven to overthrow the decision of this
management.
90. Whatarethearbitralremediesindischargeand
disciplinecases?
The more common remedies utilized by arbitrators in

setting aside managerial actions in discharge and discipline cases
includethefollowing:
a. if a penalty of discharge is upset through

arbitration, the award often will order reinstatement
eitherwithbackpay,withoutbackpay,orwithpartial
backpay,andoftenwillfurtherorderthatotherrights
and privileges shall remain unimpaired or the
discharge maybe commuted to suspension for a
specificperiod,oreventoareducedpenaltyofonlya
reprimandorwarning
b. Where a penalty of suspension assessed

management is upset through arbitration, the award
willeithervoidthesuspensioncompletely(sometimes
substituting a reprimand or warning), or will simply
reducethelengthofthetimetheemployeeisdeemed
suspendedin either event back pay will be ordered
consistent with the shortened or eliminated period of
suspension.
The remedy may, however, be provided in the Submission

agreementofthepartiesfromtheArbitratorcannotdictate.
91.Whataresomeviolationsinarbitralremediesthat
arelessfrequentlyused?
a. Lossofseniority. Some employees have

been ordered reinstated on the basis that they not be
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credited with any seniority for the period between
discharge and reinstatement. Loss of some seniority
that had accrued prior to the discharge is also a
possibility.
b. Loss of other benefits under the

agreement. In denying seniority credit for the period
between discharge and reinstatement, arbitrators
often prohibit the accumulation of the other
agreementprovidedbenefitsduringsaidperiod.
c. Probation or final warning. Some

discharged employees have been reinstated on a
probationbasis(theprobationconditionsvaryingfrom
award to award and the probationary periods often
ranging from 1 to 12 months), or with a final warning
that any repetition of the offense will justify
immediatedischarge.
d. Reinstatementconditioneduponsome
specialactorpromisebyemployee. Reinstatement
has been ordered on the condition that the employee
resignshisoutsidejob,thathefurnishesanindemnity
bond required by the employer, that he signs an
agreementbywhichhepromisestoapplyandcomply
conscientiously with company safety rules, that he
acceptscounselingfromhispastororsomecompetent
social agency, or that the employee complies with
someotherspecifiedcondition.
e. Written waiver required. Where the

collective agreement arguably might have required
back in the event of reinstatement after discharge, a
conditiontoreinstatementwasimposedintheformof
a requirement that the employee agree in writing to
waivebackpay.
SOMESTANDARDSINARBITRATIONOFINTERESTDISPUTES
92.Whataresomestandardsthatserveasguidesin
thearbitrationofinterestdisputes?
Arbitrators often use some of the following standards in

arbitrating interest disputes: 1) prevailing practice, 2) cost of
living, 3) living wage, 4) ability to pay, 5) competition, 6) wage
pattern, 7) productivity, 8) takehome pay, 9) past practice and
bargaininghistory
93.Whatshouldguidethearbitratorsingivingeffect
totheprevailingpractice?
Arbitrators usually rely upon precedent, adopting for the

parties that which has been adopted by other parties through
collective bargaining or, sometimes, as a result of arbitration
awards.Anawardbasedupontheapplicationofthesestandardsis
not likely to be too far from the expectations of the parties, since
most persons in the business community have long accepted the
idea that there should be no basic inequalities among comparable
individualsorgroups.
94. What are some limitations on the use of

comparativestandardsbasedonprevailingpractice?
Application of the prevailing practice standard may involve

difficulties. First, what is to be the basis of comparison? Is it the
entire industry, the particular industry within the area, or the
industry in general within the area? After the question is decided,
what practice should be determined? Finally, how to apply the
practice to the particular company involved in the case should also
bedetermined?
Inmanycases,strongreasonsrestforthecaseofprevailing
practiceofthesameclassofemployeeswithinthelocalityorarea.
The responsibility of the arbitrator is to determine the appropriate
basis for the comparison from the facts and circumstances of the
case.
95. If a prevailing practice has already been

determined,howshouldthearbitratorapplythesamein
agivencase?
It would be difficult to apply the standard if the issue does

not involve the fixing 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
justifywhytheemployershouldnotpaytheprevailingrates.These
reasons include such matters as relative general differentials of
skillandtraining,responsibility,steadinessofemployment,hazards
of the employment, fringe benefits, established geographical
differentialsandwageleadership.
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96. Whenandhowdoarbitratorsusecostofliving
standardsinarbitratinginterestdisputes?
During periods characterized by pronounced changes in

living costs, the use of the standard measured in terms of the
Consumer Price Index (CPI) makes it possible to measure changes
in retail costs of services and commodities and the resulting effect
upon the purchasing power of the income of the workers. The CPI
reflects the cost of living as of a date about six weeks prior to its
issuanceorpublication.
97.Whatisthelivingwagestandard?
Thelivingwagestandardisrelatedto,butnotthesameas,
thecostoflivingstandard.Thelivingwagestandardisbasedupon
the idea that the standard of living of workers should be raised to
thehighestlevelpossible,butmorerealisticbasisforitisthebelief
that employees are entitled to wages and salaries sufficient to
enable them, through the exercise of thrift and reasonable
economy, to maintain themselves and families in decency and
comfortandtomakereasonableprovisionforoldage.
98. What is the abilitytopay standard? To what

extentshoulditbeappliedinthearbitrationofinterest
disputes?
Although it is a generally recognized principle that large

profits do not alone justify demands for wages substantially higher
thanthosewhicharestandardwithinanindustrywhilesmallprofits
donotjustifythepaymentofsubstandardwages,theabilitytopay
criterion is of great importance in the determination of wage rates
andothercontractbenefits.
Employers who have pleaded inability to pay have been held to

have the burden of producing sufficient evidence to support the
plea.InanumberofdecidedAmericancases,ithasbeenheldthat
theallegedinabilitymustbemorethanspeculativeandfactorsto
produce sufficient evidence will result in a rejection of the plea.
The payment of reasonable dividends to stockholders and of
reasonable salaries to top management has been held to render
invalid a plea of inability to pay. Arbitrators should provide any
safeguards needed to protect the confidential nature of such
evidences.
99. Whenisthecompetitivenatureofthebusiness
standardrelevantinarbitratinginterestdisputes?
Quoting a long line of decided cases, Elkouri and Elkouri

