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MEMORANDUM

To: Atty. Joy Casis


From: Continuado, Abi
Miranda, Raniel
Ong, Gregory
Palma, Isa
Re:
Reasons for Philippine Compliance with ILO Convention 98 Right to Organise and
Collective Bargaining Convention, 1949
Date: November 18, 2014
x-----------------------------------------------------------------------------------------------------------------x
Introduction
This paper will discuss the measures taken by the Philippine
government as a signatory of ILO Convention No. 98 entitled, Right to
Organize and Collective Bargaining Convention which was adopted in
Geneva, on 1 July 1949.
In order to observe compliance, the provisions in the said Convention
has been incorporated in the Philippine Labor Code as well as other
administrative rules such as the Manifesto issued by the Department of
Labor and Employment in cooperation with the Philippine National Police.
As such, the workers are placed in paramount consideration when it
comes to collective bargaining agreements and the right to organize.
Particularly, the State has declared its policy to promote and emphasize the
primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor
or industrial disputes and to promote free trade unionism as an
instrument for the enhancement of democracy and the promotion of social
justice and development;
The rights of employees to participate in policy or decision-making on
matters affecting their rights, duties and welfare is guaranteed in the
Constitution and reinforced in the Labor Code and Supreme Court Rulings. 1
And such right, According to Art. 256 of the Labor Code, shall not be
abridged.2
1. Unfair Labor Practices
ILO Convention No. 98, Article I provides:

1 Azucena, The Labor Code with Comments and Cases, 8th ed., Vol II-A and Vol II-B, p17
2 Labor Code of the Philippines, Art. 256

1. Workers shall enjoy adequate protection against


acts of anti-union discrimination in respect of their
employment.
2. Such protection shall apply more particularly in
respect of acts calculated to-(a) make the employment of a worker subject to the
condition that he
shall not join a union or shall
relinquish trade union membership;
(b) cause the dismissal of or otherwise prejudice a
worker by reason
of union membership or because of
participation in union activities
outside
working
hours or, with the consent of the employer, within
working hours.
ILO Convention 98 was adopted in Geneva in 1 July 1949. It came into
force on 18 July 1951, and the Philippines ratified it on 29 December 1953.
It is considered to still be in force in the Philippines today. The acts
contemplated under Art 1 of ILO Convention 98 are considered unfair labor
practices on the part of management under the Labor Code of the
Philippines. B.P. 130 last amended this provision in 1981, and is currently
stated as:
Art. 249. Unfair labor practices of labor organizations. It
shall be unfair labor
practice for a labor organization, its
officers, agents or representatives:
1. To restrain or coerce employees in the exercise of their
right to selforganization. However, a labor organization
shall have the right to prescribe
its own rules with respect to
the acquisition or retention of membership;
2. To cause or attempt to cause an employer to
discriminate against an
employee, including discrimination
against an employee with respect to
whom membership in
such organization has been denied or to terminate an
employee on any ground other than the usual terms and
conditions under which
membership
or
continuation
of
membership is made available to other members;
3. To violate the duty, or refuse to bargain collectively with
the employer,
provided it is the representative of the
employees;
4. To cause or attempt to cause an employer to pay or
deliver or agree to pay or deliver any money or other things of
value, in the nature of an exaction,
for services which are
not performed or not to be performed, including the demand for
fee for union negotiations;

