[ HUMAN RESOURCE MANAGEMENT ]  Before promotion, the department head in

(FINALS REVIEWER) consultation with the HRD must look into

the qualification standards as specified in the
CHAPTER 10 – CHANGES IN PERSONNEL job description.
STATUS  The company must consider the seniority
rule – first to be hired must be given the
[RATIONALE OF PERSONNEL MOVEMENT] priority to be promoted.
 The employee upon entering the  Careful analysis of qualifications of any
organization is bound to change his individual has to be subjected to a series of
employment status. test, interviews, and record check.
 Employee starts as temporary then moves up  Performance should not be the sole criteria
to probationary upon meeting req. of especially when leadership position is to be
position filled up.
 Placement – proper movement of the  Technical competence and human relation
employee in the organization; assignment of capabilities are two important factors.
the right man to the right job.  Attendance records and performance for the
 Company and org. must have the clear-cut last two to three years have to be examined.
policies and procedures in performing this
operative functions. [EMPLOYEE TANSFER]
 Education, training and experience are the  The movement from one job to another of
usual considerations for employee equivalent rank or position at the same pay
movement into the ladder of higher position. class within the organization.
 A job requirement continually changes.  Transfer may involve some changes in
duties and responsibilities and may involve
[PROMOTION] increase in pay.
 A movement of an employee from a lower  Transfer may be initiated by the
level to a higher level in the organization management to assign an employee from the
ladder involving more duties and mother company to a subsidiary.
responsibilities.  Policy manual is important in employee
 Usually carries with it higher pay and higher transfer; must contain the following:
status. 1. Person who should initiate
 Better privileges and better working transfer
conditions. 2. Authorized personnel who will
approve the transfer
[RATIONALE FOR EMPLOYEE 3. Reason why an employee has to
PROMOTION] be transferred
 Recognition and reward for good 4. Status of the employee upon
performance transfer.
 Incentive for employees to improve
academically and professionally [KINDS OF EMPLOYEE TRANSFER]
 Employees who are promoted usually know  Temporary transfer – done for the employee
the job well to substitute for an absent employee or for
 Boost employee morale and develops an employee to learn other duties and
greater loyalty to the organization. responsibilities as preparation for
promotion.
[FACTORS TO BE CONSIDERED IN  Payment transfer – made to fill in a vacant
PROMOTION] position in another unit or dept. requiring the
skills and capabilities of the employee being 4. When employee commits an
transferred. infraction of the company’s rules
and regulations.
Note: Note: Cautions should be observed in demoting an
 when an employee performs according to employee.
management expectations, he then becomes
permanent. [EMPLOYEE SEPERATION AND
 An employees’ transfer may be positive or TERMINATION]
negative
 Negative or remedial transfer – resorted to  Separation – termination of employment
when an employee is not suited to his relationship between the employee and
present job caused by a poor selection employer.
process or other factor in workplace; made  May be caused by resignation of the
in hope that the employee will change for employee or unilateral action of
the better. management.
 The personnel department must find out the  Voluntary separation – resignation by the
real account of th employee.
 e problem when a supervisor requests for the  Lay-off or discharge – the lateral action
transfer. of management to terminate the
relationship.
[TRANSFERS ARE USEFOOL TOOLS FOR  Causes of employee resignation:
SOME OPERATIONAL NEEDS OF THE 1. Better job opportunities in other
COMPANY DUE TO THE FOLLOWING:] companies.
2. An employee seeks higher wages
 Meet the company needs during peak season and better working conditions.
 Protect the health and safety of the 3. Due to misunderstanding with his
employee immediate superior or co-
 Meet expansion needs employee in the department.
 Correct an error in the hiring of the 4. Due to the distance from work
employee because of change in residence.
5. Most woman, due to change in
[DEMOTION] marital status.
6. Physical and health conditions,
 Movement of an employee from his present family relation, working
job to a job of lower rating or in a lower conditions and etc.
grade. One of the most difficult personnel
functions of the HRD. [PROCEDURE IN HANDLING SEPERATION
 Resorted by management under following OF EMPLOYMENT]
conditions:
1. Slack business demand and  Following requirements are met before they
operations reducing manpower are given their remaining benefits or salary:
budget. 1. Employee clearance – make sure
2. Inability of the employee to meet he or she is cleared of all money
the job requirements. and property responsibilities
3. Failure of the employee to meet before he is paid with whatever
technical changes in the job. benefits or salary payable.
Clearance must be signed by all
responsible department heads.
2. Conduct exit interview – an  Retirement plans intend to keep employees
attempt to find out the actual until they reach their retirement age.
reason of all employees in  Longevity pay – paid to good workers who
resigning from the company. stay loyal to serve the organization.
Purpose of exit interview:  Labor turnover – term used to express the
1. Determine the real cause of the employee relationship between the flow of workers
resignation leaving the company
2. Determine that all required papers related to  Causes of employee turnover:
his separation are properly accomplished. 1. Poor supervisory practices
3. Create in the employee the impression of 2. Poor company policy of
goodwill toward the company attracting potential and good
4. Create an impression to the employee that employees
the company is still interested in his career 3. Poor working conditions
as he is an asset employee. 4. Good opportunities in another
5. Employee should be awarded a service merit country or another company.
plaque or recognition in serving the 5. Poor selection, hiring of
company the best years of his life. employees, training and
inadequate supervision.
[PROCEDURE IN HANDLING LAY-OFF AND note: turnover rate could be positive or negative.
SUSPENSION OF RELATIONSHIP]  Positive when the rate turnover is within an
average of 10 or 12 percent per year.
 Lay-off may be permanent or temporary.  Negative when the rate of turnover goes
 Permanent lay-off – refers to the total more than 15 to 20 percent of the total labor
separation of employment relationship force and those leaving the company are the
 Temporary lay-off may be for a certain younger workers.
period of time caused by lack of materials or
orders that would require the services of the
employees.
 Following procedure should be observed:
1. Determine the total number of
employees that will be affected
2. Determine the total amount
involved according to the law
3. Determine the skills and job
requirement that would still be
needed
4. Determine those who can be
trained for new jobs.
5. Determine all the potentials,
skills, knowledge and lengths of
services of employees

