GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION

ART. 260.Grievance machinery and voluntary arbitration.- The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies.

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 Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above.

COMMENT:

Grievance

-­‐ is a dispute or controversy between an employer and the collective bargaining agent, individual employee or group of employees, arising from interpretation or implementation of the collective bargaining agreement or interpretation or enforcement of company personnel policies.

Grievance Machinery

-­‐ where grievances are processed which the parties to a collective bargaining agreement are required to establish under Article 260 of the Labor Code.

If NO Grievance Machinery provided in the Collective Bargaining Agreement

-­‐ the parties are required to create, within ten (10) days from signing of the collective bargaining agreement, a grievance committee to be composed of at least two(2) representatives from the members of the bargaining unit(which shall be designated by the union) and at least two(2) from the employer.

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

Grievance Procedure

The following procedures shall be observed, UNLESS a different procedure is prescribed in the collective bargaining agreement:

a. - An employee shall present his grievance or complaint orally or in writing to the shop steward.

- Upon receipt thereof, the shop steward shall verify the facts and determine whether or not the grievance is valid.

b. - if the grievance is VALID, the shop steward shall immediately bring the complaint to the employee’s immediate supervisor.

- the shop steward, the employee and his immediate supervisor shall exert efforts to settle the grievance at their level.

c. if No settlement is reached, the grievance shall be referred to the grievance committee which shall have ten (10) days to decide the case.

Grievance Handling - Part of the Collective Bargaining Process

-­‐ it is a continuous process

-­‐ the duty to bargain collectively imposes upon the parties during the term of their agreement to meet and confer promptly and expeditiously ad in good faith for the purpose of adjusting any grievance or question arising under such agreement.

Voluntary Arbitration

-­‐ is a system whereby the parties agree to refer their dispute to an impartial third person for a final and binding resolution, UNLIKE in compulsory arbitration in which the third party is appointed by the government.

ART.261.Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators.- 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 arising from the interpretation or enforcement of company personnel 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 Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

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 Arbitrators and shall immediately dispose and refer the same to

the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.

COMMENT:

Voluntary Arbitrator

-­‐ is a person accredited as such by the National Conciliation and Mediation Board;or

-­‐ any person chosen or designated by the parties in the collective bargaining agreement;or

-­‐ one chosen with or without the assistance of the National Conciliation and Mediation Board pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement;or -­‐ any official who may be authorized by the

Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute, whose function is to resolve the disputes submitted to it by the parties.

Jurisdiction of Voluntary Arbitrators Original and Exclusive Jurisdiction

a. unresolved grievance arising from interpretation or implementation of a collective bargaining agreement;

b. unresolved grievance arising from interpretation or enforcement of company personnel policies;

c. disputes arising from wage distortion caused by the application any wage order in organized establishments; and

d. disputes arising from interpretation and implementation of the productivity incentive programs under RA No. 6971

Jurisdictional Preconditions

A voluntary arbitrator can acquire jurisdiction over the foregoing disputes only when the following conditions have been complied with:

a. the dispute has been brought to the grievance machinery for resolution;

b. the grievance machinery failed to resolve the dispute; and

c. the parties agree to submit the dispute for voluntary arbitration.

Jurisdiction Over Termination Disputes General Rule:

Disputes over the validity of dismissal or severance of employment do not fall within the jurisdiction of voluntary arbitrators BUT within the original and exclusive jurisdiction of the Labor Arbiter.

Exception:

Disputes over the validity of dismissal or severance of employment will fall within the jurisdiction of voluntary arbitrators only when the issue pertains to interpretation or

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

implementatation of a collective bargaining agreement or company personnel policy.

Case involving “interpretation or implementation of collective bargaining agreemen or company personnel policies” vs. case involving “termination”

ü Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the GRIEVANCE MACHINERY set up in the collective bargaining agreement OR to VOLUNTARY ARBITRATION.

ü Where there was already actual termination, i.e., violation of rights, it is already cognizable by the LABOR ARBITER.

