Ateneo de Davao University

E. Jacinto Street, Davao City

Employee Relations

HRM 2232: Human Resource Management

(3-706 / Monday and Wednesday / 11:00 AM - 12:30 PM)

Submitted by:

Kiara Shiyn Masgon

Submitted to:

Caesar Billones
Professor of Human Resource Management

September 13, 2022

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 TABLE OF CONTENTS

What is an employment relationship?...........................................3

Dimensions of the employment relationship.................................3-4
Basis of the employment relationship............................................4
Employment relationship contracts................................................4-5
Labor relations............................................ ......................................5-6
Labor union/labor organization........................................................6-7
Article XIII Section 3, Philippine Constitution.................................7-8
The Labor Code of the Philippines...................................................8-9
Bargaining, types of bargaining, and bargaining zone...................9-10
Negotiation, effective negotiation skills, barriers to effective
negotiation............................................ ..............................................10-14
Collective Bargaining Agreement......................................................14-15
Unfair labor practice............................................ ...............................15-18
Grievance machinery............................................ ..............................18-19
Strike, picketing, and lock-out............................................ ................19
Arbitration, mediation, conciliation.....................................................20
Department of Labor and Employment: Organizational Structure and
functions............................................ ....................................................21
Rerum novarum and laborem exercens: Catholic Social Teachings on
Labor............................................ ..........................................................22
Reflection............................................ ..................................................23
References............................................ ..................................................

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What is an employment relationship?

The employment relationship is the legal connection that exists between

employers and employees. It exists when a person performs work or provides
services under certain conditions in exchange for monetary compensation. The
existence of an employment relationship determines the application of labor and
social security law provisions aimed at employees. It is the primary source for
determining the nature and scope of employers' rights and obligations to their
employees (Employment Relationship, 2011).

Dimensions of the employment relationship

The dimension of employment relation consists of four key elements as in parties,

substance, structure and operation as per Kessler and Undy (Kessler & Undy,
1996). Parties consist of managers, employee and employee’s representatives.
Whereas substance consists of individual and collective needs.

Keslar and Undy, 1996 (extracted from Armstrong 2012) proposed the dimensions
of the employee relationship as follows:

1. Parties: Employment relationship is formed between the managers, the

employees and the employee representative or the trade unions. This
relation can be both formal and informal. Although managers mange the
employee, the employees have certain rights given by the labour law which
the trade unions are ready to exercise if not followed. So the relationship
between the parties are more of a balancing act.

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 2. Substance: The employee relationship is based on the substance such as
job, reward, career, communication, culture, joint agreement and joint
machinery. The relationship between the employee and employer is formed
around these substance. For example the employee have a set
performance job standard whose evaluation is what the reward is based.
Similarly the relationship is strengthened by the organization culture and
communication.
3. Structure: The relationship must have a certain level of boundaries for both
the parties. The relationship may have written structures or structures that
are implied. Thus formal rules, procedures, informal understanding,
expectation and assumptions fall under the structure.
4. Operation: The last dimension of the employee relationship is the operation.
The level of employee, process and style of work defines the relationship
between the employees. The manager and the employees are at different
level and so their working process and style are also differently catered.
Basis of the employment relationship

The main basis of an employment relationship is the terms and conditions of

employment between the parties. There is no legal requirement for a contract of
employment to be in writing; it can be oral or written or a mixture of both.

Source:https://app.croneri.co.uk/topics/employeremployee-relationship/
indepth#:~:text=shareholder%20were%20removed.-,The%20Employment
%20Relationship,or%20a%20mixture%20of%20both.

Employment relationship contracts

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The contract of employment is the agreement between the business and
employee, and specifies the employment relationship. The contract does not have
to be written down for a contract of employment to exist; however, it is worth
having written copies (Employee Contracts & Contract Rights, 2020)

Terms in a contract of employment include:

 Employment conditions
 Rights
 Responsibilities
 Duties

Having a contract provides both parties with responsibilities, obligations, and

rights. For example, an employee has the right to be paid for the work they do, and
although you can agree to add or remove terms from a contract, you cannot
remove a right an employee has under law, such as the right to earn the minimum
wage. Employment contracts start the moment an employee accepts an offer of
employment, whether the employee is fully aware of the terms of employment or
not (Employee Contracts & Contract Rights, 2020).