[HANDLING HUMAN RESOURCE

TURNOVER]

 It is the intention of management to keep its

loyal and good workers
CHAPTER 11 – THE MANAGEMENT OF  Reformation is not punishment but it
EMPLOYEE DISCPLINE tends to correct and put into proper
perspective the behavior of the person.
[NATURE OF DISCIPLINE]
[THE OBJECTIVE OF ESTABLISHING
 Discipline – regarded as the training of the GOOD DISCIPLINE]
mental, physical, moral, and development of
individual character inherent in an  Discipline is employed to bring employee
organizational system. behavior under control.
 An instrument of management against  The purpose of penalty is not to exact
infraction of policies and rules. retribution or vengeance. It is to impress
 Preventive than punitive. upon the employees the need for doing
 Process of control to protect the interest things rightly.
of organization  Discipline is educating the employees in the
 Implies that certain activities are not fundamental standards of behavior and
done according to specified forms of performance.
behavior in the company policies.  Discipline is needed in a business and other
 Training that corrects and strengthens organization to maintain its profitability and
personal values sustain its growth.
 Manner in which members conform to  Discipline by means of warning, or
the established rules and regulations of reprimand, and other personnel actions is the
the organization. prerogative of management.
 Tends to teach and reform and to prevent
others from committing similar offense. NOTE: Top management establishes policies, rules
 Employees’ attitude toward work is a crucial and regulations with the assistance and guidance of
factor of productivity and discipline plays an the HRD. All policies are discussed during the
important role. employees’ orientation program and are
 Discipline is a corrective action for better disseminated in employee handbooks or policy
performance and does not equate with guidelines issued from time to time.
punishment.
[THE ROLE OF HUMAN RESOURCE
[THREE DIMENSIONS OF DISCIPLINE] MANAGER]
 The HRM’s role id greater in small
 It is means of telling the employees what is companies than in large organizations and is
expected to them. usually greater in non-business
 The employees must act in conformity to organizations than in business firms.
standard norms that the organization  HRD is the vanguard of all employees’
would like to follow in the course of its welfare and discipline.
existence. Functions of disciplining employees:
 It is means of ensuring that they do what 1. At the lower level of discipline, involving
they are expected to do. only warning, the first line supervisor has
 Systems of work values are instruments the final authority.
to ensure conformity to such a set of 2. At the middle level, involving suspension,
standards. line supervisors, and managers have the
 It is a means of correcting reforming final authority.
employees committing any infractions or 3. At the top levels, involving discharges, the
violation of rules and regulations. authority is about evenly distributed or split
between line managers and the human  Unions under the modified step, serve as
resource managers. catalyst for the adoption of grievance
Note: In general, as the severity of the offenses procedures and they have contributed
increases, the role of the first line supervisors significantly to the development of
decreases and the role of the HRD increases. collective agreements where discipline is
included as part of the union responsibility.
Line supervisors are more inclined to give
considerations while supervisors are somewhat [SOME MAJOR PRINCIPLES THAT UNION
reluctant to follow rules in strict fashion for fear of AND MANAGEMENT ARE WORKING ON
losing the cooperation of subordinates if they are ARE:]
too strict.
 Discharge or termination can occur only for
Guidelines and procedures maybe taken into a just cause.
consideration  The burden of proof should be on the
1. When an employee commits a minor employer and not on the employee.
offense, meriting punishment, there are  The formal grievance procedure should be
casual private reminders from the used.
department supervisors in friendly  Management action must meet due process.
manner. Due process- procedure where the employee
2. If a second offense occur within one is given the opportunity to be heard and no
month or two, the reminders are repeated action is taken against him unless proven
but a written explanation from the guilty.
employee is required and a promise.
3. The third offense will lead to another Circumstances that must be present before
discussion, and will usually involve management could establish that there exists a
some degree of warning and suspension. “just case” for discharge of employee:
An investigation should be done. 1. Employee has prior warning
4. If a fourth incident occurs within a 2. Misconduct is related to the operation of
period of 6 months, the supervisor and business.
his manager will conduct the final 3. HRD has properly investigated the offense
discussions with the HRD and a final and has evidences and testimonies.
warning of termination is issued. 4. Decision is not discriminatory
5. When the employee continues to give 5. Disciplinary measures are reasonably related
good performance and complies with the to the offense.
terms and conditions of probation, this
will lead to the clearing of the In preparing guidelines, following must be
employees’ record. satisfied:
1. Rules are necessary
 Principle of reinforcement – is applied to 2. Mus be widely applicable
correct the behavior of the employee and the 3. Must be consistent with organizational
supervisor must let the worker know that objectives.
any improvement is appreciated. 4. Must be communicated and known to all.
 The role of line supervisors and managers is 5. Must be clear and easy to understand
to see to it that human resource policies, 6. Must be reasonable
rules, and regulations are followed 7. Must be enforceable.
uniformly in the organization. They are in
direct contact with employees.
[MAIN TYPES OF PENALTIES] policy. Major ones are usually caused by
 Reprimand – verbal warning given by the poor selection and hiring of employees.
supervisor to correct immediately infraction - Discharge from employment is
of a company rule. capital punishment in the
- One immediate action is verbal employment world.
reprimand depending on the gravity - HRD must remember that when
of the offense. imposing a penalty, the treatment
must be equal and it is the offensive
action that is being punished and not
the offender himself.
- Due process is observed.

