You are on page 1of 79

Introduction

It gives a detailed explanation of the research question, a


literature review to demonstrate the most recent researches on your
topic, states the significance of the problem, and ultimately states how
you will address the problem identified.

The relationship between the employer and the worker is not


always smooth and harmonious. Since the employer is more powerful
than the worker, there is a need for mechanisms that would render
support to the plight of the workers.

Literature Review

I. Labor Unions and Their Effects

A labor union is a formal union of employees/workers that


deals with employers, representing workers in their pursuit of justice
and fairness in the fight for their collective or common interest.
Workers who join labor unions expect an improvement in their utility,
typically manifested in the form of higher wages and benefits. Indeed,
there is a substantial literature that suggests that, other things equal,
unionized workers do receive higher rates of compensation than their
nonunion counterparts (Lewis, 1963, 1985). At the same time,
however, it is possible that unions have longer-term detrimental
effects on the economy as a whole and, arguably, therefore, unionized
workers. Labor unions may promote practices that reduce hours
worked or productivity growth (from union rules, reduced capital
formation, barriers to resource mobility, etc). A number of studies
observe a negative relationship between the incidence of union
membership and economic performance (Vedder and Gallaway, 1986;
Pantuosco et al., 2001). On the other hand, proponents of the concept

1
of efficiency wages and others might argue that the positive effect of
unionization on worker moral e might raise productivity and possibly
economic growth (Krueger and Summers, 1988; Katz, 1986;
Altenburg and Straub, 1998). Of course, the impact of unions on the
aggregate performance of the economy would depend in part on their
relative importance in labor markets and that has changed
dramatically over time. To roughly summarize the 20th century
experience, during the first one-third of the century, union
membership tended to be small (usually 10 percent or less of
employment), in the middle third of the century it tended to be much
larger (reaching one-third or so of the labor force), and in the last third
of the century the "market share" of labor unions in the private sector
was falling rather steadily, by century's end approaching the levels of
the earlier part of the century. Thus, if unions on balance had adverse
effects on the rate of economic growth as some have suggested, peak),
but diminishing in the latter part of the century.

When a salary earner finds out that, as an entity, he is at a


drawback in advertising his manual labor; and that this difficulty is
the result of his individual rivalry with member employees for the
identical work, the finding chairs him in control of the cure, which is
mixture. The kind of mixture, which rationally pursues his finding, is
not mixture with all salary earners, but with those who are behind
the similar jobs. Such mixtures are the labor unions, and such unions
are effortless selling proposals, especially for those employees who
follow trades or crafts, which necessitate some degree of knowledge
and guidance.

It was in the character of the state of affairs that the workers


who ensued a deal, which obligated ability and guidance, would be
involved in proposals for the protection of deal values, and that

2
workers devoid of particular ability would demonstrate fewer
apprehension. As accomplished workers know how to earn extra at
their individual deal than at some other type of labor, the
maintenance of the wage level is to them a substance of life
significance. It is factual, as a broad-spectrum proposal that
association by trade, and everlasting association of any sort, has
pleaded to workers according as they have little or much to gain in
the trade they follow.

Labor union grouping is so clearly better to the rivalry of


individuals looking for work that workers, in strain of strong
competition, would have joint roughly impulsively if their
arrangement had not encountered the radical conflict of those who
restricted the allocation of the jobs. The trade form of association not
merely goes after the urge for grouping under pressure of contest, but
it goes after individual favorites in the involvement of men of
comparable gear and societal status. All other things being equivalent,
machinists as a group would be more pleasant-sounding than a
diverse group of machinists and shoe operators: or carpenters would
be grateful for involvement with other carpenters more than
relationship with the different kinds of workers in a department store.
The labor union is in this wisdom an automatic appearance of
association, and, as it follows individual favorites, it is the primal
shape of the existing labor groupings. In this lie the power and the
fault of "pure and simple" labor unionism.

The industrial union is bottomed on the labor groupings which


capital creates for the production and delivery of a product or of
merchandise of a parallel nature in rivalry or exercise. The industrial
unionists not only ignore the individual favorites for involvement, but
they set themselves the job of conquering those favorites and making

3
in their place novel requirements for involvement footed on class
welfare which build up in the resistance for power of industry; for
industrial liberty. In this logic the industrial union is the complicated
shape of association.

The industrial union might give for the supplementary


association of craft workers, who are in straight contest, but these
trade groups are secondary and minor to the industrial group of which
the trade is a fraction. While the trade unionist conceives of a job as
an obsession in itself, the industrial unionist understands that it is a
fraction of a procedure. In other words, the unit of organization for
labor, as it is for capital, is the industry in which workers,
representing possibly several trades, are associated for the
manufacture of a product. Some industries are comparatively simple
in their processes, and the membership of an industrial union is
therefore not necessarily complex or inclusive of several trades.

Whether an industry is multifaceted or uncomplicated in its


operational force, whatever might be the separation of the procedures,
it is capital and not labor which determines and directs it. Capital
decides what kind of workers are to be employed and employs them.
As capital sees fit it discharges them. It changes the processes and
the kinds of workers. As capital regards the whole group with a single
eye so would the industrial unionist regard capital? From an
organization point of view, labor is weak or strong, in agreement with
capital, or in rebellion against it, as it includes every worker which
capital has considered of sufficient importance to employ.

The industrial unionist lays pressure on the significance of


alteration in the form of organization so that it will communicates to
the changes in modern industry. He is apt to assume that an age has
arrived in which all industrial processes have reached a maximum

4
state of concentration and simplicity. While this is far from the truth,
concentration is a characteristic of modern industry. It is of the first
importance to labor organization that new methods of management,
no less than new machinery, are creating new trades, and that they
are re-creating and destroying old ones. The creation of a new trade
or the destruction of an old trade was at one time an event of historic
importance; today it receives not much more than passing comment
in newspaper notice. The industrial unionist charges that the trade
form of organization is as ill equipped to fight present-day battles, as
were the guilds to represent the interests of the journeymen a
hundred and fifty years ago. The industrial unionist thus challenges
the trade unionist, placing him on the defensive.

II. The Labor Market in Perspective

In the broadest sense, labor markets tend to conform to the


economist's perception of institutions that tend to move toward
equilibrium outcomes. In an unconstrained labor market, the price of
labor (the wage rate) will move toward a level at which the number of
workers interested in working at that wage will match the number of
workers that employers are interested in hiring. In the aggregate, this
is not likely to occur in all markets, but, when it is the typical case,
what is often called a "full-employment" situation exists. This does not
mean that there is an absence of statistically-measured
unemployment. The measured unemployment under these
circumstances can be explained through a choice-theoretic,
reservation-wage, job-search model. Job-seeking workers approach
the labor market with a reservation wage in mind. If an initial search
reveals no job opportunities that satisfy their reservation-wage
aspirations, they continue to search. As they do this, they will be
regarded by the statistical authorities as involuntarily unemployed,

5
that is, actively seeking work but without a job. As the search process
continues and time passes, two things will happen: Superior job
alternatives will be revealed, and workers will revise their reservation
wage expectations downward in response to the previous search
disappointments. Eventually, a correspondence between an actual job
(and wage) opportunity and the job-seeker's reservation wage will be
attained and the market will clear, as shown graphically in Figure I.
When all job opportunities have been filled, historical experience tells
us that there will still be active job seekers in the market.
Consequently, statistically measured unemployment will still be
observed. X expressed as an unemployment rate, this is the
"equilibrium" or "natural" rate of unemployment. It differs from the
"effective" rate of unemployment, which reflects any mismatch
between the quantity demanded of labor and the quantity supplied.
At full employment, the effective unemployment rate is zero. B In the
truest sense of the word, any measured unemployment at this point
should be viewed as voluntary.

III. Labor Union and the Corporate Social Responsibility

The issues currently driving the discussion about corporate


social responsibility (CSR) – the proactive engagement in stakeholder
issues to assure positive societal impact while enhancing corporate
viability – are increasingly complex; human and workers’ rights,
global supply networks, and governance (or the lack thereof), issues
that also involve the governments, non-governmental organizations
(NGOs), and labor unions with whom corporations interact. As a
consequence, CSR research is expanding beyond how business firms
address their responsibilities, to how those responsibilities are framed
altogether. Some research employs the term corporate citizenship to

6
describe the social role of business and suggests that as powerful
public actor businesses have a responsibility to provide and respect

Figure 1. Employment and Wage Curve


basic civil, social, and political rights (Matten and Crane, 2005; Wood
and Logsdon, 2001). Some other research studies suggest that global
supply networks are political and economic entities that are best
viewed from a political perspective (Levy, 2008; Scherer and Palazzo,
2007), or emphasize the growing role of NGOs as partners in CSR
efforts (Jamali and Keshishian, 2008). Largely absent from these
discussions are the labor unions, who are the vital corporate partners
and important organizations in their own right. Labor union’s
reticence toward CSR begins with skepticism about the voluntary
nature of CSR that circumvents the contractually binding provisions
of collective bargaining. There is also general labor union’s1 wariness
about the stakeholder framework, and specific concerns about CSR
programs that it tends to equate labor unions with other stakeholders.
Some unionists believe stakeholder status implies a separate and
subsidiary role, alongside the local community and others, rather
than recognizing unions as equal partners in the business enterprise.
Moreover, while CSR stresses the importance of identifying and

7
engaging stakeholders, it emphasizes unilateral managerial decision
making and rarely refers to the type of power that workers exercise
through their trade unions (Justice, 2003). As a result of these
misgivings, some labor unions have concluded that CSR is simply
another management system that will be used to undermine union
stature and influence. They prefer a version of CSR that complements,
but does not replace, legislation on economic and social rights and
environmental standards and is more deferential to collective
bargaining (Mather, 2006; Preuss et al., 2006). Other labor union
leaders believe unions should collaborate with organizations
concerned about the social ramifications of business. They contend
that CSR is an enduring part of the business landscape and failing to
engage social responsibility merely plays into the hands of businesses
that are trying to use CSR to forestall regulation. Engaging CSR also
affords union leaders an opportunity to promote compliance with
regulatory standards and respect for the role of labor unions
(International Confederation of Free Trade Unions, 2001). Hence,
labor unions should lay claim to a role in CSR, make their viewpoints
known, and take on the challenge of thwarting business attempts to
supplant government regulation with CSR (FNV Mondiaal, 2004). As
the loyal opposition, and hybrid organizations that simultaneously
embrace and challenge the corporate structure, labor unions are
uniquely positioned to present a view of social responsibility that
speaks to both benefactors and beneficiaries. More importantly, in the
current business and social environment, labor unions will also be
challenged regarding the social ramifications of their activities. For
example, even as most Americans recognize the need for labor unions,
they question union productivity and economic impact (Panagopoulos
and Francia, 2008). Even so, there is no clear formulation of labor
union social responsibility. While the management literature has

8
focused on CSR, as if corporations are the only organizations with
social responsibilities, labor relations research is largely devoid of
discussion about labor union responsibilities to society. Labor
unions, however, were early purveyors of the tenets of CSR – an
equitable wage, humane working conditions, due process for workers,
and concern for marginalized communities. The objective of this term
paper is to provide a conceptual model of social responsibility for labor
unions and discuss its implications. In what follows, I will contend
that labor union social responsibility (a) is derived from institutional
imperatives and the social contract, (b) occurs within the context of
expected functions, day-to-day activities, (c) requires the control or
influence of something of value, (d) is directed toward stakeholders,
and (e) has ramifications for strategy and practice. Foundations for
labor union social responsibility Social responsibility connotes
organizations having a role in society that extends beyond laws and
regulations to maintaining a level of behavior that is in concert with
the prevailing social norms, values, and expectations (Sethi, 1975),
and encompasses a wide range of economic, legal, ethical, and
philanthropic activities that society expects of powerful organizations
(Carroll, 1991). Institutional and social exchange theories and
deontological ethics are bases of social responsibility that have
primarily been directed toward other organizations, but provide a
sound rationale for labor union social responsibility as well. According
to institutional theory, institutions such as government, professional
groups, and interest groups jointly specify rules, procedures, and
structures for organizations as a condition for granting legitimacy –
the general perception that the actions of an entity are acceptable
within the normative parameters of society (Meyer and Rowan, 1977;
Suchman, 1995). To the extent that an organization’s interactions and
contributions are viewed favorably, it achieves the legitimacy –

