Creation of National Labor Relations Commission

Presidential Decree No. 21 declares the objective of promoting industrial peace, maximizing productivity, and securing social justice for all the people.

A National Labor Relations Commission is established in the Department of Labor (Section 1).
The Commission is composed of three (3) members (Section 1).
The Chairman is the Undersecretary of Labor or the Undersecretary’s duly authorized representative (Section 1).
Two members are the Director of Labor Relations and the Director of Labor Standards, or their duly authorized representatives (Section 1).
If the Undersecretary of Labor cannot attend, the Undersecretary’s duly authorized representative sits as member; if the Undersecretary is absent, the Director of Labor Standards or in his absence the Director of Labor Relations acts as Chairman (Section 1).

The Commission has original and exclusive jurisdiction over employee-employer relations matters and disputes/grievances that may lead to strikes and lockouts under Republic Act No. 875 (Section 2[1]).
The Commission has original and exclusive jurisdiction over strikes overtaken by Proclamation No. 1081 (Section 2[2]).
The Commission has original and exclusive jurisdiction over all pending cases in the Bureau of Labor Relations (Section 2[3]).
The Commission’s jurisdiction is conditioned on exhaustion of grievance procedures and voluntary arbitration steps before issues are brought to it (Sections 3 and 4).

Parties to any dispute, grievance, or issue must first exhaust the grievance procedure in the applicable collective bargaining agreement or another mutually agreed dispute settlement method before raising the issue to the Commission (Section 3).
The complaining party must show proofs of failure to settle the dispute, grievance, or issue under the agreed procedure before filing with the Commission (Section 3).

Before assuming jurisdiction over any issue, dispute, or grievance, the Commission or its authorized representative must give the parties a chance to submit the problem for voluntary arbitration (Section 4).
If the parties fail to agree on the arbitrator, the Commission may designate an arbitrator to hear and decide the grievance, dispute, or issue, or the Commission itself may act as the arbitrator (Section 4).

Commission decisions are immediately executory, subject to appeal to the Secretary of Labor (Section 5).
Appeals to the Secretary of Labor must be acted upon within five (5) days from filing (Section 5).
The Secretary of Labor’s decision is appealable to the President (Section 5).
Outside the Greater Manila Area, the Commission may designate a representative that, together with a union representative and a management representative nominated by the immediate parties, must mediate, conciliate, and if necessary conduct a fact-finding investigation (Section 5).
The fact-finding findings must be submitted to the Commission within five (5) days from commencement of the investigation for decision (Section 5).

Upon promulgation of Presidential Decree No. 21, all collective bargaining agreements must contain a provision designating a voluntary arbitrator to decide disputes and grievances arising from implementation of the collective bargaining agreements (Section 6).
The voluntary arbitrator may be an individual or a committee (Section 6).
Existing collective bargaining agreements that lack such a provision must be amended to include it (Section 6).
The required CBA amendment must be reported immediately to the Commission (Section 6).
All lockouts are deemed illegal (Section 6).

The Commission and any member may administer oaths (Section 7).
The Commission and any member may issue subpoenas and subpoenas duces tecum (Section 7).
The Commission and any member may hold any person in contempt for refusal to comply (Section 7).

On recommendation of the Commission, the Secretary of Labor shall designate mediators, fact-finders, representation officers, and other assistants as the Commission deems necessary (Section 8).
The designated mediators, fact-finders, representation officers, and assistants must be drawn from among existing officials and personnel of the Department of Labor (Section 8).

The Commission must promulgate rules of procedure and other regulations enabling it to resolve or terminate all cases within thirty (30) days from filing (Section 9).
The Commission must also promulgate rules and regulations governing collective bargaining (Section 9).

On recommendation of the Commission and the Secretary of Labor, the President of the Philippines may order the arrest and detention of any person held in contempt by the Commission (Section 10).
The arrest and detention authority covers non-compliance and defiance of any subpoena, order, or decision duly issued by the Commission under Presidential Decree No. 21 and its implementing rules and regulations (Section 10).

No employer may shut down an establishment (Section 11).
No employer may dismiss or terminate the services of regular employees with at least one year of service (Section 11).
Such shutdown or dismissal/termination may be done only with the written clearance of the Secretary of Labor (Section 11).

All provisions of existing laws, orders, and regulations that are contrary to or inconsistent with Presidential Decree No. 21 are repealed (Section 12).

CBA provisions on voluntary arbitration must be in place upon promulgation of Presidential Decree No. 21 (Section 6).
Existing CBAs lacking the arbitration designation must be amended and the amendment must be reported immediately to the Commission (Section 6).