the following procedure is necessary to

determine the guild of the employee:
1. Investigate the facts and interview witness
2. Ascertain the guilt
3. Determine the most appropriate penalty
4. Investigate how similar infractions of
Types of reprimand are:
policies have been handled in the past.
1. Oral warning – done by the supervisor or
5. Review the employee’s file and determine
line manager to correct immediately the
past misbehavior
misdeeds of the employee using the
6. Apply the appropriate penalty as judiciously
cardinal rules.
as possible.
2. Written warning – usually given by the
manager or line supervisor and is made a
prat of his personal file. Could be
Note: managerial counseling is designed to help
referred to for future actions.
employees to do a better job by providing them with
an understanding of their relationship with their
 Suspension – temporary lay-off of an
superiors, fellow workers, and subordinates.
employee from work due to a repeated
violation of minor policies that don’t Counselling is an accepted process of management.
warrant total separation or termination. It is Done in controversial setting between two people
a prevention action for an employee to where consultations of a problem is discussed;
realize his actions. involved in all aspects of personnel management.
Preventive suspension is an Starts with the selection process and ends only
appropriate disciplinary action in when the employee is finally separated from
cases where the facts of the offense employment.
cannot be established, and the
situation is potential explosive issue, Areas frequently subject for counselling:
especially when there is union 1. Job-related activities – most prevalent cases
protest; only resorted when all are found in the following areas:
possible remedies failed to improve a. Performance – management is
the employee’s attitude. responsible for informing the employee
 Discharge or termination of employment – of their progress.
means total loss of job and loss of privileges b. Disciplinary cases – manager or
and fringe benefits except those granted in supervisor must do the remedial
collective bargaining agreement of the measures and do intensive counseling;
company or as stipulated in the company
counseling must be done first before CHAPTER 12 – DEVELOPMENT OF
imposing disciplinary action. EMPLOYEE MORALE
c. Conflict in the workplace  Human resources are company assets that
d. Safety and industrial health must be maintained to keep the company at
e. Retirement competitive advantage in this changing
f. Termination world of work.
2. Personal problems  Employees are assets that could not be
3. Family problem changed immediately by changing its part.
a. Interpersonal relationship  The company must understand its work
b. Alcoholism and drug abuse – prominent force as to their need and wants and how
health problems facing the HRD. they react to different situations.
c. Occupational stress – problems either
inside the workplace or cause by [EMPLOYEE MORALE]
external environment.
 Morale – is the mental attitude that makes
the employee performs his work willingly
[CORRECTIVE DISCIPLINARY
and enthusiastically. It is the state of mind
MANAGEMENT]
that is intangible to measure and it is
 Is the system instituted by the organization manifested in his attitude toward work and
to eradicate the unsatisfactory situations that his relationships with the work environment.
would affect the profitability and job  Morale could be measured in terms of foam
performance of workers. spirit, loyalty and employees’ goodwill.
 counseling and reprimand are remedial  The development of morale rests on
measures to get employees on track toward effective supervision and management of
good job performance. human resources, as they are in direct
1. Planning corrective discipline – involve contact with the employees concerned.
in group in instituting discipline in the
Factors that Influence the Development of
work group.
Morale:
2. Organize teams – develop teams and let
them plan work activities related to good 1. Employee Factor - The employee's attitudes
conduct, and values are the results of his kind of
3. Directing group actions – delegate education, social environment and economic
authority to subordinates as far down the status.
line as possible.
The employee must be properly appraised of
Note: a good management system develops better
his job performance
employees and good employees serve the
periodically, such assessment will develop
organization with dedication and loyalty.
skills and attitudes necessary or
effective delivery of work output
2. Management Practices - As properly
emphasized in the previous discussions. The
quality of supervision and management
practices are the makings of the front
managers and supervisors.

The quality of supervisions and management

depends on the supervisory and
managerial skills abilities in handling would channel the extra energy and develop
employee problems at the work place. cooperative attitudes that in turn develop employee
3. Environmental Communication - Good morale.
employee and management relationship
d. Training Programs - This could be formal settings
depends on the environmental
where employees discuss both technical and value
communication. Open communication
formation topics that could greatly influence the
between the management and employee is
development of employee morale toward the
the basic in all relationships.
company’s objectives and goals.

