Labor organizations

A labor organization is 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

1. Concept

“Labor Organization” – refers to any union or association of employees in the private sector which exists in whole or in part for the purpose of collective bargaining, mutual aid, interest, cooperation, protection, or other lawful purposes. (Section 1[dd], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

“Labor organization” – refers to “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.” (Samahan ng Manggagawa sa Hanjin Shipyard v. Bureau of Labor Relations, G. R. No. 211145, 14 October 2015)

“Union” – refers to “any labor organization in the private sector organized for collective bargaining and for other legitimate purpose, while a workers’ association is an organization of workers formed for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining.” (Ibid.)

Many associations or groups of employees, or even combinations of only several persons, may qualify as a labor organization yet fall short of constituting a labor union. While every labor union is a labor organization, not every labor organization is a labor union. The difference is one of organization, composition and operation. (Ibid.)

“Union” – refers to any labor organization in the private sector organized for collective bargaining and for other legitimate purposes. (Section 1[ccc], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

“Legitimate Labor Organization” – refers to any labor organization in the private sector

registered or reported with the Department in accordance with Rules III and IV of [DOLE Department Order No. 40-03]. (Section 1[ff], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

More: Legitimate labor organizations

a. Not necessarily a union

“Legitimate Workers’ Association” – refers to an association of workers organized for mutual aid and protection of its members or for any legitimate purpose other than collective bargaining registered with the Department in accordance with Rule III, Sections 2-C and 2-D of [DOLE Department Order No. 40-03]. (Section 1[gg], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

“Workers’ Association” – refers to an association of workers organized for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining. (Section 1[eee], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

The right to self-organization is not limited to unionism. Workers may also form or join an association for mutual aid and protection and for other legitimate purposes. (Samahan ng Manggagawa sa Hanjin Shipyard v. Bureau of Labor Relations, G.R. No. 211145, 14 October 2015)

2. Categories of labor organizations

Labor organizations may be classified as follows:

1) National Union or Federation; or

2) Independent Union or Local Union.

a. National Union or Federation

“National Union” or “Federation” – refers to a group of legitimate labor unions in a private establishment organized for collective bargaining or for dealing with employers concerning terms and conditions of employment for their member unions or for participating in the formulation of social and employment policies, standards and programs, registered with the Bureau in accordance with Rule III, Section 2-B of [DOLE Department Order No. 40-03]. (Section 1[ll], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

b. Independent Union

“Independent Union” – refers to a labor organization operating at the enterprise level that acquired legal personality through independent registration under Article 234 of the Labor Code and Rule III, Section 2-A of [DOLE Department Order No. 40-03]. (Section 1[ll], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

“Affiliate” – refers to an independent union affiliated with a federation, national union or a chartered local which was subsequently granted independent registration but did not disaffiliate from its federation, reported to the Regional Office and the Bureau in accordance with Rule III, Sections 6 and 7 of [DOLE Department Order No. 40-03]. (Section 1[b], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

“Chartered Local” – refers to a labor organization in the private sector operating at the enterprise level that acquired legal personality through registration with the Regional Office in accordance with Rule III, Section 2-E of [DOLE Department Order No. 40-03]. (Section 1[j], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

3. Rights of a labor organization

A labor organization has two broad rights:

1) To bargain collectively; and,

2) To deal with the employer concerning terms and conditions of employment. (Ibid.)

To bargain collectively is a right given to a union once it registers itself with the DOLE. (Ibid.)

Dealing with the employer, on the other hand, is a generic description of interaction between employer and employees concerning grievances, wages, work hours and other terms and conditions of employment, even if the employees’ group is not registered with the DOLE. (Ibid.)

a. Right to collective bargaining

Collective bargaining is just one of the forms of employee participation. Despite so much interest in and the promotion of collective bargaining, it is incorrect to say that it is the device and no other, which secures industrial democracy. It is equally misleading to say that collective bargaining is the end-goal of employee representation. Rather, the real aim is employee participation in whatever form it may appear, bargaining or no bargaining, union or no union. Any labor organization which may or may not be a union may deal with the employer. This explains why a workers’ association or organization does not always have to be a labor union and why employer-employee collective interactions are not always collective bargaining. (Ibid.)

b. Right to deal with the employer

To further strengthen employee participation, Article 255 (now 261) of the Labor Code mandates that workers shall have the right to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form LMCs [Labor-Management Councils/Committees]. (Ibid.)

4. Rights and Conditions of Membership

The following are the rights and conditions of membership in a labor organization:

1) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;

2) The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;

3) The members shall directly elect their officers in the local union, as well as their national officers in the national union or federation to which they or their local union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirement for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization;

4) The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision in behalf of the general membership;

5) No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity;

6) No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;

7) No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;

8) Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

9) The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

10) Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.

   Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, That failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization;

11) The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;

12) The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:

a) At least once a year within thirty (30) days after the close of its fiscal year;

b) At such other times as may be required by a resolution of the majority of the members of the organization; and,

c) Upon vacating his office.

   The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor.

13) The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours;

14) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president.

15) Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; and,

16) It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws. (Article 250, P.D. 442, Labor Code)

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities. (Paragraph 2, Article 250, Ibid.)

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty. (Paragraph 3, Article 250, Ibid.)

Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts. (Paragraph 4, Article 250, Ibid.)

References

⦁ Book V, Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

⦁ Book V, Omnibus Rules Implementing the Labor Code

⦁ DOLE Department Order No. 40, Series of 2003

⦁ DOLE Department Order No. 40-A-I, Series of 2003

⦁ DOLE Department Order No. 40-B, Series of 2003

⦁ DOLE Department Order No. 40-C, Series of 2004

⦁ DOLE Department Order No. 40-D, Series of 2005

⦁ DOLE Department Order No. 40-F-3, Series of 2008

⦁ DOLE Department Order No. 40-G-03, Series of 2010

⦁ DOLE Department Order No. 40-I, Series of 2015

⦁ DOLE Department Order No. 15, Series of 2015

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/Updated: February 9, 2023