Trade Union Development and Labor Relations Policy in the Philippines

By David Wurfel, Cornell University.
in Industrial and Labor Relations Review, Vol. 12, No. 4 (Jul., 1959), pp. 582-608

In its thirteen years of independence, despite periods of retrogression, the Philippines has progressed significantly toward economic development and political democracy. It is already the most industrialized country in Southeast Asia, with manufacturing now accounting for nearly 15 percent of the net domestic product. Manufacturing also provides jobs for about 13 percent of the employed labor force.’ Politically the Philippines has withstood armed rebellion and widespread corruption without abandoning constitutional government. In fact, it is the only country in Southeast Asia where an existing administration has been peacefully turned out of office by a national election.

Philippine labor organizations have both shared in and contributed to this progress in the economic and political life of the nation. About 40 percent of the labor force are engaged in nonagricultural occupations; by 1958 nearly one-fourth of nonagricultural wage and salary workers were organized. Trade unions have contributed both to high wage levels and to political stability, by channeling mass aspirations into efforts producing measurable achievements.

However, economic conditions since the end of World War II have not been uniformly conducive to union expansion. Wages have risen. Immediately after the war the Filipino laborer was in a much worse position than he had been in 1940, but since 1946 price trends have been generally down and wage trends up so that the index of real wages for unskilled workers in Manila moved from 82 to 102 between 1948 and 1956.2 (Over 40 percent of the nonagricultural workers are found in the Manila metropolitan area.) However, the number of available laborers is growing faster than the number of new jobs, so that by 1956 there were reported to be over one million unemployed, the equivalent of about 12.5 percent of the entire labor force. Keen competition for existing jobs creates pressures to reverse the wage trend and makes the strike a weapon of uncertain effectiveness. Scabs are plentiful.

Resulting from changes in political leadership and labor legislation, since 1953 the Philippine political climate for trade unionism has been more favorable than the economic. The Industrial Peace Act of 1953, which constitutes the most important statutory statement of present government policy, borrowed many of its its provisions-some almost verbatim-from the Wagner and Taft-Hartley Acts. As administered, it allows unions a greater combined security from employer retaliation and government interference and provides greater encouragement for collective bargaining than is found elsewhere in Southeast Asia. Furthermore, the government-financed and university-directed labor education program designed to assist the implementation of the Act is also unique in the region.

Because the Philippines is well-known for having a political elite which is comparatively conservative for Southeast Asia, it is somewhat surprising to find that Philippine labor relations and trade union policy is quite liberal by Asian standards. In trying to assess why it has been possible to adopt such a policy in the Philippines, we must pay special attention to four factors: foreign, especially American, influence; the socioeconomic composition of the political elite and the style of competition within it; the economic role of government; and, finally, the strength of the labor movement itself. Other considerations have also affected policy, but these factors, consciously or unconsciously, have probably had the greatest influence on the decision-makers.


Before it reached its present advanced state, Philippine trade union and labor relations policy went through three stages: repression, 1901-1907; recognition, 1908-1935; and regulation and protection, 1936-1953. The stage since 1953 might be termed protection and encouragement. At each stage the relative importance of the four factors in the formulation of policy has differed. At first all decisions were American ones, whereas by the beginning of the third stage even American influence was of minor importance. Labor unions did not have any impact on policy until the third stage, and then mainly by causing policy makers to react to union strength. The Filipino political elite, dominated by landlords, moved from no to almost complete control over policy by the 1930’s. At that time, the elite was united in one party, the Nacionalistas, under one man, Manuel Quezon; and government corporations were predominant in Filipino industrialization. By 1953, however, American influence and direct pressure had again intensified; the Filipino political elite was economically more variegated and politically divided, with various elements competing for mass support; government-owned industries had declined in relative importance; and labor organizations were more capable of voicing and pressing for their demands.

The formal policy which resulted from this combination of pressures, both domestic and foreign, relied heavily in some part on an American model. It drew also from past Philippine experience and retained existing institutions. In practice post-1953 policy has often reverted to pre-1953 patterns. The attitudes of both administrators and union officials have often favored such a reversion. The whole complexion of Philippine labor policy could be more greatly altered, however, if some of the conditions which made that policy possible should change. Some such changes appear likely.


Between 1901 and 1907, government policy called for legal and administrative repression of trade unions. The Spanish Penal Code, which remained in force after the American succession, defined sedition so as to include “any act of hatred. . .upon a private person or any class of persons.” An act of the U.S. Philippine Commission in 1901, designed to prohibit nationalist activity, made membership in a society having sedition as its object, “in whole or in part,” punishable by fine or imprisonment. When the first trade union was organized among the printers in 1902 by Spanish-educated Don Isabelo de los Reyes, it was quickly dissolved. Don Isabel() was imprisoned after he led the Philippines’ first strike in that same year. Dr. Dominador Gomez, who had also been educated in Spain, founded another union in the following year; his union was also dissolved for being a “subversive and illegal society.” Both men had combined nationalistic and labor agitation; this the law clearly penalized.

The legalization of nationalist political activity and the subsequent election of the First Philippine Assembly in 1907 dealt a serious blow to radical political unionism, from which it did not soon recover. Both Gomez and de los Reyes became legislative candidates, and were eventually elected. The best leadership was thus diverted from union to political activity.


In the first stage policy decisions had been entirely American. In the second stage of the development of labor policy, the Philippine Assembly played a coordinate role.

Trade unionism was legally recognized, by indirection, in 1908. Act No. 1868, which created a Bureau of Labor in the Department of Commerce and Police, set forth as one of the Bureau’s duties, “to acquire .. . data and submit .. . reports . . .relative to. . .strikes and other labor difficulties; mutual benefit associations, workers’ insurance societies, . . and other labor organizations.” This degree of union recognition continued until 1935. The Bureau of Labor was also given powers of conciliating labor disputes.

As the terminology in Act 1868 implied, the most important kind of labor organizations at the time were the mutual aid “lodges,” many of which were also secret societies. Several of these organizations were quasi-military in form, and specialized in elaborate initiation rituals. Officers of some of these associations were frequently reported to have pocketed organizational funds.

The 1920’s witnessed a rapid expansion of industry and trade in the Philippines, multiplying the raw material of unionism, the urban worker.3 Without a change in the legal environment, unions grew rapidly too. In 1919 there were only 31 unions registered with the Bureau of Labor, having a reported membership of about 42,000. By 1924 the number of unions had grown to 145 and the membership to 90,000. From that year the size of the labor movement remained nearly stable, with only a slight decline, until 1935.

More important than the growth in number of unionists during the 1920’s however, was the intrusion of the new ideology of communism into the movement. It served as a catalyst for increased union activity, even by those who did not adhere to it. This intrusion marked the beginning of modern Philippine trade unionism. In 1925 both Tan Malakka, the Indonesian Communist, and William Janequette, an American Communist organizer, visited the Philippines to urge Filipino attendance at the First Congress of Oriental Transportation Workers in Canton.4 Several Filipino labor leaders, the first among their colleagues to go abroad, did attend. One of those, Crisanto Evangelista, who had visited Russia in the meantime, formed a new labor union on his return to the Philippines in 1929. Evangelista and others proclaimed the founding of the Communist party of the Philippines a few days later.5 In 1931 both the party and the union, which was apparently linked organizationally with the party, were declared illegal by the courts. Open Communist political and union activity did not reappear until after the pardon of the imprisoned leaders by President Quezon in 1938.

The non-Communist labor unions, though stimulated to somewhat greater activity by Communist competition, unfortunately presented a general picture of organizational confusion, opportunism, highly personalized leadership often not responsible to the membership, and strong rivalries based entirely on personality conflict. Though since 1913 all labor leaders had held an annual convention on May Day, called the Philippine Labor Congress, there was no overall national federation or confederation which functioned throughout the year. However, some continuity was given by three strong unions: the Union Obreros Estivadores de Filipinas, centered on the Manila waterfront; the National Labor Union, drawing its strength from industrial workers around Manila; and the Federacion Obrera de Filipinas, composed of both agricultural and nonagricultural workers in the Visayas, the southern islands of the Philippines. All three of these were formed before 1930, but maintained their importance even after World War II.6

In 1935, with the establishment of the Commonwealth, the Philippines gained complete internal self-government. Manuel Quezon was elected president in the midst of intense agrarian unrest and increasing left-wing union and political activity. In an imaginative conservative’s reaction to this situation, Quezon and his advisors launched a “social justice” program which was designed to grant the minimum demands of tenants and laborers, but also to preserve the basic characteristics of the economy and to allow greater governmental control over agrarian and industrial relations. Though the “social justice” program employed much of the language of the New Deal, some of the institutions established in its name were borrowed from the experience of nondemocratic countries.


Included in this program of the Quezon government were two major pieces of labor legislation, one providing for compulsory arbitration and the other for union registration. Their enactment marked the advent of the third stage of labor relations and trade union policy. Previously characterized as regulation and protection, the emphasis in this stage was on regulation. That this should have been so is explainable by assessing the factors affecting policy.

Americans had actually, as well as officially, withdrawn from internal Philippine policy formulation. In fact, it is fairly clear that High Commissioner Frank Murphy, a representative of the U.S. President with no executive authority, not even the power of veto, was not in sympathy with all the measures which President Quezon adopted. Labor organizations, though obstreperous enough to elicit a reaction from the political elite, had no positive influence over policy. The political elite itself was united behind Quezon who, with his associates, was determined to control communism and all related manifestations.