Labor Relations

Labor relations are the term used to define the process between employers and
employees, management and unions in order to make decisions in organizations.
The decisions taken refer to wages, working conditions, hours of work, and safety
at work, security and grievances (Bercu & Vodă, 2017).

The labor relations are more than a static interpretation of contract between an
employee and an employer. Means a sum of connections between skills, abilities,

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values and opportunities at work. Employee role in organization has grown in
importance and variety over the time. For them, the labor relations become a way
to live, to self‐development and to obtain recognition. The employers realize that to
keep motivated and committed people in organization need more than a salary. It
is about benefits in financial terms, but, also, talking about safety at work, security,
rights and duties. Benefits are necessary to assure the job satisfaction (Bercu &
Vodă, 2017).

Employee and Labor Relations assists with general management regarding

developing, maintaining and improving employee relationships via communication,
performance management, processing grievances and/or disputes as well as
interpreting and conveying University policies. Essentially, Employee and Labor
Relations is concerned with preventing and resolving problems involving
employees which stem out of or affect work situations. In addition, Employee
Relations recognizes employees for service contributed to the Pace community
and provides assistance with professional growth. Finally, Employee and Labor
Relations is responsible for negotiation and administration of the Collective
Bargaining Agreements for the two employee Unions on campus (Human
Resources | Employee and Labor Relations, n.d.).

Labor union/labor organization

A labor union or trade union is an organized group of workers who unite to make
decisions about conditions affecting their work. Labor unions strive to bring
economic justice to the workplace and social justice to our nation. There are more
than 60 unions representing more than 14 million workers throughout the country.
No matter what work you do, there's probably a union that represents your work
(Union Plus, 2018).

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Unions work like a democracy. They hold elections for officers who make
decisions on behalf of members, giving workers more power on the job. A local
union is a locally-based group of workers with a charter from a national or
international union such as the Service Employees International Union (SEIU) or
United Auto Workers (UAW). A local may include workers from the same company
or region. It may also have workers from the same business sector, employed by
different companies (Union Plus, 2018).

A labor organization is an association of workers who have combined to protect or

promote their interests by bargaining collectively with their employers to secure
better working conditions, wages, and similar benefits. Similar benefits include
benefits traditionally provided by labor organizations, such as strike, lockout,
death, sickness, accident, and other benefits. Labor organizations need not be
recognized labor unions. An organization does not qualify for an exemption if its
net earnings inure to the benefit of any member (Labor Organizations | Internal
Revenue Service, 2019).

Labor organization" means any union or association of employees which exists, in

whole or in part, for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment (R.A. 875, n.d.).

Article XIII Section 3, Philippine Constitution

LABOR

Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining

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and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided
by law.

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to expansion and growth
(THE 1987 CONSTITUTION of the REPUBLIC of the PHILIPPINES – ARTICLE
XIII | GOVPH, 2020).

The Labor Code of the Philippines

The Labor Code of the Philippines stands as the law governing employment
practices and labor relations in the Philippines. It was enacted on Labor day of
1974 by President Ferdinand Marcos, in the exercise of his then extant legislative
powers. It prescribes the rules for hiring and termination of private employees; the
conditions of work including maximum work hours and overtime; employee
benefits such as holiday pay, thirteenth month pay and retirement pay; and the
guidelines in the organization and membership in labor unions as well as in
collective bargaining.

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The Labor Code contains several provisions which are beneficial to labor. It
prohibits termination from employment of Private employees except for just or
authorized causes as prescribed in Article 282 to 284 of the Code. The right to
trade union is expressly recognized, as is the right of a union to insist on a closed
shop.

Strikes are also authorized for as long as they comply with the strict requirements
under the Code, and workers who organize or participate in illegal strikes may be
subject to dismissal. Moreover, Philippine jurisprudence has long applied a rule
that any doubts in the interpretation of law, especially the Labor Code, will be
resolved in favor of labor and against management (Labor Code of the Philippines
| Bureau of Labor Relations, 2014).

