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 JOURNAL OF THE
PHILIPPINE ASSOCIATION ON
VOLUNTARY ARBITRATION
Vol. IX No. 1 December 2015

ON VOL

Uj

Request for Certification as Sole and

Exclusive Bargaining Agent (The New
AlternativeMethod to Determine the
Workers' BargainingRepresentative) Arnold F. de Vera

Reconsidering the
Voluntary Arbitration Judgment Rafael E. Khan

Voiding the Voluntary Arbitrator's Award:

The Honda CarsPhilippines,Inc. Case Francis V Sobrevifias

Evolving Changes in Voluntary Arbitration Rosa Maria T Juan-Bautista

Significant Supreme Court

Labor Decisions in 2014 Maria Victoria Gleoresty Sp. Guerra
 BOARD OF EDITORS
2014-2016

Editor-In-Chief
FRANCIS V. SOBREVINAS

Editors

CESARIO A. AZUCENA, JR. MANUEL P. LEGASPI

ROSA MARIA J. BAUTISTA PATERNO D. MENZON
VIRGINIA P. ELBINIAS RENE E. OFRENEO
JOSEPHUS B. JIMENEZ RUFUS B. RODRIGUEZ
ISMAEL G. KHAN, JR. ART 0. TAN

Members of the Philippine Association on Voluntary Arbitration are invited to

submit short articles for publication, preferably on single legal points properly
supported by citations of authorities placed in footnotes. The maximum length
of the articles should ordinarily be twelve typewritten pages, legal-size and
double-spaced.

No article will be considered that has been accepted or published elsewhere.

The publication of speeches is generally discouraged.

The Board of Editors carefully considers all contributed articles. It reserves

the right to reject any of them for any reason whatsoever, including space
constraints.

The views and opinions of individual authors are not to be taken as the
official position of the Philippine Association on Voluntary Arbitration or of the
Editorial Board of the JOURNAL.

Permission is hereby given to quote from or reprint, with credit, any article
published in the JOURNAL.

Address all communications to: Journal of the Philippine Association on

Voluntary Arbitration, VA Center, Ground Floor, DOLE Bldg., Intramuros,
Manila.
 JOURNAL OF THE 00V

PHILIPPINE ASSOCIATION ON
VOLUNTARY ARBITRATION
.PA VAD

CONTENTS

ARTICLES

Request For Certification as Sole and

Exclusive Bargaining Agent (The New
Alternative Method to Determine The
Workers' Bargaining Representative) Arnold F de Vera 1

Reconsidering the
Voluntary Arbitration Judgment Rafael E. Khan 12

Voiding the Voluntary Arbitrator's Award:

The Honda CarsPhilippines,Inc. Case Francis V Sobrevifias 20

Evolving Changes
in Voluntary Arbitration Rosa Maria T. Juan-Bautista 29

Significant Supreme Court

Labor Decisions in 2014 Maria Victoria Gleoresty Sp. Guerra 35
 IN THIS ISSUE
The Volume IX, No. I issue of the Journal of the Philippine Association on
Voluntary Arbitration starts off with four articles and a summary of significant
Supreme Court decisions in Labor Law.

In the first article, Request for Certiflcation as Sole and Exclusive Bargaining
Agent (The New Alternative Method to Determine The Workers' Bargaining
Representative), Arnold E de Vera analyzes Department Order No. 40-I which
repeals the Labor Code provisions on Voluntary Recognition and provides in
their stead the new procedure called Request for Sole and Exclusive Bargaining
Agent (SEBA) Certification. By totally removing any employer role in the
process of certifying a SEBA, this new procedure aims to simplify and expedite
the way by which workers may exercise their right to self-organization and
collective bargaining and negotiations.

Next, Rafael E. Khan takes a look at two basic questions in Reconsideringthe

Voluntary Arbitrationjudgment: First, before elevating the case to the Court of
Appeals, is a party aggrieved by the decision of a Voluntary Arbitrator required to
initially file a motion for reconsideration? Secondly, within what period of time
must the aggrieved party file a Petition for Certiorari with the Court of Appeals
under Rule 43? He then discusses procedural principles found in Department
Order No. 40-03, the 2005 Revised Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings, Article 262-A of the Labor Code and Rule
43 of the Rules of Court, as applied and construed by the Supreme Court in
recent cases.