The following are the requirements of effective

[THE ROLE OF MOTIVATION IN THE
communication:
DEVELOPMENT OF EMPLOYEE MORALE]
a. Stress openness, fairness, and direct to the point
 The word ‘motivation and motivating’ are
communication.
derived from the word “motives” which are
b. Encourage feedback and immediate response drives, impulses, or desires that mové
from the receiver. toward the desired goal or objective.
 A motive is an inner state of the employee
c. Listen attentively.
mental process that directs him to seek to
d. Repeat communications when necessary. satisfy a felt need that develops his morale
toward the attainment of a personal goal or
purpose.
4. Social and Environmental Factors - The social  managerial motivation - is the process by
conditions outside the work environment play to which managers and supervisors stimulate
some extent on the development of employee employee behavior and direct it toward
morale. His mental and emotional conditions are achieving desired personal and
influenced by the social forces to which the organizational objectives.
employee is exposed daily.  The motive for performance must come
from within the employees’ inner drive and
it occurs only when he is motivated to do
To counteract and develop more concerned something for his interest and wants. The
employees, the management must develop social skills and abilities determine what the
programs within the organizational employee can do, but it is the motivation
environment. Good employee moral could be that determines what he will do.
developed through the following;
a. Recreational Activities - The company [THEORIES OF MOTIVATION THAT
recreational activities must focus on the AFFECT MORALE AND PERFORMANCE]
development of teamwork and cooperation among
employees and a positive attitude toward the 1. Maslow’s Hierarchy of Needs — Abraham
attainment of moral values. Maslow developed the theory based on the
hierarchy of human needs. According to him
b. Social Activities - Company socials such as the human needs progress through five basic
annual outings, Christmas parties, and other levels which are as follows:
important company gatherings are venues for social
development. a. Psychological Needs - need for food, drink,
clothing, shelter, rest, sleep and sex.
c. Athletic Programs - All-year-round athletic
competitions and departmental athletic activities
b. Safety and Security Needs - need for protection can be learned and management develops
against any danger, attack, and environmental self- motivation by appealing to the
elements, including security in employment. employee's drives.
c. Social Needs - involve associations and
4. Expectancy Theory - According to this
interaction with others in group for love, friendship,
theory, the employee’s motivation is the
affection and acceptance.
force driving them to achieve some level of
d. Esteem and Status Needs - are related to self- job performance. The amount or level of
respect, respect for others, prestige, recognition, and performance is the result of his perception of
ego satisfaction. the benefits in terms of higher wages or
other company incentives.
e. Self-actualization Needs - motivates us for self-
development, self-expression, creativity and self-  Profits are results of effective
fulfillment by becoming what we are capable of company operations and higher
doing. wages are relative to employee
 Relative to this theory of Maslow is that the performance.
employee has to be satisfied with the first [IMPROVING EMPLOYEE SELF-
level before the next level needs are PERCEPTION]
activated.
 To satisfy his self-actualization needs,  People in an organization are the very
individuals should have levels of aspiration backbone of its existence.
equal to or higher than their abilities  As pointed out, people are important and
and developmental levels. HRD can do a lot to help them grow as
individuals to develop them as assets that
will play vital roles in the development of a
2. Herzberg’s Motivation Hygienic Theory - productive organization.
Herzberg’s motivation hygienic theory
assumes that the relationship between job
factors such as personal attitudes and Self-perceptual models:
performance cannot be studied in isolation
1. Factor Of Production Approach - This is
but must be studied together. The hygienic
classical approach that considers an
factor such as company policy, supervision,
employee as another factor of production.
salary, job security, and job-related benefits
This system of thought provides background
would lead to job performance if present in
for Douglas McGregor’s Theory X which
the organization. The motivating factors
states that the average human being is:
such as achievement, responsibility,
recognition, ego and social needs are
a. Generally lazy
necessary to achieve participative attitude
b. Dislikes work and would avoid it if
that produces outstanding employee
possible
performance.
c. Avoids responsibility
d. Needs to be coerced to perform
effectively
3. McClelland’s Achievement Motive Theory -
This theory emphasizes that every motive is  While autocratic supervision will work
learned. He identified that power, affiliation, effectively under this set-up many managers
and achievement develop motives that drive have shown a more compassionate and
an employee’s morale and performance. His
conclusion is that the need for achievement
paternalistic attitude to change the 3. Job Enlargement - It is an effort to make a job
behavioral pattern. more interesting by adding more duties. This
approach assumes that variety in a job makes it
2. Human Relations Approach - The more satisfying with the result that an employee is
Hawthorne experiment and other researchers more motivated.
emphasize the concept that “people are
human and would like to be treated as such”.
The model for this management method is: 4. Job Enrichment - It means incorporation of
motivating factors into a job. An enriched
Employee participation — Job satisfaction job gives an employee more responsibilities
— Increased productivity to make decisions and more recognition for
good performance. Enriched jobs are more
This model is most similar to the concept of challenging and presumably more
McGregor’s Theory Y that people: rewarding.

a. Like to work and consider it normal as if

in play [HAVING HIGH EXPECTATION]
b. Have the initiative and only need to be  A supervisor who wishes an employee to set
motivated high standards for himself must think and
c. Have ability and capability to do work speak with the assumption that the employee
d. Accept responsibility and enjoy working is capable of meeting high standards.
with a team
3. Human Resource Approach - This approach
views the productivity of the employee as an [PROVIDE EMPLOYEE REWARDS THAT
economic resource of an organization. ARE VALUED]
Performance is viewed and measured by the  Rewards are motivating factors for an
economic criteria of productivity, efficiency, employee to perform but not all rewards
effectiveness, cost and profitability, and the have the same effect on all employees.
employees themselves their relationships
with members of the organization viewed as  The rewards that supervisors use should be
having dignity, worth and value. linked to employee performance.