9
congruency between the values, norms, and expectations of society
and the activities and outcomes of the organization (Ashforth and
Gibbs, 1990) – that is essential to its viability and vitality (Aldrich and
Fiol, 1994; Scott, 1995). Labor unions, such as other social
institutions, depend on society’s acceptance and must, therefore,
operate in a manner that garners societal approval. A second source
of labor union social responsibility is the social contract. According to
Blau (1964), an implicit social contract is established when one party
provides something of benefit to another that produces a reciprocal
obligation. In order to discharge this obligation, the second must
furnish benefits to the first in turn. Donaldson and Dunfee (2002)
refer to implicit understandings or ‘‘contracts’’ that bind industries,
companies, and economic systems into moral and ethical
communities. These social contracts are necessary because society
confers privileges on certain organizations that contribute to
important societal goals. That privilege, however, must be
accompanied by constraints because privilege can result in a number
of troublesome social outcomes (Aldrich, 1999; Valasquez, 1996). For
example, because labor unions monopolize labor, their actions can
disrupt the availability of vital goods and services. Societal
institutions provide the prerogative for organizations to operate in the
public sphere, but to maintain legitimacy, those organizations must
reciprocate with benefits for society. The final source of labor union
social responsibility is ethical obligation. Deontological ethics focuses
on the actions themselves, rather than on consequences, and its
tenets of moral duty and justice form the ethos of the labor movement.
Samuel Gompers, first president of the American Federation of Labor,
emphasizes moral standing in tandem with the teleological objective
of equitable demands by stating, Labor needs to be strong through …
the justice of its cause, and the reasonableness of its methods. It relies

10
on moral suasion because of its conviction that its demands are
generally equitable, and picketing is as necessary to the employment
of moral influence as the boycott is necessary to the proper use of the
moral power wielded by labor and its sympathizers (U.S. 57th
Congress, 1902, p. 61). As a consequence, institutions such as the
Catholic Church and the United Nations have supported labor unions
as a vehicle for improving working conditions and recognizing human
potential (Paul XXIII, 1991; Thomas, 2009; United Nations, 2008).
This support is based on the perceived morality of labor union appeals
and the expectation that unions will continue their commitment to
moral causes. Labor union voice Responsibility, giving account for
conduct and obligations, implies that an entity is consequential in
that it influences, possesses, or produces an outcome of value. For
labor unions that outcome of value is voice. According to Hirschman
(1970, p. 30), voice is ‘‘the ability to change, rather than accept or
escape from, an objectionable state of affairs,’’ and is often
accompanied by the capacity to provide due process in the hearing of
a concern, information about issues of interest, and safeguards
against reprisals for unpopular views (Budd and Scoville, 2005). As a
direct channel of communication between workers and employers,
voice enables workers to express discontent and change the
workplace relation without quitting, slowdowns, or sabotage. It is
often assumed that a union’s most important asset is its ability to
improve the earnings of its members, but wages are a deficient
indicator of labor union value. After voice is established through
collective action, workers can employ that voice to any number of
interests, including wages. The market, however, tends to constrain
the union wage premium to approximately 15% such that it has been
relatively stable (Hirsch and Macpherson, 2000; Wunnava and Peled,
1999) or declining (Bennett and Kaufman, 2007; Blanchflower and

11
Bryson, 2004) over the last several decades. Thus, rather than unions
having voice because of their monopoly wage power, it is the promise
of voice – monopoly wage power is derived from collective bargaining
– that inspires workers to form unions. In a survey of union members,
Waddington and Whitston (1997) found that 72% chose support if I
had a problem at work as a reason for joining a labor union, compared
to 36% that cited improved pay and working conditions. 2 This
outcome is consistent with classic labor union research (e.g., Parker,
1920; Tannenbaum, 1951) maintaining that preserving workers’
dignity is the primary motive for unionization. If, as proposed here,
the primary union activity is to articulate its members’ concerns, then
the currency for labor unions is voice, not wages. Gross (2002, p. 70)
states, ‘‘a full human life requires the kind of participation in the
political, economic, and social life of the human community that
enables people to have an influence on the decisions that affect their
lives.’’ Of course, labor union members are the primary beneficiaries
of voice, but the fundamental necessity of voice makes it valuable to
other union stakeholders as well. Since voice is the currency of labor
unions, labor union impact on society occurs through advocacy, the
use of voice to advance its interests and objectives.
Objectives of labor union social responsibility with the
exception of egregious behavior, social responsibility usually does not
require a radical departure from an organization’s normal operations,
but rather engaging in their roles and activities in a way that is
consistent with prevailing ethical standards and societal
expectations. With that in mind, a characterization of labor union
social responsibility must address a central question, where do
unions have societal impact? As shown in Table I, presented is a range
of perspectives on labor union roles and activities to identify three
primary objectives: (a) economic equity, which is geared toward

12
gaining equitable wages and benefits, (b) workplace democracy, which
is centered on social standing at work through democratic processes
and procedures (e.g., due process), and (c) social justice, which
focuses on justice in the broad societal context through participation
as a member of the polity. Freeman and Medoff (1984) describe two
faces of unionism, the monopoly face whereby unions employ
collective bargaining to provide wage and benefit premiums to their
members, and the collective voice face whereby the union establishes
mechanisms for fair treatment in the workplace. These two faces of
unionism coincide with the economic equity and workplace
democracy objectives of social responsibility. Godard’s (1997) survey
of Canadian workers resulted in five union roles: (a) economic,
maximizing wages and benefits; (b) workplace democratization,
securing worker rights and protections; (c) integrative, providing
orderly conflict resolution mechanisms; (d) social democratic,
addressing broader social issues, and (e) conflict, countervailing the
corporate agenda as a general advocate for workers. Godard’s
economic role is consistent with the economic equity objective and the
workplace democratization and integrative functions are subsumed in
the workplace democracy objective. The social democratic and conflict
activities are entailed in the social justice objective because the social
interests of workers are largely addressed by competing against
businesses for favorable regulations and social legislation. Based on
the experience of European labor unions Hyman (1996) offers four
union identities: (a) collective bargaining, maximizing wages and
benefits; (b) workplace governance, establishing due process
mechanisms and limits to arbitrary employer authority; (c) schools of
war, advocacy of regulatory and macroeconomic policies that effect
wage rates; and (d) advocacy on quality of life issues such as the
environment and consumer protection. The collective bargaining and

13
workplace governance activities that Hyman identifies align with the
economic equity and workplace democracy objectives of union social
responsibility, while the schools of war and quality of life identities
align with the social justice objective. Budd et al. (2004) propose that
the three primary objectives for the employment relationship are
efficiency, equity, and voice. Their objective of efficiency equates to the
economic equity objective and the equity and voice objectives equate
to the workplace democracy objective. They do not make a connection
between the objectives pursued in the workplace and social conditions
on the outside. Finally, the moral foundations of work presented by
Kochan and Shulman (2007), efficiency, dignity, and social solidarity,
align closely with the economic equity, workplace democracy, and
social justice objectives, respectively. The efforts to improve the
financial standing of workers can be effective because of collective
activities such as negotiations, work actions, strikes, and corporate
campaigns. Workplace democracy is achieved by continually
negotiating the collective bargaining agreement through the grievance
and arbitration procedures. Unions contend that corporate legal
rights have been extended through the International Financial
Institutions (e.g., WTO, International Monetary Fund, World Bank)
and trade agreements, but worker representation has not kept pace.
Obviously labor unions must deliver financial benefits to their
members to remain viable but, because the social and political
aspirations of their stakeholders are so closely linked to their financial
well-being, unions are called upon to address those aspirations as
well. Social justice occurs through political means such as corporate
campaigns and other activities that raise awareness, but also by
bargaining on behalf of stakeholders. For example, some global union
federations have reached International Framework Agreements with
particular global corporations that secure workers’ rights to freedom

14
of association and collective bargaining, and prohibit forced labor,
child labor, and workplace discrimination. Each of the objectives of
labor union social responsibility exists simultaneously and any given
labor union activity can embody economic, workplace, and social
motives.

IV. Types of Labor Union

Labor union may be classified as either (1) craft or trade, or (2)


industrial.
Craft or Trade unions are those whose membership contains of
workers engaged in a particular trade such as drivers, singers,
musicians, carpenters, etc. Examples are the Philippine Lawyers
Guild, the Fishermen’s Union, and the Shoemaker’s Union that were
in existence in 1946.
An industrial union is one whose members are employed in a
given industry regardless of the type of work performed by each
member. Examples are the Bayview Park Hotel Employees Union and
Employees Union Bayer in the Philippines.

15
16
V. Stakeholders and Labor Union Social Responsibility

In developing a conceptual framework for labor union social


performance, it is necessary not only to specify the nature (economic,
workplace, social) of those responsibilities but also to identify the
stake- holders toward whom beneficial policies and activities are
directed, and to whom accountability is due. According to Rest (1986,
p. 7) the foundation of ethical decision making is moral awareness,
‘‘…[having] been able to make some sort of interpretation of the
particular situation in terms of what actions were possible, who
(including oneself) would be affected by each course of action, and
how the interested parties would regard such effects on their welfare.’’
Applying the concept of moral awareness to labor unions at the
organizational level, if labor unions are able to determine who is
affected by their activities, then they have sound a basis on which to
employ a deontological approach of pursuing pro- grams that may be
unrelated to union members, or a teleological approach of directing
programs toward areas of mutual benefit for union members and
outside stakeholders.

Figure 2 shows three basic groups of union stakeholders that


align with the three objectives of social responsibility: the economic
community, the workplace community, and the social community;
Table II provides some ways that labor unions can respond to their
concerns. The economic community includes the union locals,
businesses, consumers, and public bystanders who may be affected
by the outcomes of collective bargaining. Labor unions are business
partners that must balance their wage demands with management
concerns about efficiency and quality. For example, increased quality
and productivity must accompany increased compensation to
maintain current profit margins. Managers, consumers, and the

17
public require wage demands that recognize the importance of
corporate competitiveness, and responsible strike activity that does
not unduly disrupt essential goods and services.

Lastly, regulatory compliance requires labor unions to be prudent


stewards of their members’ rights and resources and operate in a way
that assures favorable legal standing.

The workplace community focuses on workplace democracy and


is composed of union workers, their supervisors, and the
management and union hierarchies that jointly administer the
collective bargaining agreement. Union members require expeditious
handling of grievances, and constraints on management authority,
whereas management desires worker flexibility and problem-solving
contributions. Managers generally welcome worker input; it is not
unusual for workers to withhold ideas for fear that increased
efficiencies will lead to reductions in force (Lawler, 2001). Labor
unions interact with management to ensure that conflicts over work
rules and assignments are resolved constructively and worker
participation can occur without unduly compromising job security.
Workplace democracy is joint administration of the workplace
whereby workers have a vehicle for representation in accordance with
the collective bargaining agreement. The workplace stakeholders are
those that are present a physical address in the day-to-day issues in
the place of employment such as joint decision making, grievances,
and arbitration. Thus, the broad objective of the workplace
stakeholders is effective mechanisms for conflict resolution in a
workplace that is both humane and efficient.

