Collective Bargaining and Negotiations

Collective Bargaining Representation

• Collective bargaining is the process where workers, through their unions, negotiate contracts with their employers to determine the terms of employment.

• A collective bargaining agent refers to the union chosen by the majority of the employees in the bargaining unit to represent them in bargaining with the employer.

• The collective bargaining unit is a group of employees sought to be represented by a union.

• A Collective Bargaining Agreement (CBA) is the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit; it serves as the law between the parties.

Bargaining Collectively with the Employer

• The duty to bargain collectively is defined as the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement, and executing a contract incorporating such agreements if requested by either party; however, such duty does not compel any party to agree to a proposal or to make any concession (LABOR CODE ARTICLE 263).

Union Status for Bargaining

• In order to begin with the bargaining process the union must be the sole and exclusive bargaining representative.

• The requirements for the status of the union are:

  • The winner union in the certification election, consent election, or run-off election.

  • The only union operating in the bargaining unit and it has secured a certification from the DOLE Regional Office stating such fact based on Department Order No. 14-I-15, September 7, 2015.

Types of Elections

• Certification election refers to the process of determining through secret ballot the sole and exclusive representative of the employees in bargaining with the employer in case there are two or more unions operating in the bargaining unit.

• Consent election determines who among the unions would bargain with the employer.

• Run-off election is an election between the labor unions receiving the two highest number of votes in a certification or consent election with three or more choices, provided that the total number of votes for all contending unions is at least fifty percent ($50$) of the number of votes cast.

• Rerun election is an election conducted to break a tie between contending unions.

Sole and Exclusive Bargaining Agent (SEBA)

• In case there is only one legitimate labor union operating in the industry, SEBA certification issued by the DOLE Regional Office would give the union the personality to bargain with the employees.

Stages in the Collective Bargaining

• Following the provision of Article 261 of the Labor Code:

  • When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten ($10$) calendar days from receipt of such notice.

  • Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten ($10$) calendar days from the date of request.

  • If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call.

  • During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and

  • The Board shall exert all efforts to settle disputes amicably and encourages the parties to submit their case to a voluntary arbitrator.

Steps/Stages in Collective Bargaining and Negotiation

• Preliminary Stage: Sending of a written notice to bargain.

• Negotiation: Stage where the parties give their proposals and counter proposals.

• Execution: The parties sign the Collective Bargaining Agreement.

• Publication: The posting of the CBA in two conspicuous places in the factory or industry at least five days before the scheduled date of ratification.

• Ratification: Process where the members of the bargaining unit vote to approve or disapprove the CBA.

• Registration: The parties register their CBA with the DOLE Regional Office or the Bureau of Labor Relations.

• Administration: The parties implement the provisions of the CBA for the mutual benefits of the employees and the employer.

• Interpretation and Application: This happens if there is ambiguity in any of the provisions of the CBA.

National Conciliation Mediation Board (NCMB)

• Under Article 261 of the Labor Code under Executive Order No. 126, January 31, 1987, recognizing the DOLE, and was tasked to formulate policies, develop plans and programs, and set standards and procedures relatives to the promotion of conciliation and mediation of labor disputes through the preventive mediation, conciliation, and voluntary arbitration.

• Facilitation of labor-management cooperation through joint mechanisms for information sharing, effective communication and consultation, and group problem-solving.

Requirements for Collective Bargaining

• Mechanics of collective bargaining are set in motion only when the following jurisdictional preconditions are present:

  • Possession of the status of majority representation of the employees’ representative in accordance with any of the means of selection and designation provided for by the Labor Code.

  • Proof of majority representation by the union which refers to the certification issued by the election officer or mediator- arbitrator (MED-ARBITER) from the Bureau of Labor Relations or the DOLE Regional Office.

  • A demand to bargain with the employer as provided under Article 261(a) of the Labor Code.

Parts of the Collective Bargaining Agreement

• Preamble: Introduction.

• Recognition of the Majority Status of the Contracting Union: Its right to exclusively represent the members of the collective bargaining unit.

• Management Prerogative: The right of the employer to discipline its employees.

• Union Prerogative: The right of the union to discipline its members.

• Scale of Wages: The provisions which are intended to prevent discrimination in the payment of different types of workers and to avoid wage distortion.

• Promotion of Employees to Higher Position.

• Leave of Absence: The provisions for leaves like sick leave, vacation leave, etc.

