Chapter One

FUNDAMENTAL PRINCIPLES AND POLICIES

TOPICS PER SYLLABUS
I.
FUNDAMENTAL PRINCIPLES AND POLICIES
A. Constitutional Provisions

1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20.

2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2) .
3. Article XIII, Secs. 1, 2, 3, 13, 14.

A.
CONSTITUTIONAL PROVISIONS
I.
ARTICLE II
OF THE CONSTITUTION
1. TWO DIVISIONS OF ARTICLE II.
Article II is divided into two (2) sections, namely: (a) Principles,1 and (b) State Policies.2 All
the seven (7) sections cited in the Syllabus fall under State Policies, the provisions of which are quoted
below.
ARTICLE II
DECLARATION OF PRINCIPLES AND STATE POLICIES
STATE POLICIES
Section 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people
from poverty through policies that provide adequate social services,
promote full employment, a rising standard of living, and an improved
quality of life for all.
Section 10. The State shall promote social justice in all phases of
national development.
Section 11. The State values the dignity of every human person and
guarantees full respect for human rights.
Section 13. The State recognizes the vital role of the youth in nation-
building and shall promote and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall inculcate in the youth patriotism
and nationalism, and encourage their involvement in public and civic
affairs.
Section 14. The State recognizes the role of women in nation-building,
and shall ensure the fundamental equality before the law of women and
men.
Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
Section 20. The State recognizes the indispensable role of the private
sector, encourages private enterprise, and providesincentives to needed
investments.
2. ARTICLE II, NOT A SELF-EXECUTING PROVISION.
By its very title, Article II of the Constitution is a “declaration of principles and state policies.
” These provisions are not intended to be self-executing tenets ready for enforcement through the
courts.3 They are used by the judiciary as aids or as guides in the exercise of its power of judicial
review, and by the legislature in its enactment of laws. The disregard of these provisions cannot give
rise to a cause of action in the courts. They do not embody judicially enforceable constitutional rights
but guidelines for legislation. 4 These broad constitutional principles need legislative enactments to
implement them.5
The reasons for denying a cause of action based on alleged infringement of broad
constitutional principles are sourced from basic considerations of due process and the lack of judicial
authority to wade “into the uncharted ocean of social and economic policy-making. ”6
3. DISCUSSION OF SELECTED SIGNIFICANT PROVISIONS OF ARTICLE II.
Since most of the provisions under this topic are self-explanatory, only certain provisions will be
discussed herein by reason of their constitutional significance and relevance to labor cases and situations.
a. Section 10 (Social Justice) .
The case of Central Bank (now Bangko Sentral ng Pilipinas) Employees Association, Inc.
v. Bangko Sentral ng Pilipinas, 7pronounces that equality is one ideal which cries out for bold
attention and action in the Constitution. The Preamble proclaims “equality” as an ideal precisely in
protest against crushing inequities in Philippine society. The command to promote social justice in
Article II, Section 10, in “all phases of national development,” further expounded in Article XIII,8 are
clear commands to the State to take affirmative action in the direction of greater equality. … There is thus in
the Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a
reasonable measure of equality.
Our present Constitution has gone further in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. Under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the humane justification that those with
less privilege in life should have more in law. And the obligation to afford protection to labor is
incumbent not only on the legislative and executive branches but also on the judiciary to translate this
pledge into a living reality. Social justice calls for the humanization of laws and the equalization of
social and economic forces by the State so that justice, in its rational and objectively secular
conception, may at least be approximated.9
b. Section 18 (Protection-to-Labor Clause) .
Among the provisions afore-quoted, it is Section 18 which is often cited in labor cases. Along
with Section 3 of Article XIII, infra, it is often referred to as the protection-to-labor clause in the
Constitution. It is often invoked in resolving doubts or ambiguities in the interpretation of the law,
employment contracts, collective bargaining agreements and appreciation of evidence. The
constitutional tenet embodied in this provision is the basis for the following provisions in the law:
(1) Article 1702of the Civil Code which provides that all labor legislation and labor contracts
should be construed in favor of the safety and decent living for the laborer; and
(2) Article 4of the Labor Code which states that all doubts should be resolved in favor of
labor.10
Thus, when conflicting interests of labor and capital are to be weighed on the scales of social
justice, the heavier influence of the latter should be counter-balanced by sympathy and compassion the
law must accord the underprivileged worker.11 In interpreting the protection to labor and social justice
provisions of the Constitution and the labor laws or rules and regulations implementing the
constitutional mandates, the liberal approach which favors the exercise of labor rights should always be
adopted.12
The same provision is the constitutional touchstone for the State’s discharge of its avowed
duty of protecting and promoting the exercise of all the rights granted to workers, such as the right to
full employment and equality of employment opportunities, self-organization, collective bargaining
and negotiations, strike and other peaceful concerted activities, security of tenure, humane conditions
of work, and a living wage, including the right to participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.13
c. Section 18, not meant to oppress employers.
The constitutional policy to provide full protection to labor is not meant to be a sword to
oppress employers. The commitment of the Court to the cause of labor does not prevent it from
sustaining the employer when it is in the right. Certainly, an employer should not be compelled to
pay employees for work not actually performed and in fact abandoned.14
The employer should not be compelled to continue employing a person who is admittedly
guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the
employer. The law protecting the rights of the laborer authorizes neither oppression nor self-
destruction of the employer.15

II.
ARTICLE III
OF THE CONSTITUTION
1. SEVEN (7) RELEVANT SECTIONS.
Out of the total of 22 Sections in Article III, only seven (7) are mentioned in the Syllabus,
thus:
ARTICLE III
BILL OF RIGHTS
Section 1. No person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal
protection of the laws.
Section 4. No law shall be passed abridging the freedom of speech, of
expression, or of the press, or the right of the peoplepeaceably to assemble and
petition the government for redress of grievances.
Section 7. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and
to documents and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as
may be provided by law. 16
Section 8. The right of the people, including those employed in
the public and private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
Section 10. No law impairing the obligation of contracts shall be
passed.