5. To ask for or accept negotiation or attorneys fees from


employers as part
of the settlement of any issue in
collective bargaining or any other dispute; or
6. To violate a collective bargaining agreement.
The
provisions
of
the
preceding
paragraph
notwithstanding, only the
officers, members of governing
boards, representatives or agents or members of
labor
associations or organizations who have actually participated in,
authorized or ratified unfair labor practices shall be held
criminally liable. (As
amended by Batas Pambansa Bilang 130,
August 21, 1981)
The Philippines, in recognizing the acts mentioned under Art 1 of ILO
Convention 98 as unfair labor practices, places these acts under the
jurisdiction of the Labor Arbiters and the NLRC, or Voluntary Arbiters in
case the parties agree to refer the case to them.3 These acts are also
considered to be criminal acts under Philippine law. 4 Unfair labor practices
also give employees the right to strike provided that the procedures
required under the law are complied with.5
The strictness of these provisions should effectively deter
management authorities from violating the rights of labors to freely
associate, as guaranteed under the 1987 Philippine Constitution. Moreover,
making these acts criminal acts ensures that there will be accountability for
particular persons who commit these acts.
Azucena, citing Rothenberg on Labor Relations, states that [w]here,
however, an employer does violate the Act and is found guilty of the
commission of an unfair labor practice, it is no excuse that his conduct was
unintentional and innocent.6
Philippine jurisprudence is also rich with cases on unfair labor
practices committed by the employer, and the Supreme Court has indeed
ruled in favor of labor in several cases where discrimination on account of
unionism was alleged.7
2. Non-Interference by Employers and Labor Organizations
ILO Convention No. 98, Article II provides:
1. Workers' and employers' organisations shall enjoy
adequate protection against any acts of interference by
each other or each other's agents or members in their
establishment, functioning or administration.
3 Labor Code of the Philippines, Art 217
4 Id, at Art 247
5 Id, at Art 263
6 Azucena, The Labor Code with Comments and Cases, 8th ed., Vol II-A and Vol II-B, p297
7 See the case of Dabuet et al v. Roche Pharmaceuticals, Inc. No. L-45402, April 30, 1987.

2. In particular, acts which are designed to promote the


establishment of workers' organisations under the
domination of employers or employers' organisations, or
to support workers' organisations by financial or other
means, with the object of placing such organisations
under
the
control
of
employers
or
employers'
organisations, shall be deemed to constitute acts of
interference within the meaning of this Article.
First, labor unions, as collective entities, may represent its members
on issues involving unfair labor practices and money claims, without having
to join each member as a party. In Pampanga Sugar Development Co., Inc
vs. CIR8, the Court ruled that the company's act in securing 53 quitclaims
without involving the union amounts to sabotage, is evidence of bad faith,
and violates good morals.
Second, one seeming impediment to compliance with ILO C98 is Article 254
of the Labor Code which provides for the ineligibility of managerial and
confidential employees to join any labor organization. This is due to loyalty,
conflict of interest, and practical issues. However, the status of managerial
(including supervisory) and confidential employees are not necessarily
incompatible with ILO C98. First, "such workers have the right to form their
own associations to defend their interests."9 Second, "the categories of such
staff are not defined so broadly as to weaken the organization of other
workers in the enterprise or branch of activity by depriving them of a
substantial portion of their present or potential membership."10
Third, non-interference by the employers is provided for in Article 258 of
the Labor Code and the Supreme Court has consistently been strict in the
interpretation of the concept of non-interference by the employer. Article
258(a) states that it shall be unlawful for the employer "to interfere with,
restrain or coerce employees in the exercise of their right to selforganization." Clearly, outright and unconcealed intimidation is an obvious
form of interference but it is not unusual that interference is practiced in a
more covert and disguised manner to escape detection. 11 Thus, the strict
interpretation provided for by the Supreme Court. First, questioning or
interrogation by employers, in order not to be deemed coercive, must be
done in a voluntary and informed manner.12 Interrogation does not, in itself,
constitute unfair labor practice but, the circumstances of a particular case
may make it such.13 Second, interference may constitute unfair labor
8 114 SCRA 725 (1982)
9 Azucena, p274, citing Neville Rubin [ed.], Code of International Labor Law,
Cambridge (2005), pp. 130-31.
10 id.
11 id, p.303.
12 International Union of Operating Engineers vs. NLRB, 353 F 2d 852.
13 Philippine Steam Navigation vs. Philippine Marine Officers guild, 15 SCRA 174.