[HOW A SUPERVISOR CAN MOTIVATE]

[TREATING EMPLOYEES AS
The following are some work-related motivators INDIVIDUALS]
for employees:
1. Job Rotation - involves moving an employee
from one job to another to give him more variety.  As much as possible, the supervisor must
This requires an employee to have broad skills so respond to individual differences. If one
that he can be assigned to other jobs that fit his type of motivation is not applicable then the
skills and qualifications. supervisor should try other motivating
factors that would make the individual
2. Cross Training - This could be related to job respond favorably.
rotation. The employee must be provided with other
training programs to acquire new skills. Learning
new skills will serve as motivating factors for an
employee to perform other jobs.
[MONEY AS MOTIVATOR] goods or services more than the required
quota.
 The organization assumes that the main
4. Payment for Suggestion System - To
thing employees want out of employment is
encourage employees to think of product
the monetary consideration.
improvement or methods improvement
and make better products or reduce
 If money motivates employee they must
working time schedule employees are
believe that they are able to achieve
rewarded for good suggestions.
financial rewards that the company offers.
5. Group Incentive Plan - a financial
 Financial incentives - The way the pay plan
incentive plan that rewards a team of
is structured can influence the degree to
workers for meeting or exceeding the
which the employees are motivated to
target objective. This works well under
perform well, Some pay plans offer bonuses,
the concept of management by
commissions or other kinds of pay, meeting
objectives.
or exceeding target objectives.
6. Profit Sharing Plan - This is a group
 Piecework and Production Bonus - Some
incentive plan under which company
companies pay for additional piecework
sets aside a share of its profit and divides
produced that is over and above the
it among the employees. The assumption
production quota. Additional productions are
is that the better the work is done the
paid extra and motivate the employees to be
more the company will earn and
more efficient in their work.
therefore the bigger is the bonus. Before
this practice was made only for
 The following are additional incentive pay
executives but most companies now
system:
recognize the employee in the sharing of
profit as they are the backbone of the
1. Piece Rate — Some companies pay
organization.
additional premiums for additional
pieces of work accomplished more than
7. Gain Sharing - This is a group incentive
the required quota for production. These
plan in which the organization
incentives are offered instead of
encourages employees to participate in
overtime work which is not quantifiable
making suggestions, decisions and
in terms of output. Contractors usually
then rewards the group with a share of
give this type of plan for producing
improved earnings. Gain sharing seeks
pieces of goods.
to motivate not only by giving financial
incentives but also by making the
2. Production Bonus System - When sales
employees feel they have an important
are at their peak and workers are
role as part of the team.
required to produce more goods to take
advantage of the growth in sales
production bonuses are given by the
management in excess of the regular
CHAPTER 13 – LABOR AND MANAGEMENT
production quota.
RELATIONS / COLLECTIVE BARGAINING

 Labor refers to the hired workers of an

3. Commissions - These are incentives
industry.
usually given to sales people who sold
 Capital refers to the owner or investors of an 2. Workers protection and welfare;
industry.
3. Promotion and maintenance of industrial peace.
 The Labor Code of the Philippines defines
the relationship between capital and labor
but no amount of law can truly harmonize
men unless man himself accepts that National Labor Relations Commission (NLRC)
goodness and justice come from within.  This agency coordinates programs and
policies with DOLE but it is otherwise a
[THE QUESTION OF JUST WAGE] separate agency. The NLRC overseas unfair
labor practices allegations, job termination
 It is usually claimed that wages are fixed by disputes, and other labor matters not strictly
mutual agreement between employee and related to wages. It consists of 14
employer. commissioners in combination with the
National Conciliation and Mediation Board
(NCMB), the NLRC serves as Quasi-judicial
[MINIMUM WAGE]
mechanism for hearing and adjudicating
 Minimum Wage is the rate of pay fixed workers claims and it has exclusive
either by a collective bargaining agreement appellate jurisdiction over all cases decided
or by government enactment as the lowest by labor arbiters.
wage payable to specified categories of
employees. In general, the setting of a
minimum wage does not preclude the right Regional Tripartite Wages and Productivity
of employees to demand wages above the Commission (RTWPC)
established minimum. The method
of establishing a minimum wage by  There are 15 regional boards each
collective bargaining suffers from a serious representing a section of the country. The
limitation. However, because the collective Boards assists the NPWC. Specially they are
bargaining agreements cover only the charged with developing plans, programs,
workers in a specific plant, craft, industry, or and projects related to wages, income, and
local area, and hence are inadequate productivity improvements for their
in situations in which wage rates prevailing respective regions, as well as determining
throughout an entire nation have fallen and fixing minimum wages rates. They also
to excessively low levels. The realization of act on applications for exemptions from
this shortcoming has led labor unions to prescribed wage rates.
demand government minimum wage
programs as early as the 1890's and resulted
in the enactment of the legislation setting National Wages and Productivity Commission
minimum wages. (NWPC)

Government Regulators  The NWPC consults and advises the

national government on wages and worker
Department of Labor and Employment (DOLE) productivity. It formulates policies and
 This department is responsible for the guidelines on these issues, prescribes rules
overall regulation of employment in the and guidelines for determining minimum
Philippines. wage and productivity standards; and
reviews wage levels set by the RTWPC for
Three areas of authority: compliance with prescribed guidelines and
national development plans. It also studies
1. Promotion of employment and apprenticeship;
and disseminates information on wages and
productivity and other related information 1. There is a sufficient and just reason for it;
on employment, cost of living, and labor
2. The intended good results must be proportionate
costs.
to the evil effects;
 The minimum wage prescribed by the law
may not necessarily be a just wage. 3. The means employed are lawful.
a. A strike should not be resorted to unless
all other means of conciliation have been tried.
What is a Just Wage?
There must be sufficient reason for holding it
 A just wage is defined as the remuneration
b. The good results must be weighed as
which is enough to support the wage- earner
against the evil effects. Prudence dictates that where
in reasonable and frugal comfort.
more harm than good would result, a strike should
The Just Wage: A Family Wage be ruled out.
 A family wage will enable man to provide a c. Threats, coercion, or violence should
sufficiency of decent food and clothing never be employed by either labor or capital in
for himself and his family, a decent home, settling differences.
security for sickness and old age, and means
of leisure for moderate and wholesome
recreation. The Rights of Labor
Unionism: A Natural Right 1... The Philippines is a signatory to the United
Nations International Covenant on Economic,
 “It is morally wrong (and in our country a
Social, and Cultural Rights. We cite those pertaining
crime punishable by law) for anyone to
to labor:
interfere with this natural right either by
threat or by discrimination against those 2. The state parties to the present covenant
who join such associations.” recognize the right to work which includes the right
of everyone to the opportunity to gain his living by
work which he freely chooses or accepts, and wills
 Labor if organized can have an effective to appropriate steps to safeguard this right (Part III,
voice to protect its rights and to bargain Art.6)
collectively with capital. Therefore, for as
a. The state parties to the present covenant
long as unions are peaceful and seek their
recognize the right of everyone to the enjoyment of
objectives by lawful means they are
just and favorable conditions of work which ensure
beneficial to its members and to the society
in particular:
as a whole.
o Remuneration which provides all workers as
a minimum:
Morality of Strikes o Fair wages and equal remuneration for work
without distinction of any kind;
 Organized Labor often resorts to strikes. A
o A decent living for themselves and their
strike is a cessation from work by workers
for the purpose of forcing their employers to families in accordance with the provisions of
assert to their demands (Henry Davis, 1984). the present covenant;