Section 16. All persons shall have the right to a speedy disposition of their
cases before all judicial, quasi-judicial, oradministrative bodies.
Section 18. xxx (2) No involuntary servitude in any form shall
exist except as a punishment for a crime whereof the party shall have been
duly convicted.
Except for Section 1, all the others have relevance and applicability to labor law.
Notably, Section 1 has been declared not the proper basis for the invocation of due process in plant-
level termination of employment; nor is the equal protection clause therein embodied applicable
thereto.
(NOTE: See discussion below on this topic entitled “V. CONSTITUTIONAL
PROVISIONS NOT APPLICABLE TO LABOR CASES”)

2. DISCUSSION OF SELECTED SIGNIFICANT PROVISIONS OF ARTICLE III.

 a. Section 4 (Freedom of Speech, of Expression and of the Press and Peaceably to
Assemble and Petition the Government for Redress of Grievances) .
This provision is the constitutional basis for the exercise of the right to picket provided in the
Labor Code,17 as distinguished from its twin right to strike which finds its constitutional mooring in
another provision thereof, particularly, Section 3 of Article XIII. Broadly speaking, the right to picket
is part of the right guaranteed under the law “to engage in concerted activities for purposes of
collective bargaining for their mutual benefit and protection”18 but it is principally guaranteed under the
freedom of speech principle in the Constitution.19
To strike is to withhold or to stop work by the concerted action of employees as a result of an
industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking
employees outside of the company compound. While a strike focuses on stoppage of work, picketing
focuses on publicizing the labor dispute and its incidents to inform the public of what is happening in
the company struck against. A picket simply means the marching to and fro in front of the employer’s
premises, usually accompanied by the display of placards and other signs making known the facts
involved in a labor dispute. It is a strike activity separate and different from the actual stoppage of
work.
According to the 2010 case of Phimco Industries, Inc. v. Phimco Industries Labor
Association (PILA) ,20 while the right of employees to publicize their dispute falls within the
protection of freedom of expression and the right to peaceably assemble to air grievances, these rights are by
no means absolute. Protected picketing does not extend to blocking ingress to (entrance) and egress from
(exit) the company premises. That the picket was moving, was peaceful and was not attended by actual
violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the
company premises.
b. Section 8 (Right to Organize Unions) .
This provision is the constitutional basis for the exercise of the right to self-organization by
workers in both public21 and private22 sectors. To breathe life to this constitutional tenet, the Labor
Code:
(1) protects the right of workers to self-organization and to form, join, or assist labor
organizations of their own choosing.23
(2) declares as a policy of the State the fostering of a free and voluntary organization of a
strong and united labor movement.24
(3) declares that it shall be unlawful for any person to restrain, coerce, discriminate against
or unduly interfere with employees and workers in their exercise of the right to self-
organization, which includes the right to form, join, or assist labor organizations for the
purpose of collective bargaining through representatives of their own choosing and to
engage in lawful concerted activities for the same purpose or for their mutual aid and
protection.25
c. Section 10 (Non-Impairment of Obligation of Contracts) .
A law authorizing interference, when appropriate, in the contractual relations between or
among parties is deemed read into the contract and its implementation cannot successfully be resisted
by force of the non-impairment guarantee. There is, in that instance, no impingement of the non-
impairment clause.26
The purpose of the non-impairment clause of the Constitution is to safeguard the integrity of
contracts against unwarranted interference by the State. As a rule, contracts should not be tampered
with by subsequent laws that would change or modify the rights and obligations of the
parties.27Impairment is anything that diminishes the efficacy of the contract. There is an impairment if
a subsequent law changes the terms of a contract between the parties, imposes new conditions,
dispenses with those agreed upon or withdraws remedies for the enforcement of the rights of the
parties.28 The non-impairment clause is limited in application to laws that derogate from prioracts or
contracts by enlarging, abridging or in any manner changing the intention of the parties.29 Necessarily,
the constitutional proscription would not apply to laws already in effect at the time of contract
execution. 30
Anucension v. National Labor Union. 31 - R.A. No. 335032 exempts members of any
religious sects, which prohibit affiliation of their members in any labor organization, from being
covered by a union security clause. The union contends that R.A. No. 3350 is unconstitutional for
impairing the obligation of its contract, specifically, the “union security clause” embodied in its
Collective Bargaining Agreement (CBA) with the company, by virtue of which “membership in the
union was required as a condition for employment for all permanent employees and workers. ” This
agreement was already in existence at the time R.A. No. 3350 was enacted on June 18, 1961, and it
cannot, therefore, be deemed to have been incorporated into the agreement. But by reason of this
amendment, Anucension as well as others similarly situated, could no longer be dismissed from his job
even if he should cease to be a member, or disaffiliate from the union, and the company could continue
employing him notwithstanding his disaffiliation from the union. The Act, therefore, introduced a
change into the express terms of the union security clause; the company was partly absolved by law
from the contractual obligation it had with the union of employing only union members in permanent
positions. It cannot be denied, therefore, that there was indeed an impairment of said union security
clause.
The Supreme Court, however, ruled that the prohibition to impair the obligation of contracts
is not absolute and unqualified. In spite of the constitutional prohibition, the State continues to possess
authority to safeguard the vital interests of its people. Legislation appropriate to safeguard said interest
may modify or abrogate contracts already in effect. Otherwise, important and valuable reforms may be
precluded by the simple device of entering into contracts for the purpose of doing that which otherwise
may be prohibited. It follows that not all legislations which have the effect of impairing a contract are
obnoxious to the constitutional prohibition as to impairment, and a statute passed in the legitimate
exercise of police power, although it incidentally destroys existing contractual rights, must be upheld
by the courts. This has special application to contracts regulating relations between capital and labor
which are not merely ordinary but impressed with public interest and therefore must yield to the
common good.