Voiding the Voluntary Arbitrator'sAward: The Honda Cars Philippines, Inc.

Case, by Francis V Sobrevifias, examines the precept that no matter how broad
may be the freedom of contracting parties to establish such stipulations, clauses,
terms and conditions as they may deem appropriate pursuant to the principle of
party autonomy in contracts, it does not go so far as to countenance disrespect
for a failure to observe a legal prescription. Hence, a stipulation in a collective
bargaining agreement must yield to the statute.

In the fourth article, namely, Evolving Changes in Voluntary Arbitration, Rosa

Maria T Juan-Bautista reviews and evaluates some leading cases displaying the
evolution of doctrines, both substantive and procedural, in the area of labor
dispute resolution particularly voluntary arbitration.

And last, but certainly not the least, Maria Victoria Gleoresty Sp. Guerra
reports on some cases adjudicated by the highest court of the land in the very
instructive Sijniflcant Supreme Court Labor Decisions in 2014. Per the survey,
some of the decisions have broken new ground while others reiterate previously
enunciated doctrines.
 REQUEST FOR CERTIFICATION AS SOLE
AND EXCLUSIVE BARGAINING AGENT
(The New Alternative Method to Determine
the Workers' Bargaining Representative)

Arnold F. de Vera*

Itinuturo ng katwiran na huwag nating sayangin ang

panahon sa pag-asasa ipinangakongkaginhawahanna
hindi farating at hindi mangyayari.

Itinuturo ng (atwiranna tayo'y umasa sa ating sarili

at huwag antayin sa i6a ang ating kabubayan.

Itinuturo ng katwiran na tayo'y magkaisang-foo6,

magkaisang-isip at aalfa, at tayo'y magkalakas na
maihanapng funas ang naghaharingkasamaansa ating
Oayan.

Andres monifacio
(Ang 'Dapat!tabatidng mga Tagafog)

The unity of workers remains the bedrock upon which their aspirations and
rights are founded. Workers have long expressed the belief that the achievement
of their goals depends more on their own initiative and action than on the
unilateral generosity of a benefactor. Thus, a fundamental guarantee under
the 1987 Constitution is that all workers have the rights to self-organization,
collective bargaining and negotiation.' By forming or joining their own labor
organization, workers can, as equals, discuss and agree with their employers
regarding their terms and conditions of employment.

One may reasonably harbor the expectation that, after some 28 years since the
Constitution took effect, significant progress should have been made in realizing
and promoting the constitutional promises of self-organization and collective

* Partner, Gabriel and Mendoza Law; B.S., Ateneo de Manila University; LL.B., University
of the Philippines; LL.M. (Global Public Service Scholar), New York University.
1 Constitution, Article XIII, Section 3, paragraph 2.

1
bargaining. However, figures from the Department of Labor and Employment
(DOLE) tend to disappoint. The table below shows that as of September
2015, the number of unions remain at a low 63,008 consisting of only 206,927
workers. This means that out of the estimated 41.84 million comprising the
Philippines' total workforce2 , only 9.2% belong to labor organizations and an
even lower number comprising 49% are covered by existing collective bargaining
agreements (CBAs).

Table 1.
Labor Organizations / Number of Reported Members
Collective Bargaining Organizations / Workers Covered
Agreements CBAs

Labor Organizations 63,0083 3,852,774

Existing Collective
Bargaining Agreements

Source: Bureau ofLabor Relations'

Needless to say, in the years from 1987 to the present, it is only a small fraction
of the workforce that engages in and benefits from collective bargaining with
their respective employers. The various reasons for the low number of workers
covered by CBAs vary and include (1) the prevalence of precarious employment
arrangements characterized by short tenure which effectively prevent workers
from exercising their rights to form and join unions, (2) the vulnerability of
workers to threats and intimidation when forming and registering their own
labor organization, and (3) the ability of employers to influence the process
in choosing the workers' bargaining representative. In its Philippine Country

