Dispute Settlement Mechanisms in the Labor Code

The Constitution is very clear in its wording that it favors the use of voluntary
methods in settling labor disputes. Hence, incorporated in the Labor Code enshrined
in Article 211 is the promotion and emphasis on the use of voluntary arbitration,
mediation and conciliation, as modes of settling labor or industrial disputes. There
are three ways of resolving labor disputeson top is the compulsory arbitration,
followed by the conciliation mediation and the alternative dispute resolution. These
dispute settlement mechanisms are provided under Articles 260 to 262.
However, many a number of studies and researches revealed that this is only
true in theory and never in practice. Perusal of the system manifest that the
countrys approach is adversarial and litigious in nature. At the plant level, the
country is still crippled by the problem that workers and employers tend to rely on
litigation and third party dispute resolution rather than settling their own
differences. And, at the national level, the defining characteristic of industrial
relation system of the country is its adversarial nature. At present, the policy on
labor dispute settlement system in the Philippines is incongruent to the
characteristically-eastern culture of mutual trust and collaboration, or the Filipino
way of responding to the problems. When disputes happen at the plant level,
ideally, the two parties involved (worker and employer) settled their own disputes.
However, when the parties have already exhausted the plant level grievance
machinery but have not reached an agreement, they seek the assistance of a third
party to settle their dispute. The government usually plays the role of third party
intervenor, as part of its role under the police power of the State. On part of the
government, the Department of Labor and Employment is mandated to prevent and
settle labor disputes as a guardian of industrial peace.
President Aquino, finding out this present state of the labor sector, in his
SONA, directed the Department of Labor and Employment (DOLE) to reform the
labor arbitration and adjudication system. The Department launched a new program
to make dispute settlement system fast, simple, least costly and beneficial to both
parties. This new program is called, Single Entry Approach (SENA), which took effect
on October 20, 2010. The Single Entry Approach (SEnA) Program is an
administrative approach to provide a speedy, impartial, inexpensive and
accessible settlement procedure for all issues/complaints arising from employeremployee relations to prevent them from escalating into full blown disputes.
Under this approach, all labor and employment disputes shall undergo a 30-day
mandatory conciliation-mediation process to effect settlement among the
contending parties. After SEnA took effect on 26 October 2010 and from the
time of its implementation, a total of 50,577 RFAs had been filed in the DOLE
Regional Offices and its Attached Agencies as of June 2012. 24,533 of these
RFAs were settled garnering a total of Php 1,214,920,484.07 in monetary
benefits with 36,767 workers covered.

In just two years of implementation, because of its efficacy in settling

requests for assistance, the Congress has enacted R.A. 10396 institutionalizing
conciliation-mediation as a mandatory mode of dispute settlement for all labor
cases. President Aquino III signed it into law on 14 March 2013. Republic Act No.
10396, or the Mandatory Conciliation-Mediation Law, provides that all issues arising
from labor and employment shall be subject to mandatory conciliation-mediation.
Only cases and complaints that are not resolved at the mandatory conciliationmediation stage will be elevated to compulsory arbitration, or to the appropriate
DOLE office, upon endorsement by the duly authorized officer. The act also provides
that any or both parties involved in the dispute may pre-terminate the conciliationmediation proceedings and request referral or endorsement to the appropriate
DOLE agency or office. Both parties may also agree to refer the unresolved issues to
voluntary arbitration.
In todays market, the firms undergo functional and numerical flexibility to
compete to the world market. As the firms try to metamorphose to the new trend of
global market, labor disputes at the local level increases. Hence, the government
move in strengthening the conciliation-mediation as voluntary mode of dispute
settlement for all labor cases is a smart move with great potential in resolving labor
disputes in the country, it being a non-litigious, non-adversarial, less expensive and
expeditious mechanism in assisting the parties towards voluntarily reaching their
own mutually acceptable settlement to the labor dispute. Under this informal setup, the parties find it more expedient to fully ventilate their respective positions
without running around with legal technicalities and, in the course thereof, afford
them wider latitude of possible approaches to the problem. Moreover, conciliationmediation maybe considered as an impartial dispute settlement procedure as
disputes are settled through parties mutually-agreed arrangements that came into
existence as a result of painstaking efforts among the union, management, and the
Conciliator-Mediator. In this regard, the parties are bound to honor any agreement
entered into by them. It is in sync to the culture of mutual trust and collaboration or
of the Filipino way of responding to the problems since it involves open dialogue and
mutual agreement way of settlement. The statistics also speak for themselves.
Since the implementation of SEnA, the Regional Offices skillfully use conciliationmediation to prevent labor disputes from escalating into labor cases. The number of
unsettled Requests for Assistance (RFAs) being referred to NLRC decreased by
57.1% from 2,724 in the first semester of 2011 to 1,168 in the first semester of
2012. The NLRC had a 6.5% decrease in the number of cases filed before its office
since SEnA was implemented from 32,958 in 2010 to 30,812 in 2011. For the first
semester of 2012, there are a total of 15,657 cases filed before the office.
In this regard, I am of the opinion that the method of dispute settlement must
be restructured in such a way that alternative dispute resolution must be placed on
top, followed by the conciliation-mediation and only in limited cases shall there be
compulsory arbitration. National Conciliation and Mediation Board (NCMB) plays a

major role at the base and apex of the tiers in DOLE dispute settlement. At the base
are the alternative dispute resolution (ADR) programs or the dispute prevention
approaches, like labor management education on employment relations; promotion
of pro-active social dialogue bipartite, tripartite and tripartite plus; workplace
based labor dispute settlement mechanisms; conciliation-mediation; voluntary
arbitration; and Administrative Intervention for Dispute Avoidance (AIDA). The move
of the President in signing the new law is a great start in implementing the change
the government wanted to enforce. In the first place, this law only materializes the
true spirit of the lawthat is, labor dispute must be resolved through voluntary
arbitration and not otherwise and that the labor law is more leaning to the welfare
of the laborers. In line with this, it is expected from the government to invest
heavily and to direct their funds with the NCMB and the SEnA in order to sustain the
potential increase in solving labor disputes through the ADR and conciliation
mediation.