Just as corporations cannot focus exclusively on shareholders,


labor unions must reconcile the interests of union members with
those of other stake- holders. Stakeholders in the social community
18
include NGOs and civic organizations, potential union members, and
the marginalized segments of society to whom labor unions have
traditionally appealed. Social stakeholders are most focused on
whether unions are addressing ethical obligations with regard to
promoting societal well-being and seeking to affect the pattern of
privilege and disadvantage in society. Workplace democracy is joint
administration of the workplace whereby workers have a vehicle for
representation in accordance with the collective bargaining
agreement. The workplace stakeholders are those that present a
physical address in the day-to-day issues in the place of employment
such as joint decision making, grievances, and arbitration.

19
Enfranchisement

= Dimensions of social responsibility


...... = Stakeholders

= Issues

Figure 2. Labor union stakeholders and issues.

20
There are also issues generated by globalization such as
offshoring, environmental protection, and human and worker rights
abroad. Activities may be more typical of social movements and center
on political enfranchisement and mobilizing broad coalitions on
behalf of favorable governmental actors and policies. As shown in
Table III, various stake- holders will view labor union social
responsibility differently such that it presents threats and
opportunities for labor leaders to consider. Being perceived as socially
responsible can improve an organization’s image (Fombrun et al.,
2000) and increase member commitment (Valentine and Fleischman,
2008). Some members may, however, think that it is counter-intuitive
for labor unions to address social responsibility at a time when union
strength is waning and scarce resources can be employed elsewhere.
Depending on how members view this paradox, labor union social
responsibility may increase member commitment or result in
withdrawal because members question advocacy directed toward
outside stakeholders and issues.

Consumers tend to patronize organizations whose values they


share (Bhattacharya et al., 1995; Maignan and Ferrell, 2001), and
social responsibility may lead to increased support for labor unions.
On the contrary, social responsibility involves risk because social
issues may involve aligning with politically unpopular groups that
alienate other stakeholders. Businesses are voluntarily engaging CSR
and may simply add socially responsible initiatives to the list of joint
labor-management programs. Some managers may, however, view
labor union social involvement as an attempt to corrode management
influence. To the extent that there is management intransigence or
antipathy, the ability for labor unions to embrace workplace
democracy initiatives may be limited (e.g., participation in workplace
innovation).
21
Since regulation tends to result from excesses, labor union
attentiveness to regulations makes more oversight less likely. This
factor is particularly relevant given the recent abuses in businesses
and NGOs. Lastly, the level of agreement and cooperation between
labor unions and their partner organizations is likely to vary
significantly.

Thus, labor union social responsibility occurs to the extent that


labor unions employ voice to enhance the standing of their
stakeholders in areas of economic equity and efficiency, workplace
rights and protections, and social justice, and reconciles the interests
of their stakeholders in a manner that is consistent with ethical
principles and the social contract.

22
TABLE II

Union responses to stakeholder issues

Economic Community Workplace Community Social Community

Attempt to negotiate Promote workplaces Pursue stronger


International that are safe, secure, domestic and
Framework healthy and free of international
Agreements with harassment, legislation to ensure
business firms that intimidation, violence that business firms
support workers’ and discrimination meet their social and
rights to organize – Local plants of a environmental
throughout corporate global corporation, responsibilities
GSNs take active part in
building a global Advocate for inclusion
Advocate the right to union network for its of workers’ rights, into
collectively bargain workers the international
for all workers Use financial and trade
union pension funds Campaign/negotiate institutions (WTO,
(particularly where for work uniforms, IMF, and World Bank)
trade unionists are equipment, and regulatory regimes
represented on fund supplies that are
boards), to reward ethically sourced Encourage businesses
responsible to build CSR
businesses Support Ensure that workers’ requirements into their
workers’ attempts for rights to freedom of public–private
decent wage and fair association and partnerships, supply
working conditions collective bargaining contracts, and aid
domestically and are more than a programs
internationally charitable concern,
but center-stage for Build joint campaigns
CSR with NGOs and
consumers to legal
Promote the and ethical conduct
integration of public and environmentally
enforcement bodies sustainable practices
such as labor/health with workers,
and safety stakeholders and the
inspectorates into community Voice
CSR initiatives opposition to
discrimination in all
forms including that
based on race,
religion, ethnicity,
gender, disability,
sexual preference and
political beliefs

23
TABLE III

Labor union social responsibility – threats and


opportunities

Stakeholder Opportunities to Threats to


pursue avoid
Union members Increased commitment Withdrawal
Consumers Support Indifference
/antipathy
Management Accord Increased
hostility
Regulators Favorable regulation Unfavorable
regulation
Social community Collaboration Opposition

VI. Social Responsibility and Labor Union Strategy

The strategic ramifications of labor union social responsibility


include not only how unions should respond to social pressures, but
also the character of their long-term role in society. Labor unions may
choose to anticipate the changes that stem from their activities, or they
may become involved due to the emergence of social problems wherein
they have a stake or can play an important role. Social responsibility is
a reflection of organizational values (Waldman et al., 2006) and takes
shape through an organization’s strategy. Snape and Redman (2004)
identify three union strategies that they term the service, organizing,
and covenantal models, respectively. As shown in Table IV, these
strategies differ with respect to their ethical foundations and how they
address the objectives, stakeholders, and issues of social responsibility.
Finally, the differences are clearly reflected in the union mission
statements.

The service strategy characterizes union operations in terms of


economic exchange and membership is based more on instrumental
outcomes than ideological similarity (Bamberger et al., 1999; Gordon et

24
al., 1995). Thus, the service strategy is weighted toward the economic
equity objective of social responsibility and bread and butter unionism
focused narrowly on promoting and securing the interests of union
members. The primary ethic is utilitarian in that unions garner support
based on exchange – the expected value to their members and society
offsets the undesirable aspects of monopoly labor power. Labor un- ions
that focus on the economic equity aspect of social responsibility are less
likely to afford voice to the concerns of outside stakeholders. These
characteristics make it more likely that unions employing the service
strategy will react to social issues rather than initiating action or
shaping developing issues.

The organizing strategy (Grabelsky and Hurd, 1994) emphasizes


socialization of members to active involvement, and the union as a self-
reliant occupational community. The primary ethic is justice in that it
focuses on empowering union members to influence important
outcomes with respect to workplace democracy and economic equity.
Organizing strategy proponents believe that building a larger labor
movement is the way to increase its strength and this viewpoint leads
to a broader stakeholder focus (Bacharach et al., 2001; Frege and Kelly,
2004). Labor unions that adopt the organizing strategy will take stands
on social issues that impact their interests or the interests of
prospective members, particularly those that are the targets of
organizing efforts. For example, union involvement with home
healthcare workers in California, Oregon, and Washington (Schneider,
2005) and with the Justice for Janitors campaigns (Erickson et al.,
2002) framed economic issues in the social rhetoric of justice. The
mission statement of the International Brotherhood of Electrical
Workers presented in Table II exemplifies social responsibility in the
organizing strategy.

25
The covenantal strategy is most closely associated with the social
justice objective of labor union social responsibility. Mutually shared
values and acceptance of the organization’s mission are critical because
members are not only addressed on the basis of self-interest, but on
their desire to realize organizational ideals (Van Dyne et al., 1994).
Unions that adopt the covenantal strategy tend toward a duty ethic in
that they are more likely than other unions to take stands on issues
of public concern and may support causes that are not closely related
to union interests (e.g., the Teamsters & Turtles campaign). As a
consequence, a covenantal approach is typical of Social Movement
Unionism and aligns trade unions with outside coalitions for social and
economic justice. Through its recognition of duty to outside
stakeholders, social unionism proponents see unions not only as
workplace vehicles for securing economic gains, but as participants in
the civic and political life of their respective countries (Turner, 1992).
The American Federation of Teachers mission statement not only
embraces the financial and workplace objectives of the service and
organizing strategies, but extends to advocate for the economic and
social aspirations of those in social communities as well. The three
strategies represent different emphases and views of the social role of
labor unions in society, but are not mutually exclusive.

26
27
VII. Union Organizing

Terry Moser, an expert union organizer, was credited by Snell and


Bohlander (2011) for the following union-organizing steps:

Step 1. Employee/Union Contact.


To explore unionization possibilities, employees weigh the
advantages and disadvantages of seeking labor representation while the
union officers gather more data about the employees’ complaints, as well
as data about the employer’s management styles, financial stability,
policies, etc. These actions by employees and union officers are necessary
to build a case against the employer and a defense for the employees’
decision to unionize.

Step 2. Initial Organizational Meeting.


This is conducted to attract more supporters and select potential
leaders among the employees who can help the union organizers.
Information or data obtained in Step 1 will be used by the organizers to
meet the employees’ need to explain the means to accomplish their goals.

Step 3. Formation of In-House Organizing Committee


This starts with identification of employees who are ready to act as
leaders in campaigning for their goals, in trying to get the interest of other
employees to join their movement, and in convincing employees to sign an
authorization card to show their willingness to be represented by a labor
union in collective bargaining with the employer. The strength of the union
is shown by the number of employees who signed the authorization card.
At least 30 employees must sign the said card before the National Labor
Relations Commission (NLRC) approves the holding of a representation
election.

28
Step 4. If a sufficient number of employees support the movement, the
organizer requests for a representation election or certification election.
A representation petition is filed with the NLRC asking for the
holding of a secret ballot election to determine the employees’ desire for
unionization. Before the election, leaders campaign for the employees’
support for the election and encourage them to cast their votes. Intense
emotions are showed by employees, the labor group, and the employers
during this period.

Step 5. End of Union Organizing.


When the sufficient number of votes is gathered, the NLRC certifies
the union as the legal bargaining representative of the employees. Contract
negotiations or collective bargaining agreement (CBA) negotiations follow
the certifications. The CBA process involves the following procedures:

a. Prepare for negotiations – Data to support bargaining proposals are


collected and arranged in an orderly manner by both parties-the
union and the employer’s groups. This is followed by the selection of
the members to their respective bargaining teams. Usually, each
side has four to six representatives at the bargaining table. The chief
negotiator from the union is the union president while the chief
negotiator for the management is the organization’s vice president
or the labor relations manager. Supporting date to back up the
positions of each group are gathered. Economic data are very
important. Other internal organization date needed include: record
of promotions, transfer, overtime work, grievances, disciplinary
actions, and arbitration.

b. Develop strategies – Management proposals are developed and limits


of concessions are determined, while also considering the union’s
goals and their possible strike plans. The union, on the other hand,
29
tries to develop better strategies to convince the management group
to accept its proposals.

c. Conduct negotiations – This consists of bargaining, analyzing


proposals, resolving issues related to proposals, and remembering
to stay within their respective bargaining zone. If no agreement is
reached at this point, a deadlock may result.

The union’s bargaining power may be exercised by holding a


strike, picketing, or boycotting the employer’s product or services.
The management’s bargaining power, on the other hand, may be
exercised either by continuing operations or shutting down
operations. Another method is by lockout of its employees, or
denying employees the opportunity to work.

Unions and employers may try to resolve bargaining


deadlocks by mediation and arbitration. Mediation is the use of a
natural third party to reach a compromise decision in employment
disputes. Arbitration also uses a neutral third party who resolves
the labor dispute by issuing a final decision in the disagreement.

d. Formalize agreement – After the negotiation process, the union and


management groups have top formalize their agreement. This
agreement is a formal binding document which lists down the terms,
conditions, and rules under which employees and managers agree
to operate; clear language must be used in the contract, which has
to be ratified by the majority of the employees. After the ratification,
all members of the union and the management bargaining teams as
well as the president or chief executive officer of the organization
must sign the document, before its dissemination to all parties
concerned.

