Employee Relations and Discipline PDF

## Chapter 10: Employee Relation and Employee Discipline ### The Importance of Labor Relations * Employee relations are characterized by some as a union avoidance strategy. * The objective is to provide an atmosphere in which all employees can perform their jobs to the best of their abilities and...

## Chapter 10: Employee Relation and Employee Discipline ### The Importance of Labor Relations * Employee relations are characterized by some as a union avoidance strategy. * The objective is to provide an atmosphere in which all employees can perform their jobs to the best of their abilities and creatively contribute to the organization. * Employee relation activities affect efficiency where potential reasons for performance problems are confronted and help is offered to remove these problems. * An employee's attitude toward work is a crucial factor in productivity and performance where discipline plays an important part. * Discipline has many definitions and most people equate discipline with punishment. * However, discipline is not synonymous with punishment. ### Employee Discipline * Employee discipline is an employer's actions against an employee for infraction of company policy or rules. * An employee may also be disciplined for misconduct that adversely affects the efficiency of the organization. * Conduct problems typically stem from employees who fail to comply with the written and unwritten rules of the workplace such as coming to work on time, obeying orders, protecting the company property, and generally supporting and not interfering with the efficiency of the company. * Employees may also exhibit problems with their performance that may stem from the lack of knowledge, skill, or ability (KSA) to successfully perform the duties of their position. ### Disciplinary Action * Disciplinary action is the most appropriate avenue in which to address misconduct directly related to the performance of assigned duties. * The overall objective of disciplinary action is to remedy a problem and to help employees achieve success in their work. * This is also the area of human resource management which refers to important action taken to enforce organizational standards. ### If an Employee has Demonstrated that he/she has the KSA's necessary to perform the full Range of Duties of the Job but Commits an Act of Negligence, Carelessness, or Disregard of Rules, Counseling or Discipline is Warranted. * The goal of discipline is to correct misconduct and modify unacceptable behavior, rather than to punish an employee. * Discipline, if imposed, should be progressive, beginning with the minimum discipline necessary to correct the offense. * In addition, penalties should be reasonably consistent with those imposed on other employees for similar offenses. ## Prevention of Employee Misconduct * Discipline is something that can only be imposed after an act of misconduct has already occurred, but managers and supervisors can use strategies to prevent misconduct before it occurs. * Certain actions by supervisors can serve to prevent employee misconduct from ever occurring. * Managers may help to prevent the necessity for disciplinary action by recognizing the fundamental worth and dignity of the individual employee and by communicating their belief that all employees should strive for and reach their highest potential. ### Some Examples of Ways in Which Supervisors May Be Able to Prevent Employee Problems Include: * Setting an example by their own conduct; maintaining high professional and ethical standards as leader of the organization. * Providing a high-quality work environment that is conducive to innovation and increased productivity. * Establishing and communicating clear guidelines concerning their expectations for the operations of their office. * Establishing objective, understandable, obtainable. and measurable performance standards and communicating them clearly to employees. * Monitoring performance and giving frequent feedback. * Holding employees accountable for results and recognizing and rewarding good performance. * Providing opportunities for individual growth and development through training and seminars. ## Categories of Difficult/Problem Employees 1. **Ineffective employee/with unsatisfactory performance** * Employees whose performance is due to factors directly related to work are theoretically the easiest to work with and to adjust. * Ineffective performance may be the result of skill, job, or motivational climate factors. * Each of these factors or causes ought to be carefully assessed. 2. **Rule violators** * Some companies have general rules that are informally communicated to employees while others have specific rules that prohibit such things as possession of deadly weapons, use of alcohol or narcotics, use of abusive or threatening language, insubordination, and sleeping on the job. * Nonunionized companies are free to make and enforce whatever rules they want as long as these rules are consistent with other laws. 3. **Illegal or dishonest acts** * A serious disciplinary problem for all organizations concerns any form of illegal or dishonest behavior such as theft, embezzlement, misuse of company facilities or property, or falsifying records. * Even if an illegal act is not prosecuted, the employee committing the act is usually discharged unless a company does not have sufficient evidence. 