explainsthatafactorwhichmustbegivenconsiderationininterest
arbitrationisthecompetitivenatureoftheemployersbusiness.In
somerespectthisisrelatedtotheabilitytopaystandard.In other
respect it is related to the prevailingprice standard. For these
reasons it is generally not considered as an independent standard.
Where, however, an employer is engaged in a highly competitive
business or is faced with special competitive problems, the
arbitrator may specifically point out the competitive nature of the
employersbusinessasafactortobegivenspecialconsiderationin
setting contract terms (sometimes even justifying a wage
reduction).
100. What are wage patterns as standards in

arbitrationofinterestdisputes?
Thepatternmaybedefinedasaparticularkindofsolution
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 prevailingpractice standard and could
reasonablybeconsideredmerelyasoneofitsaspects.However, it
isoftenspokenofasifitwereadistinctcriterion.
A pattern in wage arbitrations is often stated in terms of a

specific number of cents per hour, or it may be stated as a
percentage wage increase. For instance, the pattern standard
would recognize that where companies or industries A, B, and C
have granted several wage increase of 10 cents per hour, related
companyorindustryDshouldgranta10centincreasealso.In the
application of this standard, stress is placed upon the granting of
the same number, amount or percentage of increase granted by
others, rather than granting of the same total wage that is paid by
comparableemployers.
101.Howdoarbitratorsapplyproductivitystandardsin
wagedispute?
The application of productivity standards proceeds from the
recognition that there is a close relationship between the general
level of productivity and the general level of wages and that both
an increase in wage rates and a reduction in hours may be
warranted by increased productivity measured in terms of added
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outputpermanhour.
Increases in productivity can relatively result in decreased

wages, decreased prices, increased profits, or some combinations
of the three. If the increase in output per manhour is due to
greater effort and to greater skill, there would appear to be no
doubt that the gain should accrue to the benefit of the employees.
But if the increase is the result of technological progress or better
management,severalconsiderationsmustbetakenintoaccount.
102. When is past practice and bargaining history of

specialsignificanceinarbitrationofinterestdisputes?
Arbitrator Clark Kerr gave importance to the standard when

thepartiesarenegotiatingtheircontractforthefirsttime.He said
that the arbitrator considers past practice a primary factor. It is
standard form to incorporate past conditions into collective
bargaining contracts, whether these contracts are developed by
negotiationorarbitration.Thefactofunionizationcreatesnobasis
for the withdrawal of conditions previously in effect. If they were
justified before, they remain justified after the event of union
affiliation.Itisalmostaxiomaticthattheexistingconditionsshould
be perpetuated. Some contracts even blanket them in through a
generalcatchallclause.
ARBITRATIONAWARD/DECISION
103.HowisAwarddistinguishedfromanOpinion?
Theawardisthearbitratorsdecisionofthecase.Often the
arbitrator accompanies his award with a written opinion stating the
reasons for the award. Under existing laws and procedures, the
awardmuststateinclear,conciseanddefinitetermsthefactsand
thebasisuponwhichtheawardisrendered.
In cases involving monetary claim, the award must specify

theamountgrantedandtheformulausedinthecomputation.
Theawardmustbesignedbythearbitrator.If 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 the
awardbytheneutralalone.
104.WhataretheelementsofagoodDecision?
The following essential elements make up the format of a good

Decision:
1. Essential preliminary matters like who are

the parties, where and when the hearing was held,
who appeared for each party, who were the
witnesses,whetherbriefswerefiledandifso,when,
2.Statementoftheissue,whetherstipulatedby
thepartiesorasdeterminedbythearbitrator
3.Contractclausesthatbearupontheissues
4.Backgroundofthedispute,meaningthefacts
thatledtothegrievance
5.Positionoftheparties
6. Arbitrators discussions of the positions as

they apply to the background and relevant contract
clauses, giving his or her considered conclusion on
eachargumentmadeandthereasonsforit
7.The award, stating what will happen to the

grievance, whether sustained or denied, and, if the
former,whatwillbetheremedy.
105.WhataresometipsinwritingaDecision?
Atty.RosaMariaBautistainthesamepaperpresentedatthe
InstituteonGrievanceSettlementandVoluntaryArbitration,shared
thefollowingtipsinwritingadecision:
1.Makeyourawardamasterpiece. It should
be brief, clear and direct to the point. Every word
andsentencecount.
2.Enumerateyourfactschronologicallybased
on the stipulation of the facts by the parties. Be
objective in writing the facts. No opinion or
conclusionshouldappearasfacts.
3. Refer to the Submission Agreement and
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attach it as Annex A since this is the basis of your
authority.
4.HavetheSupremeCourtinmindwhenyou
write your award. Remember that the Justices are
very busy and that if your award is twenty pages or
more, they may not have the time to read your
awardfully.
5. If you write in English, be sure that your

grammariscorrect.Otherwise,youmaygodownin
history (seldom do you have a chance to have your
work elevated to the Supreme Court) as the
arbitrator whose verbs and tenses do not agree with
oneanother.Continue to improve yourself. Grow in
the law, in English, and in style. Use short
sentences. If you can still delete a sentence or a
word,yourawardisstillnottightandconcise.
6.Statetheissue/sdirectlyandsimply. Avoid
verbosity. Phrase and rephrase the issue/s until an
ordinarylaymancanreadyourstatementsandnotbe
confused. Formulate the issue or issues in the form
ofquestions,ifpossible.
7. State your decision by answering the

questionorquestionsineitheryesorno.Thentackle
the reasons one by one. Cite the specific provisions
of the labor law, or the CBA, or the rules and
regulations of the company, or the particular policy,
or practice. Remember that the intent of the parties
(notyourown)istheonethatmatters.
8.Besurethatyourawardisspecificenoughto
be understood and enforced. If your award or
decision will just add to the conclusion, redraft it,
havinginmindthejusticesoftheSupremeCourtwho
willreadit.Whileyourawardordecisionmaynotbe
questioned on certiorari, write it in such a manner
that it can survive a petition for certiorari. It should
bemorethanonethatyoucandefendthroughallthe
legal attacks of the learned justices, and most
important of all, the admonition of your own
conscience.
9. Your award should promote not only industrial