practice even if it occurs four months before the union's organizational


meeting and more than a year before it's registration. 14 Third, it is unlawful
to prohibit organizing activities in company premises both during working
and non-working time. 15Fourth, even surveillance, through the presence of
supervisors near the place where a union meeting was being held, though
subtle, may constitute unlawful interference, not so much on the purpose of
the employer but rather, on the fact of pressure, threat of economic
coercion, or retaliation on the employees for their union activities. 16 Fifth,
the announcement by an employer of benefits prior to a representation
election was held by the Court as constituting unfair labor practice. 17 In
such cases, the Court has applied the "totality of conduct doctrine" wherein
"the culpability of employer's remarks was to be evaluated not only on the
basis of their implications, but against the background of and in conjunction
with collateral circumstances."18 Lastly, mass layoffs, lockouts, and closures
as a means of camouflaging profits or to dissuade employees from
exercising their right to organize also constitutes unfair labor practice.19
Fourth, on unfair labor practices of labor organizations, Article 259(a) of the
Labor Code only states "to restrain or coerce employees in the exercise of
their right to self-organization." Unlike in the case of employers, unfair
labor practice by labor organizations includes restraint and coercion, but
not interference. According to Azucena, "interference by a labor
organization is not U.L.P. because interfering in the exercise of the right to
organize is itself a function of self-organizing... manifestations of union
dynamics and democracy whose ultimate beneficiaries presumably will be
the workers themselves."20
3. Primacy of Free Collective Bargaining and Negotiation
ILO Convention No. 98, Article III and IV provides:
(Article 3) Machinery appropriate to national conditions
shall be established, where necessary, for the purpose of
ensuring respect for the right to organise as defined in
the preceding Articles.
(Article 4) Measures appropriate to national conditions
shall be taken, where necessary, to encourage and
14 Azucena, p. 304-5.
15 Mathews and Co. vs. NLRB, 52 LC 24, 024.
16 Henriz Manufacturing Co. vs. NLRB, 321 F 2d 00; Mathews and Co. vs. NLRB,
52 LC 24-024.
17 Re: Hancock Fabric Outlet, 175 NLRB No. 42.
18 Azucena, p. 308.
19 Madrigal and Company, Inc. vs. Zamora, G.R. No. L-4823, June 30, 1987; Sy
Chie Junk Shop vs. Federacion Obrero de la Industria, G.R. No. 30964, May 9,
1988.
20 Azucena, p. 348.

promote the full development and utilisation of machinery


for
voluntary
negotiation
between
employers
or
employers' organisations and workers' organisations, with
a view to the regulation of terms and conditions of
employment by means of collective agreements.
These were incorporated in the Labor Code, Art. 211, which provides:
Art. 211. Declaration of Policy.
It is the policy of the State:
1. To promote and emphasize the primacy of
free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of
settling labor or industrial disputes;
2. To promote free trade unionism as an
instrument for the enhancement of democracy and the
promotion of social justice and development;
3. To
foster
the
free
and
voluntary
organization of a strong and united labor movement;
4. To promote the enlightenment of workers
concerning their rights and obligations as union members and
as employees;
5. To provide an adequate administrative
machinery for the expeditious settlement of labor or industrial
disputes;
6. To ensure a stable but dynamic and just
industrial peace; and
7. To ensure the participation of workers in
decision and policy-making processes affecting their rights,
duties and welfare.
8. To encourage a truly democratic method of
regulating the relations between the employers and employees
by means of agreements freely entered into through collective
bargaining, no court or administrative agency or official shall
have the power to set or fix wages, rates of pay, hours of work
or other terms and conditions of employment, except as
otherwise provided under this Code. (As amended by Section 3,
Republic Act No. 6715, March 21, 1989)
With the policy of promoting free bargaining and negotiations, Art.
261 of the Labor Code allows the parties to devise more expeditious means
of bargaining than those confined in the Labor Code. They are given the
freedom with regard to the subject the matter and the manner of the
negotiations.
The State recognizes the union as the vehicle for laborers to air their
grievances as well as to exercise their right of collective bargaining.