4. **With personal problems** * Employees are normally expected to handle personal problems on their own without letting them interfere with work performance. * Temporary difficulties due to family problems are common. * Falling in love, getting married, having children, and getting a divorce are unsettling experiences that may affect performance on the job. * Large organizations provide personal counseling services for their employees. 5. **Substance abuse** * The most serious personal problems are alcoholism and drug abuse. * These problems are not temporary and are not solved by ignoring them or by assuming they will be corrected on their own. * Both increase the rates of absenteeism and tardiness, contribute significantly to accidents at work, and greatly reduce productivity. * Both are serious problems affecting employees at all levels in almost every company. * Both are now viewed as a disease—a treatable disease, not a disease that will go away by itself; it requires a treatment needing confrontation. ## Discipline or Infraction Cases * Rules and regulations governing personnel discipline may contain the following infractions covering the following subjects: * **Against Person** * Physical injury * Assault * Homicide * Murder * **Against Property** * Misuse of property * Damage to property * Theft and robbery * Negligence in the use of property * **Orderliness/Good Conduct** * Fighting/quarreling * Violation of rules * Discourtesy/disrespect * Intoxication while at work * Possession of drugs/narcotics/alcoholic drinks * Illegal strike * Strike violations/sabotage * Failure to cooperate in investigations * Hygiene * Safety * Union activity * Moonlighting * Deportment * Financial interest * Unauthorized outside work * Personal affairs * Disorderliness, horseplay * Use of foul language * **Attendance and Punctuality** * Timekeeping violations * Absenteeism * Tardiness * Undertime * AWOL (absent without leave) * **Morality** * Immorality * Sexual harassment * **Conflict of Interest** * **Nonperformance** * Insubordination * Negligence of duty * Inefficiency * Malingering * Carelessness * Poor quality * **Honesty/Integrity** * Falsity/falsification * Fraud * Dishonesty * Breach of trust * Unfaithfulness * Loss of confidence * Usurious transaction * Disclosure of information * Disloyalty * Nonpayment of debt ## Addressing Employee Conduct Problems * If an employee is exhibiting conduct problems, there are many steps that a supervisor may take to help that employee to improve. * Below are some examples: 1. **Discuss** any misconduct or performance problems **directly** with the employee. Give the employee an opportunity to provide an explanation, and carefully listen to and consider what the employee has to say. 2. **Clearly explain** expectations to the employee and **review** any rules, regulations, or policies in the area where the employee is exhibiting problems. Provide the employee an opportunity to ask any questions and offer assistance in complying with your expectations. 3. **If applicable**, **develop a plan** with the employee directed at helping to improve misconduct. If possible, set time limits for improvement and be very clear about the consequences. 4. **Give the employee** periodic **and specific feedback**. Be firm and clear about what improvement you expect to occur. Tell the employee you may have to take further steps if behavior does not improve. 5. **If misconduct continues**, the supervisor may choose to **orally admonish** the employee, providing a strong message that further incidents of similar misconduct may lead to a more formal action. If after all informal attempts have failed and the misconduct continues, the supervisor, following consultation with HR, may decide to formally discipline the employee. ## Approaches to Discipline * The violation of company rules can be handled in many different ways: ### A. Hot Stove Rule by Douglas McGregor * This approach to discipline is discussed in terms of what happens when a person touches a hot stove. * The consequences are: 1. **A warning system**—a good manager has, before any behavior has occurred, communicated what the consequences are for the undesirable behavior. 2. **An immediate burn**—if discipline is required, it must occur immediately after the undesirable act is observed. The person must see the connection between the act and the discipline. 3. **Consistency**—there are no favorites; hot stoves burn everyone alike. Any employee who performs the same undesirable act will be disciplined similarly. 4. **Impersonal**—disciplinary action is directed against the act, not at the person. It is meant to eliminate undesirable behaviors. ### B. Progressive Discipline * This is an approach in which a sequence of penalties is administered, each one slightly more severe than the previous one. * The goal is to build a discipline program that progresses from less severe to more severe in terms of punishment. * It is important in any disciplinary system to formally record what the policy is, and when and what action was taken. * This is the policy applied by most employers that entails stronger penalties for repeated offenses. * Its purpose is to instill in the employee an opportunity for self-correction in order to avoid further infractions (see topic on disciplinary process). * Progressive discipline must include due process to satisfy that employee rights were not violated. * It defines the conditions for responsible use of discipline. * This means that procedures were taken to ensure the employee was treated justly and fairly to deter outbreaks from the labor sector, especially unions. Major requirements include: presumption of innocence until reasonable proof is presented, and the punishment must fit the crime. ### C. Positive/Corrective