Amendment to Commonwealth Act No. 103 on Industrial Relations

Authority, tribunal, and supervision

Section 1 creates a Court of Industrial Relations with jurisdiction over the entire Philippines.
The Court has jurisdiction to “consider, investigate, decide, and settle” disputes between:
- employers and employees or laborers, and
- landlords and tenants or farm-laborers.
The Court also regulates relations between the parties, subject to the provisions of Commonwealth Act No. 103.
Section 1 gives the Court jurisdiction over cases submitted to it under the provisions of Commonwealth Act No. 461.
The Court consists of a presiding judge and four associate judges appointed by the President of the Philippines with the consent of the Commission on Appointments of the National Assembly.
The judges’ qualifications are the same as those required by the Constitution for members of the Supreme Court, and they hold office during good behavior until they reach seventy years or become incapacitated.
Section 1 defines that whenever “senior judge” or “judge” and “judges” appear in Commonwealth Act No. 103, they mean “presiding judge” and “associate judge,” respectively, unless the context provides otherwise.
Section 1 provides that judges may be suspended or removed in the same manner and on the same grounds as judges of the Court of First Instance.
The Department of Justice exercises executive supervision over the Court.
The Court keeps a record of its proceedings, and judges act on matters the presiding judge designates.
Section 1 grants the presiding judge authority to designate matters, and each judge has power to preside over hearings of cases assigned and to render decisions thereon.
If a party requests reconsideration of a ruling or decision, the judges sit together and at least three of the five judges must concur for the pronouncement of a decision, order, or award.
If illness, absence, incapacity, temporary disability, or a vacancy prevents the presence of the required number of judges, or if there is a tie vote, the Secretary of Justice may designate the necessary number of judges of the Court of First Instance to sit temporarily until a decision, order, or award is ready.

Tribunal composition and compensation

The presiding judge receives annual compensation of eleven thousand pesos.
Each of the four associate judges receives annual compensation of ten thousand pesos.
The judges are entitled to traveling expenses and per diems when performing official duties outside the City of Manila.

Industrial and agricultural disputes coverage

Section 2 authorizes the Court to take cognizance for prevention, arbitration, decision, and settlement of an industrial or agricultural dispute causing or likely to cause a strike or lockout.
The dispute must arise from differences regarding:
- wages,
- shares or compensation,
- dismissals,
- lay-offs, or
- suspensions of employees or laborers, and/or tenants or farm-laborers,
- hours of labor, or
- conditions of tenancy or employment,
- between employers and employees or laborers, and between landlords and tenants or farm-laborers.
Section 2 applies only when the number of employees, laborers, tenants, or farm-laborers involved exceeds a threshold stated in Commonwealth Act No. 103 as amended (as reproduced in the amended section).
A dispute causing or likely to cause a strike or lockout must be submitted to the Court by the Secretary of Labor, or by any or both of the parties.
The Secretary of Labor’s intervention ends upon submission of the controversy or question to the Court as authorized by law.
The Secretary of Labor or the submitting party or parties must clearly and specifically state in writing the questions to be decided.
Before hearing, the Court must endeavor to reconcile the parties and induce a settlement by amicable agreement.
If an agreement is reached, the parties must sign and acknowledge a written memorandum of the terms before a judge or authorized official who can administer oaths or acknowledgments, or before a notary public.
The memorandum must be filed with the Clerk of Court; unless the Court orders otherwise, it has the same effect between the parties as a decision or award.

Subpoena power, contempt, and liability

Section 3 empowers the Court or any judge to administer oaths in matters connected with the Court’s business.
The Court may summon parties, issue subpoenas, require witness attendance and testimony, and require production of relevant books, papers, contracts, records, statements of accounts, agreements, and other relevant materials.
The Court may delegate these powers to any board or person acting on behalf of the Court.
The Court has inherent powers of a court of justice under paragraph 5 of Rule 124 of the Supreme Court, and contempt powers under Rule 64 of the Supreme Court, using the same procedures and penalties.
Section 3 provides that any violation of an order, award, or decision of the Court—after it becomes final, conclusive, and executory—constitutes contempt of court.
For indirect contempt, the complaint must be in writing, signed and filed with the Clerk of Court by the Attorney of the Court or other officer or employee designated by the Court, or by any provincial or city attorney designated by the Secretary of Justice.
If the violating employer or landlord is an association or corporation, liability attaches to:
- the manager or person in charge of management, and
- the officers or directors who ordered or authorized the violation or contempt.
If contempt is committed by persons belonging to a labor union, association, or group of laborers that directs or assumes representation, liability attaches to the president or duly authorized representative who caused the act resulting in the contempt.
Section 3 clarifies that contempt proceedings are without prejudice to the offender’s criminal liability under Section 24 of Commonwealth Act No. 103.

Support from government; inspection powers

Section 4 (amending the Court’s institutional powers) authorizes the Court to require services of any Government official or employee to help the Court without additional compensation.
Writs and processes issued by the Court are served and executed free of charge by provincial or city sheriffs or by persons authorized by the Court, in the same manner as writs and processes of Courts of First Instance.
Section 4 also empowers a judge, or any officer or authorized person, in writing, to enter any labor establishment, building, ship or vessel, place or premises during working hours to inspect and view work, material, implementation, machinery, appliances, or any object therein.
The inspection authority includes the power to ask employees, laborers, tenants, farm-laborers, or any person for information or data relative to the inspection subject.
Section 4 makes it contempt of Court if any person, without justifiable cause, prevents or hinders judges or authorized officers from entering for inspection, refuses to furnish requested information or data, refuses to answer questions, or obstructs judges or authorized persons while performing official duties.