2 The number of persons in the workforce is as of April 2015 and are from the Philippine
Statistics Authority. The period (i.e. April 2015) may not match exactly with the period
represented by the figures from the Bureau of Labor Relations (i.e. September 2015).
3 Out of this number, only 17,023 are enterprise unions. 43,981 labor organizations do
not even collectively bargain and are classified as workers' association which are defined
under Book V Rule I, Section 1 (ccc) of the Implementing Rules and Regulations of the
Labor Code as an "association of workers organized for the mutual aid and protection of its
members or for any legitimate purpose other than collective bargaining."
4 The full data are available online at http://www.blr.dole.gov.ph/reports/58-statistical-reports.

2
Reports on Human Rights Practices for 2014, the State Department of the
United States of America noted a number of challenges faced by Philippine
workers in exercising their right to freedom of association and collective
bargaining and highlighted reports of anti-union behavior in Philippine Special
Economic Zones (SEZs), the practice of employing "non-regular" workers, and
undue interference in union activities.s

Faced with such obstacles to the workers' exercise of their constitutional

rights, various groups have proposed measures to amend the Labor Code or its
implementing rules.

One of these measures was successfully enacted into law in 2007 as Republic
Act No. 9481 also known as the Act Strengthening Workers' Constitutional
Right to Self Organization in the Area of Registration, Representation, and
Union Cancellation. On its face, R.A. No. 9481 is a step in the right direction
as it removed procedural bottlenecks in trade union registration and addressed
typical causes of intimidation and threats experienced by unionists. Still, workers
and labor organizers continue to observe an inability to realize the law's full
potential given an uneven implementation by DOLE officials. 6

But aside from registration, workers also have to hurdle bureaucratic processes
required to attain the status of a "Sole and Exclusive Bargaining Agent" (SEBA)
so as to be able to compel a specific employer to negotiate with it.7 Under
the law, the principal way by which a legitimate labor organization is certified
as the SEBA is through a certification election which allows members or an
appropriate bargaining unit to choose whether to be represented by a union or
not and, in the former case, which union should represent them.' Certification

5 United States of America Department of State, Bureau of Democracy, Human Rights and
Labor, Country Reports on Human Rights Practices for 2014, accessible at http://www.
state.gov/j/drl/rls/hrrpt/humanrightsreport/#wrapper.
6 For instance, even as R.A. No. 9481 introduced Article 241 (as renumbered) which
prevents the identities of union officers from being revealed before certification elections,
it is commonly experienced for DOLE to require the names of such officers several days
before the date of the election. Thus, while the intent of the law is to prevent the harassment
of union supporters, actual implementation is not uniformly faithful to it.
7 Presidential Decree No. 442, Labor Code, Article 267 (as renumbered). Exclusive bargaining
representationand workers'participationin policy and decision-making. - The labor organization
designated or selected by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or group of employees
shall have the right at any time to present grievances to their employer. xxx
8 Ibid., Article 268 (as renumbered). Representation issue in organized establishments. - In

3
election is the exclusive way of determining the SEBA where the bargaining unit
is covered by an existing CBA or where more than one union exists among the
members of the bargaining unit.

In case the workers in the bargaining unit are not represented by a SEBA and
there is only one union among them, there was another way by which a SEBA
used to be determined. In addition to certification election, the Implementing
Rules and Regulations of the Labor Code provided for the process of Voluntary
Recognition. 9 Under this concept, the employer may choose to voluntarily
recognize a union as the bargaining representative of all the members in the
bargaining unit sought to be represented.10 Voluntary Recognition was available
only when (1) there is only one legitimate labor organization operating within
the bargaining unit, (2) at least majority of the members of the bargaining unit
support the voluntary recognition, and (3) the employer agrees to recognize
the union as the sole bargaining agent. When the Regional Office of the DOLE
records that a union has been voluntarily recognized by an employer, the
recognized labor union shall then enjoy the rights, privileges and obligations of

organized establishments, when a verified petition questioning the majority status of