What then was the purpose sought to be achieved by R.A. No. 3350? Its purpose was to insure
freedom of belief and religion, and to promote the general welfare by preventing discrimination against
those members of religious sects which prohibit their members from joining labor unions, confirming
thereby their natural, statutory and constitutional right to work. It cannot be gainsaid that said purpose
is legitimate. It may not be amiss to point out here that the free exercise of religious profession or belief
is superior to contract rights. In case of conflict, the latter must, therefore, yield to the former.
In another case where this issue was raised, Abella v. NLRC, 33 petitioner leased a farm land
for a period of ten (10) years, renewable, at her option, for another ten (10) years. During the existence
of the lease, she employed herein private respondents. Upon the expiration of her leasehold rights,
petitioner dismissed private respondents and turned over the hacienda to its owners who continued the
management, cultivation and operation of the farm. In the illegal dismissal case filed by private
respondents, petitioner claims that she is not liable to pay separation pay because the basis for the
award thereof is Batas Pambansa Blg. 130 which was enacted only on August 21, 1981, amending
Article 283 of the Labor Code which grants separation pay in case of closure of business operations.
Petitioner contends that this amendatory law violates the constitutional guarantee against impairment of
obligations and contracts because when she leased the hacienda on June 27, 1960, neither she nor the
lessor contemplated the creation of the obligation to pay separation pay to workers at the end of the
lease. In debunking this posture of petitioner, the Supreme Court cited the above case
of Anucension34 where this issue has been laid to rest. The purpose of Article 283, as amended, is
obvious - the protection of the workers whose employment is terminated because of the closure of
establishment and reduction of personnel. Without said law, employees like private respondents in the
case at bar will lose the benefits to which they are entitled - for the thirty-three years of service in the
case of Dionele and fourteen years in the case of Quitco. Although they were absorbed by the new
management of the hacienda, in the absence of any showing that the latter has assumed the
responsibilities of the former employer, they will be considered as new employees and the years of
service behind them would amount to nothing. Moreover, to come under the constitutional prohibition,
the law must effect a change in the rights of the parties with reference to each other and not with
reference to non-parties. As correctly observed by the Solicitor General, Article 283 as amended refers
to employment benefits to farm hands who were not parties to petitioner's lease contract with the owner
of the hacienda. That contract cannot have the effect of annulling subsequent legislation designed to
protect the interest of the working class.

As held in the 2009 en banc case of Serrano v. Gallant Maritime Services, Inc. :35
 “The prohibition [against impairment of the obligation of contracts] is aligned
with the general principle that laws newly enacted have only a prospective
operation,36 and cannot affect acts or contracts already perfected;37 however, as
to laws already in existence, their provisions are read into contracts and deemed
a part thereof.38 Thus, the non-impairment clause under Section 10, Article III
[of the Constitution] is limited in application to laws about to be enacted
that would in any way derogate from existing acts or contracts by
enlarging, abridging or in any manner changing the intention of the parties
thereto.”39
Thus, in this case, the enactment in 1995 of R.A. No. 8042, otherwise known as the “Migrant
Workers and Overseas Filipinos Act of 1995”preceded the execution of the employment contract
between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042,
particularly the subject clause,40 impaired the employment contract of the parties. Rather, when the
parties executed their 1998 employment contract, they were deemed to have incorporated into it all the
provisions of R.A. No. 8042.
Police Power vs. Non-Impairment Clause.
It must be borne in mind that police power is superior to the non-impairment clause.41 The
constitutional guarantee of non-impairment of contracts is limited by the exercise of the police power
of the State, in the interest of public health, safety, morals, and general welfare of the community.42
Thus, in the same en banc case of Serrano,43 it was further held that even if the Court were to
disregard the timeline when the law was enacted vis-à-vis the contract, the subject clause may not be
declared unconstitutional on the ground that it impinges on the impairment clause, for the law was
enacted in the exercise of the police power of the State to regulate a business, profession or calling,
particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring respect
for the dignity and well-being of OFWs wherever they may be employed.44 Police power legislations
adopted by the State to promote the health, morals, peace, education, good order, safety, and general
welfare of the people are generally applicable not only to future contracts but even to those already in
existence, for all private contracts must yield to the superior and legitimate measures taken by the State
to promote public welfare.45
The Conference of Maritime Manning Agencies, Inc. v. POEA,46 illustrates this point. The
POEA issuances47 were assailed, inter alia, as being violative of the non-impairment clause in the
Constitution as they were made applicable to any Filipino seafarer already on-board any vessel. In
upholding their validity, the Supreme Court pronounced that the constitutional prohibition against
impairing contractual obligations is not absolute and is not to be read with literal exactness. It is
restricted to contracts with respect to property or some object of value and which confer rights that may
be asserted in a court of justice; it has no application to statutes relating to public subjects within the
domain of the general legislative powers of the State and involving the public rights and public welfare
of the entire community affected by it. It does not prevent the proper exercise by the State of its police
power by enacting regulations reasonably necessary to secure the health, safety, morals, comfort, or
general welfare of the community, even though contracts may thereby be affected, for such matters
cannot be placed by contract beyond the power of the State to regulate and control. Thus:
“Verily, the freedom to contract is not absolute; all contracts and all rights are subject to the
police power of the State and not only may regulations which affect them be established by
the State, but all such regulations must be subject to change from time to time, as the
general, well-being of the community may require, or as the circumstances may change, or
48
as experience may demonstrate the necessity. And under the Civil Code, contracts of
labor are explicitly subject to the police power of the State because they are not ordinary
contracts but are impressed with public interest. The challenged resolution and
memorandum circular being valid implementations of E.O. No. 797,49 which was enacted
under the police power of the State, they cannot be struck down on the ground that they
violate the contract clause. To hold otherwise is to alter long-established constitutional
doctrine and to subordinate the police power to the contract clause.”
The stipulations in the contract must be valid.