Bargaining, types of bargaining, and bargaining zone

Bargaining or haggling is a type of negotiation in which the buyer and seller of a

good or service dispute the price and the exact nature of the transaction with the
goal of coming to an agreement. Like negotiation skills, you can practice and
improve your bargaining skills. 

Bargaining is often positioned as a way for two or more parties to act as

teammates seeking a common goal. This “working towards the same thing” is
common as an alternative pricing strategy to fixed prices (Bargaining, 2022).

Not all types of collective bargaining are the same. In fact, collective
bargaining can be divided into several categories. We've noted some of
the most common types below.

Composite Bargaining
Composite bargaining has nothing to do with compensation. Instead, it focuses on
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other issues, such as working conditions, job security, and other corporate
policies, These may include hiring and firing practices as well as workplace
discipline. The goal of composite bargaining is to come up with a suitable
agreement leading to a lasting and harmonious relationship between employers
and their employees.
Concessionary Bargaining
As its name implies, concessionary bargaining focuses on union leaders making
concessions in exchange for job security. This is common during an economic
downturn or recession. Union leaders may agree to give up certain benefits in
order to guarantee the survival of the employee pool and, ultimately, of the
business.
Distributive Bargaining
This process is characterized as benefitting one party financially at the expense of
the other. This can come through increased bonuses, salaries, or any other
financial benefits. Distributive bargaining normally favors workers over employers.
Unions must have a higher degree of power in order for distributive bargaining to
work. Higher membership means more power. If an employer refuses to accept a
union's demands, it can call a strike.
Integrative Bargaining
Each party tries to benefit through integrative bargaining, which is why it's often
referred to as a form of win-win bargaining. Each side tries to consider the other's
position and bring issues to the table that aim to benefit both parties. As such,
employees and employers both stand to lose and gain with integrative bargaining.
Productivity Bargaining
This type of bargaining revolves around compensation and the productivity of
employees. Labor union leaders often use higher salaries and compensation as a
way to boost employee productivity, which leads to higher profits and value for the
employer. In order for this kind of bargaining to work, both parties need to agree to
financial terms in order to increase productivity.

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Negotiation, effective negotiation skills, barriers to effective negotiation

Negotiation, in its most basic form, is an exchange of dialogues involving two or

maybe more conflicting parties who are striving to reach a consensus on their
dilemma. This person or group procedure usually takes place on a domestic,
professional, or global scale. Rather than fighting publicly, they try to look for
common ground (Kenton, 2021).

Negotiation needs both offerings as well as receiving. One should hope for a
mutually respectful conversation that convinces both sides. Good negotiation is
one when one can make subtle sacrifices whilst offering whatever is significant to
the other defendant. Regardless of the disparities in party interests, the approach
should avoid misunderstanding. A successful negotiation tends to leave both
parties content and willing to meet again (Kenton, 2021).

According to (Indeed Editorial Team, 2021). Negotiation skills are inherent

qualities that help two or more parties agree to a common logical solution. In the
workplace, you may have to display your negotiating skills in various situations
such as:
 Negotiating a salary hike with the HR manager after promotion
 Negotiating a project deadline with your team lead or manager
 Negotiating few days off for a family holiday with your manager
 Negotiating contract terms with a potential customer

Lack of negotiation skills affects the business bottom line and could ruin customer
relationship. Negotiation skills are soft skills and essential to become a negotiator

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and resolve workplace conflicts.
However, this skill set depends on the work environment, the parties involved and
outcome desired. Often, when one party is ready for reaching a compromise, the
other party may be resistant. This makes negotiation difficult and you are likely to
encounter such situations in the workplace. That is why you need to master your
negotiation skills (Indeed Editorial Team, 2021).

Knowing how to negotiate when decks are stacked against you and when factors
are constant, is important. For an effective procurement negotiation, avoid these
pitfalls (Andres Lares, 2019):

 1. Rushing

You need enough time to negotiate effectively. Sealing a deal in a hurry is a

cardinal sin in procurement. Analyze the product and its value, hear the supplier
out, make an offer and justify it to the supplier’s satisfaction. Never rush to buy or
to seal a deal.