 For a strike to be moral the following

conditions must be present: b. Safe and healthy working conditions;
c. Equal opportunity for everyone to be 1. Work honestly and comply with all the
promoted to an appropriate higher level subject to requirements;
no considerations other than seniority and 2. Never injure capital, nor steal from the
competence; employer;
3. Never outrage the person of the employer;
4. Never employ deceit nor violence in
e. Rest, leisure, reasonable limitation of presenting a cause;
working hours and periodic’ holidays with 5. Never consort with the “agitators” or men of
pay as well as remuneration for public evil principles.
holidays. (Art. 7)
3. The state parties to the present covenant
Basic Duties of Employers
undertake to ensure:
 Employers have the sacred task of caring for
a. The right of everyone to form trade
their workers. Theirs is the golden
unions and join the trade union of his choice subject
opportunity to become the ethical “man for
only to the rules of the organization concerned for
others”. They must be fair-minded and
the promotion and protection of his economic and
generous in their dispositions. The following
social interests. No restriction may be placed on the
are their basic duties toward their workers:
exercise of his right other than those prescribed by
the law and which are necessary in a democratic
1. Respect the human dignity of the workers;
society in the interest of national security or public
2. Appreciate their work;
order for the protection of the rights and freedom
3. Never treat them as slaves for making
for others;
money;
b. The right of trade unions to establish 4. Never assign them tasks beyond their
national federations or confederation and the right strength, do not employ them in work not
of the latter to form or join international trade union suited to their sex;
organizations; 5. Give them commensurate wages;
6. Provide for their health and social
c. The right of trade unions to function recreation;
freely subject to no limitations other than those 7. Provide them time to practice their religion;
prescribed by the law and which are necessary in a 8. Instruct them on how to use their money
democratic society in the interests of national wisely;
security or public order or for the protection of the 9. Instruct them to love their family;
right and freedom of others; 10. Provide them with opportunities.
d. The right to strike provided that it is
exercised in conformity with the laws of the
particular country (Art. 8). Unfair Labor Practices of Employers
 It shall be unlawful for an employer to
commit any of the following unfair labor
Basic Duties of Workers practices (Art. 248).
 Conscience dictates the duties of a worker. It
is conscience because it is impossible for
anyone not to have an inkling of these duties 1. To interfere with restrain or coerce
namely: employees in the exercise of their right to
self-organization;
2. To require as a condition for employment
that a person or an employee shall not join a
labor organization or shall withdraw from e. Provide an adequate administrative
one to which he belongs; machinery for the expeditious settlement of
3. To contract out services or functions being a labor dispute;
performed by union members when such f. Ensure a stable but dynamic and just
will interfere with restrain or coerce industrial peace; and
employees in the exercise of their right to g. Ensure the participation or workers in
self-organization; decision and policy-making processes
4. To initiate, dominate, assist, or otherwise affecting their rights, duties and welfare.
interfere with the formation or
administration of any labor organization
including the giving of financial or other 2. To encourage a truly democratic method in
support to it or its organizers or supporters; regulating the relations between the employers and
5. To discriminate in regards to wages, hours the employees by means of agreements freely
of work, and other terms and conditions of entered into thorough collective bargaining, no
employment in order to encourage or court, administrative agency or official shall have
discourage membership in any labor the power to set or fix wages, rates of pay, hours of
organizations; work or other terms and conditions of employment
6. To dismiss, discharge, or otherwise except as otherwise provided under this code. (As
prejudice or discriminate against an amended by R.A. 6715)
employee for having given or being about to
give testimony under this Code;
7. To violate the duty to bargain collectively as A. Labor Relations Laws .
prescribed by this Code;
8. To pay negotiation or attorney’s fees to the These laws are concerned with stabilization
union or its officers or agents as part of the of relations of employer and employees and seek to
settlement of any issue in collective forestall and adjust differences between them by the
bargaining or any other dispute; or encouragement of collective bargaining and
9. To violate a collective bargaining settlement of labor disputes through conciliation,
agreement. mediation and arbitration.

