Legal basis and implementing framework
- The NCMB is mandated to issue these guidelines under Executive Order No. 126, as amended by Executive Order No. 251.
- The guidelines implement Articles 260-262 of the Labor Code, as amended by Republic Act No. 6715.
- The guidelines also implement Department Order No. 40-03.
- The guidelines regulate proceedings before a voluntary arbitrator within the collective bargaining process.
- The rules of court are treated as directory or suppletory only when parties have no agreement on a particular aspect of voluntary arbitration proceedings.
Policy and construction mandate
- The guidelines must be liberally construed to carry out the objectives of the Labor Code of the Philippines, as amended.
- The guidelines promote voluntary arbitration as a preferred mode of labor or industrial dispute settlement.
- Voluntary arbitration is treated as an integral component of the collective bargaining process.
- Proceedings are structured so they are non-litigious in nature while still complying with due process.
Key definitions governing terms
- The Board refers to the National Conciliation and Mediation Board and its Regional Branches created under Executive Order No. 126, as amended.
- The Executive Director refers to the head of the Board.
- A Regional Branch refers to any NCMB regional branch.
- Voluntary Arbitration is the mode of settling labor-management disputes where parties select a competent, trained and impartial third person who decides the merits, and whose decision is final and executory.
- A Voluntary Arbitrator includes:
- an accredited voluntary arbitrator by the Board;
- a person named or designated in the collective bargaining agreement (CBA);
- one chosen by the parties with or without Board assistance under a selection procedure in the CBA; or
- one appointed by the Board when a party refuses to submit to voluntary arbitration.
- Permanent Arbitrator is the voluntary arbitrator specifically named or designated in the CBA.
- Ad-Hoc Arbitrator is the voluntary arbitrator chosen by the parties in accordance with CBA procedures, or appointed by the Board in case of failure in selection or refusal to submit.
- Collective Bargaining Agreement (CBA) is the contract between a duly recognized or certified exclusive bargaining agent of workers and the employer concerning wages, hours of work, and all other terms and conditions of employment in the appropriate bargaining unit.
- Grievance is a complaint arising from interpretation or implementation of the CBA, interpretation or enforcement of company personnel policies, personnel policies, established practices, or other controversies involving the employer-employee relationship.
- Grievance Procedure is the system of grievance settlement provided in the CBA, usually with successive steps ending, when necessary, at voluntary arbitration.
- A Submission Agreement is a written agreement submitting the case for arbitration, containing the issues, the chosen arbitrator, and stipulation to abide by and comply with the resolution including the cost of arbitration.
- A Notice to Arbitrate is a formal demand by one party to the other for arbitration of a particular dispute when a party refuses to submit to arbitration under a CBA.
- An Arbitration Clause is a CBA provision requiring that unresolved grievances be finally resolved by a voluntary arbitrator.
- Wage Distortion is a situation where an increase in prescribed wage rates results in elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate distinctions embodied in the wage structure based on skills, length of service, or other logical bases of differentiation.
- Productivity Incentive Programs are formal agreements voluntarily established by a labor-management committee containing a productivity improvement program that promotes gainful employment, improves working conditions, maintains industrial peace, and results in increased productivity, including cost savings, and includes a productivity gainsharing program granting employees productivity bonuses.
Scope and arbitration coverage
- The voluntary arbitrator has exclusive and original jurisdiction over:
- all unresolved grievances arising from interpretation or implementation of the CBA;
- all unresolved grievances arising from implementation or enforcement of company personnel policies;
- all wage distortion issues arising from application of any wage orders in organized establishments; and
- all unresolved grievances arising from the interpretation and implementation of Productivity Incentive Programs under RA 6971.
- For exclusive and original jurisdiction, unresolved grievances automatically proceed to voluntary arbitration when not settled within seven (7) calendar days from submission for resolution to the last step of the grievance machinery.
- Cases within exclusive and original jurisdiction filed either with the National Labor Relations Commission (NLRC) and its Regional Branches, or with the Regional Directors of the Department of Labor and Employment, or with the NCMB and its Branches, are decided by the voluntary arbitrator upon referral pursuant to paragraph 2, Article 261 of the Labor Code, as amended by RA 6715 and Department Order No. 40-03.