While the contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, such stipulations should not be contrary to law, morals, good customs,
public order or public policy.50
51
Maynilad Water Supervisors Association v. Maynilad Water Services, Inc. - The
agreement or contract between the parties is the formal expression of the parties’ rights, duties and
obligations. It is the best evidence of the intention of the parties. Thus, when the terms of an agreement
have been reduced in writing, it is considered as containing all the terms agreed upon and there can be
no evidence of such terms other than the contents of the written agreement between the parties and
their successors-in-interest. Time and again, the rule has been stressed that a contract is the law
between the parties, and courts have no choice but to enforce such contract so long as it is not contrary
to law, morals, good customs or public policy. Otherwise, courts would be interfering with
the freedom of contract of the parties. Simply put, courts cannot stipulate for the parties or amend the
latter’s agreement, for to do so would be to alter the real intention of the contracting parties when the
primary function of courts is to give force and effect to the intention of the parties.52
d. Section 16 (Speedy Labor Justice) .
“Speedy disposition of cases” or “speedy labor justice” is a relative term and a flexible concept.
It is consistent with delays and depends upon the circumstances of each case. What the Constitution
prohibits are unreasonable, arbitrary and oppressive delays which render rights nugatory.53
Speedy labor justice, in terms of period, is provided under Article 277(i) of the Labor Code,
thus:
“(i) To ensure speedy labor justice, the periods provided in this Code within
which decisions or resolutions of labor relations cases or matters should be
rendered shall be mandatory. For this purpose, a case or matter shall be deemed
submitted for decision or resolution upon the filing of the last pleading or
memorandum required by the rules of the Commission or by the Commission
itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or
Med-Arbiter, or the Regional Director.”
In the determination of whether or not the right to a “speedy trial” has been violated, certain
factors may be considered and balanced against each other. These are the length of delay, reason for
the delay, assertion of the right or failure to assert it, and prejudice caused by the delay. The same
factors may also be considered in answering the judicial inquiry as to whether or not a person officially
charged with the administration of justice has violated the speedy disposition of cases.54
While the speedy disposition of labor cases may be the policy of the law, it must be
emphasized that speed alone is not the chief objective of a trial. It is the careful and deliberate
consideration for the administration of justice, a genuine respect for the rights of all parties and the
requirements of procedural due process, and an adherence to the principle that the disposition of cases
should always be predicated on the consideration that more than the mere convenience of the courts
and of the parties in the case, the ends of justice and fairness would be served. These are more
important than a race to end the trial.55
e. Section 18[2] (Involuntary Servitude) .
“Involuntary servitude”is every condition of enforced or compulsory service of one to another,
no matter under what form such servitude may be disguised.56 The 1987 Constitution categorically
prohibits involuntary servitude.57 It is on the basis of this constitutional precept that employees are
granted the right to terminate their employment relationship with their employers under Article 28558 of
the Labor Code. This article recognizes the equality of the parties to an employment relationship. Thus,
an employee may resign from employment at any time he wishes and with or without just cause,
subject only to certain minimum conditions imposed by law.59
Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank,60 involves the merger of BPI with FEBTC, where the Voluntary Arbitrator
ruled that, in accordance with Section 80 of the Corporation Code, the employees of FEBTC form part
of the “assets and liabilities” transferred to the surviving bank, petitioner BPI, by virtue of the merger.
The Supreme Court, however, did not agree to this postulation. In legal parlance, human beings are
never embraced in the term “assets and liabilities. ” It is contrary to public policy to declare the former
FEBTC employees as forming part of the assets or liabilities of FEBTC that were transferred and
absorbed by BPI in the Articles of Merger. Assets and liabilities, in this instance, should be deemed to
refer only to property rights and obligations of FEBTC and do not include the employment contracts of
its personnel. A corporation cannot unilaterally transfer its employees to another employer like chattel.
Certainly, if BPI as an employer had the right to choose who to retain among FEBTC’s employees,
FEBTC employees had the concomitant right to choose not to be absorbed by BPI. Even though
FEBTC employees had no choice or control over the merger of their employer with BPI, they had a
choice whether or not they would allow themselves to be absorbed by BPI. Certainly nothing prevented the
FEBTC’s employees from resigning or retiring and seeking employment elsewhere instead of going along
with the proposed absorption. Employment is a personal consensual contract and absorption by BPI of a
former FEBTC employee without the consent of the employee is in violation of an individual’s
freedom to contract. It would have been a different matter if there was an express provision in the
Articles of Merger that as a condition for the merger, BPI was being required to assume all the
employment contracts of all existing FEBTC employees with the conformity of the employees. In the
absence of such a provision in the Articles of Merger, then BPI clearly had the business management
decision as to whether or not to employ FEBTC’s employees. FEBTC employees likewise retained the
prerogative to allow themselves to be absorbed or not; otherwise, that would be tantamount to involuntary
servitude.
Compulsory fulfillment of military or civic duty.
Article 28661 of the Labor Code which provides for compulsory fulfillment of military or civic
duty, may well be considered as the exception to this constitutional proscription. This is so because the
constitutional prohibition should be subordinated to the right of the government to call upon its citizens to
protect their State as provided under Section 4, Article II of the Constitution. The survival of the State is the
paramount justification for such involuntary servitude.
III.
ARTICLE XIII
OF THE CONSTITUTION
1. FIVE (5) SECTIONS OF ARTICLE XIII.
Article XIII embodies 19 Sections but only five (5) are included in the Syllabus, to wit:
ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
Section 1. The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human
dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
Section 2. The promotion of social justice shall include the commitment to
create economic opportunities based on freedom of initiative and
selfreliance.
LABOR
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions of work, and
a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to fosterindustrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns to investments, and to
expansion and growth.
 WOMEN
Section 14. The State shall protect working women by providing safe
and healthful working conditions, taking into account their maternal
functions, and such facilities and opportunities that will enhance
their welfare and enable them to realize their full potential in the service of
the nation.
2. DISCUSSION OF SELECTED SIGNIFICANT PROVISIONS OF ARTICLE XIII.
a. Section 1 (Human Dignity, Inequality and Discrimination) .
