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V. Labor Relations
The right of employees to self-organization is embodied in the 1987 Philippine Constitution.
Furthermore, it is the policy of the Philippines to promote the free and responsible exercise of the right
to self-organization.
Employees generally have the right to self-organization and the right to form, join or assist labor unions
for purposes of collective bargaining. There are, however, certain limitations to the right to form, join or
assist labor unions. Managerial employees and confidential employees are not eligible to form, join or
assist labor unions. Supervisory employees are not eligible for membership in the collective bargaining
unit of rank-and-file employees, but may join, assist or form separate collective bargaining units and/or
labor unions of their own.
While the formation of labor unions is encouraged, the activities of labor unions are regulated. For
example, labor unions are not allowed to commit unfair labor practices. Labor unions are prohibited
from, among other things: (i) restraining or coercing employees in the exercise of their right to self-
organization; (ii) causing or attempting to cause an employer to discriminate against an employee; and
(iii) asking for or accepting negotiation fees from the employer as part of the settlement of any issue in
collective bargaining.
A labor union has to be registered with the DOLE for it to enjoy all the rights granted by law to labor
unions. It may register as an independent labor union or as a charter of a federation or national union.
Also, it has to be recognized or certified as the exclusive bargaining representative of the employees of
the bargaining unit for it to represent them in collective bargaining. The Labor Code and its
implementing rules and regulations define the registration process and specify the recognition or
certification process and the manner of collective bargaining. Republic Act No. 9481, amending the
Labor Code, made it simpler for a labor union to acquire a legal personality for purposes of filing a
petition for certification election.
As to collective bargaining agreement, it shall, insofar as the representation aspect is concerned, be for
a term of five years. All other provisions, such as economic provisions, should be renegotiated not later
than three years after its execution. Furthermore, within 30 days from the execution of a collective
bargaining agreement, the parties to the agreement should submit copies of the same directly to the
Philippine Bureau of Labor Relations or the appropriate DOLE regional office for registration.
Aside from labor unions, the Labor Code also allows the formation of labor-management councils in
private companies to provide a venue for labor and management representatives to discuss company
and personnel policies. The Labor Code and its implementing rules and regulations specify the
organizational structure and procedures in forming such councils.
VI. Social Insurance
The Social Security Law of 1997, National Health Insurance Act of 1995, the Home Development
Mutual Fund Law of 2009, and their respective implementing rules and regulations, as amended
(hereinafter collectively referred to as the “Social Legislations”), impose on Philippine employers and
their employees certain social security obligations.
Under the Social Legislations, a Philippine employer and its employees are required to be members of,
and make monthly contributions to, the Social Security System (SSS), Philippine Health Insurance
Corporation (PhilHealth) and Home Development Mutual Fund (Pag-IBIG Fund). The contributions of
the employer and its employees are based on the employees’ monthly compensation. The employer
must shoulder its contributions and may not deduct the same from its employees’ compensation. As to
the employees’ contributions, the employer is required to withhold the same from the employees’
compensation. Furthermore, the employer is required to remit its own contributions and those of its
employees (which it has withheld) to the SSS, PhilHealth, and Pag-IBIG Fund within the period set by
these agencies.