Quezon also had economic as well as political reasons for controlling labor. Ever since their creation during Governor-General Harrison’s administration, several government corp orations had dominated Filipino-operated industrial activity. President Quezon therefore had a special interest in preserving labor-management relations unruffled by difficult union demands. In a society such as the Philippines, with an overabundance of lawyers, it was almost inevitable that one of the techniques of control selected should have been judicial arbitration.

The provision made in 1908 for voluntary arbitration by the Bureau of Labor had not entailed a sufficient grant of governmental power to prevent numerous work stoppages. There had consequently been four attempts in the Philippine Legislature, in 1907, 1918, 1921, and 1934, to push through bills establishing compulsory arbitration legislation. Only in the last attempt had the bill actually passed, and then it was vetoed by Governor-General Murphy.7 Strikes and lockouts reached their prewar peak in 1934 when 662,399 man days were lost. Beginning in August of that year a strike of 8000 cigar workers, probably the largest strike in Philippine labor history, lasted for six weeks. There was evidence of Communist party leadership. Secretary of Labor Ramon Torres said, “That strike taught me. It showed the futility of the conciliatory functions of the Department of Labor in certain cases, and the imperative need of a government agency with full powers to summon both parties to an industrial dispute, . . decide the issues involved, and compel them to abide by its decision.. . .Fortunately the constitution of the Commonwealth of the Philippines authorizes compulsory arbitration, and so I did not lose time in proposing the creation of the Court of Industrial Relations.”8

The Court which Secretary Torres proposed was created by Commonwealth Act No. 103, adopted in October 1936, and was given jurisdiction over all labor disputes causing or likely to cause a strike or lockout which involved more than 30 workers, if submitted to it by the Secretary of Labor or by either party to the dispute. Pending consideration by the Court all strikes or lockouts were to be enjoined. The scope of the Court’s awards was not to be limited by the demands of the parties, and the awards were to be binding on both labor and management. In the first full calendar year after the passage of C.A. 103, idleness from strikes and lockouts dropped to 18,097 man-days.°

A second law, Commonwealth Act No. 213, also adopted in 1936, provided greater legal protection to trade unions than they had had before. Intimidation or coercion with the intent of preventing a worker from joining a “legitimate labor organization” was made a punishable felony. However, as the Act’s title implies, “An Act to define and regulate legitimate labor organizations,” regulation was its chief aim. It was a tool for governmental supervision and control of the labor movement. The requirements for a union to attain legitimacy were stringent. Only a registered organization was legitimate, and registration was permitted only after an investigation by the constabulary of the activities of the “applying labor organization.” Any organization with the objective of undermining and destroying the “constituted government” or violating any of its laws could be denied registration, with determination of “the objective” resting in the Department of Labor. Once registered, a union, to remain legitimate, had to file a yearly report of its meetings and financial affairs, and a list of its officers and members.

These laws remained substantially unchanged until 1953. However, within this stage of legal protection and regulation were four periods of labor policy and union development, clearly demarcated by war, armistice, Communist tactical shift, and government reaction to it. From 1936 to 1941 there were ineffective government attempts to impose “labor unity”; from 1942 to 1945 all union activity was temporarily suspended by the Japanese; from 1945 to 1950 governmental regulatory powers fell into comparative disuse; and from 1951 to 1953 they were used with the utmost stringency to bolster a semi-official trade union confederation.

Armed with Commonwealth Act No. 213, the Department of Labor in 1938 sought, by consultation with union leaders, to establish “labor unity” in the Philippines. But instead, the reappearance on the labor scene of Communists released from prison in that year caused an ideological split in the already much-splintered labor movement. Though C.A. 213 attempted to discourage Communist-led unions by its requirements for registration and by leaving unregistered unions without legal protection, it did not succeed. By the end of 1939 it was estimated that there were more members in unregistered unions, mostly affiliates of the Communist-led Collective Labor Movement, than in registered ones.10 The CLM, formed in June 1938, had 76 affiliates, including the National Labor Union and Federacion Obrera de Filipinas. On the right wing of the labor movement at that time there were two federations; the stronger of the two received substantial support from Secretary Torres, after the organization of the CLM.

The total number of registered unions grew rapidly after 1936, as can be seen from Table 1.

The Japanese occupation called a temporary halt in 1941 to trade union activity in the Philippines. Many labor leaders joined guerilla groups during the war-the left-wing gravitated toward the Huk-balahap (Tagalog for “People’s Army against the Japanese”)-then re-emerged in 1945 to spearhead new organizational drives. Some American soldiers in the Philippines, who had been union members in the U.S., assisted the rapid reestablishment of labor unions in 1945-46. A few of these were Communists.

Table 1. Registered Unions, Union Membership, and Industrial Disputes, 1922-1940.

Number of registered unions Union membership Number of registered industrial disputes* Man-days of work lost
1922 97 68,976 24 11,433
1923 118 70,548 26 24,535
1924 145 89,826 20 56,725
1925 122 83,544 23 156,917
1926 119 62,858 27 275,126
1927 103 73,716 53 99,848
1928 110 68,828 38 43,534
1929 114 62,366 20 93,716
1930 122 78,781 35 75,317
1931 110 96,041 45 113,478
1932 116 31 58,501
1933 135 13,109 [sic] 59 50,736
1934 122 72,613 63 662,399
1935 27 146,220
1936 51 117,330
1937 57 18,097
1938 188 46,456 125 32,131
1939t 351 84,013 194 30,533
1940 391 96,877 158

Source: Statistical Handbook of the Philippines, 7903-1953 (Manila, 1954), pp. 29-31; also Dept. of Labor figures cited in Kurihara, op. cit., p. 70.

*Includes disputes which did not result in work stoppage.

Estimate based on only six months of statistics.

Note: These figures on union membership are quite unreliable, some say “worthless.” Even after the war similar figures gave, at best, a rough idea of growth in the nationwide labor movement.


A Communist “united front” with non-Communist labor leaders prospered from 1945 to 1950. Early in 1945 a Committee on Labor Organization was formed, including the veteran Communist leaders Guillermo Capadocia and, according to some accounts, Mariano Balgos. In August it was transformed into the Congress of Labor Organizations with a 31-man central committee. A non-Communist newspaperman and organizer of the Philippine Newspaper Guild was named president. Amado Hernandez, another Manila journalist, was among the 18 vice-presidents. In August 1947, Hernandez was elected president; Capadocia remained executive vice-president. Hernandez visited Europe in December 1948. In January 1949, the day after the final walkout of the anti-Communists in the World Federation of Trade Unions, that body’s Executive Bureau voted to accept the CLO request for affiliation which had been pending since 1946.n

The CLO was the dominant labor federation of the early postwar period. By 1950 it claimed 78 affiliate unions-most of which were registered-and 100,000 members.12 Though its affiliates were mostly in Luzon, it had a cooperative arrangement with the Federacion Obrera de Filipinas in the southern islands. The CLO was not only numerically strong, but was also most active in pressing labor’s demands. Together with the FOF it was a party to 42 percent of the industrial disputes brought to the Court of Industrial Relations from 1945 to July 1948.13 The CLO was reputed to be responsible for an even larger percentage of strikes in that period.

After the Communist-led Hukbalahap openly declared itself in rebellion against the government in February 1950, the position of a Communist-infiltrated labor federation became increasingly untenable. Vice-president Capadocia went underground. The Labor Department frequently used its power to cancel union registrations against the CLO and its affiliates, alleging “subversive activities.” Finally on January 26, 1951, Amado Hernandez was arrested by the Military Intelligence Service. After lengthy interrogation he was charged with “rebellion, complexed with multiple murder, robbery, and arson” on the contention that he was a Communist party member and that he, as head of the CLO, had conspired with the Huks to prosecute the rebellion. At the same time scores of other Communist suspects were rounded up. A Manila Judge of First Instance upheld the prosecution’s contention and sentenced Hernandez to life imprisonment in March 1952.14

In the course of the trial it was revealed that several members of the Communist party’s Trade Union Department were also members of the CLO Central Committee. The key prosecution witness estimated, however, that only 10 percent of the CLO affiliates had been “successfully infiltrated” by Communists, and that in none were Communists a majority. During 1951 the CLO’s Communist-infiltrated affiliates were disbanded. The remainder quickly disassociated themselves from the discredited federation, which had been deprived of its registration permit by the Department of Labor. In fact, such disaffiliations had been occurring since 1948, when the Manila Railroad unions had taken that step.


Unfortunately, freedom from Communist infiltration did not usher in a free Philippine labor movement. A new attempt, reminiscent of the 1930’s, but more successful, was made by the Department of Labor to control labor unions. The method was also different from that used before the war: direct official sponsorship of a trade union federation.