This provision speaks of the constitutionally enshrined abhorrence to inequality and
discrimination for which Congress is mandated to prevent by enacting laws that “enhance the right of all
people to human dignity, reduce social, economic, and political inequalities. "
International School Alliance of Educators [ISAE] v. Quisumbing,62 illuminates on this
principle. The Supreme Court declared In this case that the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of foreign-hires and local hires is an
invalid classification. There is no reasonable distinction between the services rendered by foreign -hires
and local-hires. The practice of the School of according higher salaries to foreign-hires contravenes
public policy and, certainly, does not deserve the sympathy of the Court. In so holding, the Court cited
Section 1 of Article XIII that public policy abhors inequality and discrimination. Our Constitution and
laws reflect the policy against these evils. Thus, the Constitution, in the Article on Social Justice and
Human Rights, exhorts Congress to “give highest priority to the enactment of measures that protect and
enhance the right of all people to human dignity, reduce social, economic, and political inequalities. ”
Moreover, the very broad Article 19 of the Civil Code requires every person, “in the exercise of his
rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith. ”
b. Section 3 (Protection-to-Labor Clause) .
The most important provision among the 5 sections above is Section 3 of Article XIII which,
along with Section 18 of Article II, is the principalprotection-to-labor clause in the Constitution. The
underlined keywords are worthy to be taken note of considering that they reflect the rights and
principles that encompass almost all of the provisions of the Labor Code and other related laws.
Section 3, Article XIII, not self-executing/actuating nor judicially enforceable.
While all the provisions of the 1987 Constitution are presumed self-executing,63 there are
some which the Court has declared not judicially enforceable, Article XIII being one,64 particularly
Section 3 thereof, the nature of which the Court, in Agabon v. NLRC, 65 has described to be not self-
actuating:
“Thus, the constitutional mandates of protection to labor and security of tenure may
be deemed as self-executing in the sense that these are automatically acknowledged and
observed without need for any enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee the full exercise of the rights embodied
therein, and the realization of ideals therein expressed, would be impractical, if not
unrealistic. The espousal of such view presents the dangerous tendency of being
overbroad and exaggerated. The guarantees of „full protection to labor‟ and „security of
tenure‟ , when examined in isolation, are facially unqualified, and the broadest
interpretation possible suggests a blanket shield in favor of labor against any form of
removal regardless of circumstance. This interpretation implies an unimpeachable right to
continued employment - a utopian notion, doubtless - but still hardly within the
contemplation of the framers. Subsequent legislation is still needed to define the
parameters of these guaranteed rights to ensure the protection and promotion, not only the
rights of the labor sector, but of the employers' as well. Without specific and pertinent
legislation, judicial bodies will be at a loss, formulating their own conclusion to
approximate at least the aims of the Constitution.
“Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source
of a positive enforceable right to stave off the dismissal of an employee for just cause
owing to the failure to serve proper notice or hearing. As manifested by several framers of
the 1987 Constitution, the provisions on social justice require legislative enactments for
66
their enforceability.”
Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable
rights, for the violation of which the questioned clause may be declared unconstitutional. It may
unwittingly risk opening the floodgates of litigation to every worker or union over every conceivable
 violation of so broad a concept as social justice for labor.67 Section 3, Article XIII merely clothes it
with the status of a sector for whom the Constitution urges protection through executive or
legislative action and judicial recognition. Its utility is best limited to being an impetus not just for
the executive and legislative departments, but for the judiciary as well, to protect the welfare of the
working class. 68
Interpretation of some principles.
In the workplace, where the relations between capital and labor are often skewed in favor of
capital, inequality and discrimination by the employer are all the more reprehensible.69 Section 3,
Article XIII of the Constitution specifically provides that labor is entitled to "humane conditions of
work. " These conditions are not restricted to the physical workplace - the factory, the office or the
field - but include as well the manner by which employers treat their employees.70
The same provision of the Constitution also directs the State to promote “equality of
employment opportunities for all.” Similarly, the Labor Code71 provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed. " It would be an affront to both the spirit
and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure
equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions
of employment.72
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article
135, for example, prohibits and penalizes73 the payment of lesser compensation to a female employee
as against a male employee for work of equal value. Article 248 declares it an unfair labor practice for an
employer to discriminate in regard to wages in order to encourage or discourage membership in any labor
organization.
Last paragraph of Section 3, Article XIII as basis.
It bears noting that unlike all the rights granted thereunder, the last paragraph74 of Section
3 of Article XIII has not been implemented by any provision in the Labor Code or in any other laws.
It was, however, cited in the 2013 case of Asia Brewery, Inc. v. Tunay na Pagkakaisa ng mga
Manggagawa sa Asia (TPMA) , 75 in declaring that the DOLE Secretary has gravely abused her
discretion when she relied on the unaudited financial statements of petitioner corporation in
determining the wage award because such evidence is self-serving and inadmissible. Not only did
this violate the December 19, 2003 Order of the DOLE Secretary herself to petitioner corporation to
submit its complete audited financial statements, but this may have resulted to a wage award that is
based on an inaccurate and biased picture of petitioner corporation's capacity to pay - one of the
more significant factors in making a wage award. Petitioner corporation has offered no reason why it
failed and/or refused to submit its audited financial statements for the past five years relevant to this
case. This only further casts doubt as to the veracity and accuracy of the unaudited financial
statements it submitted to the DOLE Secretary. Verily, this procedure cannot be countenanced
because this could unduly deprive labor of its right to a just share in the fruits of production76 and
provide employers with a means to understate their profitability in order to defeat the right of labor
to a just wage.
b. Section 14 (Protection of Women) .
Theprovision of Section 14 of Article XIII which mandates that the State should accord
recognition to the protection of working women, is also non self-executory like the other provisions in
the Constitution as pronounced in a number of cases.77 It is a mere statement of principles and policies.
As such, it is a mere directive addressed to the executive and the legislative departments. If unheeded,
the remedy will not lie with the courts; but rather, the electorate’s displeasure may be manifested in
their votes.78
IV.
