Reinforcing Labor Relations through
Responsive Regulations:
An assessment of the regulatory reform areas in
Book Five of the Labor Code, As Amended
PATRICK P. PATRIWIRAWAN, JR.
Institute for Labor Studies
Department of Labor and Employment
Content Outline
Issue Definition and Objective
Theoretical Paradigms
Framework of Analysis
Policy Context and Alternatives
Recommendations
Issue Definition
• Since the enactment of the Philippine Labor
Code in 1974, profound changes in the socioeconomic and political landscapes have taken
place.
• Changes have influenced the transformation
of a new world of work now perceived to be
incongruent with the original framework of
the Code.
Research Objective
• The paper examines the responsiveness of the
Code by analyzing the extent to which policy
objectives have been carried out through the
issuance of regulatory interventions as
measured by the identified policy indicators.
• The paper advocates for the need to reform
the Labor Code as policy issues arise from
each of the regulatory areas identified in Book
Five – Labor Relations.
Theoretical Paradigms
• Dunlop’s Industrial Relations System
(Dunlop, 1953)
– Theory explains and predicts interdependencies or interrelations
among process coefficients.
• Corporatism
(Philippe Schmitter & Gerhard Lehmbruch, 1982)
– Direct state intervention in the political or economic system under the
banner of public interest.
• Theory of Economic Regulation
(George Stigler, 1971)
– Regulation is instituted primarily for the protection and benefit of the
public at large or some large subclass of the public
Framework of Analysis
Labor Market Realities
LR Policy
Objectives
INPUT
1987 Philippine Constitution
LR Policy Formulation
PROCESS
Institutions
OUTPUT
PD 442 (Book V)
Labor and Other Legislations
PD 442 (Art. 3 & Art.211)
International Conventions
LR Legislations/
Regulations
Stakeholders
FEEDBACK
LR Policy Implementation
Administrative Regulations
Policy Context: Labor Organization
• Policy Objectives:
– (1987 Constitution) Right to self-organization
– (1974 Labor Code) Free and voluntary labor organization
– (ILO Convention 87, 1953) Freedom of Association
• Policy Interventions:
– Art. 234 – 246 of Book V
– Enactment of RA 9481 (2007) Strengthening the right to
self-organization
– DO No. 40-03 Series of 2003 (IRR on Book V)
• Policy Outcome: low density rate over time
30
30.0
25
25.0
20
20.0
15
15.0
10
10.0
5
5.0
0
0.0
2000
2001
2002
2003
2004
2005
2006
Total Wage and Salary Workers
2007
2008
2009
2010
2011
2012
Union Membership
Net Union Density Rate
Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of
Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/
2013
Density Rate (%)
Number of Workers (in millions)
Union Density Rate
40,000
4.00
35,000
3.50
30,000
3.00
25,000
2.50
20,000
2.00
15,000
1.50
10,000
1.00
5,000
0.50
0
0.00
2003
2004
2005
2006
2007
2008
Employed Persons
2009
2010
2011
2012
2013
Workers Association Membership
Workers Association Density Rate
Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of
Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/
Density Rate (%)
Number of Persons (in thousands)
Workers Association Density Rate
Policy Alternatives
Level of Analysis
Policy Options
Firm/
Enterprise
 Make 20% requirement for independent unions in
Art.234 directory, not mandatory or completely remove
minimum membership requirement in Art. 234
 Recognize continuous union membership when an
employee transfers to another company
Industry
 Enable/Institutionalize multi-employer organizing such
as craft unionism or industry unionism
National
 Reduce required number of affiliates for federations
 Empower TUCs to issue charters
Global
 Encourage affiliations of national unions or federations
with international trade unions such as the ITUC
 Explore the nature of representation of such affiliations
 Look at possibilities for bilateral union agreements
towards multinational union collaborations
Policy Context: Collective Bargaining
• Policy Objectives:
– (1987 Constitution) Right to collective bargaining and
negotiations
– (1974 Labor Code) Free collective bargaining and
negotiations
– (ILO Convention 98, 1953) Right to Collective Bargaining
• Policy Interventions:
– Art. 250 – 259 of Book V
– DO No. 40-03 Series of 2003 (IRR on Book V)
• Policy Outcome: low coverage rate over time
Collective Bargaining
Coverage Rate
25,000
4.00
20,000
3.00
2.50
15,000
2.00
10,000
1.50
1.00
5,000
0.50
0
0.00
2000
2001
2002
2003
2004
2005
2006
Total Wage and Salary Workers
Workers Covered by Existing CBAs
2007
2008
2009
2010
2011
2012
Union Membership
CBA Coverage Rate
Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of
Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/
2013
Coverage Rate (%)
Number of Workers (in thousands)
3.50
Policy Alternatives
Level of Analysis
Policy Options
Firm/Enterprise
 Explore WAs negotiation with local government
authorities for security of tenure in the place or
routes where they conduct their business/work*
Industry
 Enable/Institutionalize multi-employer
bargaining or sectoral/industry-wide bargaining
National
 Explore prospects for national bargaining
Global
 Strengthen partnerships and coordination
among national trade unions of ASEAN member
countries for possibility of collective bargaining
with the employer sector within ASEAN
*Bitonio, B. E. R. (2012, November). Industrial relations and collective bargaining in the Philippines. ILO
Working Paper No. 41. ILO: Geneva.
Policy Context: Dispute Settlement
• Policy Objectives:
– (1987 Constitution) Preferential use of voluntary modes in settling
disputes, including conciliation
– (1974 Labor Code) Voluntary arbitration, mediation and conciliation, and
adequate administrative machinery for the expeditious settlement of labor
disputes
• Policy Interventions:
– Art. 260 – 262 of Book V
– Enactment of RA 6715 New Labor Relations Law and RA 10396
Strengthening Conciliation and Mediation
– DOLE Cir. No. 1 (Administrative Intervention for Dispute Avoidance) and
DO No. 40-03 Series of 2003 (IRR on Book V)
• Policy Outcome:
– low disposition rate of cases in the past but with steady improvement
– Adversarial, legalistic, complex with multiple entry points
and multiple layers of appeal
Number of Cases Handled by Type of Case
Number of Cases Handled
60000
50000
40000
30000
20000
10000
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Preventive Mediation Cases
Voluntary Arbitration Cases
Original Compulsory Arbitration Cases
SEnA Request For Assistance
2011
Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of
Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/
2012
2013
Disposition Rate by Type of Cases
100.00
Disposition Rate (%)
90.00
80.00
70.00
60.00
50.00
40.00
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Preventive Mediation
Voluntary Arbitration
Med-Arbitration (Original)
Med-Arbitration (Appealed)
Compulsory Arbitration (Original)
Compulsory Arbitration (Appealed)
SEnA Request for Assistance
Labor Standards Cases (Original)
Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of
Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/
2012
2013
Policy Alternatives
Level of Analysis
Policy Options
Firm/
Enterprise
 Institutionalize labor-management council and/or works
council as a preventive mechanism for grievance
handling and driver towards productivity gain-sharing
 Promote workplace bipartite cooperation
Industry
 Explore prospects for industry-based grievance
machineries
National
 Harmonize policies in promoting voluntary arbitration
and compulsory arbitration
 Streamline NLRC Rules of Procedure to improve case
management and quality management systems
Global
 Explore feasibility of handling grievances for workers
engaged in virtual economies
Policy Context: Strikes and Lockouts
• Policy Objectives:
– (1987 Constitution) Right to strike in accordance with law
– (1974 Labor Code) Not explicitly stated
– (ILO Convention) “The right to strike is not set out explicitly
in ILO Conventions and Recommendations.” (Gernigon,
Odero, and Guido, 1998)
• Policy Interventions:
– Art. 263 – 266 of Book V
– DO No. 40-03 Series of 2003 (IRR on Book V)
– DO No. 40-H-13, Series of 2013
• Policy Outcome: decreasing incidence of
strike/lockout
800
9.00
700
8.00
7.00
600
6.00
500
5.00
400
4.00
300
3.00
200
2.00
100
1.00
0
0.00
2000
2001
2002
2003
2004
Strike/
Lockout Notices
2005
2006
2007
2008
Actual Strikes/
Lockouts
2009
2010
2011
2012
Rate of Occurence
Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of
Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/
2013
Rate of Occurrence (%)
Number of Strikes/Lockouts
Strike and Lockout Notices
Policy Alternatives
Level of Analysis
Policy Options