Discipline * The advocates of this approach view it as future-oriented, as it involves working with employees to solve problems so that problems do not occur again. * Employees' mistakes are used to help them learn how to change. * The discussion focuses on the problem and how it can be solved rather than on who is to blame and why. * This is also an action that follows the infraction and to encourage employees to comply with the existing rules and regulations and is oftentimes accompanied by a disciplinary action such as warnings and suspensions. * The objectives of disciplinary action are positive in nature and include the following: reforming the offender, deterring others from committing the same infractions, and maintaining the smooth flow of effective group standards with the primary goal of improving the future of the employee instead of punishing him/her for his/her past. ### D. Negative Approach * This approach emphasizes the punitive effects of undesirable behavior. * The purpose is to punish employees for mistakes and it is usually severe to remind others of the consequences of wrongdoing. * The problem of this approach is that it motivates employees to achieve only the minimum acceptable performance. * Employees who are motivated by fear are not oriented toward becoming outstanding performers because they are motivated to avoid failure and to produce only the minimum amount of work to avoid punishment. ### E. Preventive Discipline * This is the action taken by companies to encourage employees to follow standards and rules so that infractions do not occur. * It is more proactive tinting them to know firsthand what the rules and regulations are. ### F. Counseling Approach * The erring employee is counseled rather than progressively penalized for the first few breaches of rules and regulations. * This approach believes that employees can be constructively corrected without penalty. * First offense: given a private discussion * Second offense: entails a corrective approach * Third offense: entails an evaluation of the whole management schema pinpointing error perhaps on the system itself. * The focus here is fact-finding and guidance to encourage desirable behavior instead of using penalties to discourage undesirable behavior. ## Elements of a Disciplinary Program * An effective, comprehensive, and successful disciplinary program should contain the following elements: * **Code of Conduct**—a handbook that is provided to every employee explaining what is expected and unacceptable behavior. * **Knowledge of disciplinary punishments**—employees should know what penalties would occur with certain offenses. * **Appeal procedure**—employees should have the opportunity to voice their side of the story. * **Reservation of right**—includes a statement that the firm has the right to modify the policy. * **Fair discipline**—discipline must be applied consistently to all employees in an unbiased way. ### The Disciplinary Process * When setting up your discipline program, it should contain the following steps in the disciplinary process: * **Informal talk**—this may occur in cases where the misconduct is very minor. * **Verbal warning**—a simple comment by a supervisor to warn employees that certain acts are not acceptable. The purpose is to ensure that employees know what is expected of them and that what they are doing is wrong. This is frequently used for minor offenses such as frequent tardiness, discourtesy, and the like. * **Verbal reprimand**—the supervisor informs the employee that the situation is not acceptable and improvement is required. Since the purpose is to correct the problem, the employee should leave the discussion feeling encouraged and committed to improve. The supervisor should make a written note of the conversation in case further discipline becomes necessary. Reprimands can take the form of constructive criticism and should include: making the facts surrounding the reprimand clear; stating what the reprimanded employee must do and why; and reaffirming one’s belief in the reprimanded employee. Always document the discussion. * **Written reprimand**—a written description of the problem and the disciplinary action. The supervisor prepares a written record that summarizes what has been said and decided when the supervisor discusses the problem with the employee. Both the supervisor and the employee concerned should sign the reprimand. Employees should be warned about the consequences if he/she does not change. Here, an employee is given a written reprimand where he/she is asked to sign his/her name on it, acknowledging its existence. This report is then included in his/her 201 file or personnel record file for future use. In general, this acts as a big deterrent to erring employees, since most companies do background checks on aspiring employees by looking at their previous employment record. * **Suspension**—if an employee fails to respond to the written reprimand and persists in wrongdoing, suspension is applied where an employee is not allowed to work for a period of time and his/her compensation is reduced accordingly. The purpose is to demonstrate the seriousness of the offense and to reinforce the idea that appropriate behavior is a prerequisite for maintaining a job. The length of suspension should be considered in light of the seriousness and type of offense. The supervisor and the HR head must be able to document every incident that has led to suspension, explain why it is an unacceptable behavior, indicate the length of the suspension, and what action will be taken next. * **Demotion**—this step will