Under-Secretary of Labor Jose Figueras had taken the oath as Secretary just one month before Hernandez’s arrest. While he was still Under-Secretary, Figueras had been elected president of the National Confederation of Trade Unions, an organization registered with the Department of Labor in May 1949. Shortly after he became Acting Secretary in September, 1950, Figueras organized a NACTU convention in Baguio which was addressed by President Quirino. Figueras at that time claimed 392 NACTU affiliates with “two million members,” of a total of 450 registered unions. In May 1951 he claimed for NACTU 624 unions with three million members, or the equivalent of the entire nonagricultural employed labor force. By May of 1953 NACTU was claiming 1376 affiliates, though shortly thereafter the Department of Labor reported a total of 836 registered unions. These claims were certainly exaggerated, but it was no exaggeration to say that NACTU dominated the Philippine labor movement from late 1950 until 1953, that is, during the incumbency of Secretary Figueras. NACTU not only gathered unto itself the two largest unions that had remained outside the CLO, the National Labor Union and the UOEF, but also counted among its vice-presidents José Nava, supremo of the FOF which had cooperated with the CL0.15 A large percentage of NACTU affiliates, however, were not true unions, but were labor contracting associations, the presidents of which profited handsomely from each contract. A number of NACTU affiliates were also charged with being “company unions.”

The purpose served by NACTU was not just the establishment of “labor unity” and suppression of radical unionism, though it did accomplish these things more effectively than had the prewar attempts. NACTU’s philosophy was explained by its executive secretary, Manila City Councillor Rupert() Cristobal:

The Secretary of Labor exercises supervision and guidance over labor unions. Government guidance in the labor movement is not as bad as some labor leaders picture and describe it. We may say further that it is a must and a necessity because such government guidance brings better cooperation and understanding between labor and management.

With the implantation of the American type of trade unionism in the Philippines, some labor leaders began to despise government guidance in the labor movement… . Such arrogant attitude only diminishes public sympathy towards the labor movement. It creates unnecessary animosity which in the long run will adversely affect the interest of free trade unionism.16

Cristobal added, “The labor movement is not for the workers alone. It also concerns educators, economists, social workers, politicians, and capitalists.” The politician it most concerned was Secretary Figueras. NACTU was, in part, designed as a vehicle for the Secretary’s political ambitions. The innumerable plaudits for the Quirino administration and the Liberal party at NACTU conventions were not just idle talk. In 1953 Figueras asked for, and received, a Liberal party nomination for the senate, whereupon he resigned form his cabinet post. Throughout the campaign NACTU provided crowds and adulation for Figueras, but it could not elect him in an “opposition year.” After the election, which brought in a Nacionalista party administration, NACTU very quickly-and completely-disappeared, indicating that the powers of the Secretary of Labor were more important than the charm of the Figueras personality in holding such an organization together.


The powers of the Secretary of Labor over labor organizations, derived from Commonwealth Act No. 213, were no greater in the early 1950’s than before, but simply were more frequently wielded, and more freely interpreted. In fiscal year 1952, a total of 391 union registrations were dropped, revoked, or suspended, or more than twice the number of such actions in the previous five years.17 Exercise of these powers thus served to thwart the growth of unions that Figueras considered a threat to NACTU. The resulting insecurity of free unions made more urgent their demands for new legislation in 1952.

After the CLO was laid to rest, NAC-TU’s chief threat came from the Federation of Free Workers. The FFW had been founded in 1950 with Juan C. Tan as president. He and most of the other leaders of the Federation were graduates of Ateneo de Manila, a college staffed by American Jesuits, which draws its student body from the Filipino upper class. The driving force behind the FFW was Fr. Walter Hogan, the dedicated and uncompromising founder of the Jesuit Institute of Social Order. Fr. Hogan and FFW officers constantly attacked racketeer, company, and Communist control of unions, and were the most outspoken critics of Secretary Figueras and his attempt to dominate the labor movement through NACTU.18 The FFW grew rapidly in 1951. This criticism and this growing strength earned retaliation from Figueras. The FFW became the prime target of his suspension of union permits and refusal to register new unions. Sometimes the ground for suspension was the union’s failure to submit a financial report, which was specifically required in C.A. 213. But since this was a condition easily remediable by the union, Figueras often found it necessary to resort to other tactics less clearly justified in the law. Incongruously enough, locals of the Catholic-led FFW were charged with “subversive activities” on several occasions.

The FFW was not the sole target of the Secretary’s abuse of power, however. For example, in late 1950 the Manila Electric Railway and Light Company Employees Union, one of the strongest and largest independent locals in Manila was asked to join NACTU. Soon after it refused to join, its permit was revoked on suspicion of “subversive activities.” (That union’s immediate predecessor at Manila Electric had withdrawn from the CLO before 1950)21

Leadership and member loyalty were strong enough, however, to enable the MERALCO Employees Union, as well as several deregistered FFW affiliates, to continue to be active, even though the Department of Justice and the Supreme Court made it clear that they had no legal existence, and therefore no right to collective bargaining, without a Department of Labor permit. In 1953 an opinion of Secretary of Justice Castelo on C.A. 213 stated that “the permit granted. . .is necessary for the existence of the personality of a labor union in representing its labor-members.”22 This opinion also confirmed the Labor Secretary’s right to revoke or suspend a union’s permit when, “after investigation,” it “has been found to be engaged in subversive or unlawful activities,” but set no criteria for making this finding. Also in 1953 the Supreme Court confirmed that a labor union was “legitimate” only with a permit.23

Earlier, in 1946, the CIR, while ruling that no unregistered union could demand “the right of collective bargaining” found in C.A. 213, had nevertheless held that “registration is not a condition…before a group of workers could come to Court for the redress of their grievances.”24 But by 1951 the CIR was holding that an unregistered union could not be a party to a case before the Court.25 It is understandable, therefore, that unregistered unions would take the lead in pushing for a revision of C.A. 213.

Even the protection which that law gave to registered unions was in many ways inadequate. For instance, with only normal bureaucratic delays the permit was often granted too late. The law provided a penalty for employers who intimidated or coerced an employee with the intent of preventing him from joining a “registered legitimate labor organization of his own choosing” or who dismissed an employee for having joined one. However, it was precisely the leaders of unions in process of formation, not yet registered, which most needed protection against coercion and dismissal. As a consequence, by the time the registration permit was issued, some unions had either succumbed to company dominance or had become merely paper organizations.

Moreover, in order to get actual protection from the law, registered unions had to go to the Court of Industrial Relations; they often found that on matters of union security the rulings of its judges -who sit both singly and en banc-were disappointing. For instance, when the demand for a closed or union shop “has become an issue in a labor dispute before the CIR, the Court has almost invariably denied” it.26 This policy was largely determined by the Supreme Court’s invalidation in 1939 of a modified closed shop imposed by a CIR award. However, other circumstances justified such a policy as well. With the Department’s “one company, one union” doctrine,27 and without any legal procedures whatsoever for accurately measuring a union’s strength, it would have been clearly undemocratic. Another cornerstone of union security, the dues checkoff, was regularly denied by the CIR until after the enactment of the Minimum Wage Law in 1951, which specifically allowed it.28

Thus the legal and administrative framework of Philippine trade unionism, as of 1953, offered little more defense against employers’ harassments than it did against government intervention, and, in fact, often facilitated them. Under C.A. 103 the effectiveness of the strike was destroyed by the employers’ ability to bring disputes to the CIR and get injunctions. With the system of compulsory arbitration the union’s “right to bargain collectively” was meaningless. Labor relations was primarily a legal battle, and lawyers were leaders in both camps. The Court’s docket was so crowded that cases were frequently decided more than three years after they were first filed; delay favored the economically stronger party, the employer. Nevertheless, in the process of arbitration the Court usually raised wages and often reinstated individual workers unjustly dismissed. It is possible to argue, and some have done so convincingly, that in an early stage of the growth of trade unions, arbitration can gain more concessions for the worker than could be won for him by the union through bargaining. At any rate, by 1952 most union leaders outside NACTU believed they had passed that stage. They were urging the adoption of a new law on union registration and settlement of industrial disputes.


At the end of the third stage of trade union policy, with its emphasis on regulation, though labor unions were still weak, they were able to voice their demands for less restrictive government regulation and more protection from management retaliation. This internal pressure coupled with a new kind of external pressure was responsible for a basic revision of the policy of regulation in June 1953. Direct U.S. influence on labor policy formulation had been practically nil throughout the early years of the Republic. Not until 1950 did the U.S. attempt to play the new role of nonsovereign tutor. Her tutelage produced results in the situation of 1953.

Encouragement had been given to the critics of Philippine trade union and industrial relations policy by the Bell Report of 1950. Soon after the beginning of the Korean war, when U.S. attention was, in general, being focused on Asia, President Truman, on the invitation of President Quirino, sent an Economic Survey Mission to the Philippines, headed by Daniel Bell, a banker. The Mission had been instructed to look into the causes of the whole political and economic crisis which that nation was then facing. Its report, released in October 1950, included many recommendations for social, economic and fiscal reform as quid pro quo for additional U.S. aid. One of the recommendations on labor provided that,

Trade unions should be encouraged that would be free from Communist influence, domination by the Government, interference by management, and racketeering by labor leaders. The Court of Industrial Relations should be guided by basic legislation on policy and its work speeded up. It should not be used as a substitute for legitimate collective bargaining.

In November 1950, in order to begin carrying out the Bell Report’s recommendations on labor, President Quirino had appointed a committee, headed by Secretary Figueras, to recommend legislation. One of the bills it recommended was entitled “An act to promote industrial peace . . .” (House Bill 825), which had been introduced by Congressman Espinosa, a high NACTU official, and passed by the House on second and third reading in May, even before the Bell Mission had been appointed.

This bill’s provisions on labor union registration not only did not coincide with the Bell Report recommendations on encouragement of free trade unionsm, but would, if enacted, have assured even stronger domination and tighter control of unions by the government than existed in 1950. It also maintained compulsory arbitration.