peacebutyourownpeaceofmind.Itshouldachieve
the highest ladder of impartiality and justice,
otherwisethereisnousebeingavoluntaryarbitrator
because the parties will never get you again as their
arbitrator.
10. The shorter your award, the less mistakes

you commit. But be sure it is complete and can
standaloneandneedsnothingelsebesides.
106. What is the period required for a voluntary

arbitrator or panel of voluntary arbitrators to render an
awardordecision?
Unlessthepartiesagreeotherwise,itshallbemandatoryfor
the Voluntary Arbitrator or panel of Voluntary Arbitrators to render
an award or decision within twenty (20) calendar days from the
dateofsubmissionofthedisputetovoluntaryarbitration(Art.262
A,LaborCode).
In cases involving unresolved wage distortion issues, the

period to render an award or decision should be within ten (10)
calendar days from the time the case was referred to voluntary
arbitration, unless agreed otherwise by the parties in writing (Art.
124,LaborcodeasamendedbyR.A.6727).
107. Maythevoluntaryarbitratormodifyhisaward,by
motionormotupropio?
No, the Supreme Court has categorically ruled on this issue

in the case of Consolidated Bank and trust Company (Solidbank)
Inc. vs. Bureau of Labor relations, et. al., G.R. No. 64962, October
15, 1988. In this case, the voluntary arbitrator did more than
justifytheoriginalaward:hemodifiedit.TheHighCourtreminded
thepartiesthatthearbitrationlaworjurisprudenceonthematter
is explicit in its stand against revocation and amendment of the
submission agreement and the arbitration award once such has
beenmade.Therationalebehindthisisthat:Anawardshouldbe
regarded as the judgment of a court of last resort so that all
reasonablepresumptionshouldbeascertainedinitsfavorandeasy
mode of obtaining justice, would be merely an unnecessary step in
the course of litigation, causing delay and expenses, but not finally
settling anything. Notwithstanding the natural reluctance of the
courts to interfere with matters determined by the arbitrators they
willdosoinpropercaseswherethelawordainsthem(Arbitration,
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Manguiat,citingU.S.vs.Geason175US588).
In the interest of justice and industrial peace, however, the

consistent stand of the National Conciliation and Mediation Board
hasbeenthatvoluntaryarbitratormaymodifytheiroriginalawards
or decisions but only to correct typographical or harmless errors
that are patently obvious on the face of the award or decision.
Theymaynot,however,introduceasubstantialamendmenttotheir
award or decision in the guise of correcting a harmless or
typographicalerror.
108.Isthedecisionofavoluntaryarbitratorappealable?
No, the decision is final, unappealable and executory after

ten(10)calendardaysfromthereceiptofthecopyoftheawardor
decision by the parties. ( Article 262A, Labor Code of the
Philippines,asamendedbyrepublicAct6715)
However, in the cases of Oceanic Bic Division (FFW) vs.

Romero, G.R. No. L43890, July 16, 1984 SCRA 392 and
Mantrade/FMMC Division Employer and Workers Union vs.
Bacungan, G.R. No. L48437, September 30, 1986, 144 SCRA 510,
the Supreme Court said that there are exceptions to the rule and
theseare:
1.wantofjurisdiction
2.graveabuseofdiscretion
3.violationofdueprocess
4.denialofsubstantivejustice
5.erroneousinterpretationofthelaw
In these instances, the Court may review the Arbitrators

decisioninaspecialcivilactionofcertiorari.
109.Arearbitratorsboundtofollowlegaljurisprudence
inrenderinganaward?
A voluntary arbitrator is neither legally normally bound by

what another arbitrator has ruled in a previous case. There is
nothing in the Labor Code that says so. But 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. If the latter is sound, it would not hurt to
followitsprecedent,asotherwise,chaosandconfusionwouldresult
from the conflicting rulings on the same issue between the same
partiesandarisingoutofthesamecontract.
On this matter, an American Arbitrator, Maurice H. Merrills

statement is very relevant: As to arbitral decisions rendered
under other contracts between parties not related to those in the
case at hand, usefulness depends upon similarity of the terms and
of the situations to which they are to be applied. They must be
weighedandappraised,notonlyinrespecttothesecharacteristics,
but also with regard to the soundness of the principles upon which
theyproceed.Certainly, an arbitrator may be aided in formulating
his own conclusions by knowledge of how other men have solved
similar problems. He ought not to arrogate as his own special
virtue the wisdom and justice essential to sound decision. In at
least two instances in recent months I have found by investigation
that a strong current of arbitral decision had overborne my first
impression of the implications of particular language. To yield to
this common sense of most, especially as, on examination, the
reason on which it was based carried plausibility, was neither to
evade my responsibility nor to sacrifice my intellectual integrity.
Contrarywise, it reduced discriminatory application of similar
provisions. It enabled me to make use of the wisdom of others
whoworkinthesamefield.
VOLUNTARY ARBITRATION COST AND SPECIAL VOLUNTARY

ARBITRATIONFUND
110. Whataretheresponsibilitiesofthepartiesinthe
paymentofthecostofvoluntaryarbitration?
The parties to a collective bargaining agreement shall

provide therein a proportionate sharing scheme to pay the cost of
voluntaryarbitration,includingthevoluntaryarbitratorsfee.
Unless the parties agree otherwise, the cost of voluntary

arbitration proceedings and voluntary arbitrators fees shall be
shared equally by the parties out of the funds that they may set
asideforthepurpose,undertheircollectiveagreement.
111. What are the factors to be considered in

determiningthefeeofvoluntaryarbitrators?
The fixing of the fee of voluntary arbitrator or panel of

