EMPLOYMEMNT Contract Interpretation

Art. 1702, Civil Code. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.

A CBA, as a labor contract within the contemplation of Art. 1700 of the Civil Code of the
Philippines which governs the relations between labor and capital, [it] is not merely contractual
in nature but impressed with public interest, thus, it must yield to the common good.

As such, it must be construed liberally rather than narrowly and technically.

The courts must place a practical and realistic construction upon it, giving due consideration to
the context in which it is negotiated, and purpose which it is intended to serve. [Davao
Integrated Port Stevedoring Services v. Abarquez, G.R. No. 102132 (1993)]

General Rule: [W]here the CBA is clear and unambiguous, it becomes the law between the
parties and compliance therewith is mandated by the express policy of the law. [Zuellig Pharma
Corporation v. Alice Sibal, G.R. No.173587 (2013)]

They shall establish a machinery for the adjustment and resolution of grievances
1. Arising from the interpretation or

implementation of their Collective

Bargaining Agreement, and

2. Those arising from the interpretation or

enforcement of company personnel policies.

All grievances submitted to the grievance machinery which are not settled within seven (7)
calendar days from the date of its submission shall automatically be referred to voluntary
arbitration prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall:

1. name and designate in advance a

Voluntary Arbitrator or panel of Voluntary

Arbitrators, or
2. include in the agreement a procedure for

the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the
listing of qualified Voluntary Arbitrators duly accredited by the Board.

In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the
Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators

• When: as may be necessary

Exception: If the words appear to be contrary • to the evident intention of the parties, the latter
shall prevail over the former. [Kimberly Clark
Phils. v. Lorredo, G.R. No. 103090 (1993)] •

i. Mandatory provisions in a Collective Bargaining Agreement

Note: See also v. Bargainable Issues under “a. Duty to bargain collectively”

Art. 273. Grievance Machinery and Voluntary Arbitration

The parties to a Collective Bargaining Agreement shall include therein provisions that will
ensure the mutual observance of its terms and conditions.

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How: pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement
Effect: designated Voluntary Arbitrator or panel of Voluntary Arbitrators shall act with the same
force and effect as if the Arbitrator or panel of Arbitrators have been selected by the parties as
described above.

ii. Administration and Enforcement of CBA