In contrast to this regressive step taken by the House, during the year following the Bell Report’s release, three bills were filed in the Senate which were truly encouraging to free trade unionism. Two of them were passed by the Senate, but were buried in the House Labor Committee. In May 1952 the Senate Labor Committee amalgamated the pending labor bills, and reported out its own bill, S.B. 423, still entitled “An act to promote industrial peace….” After very brief debate it was passed on third reading. Conferees were appointed to consult with representatives of the House, which insisted on its similar bill, H.B. 825. By May 22 the conference committee had agreed on the Senate bill and submitted its report to that effect. The Senate immediately accepted the conference committee report; the House did not.

Representative Espinosa had been the one member of the conference committee who did not sign the report. In fact, he refused to attend conference committee meetings. As chairman of the Committee on Labor, closely allied with the majority leadership in the House, he was in a strategic position to block any action on the report. His intransigence caused the bill to be tabled. The bill was thus dead for the 1952 Congressional session.

There were some provisions of S.B. 423 which an executive vice-president of NACTU had good reason to want to defeat. In sharp contrast to H.B. 825 the Senate bill completely abolished the labor registration function of the Department of Labor. Instead it simply required any union wishing to bring a case before the CIR to file a copy of the union constitution, a list of its officers, and their sworn antisubversive affidavits. This was clearly borrowed from American experience and was considered the most effective way to destroy the Secretary of Labor’s power over the labor movement. The fate of NACTU and the position of the incumbent Secretary were closely connected with this provision. Since S.B. 423 also stripped the CIR of its power of arbitration, most of the judges of that Court also opposed the bill.

Steady pressure was required to force legislative action. In the next several months there was a three-pronged attack on the Figueras-Espinosa-NACTU position, ranging in tactics from the most friendly, behind-the-scenes persuasion to the most vigorous, well-publicized verbal assaults. The assault force and persuaders consisted of the Mutual Security Agency labor division, some second-echelon officials in the Philippine Department of Labor, and, largest of all, a group of labor leaders who had begun lobbying in the 1952 session, together with their allies in the Senate, Lorenzo Tafiada, and Quintin Paredes.

The unions’ most effective argument was the political one, that support for the bill would win votes in the November elections. Secretary Figueras wanted to be elected to the Senate in 1953, so that he was quite susceptible to talk of political support. In fact, the Philippine Association of Free Labor Unions, composed of non-Communist remnants of the defunct CLO, did back Figueras in the 1953 elec-tions.29 There are some reports that this was one of the rewards promised for Figueras’ support of a modified S.B. 423.

p(=western)<>{=margin-bottom: 0.14cm}. By mid-February 1953 the once adamant Figueras was ready to discuss a compromise. On March 28 the Secretary, who had always been discreetly private in his opposition to S.B. 423, inserted an inconspicuous paragraph into a speech to Manila Railroad workers in which he said he had “no objection to the bill pending in Congress designed to do away [sic] with the power of the Secretary of Labor” over union registration.” It appeared that political arguments had won the day. But to gain this concession it had been necessary for the supporters of S.B. 423 to find an acceptable wording in which to couch the compromise. It was in drafting the compromise that the other two prongs of the attack on H.B. 825 were most important.

The Mutual Security Agency labor division in Manila had been active in promoting S.B. 423 from the first. When it seemed hopelessly enmeshed in the jammed wheels of legislation in January 1953, the mission took an even more active role in its support. As it became apparent that S.B. 423 would not pass without some modification, Emili an o Morabe, chief of the Wage Administration Service, and Robert Kinney, MSA labor division head, sat down to write a new draft, with the cooperation of some labor leaders and other officials. On the crucial question of labor registration the MSA position was that there was no real justification for “licensing” trade unions in a democracy; a number of union leaders agreed. However, the Secretary of Labor did not agree to a complete abolition of registration. Therefore, both U.S. advisors and Philippine labor leaders were willing to accept “as a minimum guarantee” a registration system in which there was provision for public hearing and appeal from decisions of the Secretary of Labor. The industrial relations provisions of S.B. 423, which had already abolished compulsory arbitration while preserving the CIR, were not significantly changed.

In early April this compromise draft was handed to Senator Paredes, chairman of the conference committee, and formed the basis of that committee’s second, and final, report. The MSA director, Dr. Roland Renne, personally called on President Quirino to get support for the bill. By mid-April Espinosa himself was willing to talk compromise.31 Senator Paredes reconvened the conference committee and a new report was agreed upon. On May 5 the new conference report was brought before both houses and adopted almost without debate. President Quirino signed the bill into law on June 17 with great fanfare. It is known formally as Republic Act No. 875, or the Industrial Peace Act, and popularly as the “Magna Carta of Labor.”


This law, composed of two parts, one dealing with union registration and internal administration, and the other with industrial relations, plus the labor education program established to further its implementation, constitutes current labor policy. It became possible because of four new factors in the policy-making process. American influence and pressure were greater than in the 1930’s, free labor organizations were stronger, the government’s direct role in the economy was comparatively smaller, and the political elite, instead of being united, was fragmented by the appearance of new competing interests. Each of the three components of present policy is the focus of a somewhat different combination of proponents and opponents, however.

The provisions of the Industrial Peace Act on union registration (Sec. 23) seem to fulfill adequately the Bell Report recommendations to encourage labor unions free from government domination. Nevertheless, they are not as originally proposed by American labor advisors and seem to show, at least in language, a greater affinity to the Philippine past than to American example.

American advisors, using the pre-Taft-Hartley situation as a reference point, favored the abolition of registration altogether. Most free union leaders, however, though sharing the American opinion, were willing to accept the compromise which could be achieved-mere abolition of compulsory registration in which the Secretary of Labor had discretionary powers. It is doubtful whether they were decisive, but the official U.S. views certainly strengthened the union demands for change.

Filipino bureaucrats with an interest in the existing situation resisted any change. Since many employers found satisfaction in a registration system which could be used as a weapon against unruly unions, they may have given covert backing to this bureaucratic position. At any rate, they were not sufficiently well-represented in Congress to make overt opposition worthwhile. The Secretary of Labor finally acceded to union demands because his political ambitions were stronger than his desire to retain bureaucratic power, not an uncommon attitude among Philippine cabinet members. To realize these ambitions, Secretary Fi-gueras found it necessary to build organized labor backing, since he did not possess the traditional power base common to the well-established members of the elite: either great personal wealth, especially in land, or control of a provincial political machine, or both. Fi-gueras was persuaded that granting the demands of the free, independent unions was more to his advantage than retaining coercive power over them.

The interaction of these forces produced a policy which encouraged trade unions free from “domination by the Government,” and which, in the words of the Industrial Peace Act, protected “the exercise by employees of their right to self-organization,” especially against the abuse of administrative power.

Though the registration function remains in the Department of Labor, almost all discretion has now been removed from the Secretary’s hand. Within thirty days of filing the required information with the Department of Labor, a “union of workers …shall acquire legal personality.” This information is limited to a copy of the union constitution and by-laws, a list of officers and their sworn non-Communist affidavits, and a copy of the last financial report if the organization has been in existence for more than a year. Registered unions are required to continue to file yearly financial reports. The Department of Labor’s right to withhold, cancel or suspend registration is restricted to cases in which unions fail to provide the legally required information, and then only after public hearing. Departmental decision to withhold or cancel can be appealed to the courts.

The Industrial Peace Act, or Magna Carta, says that registered unions “shall be entitled to all the rights and privileges granted by law to legitimate labor organizations.” Yet the incentives for filing the information prerequisite to registration are actually less than those for filing information under Taft-Hartley. The language of the rest of the Act does not clearly give registered labor organizations any important rights or privileges denied to unregistered ones.

This lack of a clear distinction in the law has not been reflected in practice, however. Both courts and trade unions have acted as if legitimacy were essential for a successful labor organization. The reason for this is probably the strength of tradition. Since the act of registration requires approximately the same information and is done in the same place, most unionists continue to attach to it the same importance it had under C.A. 213.

It is a common misconception among workers that labor unions do not even “exist” without registration.32 The fact that formerly registration was a discretionary act by the Secretary of Labor and that now it is ministerial, is a fine, though important, legal distinction which many union leaders do not perceive. What is believed to be the law is more important in practice than precisely what the language of the law says.

The most obvious indication of the importance placed on registration is the phenomenal growth of registered unions since the enactment of the Magna Carta, as can be seen from Table 2.

Table 2. Registered Labor Unions, Fiscal Years 1946-1956.

Year Unions registered annually Estimated total of registered unions
1946 69
1947 119
1948 97
1949 144
1950 109
1951 710 850
1952 92
1953 110 836
1954 838
1955 626 1888
1956 542 2180

Sources: Annual registrations, Labor Registration Division Newsletter, January 1956, pp. 7-8; Labor Registration Division, Annual Report, 1955-56. These figures take no account of cancellations, and therefore do not equal net additions to the number of registered unions. Total registrations from MSA list of unions registered from 1946 to April 1951 (may include some whose registration had already been cancelled by 1951); MSA, Labor and Social Welfare Division (Manila), Registered Trade Unions in the Philippines, July 28, 1953 (mimeographed, based on records of Department of Labor); Labor Registration Division, Department of Labor, Geographical Distribution of Labor Organizations in the Philippines for the Period Ending June 30, 1955 (mimeographed); and newspaper reports.