voluntary arbitrators, whether shouldered wholly by the parties or
subsidizedbytheSpecialVoluntaryArbitrationFund,shalltakeinto
accountthefollowingfactors:
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a.Natureofthecase
b.Timeconsumedinhearingthecase
c.Professionstandingofthevoluntary
arbitrator
d.Capacitytopayofthepartiesand
e. Fees provided for in the Revised Rules of
Court
112.Aretheregovernmentguidelinesinfixingvoluntary
arbitratorsfee?
In the absence of any agreement fixing the fee of the

voluntary arbitrator or panel of arbitrators, the parties and the
voluntary arbitrator may use the following schedule of fees
approvedbytheTVAACforsubsidypurposes,andreferenceguide:
a.InterpretationorimplementationofCBAP5,000.00
b.Interpretationorenforcementofcompany
personnelpolicies/suspensionand
dismissal/termination
P5,000.00
c.Interpretationorimplementationof
productivityincentiveagreement
P10,000.00
113. May an arbitrator charge fees if the case is

withdrawn after he has been selected and a date for
hearingisset?
The arbitrator is permitted to charge not only per diem fee but
also other fees like cancellation, postponement, rescheduling or
administrativefees.
114. Is there a fund provided by the government to

subsidizethecostofvoluntaryarbitration?
Yes, section 33 (f) of republic Act 6715 provides for a

Special Voluntary Arbitration Fund (SVAF) which will subsidize the
costofvoluntaryarbitrationincludingthearbitratorsfees,andsuch
other related purposes to promote and develop voluntary
arbitration. The Board shall administer the SVAF in accordance
with the guidelines it may adopt upon the recommendation of the
Tripartite Voluntary Arbitration Advisory Council, which guidelines
shall be subject to the approval of the Secretary of labor and
Employment.
115.Howisthegovernmentsubsidyinvolvingvoluntary
arbitrationraised?
Continuing funds for this purpose takes the nature of an amount of

fifteen million pesos (P15,000,000) in the General Appropriations
Act.
In addition, the Bureau of Labor relations or the regional

Offices of the Department of Labor and Employment shall assess
employer, for every CBA registration fee of not less than one
thousand pesos (P1,000.00) for the effective and efficient
administration of the voluntary arbitration program. The amount
collectedshallaccruetotheSVAF.
116. How my one avail of the government subsidy in

voluntaryarbitration?
The TVAACs resolution No. 2, series of 1992 sets the following

guidelinesfortheavailmentofthevoluntaryarbitrationsubsidy:
I. Coverage Parties to a Collective Bargaining

Agreementarequalifiedtoavailofthevoluntaryarbitrationsubsidy
II.CasestobeSubsidizedThevoluntaryarbitration
caseswhichcanbesubsidizedareasfollows:
1. unresolved grievances involving the

interpretation or implementation of the collective
bargaining agreement and those arising from the
interpretation or enforcement of company personnel
policies
2.productivityincentiveprogram
3. wage distortion cases and other issues
related to wage and salary administration including
those resulting from the application of Wage Orders
issued by regional Tripartite Wages and Productivity
Board
4.allothercasesnotfallingwithintheoriginal
and exclusive jurisdiction of voluntary arbitrators
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whicharesubmittedforvoluntaryarbitration.
III. Amount of Subsidy Both parties shall be entitled to the

following maximum fixed subsidy per case submitted for voluntary
arbitration:
a.InterpretationorimplementationofCBA
P10,000.00
b.Interpretationorenforcementofcompany
personnelpolicies/suspensionand
dismissal/termination
P10,000.00
c.Interpretationorimplementationof
productivityincentiveagreement
P10,000.00
d.Wagedistortioncasesandother
issuesrelatedtowageandsalary
administrationincludingthoseresulting
fromtheapplicationofwageorder
issuedbyRegionalTripartiteWages
andProductivityBoardP10,000.00
e.CollectiveBargainingDeadlock
P15,000.00
f.Thecaseisarightsdisputeinvolving
twoormoreissues
P15,000.00
g.Thecaseissubmittedunderthe
ExpeditedVoluntaryArbitration
ProcedureaslaiddowninTVAAC
ResolutionNo.2,seriesof1999.
P15,0000.00
h.Thecaseissubmittedunderthe
FLAVASProgram,whichshallbe
paidasfollows:P1,000.00tothe
legalaidoffice,P500.00totothe
PAVAlocalchapter,P3,500.00
tothevoluntaryarbitrator
P5,000.00
g.AllotherissuesP10,000.00
IV.ProcedureforthePaymentofSubsidy
1.Parties availing of the voluntary arbitration

subsidy shall accomplish the Request for Subsidy
Entitlement Form and file the same with the
appropriate regional Branch of the Board together
withacopyoftheawardordecision.
2. The Regional Branch concerned shall

immediately act on the request within two (2) days
uponreceiptthereof.Iftheconditionsforentitlement
are satisfied, the Regional Director shall forward the
request together with all the required supporting
documents to the NCMB executive Director with the
recommendation that the request be granted. Once
the entitlement to subsidy is established, the amount
shall be directly paid by the Board to the voluntary
arbitrator concerned. However, in case the
arbitrators fee has been fully paid in advance by the
party or parties to the arbitrator concerned, the
amount shall be reimbursed to the party or parties
availingofthesubsidy.
THE FUTURE OF GRIEVANCE PROCEDURE AND VOLUNTARY

ARBITRATION
We are quite optimistic about the future of grievance

machinery and voluntary arbitration in the settlement of labor
disputes.
The hindrances that were identified as contributory to the

failure of these two modes of dispute settlement in the past are
being addressed. The problem of the high cost of voluntary
arbitration fees has been addressed by the creation of the Special
VoluntaryArbitrationFundoutoftheGeneralAppropriationActand
theCBAregistrationfees.Theshortageinthenumberofavailable
trained, qualified and competent voluntary arbitrators is seriously
beingaddressedbythecontinuingtrainingprogramsbeinginitiated
and conducted by the National Conciliation and Mediation board, in
coordinationwithnongovernmentorganizations.
The legal infrastructure has also been laid down. With the
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promulgation of Republic Act 6715, voluntary arbitration has been

given a fresh impetus, with the expansion of the original and
exclusive jurisdiction of voluntary arbitration and those that they
mayhearanddecideuponagreementoftheparties.
Administrative support for the program is also very strong.