- The voluntary arbitrator has concurrent jurisdiction (by agreement of the parties) to hear and decide all other labor disputes, including unfair labor practice and bargaining deadlocks.
- Before or at any stage of compulsory arbitration, parties may agree to submit their case to voluntary arbitration.
- If the CBA does not specify the number of arbitrators, the case is heard and resolved by a sole arbitrator, unless the parties agree otherwise.
- The voluntary arbitrator exercises jurisdiction over specific cases only upon:
- receipt of a Submission Agreement duly signed by both parties; or
- receipt of a Notice to Arbitrate when there is refusal from one party; or
- receipt of an appointment/designation by the Board in either:
- failure of the parties to select an arbitrator; or
- absence of a named arbitrator in the CBA and the party served does not favorably reply within seven (7) days from receipt of the notice.
Filing and notices; parties and pleadings
- Pleadings identify the parties as Complainant (aggrieved party) and Respondent (opposing party).
- The full names of the parties, as far as known, must appear in the original caption and in all summons, notices, and processes.
- Captions follow the required structure, showing the Republic of the Philippines, Office of the Voluntary Arbitrator, the name of the voluntary arbitrator and business address, a case number, and “In Re: Voluntary Arbitration Between Complainant -and- Respondent”, including “Issues Involved”.
- A standardized numbering system must be used so the docket includes:
- 1) accreditation number;
- 2) region where the case originates;
- 3) number of the case subject of arbitration;
- 4) month when the case is submitted to the arbitrator; and
- 5) year when the case is submitted to the arbitrator.
- All pleadings in the voluntary arbitration case are filed directly with the chosen voluntary arbitrator at the arbitrator’s designated business or professional office, with a copy furnished to the NCMB Regional Branch having jurisdiction over the workplace of the complainant.
- The party filing pleadings must serve the opposing party with copies in the manner provided by these guidelines.
- Copies of pleadings, notices, or awards may be served through:
- personal service, or
- registered mail to the parties, provided that when represented, service is made on counsel or authorized representative.
- Service by registered mail is complete upon receipt by the addressee or agents.
- Parties may appear personally or by representatives; representatives must be duly authorized in writing or be practicing attorney-at-law.
- The complete name and office address, or any address change, of counsel/representative must be recorded, and the party must be properly informed.
- Representatives are presumed to have full authority to bind parties in procedural matters.
- Attorneys and representatives cannot, without a special power of attorney or express consent, enter into a compromise agreement discharging the client’s or principal’s claim in full or in part.
Submitting disputes: agreements, notices, appointments
- The Submission Agreement must contain:
- the agreement to submit to arbitration;
- the specific issues to be arbitrated;
- the name of the arbitrator;
- the names, addresses, and contact numbers of the parties; and
- the agreement to perform or abide by the decision.
- After exhaustion of the grievance procedure but the grievance remains unresolved and one party refuses to submit to voluntary arbitration, the following must be observed:
- a Notice to Arbitrate is served upon the unwilling party, with a copy furnished to the Permanent Arbitrator and the NCMB Regional Branch with jurisdiction over the workplace;
- upon receipt of the Notice to Arbitrate after lapse of the seventh-day period for response, the Permanent Arbitrator/s must immediately commence arbitration proceedings; and
- if no Permanent Arbitrator exists in the CBA, the Board appoints a voluntary arbitrator, who must immediately commence arbitration proceedings upon receipt of the appointment.
- A Notice to Arbitrate must contain:
- the names, addresses, and contact numbers of the party upon whom the notice is made;
- the arbitration clause in the CBA;
- the specific issues or disputes to be arbitrated;
- the relief sought; and
- the name, address, and contact numbers of the initiating party requesting arbitration.
- An appointment from the Board must contain:
- the name of the arbitrator;
- the names, addresses, and contact numbers of the parties;
- the issues to be arbitrated;
- the basis of appointment;
- the arbitrator’s fee; and
- the signature of the appointing NCMB Director.
Arbitrator powers, proceedings, decisions, enforcement
- The voluntary arbitrator