occur when it becomes necessary to use against the employee before termination. * **Discharge/dismissal**—represents the final step in the disciplinary process. If progressive discipline failed to correct the employee, termination will result. This should not be issued until all facts have been gathered and carefully considered. Demotions and transfers are two other alternatives for taking disciplinary actions and are usually recommended only for problems of unsatisfactory performance. * **Dismissal** is the most drastic disciplinary step the company can take toward an employee. It should be guaranteed that sufficient cause exists for it to be implemented. It should occur only after all reasonable steps to rehabilitate an employee have failed. ### Art. 282. Termination by Employer (Dismissal) * An employer may terminate an employment for any of the following just causes: * Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; * Gross and habitual neglect by the employee of his duties; * Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; * Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and * Other causes are analogous to the foregoing. * **Due process** is the mechanism that ensures both rights of management, i.e., to employee discipline and the prerogative to dismiss employees, and the right of an employee to a security of tenure, is respected. * It is the process affording the employee the opportunity to be informed of his/her alleged violation(s) and to be heard or to explain his/her side. ### Due process has Two Elements: 1. **The Substantive Due Process** 2. **The Procedural Due Process** * **Substantive due process** provides the ground for disciplinary action, i.e., corrective or retributive. * **Procedural due process** provides the procedure on how to go about hearing the side of the employee and evaluating all facts and evidence against the allegation. * **Procedural due process must follow the twin notice rule:** (1) notice to explain and (2) notice of decision. 1. **A notice of intent to dismiss** specifying the ground for termination, and giving to said employee reasonable opportunity within which to explain his or her side. 2. **A hearing or conference** where the employee is given opportunity to respond to the charge, present evidence, or rebut the evidence presented against him or her. 3. **A notice of dismissal** indicating that upon due consideration of all the circumstances, grounds have been established to justify the termination. * In a termination for an authorized cause, **due process** means a written notice of dismissal to the employee specifying the grounds given, at least 30 days before the date of termination. A copy of the notice shall be furnished by the Regional Office of the Department of Labor and Employment of the Philippines (DOLE). * **When due process is not observed, it will result to any or combination of the following:** * **Illegal dismissal or suspension** * **Illegal dismissal** will result in reinstatement and payment of back wages. * **Illegal suspension**, on the other hand, will result in payment of lost wages. ## Grounds for an Employee to Question the Dismissal * An employee may question his or her dismissal based on substantive or procedural grounds. * **The substantive aspect** pertains to the absence of a just or authorized cause supporting the dismissal. * **The procedural aspect** refers to the notice of termination or the opportunity to present an explanation. ## Rights Afforded to an Unjustly Dismissed Employee * An employee who is dismissed without just cause is entitled to any or all of the following: * **Reinstatement without loss of seniority rights, or separation pay**—reinstatement is not possible * **Full back wages, inclusive of allowances and other benefits, or their monetary equivalent from the time compensation was withheld from him or her up to the time of reinstatement** * **Damages and attorney's fees if the dismissal was done in bad faith** * **Reinstatement** * **Reinstatement** means restoration of the employee to the position from which he or she has been unjustly removed. * **Reinstatement without loss of seniority rights** means that the employee, upon reinstatement, should be treated in matters involving seniority and continuity of employment as though he or she had not been dismissed from work. * When a labor arbiter rules for an illegal dismissal, reinstatement is immediately executory even with pending appeal. * **Full back wages** * Full back wages refer to all compensations, including allowances and other benefits with monetary equivalent, that should have been earned by the employee but were not collected by him or her because of unjust dismissal. * It includes all the amounts he or she could have earned starting from the date of dismissal up to the time of reinstatement. * **Full back wages** is a form of penalty imposed by law on an employer who illegally dismisses his or her employee. ## Chapter 11: Labor Management Relations ### The Labor Movement * A labor union can be defined as an organization of employees that uses collective action to advance its members' interests in regard to wages, benefits, working conditions, and other terms and conditions of employment. * The impact of unionization on productivity, profitability, and employee attitudes can be positive or negative depending on the circumstances. * The presence of a union significantly alters several HR activities. * Unions typically try to extend their influence into other areas of management aside from wages and benefits such as establishment of work standards, scheduling