Therefore, the laborers are given freedom to elect their own officers to
negotiate terms of the collective bargaining agreement with the employers.
The union is the tool for the workers to exercise their constitutional right to
participate in policy-making.
In addition, the State also recognized the various modes of labormanagement interactions that it has incorporated Article 266 of the Labor
Code which authorizes the creation of a labor management council 21 and
Article 291 which deals with management cooperation programs 22. Also,
Department Order No. 40, series of 2003, which allows the formation of
Workers Association for the mutual aid and protection of its members or
for any legitimate purpose other than collective bargaining23.
As such, the State has widened the avenue for laborers to be able to
exercise their constitutional right to take part in policy-making for their
welfare.
Moreover the Supreme Court recognized the paramount importance
of the right to unionize to enable to be on equal footing with the
management so as not to compromise the welfare of the workers. It is the
policy of the State to promote unionism to enable the workers to negotiate
with management on the same level and with more persuasiveness than if
they were to individually and independently bargain for the improvement of
their respective conditions. To this end, the Constitution guarantees to them
the rights to self-organization, collective bargaining and negotiations and
peaceful concerted actions including the right to strike in accordance with
law.24.
Conciliation, Mediation and Arbitration are considered as the
Alternative Dispute Resolution. These are modes for expeditious resolution
of labor disputes. These are under the jurisdiction of the National
Conciliation and Mediation Board to ensure that the rights to organize and
voluntary negotiation are dealt with expeditiously without sacrificing the
substantive rights of the laborers.
E.O. 126 created the National Conciliation and Mediation Board which
absorbed the conciliation, mediation and voluntary arbitration functions of
the Bureau of Labor Relations.
Section 22 provides for the Boards
functions:
1.
Formulate policies, programs, standards,
procedures, manuals of operation and guidelines pertaining
to effective mediation and conciliation of labor
disputes;
2.
Perform
preventive
mediation
and
conciliation functions;
21 Labor Code of the Philippines, Art. 266
22 Id, Art. 291
23 Department Order No. 40, Series of 2003
24 BPI v. BPI Employees Union Davao Chapter, 627 SCRA 590

3.
Coordinate and maintain linkages with
other sectors or institutions, and other government
authorities concerned with matters relative to the prevention
and settlement of labor disputes;
4.
Formulate
policies,
plans,
programs,
standards, procedures, manuals of operation and guidelines
pertaining to the promotion of cooperative and nonadversarial schemes, grievance handling, voluntary
arbitration and other voluntary modes of dispute
settlement;
5.
Administer
the
voluntary
arbitration
program; maintain/update a list of voluntary arbitrations;
compile arbitration awards and decisions;
6.
Provide
counselling
and
preventive
mediation assistance particularly in the administration of
collective agreements;
7.
Monitor and exercise technical supervision
over the Board programs being implemented in the regional
offices; and
8.
Perform such other functions as may be
provided by law or assigned by the Minister.25
Recently, there has been a movement towards the utilization of a
grievance machinery in order to expedite proceedings of labor disputes.
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 implantation 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 labor-management disputes other than those arising from the
interpretation and implementation of collective bargaining agreement and
company personnel policies. This policy is operationalized by the following
provisions:
A.Article 260 of the Labor Code, as amended by 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 the CBA. The seven calendar days shall be reckoned from the
25 Executive Order No. 126

date the grievance is submitted to the last step in the grievance machinery
immediately prior to voluntary arbitration.
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 and those arising from the
interpretation or enforcement of company personnel policies. With this
amendment, the original and exclusive jurisdiction of voluntary arbitrators
has been tremendously expanded.
C.Article 261 provides that CBA violations are to be treated as
grievances instead of unfair labor practice acts except when the violation is
gross, meaning, it involves flagrant and/or malicious refusal to comply with
the economic provisions of the CBA.
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 jurisdiction of the voluntary arbitrator. If any of such
cases it 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 also hear and decide all other labor disputes
including unfair labor practices and bargaining deadlocks.
F.Lastly, in case issues arising from CBA interpretation and
implementation or those arising from the interpretation or enforcement of
company personnel policies are made as grounds for notices of strikes or
lockouts or requests for preventive mediation, the NCMB shall advise the
parties to submit the issue/s to voluntary arbitration (Rule XI, Section 2,
Implementing Rules, Labor Code).26
Through the methods provided for by law, the mode of collective bargaining
agreements and unionism has paved the way to empower the laborers to
exercise their constitutional right. The rise of labor unions has enabled the
workers to take a stand for their rights and to fight against the unilateral
powers of the management.
4. Partnership Between the Department of Labor and Employment
and the Philippine National Police
ILO Convention No. 98, Article V provides:
1. The extent to which the guarantees provided for in this
Convention shall apply to the armed forces and the police
shall be determined by national laws or regulations.
2. In accordance with the principle set forth in paragraph
8 of Article 19 of the Constitution of the International
26 Trends on Voluntary Arbitration, 263 SCRA 372 (1996).