the incumbent bargaining agent is filed by any legitimate labor organization including
a national union or federation which has already issued a charter certificate to its local
chapter participating in the certification election or a local chapter which has been issued
a charter certificate by the national union or federation before the Department of Labor
and Employment within the sixty (60)-day period before the expiration of the collective
bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot
when the verified petition is supported by the written consent of at least twenty-five percent
(25%) of all the employees in the bargaining unit to ascertain the will of the employees in
the appropriate bargaining unit. To have a valid election, at least a majority of all eligible
voters in the unit must have cast their votes. The labor union receiving the majority of
the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in
the unit. When an election which provides for three or more choices results in no choice
receiving a majority of the valid votes cast, a run-off election shall be conducted between the
labor unions receiving the two highest number of votes: Provided, That the total number of
votes for all contending unions is at least fifty percent (50%) of the number of votes cast. In
cases where the petition was filed by a national union or federation, it shall not be required
to disclose the names of the local chapter's officers and members.
At the expiration of the freedom period, the employer shall continue to recognize the majority
status of the incumbent bargaining agent where no petition for certification election is filed.
9 The Department of Labor and Employment's Department Order No. 40 series of 2003
before being amended by Department Order No. 40-1-2015 provided for the process of
voluntary recognition under Rule VII.
10 Lepanto ConsolidatedMining Company vs. The Lepanto Capataz Union. G.R. No. 157086,
February 18, 2013.

4
an exclusive bargaining agent of all the employees in the bargaining unit."

Now, the concept of Voluntary Recognition is no more.

On September 7, 2015, the Department of Labor and Employment issued

Department Order No. 40-1 series of 2015 (D.O. 40-1) which repeals the
provisions on Voluntary Recognition and provides in their stead the new
procedure called Request for Sole and Exclusive Bargaining Agent (SEBA)
Certification. By totally removing any employer role in the process of certifying
a SEBA, this new procedure aims to simplify and expedite the way by which
workers may exercise their right to self-organization and collective bargaining
and negotiations. This piece outlines the main features of this new process as it
is provided by D.O. 40-1.

Main Features of the Procedure for a

Request for Sole and Exclusive Bargaining Agent (SEBA)

1. Conditions When A Request Is Proper

A Request for SEBA Certification is available only (1) in unorganized

establishments (i.e. no SEBA) and (2) where the requesting union is the only
existing legitimate labor organization. Thus, like Voluntary Recognition, it is
not available where there is a SEBA or, if there is no SEBA, where there is at
least one more registered union other than the one making the Request.

Another similarity with Voluntary Recognition is that a Request will prosper

only when it is supported by at least majority of the number of employees in the
bargaining unit concerned. This fact should be revealed by the requesting union
as it submits the names of the employees in the bargaining unit who support the
Request. The Regional Director will determine whether the number of these
names constitutes at least a majority of the number of the members of the whole
bargaining unit.

11 Supra, Note 10.

5
2. Who Files the Request

Under D.O. 40-1, any legitimate labor organization may file a Request for
SEBA certification. This means that any registered independent unionl 2 or any
local chartered by a Federation may do so. The certificate of registration of the
requesting independent union should be certified by the union President. In case
the requesting entity is a chartered local, the President of the Federation of the
local shall certify the certificate of creation of the local.

3. Procedure for Request for SEBA Certification

The diagram below marks the steps involved in the Request for SEBA
certification. In detail they are:

1 Request Filed with

Regional Office

Regional Director
Regional Director Calls
for 2a directs requesting
2
Validation Conference Union to complete
submissions

Complete submission Failure to comply

3 causes issuance of constitutes withdrawal
Certification of Union as of Request
SEBA

Posting of
Certification of Union
as SEBA

12 Presidential Decree No. 442, Labor Code of the Philippines, Article 240, and Implementing
Rules and Regulations of the Labor Code, Book V, Rule III, Section 2-A.

6
Step 1. Filing of the Request

Any legitimate labor organization (independent union or chartered local)

may file a Request for SEBA certification with the DOLE Regional Office
which issued its certificate of registration (for independent union) or certificate
of creation (for chartered local)."

