Forced to Settle (Is it time to abolish the NLRC? Part 3)

A pro-labor quasi-judicial agency administering labor relations stalls progress in this country. In the last entry, I pointed out that the NLRC rule making it easy to file labor complaints has caused the flooding of the NLRC with whimsical and baseless labor cases. Today, I continue with another ill-effect of this pro-forma filing of labor cases.

Once a labor case has been commenced and summons has been served any prudent employer will have no choice but to send a lawyer to represent the employer in the hearing. Immediately, the employer incurs costs in procuring the services of a lawyer.

The average legal cost for handling a labor case may be conservatively estimated at 50,000 pesos. Thus, the employer is already hit with a budget item. To big companies like PLDT or Ayala Corporation, 50,000 pesos is nothing. Unfortunately for this country, there are very few PLDTs and Ayala Corporations here. The average enterprise in this country will feel the hit of a 50,000 useless expense. That money is about the cost of two computers that could be used for operations, or about the cost of one payroll for eight employees. It would take only one whimsical foolish employee to fill out a pro-forma complaint for an employer to get hit with 50,000 pesos.

Normally, the first two hearings with NLRC is meant for mediation and conciliation. The procedure is concluded with a deal on the table. The employee would demand for cash and the employer would have a tough choice to make: settle the claim forever at a fixed amount or watch his litigation expenses grow as the case progresses. The decision is made even tougher if the employer feels that the claim is unjust. The employee was guilty and was properly disciplined or terminated. But faced with a dilemna where he could fight for a principle and impair his business
or swallow his pride and protect his livelihood, the easy way to go is to settle.

Thanks to the NLRC the bastion of the labor movement many small and medium businesses are faced with this dilemna everyday.

(To be continued)