30
CBA activities, ideally, must be a continuous process (although it is
held every five years in many companies). Right after the formalization of
the agreement and its ratification and signing, preparations for the
negotiations for the next CBA must, again, begin. This will allow
negotiators to review weaknesses and mistakes committed during the
previous negotiations while these are still fresh in their minds.

Management
Union Claim Proposal

Negotiations
3rd Party
Referral
Collective
Agreement

Figure 3. The Collective Bargaining Process

VIII. Grievance Procedure


A grievance is generally defined as a claim by an employee that he
or she is adversely affected by the misinterpretation or misapplication of a
written company policy or collectively bargained agreement. To address
grievances, employers typically implement a grievance procedure. The
grievance procedure may also be part of a collective bargaining agreement.

A grievance procedure is a means of internal dispute resolution by


which an employee may have his or her grievances addressed. Most
collective bargaining agreements include procedures for filing and
resolving grievances. Within a union environment, the processes will
typically involve the employee, union representatives and members of the
employer’s management team.

31
Grievance processes may differ somewhat from employer to
employer and under various collective bargaining agreements. However,
most will have certain general processes in common.

Grievances are brought to the employee’s immediate supervisor.


This may be either an informal process or the beginning of the formal
process. Generally, there will be a requirement that the grievance be
submitted in writing using a grievance form. Usually, the supervisor and
the union representative will review the grievance to determine whether it
is valid. Also, most grievance procedures will require that the submission
occur within a specified timeframe following the event or incident.

Three possible outcomes may occur at this stage of the process:

▪ The supervisor and the union representative may determine that no


valid grievance exists.
▪ The grievance may be resolved.
▪ The grievance may not be resolved to the employee’s satisfaction,
and it will move forward to the next step in the process.

The next step typically involves the next level of supervisor in the
company hierarchy. In most union environments, the employee will be
represented by the union and is not present in the review process. A failure
to resolve the grievance will lead to the next step in the grievance process.

The third step in the process will lead to a review by a higher level
of company management and potentially a higher-level union
representative. Ultimately, the grievance may reach the highest levels as
set forth by the contract.

If the grievance remains unresolved through the highest levels of


management within the company, many procedures include a provision
by which an outside arbitrator may be called in to resolve the issue. Senior
leaders from both sides are typically involved in the arbitration process.

32
An effective grievance procedure provides employees with a mechanism
to resolve issues of concern. The grievance procedure may also help
employers correct issues before they become serious issues or result in
litigation.1

1https://www.shrm.org/resourcesandtools/tools-and-samples/hr-
qa/pages/aresolutionformanagementandemployees.aspx

33
Significance of the Problem

The rationale of this term paper entitled: “The Causality of Labor


Union: A Closer View to the Corporate Social Responsibility and Worker’s
Rights Beyond Wages and Working Conditions” will be focusing on every
issue faced by employees that result to the formation of a union. Given the
common employee’s problems below, each will be discussed with a further
elaboration in order to prevent a spark of a strike in the future.

Trade unions rose to prominence at a point when industrialized


countries were growing at a staggering rate, employee safety was often
secondary to profits and job security was non-existent. Today, many of
those issues have been corrected, in large part by the work of unions.
Modern unions have shifted their focus to a number of targeted issues and
work with management to protect the interests of its members in those
areas.

Early Labor Movement

The National Labor Union was created in 1866, and this founding
began the modern labor movement. Early union members lobbied for safer
working conditions, shorter workdays, weekend time off, an end to child
labor and collective bargaining rights. Many of these goals were achieved
through the Fair Labor Standards Act, a federal law designed to protect
the rights of workers. The FLSA limits child labor, requires overtime pay
for hours worked in excess of 40 hours per week and requires that
employers keep track of their employees' time. The Occupational and
Safety Health Act, another federal law supported by many unions,
established safety standards for workplaces and requires employers to
take safety precautions based upon the specific risks posed by their
industry.

34
Hours and Overtime

Labor unions often lobby for their members to work specific hours.
For example, a union might attempt to limit the number of overtime hours
workers are required to work or might request higher overtime pay than is
mandated by the FLSA. Labor union members occasionally engage in
strikes, during which they refuse to work, if they feel working conditions
are unfair, and union members might strike over excessive hours,
weekend work and other time-related issues.

Working Conditions

Working conditions are a significant issue for many labor unions.


Workers may protest, negotiate or strike over dangerous conditions,
problems with supervision or difficulties meeting workplace goals. In 2012,
for example, a teacher's union in Chicago went on strike to change job-
evaluation criteria, to negotiate the length of the school day, to prevent
school closings and to stop reform programs that they believed would harm
students.

Wages

Wages are a common issue with labor unions. Unions often use their
collective bargaining ability to negotiate for higher wages. According to the
Bureau of Labor Statistics, labor union members made an average of $5.02
per hour more than nonunion members in 2012. Union strikes sometimes
focus on pay cuts, contract changes and similar issues that affect wages
and salaries.2

Job Stability

One of the most fundamental issues for union leaders and members
is long-term job stability. Unions believe that companies have a duty to

2http://smallbusiness.chron.com/kinds-problems-did-labor-unions-want-companies-
address-61995.html

35
retain hard-working employees and fight layoffs and terminations. In
many cases, they argue for job stability in a community, fighting against
company plans to reduce the number of employees, even through attrition.
Company management often argues that this prevents the organization
from keeping pace with technology, which reduces the reliance on certain
employees, making them less competitive. They also feel that the
protection of jobs at all costs prevents the company from getting rid of poor
performers.

Pension Protection

Unions have become increasingly interested in protecting the


pension plans offered to its members as part of their compensation plan.
Pension plans that were badly managed by employers, to the detriment of
the staff, have brought the issue to the forefront. Unions fight hard for
appropriate oversight of the funds, which they believe are rightfully owned
by their members. Company executives feel that as the contributors to the
funds, they have the right to manage them as part of the corporate
portfolio, benefiting from tax reductions and credits. They argue that a few
high-profile failures do not constitute a pattern of mismanagement.

Collective Bargaining

The power of trade unions lies in their ability to negotiate with


management on behalf of the entire unionized workforce. Their strongest
weapon is their right to stop work, should the negotiations fail. They use
collective bargaining to fight for higher wages, better benefits and safer
work conditions. Company executives don't always agree with collective
bargaining because it treats the entire workforce as equals and does not
recognize the difference between workers who excel and thrive and those

36
who perform poorly. They argue that compensating employees on
performance is better for the company than compensating the collective. 3

Job Security and Protection

Unlike in a non-unionized environment, individual employees enjoy


the benefit of union protection when they face reprimand or loss of
employment. Established procedures are set out in the workplace
contract, called the collective agreement, that both the union and the
employer must follow. Although an employee may still be reprimanded or
lose her job, the process ensures the employee is properly represented
during the process.

3http://smallbusiness.chron.com/kinds-problems-did-labor-unions-want-companies-
address-61995.html

37
Objectives

The term paper entitled: “The Causality of Labor Union: A Closer


View to the Corporate Social Responsibility and Worker’s Rights Beyond
Wages and Working Conditions” aims to provide every reader of this paper
with a deeper understanding in lieu with the concept of labor union in the
corporate world. Labor union’s existence is mainly due to a conflict with
the rights and wages of employees. This paper will give help every
organization not just to address but also prevent the dilemmas that may
lead to the formation of labor union.
A labor union is an association of employees that advances member
interests through collective bargaining with an employer. Areas of
negotiations typically include wages, benefits, work rules, and other
conditions of employment such as hiring, discipline, and termination of
employees.
The main objectives of labor union are democratization of wealth,
democratization of power, and humanizing the working class.
Democratization of wealth refers to the labor union’s objective of ensuring
that the workers receive just wage and safe working conditions. A labor
union must assure that the employer does not abuse and exploit the
workers. Democratization of power pertains to the labor union’s objective
of balancing the power between the employer and the employee. In the
absence of a labor union, the employer is generally more powerful than the
worker. If there is a union, there is a sort of equality and interdependence
between the employer and the worker. In connection with this, Dennis
Collins said:
“Labor unions perform an essential equalizing function,
leveling the playing field between powerful business owners and
organizational managers, who seek to minimize employee wages and
benefits and dictate workplace rules, and individual employees who
lack the power to adequately represent their own interests. Unions
38
typically arise in circumstances where employees are continually
dissatisfied with wages, benefits, and working conditions. They
counteract managerial power by providing a unified employee voice.”

Through the labor union, workers can actively and meaningfully


participate in the formation of policies and business decisions that would
greatly affect their working conditions and their lives. Breaking from a
culture of silence, workers find voice with the help of supportive labor
union leaders. Humanizing the working class pertains to the function of
the labor union to educate the workers, and the employees and the society
as a whole with regard to the value of human labor and the dignity of the
workers. Labor unions must not only be concerned with obtaining the
material benefits from the employers. Labor leaders must raise the
consciousness of the workers with regard to their dignity. Equally
important is raising the awareness of the society in general. Ultimately,
people must not consider laborers as inferior individuals.
The labor union is indeed a powerful mechanism of employees yet a
crucial part for the employers. Having that said, may the result of this
paper be able to help build a harmonious relationship in every organization
in the corporate world comprising each and everyone’s concerns and
issues.

39
Methodology

States methods used for data collection and analysis, the relevance
of the choice made, and how you utilized the collected data. Also discusses
the limitations of the methods.

Respondents

This exploratory-descriptive research, which is qualitative in nature,


examined the context of labor union’s existence in the corporate world.
Three Human Resources staff from REX Knowledge Center in Quezon City
were given unstructured interview to gather their insights towards the
issues in the corporate world in relation to the formation of labor unions.

Data Gathering Procedure

Upon getting the approval of the Human Resources and


Development Department Head to conduct the study with the target
respondents, the researcher proceeded with the research implementation.
The interviewees were asked for their insight about the possible cause and
effects of labor union in an organization.

Aside from unstructured interview, data were gathered from the


internet. Web platform was used to gather different books, articles, and
journals in relation to business ethical issues. With a wide variety of
resources, the researcher was able to collect a bunch of foreign academic
writings that will help build the foundation of this term paper. Filipino
academic writings that are related to the main subject of this term paper
were gathered from public libraries.

40
Scope and Limitation

The study will be focusing on the labor union throughout the world
because the researcher generalized that the employees in every part of the
world share the same corporate issues in their jobs.

41
Results

These are the findings. They are stated just as they were observed at
the field. This chapter also states the limitations or challenges of the
research.

Given the causes of the formation of labor unions aforementioned in


the previous chapter. The researcher came up with 3 major classification
of the factors that contributes to the reason for the formation of employee
movement.

a. Financial Needs – complaints regarding wages or salaries and


benefits given to them by the management are the usual reasons
why employees join labor unions.
b. Unfair Management Practices – perceptions of employees
regarding unfair or biased managerial actions are also reasons
why they join mass movements; examples of lack of fairness in
management are favoritism related to promotion and giving of
training opportunities and exemption from disciplinary action.
c. Social and Leadership Concerns – some join unions for the
satisfaction of their need for affiliation with a group and for the
prestige associated with coworker’s recognition of one’s
leadership qualities.

42
Discussion

In this section of term paper, stated were the observations in your


research e.g. a regular pattern etc. It is also in this section, given are the
interpretations of the observation made.