To be complete, a Request for SEBA certification should indicate the

following:

a. The name and address of the requesting legitimate labor organization;

b. The name and address of the employer where the union operates;
c. The bargaining unit sought to be represented;
d. The approximate number of employees in the bargaining unit;
e. The statement of the existence / non existence of other labor organizations
in the bargaining unit or the existence of a CBA; and
f. The certificate of registration in case the requesting union is independent
or a certificate of creation in case it is a chartered local.' 4

Step 2. Action by the Regional Director

Within one (1) day from the submission of the Request, the Regional Director
shall determine the following:

a. Whether the Request is accompanied by all the requirements mentioned

in Step 1; and

b. Whether the bargaining unit sought to be represented is organized or

not."

To determine whether the bargaining unit sought to be represented is

organized or not or if there is another union aside from the requesting union,
the Regional Director may resort to the records of his/her office considering that
it holds all records of unions, certified representatives as well as CBAs. This is
in addition to the statement under oath by the person submitting the Request
relative to the non-existence of other labor organizations or collective bargaining
agreements within the same bargaining unit.

13 Department of Labor and Employment, D.O. 40-1-2015, Section 1.

14 Ibid., Section 2.
15 Ibid., Section 3.

7
 The Regional Director, upon submission of the Request, shall also request
a copy of the payroll so that the number of employees in the bargaining unit
may be ascertained and thus serve as the basis for determining whether at least
majority support the Request.1 6 It is submitted that the Requesting union may
submit the payroll.

If the Regional Director finds that the establishment is unorganized (i.e. no

SEBA) with only 1 legitimate labor organization, he/she shall call a conference
within 5 working days during which documents will be submitted by the union
and validated by the Regional Director (Step 2 in the diagram).' 7

Alternatively, if the Regional Director finds the submission in Step 1 deficient,

he/she shall advise the requesting union or local to complete the deficiency
within ten (10) days from notice. The Union's failure to comply is deemed a
withdrawal of the Request for SEBA certification (Step 2b in the diagram)."

However, if the Regional Director finds that the establishment is organized,

that is, there is a SEBA, he/she shall refer the Request to the Mediator-Arbiter
for the determination of the propriety of conducting a certification election.19
It is submitted that this question may be resolved by the determination of the
existence of any of the grounds to deny a petition for certification election under
Book V, Rule VIII, Section 14 of the Implementing Rules and Regulations of
the Labor Code.2 0

16 Ibid.
17 Ibid., Section 4.
18 Ibid., Section 3.
19 Ibid., Section 6.
20 Section 14. Denial of the petition; Grounds. - The Med-Arbiter may dismiss the petition
on any of the following grounds:
(a) the petitioner is not listed in the Department's registry of legitimate labor unions or
that its legal personality has been revoked or cancelled with finality in accordance
with Rule XIV of these Rules;
(b) the petition was filed before or after the freedom period of a duly registered
collective bargaining agreement; provided that the sixty-day period based on the
original collective bargaining agreement shall not be affected by any amendment,
extension or renewal of the collective bargaining agreement;
(c) the petition was filed within one (1) year from entry of voluntary recognition or a
valid certification, consent or run-off election and no appeal on the results of the
certification, consent or run-off election is pending;
(d) a duly certified union has commenced and sustained negotiations with the
employer in accordance with Article 250 of the Labor Code within the one-year

8
 Similarly, if the Regional Director finds that there is no SEBA among the
members of the bargaining unit but there is at least 1 more union aside from
the requesting union, he/she shall refer the same to an election officer for the
conduct of certification election. In this case, the provisions in the Implementing
Rules and Regulations applicable to certification elections shall apply.21

Step 3. Conference for Validation

As described above, if the Regional Director finds that the establishment

is unorganized with only 1 legitimate labor organization, he/she shall call a
conference within 5 working days (Step 2 in the diagram) during which the
union must submit the following:

a. The names of the employees in the covered bargaining unit who signify
their support for the certification. The number of these names should
comprise at least majority of the number of employees in the covered
bargaining unit.

b. Certification under oath by the president of the requesting union or

local that all documents submitted are true and correct based on his/her
personal knowledge.