EXAMPLE OF A LAW WHICH VIOLATES
SEVERAL CONSTITUTIONAL PRINCIPLES
1. THE SERRANO CASE WHERE THE PROVISION OF THE 5 PARAGRAPH, SECTION 10 OF
TH

R.A. NO. 8042 WAS DECLARED VIOLATIVE OF SEVERAL CONSTITUTIONAL

MANDATES.
Serrano v. Gallant Maritime Services, Inc. ,79 is illustrative of a case where a single
provision of law has been declared violative of several provisions of the Constitution.
Here, the following underlined clause of the 5 paragraph of Section 10 of R.A. No. 8042 has been
th
declared unconstitutional for transgressing three (3) provisions of the Constitution, to wit: (1) Section 1,
Article III; (2) Section 18, Article II; and (3) Section 3, Article XIII, in relation to labor as a
protected sector:
“In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement of his placement fee
and the deductions made with interest at twelve percent (12%) per annum, plus his salaries
for the unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less. ”
Petitioner worked as Second Officer for respondent recruitment agency and its foreign
principal, Marlow Navigation Co. , Ltd. (herein respondents) , under a POEA-approved Contract of
Employment with a fixed term of 12 months. At the time of his repatriation, he had served only two (2)
months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-
three (23) days. Petitioner’s dismissal was declared illegal and he was awarded, under the rule then
prevailing, US$8,770.00, representing his salary for three (3) months of the unexpired portion of the
aforesaid contract of employment, his contract being for one year, in accordance with the afore-quoted
provision of R.A. No. 8042. Petitioner claims that he is entitled to all his salaries for the unexpired
portion of his contract and not just to 3 months of the unexpired portion thereof. He further questioned
the constitutionality of said clause in Section 10 contending, inter alia, that:
(1) it unduly impairs the freedom of OFWs to negotiate for and stipulate in their overseas
employment contracts a determinate employment period and a fixed salary package;
(2) It impinges on the equal protection clause, for it treats OFWs differently from local Filipino
workers (local workers) by putting a cap on the amount of lump-sum salary to which OFWs
are entitled in case of illegal dismissal, while setting no limit to the same monetary award for
local workers when their dismissal is declared illegal;
(3) The disparate treatment is not reasonable as there is no substantial distinction between the two
groups; and that it defeats Section 18, Article II of the Constitution which guarantees the
protection of the rights and welfare of all Filipino workers, whether deployed locally or
overseas.
In upholding petitioner, the Supreme Court cited the following ratiocinations:
(1) The subject clause has a discriminatory intent against, and an invidious impact on, OFWs at
three levels: First, OFWs with employment contracts of less than one year vis-à-vis OFWs
with employment contracts of one year or more; Second, among OFWs with employment
contracts of more than one year; and Third, OFWs vis-à-vis local workers with fixed-period
employment.
On the first, the illegally dismissed OFW with employment contract of less than one year will be paid
all his salaries for the unexpired portion thereof; while the OFW with employment contract of at
least one year (like that of herein petitioner) or more will only be awarded whichever is
less between three months salary for every year of the unexpired term or the salary for the unexpired
portion thereof.
On the second, the subject clause creates a sub-layer of discrimination among OFWs whose
contract periods are for more than one year: those who are illegally dismissed with less than one year
left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof, while
those who are illegally dismissed with one year or more remaining in their contracts shall be
covered by the subject clause, and their monetary benefits limited to their salaries for three months
only.
On the third,prior to R.A. No. 8042, OFWs and local workers with fixed-term employment
who were illegally discharged were treated alike in terms of the computation of their money
claims; they were uniformly entitled to their salaries for the entire unexpired portions of their
contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the subject
clause, illegally dismissed OFWs with an unexpired portion of one year or more in their
employment contract have since been differently treated in that their money claims are subject
to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term
employment.
 (2) The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.
There being a suspect classification involving a vulnerable sector protected by the
Constitution, the Court, after subjecting the classification to a strict judicial scrutiny, has
determined that there is no compelling state interest80 that the subject clause may possibly
serve. In fine, the Government has failed to discharge its burden of proving the existence of a
compelling state interest that would justify the perpetuation of the discrimination against
OFWs under the subject clause. Thus, the subject clause is violative of the right of petitioner and
other OFWs to equal protection.
(3) The declaration of the unconstitutionality of the subject clause cannot be approached from the
lone perspective that the clause directly violates state policy on labor under Section 3, Article
XIII of the Constitution. This is so because this provision is not self-executing. Article XIII
should be applied in conjunction with the equal protection clause. Article XIII, by itself,
without the application of the equal protection clause, has no life or force of its own.
(4) The subject clause does not state or imply any definitive governmental purpose; and it is for
that precise reason that the clause violates not just petitioner's right to equal protection, but
also his right to substantive due process under Section 1, Article III of the Constitution, for it
deprives him of property, consisting of monetary benefits, without any existing valid
governmental purpose.
V.
CONSTITUTIONAL PROVISIONS
NOT APPLICABLE TO LABOR CASES
1. INAPPLICABILITY PER JURISPRUDENCE.
Certain constitutional rights and precepts may NOT be invoked in labor cases, particularly in
company-level administrative investigations leading to the termination of employment because they
can only be asserted against the government or the state but not against a private party like an
employer. More particularly, the following rights, per well-entrenched jurisprudence, generally find no
application in company-level administrative proceedings by the employer against an erring employee:
(a) Right to due process;
(b) Right to equal protection of the laws;
(c) Right against self-incrimination;
(d) Right to counsel and to remain silent; and
(e) Right against unreasonable searches and seizures and to privacy of communication and
correspondence.
2. CONSTITUTIONAL DUE PROCESS.
a. The Serrano case.
In the en banc decision in the 2000 case of Serrano v. NLRC, 81 the Supreme Court
distinguished denial of due process by the State and denial of due process by the employer. It thus
concluded that the violation by the employer of the notice requirement cannot be considered a denial of
due process as would result in the nullity of the employee’s dismissal or layoff. The following reasons
were cited:
1. The Due Process Clause of the Constitution is a limitation on governmental powers. It does
not apply to the exercise of private power, such as the termination of employment under
the Labor Code.
