GRIEVANCE MACHINERY is a mechanism established for the adjustment and resolution of grievances.


A grievance is defined as “any question by either the employer or the union regarding the interpretation or application of the collective bargaining agreement or company personnel policies or any claim by either party that the other party is in violation of any provision of the CBA or company personnel policies”.


The grievance referred to in the technical or restricted sense, is a dispute or controversy between the employer and the collective bargaining agent arising from the interpretation or implementation of their CBA and/or those arising from the interpretation or enforcement of company personnel policies, for the adjustment or resolution of which the parties have agreed to establish a machinery or a series of steps commencing from the lowest level of decision-making in the management hierarchy (usually between the shop steward of the employee or

employees aggrieved and the supervisor/foreman/manager which exercises control and supervision over the grievants or who is responsible for executing the management action that have given rise to the grievance) and usually terminating at the highest official of the Company. If such dispute remains unresolved after exhausting the grievance machinery or procedure, it shall automatically be referred to voluntary arbitration prescribed in the CBA.


In the technical or restricted sense, there is a grievance when a dispute or controversy arises over the implementation or interpretation of a collective bargaining agreement or from the implementation or enforcement of company personnel policies, and either the union or the employer invokes the grievance machinery provision for the adjustment or resolution of such dispute or controversy.


If the term grievance is to be applied in the loose or genetic sense, any dispute or controversy respecting terms and conditions of employment which an employee or group of employees may present to the employer can be a grievance, even without a union or CBA. Under this interpretation, any complaint, question or problem that an employee or group of employees may wish to take up or discuss with the employer respecting terms and conditions of employment for the purpose of resolving or satisfying the same, constitutes a grievance. The expansion of the original and exclusive jurisdiction of voluntary arbitrators to include questions arising from the Interpretation and enforcement of company personnel policies has the effect of widening the meaning and interpretation of a grievance to include a situation where there is no collective bargaining agent and no CBA.

Reasons for Establishing Grievance Machinery

  • To give employees an opportunity to voice their concerns;
  • To provide employees with the opportunity to appeal a decision and to resolve the problem;
  • To prevent minor disagreements from developing into full blown disputes.
  • To provide for peaceful resolution of disputes;
  • To provide a systematic way to resolve problems through fact finding;
  • To identify causes of problems;
  • To keep the lines of communication between the parties open during the life of the contract;
  • To provide a method of interpreting the contract;
  • To protect the integrity of the contractual agreement;
  • To build an organizational climate based on openness and trust; and
  • To improve labor-management relations.


A series of formal steps that parties to a collective bargaining agreement or workers and management agreed to take for the adjustment of grievances including, voluntary arbitration as the terminal step.

  • A Grievance Procedure consists of a series of steps to be taken within the specified time limits;
  • Small companies can be expected to have short, simple procedures. Larger companies usually have multi-step procedures;
  • The intermediate steps are not merely a transmission belt for passing grievances along to the top authorities. The number of steps provides a method of appeal to higher authorities of a decision from a lower/supervisory official
  • Section 2, Rule XIX DO 40-03 provides for the procedure for the unorganized or in the absence of a provision in the CBA.



In 2013, the National Conciliation and Mediation Board, in collaboration with the Tripartite Voluntary Arbitration Advisory Council (TVAAC), started the “Search for Best Enterprise-Based Dispute Resolution Practices”. This was in recognition of the efforts of labor and management in resolving issues at the company level, thereby, contributing greatly in enhancing labor-management relations.  The awarding ceremony was simultaneously done during the conduct of the National LMC Convention.

The Search was renamed in 2017 as “Search for Outstanding Grievance Machinery for Industrial Peace” for better name recall and to give emphasis on the grievance machinery program of the Board.

The Search continues to benchmark best practices and success stories on dispute resolution among the organized and unorganized companies. Participants are encouraged to showcase the best and milestone achievements of their grievance machinery or any other enterprise-based dispute resolution mechanism.

As in the past years, this year’s Search aims to highlight the contribution of GMs in enhancing labor-management relations towards company efficiency, productivity, competitiveness, and maintenance of industrial peace as a whole.


Specifically, the Search for Outstanding Grievance Machinery for Industrial Peace aims to:

  • Intensify awareness on the prevention and settlement of grievances at the enterprise-level;
  • Showcase GMs with innovations on dispute settlement and resolution practices that can serve as models to other enterprise-based dispute resolution schemes; and
  • Encourage labor and management partners to embrace innovative or new approaches in resolving workplace conflicts.

VOLUNTARY ARBITRATION refers to the mode of settling labor-management disputes by which the parties select a competent, trained and impartial person who shall decide on the merits of the case and whose decision is final, executory and binding.


The Voluntary Arbitration Program and the NCMB

Voluntary Arbitration has been at the forefront of the government’s efforts to promote cooperative and non-adversarial modes of labor dispute settlement. The program has been taking government attention more than any other modes in an effort to look for more viable alternative to strikes and lockouts and the cumbersome and legalistic nature of compulsory arbitration in the settlement of disputes. 

Voluntary arbitration reached its heights in 1987, barely a year after the EDSA Revolution, when then President Corazon C. Aquino issued Executive Order No. 126 which reorganized the Department of Labor and Employment that gave to the creation of the National Conciliation and Mediation Board (NCMB). Subsequent to EO 126, President Aquino issued Executive Order 251, creating the Tripartite Voluntary Arbitration Advisory Council (TVAAC), which advises the NCMB on matters pertaining to the promotion of voluntary arbitration as the preferred mode of dispute settlement. 

The creation of the NCMB seemed to be just what was needed in addressing the acceptance and awareness problem that had previously hindered the promotion of the program. Apparently, utilization of voluntary arbitration in the settlement of labor disputes recorded gradual. Part of the schemes adopted by the Board to promote voluntary arbitration is the implementation of massive information dissemination campaign including the provision of a subsidy from the Special Voluntary Arbitration Funds (SVAF) to subsidize the cost of voluntary arbitration proceedings. 

Republic Act 6715 that was passed in 1989 further strengthened the voluntary arbitration program. The Act provides for the mandatory use of the grievance machinery as a prerequisite to voluntary arbitration of disputes arising from CBA interpretation and implementation, as well as those arising from the interpretation or enforcement of company personnel policies. The State likewise adopted the policy to encourage voluntary arbitration of all labor-management disputes upon agreement of the parties. These provisions necessarily expanded the scope of voluntary arbitration, which should mean an extra push for its utilization. These provisions are operationalized by Articles 260 to 262 of the Labor Code, as amended by Section 256 of RA 6715. 

RA 6727 (or the Wage Rationalization Act of 1989) and RA 6971 (the Productivity Incentives Act of 1919) further broadened the scope of voluntary arbitration to include those unresolved issues arising from the application of wage orders and matters arising from the interpretation and implementation of productivity incentives.