Corporate Social Responsiblity

Extending discussions of CSR and labor relations to include a


conceptualization of labor union social responsibility adds a valuable and
needed perspective, because of the prevalence of labor unions around the
world. A few clarifications and cautions are in order. As the corporations
upon which labor unions depend experiment with new approaches to CSR,
labor relations research has not produced a framework with which to
analyze union impact on social issues. Indeed, one of the foremost
challenges faced by labor unions is the perception that they are
exceedingly self-interested. In assessing prospects of labor unions in the
new millennium, Hoyt Wheeler opined ‘‘[t]o the extent that labor is
perceived by policy makers and the public as just one more interest group
fighting for its share of the pie to the detriment of other interest groups,
not much public support is going to be forthcoming’’ (Wheeler, 2002, p.
97). Therefore, it is important for labor unions to have a place in the public
discourse surrounding social responsibility.

It is important to emphasize that this initial conceptualization of


labor union social responsibility is primarily a descriptive account of what
occurs, rather than a normative call for what should occur. The descriptive
orientation does not, however, diminish the normative and instrumental
implications. Labor union social responsibility can be viewed from a
normative perspective as a moral imperative, or from instrumental
perspective as enlightened self-interest. If, for example, labor unions view
social responsibility as a moral obligation, then the depth of commitment

43
and participation are likely to be greater than if social responsibility is
engaged for purely instrumental reasons. Bronfenbrenner and Juravich
(1997) wed normative and instrumental considerations by arguing that an
emphasis on general moral principles such as dignity, justice, and fairness
will improve the success rate of organizing campaigns.

Nevertheless, the researcher does not intend to imply that social


responsibility will improve the plight of labor unions. Being more attentive
to social responsibility is not likely, by itself, to reverse or even improve
the current condition of the labor movement and, insofar as it complicates
the mission of labor unions, may even be counterproductive. The most
plausible view is that social responsibility is one of many activities that,
properly employed, can contribute to union viability. Finally, labor unions
are not monolithic and are not likely to engage in similar behaviors or have
similar opinions about how to advance and strengthen unionism. As a
consequence, the interests of some members will conflict with those of
other members and stakeholders, and social responsibility will require an
appropriate means of reconciling those interests.

Collective Bargaining and Economic Strike4

Collective bargaining is the negotiating process between


management and unions to settle a variety of issues, including wages,
hours, plant and safety rules, and grievance procedures. It's called
"collective bargaining" because the union employees, collectively, are
negotiating with management through union representatives. Each side is
obligated by law to negotiate in good faith, which generally means
openness and fairness. Negotiating a new contact starts several months
before the old one expires. Both sides lay out their positions, which usually
start far apart to give each side plenty of bargaining room. If everything
works, the two sides come together and sign a new contract. Negotiations
can become heated. If they reach an impasse, then the conflict can be

4 https://money.howstuffworks.com/strike1.htm

44
referred to mediation, but that is not binding. If the union does not get
satisfaction, it can resort to a strike.

An economic strike is held over issues such as wages, hours and


working conditions. When workers engage in an economic strike they are
at risk of losing their jobs. The employer can hire replacement workers,
and can retain them after the strike concludes. Terminated ex-strikers can
apply unconditionally for employment, but the employer is under no
obligation to rehire them. While an economic strike is a powerful tool for a
union, it is used with some risk of weakening the union. Not only can
workers lose their jobs, but the replacement workers may not be interested
in joining the union.

When workers strike to protest unfair labor practices by the


employer, they retain their employee status and their right to be reinstated
when the strike ends. Temporary workers hired during the strike will be
terminated at the end of the strike. If a striker finds full-time employment
during the strike, he is not entitled to reinstatement. If strikers engage in
any unfair practices, including threatening workers who cross the picket
line or acts of violence, they will lose their right to employment when the
strike ends. Workers on an economic strike may attempt to convert it to
an unfair labor practices strike if they could prove, for example, that
management was not negotiating in good faith. If the economic strike can
be converted, then the striking workers retain their job security.

Labor legislation also places restraints on employers. An employer


must negotiate with a union that represents its workers. It must sign any
contract that is reached with its union and cannot make negotiation
conditional on any prior activity. Employers cannot retaliate against union
workers who file grievances against them, nor can they discriminate
against any worker for his union activity. Failure to maintain safe working
conditions is also an unfair labor practice. There can be regulatory
consequences from the National Labor Relations Board if the employer
fails to comply with its regulatory obligations.

45
Conclusion

It is in the conclusion a case is made for the topic. From the findings
and interpretations, reiterated are the points that support your argument and
reasserted and emphasized the position.

The preceding discussion raises a number of implications for further


research that can be categorized into three main areas. First, in addition
to being a conceptualization of social responsibility for labor unions, this
term paper might also be thought of as a conceptualization of social
responsibility based on labor unions. Since labor unions exhibit
characteristics of corporations and NGOs the labor union social
responsibility framework can contribute to a formulation of organizational
responsibility and citizenship that addresses all of the key players (multi-
national corporations, NGOs, unions), in a global marketplace where
market and political power are frequently intertwined. In the global context
where some nation-states do not provide economic equity, workplace
democracy, or social justice, social responsibility requires that other
organizations advocate on behalf of those prerogatives. The labor union
view of social responsibility aligns with the corporate citizenship rendering
of CSR whereby organizations assume a role in providing basic rights that
are not provided by nation states. As such, labor unions have effectively
collaborated with NGOs and governments to promote responsible social
(e.g., International Labor Organization Declaration on Fundamental
Principles and Rights at Work) and environmental practices (e.g., UN
Global Compact), and political enfranchisement (e.g., South Africa and
Bolivia). Successful partnerships, such as the tripartite ILO, portend of
favorable interactions with business firms on social responsibility issues
as well. A second area is viewing social responsibility through the lens of
voice. Hirschman (1970) originally coined the concept of voice as an

46
alternative to passive acceptance or exit, and although it appears
extensively in the labor relations literature, it need not be limited to that
context. What are the implications of applying the notion of voice-as-
currency to different types of organizations? The stakeholder model,
though it focuses on corporations, argues that those who provide capital
for an entity derive a unique set of interests and moral rights and
expectations based on that exchange. In essence, rather than accepting
current conditions (loyalty) or choosing to do business elsewhere (exit) the
stakeholders and corporations can exercise voice by negotiating the basic
rights of citizenship with governments and other powerful organizations
on behalf of their stakeholders. That logic also holds for private schools
and their benefactors, charities and their donors, hospitals and their com-
munities, NGOs and philanthropists, and other organizations that enlist
stakeholders to provide capital. It may well be argued that the social
responsibility of such organizations will depend upon the causes and
objectives to which they lend their credibility.

In conclusion, the researcher has established a broad conceptual


framework for labor union social responsibility, but empirical research is
required to test the potential dimensionality of the concept and its
potential to describe the activities of labor unions. A desirable next step
would be to develop a valid measure that can be used in empirical studies.
Researchers might, for instance, explore in more detail the extent to which
labor unions are active advocates of each of the three objectives of social
responsibility, as well as the antecedents and consequences of labor union
social responsibility. Lastly, there is the possible interplay between socially
responsible labor unions and socially responsible corporations. A number
of business firms explicitly embrace corporate social responsibility but
there is a dearth of systematic study about what, if any, impacts this has
on their relationships with organized labor.

47
Bibliography
Aldrich, H. A., & M. C. Fiol. (1994). Fools rush in? The institutional
context of industry creation. Academy of management review 19. 645–
670.

Ashforth, B. E., & Gibbs, B. W.. (1990). The Double- Edge of


Organizational Legitimation. Organization Science 1. 177–194.

Bamberger, P. A., Kluger, A.N., & Suchard, R. (1999). Research notes: the
antecedents and consequences of union commitment: a meta-analysis.
Academy of management journal 42, 304–318.

Bhattacharya, C. B., Rao, H., & Glynn, M. A. (1995). Understanding the


bond of identification: an investigation of its correlates among art
museums. Journal of marketing 59, 46–62.

Blanchflower, D. & Bryson, A.(2004). The union wage premium in the us


and the uk, in london school of economics (ed.). Center of Economic
Performance Discussion Paper # 612, 2004.

Cabrera, H., et. Al. (2016). Organization and management. Quezon City:
Vibal Publishing.

Carroll, A. B.(1991). The pyramid of corporate social responsibility: toward


the moral management of organizational stakeholders – balancing
economic, legal, and social responsibilities. Business horizons 34, 39–
53.

Cortez, F. (2016). Business ethics and social responsibility. Quezon City:


Vibal Publishing.

Collins, D. (2009). Essentials of business ethics: creating an organization


of high integrity and superior performance. Canada: Wiley.

48
Donaldson, T. And T. W. Dunfee. (2002). Ties that bind in business ethics:
social contracts and why they matter. Journal of banking & finance
26,.1853–1865.

Godard, J. (1997). Beliefs about unions and what they should do: a
survey of employed Canadians. Journal of labor research 18, 621–639.

Gordon, M. E., J. Barling and L. E. Tetrick. (1995). Some remaining


challenges. L. E. Tetrick and j. Barling (eds.). Changing employment
relations: behavioral and social perspectives .pp. 349–366.

Grabelsky, J. And Hurd, R. (1994). Reinventing an organizing union:


strategies for change. Paper Presented at the 46th Annual Meeting of
the Industrial Relations Research Association.

Gross, J. A. (2002). Applying human rights standards to employment


rights in the USA: the human rights watch report 2000. Industrial
relations journal 33. 182–196.

Hirsch, B. T. And D. A. Macpherson. (2000). Union membership and earnings


data book: compilation from the current population survey 2000 edition.
Washington: Bureau of National Affairs.

Jamali, D. And T. Keshishian. (2008). Uneasy alliances: lessons learned


from partnerships between business and NGO’s in the context of CSR.
Journal of business ethics 84. 277–295.

Levy, D. L. (2008). Political contestation in global production networks.


Academy of management review 33. 943–963.

Maignan, I., & Ferrell, O. C. (2001). ‘antecedents and benefits of corporate


citizenship: an investigation of french businesses. Journal of business research
51. 37–51.

49
Matten, D. And A. Crane. (2005). Corporate citizenship: toward an
extended theoretical conceptualization. The academy of management
review 30. 166–183.

Medina, R. (2006). Personnel & human resources management. Manila:


REX Publishing.

Meyer, W. J., & Rowan, B. (1977). Institutionalized organizations: formal


structure as myth and ceremony. American journal of sociology 83, 340–363.

Panagopoulos, C., & Francia, P.L. (2008). The polls– trends. Public opinion
quarterly 2008(72), 134–159.

Preuss, L., Haunschild, A., & Matten, D. (2006). ‘Trade Unions and CSR:
A European Research Agenda’, Journal of Public Affairs 6. 256–268.

Scherer, A. G., & Palazzo, G. (2007). Toward a political conception of


corporate responsibility: business and society seen from a Habermasian
perspective. Academy of management review 32. 1096–1120.

Seno, C. (n.d.). The law on labor union in the Philippines.

Serrano, A. (2016). Business ethics and social responsibility. Manila:


Library Services & Publishing Inc.

Sethi, S. P. (1975). Dimensions of corporate social performance: an


analytical framework. California Management Review 17. 59–64.

Simon, A. (2003). A comparative historical explanation of the


environmental policies of two woodworkers’ unions in Canada.
Organization environment 16, 289–305.

Society for Human Resources Management. (2012). Grievance procedures.


Retrieved from https://www.shrm.org/ resourcesandtools/tools-and-
samples/hrqa/pages/aresolutionform
anagementandemployees. aspx

50
Thomas, K. (2009). Catholic bishops and labor unions announce
agreement on respecting the rights of healthcare workers. Service
employees international union.

Valentine, S. , & Fleischman, G. ( 2008). Ethics programs, perceived


corporate social responsibility and job satisfaction. Journal of business
ethics 77. 159–172.

Waddington, J., &. Whitston, C. (1997). Why do people join unions in a


period of membership decline?. British journal of industrial relations 35,
515–546.