Notes: (1) It is not known exactly how many unions which were still validly registered under the old act, C.A. 213, took the trouble of filing a new registration. (The old registration, if kept active, remains valid.) Comparing the 1953 and 1955 registration lists on the basis of a substantial sample, it would appear that about 68 percent, or 568 unions, did not reregister.

(2) The tremendous growth in registered trade unions did not signify the same rate of growth in the labor movement as a whole. The difficulties involved in registration before June 1953 have already been noted. The number of nonregistered unions was much greater then than after the passage of the Magna Carta. Still there was undoubtedly a marked increase in the rate of growth of all unions beginning in late 1953.

The sharp decline in the number of cancellations or registrations by the Department of Labor may be even more indicative of a trade union movement free from government domination than the registration of new unions. There were 344 cancellations in the first three years of R.A. 875’s operation, compared to 394 in 1951. Furthermore, given the procedures set forth in R.A. 875 and generally adhered to by the Department of Labor, post-1953 cancellations, almost all of which were for failure to submit financial reports or lists of newly elected officers, merely confirmed a union’s lapse into inactivity; after 1953 they were never an instrument to destroy an active union. There has not yet been a single cancellation for “subversive activities,” so common under Figueras. In fact, the one legal method, invalidation of affidavits required for registration if fraudulently executed, which, based on American experience, might have seemed to be avail able, was ruled out by the Solicitor Gen-era1.33 Cancellations now cannot even be used to penalize mishandling of funds by union officers, as they sometimes were under the Figueras regime. Under R.A. 875 the Labor Registration Division has been obliged to accept financial reports at face value, even though they would rather not.

Filipino trade unionists were not entirely reconciled to the passive role in union registration assigned to the Department of Labor under R.A. 875. Though appreciative of the fact that the Secretary had been stripped of powers which could be used against unions, they still desired friendly assistance. There were numerous requests after 1953 for the Secretary of Labor again to intervene, usually for the protection of legitimate employees rights, in internal union affairs. But Secretary Adevoso did not respond to these requests. This new attitude on the part of the Secretary of Labor was at least as important as new legislation in giving labor new freedom, and responsibility, in its own house.


Magsaysay’s appointment of Eleuterio Adevoso had been criticized on the ground of the latter’s lack of experience. At thirty-two Adevoso was the youngest cabinet member in the Philippines’ history. Though he had won Magsaysay’s gratitude for the vigor and skill he brought to the job of national coordinator of the PresidentMagsaysay Movement, he had had no previous contact with the trade union movement or with labor law administration. This did not prevent him from fulfilling his position competently and imaginatively, however, and with close attention to the interests of labor and to the spirit of the Magna Carta. Said Adevoso soon after taking office, “The government will not interfere with labor unions, [but] will confine itself to indicating the direction and providing the incentives for sound labor organization.”34

There were areas, however, in which Filipino trade unionists expected more than incentives. They wanted protection, especially from company unions, which are a common phenomenon of nascent industrialization consistent with the traditional paternalistic relationship between employer and employee. R.A. 875 holds it to be an unfair labor practice for an employer to “initiate, dominate, assist or interfere with the formation or administration of any labor organization,” and provides for immediate Labor Department cancellation of the registration of any organization declared to be a company union by the C.I.R. But it is very difficult to prove company domination of a union before a court. Consequently, three years after the enactment of R.A. 875, only two company unions had been judicially identified, though informed persons knew them to be common. Without such judicial determination the Department of Labor has been obliged to continue to register all comers presenting the required information, even if there is already a free union in the same firm. To labor leaders who urged him to take immediate initiative in separating fish from fowl, Secretary Adevoso warned that discretionary power for the Department might boomerang against the free unions.

By 1956, however, the failure of R.A. 875 to protect union members from unscrupulous labor leaders caused Adevoso to modify his position. The law authorized 10 percent of the membership of any labor organization to bring an unfair labor practice charge against their officers, which, if proven, would result in a cease and desist order from the Court of Industrial Relations. That this procedure was used for the first time three years after the Act’s passage does not prove the purity of union administration in the Philippines, but does indicate how difficult it is for a minority to take the initiative against entrenched leadership.

Secretary Adevoso had no intention of becoming a watchdog over internecine union squabbles, as the Labor Department had been when operating under C.A. 213. Nevertheless, he did authorize an investigation, in 1955, into that desert of union democracy, the port areas. The resulting report revealed that many waterfront unions were merely facades for labor contractors. In July 1956 the Department of Labor, acting against cautious advice, launched an informational drive to acquaint laborers, shippers, and officials with the evils of labor-contracting “unions.” In some quarters the campaign was well-received, but in other areas well-connected “union” presidents were able to block progress. By interpreting the law’s provisions rather broadly, the Department also took steps to cancel the registration of such waterfront “unions.” It was held that any union which evidenced in its constitution that its president operated as a labor contractor was not covered by the definition of a “labor organization” in Sec. 2(e) of the Industrial Peace Act, and could thus legally have its permit revoked.35 But to use Sec. 2(e) as grounds for cancellation violated the intent of the Magna Carta to make the Department of Labor’s role in union registration purely ministerial. On the other hand, this was clearly consistent with the Act’s statement of policy, “to eliminate the causes of industrial unrest by encouraging and protecting the exercise by employees of their right of self-organization for the purpose of collective bargaining….” That the Department should have returned to discretionary registration, even in part, is another example of the pull of tradition being more powerful than innovating legislation. It also demonstrates the understandable tendency of tutors in democracy to step up and join their students in conducting the experiment.

With pressures from the union rank and file as well as from employers to reestablish discretionary registration, and with a Secretary of Labor who was basically opposed to it yet able to justify its limited reintroduction, it is easy to conceive of a new situation in which the spirit of the Industrial Peace Act might be seriously and chronically violated. It is more likely that the change would be an administrative than a legal one. The law’s imprecision would allow this.


The Magna Carta’s provisions on industrial relations heralded a shift of emphasis from compulsory arbitration to collective bargaining. They were much more clearly drawn from an American model than were the union registration provisions. In fact, the sections regarding collective bargaining, unfair labor practices and injunctions relied heavily on the very language of similar sections in the Wagner, Taft-Hartley, and Norris-LaGuardia Acts. Nevertheless, the end to compulsory arbitration can be explained more adequately in terms of economic interests, political forces, and ideological influences within the Philippines than as a case of borrowed social legislation.

Union support for collective bargaining, though important, was not quite as strong as that for the end of discretionary registration. Some union officers who welcomed less administrative interference in their affairs were not yet ready to free themselves of judicial arbitration. Many of these officers were lawyers, with a major source of income in their legal services to their respective unions. Others, leading small, weak unions, simply recognized the paucity of their bargaining power vis-à-vis employers. Still other union leaders, however, who looked upon the American labor movement as the approved pattern for success, considered collective bargaining to be the motif of that pattern and thus sought to introduce it into the Philippines.

Bureaucratic opposition to the repeal of compulsory arbitration came primarily from the Court of Industrial Relations, not the Department of Labor. It was sufficient to force a revision of Senate Bill 423, deleting the section abolishing the Court, but the judges’ liaison with Congress was generally not as effective as that of the more politically minded Secretary Figueras. However, neither were there political ambitions within the Court which could serve at any point to relax its opposition.

In addition, there was an economic interest group which supported collective bargaining but which had been relatively unimportant or disinterested in influencing legislative decisions on the other portions of the Industrial Peace Act. This group was the foreign employers, especially Americans. Even though most of the stronger unions are found in foreign-owned firms, as is the case in so many underdeveloped countries, foreign managers saw a certain advantage in collective bargaining. Aside from the fact that Americans were familiar with this particular technique of labor relations, as a spirit of nationalism increases, the disadvantages involved in a foreign employer appearing against a Filipino union before a Filipino judge increase also. Therefore, pressures may have been exerted on MSA by the American business community in Manila to pay particular attention to collective bargaining.” The comparative disadvantages for Filipino entrepreneurs were not sufficient, on the other hand, to make them the implacable foes of such legislation. They knew that few of the unions with which they had to deal were strong enough to pose a serious bargaining threat. At least a partial confirmation of their assessment may be found in subsequent wage statistics. Wages in Manila, where unions are strongest, rose much more slowly during the two and one-half years after the passage of the Industrial Peace Act than they did in the prior two and one-half years.37

The landed elite were either passive in this struggle between the forces of arbitration and collective bargaining or tacitly supported a measure which they thought might weaken the power base of the new entrepreneurial elite. The landed proprietors shared less common interest with the new entrepreneurs than they had before the war. Since 1936 the Filipino-controlled portion of the economy had come to be dominated by private enterprise. A few government corporations had either been abolished or been restricted in their activities. The remainder had not grown nearly so fast as the industrial sector of the economy generally, and the establishment of a few new government corporations in the early postwar period did not counterbalance the more rapid expansion and multiplication of private firms. Industrial corporations had also become a smaller part of the total of government enterprise than before the war. Thus the landed political elite, which controls government economic activity, had less reason to share attitudes on labor policy with private Filipino employers.

