2010 Labor Law, Q2

Distinguish the terms “conciliation,” “mediation” and “arbitration.” (3%)
Differentiate “surface bargaining” from “blue-sky bargaining.” (2%)

Quick check

What distinguishes arbitration from conciliation and mediation in labor dispute resolution?

What is the role of a conciliator during labor dispute settlement proceedings?

How is surface bargaining defined under Philippine labor law jurisprudence?

What characterizes blue-sky bargaining during collective bargaining agreement negotiations?

Which labor dispute resolution method permits the third party to actively propose non-binding compromise terms?

Learn more about these topics

1. Dispute Resolution Modes
Conciliation, mediation, and arbitration serve as distinct modes of labor dispute settlement under Philippine labor law. Conciliation involves a neutral third party facilitating communication between disputing parties without making formal recommendations. Mediation goes further by allowing the mediator to actively propose non-binding compromise solutions to assist the parties in reaching an agreement. In contrast, arbitration involves submitting the dispute to an impartial arbitrator or tribunal whose decision is final and legally binding on both parties. The key distinction lies in the third party's level of authority and the binding nature of the final outcome.

2. Surface Bargaining Tactics
Surface bargaining is an unfair labor practice defined as sophisticated bad-faith bargaining. It occurs when an employer or union goes through the motions of negotiating a collective bargaining agreement without a real intent to reach a consensus or finalize an agreement. Courts examine the totality of conduct to determine whether a party's participation in bargaining is merely surface-level or indicative of bad faith. Proposing absurd terms, repeatedly delaying meetings, or refusing to compromise on minor issues without justification are common indicators of surface bargaining under labor relations rules.

3. Blue Sky Bargaining
Blue-sky bargaining is a negotiation tactic characterized by making absurd, unreasonable, or grossly exaggerated demands during collective bargaining negotiations. While presenting high initial demands is not per se an unfair labor practice, blue-sky bargaining can border on bad faith if used deliberately to obstruct negotiations or stall consensus. Unlike surface bargaining, which focuses on the lack of intent to execute an agreement, blue-sky bargaining relates to the unreasonableness of the contract proposals themselves. Understanding this distinction is essential in determining whether unfair labor practice charges are warranted during collective bargaining.

About these questions and answers
The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

They are not official answers, have no connection with the Supreme Court, the Office of the Bar Confidant, or any bar review institution, and are not endorsed by any of them. Official answer keys, where released, should be preferred over anything here.Nothing on this page is legal advice, and reading it creates no lawyer-client relationship. Do not rely on any suggested answer in an actual legal matter. Consult counsel on your own facts.Suggested answers reflect the law and jurisprudence the author considers applicable as of the date shown.

Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026