Labor Relations Policy: B. Parties to Labor Relations Cases

1. Article 211. Declaration of Policy. It is the policy Every labor relation’s cases involve three
of the state to: parties: the employees’ organization, management,
and the public; and each have certain rights. The
a. Promote and emphasize the primary of free Civil Code of the Philippines expressly provides
collective bargaining and negotiations, that neither capital nor labor shall act oppressively
including voluntary, mediation and against each other or impair the interest or
conciliation as modes of settling labor and convenience of the public.
industrial disputes;
b. Promotes free trade unionism as an
instrument for the enhancement of C. Collective Bargaining
democracy and justice and development;
c. Foster the free and voluntary organization of Collective bargaining has been defined as
a strong and united a labor movement. the process of negotiation between employer or
d. Promote the enlightenment of workers employees and employees organization or union to
concerning their rights and obligations reach agreement on the terms and conditions of
as union members and as employees; employment for a specified period. It covers the
entire range of organized relationship between the submitted to them. It is also the writing containing
employers and employees represented by unions such judgment.
this includes the negotiation administration,
interpretation or application of the labor contract. It
is a dynamic and continuous process. It does not E. Mediation
end with the execution of a collective bargaining
agreement. The effectiveness of the process to The act of a third person who interferes
maintain industrial peace and stability depends upon between two contending parties with a view to
the good faith of the parties. Workers cannot of reconcile them or persuade them to adjust or settle
course bargain collectively for terms and conditions their disputes is called mediation.
of employment whether at the plant, enterprise,
industry or national level unless they are organized
into trade unions. Collective bargaining has an F. Labor Relation Policy Prior to the Labor Code
important standard-setting function together with
law. It constitutes the main source of regulations
governing wage, hours of work and other terms and ° Regime of Compulsory arbitration
condition of employment. It likewise renders the Article XIV, Section 6, of the Constitution of the
decision-making process more democratic since Philippines promulgated in 1935, provides that:
decisions are reached by agreement between all
parties concerned rather than unilaterally by the The state shall afford protection to labor
employment or the government. Collective especially to working women and minors and
bargaining has in many cases also been found to be regulate the relations between labor and capital in
an effective means of solving disputes between industry and agriculture. The state may provide for
employers and workers, thereby representing an compulsory arbitration.
element of stability and order in industrial relations.

° Shift to Collective Bargaining

D. Arbitration The Court of Industrial Relations, as the main
Arbitration is the submission for machinery to enforce the system of compulsory
determination of a disputed matter to private official arbitration however, failed in the long run to give
persons selected in the manner provided by law or adequate protection to labor and accord social
agreement. justice.

Compulsory arbitration is that which occurs

when the consent of one party is enforced by G. Labor Relations Policy Under the 1987
statutory provisions. Constitution
Voluntary submission is an agreement by Section 3 of Article XIII of the 1987
which parties agree to submit their differences to constitution guarantees to all workers the right
the decision of a referee or arbitrator. It is among others to self-organization, collective
sometimes termed as reference. In a wide sense, bargaining and negotiation, peaceful and concerted
“arbitration” may embrace the whole method of activities including the right to strike in accordance
settling controversies, and include all the various with the law and to participate in policy and
steps needed to resolve the problems. But in a more decision-making processes affecting their rights and
strict use, the term denotes only the submission and benefits as may be provided by law. The State also
hearing. The decision being separated spoken of and mandates, under this provision, to promote the
called an “award”. An award is a judgment or principle of shared responsibility between
decision of arbitrators or referees on a matter
the workers and employers and preferential use of ARTICLE 252. Meaning of duty to bargain
voluntary modes of settling disputes, including collectively means the performance of a mutual
conciliation. obligation to meet and confer promptly and
expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages,
Collective Bargaining and Administration of hours of work and all other terms and conditions of
Agreements employment including proposals for adjusting any
grievances or questions arising under such
Procedure in Collective Bargaining agreement and executing a contract incorporating
Agreement (Article 250) such agreement if requested by either party but such
The following are procedures in collective duty does not compel any party to agree to a
bargaining; proposal or to make any concession.

1. When a party desires to negotiate an

agreement, it shall serve a written notice upon the 1. Duty Requires Reasonable Efforts to Reach
other party with a statement of its proposals. The Agreement.
other party shall reply thereto not later than ten True collective bargaining involves
calendar days from receipt of such notice; more than the holding of conferences and
. 2. Should differences arise on the basis of the exchange of pleasantries. While the law
such notice and reply, either party may request for a does not compel the parties to reach an
conference which shall begin no later than ten agreement, they must approach the
calendar days from the date of request; negotiations with an open mind and make
reasonable grounds of agreement. Proposals
3. If disputes are not settled, the Board shall must be matched with counter proposals.
intervene upon request of either or both parties or at
its own initiative and immediately call the parties to 2. Sphere of Collective Bargaining
conciliation meetings. The Board shall have the
power to issue subpoenas requiring the attendance Under the foregoing article, the
of the parties to such meetings the board may call; obligation of the parties to bargain
4. During conciliation proceedings with the collectively covers “wages, hours of work
board, the parties are prohibited from doing any act and all other terms and conditions of
which may disrupt or impede the early settlement of employment” including proposals for
the dispute; and adjusting any of the aforesaid subjects
constitutes unfair labor practice. Conversely,
5. The Board shall exert all efforts to settle a party’s insistence to negotiate on matters
disputes amicably and encourage the parties to having reasonable relation to the above-
submit their case to a voluntary arbitrator. (As mentioned subjects would also constitutes
amended by R.A. 6715) an unfair labor practice.