The shift to collective bargaining left the five-man Court of Industrial Relations with a docket composed largely of two types of cases, certification elections and unfair labor practices, neither of which it had handled before 1953. Such cases, of course, relate primarily to the first stage in the process of modern industrial relations, employer recognition of the union. Unfair labor practice cases accounted for over half of the nonagrarian cases brought to the CIR in the first two years of the Indus trial Peace Act.38 Though Sec. 4 of the Act lists six specific labor practices by management and four by unions which may be enjoined, two of these, discrimination “in regard to hire or tenure of employment. .. to .. . discourage membership in any labor organization” and interference with the employees’ right of self organization, have accounted for two thirds of the complaints.

The unfair labor practice case is not a prompt and effective procedure by which unions or workers may receive legal protection. Study of a representative sample of fifty cases in 1956, forty-nine of which were charges of labor against management, revealed that about half those filed were in the Court for eight months before they were either decided or dismissed; 32 percent remained for more than a year. In the dynamics of industrial relations, worker support for a union is a decidedly perishable commodity, unless encouraged by assurance that a hostile employer will be restrained from punitive action against union-minded employees. These long delays in the settlement of disputes are probably sufficient to weaken or even destroy small unions.39 Nor are the results of this lengthy legal process encouraging to the unions which survive. In only two of the fifty cases were cease and desist orders issued; 23 were dismissed after withdrawal of the complaint; and 25 were dismissed for lack of cause. The complaint was usually withdrawn when the laid-off worker was reinstated, a collective bargaining agreement signed, or some other accommodation made by the employer.

The certification election is in many instances a necessary prerequisite to collective bargaining because of the inevitable jurisdictional disputes arising from the ease of registration. In about 75 percent of certification elections more than one union was involved. Next to unfair labor practice cases, those involving elections constitute the largest segment of the CIR’s docket-27 percent in fiscal year 1954, and 20 percent in 1955. Nevertheless, it has been estimated that less than 30 percent of the unions which are registered each year actually seek certification, even though there would seem to be a need for unions to have the extra security of certification as sole collective bargaining agent. The main reason seems to be that the process is slow and costly.

After the CIR has issued a certification, there are no further legal impediments to actual collective bargaining. If it has not been called in earlier, the Conciliation Service of the Department of Labor enters the dispute at this point. No other government agency has a role to play in normal negotiations. The Service may be called in by either party or may intervene on its own initiative. The Conciliation Service is most frequently asked to intervene by the employees, though not by the strongest unions with the most experienced negotiators in their leadership. For the weak union, however, the government conciliator who strongly encourages compliance with the law is an indispensable ally, since the subject of negotiation is frequently the employer’s failure to recognize a legitimate union or to pay the legal minimum wage. This is the source of the charge of “prounion” sometimes hurled at Labor Department conciliators.

In contrast to 144 cases settled by the Conciliation Service in the two years before the passage of the Magna Carta, 376 cases were settled in the two years following. The number of cases filed grew faster than the number settled, however, so that at the end of fiscal year 1955 more than six times the number of cases were pending than had been pending two years earlier. Collective bargaining agreements filed with the Conciliation Service during 1954 and 1955 numbered 261, over half of which were negotiated with the help of the Service. Only 78 agreements had been filed during 1952 and 1953.4°

Table 3. Conciliation Cases, Collective Bargaining Agreements and Strikes, Fiscal Years 1947-1955.

Fiscal year No. of conciliation cases filed Workers involved Collective bargaining agreements filed Workers involved Strikes Workers involved
1947 65 33,308
1948 56 23,054 44 9,116 56 12,416
1949 187 43,685 38 3,618 28 5,763
1950 136 21,637 36 4,102 26 10,921
1951 126 28,183 65 9,338 12 5,400
1952 188 38,732 37 3,862 10 7,046
1953 193 31,052 41 4,446 13 9,683
1954 417 91,264 102 31,363 53 18,417
1955 573 97,324 159 36,472 43 16,542

Source: Department of Labor, Conciliation Service, miscellaneous statistics (mimeographed).


After collective bargaining has been completed and a contract signed, the government still has a role to play in contract enforcement. For instance, contract violations may be subject to legal action in the regular courts, though no information is available on the number of such cases. The CIR does not take jurisdiction, despite the fact that R.A. 875, like Taft-Hartley, makes refusal to bargain an unfair labor practice and defines the duty “to bargain collectively” so as to include responsibility to “continue in full force and effect all the terms” of a collective bargaining agreement until after thirty days notice of modification. In 1956 the CIR held that “once parties have made a collective bargaining contract, violation. . . should be left to the usual processes of law” and refused to consider such violation an unfair labor practice.41 The CIR’s unwillingness to assume this jurisdiction is understandable. Added to the previous expansion of its purview in other ways, the case load would be so overwhelming that the present personnel of the Court could not possibly handle it. Futhermore, a minority of the Court is opposed to making the CIR the arbiter of all collective bargaining agreements, since it would go a long way toward reestablishing the degree of intervention in labor-management relations which the Court exercised before R.A. 875. On the other hand, for those judges who would not hesitate to intervene, more positive methods have been found than the restraining order arising from a ULP case.

It was the intention of the Act’s authors to allow the continued exercise of compulsory arbitration only in disputes certified to the Court by the President as being in industries “indespensable to the national interest.” But the practice of some members of the Court seems to have gone beyond that intention. Those union officers who are still more at home in the courtroom than on the picket line may not be too unhappy about this development.

Section 1 of the Magna Carta clearly states that “it is the policy of this Act. . . to promote. . .industrial peace. . .and the best interests of employers and employees by the settlement of issues respecting terms and conditions of employment through the process of collective bargaining.” Section 7 restates this purpose in another way:

In order to prevent undue restriction of free enterprise for capital and labor and to encourage the truly democratic method of regulating the relations between the employer and employee by means of an agreement freely entered into in collective bargaining, no court of the Philippines shall have the power to set wages, rates of pay, hours of employment, or conditions of employment except as in this Act is otherwise provided and except as is provided in R.A. No. 602 and C.A. No. 444 as to hours of work.

However, what appears to be a minor exception to the rule in the last phrase has been expanded by some judges into grounds for assuming jurisdiction in a wide variety of cases. Sec. 16© of R.A. 602, the Minimum Wage Law, giving the CIR power of arbitration in minimum wage disputes, has also been cited by the Court, since 1953, in assuming jurisdiction of wage questions generally, even though the language of the Minimum Wage Law, which assumes the continued existence of the old system of compulsory arbitration,42 would seem to have been superseded by the provisions of the Industrial Peace Act.

Especially because CIR judges were divided on this question, it was taken immediately to the Supreme Court by the unions. In PA FLU vs. Tan in 1956 and in four 1957 cases the high court interpreted Sec. 7 of R.A. 875 broadly, so that in any disputes in which minimum wages under the Minimum Wage Act, or hours of employment under the Eight Hour Labor Act, are involved, the CIR may assume jurisdiction. It may even issue an award including, if necessary, judgment on other matters in the same dispute.43 This would appear to open the way for an almost complete re-establishment of compulsory arbitration, restricted only by the judges’ time. An overcrowded docket has always been one of the CIR’s major problems; its case burdens are already heavy.

Even if the judges should refrain from using this opening wedge to the old system, others also exist. The Act by no means leaves the government powerless to deal with strikes. It allows both presidential certification of disputes to the CIR and the use of injunctions. The President may certify to the CIR for compulsory arbitration any dispute which in his opinion exists within “an industry indispensable to the national interest.” This is a much broader power than that given the President of the U.S. by Section 208 of the Taft-Hartley Act, to petition for an injunction in strikes imperiling “the national health or safety.” Under the terms of the Industrial Peace Act there need be no actual or threatened strike, and no disqualifications of size are put on the dispute. The phrase, “indispensable to the national interest,” is, of course, capable of the broadest interpretation. A leading Filipino authority, Cicero Calderon, has pointed out already that this could be a loophole for the re-establishment of compulsory arbitration. However, less than fifteen cases were certified to the CIR in the first three and one half years of the Magna Carta; the loophole has hardly been used.

No firm criteria for certification of emergency disputes seem to have been established. The most important single voice in advising the president on certification of disputes from 1954 to 1957 was Secretary Adevoso. On several occasions he stood against certification, but he was sometimes overruled when management’s direct pressure on the President was too great. The largest number of strikes have been certified from the sugar industry, by several criteria the Philippines’ largest and, politically, its most influential industry. The rationale has been that any reduction in sugar production would mean a reduction of exports and therefore of much-needed foreign exchange. Strikes in the telephone, electric power, shipping, and bus transportation industries can readily be seen to involve national interest, though in some instances the disputes certified touched only a small segment of the total industry or did not entail an important work stoppage even in the struck firms.

Another technique by which strikes can be halted is the injunction. It is usually sought by management. Its remedy for the dispute in question is, at best, a temporary one, since Section 9 of the Industrial Peace Act is, in large part, borrowed from the Norris-LaGuardia Act. Substantive and procedural requirements for and limitations on the issuance of an injunction set forth in Section 9 would seem to make it impossible for management or the courts to abuse that technique; nevertheless, there has been abuse.

It would appear to the layman that the language of the Act intends that only the CIR be allowed to issue injunctions in labor disputes. But Courts of First Instance have proceeded to issue them anyway, and sometimes with disregard for the procedural requirements of the Industrial Peace Act. The number of such injunctions grew rapidly in 1956, some of them merely restraining violent or coercive acts attendant on picketing, others phrased in such a way as to practically break the strike. Unions responded with both political and legal action. Political pressures resulted in the filing of a bill in Congress by Senator Tatiada to amend R.A. 875 by clearly and specifically giving the CIR exclusive jurisdiction in all cases arising from labor disputes. (The bill was not passed, however.)