51
APPENDIX

THE LAW ON LABOR UNIONS IN THE PHILIPPINES

(A Compilation from Philippine Law Journal)

A. INTRODUCTION

1. Role of Trade Unions - Development Unionism

The Labor Code of the Philippines has enunciated, among others, the
policy of the State - to promote free trade unionism as an agent of
democracy, social justice and development; and, to rationalize and re-
structure the labor movement in order to eradicate inter-union and intra-
union conflicts.

By the foregoing policy statements, the State has not only acknowledged
the role of free trade unions in our society as an agent of democracy, social
justice and development but also committed itself to the promotion thereof
to assure to our people the continued benefits derived therefrom. Nowhere
in the past has this policy been so articulated than under the aegis of the
New Society upon which the workers repose their hopes for a just, secure
and rewarding future. In the words of the Honor-able Secretary Bias F.
Ople, "x x x the Code can be summed up in only one sentence: it represents
the updating of all our labor laws to make them more responsive to the
New Society priorities - development and employment as well as social
justice."

In the light of the foregoing, the law, Republic Act No. 875 (1953) which,
until lately, governed the labor unions in our country has under-gone
reexamination in order that it could be re-aligned towards the goals of
development, employment and social justice.

52
Before the onset of the New Society, the trade union movement in the
Philippines had been characterized by fragmentation and disorientation.
While unions under Republic Act No. 875 (1953) may have multiplied in
number, several "flew by night", so to speak, depending upon whether or
not certain self-interests were satisfied. In fine, the viability and stability
of the unions were highly doubtful and instead of serving the interests of
the membership, many became more useful to unscrupulous labor leaders
and management in achieving their selfish ends. Unions were pitted
against each other and there were intense inter-union rivalries and intra-
union conflicts. Not only this, activities of several unions were disoriented;
there was no sense of direction in them and the same could hardly relate
to the priorities of national economic development.

These were the conditions then obtaining which prompted the leadership
of the New Society, as envisioned in the Code, to rationalize and
restructure the labor movement in order to eradicate inter-union and
intra-union conflicts.

To achieve these ends, the concept of "one union - one industry" has been
evolved. This concept will be treated later. Furthermore, the Labor Code
has provided for the necessary and adequate instrumentalities for
enforcement to render speedy labor justice.

In this setting, restructuring of the trade union movement is just one of


the initial steps to be undertaken in order to make it possible for trade
unions to conserve their energies and resources. This being accomplished,
trade unions can truly and effectively contribute towards the realization of
national development goals thus paving the way for "Development
Unionism" to be institutionalized in this country. No longer shall unions
be confined to their sectoral needs and interests but will become active
participants and agents of development. They shall hence-forth, under the

53
New Society, assume greater and broader responsibilities in the
community and the country as a whole.

B. SOURCES OF THE LAW

Although the Labor Code of the Philippines took effect last November 1,
1974 and the implementing Rules and Regulations thereof became
effective on February 3, 1975, most of the existing unions today are still
creations of the Industrial Peace Act; otherwise known as the Magna Carta
of Labor. These unions are undergoing the current transition period which
is expected to culminate in the restructured trade union movement in the
country as envisioned by the Labor Code.

The applicable laws, rules and regulations governing labor unions under
the present labor relations system are:

(a) The (New) Constitution of the Philippines

(c) Labor Code of the Philippines

(d) Rules and Regulations Implementing the Labor Code of the


Philippines

(e) Jurisprudence

1. Constitution of the Philippines

Among the Declaration of Principles and State Policies enunciated in our


Constitution is a commitment that:

"The State shall afford protection to labor, promote full employment, and
equality in employment, ensure equal work opportunities regardless of
sex, race, or creed, and regulate the relations between workers and
employers. The State shall assure the rights of workers to self -

54
organization, collective bargaining, security of tenure, and just and
humane conditions of work. The State may provide for compulsory
arbitration."

For the first time, such an express policy has now been constitutionally
provided. The right of workers to self-organization and collective bar-
gaining is no longer a mere statutory authority although it might be
pointed out that the old as well as the new Constitution provides that: "The
right to form associations or societies for purposes not contrary to law
shall not be abridged. "

2. Labor Code of the Philippines

Presidential Decree No. 442, which was signed by President Ferdinand E.


Marcos on May 1, 1974 took effect six months thereafter, i.e., on November
1, 1974, and along with it, Title IV and Title V of Book V thereof, which is
the current law governing labor organizations in the country.

It is now a settled question that Proclamation No. 1081 (1972) declaring


martial law in our country was a valid exercise of the constitutional powers
of the President; it is likewise settled that the new Constitution became
effective on January 17, 1973.

Section 3 (2), Article XVII of the said Constitution provides:

"All proclamations, orders, decrees, instructions and acts primal-gated,


issued or done by the incumbent President, shall be part of the law of the
land, and shall remain after the lifting of martial law or the ratification of
this Constitution, unless modified, revoked or superseded by subsequent
proclamations, orders, decrees, instructions or other acts of the
incumbent President, or unless expressly and explicitly modified or
repealed by the regular National Assembly."

55
3. Rules and Regulations Implementing the Labor Code

"Art. 5. Rules and Regulations. - The Department of Labor and other


government agencies charged with the administration and enforcement of
this Code or any of its parts shall promulgate the necessary rules and
regulations. Such rules and regulations shall become effective fifteen days
after acknowledgment of their adoption in newspapers of general
circulation."

Pursuant to such authority, the Secretary of Labor issued the


corresponding rules and regulations which took effect on February 3,
1975. The pertinent Rules governing labor unions are Rules II to VII of
Book V entitled “Labor Relations".

4. Jurisprudence

The rulings and pronouncements of the Supreme Court of the Philippines


with respect to cases and matters relating to labor relations issues form
part of our labor relations jurisprudence. Likewise, under the Labor Code,
since labor relations issues concerning registration and cancellation of
union certificates, representation issues, restructuring of unions and
rights and conditions of membership in labor organizations are now falling
exclusively within the administrative and adjudicatory functions of the
Director of the Bureau of Labor Relations and the Secretary of Labor, the
decisions of these two officials of the Department of Labor are
authoritative. In some instances, as in unfair labor practice cases, the
decisions of the National Labor Relations Commission, the Secretary of
Labor and the President of the Philippines are also controlling.

56
C. COVERAGE

1. Employers Covered

All commercial, industrial and agricultural enterprises, including


religious, charitable, medical or educational institutions operating for
profit are covered, as well as those enterprises and institutions a
forenamed but not operated for profit, which, on the date of the effectivity
of the Code, have existing collective bargaining agreements or duly
recognized labor organizations of their employees, and any employer who
voluntarily recognizes any labor organization of its employees for the
purpose of collective bargaining.

2. Employees Covered

All persons employed in the foregoing three categories shall have the right
to self-organization and to form, join or assist labor organizations for
purposes of collective bargaining. Such employees as long as they do not
fall within the definition of "managerial employee" are considered rank and
file employees for purposes of Book V of the Labor Code.

3. Employees Excluded

3.1 Security guards and other personnel employed for the protection
and security of the person, properties and premises of the employer.

3.2 - Managerial employees are not eligible to join, assist or form any
labor organizations. "Managerial employee" is one who is vested with
powers or prerogatives:

(a) to lay down and execute management policies;

(b) to hire, transfer, suspend, layoff, recall, discharge, assign or


discipline employees; and/or

(c) to effectively recommend such managerial actions.

57
3.3 - Government employees, including employees of government·
owned and/or controlled corporations.

3.4 - Employees of religious, charitable, medical and educational


institutions not operating for profit, provided the latter do not have
existing collective agreements or recognized unions at the time of
the effectivity of the Code nor have voluntarily waived their
exemption.

4. Innovation Under the Labor Code

One of the changes from the provisions of the Industrial Peace Act which
is readily noticeable under the provisions of the Labor Code is the
elimination of supervisors (unless they fall within the rank and file cate-
gory as defined by the Code) from the scope of protected activities. The
Code has evolved two general categories of employees, namely: (1)
managerial employees, and (2) rank and file employees. Under these
groupings, the supervisory employees will have to be reclassified either as
a managerial employee or a rank and file employee. This shall be
undertaken between the representatives of the supervisory union (if this

has been recognized) and the employer. If no agreement is reached


between the parties, either or both of them may bring the issue to the
nearest Regional Office for determination.

The statement by the Department of Labor Staff Committee on Labor Code


with regard to the elimination of supervisory unions is revealing and
provides the reasons therefor. Quoted hereunder is the pertinent
paragraph:

"IV. Restructuring of the labor movement. - Supervisory unions are


eliminated. There will be only two types of employees in every
establishment.

58
1. Managerial employees who are not eligible to form or join unions;
and

2. Rank and file employees who are eligible to form or Jam unions of
their own choosing. Supervisory unions have been a source of
instability, confusion and intrigues in many establishments."

The foregoing two general classifications of employees for purposes of


implementing the provisions of Book V of the Labor Code have raised an
interesting question as to whether or not confidential, technical and
professional employees should be further allowed to form separate bar-
gaining units apart from the rest of the rank and file employees for
purposes of collective bargaining as practiced under the Industrial Peace
Act. The Code has not clearly spelled this out but with the adoption of the
concept of "one union-one industry" which, brought to the level of the
enterprise, could rationally mean "one union-one enterprise", this writer
is of the considered opinion that although theoretically allowable, such
continued separation of identity will no longer serve any practical purpose
and will at most be a time consuming and energy-sapping activity.

D. REGISTRATION OF UNIONS

1. Transition from Republic Act No. 875 (1953)' to Presidential Decree


No. 442 (1974)

Republic Act No. 875 (1953) was repealed by Presidential Decree No. 442.
Although the latter law took effect on November 1, 1974, most of the
unions existing as of this writing are still creations of Republic Act No. 875
(1953). New unions, however, which filed applications for registration on
or after November 1, 1974 were processed and registered by the
appropriate Labor Relations Division or by the Bureau of Labor Relations.
Of course, the unions registered under Republic Act No. 875 (1953) will
unavoidably and gradually be purged and realigned by industry, either on

59
regional or national basis, in view of the restructuring provisions of the
Labor Code.

2. Requirements

2.1 - Local Unions

The requirement of registration of new unions or labor organizations are


provided for by Article 233 of the Labor Code which states:

"ART. 233. Requirements of Registration. - Any applicant labor


organization, association or group of unions or workers shall acquire legal
personality and shall be entitled to the rights and privileges granted by law
to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:

(a) Fifty pesos (P5O.OO) registration fee;

(b) The names of its officers, their addresses, the principal ad-dress of
the labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;

(c) The names of all the members it seeks to represent. At least 50


percent of the employees in the bargaining unit shall be members of the
applicant union;

(d) If the applicant union has been in existence for one or more years,
a copy of its annual financial reports; and

(e) Four copies of the constitution and by-laws of the applicant union,
minutes of its adoption and ratification, and the list of the members who
participated in it.

The implementing rule of the foregoing provision of law is specific that: "All
persons employed in commercial, industrial and agricultural enterprises,
including religious, medical or educational institutions operating for profit,

60
shall have the right to self-organization and to form, join or assist labor
organization for purposes of collective bargaining.

The added requirements for registration of new local unions under the
Labor Code as differentiated from the Industrial Peace Act have made it
more difficult, if not well-nigh impossible, for "fly-by-night" unions to be
registered. This is made so by the requirement that at least fifty percent
(50%) of the employees in the bargaining unit shall be members of the
applicant union.