2. Lack of information and proper planning

You win half the battle in the preparation stage. Conduct thorough background
research on the product and the supplier, have all important details at your
fingertips including the supplier’s operational facilities, company history,
management profile, their major clients, development plans, and history of
performance; and prepare answers for all hard questions the supplier might have.

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Suppliers do their homework. Don’t be caught flatfooted. Like Abraham Lincoln, if
you have eight hours to chop down a tree, spend six sharpening your ax.

3. Closed mind

Remembering both of you want a favorable deal is key in effective procurement

negotiation. Flexibility begets the same. Have your non-negotiable demands but
don’t be so rigid with other things that you’re only looking at the extra dollar a
product will cost, without paying attention to any unique properties or value the
product might have or a special deal that’s tied to it. Listen, think, and ask
questions.

4. Poor communication

Communication is a three-step process: encoding, decoding, reply. You speak,

supplier understands, and then responds, and the wheel keeps rolling. If either of
you does not listen, or understand, negotiation will stall.

You might have little to no control over how the supplier communicates, but be
clear on your end to save the situation.

5. Overthinking the power dynamics

As a rule of thumb, never be in awe of the supplier, however big they are. You
have what they want however small it is. You might not even know what’s
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important to them—it might NOT be money. If they didn’t want to have you on their
list of clients, they would not be at the negotiating table with you.

Be well versed with the product, understand the market, and stick to your non-
negotiable demands, your company’s bottom line, and the walk-away figure. Ask
questions too and shoot for the best deal. If the offer on the table doesn’t work for
you, it is what it is. Move on.

6. Using short-term negotiation tactics with long-term suppliers

It is one thing to want a product real fast and cheap, and another to want the same
—great—product for a long-term supply, at the same price. Giving a supplier a thin
margin when you have to, is okay, but if you’re looking to establish a cordial long-
term relationship, make better offers. Your supplier will stay in business and you’ll
be on the priority list.

Bottom line

A procurement negotiation is like a tug of war. The savvy supplier is pulling from
one end, to squeeze the best deal out of you, and you are on the other side pulling
harder to save your company every dollar possible. Avoid these pitfalls and you’ll
not be the one crossing the line in defeat.

Collective Bargaining Agreement

A collective bargaining agreement (CBA) is a written legal contract between an

employer and a union representing the employees. The CBA is the result of an
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extensive negotiation process between the parties regarding topics such as
wages, hours, and terms and conditions of employment (What Is a Collective
Bargaining Agreement?, 2019)

There are three different categories of subjects that are part of a CBA: mandatory,
voluntary or permissive and illegal subjects.

Mandatory subjects are those topics required by law and the National Labor
Relations Board (NLRB). Those subjects include items like wages, overtime,
bonuses, grievance procedures, safety and work practices, and seniority, as well
as procedures for discharge, layoff, recall, or discipline.

Voluntary or Permissive subjects may be negotiated but are not required and
include topics such as internal union matters and the make-up of the employer's
board of directors.

Illegal subjects that would violate a law are prohibited, such as closed shops
(when an employer will hire only members from a union) or illegal discrimination.
It is important to note that once a CBA is reached, both the employer and the
union are required to abide by that agreement. Therefore, an employer should
retain legal counsel before participating in the collective bargaining process.

Unfair labor practice

Unfair labor practices are actions taken by employers or unions that are
illegal under the National Labor Relations Act (NLRA) and other labor
laws. Some of these rules apply to the interactions between the employer
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and the union; others protect individual workers from unfair treatment by
an employer or union (Guerin, 2013).

The NLRA also prohibits employers and unions from taking certain
actions that would interfere with these employee rights or with the
delicate balance the NLRA creates between unions and employers.
These actions are called "unfair labor practices" (Guerin, 2013).