Labour Organisation the ratification of this Convention by


any Member shall not be deemed to affect any existing
law, award, custom or agreement in virtue of which
members of the armed forces or the police enjoy any right
guaranteed by this Convention.
In order to comply with ILO no. 98, the Department of Labor and
Employment and the Philippine national Police issued the Manifesto of
Commitment dated December 2011, recognizing the need to hold social
dialogue and build and develop coordinative works to improve observance
with the provisions of the Constitution, the Labor Code, the Universal
Declaration of Human Rights and the different International Labor
Standards.
The PNP and DOLE commit to promote and protect human rights and
workers rights at all times in pursuit of lasting peace based on social
justice. Also, to conduct social dialogue to ensure observance of the
Manifesto.
Conclusion
During the previous administration of President Gloria MacapagalArroyo, Kilusang Mayo Uno (KMU) Secretary General Roger Soluta,
submitted a complaint to the ILO mission, alleging government violations to
ILO Conventions 87 and 98, of which the Philippine government is a
signatory.27 The allegations were based on the fact that numerous Filipno
unionists have been summarily killed, illegally jailed, harassed, and
abducted in militarized factories and communities, and during rallies and
strikes where excessive force was being used as in the case of Hacienda
Luisita.28 It should be pointed out that the Philippines is one of only three
countries (including Cambodia and Indonesia) in the ASEAN to have ratified
the eight core ILO conventions, which include ILO Convention 98. 29 In the
case of the United States, as with other countries, the ratification of ILO
core labor standards has not been successful due to the numerous legal
impediments which would broaden the scope of Collective Bargaining
Agreements, restrict limitations on strike and lockouts, and modify burden
27 Philippine Daily Inquirer, 2009. ILO urged: Probe Labor Rights Violations,
retrieved from
http://globalnation.inquirer.net/cebudailynews/news/view/20090921-226204/ILOurged-Probe-labor-rights-violations (last accessed 18 Nov 2014).
28 International Labor Rights Forum, 2009. High Hopes for ILO's 1st High Level
Mission to the Philippines, retrieved from http://www.laborrights.org/in-thenews/high-hopes-ilo%E2%80%99s-1st-high-level-mission-philippines (last accessed
18 Nov 2014).
29 Karen Ann Tangonan, 2014. Country Report: Philippines. ILO/ACTRAV Course
Trade Union Training on Labor Law Reforms for Decent Work in Asia.

of proof and remedies, to name a few, all requiring substantial legislation. 30


However, in the Philippines, the issue of compliance or non-compliance with
ILO conventions, such as ILO Convention 98, is more of a political issue
rather than a legal issue. Though the unionization rates and extent of CBA
coverage in the Philippines is on a steady decline and that such statistics
"reveal the fiction of Philippine worker representation," 31 compliance with
ILO Convention 98 does not face substantial legal impediments.
Various laws and labor code provisions already provide for a comprehensive
social protection and social security rights for workers. First, this is present
in Article III, Section 8 and Article VIII, Section 3 of the Philippine
Constitution on the right to form unions and on the full protection of labor,
respectively. Second, aside from the labor code provisions mentioned above,
Article 4 of the Labor Code provides for construction in favor of labor.
Together with the relevant jurisprudence on the matter of right to organize
and collective bargaining, Philippine laws and labor provisions
comprehensively point towards the capability of legal and effective
compliance with ILO Convention 98.

30 United States Council for International Business, 2007. Issue Analysis: US


Ratification of ILO Core Labor Standards, retrieved from
http://www.uscib.org/docs/US_Ratification_of_ILO_Core_Conventions.pdf (last
accessed 14 Nov 2014).
31 Maragtas Amante, 2007. How to Believe in Philippine Decent Work Statistics,
retrieved from http://www.nscb.gov.ph/ncs/10thNCS/papers/invited%20papers/ips22/ips-22-02.pdf (last accessed 14 Nov 2014).