Legal action by labor, in appeals to the Supreme Court, has had a somewhat different outcome. In PAFLU vs. Tan and Reyes vs. Tan44 the Supreme Court held that Courts of First Instance did have the power to issue injunctions in labor disputes not within the exclusive jurisdiction of the CIR, but invalidated the injunction in question because it had not been issued in compliance with the procedural qualifications of the Industrial Peace Act, in Sec. 9(d).

The weight of judicial policy on other occasions has not been entirely against the striker. For instance, both the CIR and the Supreme Court have upheld the striker’s right to return to his job after the strike is over,45 if the strike is legal.” But this can be an important qualification. The courts still have wide discretion in determining what is a legal strike. The grounds for declaring a strike illegal under C.A. 103 have been retained in judicial policy.47 Failure to file a strike notice or to abide by its thirty-day waiting period are new grounds under the Magna Carta.

It is thus apparent that the politico-legal environment of trade unionism and industrial relations has not changed as sharply as a reading of the Industrial Peace Act alone would indicate. In particular the CIR continues to exercise more of its old powers in labor relations than does the Department of Labor, probably because with the new law there was an almost simultaneous change of executive leadership, whereas judges experienced in compulsory arbitration remained on the bench. The inertia of bureaucratic habits, the Filipino tradition of looking to government first for the solution of private problems, and the continued important role of lawyers in union leadership, all conspire to preserve some of the old patterns, despite a new law. In essence, a statutory change does not significantly transform a social situation unless attitudes change also.


The change of a law itself can be an educational process, but implementation of a new policy must not neglect efforts more specifically designed to change attitudes. The training of union leaders to improve their effectiveness in free collective bargaining and to familiarize them with techniques of democratic decision-making requires a special educational program.

In attempting to fulfill the Bell Report recommendations on labor and the purpose of the Industrial Peace Act to encourage employee’s organizations “for the purpose of collective bargaining and for the promotion of their moral, social and economic well-being,” neither the U.S. aid mission nor the Philippine Government overlooked the importance of labor education. In fact, labor education in 1952 helped to create a demand for new labor legislation. But not until after the enactment of R.A. 875 was a continuing, large-scale program launched.

The political obstacles to the establishment of a labor education program were less than those to the other two aspects of current policy already discussed. Even though in the long run the results of such a program might pose the greatest threat to either bureaucratic or employer dominance of labor relations, its immediate impact was not evident. It was not necessary to weaken an existing bureaucratic institution or to pass a law, thus there was neither need nor opportunity for overt opposition to labor education. The American business community in Manila has long been critical of U.S. labor advisors who become too obvious in their support for organized labor’s side in the tugging and pulling of industrial relations. But they have found the respectability of an educational program unassailable.

Labor education was institutionalized in July 1954 by the creation of the Labor Education Center at the government-financed University of the Philippines. Despite the numerous problems that arose in its first few years, this project has been the most important contribution to the implementation of the Bell Report recommendations on labor undertaken with American assistance and advice. A description of the operation of the Center and a detailed evaluation of its impact would necessarily involve a discussion of the character of the Philippine labor movement and of industrial relations at the plant level, which is outside the scope of this article. But in summary it can be said that the work of the Center has been as important as that of either the Department of Labor or the Court of Industrial Relations in building whatever independent strength Philippine trade unions have developed in the last few years vis-à-vis government and employers.

As a matter of fact, however, neither this strength nor trade union attitudes are yet at a level which enables labor to take the fullest advantage of present legislation. When labor sometimes still feels the need of a paternal government hand to protect it against employers or its own corruption, previous patterns of judicial and administrative intervention will persist despite statutory changes. Constant labor pressure on administrators and on employers would be necessary for strict law enforcement. If the strength of organized labor alone had been responsible for the passage of the new legislation, it probably would also have had the requisite capabilities for successful implementation. But labor’s cause depended upon the support of some important allies.


Labor’s power to affect policy can be measured by comparison with the situation in the West at a similar stage of growth and with the other political forces in Philippine society, the strengths of which fluctuate with the course of economic development. The ideological and economic environments have also been important in determining labor’s policy-influencing role.

In Western society an industrial labor force developed as a result of the activity of an indigenous entrepreneurial class. When labor began to organize, industrial entrepreneurs were already a dominant group in formulating governmental policy. Their struggle for power with the landed elite was largely past, and they had won. Partly a fruit of this victory was a legal system, and a philosophy to go with it, which put the employer in a very advantageous position when dealing with his employees.

In Southeast Asia, on the other hand, and in most other former colonial areas, large-scale enterprise, agricultural and commercial as well as industrial, was until recently the work of foreign capital and management. Thus a sizable urban wage labor force, and a smaller industrial one, grew up in advance of indigenous entrepreneurship. Just before World War II, or even a decade later, no country in Southeast Asia, except the Philippines, could have been said to have a significant group of native businessmen, unless, of course, one were to include in this category Chinese born in the area, which is not generally done. Yet by 1953 almost all Southeast Asian countries had an important urban labor force, and in the Philippines, Indonesia, Burma and Malaya, large blocs of it were organized. Organized labor was still very weak by comparison with Japan, Australia, the U.S., or Western Europe. But it may not be an exaggeration to say that it was, and is, stronger in relation to the political elite than the trade unions in the West at a comparable stage of industrialization.

Such a proposition can not be supported by attestations to the great size or dynamism of Southeast Asian, or Philippine, trade unions, but only in terms of the weaknesses of a divided elite. There is unity within the Filipino elite in several respects, but there is also increasing competition of economic interests, which has political manifestations. The nascent entrepreneurial class is seeking to dislodge the firm grip on political power of the landed elite. In some other Southeast Asian countries the leadership with a rural base is not possessed of great landholdings, but the conflict of political interests is, nevertheless, approximately the same.

The urban enterpriser seeks to dislocate the rural power base of his political rivals by means of agrarian reform. The dominant landed elite, on the other hand, though less aggressive and more defensive in its tactics, sees some political advantage and no economic disadvantage in supporting reform to aid urban labor. The differential attitudes of the Philippine political elite toward policy affecting rural and urban interests can be clearly demonstrated in a comparison of the legislative history of the Minimum Wage Law with that of the Industrial Peace Act. The former set a statutory minimum for agricultural wage labor that was higher in relation to the prevailing average in 1950 than was the minimum for industrial workers. The Congress in 1951, dominated by rural interests, probably would not have passed it without the use of U. S. aid as a leverage to that end. Conversely, it was clear that the protection to the organization of labor unions found in R.A. 875 would benefit urban laborers much more than agricultural workers, thus its relatively easier passage.

Not only are the terms of the conflict between dominant and aspiring elites now very different from those in 19th-century England or America, caused by the different role of foreign entrepreneurs, but the present ideological climate is different also. The educational backgrounds of the elites in the two eras have been quite distinct. The ideology developed in the West during the early industrial era had, by the late 1920’s and 1930’s, when the present Southeast Asian elites were receiving their education, been widely rejected. Welfare concepts, buttressed by moral and legal philosophies appropriate for an industrialized society, were then standard fare in the secondary schools and colleges. Such concepts had not been prominent in the education of the prewar Filipino elite.

Variations of welfare concepts in Southeast Asia can be explained largely by the variety of colonial tutors. The rarity of socialist ideas in the Philippines, for example, is the peculiarity of a former American colony. The receptivity to the introduction of collective bargaining is indicative of the educational background of both union leaders and the political elite.

There are other factors affecting Philippine labor policy which have reinforced the ideological influences and the trends in the socioeconomic composition of the elite. American advice, backed by a foreign aid program, and the decreasing importance of government enterprise have already been mentioned. In addition, there is one significant characteristic of the Philippine economy which is unusual for Southeast Asia. The Philippines has, since the early postwar period, enjoyed uncommon price stability. Even though the government is publicly committed to economic development and is engaged in economic planning, conservative monetary policy has been mainly responsible for keeping prices down. Labor unions are thus under less governmental restraint not to make wage demands than would be the case in an inflationary cycle and, at the same time, workers feel less pressure to ask for sharp hikes in wages. There is less urgency also in government efforts to stop strikes that are not quickly settled.

In sum, we can say that a Philippine policy which allows considerable freedom for union organization and collective bargaining is the result of one factor common to underdeveloped Asia, the strength of labor unions in relation to the emergent national enterpreneurial class, one uncommon one, an economy almost without inflation and dominated by private enterprise, and one with both general and unique characteristics, foreign intervention and ideological influences.

The ideological clock cannot be turned back. The political and economic rights of labor are firmly entrenched in the democratic philosophies which have been adopted in ex-colonial countries. They can be covertly frustrated by the elite, but not overtly denied. They may also be de-emphasized by the discipline of a vehement nationalism.

The direction of change in the other two factors seems less problematical. Indigenous entrepreneurs would appear, almost inevitably, to be gaining economic and political power at a faster rate than labor unions. The attitude of the political elite toward labor policy will, therefore, be based before too long on most of the same interests which motivate the directors of state industry. There might even be a drive for the prototype of prewar Japanese labor policy, but in a different ideological era it is not feasible.