Unfair Labor Practices by Employers

The NLRA prohibits employers from:

 Interfering with an employee's right to organize, join, or assist a union;

engage in collective bargaining; or engage in protected, concerted activities.
For example, employers must treat union-related conversations among
employees like any other matter unrelated to work: They may not make
special rules that single out communications relating to the union or to
workplace grievances for disciplinary treatment. (See Shop Talk for
information on employer restriction of conversations relating to the union;
for information on how these rules apply to online communications among
employees.

 Dominating or providing illegal assistance of support to a labor union.

Employers may not establish their own union (a company union or sham
union), or dominate or interfere with any labor organization. To determine
whether an employer unfairly controls a particular workplace group, the
National Labor Relations Board (NLRB) looks at all of the facts, including
who started the group, whether the employer played a role in organizing the
group and deciding how it would function, whether management attends

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 meetings or otherwise sets the group's agenda, the group's purpose, and
how the group makes decisions.

 Discriminating against employees to encourage or discourage membership

in a labor organization, or replacing workers who strike to protect an unfair
labor practice.

 Retaliating against an employee for filing a charge with, or giving testimony

to, the NLRB.

 Refusing to engage in good-faith collective bargaining.

 Making a hot cargo agreement with a union. A hot cargo agreement is an

arrangement between an employer and a union in which the employer
promises to stop doing business with another employer, typically one with
whom the union has a dispute.

Unfair Labor Practices by Unions

The NLRA prohibits unions from:

 Restraining or coercing employees in the free exercise of their right not to

support a union (for example, by threatening employees who don't want a
union or expelling members for crossing an illegal picket line.

 Restraining or coercing an employer in its choice of a bargaining

representative (by insisting on meeting only with a particularly manager or
refusing to bargain with the representative the employer chooses).

 Causing or trying to cause an employer to discriminate against an employee

for the purpose of encouraging or discouraging union membership (for
example, convincing an employer to penalize employees who engage in
antiunion activities)

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  Refusing to engage in good-faith collective bargaining (for example,
refusing to come to the bargaining table or listen to any of the employer's
proposals).

 Engaging in strikes, boycotts, or other coercive action for an illegal purpose.

 Charging excessive or discriminatory membership fees.

 Getting or trying to get an employer to agree to pay for work that is not
performed. This is called "featherbedding."

 For a union that is not certified to represent a group of workers, picketing or

threatening to picket an employer to force it to recognize or bargain with the
union or force the workers to accept the union as their representative, if (1)
another union already represents the workers, (2) a valid representation
election was held in the past year, or (3) the union does not file a petition for
an election with the NLRB within 30 days after the picketing starts.

 Making a hot cargo agreement (explained above).

 Striking, picketing, or otherwise engaging in a collective work stoppage at

any health care institution without giving required notice to the institution
and the Federal Mediation and Conciliation Service.

Grievance machinery

A grievance is defined as “any question by either the employer or the union

regarding the interpretation or application of the collective bargaining agreement or
company personnel policies or any claim by either party that the other party is in
violation of any provision of the CBA or company personnel policies” ( DOLE,
2018).

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The grievance referred to in the technical or restricted sense, is a dispute or
controversy between the employer and the collective bargaining agent arising from
the interpretation or implementation of their CBA and/or those arising from the
interpretation or enforcement of company personnel policies, for the adjustment or
resolution of which the parties have agreed to establish a machinery or a series of
steps commencing from the lowest level of decision-making in the management
hierarchy (usually between the shop steward of the employee or employees
aggrieved and the supervisor/foreman/manager which exercises control and
supervision over the grievant or who is responsible for executing the management
action that have given rise to the grievance) and usually terminating at the highest
official of the Company. If such dispute remains unresolved after exhausting the
grievance machinery or procedure, it shall automatically be referred to voluntary
arbitration prescribed in the CBA ( DOLE, 2018).

Source: https://www.dole.gov.ph/news/grievance-machinery-on-settlement-of-
labor-disputes/

Strike, picketing, and lock-out

1. STRIKE — means any temporary stoppage of work by the concerted action of

the employees as a result of an industrial or labor dispute. (Art. 212 (0), Labor
Code, as amended by Sec. 4, R.A. 6715).