ARTICLE 251. Duty to bargain collectively in the 3. Usual Provisions, Stipulations and clauses in
absence of collective bargaining agreements. — In a Collective Bargaining Agreement.
the absence of collective bargaining agreement or The duty to bargain collectively
other voluntary agreement providing for a more includes, according to the foregoing article,
expeditious manner of collective bargaining, it shall the duty to execute a contract incorporating
be the duty of the employer and the representatives their agreement, if this is requested
of the employees to bargain collectively in by either party. This contract is
accordance with the provisions of this code. called Collective Bargaining Agreement
(CBA). The provisions, stipulations and or panel of arbitrators or provide the manner for the
clauses usually found in the CBA are the selection of such arbitrator or panel of arbitrators.
following: (Art. 260, Labor Code)

a. Definition of Bargaining Unit — This is a h. No Strike, No lockout Clause — The parties may
statement of the scope of the appropriate bargaining stipulate that during the life of the agreement. The
unit covered by the agreement and of the positions union shall not go on strike and the employer shall
included and excluded from the unit. not declare a lockout.

b. Union Security Clause — This is intended to i. Completeness of Agreement- In this clause, the
maintain the strength of the contracting union parties stipulate that the CBA is a full and complete
during the life of the agreement and safeguard it settlement of all demands and proposals made
against the perfidy or fickleness of its own members during the negotiations.
and incursions by the employer. i

j- Provisions on Family Planning, participation in

c. Check-off Provision- Pursuant to this provision sports etc. — the parties undertake to encourage
the employer undertakes to deduct from the wages employee participation in programs for family
of union members union dues and other assessments planning or population control and in sports and
and remit the same to the treasurer of the union. recreational activities to reduce monotony and to
have periodic discussions on cooperative schemes
to increase productivity and sharing of profits
d. Management Prerogatives Clause- The rights and therefrom.
prerogatives of the company are enumerated in this
provision.
k. Duration of Agreement- This provision states the
duration of the agreement.
e. Economic Benefits- Provisions granting
economic benefits to the employers such as
increases, vacation and sick leaves and 4. Binding Effect of CBA Interpretation.
hospitalization and retirement.
A collective bargaining agreement entered into
by officers of union, as agents of the members and
an employer gives rise to valid enforceable
f. Provision on Administration of Agreement-
contractual relations against the individual union
Article 260 of the Labor Code requires the parties to
member in the matters that affect them peculiarly
include in their agreement provisions to ensure
and against the union in matters that affect the
mutual observance of the terms and conditions of
entire membership or large classes of its members.
the agreement and to establish machinery for the
adjustment of grievances.
A bargaining contract entered into by the duly
certified bargaining agent is binding on all
g- Voluntary Arbitration Clause- The parties are also
employees within the bargaining unit since under
required to provide in their agreement for the
Article 242(b) a legitimate labor union. When
submission to voluntary arbitration of grievance
certified acts as the exclusive representative
procedure and to designate in advance an arbitrator
of all employees within the unit for purposes of Where the collective bargaining agreement
collective bargaining. Besides under Article 231; provides that “should there be any government
the CBA when submitted to the Bureau of Labor mandated wage increases and/or allowances the
Relations must be accompanied by a verified proof same shall be over and above the benefits herein
of ratification by the majority of all the workers in granted”. It is a grave abuse of discretion for the
the bargaining unit. voluntary arbitrator to require the employer to grant
increases to all employees covered by the
agreement regardless of whether or not they are
In the absence of a provision of law or the entitled to the wage increases provided for in the
collective bargaining agreement to the effect that wage orders.
the benefits provided by the former encompass
those provided by the latter, benefits derived from
either law or a contract should be treated as separate 5. Effect of Shift of Union Allegiance of Employees
from each other. A collective bargaining agreement after Execution of the CBA; Substitutionary
is a contractual obligation; it is distinct from all Doctrine.
obligation imposed by law. Benefits derived from
The shift of employees union allegiance
law are exclusive for benefits arrived at through
after the execution of collective bargaining
negotiation and agreement unless otherwise
agreement will not result in the cancellation of the
provided by the agreement itself or by law.
contract. Otherwise, employees can easily cancel a
CBA by the simple expedient of leaving the
bargaining agent. While the employees no doubt
A collective bargaining agreement just like
can change their agent. The contract continues to
any other contract is respected as the law between
bind them up to its expiration date. Otherwise,
the contracting parties and compliance therewith in
employees can easily revoke or renege to the
good faith is mandated. Similarly the rules
prejudice of the employer an existing contract by
embodied in the Civil Code on the proper
the simple expedient of changing their union. More
interpretation of contracts can very well govern.
importantly, we should not overlook the fact that the
The intention of the parties is primordial if the
employees not the union are the true parties
terms of the contract are clear. The literal meaning
interested in the contract. The new agent may
of the stipulations shall control but if the words
however, bargain for the shortening of the period of
appear to be contrary to the evident intention of the
the contract.
parties the latter shall prevail over the former.

ARTICLE 253. Duty to bargain collectively when

There is nothing sinister in a stipulation in
there is a collective bargaining agreement. When
the CBA to the effect that increases provided therein
there is a collective bargaining agreement the duty
shall be creditable to wage increases that are or may
to bargain collectively shall also mean that neither
be mandated within the applicable period by law.
party shall terminate nor modify such agreement
Such stipulation merely creates equivalence
during its lifetime. However, either party can serve
between legal and contractual imperatives rendering
a written notice to terminate or modify the
both obligations susceptible of performance by
agreement at least 60 days prior to its expiration
compliance with either subject only to the condition
date. It shall be the duty of both parties to keep the
that where the increases given under the agreement
status quo and to continue in full force and effect
fall short of those fixed by law. The difference must
the terms and conditions of existing agreement
be made up by the employer.
during the 60-day period and/or until a new
agreement is reached by the parties.