• Union Security Clause: The provision requiring the employer to recognize the right of the union which negotiated the CBA to maintain and protect its membership by imposing certain terms and conditions in hiring new employees and retention of employment for the duration of the CBA.

• Grievance Machinery: A method of addressing and resolving grievance or questions by the management or the union regarding interpretation and enforcement of the CBA provisions and interpretation and implementation of company personnel policies.

• Voluntary Arbitration: A method of settling labor - management disputes by submitting the controversy before a voluntary arbitrator or panel of voluntary arbitrators chosen by the parties to the CBA or accredited by the National Conciliation Mediation Board (NCMB).

• Check-Off: A method of deducting from an employee’s salary at prescribed periods to pay for the employees’ union membership fees, fines, or assessments for the purpose of raising funds for the union as provided under Article 240(o) of the Labor Code.

• Family Planning: Population education pursuant to the program of the government for reproductive health.

• Labor Education: A mechanism designed to inform and educate and the workers regarding their rights and duties.

• Effectively clause

• Interpretation Clause: Provision for the mechanism in applying and interpreting the provisions of the CBA.

Lifetime of the CBA

• Presidential Decree No. 442, also known as the Labor Code of the Philippines, as amended by Republic Act No. 6715, provides for a term of five ($5$) years for the representation aspect, while three ($3$) years for all other provisions for all other provisions (economy aspect) of any Collective Bargaining Agreement (CBA).

Representation Aspect of the CBA

• Refers to the union who represents the employees in the bargaining unit in negotiating with the employer.

• The selected union will be representing the employees for the period of five years that is also the duration of the CBA.

Contract Bar Rule

• Is provided in Article 265, that no petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty- day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement.

• Exceptions to the Contract Bar Rule:

  • During the freedom period, the DOLE may entertain a petition for certification election filed before it.

  • If the CBA is not registered with the Bureau of Labor Relations by the parties to the CBA.

Freedom Period

• Refers to the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement.

Automatic Renewal Clause

• Also known as the “Evergreen Clause”, is deemed, incorporated in all CBA.

• The duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime

Economic Aspect of the CBA

• All other provisions of the CBA shall be renegotiated not later than three ($3$) years after its execution. (LABOR CODE, ARTICLE 265)

Automatic Retroactivity

• Any agreement on such other provisions of the CBA entered into within six ($6$) months from the date of expiry of the term of such other provisions as fixed in such CBA shall retroact to the day immediately following such date.

Enforcement of the Collective Bargaining Agreement

• Contract between the union representing the employees in the bargaining unit and the employer.

• The parties to the CBA are expected to implement and comply with its terms and conditions in good faith.

Publication of the CBA

• Once the CBA has been finalized, the employer is mandated by the implementing rules of the Labor Code as well as the decisions of the Supreme Court to post a copy of the CBA in two conspicuous places in the workplace at least five days before the data of its ratification.

Economic Aspect of the CBA

• All other provisions of the CBA shall be renegotiated not later than three (3) years after its execution. (LABOR CODE, ARTICLE 265)

The Employer's Obligation to Post the CBA

• The posting of the CBA as compliance with the publication requirements of the rules is the obligation of the employer.

Purpose of the Publication

• It must be remembered that the ones who negotiate the CBA with the employer are the officers of the union, therefore, the employees in the bargaining unit are not aware of the terms and conditions contained in the CBA.

Ratification of the CBA

• Five days after the posting of the CBA, all the employees in the bargaining unit are given the opportunity to votes yes or no on the issue of accepting or rejecting the CBA.

Registration of the CBA

• Within 30 days from execution of a collective bargaining agreement, the parties thereto shall submit to the DOLE Regional Office:

  • Original and two ($2$) duplicate signed copies of the CBA.

  • Duly accomplished and notarized application form.

  • Statement that the CBA was posted.

  • Statement that the CBA was ratified.

  • Pay the registration fee.

Effects of the Registration of CBA

• No one is allowed to modify or disturbed the terms and conditions of the said CBA and the DOLE will not entertain any petition for certification election filed by any party for five years except only during the sixty-day freedom period.

• The CBA remains valid and binding between the union and the employer who are parties to the said CBA, but the parties cannot invoke the contract bar rule

Violation of the CBA

• The violation of the provisions of the CBA are considered grievances and are to be resolved through this grievance machinery and voluntary arbitration as provided for in the CBA itself.