Section 4, Rule II, Book V of the Rules and Regulations has added another
requirement which shall accompany the application for registration and
that is "(if) a sworn statement by the applicant union to the effect that
there is no recognized or certified collective bargaining agent in the
bargaining unit concerned." This requirement promotes the stability of a
union that is recognized as a collective bargaining agent within an
enterprise and consequently reduces the possibilities of inter-union
conflicts in said establishment. The criticism against prior government
policy in effecting indiscriminate registration of applicant labor
organizations which, in many instances, has contributed also to the
continuing divisiveness and fragmentation of the labor movement is thus
positively met. Furthermore, the "one union-one enterprise" concept is also
fostered.

2.2 – Requirements regarding constitution and by-laws

The constitution and by-laws shall:

(a) Conform with Article 233 of the Code;

(b) Provide a definite procedure for settling internal disputes;

(c) Provide for an education and research fund; and

61
(d) Provide for a three (3) year term of office for the officers. Upon the
effectivity of the Code, all incumbent officers of a legitimate labor
organization shall be allowed to complete their terms of office. Thereafter,
the election of union officers shall be held once every three (3) years."

2.3 -Additional Requirements for federations or national unions

Subject to Article 237 of the Labor Code, if the applicant for registration is
a federation or a national union, it shall, in addition to the aforementioned
requirements submit the following:

(a) Proof of the affiliation of at least ten (10) locals or chapters, each of
which must be a duly recognized collective bargaining agent in the
establishment or industry in which it operates, supporting the
registrations of such applicant federations or national union; and (b) the
names and addresses of the companies where the locals or chapters
operate and the list of all the members in each company involved.

2.4 - Conditions for registration of federations or national unions

No federation or national union shall be registered to engage in any


organizational activity in more than one industry in any area or region,
and no federation or national union shall be registered to engage in any
organizational activity in more than one industry all over the country.

The federation or national union which meets the requirements and


conditions herein prescribed may organize and affiliate locals and chapters
without registering such locals or chapters with the Bureau.

Locals or chapters shall have the same rights and privileges as if they were
registered in the Bureau, provided that such federation or national union
organizes such locals or chapters within its assigned organizational field
of activity as may be prescribed by the Secretary of Labor.

62
The Bureau shall see to it that federations and national unions shall only
organize locals and chapters within a specific industry or region. The
foregoing provisions of law reinforce the restructuring objectives of the
labor movement and are geared towards the "one union-one industry"
concept.

Viewed under geographical considerations, industry and sub-industry


unions may be allowed to operate and organize within a defined regional
or national basis. Such industry or sub-industry union must perforce be
a federation or national union.

3. Where Application Filed

Any labor organization may file an application for registration with the
nearest Regional Office (of the Department of Labor).

The registration of the industry and sub-industry unions under the


restructuring processes provided for under Rule II, Book V, of the Rules
and Regulations can only be undertaken by the Bureau of Labor Relations
taking into consideration the role of the Bureau at various stages of the
restructuring efforts.

4. Action on Application

The Regional Office or the Bureau in appropriate cases shall act on all
applications for registration within thirty (30) days from filing.

5. Denial of Registration of Local Unions

The Regional Office may deny the application for registration on any of the
following grounds:

(a) non-compliance with the requirements enumerated in Section 4 hereof;

(b) non-compliance with the requirements enumerated in Section 5 hereof,

(c) engaging in the "cabo" system or other illegal practices.

63
The decision of the Regional Office denying the application for registration
shall be in writing, stating in clear terms the reasons therefor. A copy
thereof shall be furnished the applicant union.

6. Appeal

Any applicant union may appeal to the Bureau the denial of registration
by the Regional Office within ten (10) working days upon receipt of such
decision on grounds of:

(a) grave abuse of discretion; and

(b) gross incompetence.

The appeal shall be filed in the Regional Office which shall cause the
transmittal of the records to the Bureau within five (5) working days from
receipt of the appeal.

The Bureau shall decide the appeal within twenty (20) working days from
receipt of the records of the case. The decision of the Bureau shall be final
and unappealable.

7. Rights of Legitimate Labor Organization

A legitimate labor organization shall have the right:

(a) To act as the representative of its members for the purpose of


collective bargaining;

(b) To be certified as the exclusive representative of all the employees in


an appropriate collective bargaining unit for purposes of collective
bargaining;

(c) To own property, real or personal, for the use and benefit of the labor
organization and its members;

(d) To sue and be sued in its registered name; and

64
(e) To undertake all other activities designed to benefit the organization
and its members, including cooperative, housing, welfare and other
projects not contrary to law.

The income and properties of legitimate labor organizations shall be free


from taxes, duties and other assessments, including gifts or donations
they may receive from fraternal and similar organizations, local or foreign.

A "legitimate labor organization" means any labor organization duly


registered with the Department of Labor and includes any brand or local
thereof.

Ordinarily, a legitimate labor organization can represent only its members


for purposes of collective bargaining. But this is rarely recognized by the
employer in actual practice especially since in the process of determining
the collective bargaining unit, the category of the employees, i.e., whether
they are rank and file or managerial employees, rather than membership
in the union, is the controlling factor. Once the collective bargaining unit
is determined, it usually comprises members and non-members of the
union and it is incumbent upon the latter to prove that the majority of the
employees embraced within the unit are members thereof; otherwise, the
union will not have the legal standing to negotiate with the employer.

The certification of a legitimate labor organization as the exclusive


representative of all the employees in an appropriate collective bargaining
unit for purposes of collective bargaining becomes necessary when the
employer refuses to extend voluntary recognition to the union. Such
certification is issued by the med-arbiter of the appropriate Labor
Relations Division where the petition for certification election was filed. If
the petition covers an industry or sub-group it shall be filed with the
Bureau.

Although under the Industrial Peace Act,35 unions were not prohibited
from engaging in socio-economic programs or activities for benefit of the

65
organization and its members, the Code now specifically mentions such
activities to be undertaken by them. Whereas, the Industrial Peace Act
emphasizes the primary role of unions to represent its members for
purposes of collective bargaining and secondarily allowing unions to
engage in socio-economic activities, the Code, by express provision, now
vests upon unions the right to undertake all other activities designed to
benefit the organization and its members and therefore gives equal
emphasis to these activities as any other. In fine, the Code not only
recognizes but also reinforces the role of "development unionism" in our
society.

The certificate of registration of any legitimate labor organization, whether


national or local, shall be cancelled by the Bureau if it has reason to
believe, after due hearing, that the said labor organization no longer meets
one or more of the prescribed requirements.

The Bureau upon approval of the Code shall immediately institute


cancellation proceedings and take such other steps as may be necessary
to restructure all existing registered labor organizations in accordance
with the objective as envisioned.

1. Grounds for Cancellation of Union Registration

The certificate of registration of any legitimate labor organization,


including labor federations and national unions registered under Republic
Act No. 875 (1953) or under the Code, may be cancelled by the Regional
Office on any of the following grounds:

(a) violation of Articles 233, 237 and 239 of the Code;

(b) failure to comply with Article 236 of the Code;

(c) violation of any of the provisions of Article 241 of the Code; and

(d) any violation of the provisions of this Book.

66
2. Notice of Cancellation

The Regional Office shall serve a notice of the cancellation proceedings on


the labor organization concerned stating the grounds therefor, at least
three (3) working days before the scheduled date of hearing. In such
hearing, the representative of the labor organization shall have the right
to present its side.

3. Appeal

The labor organization may, within ten (10) working days from receipt of
the decision cancelling or revoking its certificate of registration, file an
appeal to the Bureau on any of the following grounds:

(a) grave abuse of discretion; and

(b) gross incompetence.

The Bureau shall have twenty (20) working days from receipt of the records
of the case within which to decide the appeal. Its decision shall be final
and unappealable.

1. "One Union - One Industry" Concept

The primary objective in restructuring the labor movement is to eradicate


inter-union and intra-union conflicts. To achieve this end, the Code has
introduced the "one union - one industry" concept.

Under this concept, the Bureau, upon consultations with workers' and
employers' representatives and subject to the approval of the Secretary of
Labor, shall divide the economy into appropriate and viable industry
groups, each of which may in turn be divided into appropriate and viable
sub-groups as circumstances and policy may require.

67
After the economy shall have been divided into appropriate and viable
industry groups, a process of selection or appropriate identification of a
national union or federation assigned to each industry shall be undertaken
either on a regional or national basis. The objective as aforementioned is
clear but the strategies of accomplishing it are still to be plotted out. So
much effort has already been exerted along this direction but so far,
concrete results have yet to be produced. As a matter of fact, labor leaders
have been pre-occupied in these restructuring efforts for the past two years
with the hope that, eventually, they will be able to come up with a
restructured labor movement.

2. "Equity of the Incumbent" Principle

To obviate initial obstacles towards the implementation of the "one union


- one industry" concept, the "equity of the incumbent" principle was
evolved. As circumscribed by the Code, "all existing federations and
national unions which meet the qualifications of a legitimate labor or
generation and none of the grounds for cancellation shall continue to
maintain their existing affiliates regardless of the nature of the industry
and the location of the affiliates.

G. INTER-UNION AND INTRA-UNION DISPUTES

1. Jurisdiction and Adjudication

Under the Labor Code, the Bureau of Labor Relations and the Labor
Relations Divisions in the regional offices of the Department of Labor shall
have original and exclusive authority to act at their own initiative or upon
request of either or both parties, on all inter-union and intra-union
conflicts.

Under the Industrial Peace Act, these issues were cognizable by the Court
of Industrial Relations and it is worthy to note that neither the ad hoc
National Labor Relations Commission created under Presidential Decree

68
No. 21 (1972) nor the present National Labor Relations Commission under
Presidential Decree No. 442 (1974) has acquired jurisdiction over these
matters.

"The jurisdiction of the ad hoc National Labor Relations Com-mission


created under Presidential Decree No. 21 as well as the pre-sent
Commission created under Presidential Decree No. 442 as amended, does
not embrace intra-union disputes and cases involving rights and
conditions of membership. It is clear, therefore, that under Republic Act
No. 875, the Court of Industrial Relations until its abolition on October 31,
1974 continued to exercise such jurisdiction. Thereafter, upon the
effectivity of Presidential Decree No. 442, otherwise known as the Labor
Code of the Philippines on November 1, 1974, the Labor Relations revision
and the Bureau of Labor Relations acquired this jurisdiction. Only CIR
cases involving such issues could be juris-dictionally transferred to, for
appropriate disposition by, the corresponding Labor Relations Division
pursuant to Article 289 of the Labor Code, the pertinent portion of which
is hereby quoted as follows:

"ART.289. Disposition of pending cases. - All cases pending before the


Court of Industrial Relations and the National Labor Relations
Commission established under Presidential Decree No. 21 on the date of
effectivity of this Code shall be transferred to and processed by the
corresponding Labor Relations Division and the National Labor Relations
Commission created under this Code having cognizance of the same in
accordance with the procedure laid down herein and its implementing
rules and regulations. Cases on labor relations on appeal with the
Secretary of Labor or the Office of the President of the Philip-pines as of
the date of effectivity of this Code shall remain under their respective
jurisdiction and shall be decided in accordance with law, rules and
regulations in force at the time of appeal.

69
"This is precisely so, because the ad hoc Commission, in such cases, if
ever it entertained them as in the instant case, could not validly transfer
jurisdiction - where none exists over these cases - to the appropriate Labor
Relations Division and much more to this Com-mission under the terms
of Article 289 of the Labor Code as afore-cited."'-

2. Rights and Conditions of Membership

The rights and conditions of membership in a labor organization are


defined under Article 241 of the Labor Code. Any violation of said rights
shall be a ground for cancellation of union registration or expulsion of an
officer from office, whichever is appropriate.