of work, subcontracting, and the introduction of new equipment and methods which management claims as exclusive management prerogatives. * Whether an employer succeeds in maintaining exclusive control over these prerogatives depends on the relative strength of each side in collective bargaining and on the resolution of other conflicts, such as grievances, strikes, and lockouts. ### A Background on the Early Philippine Labor Movement * While it is contended that trade unions in the Philippines may be traced back to the years when this country was still exerting efforts to extricate herself from the grip of Spain, Philippine trade unionism did not begin to take healthy roots and development until 1901. In that year, Isabelo delos Reyes formed the Union de Litografos e Impressores de Filipinas upon his return to the country from his exile in Spain. He is thus acknowledged as the father of Philippine trade unionism. * During this time, the workers were not protected by any labor law or accorded protection by the government as there were hardly any labor law regulating labor and employment in the Philippines. As result, Filipino workers suffered a lot of injustices from the hands of the Spaniard employers. Without state legislation to protect their rights, laborers and farmers often worked under extremely difficult conditions. Filipino workers were often forced to give free labor to their Spanish masters. * Up the 1960s, due to the oppression and excesses of landowners, farm laborers were burdened with debt and were compelled to till the land of their masters. The passage of R.A. No. 3844 on August 8, 1963 known as the Agricultural Land Reform Code made a slight improvement on the living conditions of the tenants. * This legislation was strengthened by the passage of the Labor Code. It was on May 1, 1974 when the former president, Ferdinand E. Marcos issued Presidential Decree No. 442, "a decree instituting a labor code and consolidating labor and social laws to afford protection to labor, promote employment and human resources development, and insure industrial peace based on social justice." It took effects months from its promulgation on November 1, 1974. Construction in favor of labor makes it explicit that all doubts in the implementation and interpretation of the provisions of the Labor Code, its implementing rules and regulations, shall be resolved in favor of labor which further strengthened protection of workers. * The provisions of the 1935 Constitution on social justice and on the promotion of the employees were also found inadequate. It was only in the plebiscite held on January 17, 1973 when the provisions of the 1973 Constitution on the protection of labor were made broader and more explicit. * After the EDSA Revolution that ushered the new administration of President Corazon Aquino, a new constitution was drafted, wherein a full section was devoted to the protection of labor. It also enjoins the workers and employers to observe the principle of shared responsibility in running the enterprise. * From then on, the fundamental law of the land sets the broad policies regarding labor protection and employment. Legislations have been enacted to translate these policies into specific terms. Most of these find expression in amendments to the Labor Code and its implementing rules and guidelines. Gradually, the wage earners secured social sanction for the right to organize. ### Three Categories of Employees 1. **Managerial employees** 2. **Supervisory employees** 3. **Rank-and-file employees** ### Distinction between Managerial Employees and Supervisory Employees * The principal distinction between managerial employees and supervisory employees is that the former have the “power to decide” and do managerial acts, while the latter have the power only “to recommend” managerial acts such as laying down policy, hiring or dismissal of employees, and the like. ### Distinction between a Labor Organization and a Workers’ Association * A labor organization is established principally for collective bargaining purposes, while a workers' association is organized for the mutual aid and protection of its members but not for collective bargaining purposes. ### Definition of Terms * **Labor relations** —refer to that part of labor law which regulates the relations between employers and workers. * **Example:** Book V of the Labor Code which deals with labor organizations, collective bargaining, grievance machinery, voluntary arbitration, conciliation and mediation, unfair labor practices, strikes, picketing, and lockout * **Labor standards** —refer to that part of labor law which prescribes the minimum terms and conditions of employment which the employer is required to grant to its employees. * **Examples:** Books I to IV of the Labor Code as well as Book VI thereof which deal with working conditions, wages, hours of work, holiday pay and other benefits, conditions of employment of women, minors, house helpers and home workers. * **Medical and dental services, occupational health and safety, termination of employment, and retirement** * **Labor organization** - means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. * **Legitimate labor organization** —any labor organization duly registered with the Department of Labor and Employment (DOLE). * **National union or federation** —an alliance of a group of unions in one industry in any area, region, or country.” * **Exclusive bargaining representative**—any labor organization duly recognized or certified as the sole and exclusive bargaining agent of all employees in the bargaining