A whole division of the NCMB and its counterpart units in fifteen
(15) Regional Branches are tasked to promote the program over a
fiveyear period. The Tripartite Voluntary Arbitration Advisory
Council (TVAAC) has also been created solely for the purpose of
advising the NCMB on how to promote the voluntary arbitration
program. The greater challenge now faces labor and management
whose use and support of voluntary arbitration will spell the
differencebetweensuccessandfailure.
RepublicofthePhilippines
DepartmentofLaborandEmployment
NationalConciliationandMediationBoard
TRIPARTITEVOLUNTARYARBITRATIONADVISORY
COUNCIL
GroundFloor,DOLEBuilding,Intramuros,Manila
TelephoneNumbers:527346352734965273474
RESOLUTIONNO.1
Seriesof1999
AMENDINGANDCONSOLIDATINGTHEGUIDELINESON
THEFEESANDINTHEPROCESSINGANDPAYMENTOF
SUBSIDYENTITLEMENTFORVOLUNTARYARBITRATION
CASES
WHEREAS, Resolutions no. 1, 2 and 3, series of

1997, all of which were passed by the Tripartite Voluntary
Arbitration Advisory Council and approved by the Secretary
ofLaborandEmploymentonJanuary6,1997,establishedthe
Guidelines on Expedited Voluntary Arbitration Procedure,
revised the Guidelines on the Processing and Payment of
SubsidyEntitlementandtheGuidelinesforSubsidyUnderthe
Free Legal Aid and Voluntary Arbitration Services (FLAVAS)
program,respectively
WHEREAS, these guidelines need to be reviewed

periodically particularly in view of the changing times and
increasing costs of professional service and other expenses
incidentaltoarbitrationoflabordisputes
WHEREAS, to promote acceptance of voluntary

arbitration, there is a need to remove the burden of cost
fromtheparties
WHEREAS, the Council, during its 39th Special

Meeting held on 23 April 1999, resolved to revise the
Guidelines On Expedited Voluntary Arbitration Procedure and
consolidate under one general guidelines, subject to
appropriate distinctions as herein provided, all guidelines on
subsidies for cases falling under regular and expedited
voluntary arbitration procedures as well as cases falling
undertheFLAVASprogram
WHEREAS, the Council likewise resolved that the

subsidy should be provided only to parties who have no
capacitytopaythearbitratorsfees
WHEREFORE,pursuanttotheprovisionsofRepublic
Act. No. 6715 authorizing the Council to recommend
appropriate guidelines on the use of the Special Voluntary
Arbitration Fund particularly on subsidy, Resolution No. 3,
Series of 1997 is hereby incorporated and Resolution No. 2,
Seriesof1997isherebyamendedtoreadasfollows:
I.COVERAGE
The subsidy shall cover all arbitration cases whether

involving unionized or nonunionized establishments, upon
proof by either or both parties of lack of capacity to pay the
costofarbitrationinaccordancewithno.IIhereinandsubject
tothefollowingconditions:
A. UNDER REGULAR AND EXPEDITED

VOLUNTARYARBITRATIONCASES
The subsidy shall be provided to all arbitration

casesinvolvingunionizedestablishments.
B. UNDER THE FREE LEGAL AID AND

VOLUNTARYARBITRATIONSERVICES(FLAVAS)
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PROGRAM,thesubsidyshallbeavailabletothe
following:
1. Individual workers in establishments with no

unionsorwithnocollectivebargainingagreements
(CBAs)
2.Unionswhicharestillintheorganizational
stageand
3.Managementofdistressedcompaniesandsmall
andmediumenterprises(SMEs)
II.PROCEDURESANDREQUIREMENTS
Thesubsidyispayabletothevoluntaryarbitratororto
the Chairman and its members in case of panel of
voluntaryarbitratorsexceptincasesofreimbursementfor
amounts paid to the arbitrator or panel of arbitrators by
eitherparty,inwhichcaseitshallbepaidtotheunionor
thecompany,asthecasemaybe.
The request for subsidy shall be supported by the

following:
A. Dulyaccomplished request for Subsidy

EntitlementForm
B.CopyofDecisionorAward
C. For establishments with CBAs, copy of CBA or

CertificateofCBAREGISTRATION
D.CopyofSubmissionAgreement
E. In cases of reimbursement, proof of partial/full

paymenttothevoluntaryarbitrator
F.Waiver from the other party not availing of the

subsidy,whereappropriate.
All requests, accompanied by the aforementioned

documents shall be filed with the appropriate Regional
Branch.
III.AMOUNTOFSUBSIDY
A.As a rule, the amount of subsidy shall be

Ten Thousand Pesos (P10,000.00) for all types
of voluntary arbitration cases, except as specified
hereunder:
1)Fifteenthousandpesos(P15,000.00)shallbe
providedif:
a) The case is submitted under the Expedited

Voluntary Arbitration Procedure as laid down in
TVAACResolutionNo.2,seriesof1999.
b) The case is a rights dispute involving two

ormoreissues.
c) The case involves bargaining deadlock

regardlessofthenumberofissues.
2) Five thousand pesos (P5,000.00) shall be

providedifthecaseissubmittedundertheFLAVAS
program.
Theamountshallbedisposedofasfollows:
a) P1,000 shall be paid to the office of the
legalaid
b) P500 shall be remitted to the pava regional

chapter
c) P3,500 shall be paid to the voluntary

arbitrator
B. In instances where the case is settled

through a compromise agreement entered into by
the parties with the assistance of the Voluntary
Arbitrator,fullregularsubsidymaybegiventothe
parties should it appear to the satisfaction of the
Board that the compromise agreement is not
contrary to law, morals, good order and public
policyandenteredintoingoodfaithandnotsolely
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for the purpose of claiming the subsidy. The
subsidy under this provision can be availed of by
thesamepartiesonlyonce.Any agreement which
tantamounts to a mere withdrawal of the case is
excludedfromcoverageofthisprovision.
C. If both parties avail of the subsidy, the