2. PEACEFUL PICKETING — the right of workers during strikes consisting of the

marching to and from before the premises of an establishment involved in a labor
dispute, generally accompanied by the carrying and display of signs, placards or
banners with statements relating to the dispute. (GUIDELINES GOVERNING
LABOR RELATIONS, October 19, 1987).

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3. LOCKOUT — means the temporary refusal of an employer to furnish work as a
result of and industrial or labor dispute. (Article 212 (p) Labor Code, as amended
by Section 4, R.A 6715).

Source: https://www.chanrobles.com/PRIMER%20ON%20STRIKE
%20PICKETING%20AND%20LOCKOUT.pdf
Arbitration, mediation, conciliation

Arbitration is a procedure in which a dispute is submitted, by agreement of the

parties, to one or more arbitrators who make a binding decision on the dispute. In
choosing arbitration, the parties opt for a private dispute resolution procedure
instead of going to court (World Intellectual Property Organization, 2019).

Mediation is another of the methods of alternative dispute resolution (ADR)

available to parties. Mediation is essentially a negotiation facilitated by a neutral
third party. Unlike arbitration, which is a process of ADR somewhat similar to trial,
mediation doesn't involve decision making by the neutral third party. ADR
procedures can be initiated by the parties or may be compelled by legislation, the
courts, or contractual terms.

Like mediation, conciliation is a voluntary, flexible, confidential, and interest

based process. The parties seek to reach an amicable dispute settlement with the
assistance of the conciliator, who acts as a neutral third party.
The main difference between conciliation and mediation proceedings is that, at
some point during the conciliation, the conciliator will be asked by the parties to
provide them with a non-binding settlement proposal. A mediator, by contrast, will
in most cases and as a matter of principle, refrain from making such a proposal.

Conciliation is a voluntary proceeding, where the parties involved are free to

agree and attempt to resolve their dispute by conciliation. The process is flexible,
20
allowing parties to define the time, structure and content of the conciliation
proceedings. These proceedings are rarely public. They are interest-based, as the
conciliator will when proposing a settlement, not only take into account the parties'
legal positions, but also their; commercial, financial and / or personal interests.
Like in mediation proceedings, the ultimate decision to agree on the settlement
remains with the parties.
Source: https://www.findlaw.com/adr/mediation/what-is-mediation-.html
https://www.dispute-resolution-hamburg.com/information/conciliation

Department of Labor and Employment: Organizational Structure and

functions

Organizational Structure the DOLE is headed by a Secretary, assisted by

Undersecretaries and Assistant Secretaries. The Department has 16 Regional
Offices and 83 Field Offices, 5 Bureaus, 7 Services and 10 Attached Agencies and
38* Philippine Overseas Labor Offices.

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To promote gainful employment opportunities, develop human resources, protect
workers and promote their welfare, and maintain industrial peace.
Source: https://www.dole.gov.ph/php_assets/uploads/2019/09/2019-Program-
Brief.pdf

Rerum novarum and laborem exercens: Catholic Social Teachings on Labor

Reflection

John Paul II's encyclical Laborem exercens significantly expanded the notion of
work. He indicated that labor does not refer principally to industrial labor, as it
tended to do in previous encyclicals. Oppression and inequality in the world are
caused by a disorder in the organization of labor. John Paul II's encyclical
Laborem exercens argued that the dignity of labor is such that laborers are entitled

22
to co-own the goods they produce. Workers are also entitled to share in the
decisions concerning the work process. According to John Paul II, workers are
meant to be "the subjects" of production.

Rerum Novarum, an encyclical issued by Pope Leo XIII in 1891 and regarded as
extremely progressive by many conservative Roman Catholics, enunciated the late
nineteenth-century Roman Catholic position on social justice, particularly in
relation to the problems created by the Industrial Revolution, and emphasized the
church's right to make pronouncements on social issues as they related to moral
questions (“Rerum Novarum | Encyclical by Leo XIII,” 2019).

Source: https://www.encyclopedia.com/religion/encyclopedias-almanacs-
transcripts-and-maps/laborem-exercens

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