Second, inflation and the consequent spiraling of wage demands is likely to become an important problem. Under such conditions, lab or may be hard pressed even to maintain its present political and economic status, let alone advance. Many of the conditions for unrest would then have been created. Despite popular phraseology, “industrial peace” is by no means inherently present in the contemporary Philippine scene.

One wonders whether a crisis can be averted. Even the student who is sympathetic to trade union interests is forced to admit that high wages and frequent strikes do not contribute to capital formation, the central problem of economic development.48 Yet a labor force which has tasted the immediate fruits of organization is not ready to give them up in favor of long-term social objectives. Capital from outside the national economy would appear to be the only solution, short of authoritarianism, for the country with active labor unions which is also determined to maintain a steady rate of economic growth.


1 IECAFE, Economic Survey of Asia and the Far East, 1957, p. 215. Philippine Statistical Survey of Households Bulletin, 1:1 (May 1956).

2 Economic Survey of Asia and the Far East, 1956, p. 216.

3 Though plantation workers have constituted an important part of organized labor in other underdeveloped countries, this has not been so in the Philippines. Filipino agricultural wage labor is composed almost entirely of migrant workers, seasonally employed. Rubber and tea, which require either care or harvesting year round, have not been grown in important commercial quantities in the Philippines. Coconuts have, but coconut plantations worked by resident wage laborers are rare.

4 Ildefonso Runes, “Fifty Years of the Labor Movement,” Labor Golden Book (May 1, 1953), pp. 7-8, 85-92, 117-118.

5 Congress of the Philippines, House of Representatives, Special Committee on Un-Filipino Activities, Communism in the Philippines (Manila: Bureau of Printing, 1952), P. 6.

6 See José J. Hernandez, “Men Behind the Philippine Labor Movement,” Asian Labour, II: 1 (April 1950), pp. 97-110.

7 Cicero Calderon, “From Compulsory Arbitration to Collective Bargaining: A Study in the Development of Labor Policy in the Philippines,” unpublished LL.D. thesis, Yale University, 1956, p. 84.

8 Ramon Torres, The Philippine Labor Situation, (Manila: IPR, 1938), p. 10.

9 Statistical Handbook of the Philippines, 19031953 (Manila: Bureau of Printing, 1954), p. 31.

10 Kenneth Kurihara, Labor in the Philippine Economy (Stanford: Stanford University Press, 1945), pp. 70, 74-77.

11 See WETU, Report of Activity Presented to the Second World Trade Union Congress (Milan, June-July 1949), pp. 200-204. See also minutes of the Executive Bureau, January 20, 1949, p. 89 (typescript).

12 Juan Ponce-Enrile, “The CLO: The Tragedy of a Militant Labor Union when taken over by the Communists,” Philippine Law Journal, XXVII:5 (October 1952), pp. 735-750.

13 Court of Industrial Relations, Annual Report, FY 1948. The next largest union, the National Labor Union, was party to 12.5 percent of the cases.

14 He is now free on bail pending appeal of his conviction.

15 In September 1951, however, Figueras cancelled the permit of the FOF on recommendation of Secretary of National Defense Magsaysay, on grounds of “subversive activity.” Manila Times, Sept. 2, 1951.

16 “Government Guidance in the Labor Movement,” Labor Golden Book, 1951, p. 24.

17 Labor Golden Book, 1953, p. 10. The doctrine of “one company, one union” was the rationale for many such refusals. Enunciated by Secretary of Labor Prinaitivo Lovina, it was continued by Figueras even though the Supreme Court, in April 1950, would not recognize it as a valid grounds for refusal to register an applicant union. See Umali vs. Lovina, GR L-2771, 19 April 1950, in Antonio M. Castro, Labor and Social Legislation (Manila: Modern Book Co., 1957), pp. 965-968. The ostensible purpose of this policy was avoidance of jurisdictional disputes, in which it succeeded. But its actual effect in many cases was to protect a company union against competition.

18 For instance, an editorial in the Free Worker, Labor Day Issue, 1952, said: “Figueras rivals Peron in crushing free trade unionism.”

19 Manila Chronicle, Feb. 13, 14, 1951.

20 See Association of Beverage Employees, et al., vs. Figueras, GR No. L-4813, May 28, 1952, in Castro, op. cit., pp. 972-975.

21 Interview with MERALCO union officers, Manila, August 18, 1956.

22 No date, c. 1953. In Castro, op. cit., pp. 10381041.

23 See PLASLU vs. CIR and Pepsi-Cola Bottling Co., Nos. L-5664, L-5698, 17 September 1953, 49 Official Gazette 9 (September 1953), pp. 3859-3869.

24 Philippine Oil Workers Union (CIO) vs. Central Vegetable Oil, CIR Case No. 3-V, March 11, 1946.

25 See G.C.C. Employees Labor Union (KKM) vs. Genato Commercial Corporation, and Genato Commercial Corp., vs. Felixberto Olalia, et al., CIR cases No. 560-V and 561-V, 18 December 1951, in Castro, op. cit., pp. 968-969.

26 Calderon, op. cit., p. 136.

27 See note 17.

28 See, for example, Manggagawang Nagkaisa (CLO) vs. Laguna Coconut Products, 64-V, 43 Official Gazette 4809 (June 1947).

29 With the exception of Cipriano Cid, later PAFLU president.

30 Manila Times, March 29, 1953.

31 Manila Times, April 18, 1953.

32 According to Atty. Villavieja, Chief, Labor Registration Division, Department of Labor, in a lecture at the Labor Education Center on Oct. 11, 1955. Many LEC students shared this misconception.

33 Manila Bulletin, June 2, 1956.

34 Manila Times, June 3, 1954.

35 ‘Labor organization’ means any…associa-tion of employees which exists, in whole or in part, for the purpose of collective bargaining… with employers….”

36 See “The New Labor Law” (editorial), American Chamber of Commerce Journal, June 1953, pp. 222-223, supporting collective bargaining.

37 This does not mean that collective bargaining had no impact on Manila wage levels, however. It simply indicates that the partial enforcement of the Minimum Wage Law, passed in 1951, had a greater impact.

38 Until July 1955 the CIR handled tenancy cases as well as industrial.

39 See Harry Woods, “Labor Relations and the Administrative Process in the Philippines,” Philippine Studies, V:1 (March 1957), pp. 23-44.

40 Conciliation Service, miscellaneous statistics (mimeographed, c. 1956).

41 Pambujan Sur United Mine Workers vs. Semar Mining Co., Inc., G.R. No. L-5694, May 12, 1954, 50 Official Gazette 6 (June 1954), pp. 2449-2456.

42 Emiliano Morabe, “The CIR and Compulsory Arbitration,” The Law Review, VII:2 (Sep-tember-October 1956), p. 106ff.

43 See Vicente Casim, Virginia Diaz, and Alberto Guevara, Jr., “A Survey of Labor Cases Decided by the Supreme Court in the Year 1957,” The Law Review, VIII:4 (January-February 1958), p. 373 ff. Also Manila Chronicle, Sept. 13, 1956. l’G.R. No. L-9137, August 31, 1956, 52 Official Gazette 14 (October 1956), pp. 6187-6190.

44 Radio Operators Association of the Philippines vs. Philippine Marine Radio Officers Association, G.R. No. L-10112, Nov. 29, 1957, 54 Official Gazette 10, pp. 3218-3221.

45 National City Bank of New York vs. National City Bank Employees Union, G.R. No. L-6843, January 31, 1956, 52 Official Gazette 2 (February 1956), p. 799 ff.

46 Interwood Employees Association vs. International Hardwood and Veneer Co. of the Philippines, G.R. No. L-7409, May 18, 1956, 52 Official Gazette 8 (July 1956), pp. 3936 ff.

47 In Luzon Marine Department Union vs. Roldan (G.R. No. L-2660) in 1950 the Supreme Court had given the illegal strike its widest definition. Said the Court: “The law does not look with favor upon strikes and lockouts because of their disturbing and pernicious effects upon the social order and the public interests….The law does not expressly ban strikes except when enjoined against by the Court; but if a strike is declared for a trivial, unjust or unreasonable purpose, or if it is carried out through unlawful means, the law will not sanction it and the Court will declare it illegal, with the adverse consequences to the strikers.” Quoted in Juan L. Lanting, “The Legal Aspect of Trade Unionism in the Philippines,” The Law Review (Univ. of Santo Tomas) (September-October 1951), pp. 119-120.

48 See Felicia J. Deyrup, “Organized Labor and Government in Underdeveloped Countries: Sources of Conflict,” Industrial and Labor Relations Review, Vol. 12:1 (October 1958), pp. 104112.

In 1953, the Philippine legislature passed a comprehensive labor law designed to encourage free collective bargaining and to minimize government and employer interference with trade union development. Such legislation is almost unique among the non-Communist countries of Southeast Asia. This article traces the development of labor relations policy and the growth of unionism in the Philippines from its beginnings, and analyzes the complex of forces that led to the passage of a modern labor law. The author also describes and analyzes the extent to which the law’s purposes have been effected in the context of a constantly shifting balance of social and political power.

The author wishes to thank Anthony Luchek of the University of Wisconsin for his comments on an early draft of this article, and the Ford Foundation for a grant in support of the field research on which it is based. Neither the Foundation nor Professor Luchek is, of course, responsible for the views expressed.

David Wurfel is associated with the Southeast Asia Program at Cornell University, and is completing the requirements for the Ph.D. degree in the Department of Government.

Categories Philippines, Labour