applicable amount shall be applied in accordance
with the sharing scheme of the parties per CBA
provision. Should the sharing scheme provide for
6040 or 7030 or any sharing other than 5050,
forpurposesofsubsidy,theamounttobeprovided
shall be reversed, the bigger amount will be
appliedtolabor.Intheabsenceofanyscheme,the
subsidy shall be applied equally. However, in no
case shall the subsidy be more than the share of
eitherpartyintheagreedfeesofthearbitrator.
IV.SUPERSESSIONCLAUSE
Resolution No. 2, Series of 1997 Providing Guidelines

on the Fees and in the Processing of Payment of Subsidy
Entitlement for Regular Voluntary Arbitration Cases is hereby
amended. Resolution No. 3, series of 1997 providing
GuidelinesforSubsidyUndertheFreeLegalAidandVoluntary
Arbitration Services Program is hereby incorporated by
reference.
All other resolutions inconsistent with this are hereby

superseded.
V.APPROVALOFTHEGUIDELINES
Theseguidelinesshallbesubjecttotheapprovalofthe
SecretaryofLaborandEmployment.
NOW, THEREFORE, the Tripartite Voluntary

Arbitration Advisory Council has RESOLVED, as it is hereby
RESOLVED, that the National Conciliation and Mediation
Board shall observe and comply with the guidelines set forth
herein as approved by the Secretary of Labor and
Employment, in the administration of the Special Voluntary
Arbitration fund and in the use of the voluntary arbitration
subsidy.
APPROVED.
Manila,Philippines,November15,1999
(SGD.)BUENAVENTURAC.MAGSALIN
Chairman
(SGD.)BENEDICTOERNESTOR.BITONIO,JR.
MemberGovernmentSector
(SGD.)ROBERTOA.PADILLA
MemberLaborSector
(SGD.)EDGARC.RECIA
MemberLaborSector
(SGD.)RANULFOP.PAYOS
MemberEmployerSector
(SGD.)ANIANOG.BAGABALDO
APPROVED:
(SGD.)BIENVENIDOE.LAGUESMA
Secretary
COUNCIL
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RESOLUTIONNO2.
Seriesof1999
ESTABLISHINGTHEREVISEDEXPEDITEDPROCEDURES
FORVOLUNTARYARBITRATIONOFLABORMANAGEMENT
DISPUTES
WHEREAS, Resolution No. 1 series of 1997 was

passed by the Council on January, 1997 establishing the
Expedited Procedures for Voluntary Arbitration of Labor and
Managementdisputes
WHEREAS,theCouncilduringits39thSpecialMeeting
held on 23 April 1999 resolved to amend these guidelines to
further promote the expeditious settlement of labor disputes,
asfollows:
1. The procedures shall apply to all voluntary

arbitration cases handled by a single voluntary
arbitrator involving simple issue/s where hearings,
reception of evidences, submission of post hearing
briefs/ position papers, if necessary, and
promulgation of decision can be completed within
twenty (20) calendar days from submission of the
casetothearbitrator. However, this procedure shall
notapplytocasesfallingundertheFreeLegalAidand
VoluntaryArbitrationServices(FLAVAS)program.
2. The arbitrator shall meet the parties within

two(2)daysfromreferralofthecaseforarbitration.
For subsequent hearings, the arbitrator, with the
agreement or in consultation with the parties, shall
fixthedate,time,andplaceofthehearing.
3. The hearing shall be conducted by the

arbitrator in a manner that will expedite full
presentation of the evidence and arguments of the
parties. The arbitrator shall prepare minutes of the
proceedings duly signed the parties and attested to by
the arbitrator, and which shall form part of the
recordsofthecase.
4.Theawardshallbeinwriting,signed by the
arbitrator and rendered withintwenty(20)calendar
days from the date the case is submitted for
arbitration.
5. In case of compliance with this Resolution,

any party who has no capacity to pay the arbitrators
fee and upon approval of the application for subsidy
shall be entitled to a maximum subsidy of fifteen
thousand pesos (P15,000.00). Such subsidy shall be
paid directly to the voluntary arbitrator upon
submission of the documentary requirements by the
parties.
APPROVED.
Manila,Philippines,November15,1999.
(SGD.)BUENAVENTURAC.MAGSALIN
Chairman
MemberLaborSector
(SGD.)EDGARC.RECINA
MemberLaborSector
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APPROVED:
(SGD.)BIENVENIDOE.LAGUESMA
Secretary
COUNCIL
RESOLUTIONNO1.
Seriesof2001
WHEREAS, on 07 June 1999, The National

Conciliation and Mediation Board (NCMB), the Philippine
Overseas Employment Administration (POEA), the Seafarers
Unions Group and the Seafarers Employers Group entered
into a Memorandum of Agreement adopting the system of
voluntary arbitration as a mode of settling disputes between
theseafarersandtheiremployersprincipals
WHEREAS, said Memorandum of Agreement covers

theSeafarersUnionsandSeafarersEmployers Group in the
maritimeindustrywithcollectivebargainingagreements
WHEREAS, under said Memorandum of Agreement,

unresolved disputes involving seafarers and their employers
principalsarisingfromtheinterpretationorimplementationof
the Standard Employment Contract, the Shipping Article,
Collective Bargaining Agreement, the interpretation,
enforcement of company personnel policies at the worksite,
and other employeremployee relations cases involving
Filipino seafarers and their employers, principals and
contracting partners, including but not limited to causes
arising from contracts, disciplinary actions, or other cases
shallbesubmittedtovoluntaryarbitrationforresolution
WHEREAS, under the said Memorandum, the NCMB

has committees to provide subsidy to parties under Special
Voluntary Arbitration Fund in defraying the cost of voluntary
arbitration under the existing guidelines on availment of
subsidyandsuchotherguidelinesitmaypromulgate:
WHEREAS, on 15 November 1999, the Tripartite

Voluntary Arbitration Advisory Council (TVAAC) passed
Resolution No. 1, Series of 1999 which amends and
consolidates the guidelines on fees and on processing and
payment of subsidy entitlement for voluntary arbitration
cases
WHEREAS, during the 44th Special Meeting of the