unit. * **Collective bargaining** —is the decision-making process where management and the union set the terms and conditions of employment and the rules and procedures in the employee-employer relationship. * **Collective bargaining agreement**—the end result of collective bargaining; refers to 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, including mandatory provisions for grievances and arbitration machineries. * **Labor disputes** —refer to questions or controversies regarding terms and conditions of employment, including the ways by which such terms and conditions are negotiated, fixed, arranged, or modified over and above minimum standards. * **Arbitration** —represents the final stage in the dispute resolution process. The grievance does not always result in an acceptable solution because when a deadlock occurs, labor contracts call for arbitration. It has two kinds: voluntary and compulsory. * **Strike** —any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. * **Lockout**—the temporary refusal of any employer to furnish work as a result of an industrial dispute. * **Labor arbiter**—the hearing officer of the National Labor Relations Commission (NLRC) and his decision is appealable to NLRC. * **Union security agreement** —a contractual agreement, usually part of a collective bargaining agreement, in which an employer and a trade or labor union agree on the extent to which the union may compel employees to join the union, and/or whether the employer will collect dues, fees, and assessments on behalf of the union. ### Types of Labor Disputes 1. **Rights Disputes** —involves alleged violation of a right recognized by law, collective bargaining agreement (CBA), contracts, or company policy. 2. **Interest Disputes** —economic or bargaining dispute where the issues involved are not mandated by law and could be negotiated. 3. **Labor Standards Disputes** —include nonpayment or underpayment of wages and wage-related benefits and violations of health and safety standards. 4. **Labor Relations Disputes** —involves employee discipline, unfair labor practice, deadlocks, strikes, etc. 5. **Welfare and Social Legislation Disputes**—refer to claims arising from the failure of the employer to comply with the social and welfare obligations under the law. ### National Policy on Labor Dispute Settlement * The present national policy on labor dispute settlement is enunciated in the following instruments: * **1987 Constitution** —Sec. 3, Article XIII provides: “The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.” * **Labor Code, as amended by Republic Act 6715**—Article 211 of the Code provides, among others: * "...It is the policy of the State...to promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation, and conciliation, as modes of settling labor or industrial disputes." * "To provide adequate administrative machinery for the expeditious settlement of labor or industrial disputes." ### Early Policies Adopted by the Government on Settling Labor Disputes * **Philippine labor policy may be said to have evolved over four periods:** * **Commonwealth Period (1936-1953)** —Commonwealth Act No. 103 established our first labor dispute settlement system by creating the Court of Industrial Relations and vesting it with compulsory arbitration powers over labor disputes involving both workers in the private sector and in government-owned or controlled corporations. * **Industrial Peace Act Period (1953-1972)** —In 1953, Republic Act No. 875 was enacted fundamentally changing the framework of labor relations policies from that of compulsory arbitration to collective bargaining. The Act severely restricted the compulsory arbitration powers of the Court of Industrial Relations (CIR). The latter was divested of the power to set wages, rates of pay, hours of work, other terms or conditions of employment, or otherwise regulate the relation between employers and employees, as a compulsory arbitration body, except in labor disputes involving industries indispensable to the national interest. * **Martial Law Period (1972-1986)** —It was during the period of martial law that voluntary arbitration became an integral part of the Philippine labor relations policy. This period was also marked by the banning of strikes in the so-called "vital industries." To cushion the impact of the strike ban, Presidential Decree No. 21 was issued creating the National Labor Relations Commission, which exercised original jurisdiction over practically all kinds of labor disputes. * **Post-Martial Law Period (1986-present)** —There was emphasis on the promotion of voluntary modes of dispute settlement. By virtue of Executive Order No. 126, which reorganized the Department of Labor and Employment, the National Conciliation and Mediation Board (NCMB) was created to oversee the implementation of the constitutional policy of promoting the preferential use of the voluntary modes of dispute settlement, including conciliation. Republic Act 6715 introduced amendments to the Labor Code which strengthened trade unionism and collective bargaining as essential elements of an effective labor dispute settlement system. ## Different Modes of Settling Labor Disputes 1. **Negotiation** * **Parties control the process.** * **Parties engaged in verbal interaction completely in their own terms.** * **Decision is made by the two conflicting parties.** * **Outcome is whatever the parties agree to.** * **Applied to the nonunionized or unorganized group of workers in the private and government sectors.** 2. **Collective Bargaining** * **Decision-making process between union and management.