CASE: Sanyo Philippines Workers Union v. Canizares 211 SCRA 361

FACTS:PSSLU had an existing collective bargaining with Sanyo Philippines, Inc. which contains a union security clause. On account of anti-union activities, disloyalty and for joining another union, PSSLU expelled twelve (12) employees from the Union. As a result, PSSLU recommended the dismissal of said employees pursuant to the aforequoted union security clause in the CBA. Sanyo approved the recommendation and considered the said employees dismissal. The dismissed employees filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal. PSSLU maintained that the jurisdiction belonged to the voluntary arbitrator.

ISSUE: Whether or not the voluntary arbitrator has jurisdiction over the case.

HELD: The voluntary arbitrator has no jurisdiction over the case. There is no grievance between the union and management which could be brought to the grievance machinery. The dispute is between PSSLU and Sanyo, on the one hand, and the dismissed union members, on the other hand. The dispute, therefore, does not involve interpretation or implementation of a collective bargaining agreement.

CASE: Pantranco North Express Inc. v. NLRC 259 SCRA 161

FACTS: X, who was a member of Pantranco Employees Association-PTGWO, was employed by PNEI as bus conductor. He continued in the employ of PNEI until August 12, 1989, when he was retired at the age of 52 and after having rendered 25 years of service. The basis of his retirement was the compulsory retirement provision in the collective bargaining agreement between PNEI and the Pantranco Employees Association-PTGWO. Claiming that his retirement was tantamount to dismissal, X filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal. PNEI challenged the jurisdiction of the Labor Arbiter on the ground that the dispute concerns a provision of the CBA and its interpretation, the jurisdiction of which falls under the voluntary arbitrator.

ISSUE: Whether or not the voluntary arbitrator has jurisdiction over the case.

HELD:The voluntary arbitrator has no jurisdiction over the case. No dispute exists between the Union and PNEI, so as to create a grievance, because both have previously

agreed the compulsory retirement of X as embodied in the CBA. It was only X on his own who questioned the compulsory retirement. Thus, this case is properly denominated as “termination dispute” which comes under the original and exclusive jurisdiction of labor arbiters.

CASE: Maneja v. NLRC 290 SCRA 603

FACTS: X was employed as Telephone Operator of Manila Midtown Hotel. She was dismissed from her employment for committing the following violations of Offenses Subject to Disciplinary Actions (OSDA), namely: falsifying official documents and culpable carelessness-negligence or failure to follow specific instructions or established procedures. X filed a complaint for dismissal with the Arbitration Branch of the NLRC. The Hotel challenged the jurisdiction of the Labor Arbiter on the ground that the case falls within the jurisdictional ambit of the grievance procedure and voluntary arbitration under the CBA.

ISSUE: Whether or not the Labor Arbiter has jurisdiction.

HELD: The Labor Arbiter has jurisdiction. The dismissal of X does not call for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the Labor Arbiter.

ART. 262.Jurisdiction over other labor disputes.- The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

COMMENT:

The Import of the Phrase “all other labor disputes”

-­‐ May include termination disputes, provided that the parties conform to the submission of termination disputes to voluntary arbitration.

-­‐ There is a need for an express stipulation in the collective bargaining agreement that the termination disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, considering that termination disputes fall within a special class of disputes that are generally within the exclusive original jurisdiction of Labor Arbiters by express provision of law.

-­‐ Without such express stipulation, the phrase “all disputes” should be construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation or enforcement of company personnel policies.

-­‐ Termination disputes – not falling within any of these categories – should then be considered as a special area of interest governed by a specific provision of law.

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

Agreement of the Parties is Necessary to Confer Jurisdiction

-­‐ The jurisdiction of the voluntary arbitrator over the dispute(particular labor dispute) is acquired upon receipt of the Submission Agreement duly signed by both parties(express and specific agreement).

-­‐ HOWEVER, even WITHOUT an express agreement between the parties, no one can arrogate into the powers of Voluntary Arbitrators the original and exclusive jurisdiction of Labor Arbiters over unfair labor practices, termination disputes, and claims for damages.