TVAAC held on August 11, 2000 at the Office of the National
Conciliation and Mediation Board in Manila, the members of
the Council have agreed to extend the subsidy to maritime
voluntary arbitration cases covered by the aforementioned
Memorandum of Agreement, subject to existing guidelines on
theavailmentofsubsidy
WHEREFORE, pursuant to the provisions of Republic

Act. No. 6715 authorizing the TVAAC to recommend
appropriate guidelines on the use of the Special Voluntary
Arbitration Fund particularly on subsidy, Resolution No. 1,
Seriesof1999isherebymadeapplicablealsotoallmaritime
disputesasdefinedundertheabovementionedMemorandum
ofAgreement.
APPROVED.
Manila,Philippines,11April,2001.
(SGD.)ROLANDORICOC.OLALIA
Chairperson,TVAAC
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MemberLaborSector
(SGD.)EDGARC.RECINA
MemberLaborSector
APPROVED:
(SGD.)PATRICIAA.STO.TOMAS
Secretary
NATIONALCONCILIATIONANDMEDIATIONBOARD
Intramuros,Manila
REQUESTFORSUBSIDYENTITLEMENT
PursuanttoRevisedGuidelinesontheUtilizationof
theSpecialVoluntaryArbitrationFundonthegrantofsubsidy,
the undersigned party/parties request for entitlement under
the following circumstances (PLEASE CHECK APPLICABLE
CONDITIONS):
1.Partiesavailingofthesubsidy
WearepartytoadulysignedCBAwithDOLE.
WearepartytoaCBAnotyetregisteredwithDOLE,a
copyofwhichisattached.
Weareapartynotrepresentedbydulyrecognized
union.
Weareapartybelongingtotheunorganizedsector.
2.Reasonsforavailingthesubsidy
The Voluntary Fund provided in our CBA is insufficient

as we are able to shoulder the part of the cost of
voluntary arbitrators fees in the amount of
P____________.
Due to financial and budgetary constraints we are

unable to pay the remaining balance of the total cost
of the proceedings, especially the voluntary
arbitratorsfeescorrespondingtoourshare.
Wehavenofundtopayforthevoluntaryarbitrators
fees.
Otherreasons,pleasespecify
__________________________________________
__________________________________________________________________
__________________________________________________________________
3.ProcedureUtilized
Expedited Voluntary Arbitration Procedure (decided

within 20 calendar days from date of submission to
arbitration)
RegularVoluntaryArbitrationCaseProcedure
Free Legal Aid and Voluntary Arbitration Services

(FLAVAS)
4.Relevantinformationareasfollows:
a)Parties:
Union:_________________________________________
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Management:
________________________________________________
b)NameofArbitrator:
______________________________Acc.No.______
c)Issue/sinvolved
____________________________________________
________________________________________________________
d)DateSubmittedtoArbitration
_____________________
e)DateSubmittedforDecision
______________________
f)DateDecided
_________________________________
g)TotalCostofArbitration(including
Counsel/LawyersFees)P____________
UnionShareP_______________Management
ShareP________________
h)CostSharingSchemeunderCBA
Union______________%
Management__________________%
i)AmountPaidtoArbitratorP
______________________
j)AmountofSubsidyRequestedP
___________________
PayabletoArbitrator
ReimbursabletoRequestingParty
The other party is not availing of the

Subsidy(Pleasecheckifapplicable)
In support of this request, we submit herewith the

followingdocumentaryrequirements:
AuthenticatedcopyoftheCertificateofCBA
Registration
CopyofUnregisteredCBA
Photocopy of CBA Provision on Grievance

Machinery
and
Voluntary
Arbitration
authenticated by both parties (In its absence,
costsharingschemeshallbe50%50%)
CopyofSubmissionAgreement
CopyofDecision/Award
Waiver from the other party not availing of the

Subsidy,whereapplicable
Proof of Partial/Full Payment to the arbitrator

(forreimbursementonly)
Submittedby:
_____________________________________
SignatureoverPrintedName
______________________
Position

_____________________________________________
REQUESTINGPARTY
Attestedby:
_________________________________
VoluntaryArbitrator
__________________
AccreditationNumber
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RegionalBranchNo.__________
SUMMISSIONAGREEMENT
FOREXPEDITEDVOLUNTARYARBITRATION
PROCEDURES
Date
_________________________
Thepartiesherein,afterexhaustingtheproceduresof
the grievance machinery, do hereby agree to adopt the
expedited voluntary arbitration procedure pursuant to TVAAC
ResolutionNo.1,Seriesof1999.
TOSUBMITtoarbitrationthefollowingissue/s:
_______________________________________________________________________________________________________________________________________
TO DESIGNATE AND APPOINT

________________________
asthevoluntaryarbitrator
TOABIDEBYandcomplywiththeDecision/Order/
Resolution / Award of the Arbitrator on the issues submitted
for arbitration and to accept the same as final and biding
uponthepartiesherein.
TOPAYthearbitratorsfeesinaccordancewiththe
proportionate sharing scheme under the CBA and in the
absence or insufficiency of funds, to avail of the subsidy
pursuanttoexistingTVAACguidelines.
EMPLOYER:
___________________________________________________________
Address:
_______________________________________________________________
Telephone No. ________________________________ Fax No.

____________________
Represented by: ___________________________________

Position:_______________
UNION:
________________________________________________________________
Address:
_______________________________________________________________

____________________
Represented by: ___________________________________

Position:_______________
CONFORME:
_____________________________
_______________________________
Union
Management
_________________________
VoluntaryArbitrator
_________________________
DateAccepted
RegionalBranchNo.__________
SUMMISSIONAGREEMENT
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Date_________________________
Thepartiesherein,afterexhaustingtheprocedures
ofthegrievancemachinery,doherebyagree:
TOSUBMITtoarbitrationthefollowingissue/s:
_______________________________________________________________________________________________________________________________________
TO DESIGNATE AND APPOINT

___________________________________ as the voluntary
arbitratororthefollowingaspanelofarbitratorsinthiscase.
1. __________________________________,
Chairman
2.__________________________________,Member
3.__________________________________,Member
TOABIDEBYandcomplywiththeDecision/Order/
Resolution/AwardoftheArbitrator/PanelofArbitratorsonthe
issues submitted for arbitration and to accept the same as
finalandbindinguponthepartiesherein.
TOPAYthearbitratorsfeesinaccordancewiththe
proportionate sharing scheme under the CBA and in the
absence or insufficiency of funds, to avail of the subsidy
pursuanttoexistingTVAACguidelines.
EMPLOYER:
___________________________________________________________
Address:
_______________________________________________________________