** * **Aims to set the terms and conditions of employment and procedures in the employer-employee relationship.** * **Aims to ensure that the agreement is enforced through the grievance machinery with voluntary arbitration as the last step in the process.** 3. **Grievance Machinery** * **Internal rules of procedures intended to resolve all issues arising from the implementation and interpretation of the collective bargaining agreement.** * **Part of the continuous process of the collective bargaining intended to promote friendly dialogue between labor and management as a means of maintaining industrial peace.** 4. **Mediation** * **Similar to conciliation although the mediator is expected to put forward settlement proposals.** * **Parties fully participate in deciding issues and in creating, evaluating, and solving the conflict to come up with a win-win solution.** ### When Is Mediation Useful? 1. **When parties want to resolve the conflict.** 2. **When parties are able to verbalize the cause of their distress** 3. **When they need to continue or maintain a relationship.** 4. **When they have issues that are complicated by strong emotions.** 5. **When they feel uncomfortable confronting the other.** 6. **When they are able to live up to their promises.** ### Benefits of Mediation 1. **It is time saving.** 2. **It costs a fraction of 10% of litigation.** 3. **It is private and confidential.** 4. **It restores relationships.** 5. **It improves understanding of underlying issues.** 6. **It does not close doors to other options if the parties are not satisfied.** 7. **It is proven to be more successful in the Philippines.** ### 5. Conciliation * **Occurs when a conciliator-mediator intervenes in a negotiation.** * **Conciliator cannot decide upon the dispute.** * **Can only reconcile the dispute by facilitating the meeting of the minds between the parties.** * **In the meeting with the conciliator, the disputing parties are given the chance to state their demands and position with the aim of reaching a viable agreement.** ### Role of Conciliator-Mediator * An officer of the NCMB has the principal function to assist in the settlement of labor disputes through conciliation and preventive mediation, including the promotion and encouragement of voluntary approaches to labor disputes prevention and settlement. ### 6. Arbitration * **Process where a third party, the arbitrator, decides upon the agreement or award in a labor dispute** * **A quasi-judicial process in which the parties agree to submit an unresolved dispute to a third neutral party for binding settlement** * **Represents the final stage in the dispute resolution process. The grievance does not always result in an acceptable solution because when a deadlock occurs, labor contracts call for arbitration** ### Two Kinds of Arbitration 1. **Voluntary Arbitration** —the parties agree to submit themselves to arbitration. 2. **Compulsory Arbitration** —parties are compelled or ordered to submit themselves to arbitration in case there is deadlock during collective bargaining. ### Authority of an Arbitrator 1. **Investigate and hear the case upon notice of the parties** 2. **Render an award (decision) based on the contract and record of the case** 3. **Set and conduct hearing, attendance of witnesses and proof documents** 4. **Conduct fact-finding and other modes of discovery** 5. **Conduct reopening of hearing** 6. **Modify any provision of existing agreement upon which a proposed change is submitted for arbitration** ## Unionism in the Philippines * Unionization and labor action have dwindled. According to the Bureau of Labor and Employment Statistics. one of the department bureaus of DOLE, if one will look at the percentage of labor union members to total wage and salary workers, there is a notable decline from 30.7% in 1982 to 29.5 in 1993 down to 10.6% in 2009. * But for labor leaders and those who are active in the labor movement, they claim that the prevalent practice of contractualization has been the main culprit in the reduction of union membership on a national scale. * Remollino cited the case of Ilaw at Buklod ng Manggagawa (IBM), the union of workers of the San Miguel Corporation (SMC) conglomerate, the country’s largest food and beverage corporation. * According to Remollino, it used to be a showcase of what being a strong union was all about. * During the early 1990s, majority of San Miguel’s then 39,000 strong workforce were members of IBM. * Remollino mentioned that out of 26,000 employees, only 1,100 remained as regular employees and members of the union at the same time. * This was based on the interview with Ka Neri, a full-time KMU organizer working with the IBM union who is also a former contractual employee at SMC. * This, according to him, was brought about by contractualization in the workplace. * There were several employees who were laid-off, got dismissed, or had availed early retirement and then they were replaced with contractual employees with lower wages. * Added to this, certain processes are already contracted out by big companies. * This paved the way for the growth of business process outsourcing here in the Philippines. For example, in the case of PLDT, installations of new telephone lines are now being done by contractuals who are hired by agencies. * These contractuals are paid by piecemeal where their pay depends on the number of telephone lines they installed; no installation, no pay. ### Contractualization and Unionism * Based on the data from the Bureau of Labor Relations (BLR), there was a sharp slide in union membership from 2001