CASE: San Miguel Corporation v. NLRC 255 SCRA 133 FACTS:SMC terminated the services of several mechanics, machinists, and carpenters on the ground of redundancy. As a result, the Union filed with the Arbitration Branch of the NLRC a complaint for unfair labor practice and illegal dismissal against SMC. SMC moved for the dismissal of the complaint on the ground that the Labor Arbiter has no jurisdiction over the subject matter of the complaint. SMC’s thesis is that the dispute as to the termination of the union members and the unfair labor practice should be settled by voluntary arbitration, and not by the labor arbiter following the provision of the CBA, which ought to be treated as the law between the parties.

Additionally, SMC theorized that since the Union questioned the discharges, the main question is whether SMC had the prerogative to effect the discharges on the ground of redundancy, and this necessarily calls for the interpretation or implementation of Article III (Job Security) in relation to Article IV (Grievance Machinery) of the CBA.

HELD: SMC’s contention is not meritotious because:

a. There is no agreement whatsoever between SMC and the Union that would state in unequivocal language that they conform to the submission of termination disputes and unfair labor practice to voluntary arbitration.

b. SMC cannot validly invoke Section 2, Article III to show that the dispute is proper subject of grievance because the Union did not exercise its right to seek reconsideration of SMC’s move to terminate the services of the employees concerned.

c. There is no connection whatsoever between SMC’s management prerogative to effect the discharges and the interpretation or implementation of Article III and IV of the CBA.

Hence, the Union acted well within its right in filing the complaint for illegal dismissal with the Labor Arbiter.

The termination disputes are matters falling under the original and exclusive jurisdiction of the Labor Arbiter.

ART. 262-A. Procedures.- The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or issues

subject of the dispute, including efforts to effect a voluntary settlement between parties.

All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing may be adjourned for cause or upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration.

The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award.

COMMENT:

Scope of Arbitration Awards

-­‐ The power and authority of voluntary arbitrators to decide a case is limited to those matters which have been submitted to them for arbitration.

Judicial Review of Arbitration Awards

-­‐ Decisions or awards of voluntary arbitrations are appealable to the Court of Appeals.

-­‐ The state of our present law relating to voluntary arbitration provides that “the award or decision of the Voluntary Arbitrator x xx shall be final and executory after 10 calendar days from receipt of the copy of the award or decision by the parties,” while the

“decisions,awards, or orders of the Labor Arbiters are final and executory unless appealed to the Commission by any or both parties within 10 calendar days from receipt of such decisions, awards, or orders.”

-­‐ Hence, while there is an express mode of appeal from the decision of labor arbiter, RA No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

Power to Enforce Arbitration Awards

-­‐ The Voluntary Arbitrator has the power to:

a. Issue writ of execution

b. May require the sheriff of the NLRC or the regular courts or any public official whom the parties may designate in the submission agreement, to execute the arbitration award.

-­‐ In the ABSENCE of Voluntary Arbitrator or in case of his INCAPACITY, the motion for issuance of writ of execution may be filed with the Labor Arbiter in the region having jurisdiction over the workplace.

ART. 262-B.Cost of voluntary arbitration and Voluntary Arbitrator’s fee. - The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrator’s fee. The fixing of fee of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary Arbitration Fund, shall take into account the following factors:

a. Nature of the case;

b. Time consumed in hearing the case;

c. Professional standing of the Voluntary Arbitrator;

d. Capacity to pay of the parties; and

e. Fees provided for in the Revised Rules of Court.

COMMENT:

Voluntary Arbitrator’s Fee and Arbitration Cost

-­‐ Unless the parties agree otherwise, the cost of voluntary arbitration proceedings and voluntary arbitrator’s fee shall be shared EQUALLY by the parties.

-­‐ If their funds is INSUFFICIENT, they may avail of the subsidy under the Special Voluntary Arbitrator’s Fund.

Title VIII