2. The notice and hearing required under the Due Process Clause applies before the powers of
organized society are brought to bear upon the individual. This is obviously not the case of
termination of employment under Articles 282 and 283 of the Labor Code because the
 employee is not faced with an aspect of the adversary system. The purpose for the
requirement of notice and hearing is not to comply with the Due Process Clause of the
Constitution. The time for notice and hearing is at the trial stage. Then that is the time we speak
of notice and hearingas the essence of procedural due process. Thus, compliance by the
employer with the notice requirement before he dismisses an employee does not foreclose
the right of the latter to question the legality of his dismissal.
3. The notice requirement under Articles 282 and 283 of the Labor Code cannot be considered
a requirement of the Due Process Clause since the employer cannot really be expected to
be entirely an impartial judge of his own cause.
b. The Agabon case.
In the en banc decision in the 2004 case of Agabon v. NLRC,82 the Supreme Court further
expounded on the doctrine laid down in Serranoby making a distinction between constitutional due
process and statutory due process. Thus:
“Constitutional due process protects the individual from the
government and assures him of his rights in criminal, civil or administrative
proceedings; while statutory due process found in the Labor
Code and Implementing Rules protects employees from being unjustly
terminated without just cause after notice and hearing.
Resultantly, where there is just cause for dismissal but due process has not been observed
properly by an employer, it would not be right to order either the reinstatement of the dismissed
employee or the payment of backwages to him. In failing, however, to comply with the procedure
prescribed by law (Article 277[b] of the Labor Code) in terminating the services of the employee, the
employer must be deemed to have opted or, in any case, should be made liable, for the payment of
separation pay. It might be pointed out that the notice to be given and the hearing to be conducted
generally constitute the two-part due process requirement of law to be accorded to the employee by the
employer. Nevertheless, peculiar circumstances might obtain in certain situations where to undertake
the above steps would be no more than a useless formality and where, accordingly, it would not be
imprudent to apply the res ipsa loquitur rule and award, in lieu of separation pay, nominal damages to
the employee.
c. The Abbott Laboratories case.
A new doctrine on contractual due process, as distinguished from statutory due process, has
been enunciated in the 2013 en bancdecision in Abbott Laboratories, Philippines v. Pearlie Ann F.
Alcaraz. 83 Thus, in a situation where there is an existing company policy enunciating the procedural
due process that must be observed in termination of employment, compliance alone with
the statutorily-prescribed procedural due process,84 would not suffice. Additionally, there must be
compliance too with the company-prescribed due process procedure or the so-called contractual due
process. Otherwise, the same consequence as in Agabon will ensue, that is, the termination shall be
considered legal and valid but for lack of contractual due process, the employer will be penalized with
indemnity in the form of nominal damages in the amount ofP30,000.00.
In this case, it was found that respondent Alcaraz,85 who was hired as a probationary
managerial employee, was afforded both substantive and statutory procedural due process, when she
was terminated86 for failure to qualify as a regular employee. Nonetheless, despite the existence of a
sufficient ground to terminate Alcaraz’s employment and Abbott’s compliance with the Labor Code
termination procedure, it was found that petitioner Abbott breached its contractual obligation to Alcaraz
when it failed to abide by its own procedure prescribed in its company rules in evaluating the performance of
a probationary employee.
Veritably, a company policy partakes of the nature of an implied contract between the
employer and employee. Hence, given such nature, company personnel policies create an obligation on
the part of both the employee and the employer to abide by the same. While it is Abbott’s management
prerogative to promulgate its own company rules and even subsequently amend them, this right
equally demands that when it does create its own policies and thereafter notify its employee of the
same, it accords upon itself the obligation to faithfully implement them. Indeed, a contrary
interpretation would entail a disharmonious relationship in the work place for the laborer should never
be mired by the uncertainty of flimsy rules in which the latter’s labor rights and duties would, to some
extent, depend.
d. The only relevant aspect of Section 1, Article III, to labor cases.
 The doctrine that labor is considered a “property” within the constitutional guarantees
remains constant to this day.Despite the changes in the concept of due process introduced
by Serrano and Agabon, the Supreme Court continues to recognize to this day that labor
is “property” falling within the ambit and protection of the due process clause in the Constitution.87 In
other words, even if it is not the constitutional due process that is violated if an employee is dismissed
sans due process, the legal notion that labor or employment is “property”under the Constitution
continues to be adhered to and respected. Thus, it was emphasized in Sagales:88 “Labor is property, and
as such merits protection. The right to make it available is next in importance to the rights of life and
liberty. It lies to a large extent at the foundation of most other forms of property, and of all solid
individual and national prosperity,” and in Polsotin:89 “A worker cannot be deprived of his job, a
property right, without satisfying the requirements of due process. As enshrined in our bill of rights, no
person shall be deprived of life, liberty or property without due process of law. ” Most recently, this
principle was again reiterated almost verbatim in Opinaldo.90
e. Constitutional due process, when necessary.
Observance of the constitutional due process becomes necessary in proceedings before Labor
Arbiters, the Commission (NLRC) and other labor tribunals. As distinguished from employer’s
company-level due process, the government is now involved; hence, any deprivation of due process of either
party to the labor suit by such labor officials/tribunals would constitute a violation of the constitutional
due process under Section 1 of Article III of the Constitution.
3. RIGHT TO EQUAL PROTECTION OF THE LAWS.
It is a settled principle that the commands of the equal protection clause91 are addressed only
to the state or those acting under the color of its authority. The equal protection clause erects no shield against
merely private conduct, however, discriminatory or wrongful it may have been.
Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. 92 - The
employer’s policy prohibiting its employees from any personal or marital relationships with employees
of competitor companies was held not violative of the equal protection clause in the Constitution and
not unreasonable under the circumstances because relationships of that nature might compromise the
interests of the company. Significantly, the company actually enforced the policy after repeated
requests to the employee to comply therewith. Indeed, the application of the said policy was made in an
impartial and even-handed manner with due regard for the lot of the employee. In any event, from the
wordings of the contractual provision and the policy in its employee handbook, it is clear that the
company does not impose an absolute prohibition against relationships between its employees and
those of competitor companies. Its employees are free to cultivate relationships with and marry persons
of their own choosing. What the company merely seeks to avoid is a conflict of interest between the
employees and the company that may arise out of such relationships.