Clarify the elements considered in declaring a valid strike especially in
consideration of the new element of “damage to employer” as applied
in the decisions of the Supreme Court in the cases of Biflex vs. Filflex
(2006) and NUWHRAIN vs. Court of Appeals (2008).

Align coverage of prohibition in the exercise of the right to strike from
the ILO principle concerning the right to strike with Section 18 of DO
40-G-03 to exclude private security guards and similar personnel in the
private security agency.

Align ‘essential services’ criterion with the ‘national interest’
requirement in the exercise of Assumption of Jurisdiction

Explore the possibility of a globalized strike/lockout among
internationally affiliated federation members or multinational
companies to provide appropriate intervention in light of the
globalized labor economy.
Firm/
Enterprise
Industry
National
Global
Recommendations
1. Alignment of the provisions of the 1974
Labor Code with the fundamental guarantees
of the 1987 Philippine Constitution;
2. Harmonization with international
conventions and other labor-related
instruments;
3. Expansion of the coverage of employment
and employment relations including
promotion of gender equity and equality in
the definition of employment relations;
Recommendations
4. Recognition of the emerging forms of work
arrangements and work representations with
consideration for gender-specific requisites;
5. Integration of voluntary modes of practices
and partnerships between workers and
employers; and
6. Configuration of more streamlined dispute
settlement systems
THANK YOU!
Institute for Labor Studies
Department of Labor and Employment
www.ilsdole.gov.ph
(+63) (02) 527-3523