Enforcement; appeal; Supreme Court review

Section 4 provides enforcement rules for cases under Section 4 of Commonwealth Act No. 103 as amended.
After the expiration of ten days from the date of an award, order, or decision, judgment must be entered in accordance with it.
If an aggrieved party appeals to the Supreme Court by writ of certiorari within the ten days, filing of the appeal does not stay execution of the award, order, or decision unless the Court orders a stay for special reasons.
When a stay is ordered, the Court may require the appellant to:
- deposit with the Clerk of Court an amount equivalent to salaries or wages due employees, laborers, tenants, or farm-laborers under the award/order/decision appealed from, or
- provide security in the form and of such amount as insures compliance, if the required deposit is not made.
The Court may require weekly deposits with the Clerk of Court, on a day fixed by the Court, equal to the salaries or wages to be earned during the appeal by employees/laborers/tenants/farm-laborers whose reinstatement or readmission was decreed.
Failure to make the required deposit vacates the order for stay of execution.
When writs of execution issue, the proceeds are kept by the Clerk of the Court of Industrial Relations in custody pending the Supreme Court’s decision, and then are disposed of in conformity with the final judgment.
Section 4 authorizes Supreme Court review: the Supreme Court may, in its discretion, in any case involving a question of law, require by certiorari that the case be certified for review and determination upon petition of the aggrieved party and under rules and conditions the Supreme Court prescribes.
Upon final determination of issues raised, the Clerk of the Supreme Court immediately transmits a certified copy of the decision or judgment to the Clerk of the Court of Industrial Relations.
Upon receipt, the decision or judgment becomes conclusive, final, and executory immediately.
If exceptions to the award/order/decision are finally sustained, judgment is entered setting aside the award/order/decision in whole or in part.
Parties may agree on a judgment disposing of the controversy’s subject matter; the agreed judgment has the same force and effect as a judgment entered, award, order, or decision.

Implied contract conditions and work stoppage rules

Section 5 establishes an implied condition in every employment or tenancy contract, whether verbal or written.
The implied condition applies when a dispute between employer/landlord and employee/tenant/laborer is submitted to the Court for settlement or arbitration under the Act.
The implied condition also applies when the President of the Philippines orders an investigation under Section 5 of Commonwealth Act No. 103 to determine the necessity and fairness of fixing and adopting a minimum wage or share.
While the dispute is pending before the Court, or while the investigation is pending, the employee/tenant/laborer must not strike or walk out of employment when enjoined by the Court after hearing and when public interest so requires.
If the employee/tenant/laborer has already struck or walked out, the employee/tenant/laborer must return forthwith upon Court order issued only after hearing when public interest so requires, or when the dispute cannot be promptly decided or settled by the Court.
If the employee/tenant/laborers fail to return to work, the Court may authorize the employer/landlord to accept other employees/tenants/laborers.
The implied condition also requires that while the dispute or investigation is pending, the employer/landlord must refrain from accepting other employees/tenants/laborers unless with the express authority of the Court.
The employer/landlord must permit continued service under the last terms and conditions existing before the dispute arose.
Employers engaged in the operation of public services or businesses coupled with public interest are excepted from the prohibition on hiring strike breakers.
The law prohibits employers from engaging the services of strike breakers within fifteen days after the declaration of the strike, except for employers in public services or businesses coupled with public interest.
Violations by either employers/landlords or employees/tenants/laborers of the Court’s order or the implied contractual condition constitute contempt of the Court of Industrial Relations.
Contempt for violating these conditions is punished by the Court in the same manner and with the same penalties as contempt of a Court of First Instance.
For corporate employers, responsibility lies with the manager or person in charge of management and the directors who ordered and/or authorized the act of contempt.
For labor-union or labor-group contempt, responsibility lies with the union’s or group’s officers and/or leaders who participated in directing the movement resulting in the contempt complained against.
Section 5 prohibits any employer or landlord from suspending, laying-off, or dismissing any employee/laborer/tenant/farm-laborer without just cause from the time a labor association or organization (or group of laborers/tenants/farm-laborers) presents a petition or complaint likely to cause a strike or lockout to the employer or landlord and a copy is furnished to the Department of Labor.
Section 5 also bars suspensions, lay-offs, or dismissals without just cause while an industrial or agricultural dispute is pending before the Court.
If an employee/laborer/tenant/farm-laborer is suspended or dismissed without just cause during the covered period, the Court may order reinstatement and payment of salary or wage during the suspension or dismissal, or payment of what the worker should have received had there been no suspension or dismissal.
The Court’s reinstatement and wage payment is without prejudice to criminal liability of the employer or landlord under Section 24 of the Act.

Civil enforcement of final awards

Section 6 provides that when there is non-compliance with any award, order, or decision after it becomes final, conclusive, and executory, the judgment may be enforced by a writ of execution or any other legal remedy for enforcement and execution of orders, decisions, or judgments of Courts of First Instance.

Funding and appropriation

Section 7 appropriates sixty-thousand pesos out of any funds in the National Treasury not otherwise appropriated.
The Secretary of Justice disburses the funds for salaries of additional associate judges of the Court of Industrial Relations and other personnel, purchase of furniture and equipment, and sundry and other incidental expenses necessary to carry out the Act.
The appropriation covers the balance of the fiscal year nineteen hundred and forty and the fiscal year nineteen hundred and forty-one.