2.1 - Changes Under the Labor Code from Republic Act No. 875 (1953)

Under the Industrial Peace Act, a minimum of ten percent (10 %) of the
members of a labor organization may report an alleged violation of internal
labor organization's procedures to the Court of Industrial Relations. If the
said Court finds, upon investigation, evidence to substantiate the alleged
violation and that efforts to correct the alleged violation through the
procedures provided by the labor organization's constitution and by-laws
have been exhausted, the court shall dispose of the complaint as in "unfair
labor practice" cases.

The foregoing requirements have already been modified by the pro-visions


of the Labor Code: firstly, the minimum requirement of ten per· cent of the
membership to initiate the complaint is now increased to at least thirty
per cent (30%) if the issue involves the entire membership of the union;
secondly, if the issue affects a single member only, such member may
alone file his complaint; thirdly, the venue of the com-plaint is with the
Labor Relations Division of the appropriate Regional Office of the
Department of Labor; and fourthly, the complaint is no longer disposable
like an "unfair labor practice" case.

70
Another modification is the term of office of elective union officials which
the Code, through the Implementing Rules and Regulations, has now fixed
at three (3) years instead of two (2) years under the Industrial Peace Act.

H. REPRESENTATION ISSUES

The resolution of representation issues as a pre-requisite to collective


bargaining would necessarily give rise to a particular union's recognition
as the exclusive bargaining representative of a defined collective
bargaining unit. This can be achieved either by (a) voluntary recognition
extended by management after satisfying itself that such union commands
majority membership among the rank and file employees embraced within
the bar-gaining unit, or, by (b) compulsory recognition in case the union
is certified by the med-arbiter assigned to the case, or, in proper cases, by
the Director of the Bureau of Labor Relations.

1. Certification Cases 1.1 Where to file

A petition for certification election may be filed with the Regional Office
which has jurisdiction over the employer. The petition shall be in writing
and under oath.

Where two or more Regional Offices have jurisdiction over an employer,


the Regional Office which shall first acquire jurisdiction over -the petition
shall exclude the others.

If the petition covers an industry group or sub-group, the petition shall be


filed with the Bureau.

71
1.2 Who May File Petition

The employer or any legitimate labor organization may file the petition.

The petition when filed by a legitimate labor organization, shall contain,


among others:

(a) the name of petitioner and its address and affiliation, if any;

(b) name, address and nature of the employer’s business;

(c) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require;

(d) approximate number of the employees in the alleged bargaining


unit;

(e) names and addresses of other legitimate labor organizations in the


bargaining unit;

(f) the signatures of at least 30% of the employees in the bargaining


unit supporting the petition; and

(g) other relevant facts.

When the petition is filed by an employer, it shall contain among others:

(a) the name, addresses and general nature of the employer's business;

(b) names and addresses of the legitimate labor organizations involved;

(c) approximate number of the employees in the appropriate bargaining


unit:

(d) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require; and

(e) other relevant facts.

72
1.3 When to file

In the absence of a certified collective bargaining agreement, a petition for


certification election may be filed anytime. However, no certification
election can be held oftener than once every twelve (12) months from date
of last election. If there exists a certified collective bargaining agreement,
a petition for certification election may only be entertained within sixty (60)
days prior to the expiry date of such agreement.

1.4 When to File Motion for Intervention in Certification Election


Proceedings

Motion for intervention in certification election proceedings may be filed at


any time at any stage thereof by the intervenor union which shall be
reduced in writing and under oath stating specifically the grounds
therefore.

1.5 Where to File Motion for Intervention

The motion for intervention in certification election proceedings shall be


filed before the med-arbiter assigned to the case. The mere filing of said
motion, however, will not suspend the holding of the certification election
without an order issued by the med-arbiter.

1.6 Procedure

Upon receipt of a petition, the Regional Director shall assign the case to a
med-arbiter for hearing. The med-arbiter shall have twenty

(20) working days within which to deny or grant the petition. In either
case, he shall state the grounds therefor. The decision shall contain the
following:

(a) names of the contending unions;

(b) name of the employer;

73
(c) description of the bargaining unit; and

(d) list of eligible voters.

The certification election shall be held within twenty (20) days from receipt
of the order by the parties.

1.7 Appeal

Any aggrieved party may appeal the order of the med-arbiter to the
Bureau only on any of the following grounds:

(a) grave abuse of discretion; and

(b) gross incompetence.

The appeal shall specifically state the grounds relied upon by the appellant
with supporting memorandum of arguments.

1.8 Where to File Appeal

The appellant shall file his appeal in the Regional Office; where the case
originated, which appeal shall be under oath, copy furnished the appellee.

1.9 Period of Appeal

The appeal shall be filed within ten (10) working days from receipt of the
order by the appellant. Likewise, the appellee shall file his answer thereto
within ten (10) working days from receipt of the appeal. The Regional
Director shall immediately forward the entire records of the case to the
Bureau.

1.10 Decision of the Bureau is Final and Unappealable

The Bureau shall have twenty (20) working days within which to decide
the appeal from receipt of the records of the case. The decision of the
Bureau in all cases shall be final and unappealable.

74
1.11 Execution Pending Appeal

The execution of the order of the med-arbiter shall not be stayed by an


appeal unless otherwise ordered by the Bureau.

1. Visitorial Power

The right or authority of the Secretary of Labor under Republic Act No.
1941 (1957) is presently incorporated under the Labor Code, particularly
Article 264 thereof, providing as follows:

"ART.264. Visitorial power. - The Secretary of Labor or his duly authorized


representative is hereby empowered to inquire, from time to time, into the
financial activities of legitimate labor organizations and to examine their
books of accounts and other records to deter-mine compliance or non-
compliance with the law and to prosecute any violation of the law and the
union constitution and by-laws."

The validity of such visitorial power vested in the Secretary of Labor over
the financial activities of labor organizations has been upheld by the
Supreme Court in Philippine Association of Free Labor Unions (PAFLU) v.
Secretary of Labor.56 The law then, Republic Act No. 1941 (1957), which
amended Section 23 (e) of Republic Act No. 875 (1953), reads as follows:

"Provisions of Commonwealth Act Numbered Two Hundred and Thirteen


providing for registration, licensing, and cancellation of registration of
organizations, associations, or union of labor, as qualified and expanded
by the preceding paragraphs of this Act, are hereby amended; Provided,
however, that the Secretary of Labor or his duly authorized representative
is hereby empowered to inquire, from time to time, into the financial
activities of any legitimate labor organization and to examine its books of
accounts and other financial records to determine compliance or non-
compliance with the laws and to aid in the prosecution for any violation
thereof.

75
"The Secretary of Labor shall appoint such accounts examiners as may be
necessary for carrying out the purpose of this Section."

In upholding the validity of the visitorial power of the Secretary of Labor in


the case of PAFLU v. Secretary of Labor, the Supreme Court made the
following observations:

"Respondents authority under said Act is limited to an inquiry into the


financial activities of any legitimate labor organization and to the
examination of "its books of accounts and other financial records to
determine compliance with the laws and to aid in the prosecution for any
violations thereof." Certainly, none of the provisions of Conventions 37 and
98 seek to protect or shield labor organizations which violate said laws.
Upon the other hand, Republic Act No. 1941 merely tries to forestall the
misuse of funds of the union officers thereof, by restoring to the Secretary
of Labor a visitorial power he had under Commonwealth Act No. 213,
which had not been included in Republic Act No. 875. Needless to say, if
respondent should use the powers under Republic Act No. 1941in such an
arbitrary or oppressive manner as to impair the rights of the workers or of
their organization, then the remedy would be to challenge the action thus
taken, "not to invalidate the law" - in the language used in Philippine
Association of Colleges and Universities vs. Secretary of Education (51 Off.
Gaz., 6230)."

It is of interest to note that under Republic Act No. 1941 (1957), the
Secretary of Labor is limited to an inquiry into the financial activities of
any legitimate labor organization, and to determine compliance or non-
compliance with the laws and to aid in the prosecution for any violation
thereof; however, under the present Code, his powers are broadened to
include violations of the union constitution and by-laws and furthermore,
made more effective as the said official can now, motu proprio, prosecute
such violations. Moreover, the visitorial power exercised by the

76
Department of Labor is made more pervasive under the terms of Article
225 of the Code which is reproduced hereunder:

"ART. 225. Bureau of Labor Relations. - The Bureau of Labor Relations


and the Labor Relations Division in the Regional Offices of the Department
of Labor shall have original and exclusive authority to act, at their own
initiative or upon request of either or both parties, on all inter-union and
intra-union conflicts, and all disputes, grievances or problems arising from
or affecting labor management relations in all workplaces, whether
agricultural or non-agricultural, except those arising from the
implementation or interpretation of collective bargaining agreements
which shall be the subject of grievance procedure and/or voluntary
arbitration."

The present Code has incorporated new provisions as aforecited, the


validity and constitutionality of which have yet to be duly passed upon.
Looking back to the case of PAFLU v. Secretary of Labor, petitioner PAFLU
therein assailed the validity and constitutionality of Republic Act No. 1941
(1957) on the ground that it is violative of Conventions 87 and 98 of the
International Labor Organization which is an international agreement to
which the Philippine is a party. The Supreme Court did not consider the
necessity of passing upon the issue of constitutionality of said Act as it
found that "x x x none of the provisions of Conventions 87 and 98 seek to
protect or shield labor organizations which violate said laws," and that " x
x x Republic Act No. 1941 (1957) merely tries to forestall the misuse of
funds of the union by officers tihereof x x x". Of pertinence is the following
portion of the said decision:

"It is argued by petitioner herein that this proviso is inconsistent with


Article 3, 4, 7 and 8 of said Convention 87, to which the Philip-pines is a
party, reading:

77
"1. Workers' and employers' organizations shall have the right to draw up
their constitutions and rules. to elect their representatives in full freedom.
to organize their administration and activities and to formulate their
programs.

"2. The public authorities shall refrain from any interference which would
restrict this right or impede the lawful exercise thereof. (Article 3).

"Workers' and employers' organizations shall not be dissolved or


suspended by administrative authority". (Article 4).

"The acquisition of legal personality by workers' and employers'


organizations, federations and confederations shall not be made subject to
conditions of such a character as to restrict the application of the
provisions of Articles 2. 3 and 4 hereof1". (Article 7).

"3. The law of the land shall not be such as to impair, nor shall it be so
applied to impair the guarantees provided for in this Convention". (Article
8)

"We are not aware of, and petitioner has not cited. any provision of
Convention No. 1941, except insofar as said Convention, like Convention
No. 87, provides for the time and procedure for denunciation by any of the
contracting parties, thus indicating that the latter. are, prior thereto.
bound to comply with the provisions of both Conventions.

"Moreover, petitioner assumes that an act of Congress is unconstitutional


and/or invalid if it contravenes an international agreement to which the
Philippines is a party. Without passing upon the validity or accuracy of
this predicate, we find that petitioner's contention is untenable. Indeed,
we see no conflict between Republic Act No. 1941, on the one hand, and
any of the provisions of said Conventions. There is in said Republic Act
No. 1941 nothing that may authorize respondent either to interfere in the
right of workers' and employers' organizations to draw up their

78
constitutions, to freely elect their representatives, to organize their
administration and activities and to formulate their programs, or to
dissolve or suspend said organizations, or to subject the acquisition of
legal personality thereof to such conditions as to restrict or impair the
rights aforementioned."

In the case, the Supreme Court concluded that Republic Act No. 1941
(1957) is concerned with the authority of the Department of Labor

to inquire into the financial activities of said organization determine


compliance or noncompliance with the laws and prosecution for any
violations thereof."

The Labor Code, however, embraces much more than Act No. 1941 (1957)
circumscribed, by virtue of Articles of said Code.

79