____________________
Represented by: ___________________________________

Position:_______________
UNION:
________________________________________________________________
Address:
_______________________________________________________________

____________________
Represented by: ___________________________________

Position:_______________
CONFORME:
_____________________________
_______________________________
Union
Management
_________________________
VoluntaryArbitrator
_________________________
DateAccepted
REFERENCES
ArbitrationAssociationofthePhilippines(AAP)andFederacion
InternationalAbogadas(FIOA).VoluntaryArbitration
WhysandWhereforesQuezonCity:RexPrintingCo.,
Inc.1987.
AsianAmerican Free Labor Institute (AAFLI), Arbitration

Association of the Philippines (AAP), Department of
Labor (DOL), Open Symposium on Arbitration.
QuezonCity,1974
AsianAmerican Free Labor Institute (AAFLI)Washington,

Contract Interpretation and Application. Labor
ManagementArbitration,Washington,1975.
Bautista, Rosa Maria J., Hearing Procedures in Voluntary

Arbitration, Institute on Grievance Settlement and
VoluntaryArbitration,BaguioCity,1989.
Diamonon,JesusB.,TheCollectiveBargainingAgreement:
45/50
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Its Content, Interpretation and Enforcement,
Institute on Grievance Settlement and Voluntary
Arbitration,Bacolod,CagayandeOroCity,BaguioCity
andQuezonCity,1989.
Elkouri, Frank and Edna Asper Elkouri, How Arbitration

Works, 4th ed., Washington, D.C.: Bureau of National
Affairs,Inc.1985.
Fernandez,PerfectoV.,LaborArbitration, Quezon City: Tala

PublishingCorporation,1975.
ILO/UNDP/ASEAN Programme on Industrial Relations for

Development,VoluntaryandCompulsoryArbitration
ofLaborDisputes. International Labour Organization,
1988.
LaborCodeofthePhilippines,1985Edition.
Magnaye, Bienvenido, Company Personnel Policies,

Institute on Grievance Settlement and Voluntary
Arbitration, Bacolod City and Cagayan de Oro City.
1989.
National Conciliation and Mediation Board, Department of

Labor and Employment, Basic Documents on
Voluntary Arbitration of LaborManagement
Disputes.Manila,1992RevisedEdition.
Trade Union Congress of the Philippines, Manual for Shop

Stewards, Department of Education and Research,
TUCP.
TUCP/AAFLI, Voluntary Arbitration in the Philippines, How

toMakeitWork,1981.
RepublicActNo.6727.
RepublicActNo.6971.
PROJECTSTAFF
ProjectDirector:RosalindaD.
Baldoz
ProjectCoordinators:GilbertD.
Pimentel
ElenitaM.
Francisco
TechnicalStaff:JaliloO.delaTorre
IsidroL.Cepeda
Ma.ShirleyI.
Saguinsin
EditorialStaff:ReydeluzD.Conferido
JeffreyD.Cortazar
AdministrativeStaff:TeresitaF.
Eugenio
ArthurR.Audea
EmmanuelT.
Diones
CeciliaP.Lanuzo
PrintingandPublication:JosefinaO.
Santos
JuniceM.Osunero
TeresitaD.
Rolluda
BoardofConsultants:
BuenaventuraC.Magsalin
JesusB.Diamonon
CiceroD.Calderon
FroilanM.Bacungan
HermanM.Montenegro
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PrimeronGrievance
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Primer On Grievance

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Primer On Grievance

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12/10/2015

For better appreciation of the subject, the Primer traces

The various topics on the main subject of voluntary

The topic on Arbitration Cost and Special Voluntary

With the continued support from government, labor and

The present national policy on labor dispute settlement is

The State shall promote the principle of shared

(b) To provide an adequate administrative

Philippine labor policy may be said to have evolved over

On the enactment of CA 103, the highly respected

In 1953, Republic Act No. 875 was enacted

2. It made grievance procedure a

3. It provided that before assuming

What appears to be the hallmark of this period in so

settlement. By virtue of Executive Order No. 126 which

Republic Act 6715 introduced amendments to the

Definitely. Republic Act 6715 now provides for the

Secondly, it is now the policy of the State to encourage

B.Article 261, which provides for the original

D. The same article enjoins the NLRC, its

E. Moreover, under Article 262, upon

F. Lastly, in case issues arising from the CBA

A grievance is defined as any question by either the

The grievance referred to in the technical or restricted

In the technical or restricted sense, there is a grievance

8. Are all grievances arising from the

Art.261,on the other hand, directs the NLRC, its Regional

Every collective agreement usually contains noneconomic

Personnel policies are guiding principles stated in broad,

Rules and regulations governing personnel discipline may

The grievanceprocedure is the series of formal steps that

Legally speaking, the grievance procedure is an appeal

13. Are there minimum legal requirements for the

In most collective agreements, the provision of

14. Can there be a collective bargaining agreement

The following standards are suggested in the formulation of

1. Collective bargaining agreements should

1.The agreement should provide

2. Issues should be clearly

3.Management and union should

4. Provision should be made for

d.The procedure should be open to the

3. Management and unions should inform and

a. That the basic objective of the

d. That the willingness of management

16. What are the usual steps in the Grievance

Commissioner Jesus B. Diamonon of the Tripartite Voluntary

According to him, the grievance procedure has two (2)

17. What is the interrelationship between the

It is of vital importance that the interrelationship of the two

Theadvantages of fewer stages in the grievance procedure

The multistage procedure has the following advantages: (1)

Its disadvantages are: (1) it is wasteful of personnel time

The parties attitude in handling grievances, probably more

Both stewards and foreman should make every effort to

The Labor Code fixes the scope or coverage of the grievance

The voluntary arbitrator or panel of voluntary arbitrators

The Commission, its Regional Offices and the Regional