Thus, it appears that the Regional Director may be able to ascertain the total
number of workers in the bargaining unit from (1) the indication in the initial
Request (Step 1) and (2) the payroll submitted to him/her. From this number,
he/she can then determine whether the names submitted during the validation
conference comprise at least majority of the number of employees in the covered
bargaining unit.

Any member of the bargaining unit may contest the submissions made during
the validation conference. Otherwise, these submissions are presumed to be true
and correct. It is noted that for this purpose, the employer or any representative
of the employer may not contest the submissions and, consistent with the

period referred to in Section 14.c of this Rule, or there exists a bargaining deadlock
which had been submitted to conciliation or arbitration or had become the subject
of a valid notice of strike or lockout to which an incumbent or certified bargaining
agent is a party;
(e) in case of an organized establishment, failure to submit the twenty-five percent
(25%) support requirement for the filing of the petition for certification election.
21 Implementing Rules and Regulations of the Labor Code, Book V, Rule IX.

9
employer's role in representation proceedings, is considered a by-stander and
not a party-in-interest. 2 2

In case of failure by the requesting union or local to complete the requirements

during the validation conference, the Request for SEBA certification shall be
referred to an election officer for the conduct of certification elections.23 This
referral is consistent with the policy in the Labor Code"(t)o promote and
emphasize the primacy of free collective bargaining and negotiations" and "(t)
o ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare." 24 In this case, the procedure applicable
to certification elections will be applied.

Alternatively, in case the Regional Director finds the submissions complete,

he/she shall, during the validation conference itself, issue a certification that the
union is the sole and exclusive bargaining agent enjoying the rights and privileges
of an exclusive bargaining agent of all employees in the covered bargaining unit
(Step 3 of diagram).

At this point it may be noted that the periods provided by D.O. 40-1 appear
to be deliberate measures to make the whole process as fast as possible. So,
with 1 day to review the Request filed, 5 working days to call for the validation
conference and the issuance of the certification itself on the day of the validation
conference, a union may be able to be certified as a SEBA through this new
process within just a week from the time it files the Request. Such expedience
will go a long way to promote the workers' rights to bargain and negotiate.

Step 4. Posting of Certification

After issuance, the Regional Director shall cause the posting of the SEBA
certification for fifteen (15) consecutive days in at least 2 conspicuous places
in the establishment or covered bargaining unit (Step 4 of the diagram). 2 5
D.O. 40-1 does not indicate whether the lack or defect in posting affects the
certification of the union as SEBA. It is submitted that the status of SEBA
attaches from the day on which the certification to that effect is issued by the

22 Department of Labor and Employment, D.O. 40-1-2015, Section 4.

23 Ibid.
24 Presidential Decree No. 442, Labor Code of the Philippines, Article 218 (as renumbered)
(a) and (g).
25 Department of Labor and Employment, D.O. 40-1-2015, Section 5.

10
Regional Director and that the subsequent posting serves to put everyone on
notice of said certification.

Conclusion

In discussions leading to the issuance of D.O. 40-1, it was emphasized that

the changes in new concept of Request for SEBA certification aim to make
the process of determining a SEBA faster, simpler and, consistent with the
bystander rule incorporated into the Labor Code by R.A. No. 9481, free from
the intervention of the employer. Stakeholders are only too aware, however, that
intention is not reality. They have seen that the success of previous measures
to promote workers' rights have had to depend largely on the fidelity and
competence of implementors as it does on the actual use and reliance by workers
and workers' advocates. The familiarity of stakeholders with this new concept
involving a Request for Certification is a crucial first step for the success of the
measure and one which this piece seeks to facilitate. Whether the number of
workers covered by CBAs will increase in the days ahead remain uncertain as
that certainly involves more than just the question of determining the SEBA.
Still, even as employment of short duration continues and the organization
and registration of unions remain perilous, D.O. 40-1 represents a way ahead
towards promoting workers' rights. What remains now is taking that next step
of using and applying its provisions.

11