Yrasuegui v. Philippine Airlines, Inc. 93 - Petitioner was dismissed because of his failure to
measure up to the weight standards set by respondent. His termination due to obesity was held legal
and not violative of the equal protection clause in the Constitution. The High Court observed that the
United States Supreme Court, in interpreting the Fourteenth Amendment which is the source of the
equal protection guarantee in the 1987 Constitution, is consistent in saying that the equal
protection clause erects no shield against private conduct, however discriminatory or wrongful it may be.
Private actions, no matter how egregious, cannot violate the equal protection guarantee.
4. RIGHT AGAINST SELF-INCRIMINATION.
It is enshrined in the Constitution that “no person shall be compelled to be a witness against
himself. ”94 This right against self-incrimination is accorded to every person who gives evidence,
whether voluntarily or under compulsion of subpoena, in any civil, criminal, or administrative
proceeding.95
a. The right gives option of refusal to answer questions but not a prohibition of inquiry.

The precept on the right against self-incrimination has a settled meaning.96 It prescribes an
“option of refusal to answer incriminating questions and not a prohibition of inquiry. ”97 It simply
secures to a witness, whether he be a party or not, the right to refuse to answer any particular
incriminatory question, i.e. , one the answer to which has a tendency to incriminate him for some
crime. However, the right can be claimed only when the specific question, incriminatory in character,
is actually put to the witness. It cannot be claimed at any other time. It does not give a witness the
right to disregard a subpoena, to decline to appear before the court at the time appointed, or to
refuse to testify altogether. The witness receiving a subpoena must obey it, appear as required, take
the stand, be sworn and answer questions. It is only when a particular question is addressed to him,
the answer to which may incriminate him for some offense, that he may refuse to answer on the
strength of the constitutional guaranty.98
b. Only an accused in a criminal case and by way of exception, a respondent in an
administrative case that partakes of the nature of, or analogous to, a criminal
proceeding can refuse to testify.

But as distinguished from a mere witness, the accused in a criminal case or a respondent in
an administrative case that partakes of the nature of, or analogous to, a criminal proceeding, can
refuse to testify altogether. As held in Rosete v. Lim,99 it is clear that only an accused in a criminal
case can refuse to take the witness stand. The right to refuse to take the stand does not generally
apply to parties in administrative cases or proceedings. The parties thereto can only refuse to answer
if incriminating questions are propounded. The Supreme Court applied the exception - a party who is
not an accused in a criminal case is allowed not to take the witness stand - in administrative
cases/proceedings that partook of the nature of a criminal proceeding or analogous to a criminal
proceeding.100
c. No obligation on the part of the employer to advise respondent employee or a witness of
his right against self-incrimination.

The Constitution101 does not impose on the judge, or other officer presiding over a trial,
hearing or investigation, any affirmative obligation to advise a witness of his right against self-
incrimination. It is a right that a witness knows or should know, in accordance with the well-known
axiom that everyone is presumed to know the law and that ignorance of the law excuses no one.
Furthermore, in the very nature of things, neither the judge nor the witness can be expected to know
in advance the character or effect of a question to be put to the latter.102
d. The right should be claimed; otherwise it is deemed waived.
The right against self-incrimination is not self-executing or automatically operational. It must
be claimed. If not claimed by, or in behalf of, the witness, the protection does not come into play. It
follows that the right may be waived, expressly or impliedly, as by a failure to claim it at the
appropriate time.103
5. RIGHTS TO COUNSEL AND TO REMAIN SILENT.
a. Rights to counsel and to remain silent may be asserted only in custodial interrogation;
Distinguished from right against self-incrimination.
The rights to remain silent and to counsel apply to persons “under investigation for the
commission of an offense,” i.e. , “suspects” under investigation by police authorities; and this is what
makes these rights different from the right against self-incrimination which, as aforestated,
indiscriminately applies to any person testifying in any proceeding, civil, criminal, or administrative.104
b. Invocation of right to counsel in an administrative proceeding.
The right to counsel cannot be invoked in an administrative proceeding such as the companylevel
investigation conducted for the purpose of determining whether the respondent employee should be dismissed
or not.
This principle has been recognized in Manuel v. N. C. Construction Supply. 105 In this case,
petitioners were positively identified as being involved in a series of thefts at respondent company.
They were thus invited to the Pasig police station for investigation regarding their alleged involvement in the
offense. At the police station, it was not the police but the private respondents’ counsel who conducted the
investigation regarding petitioners' involvement in the theft. He interrogated the petitioners on their
alleged participation in the series of thefts committed at respondent company. Petitioners initially denied
the charge. However, after being positively identified by a witness, petitioners admitted their guilt and
offered to resign in exchange for the withdrawal of any criminal charge against them. The company lawyer
accepted their resignation.
In the illegal dismissal case they filed against private respondents, petitioners argued that their
admission made at the Pasig police station regarding their involvement in the theft as well as their
resignation were not voluntary but were obtained by private respondents’ lawyer by means of threat
and intimidation. They contended that the admission is inadmissible as evidence against them under
Section 12, Article III [Bill of Rights] of the 1987 Constitution. In rejecting this argument and
upholding the validity of their dismissal, the Supreme Court emphasized that the right to counsel under
the said constitutional provision is meant to protect a suspect in a criminal case who is under custodial
investigation. Custodial investigation is the stage where the police investigation is no longer a general
inquiry into an unsolved crime but has begun to focus on a particular suspect who has been taken into
custody by the police to carry out a process of interrogation that lends itself to elicit incriminating
statements. It is that point when questions are initiated by law enforcement officers after a person has
been taken into custody or otherwise deprived of his freedom of action in any significant way. The
right to counsel attaches only upon the start of such investigation.106 Therefore, the exclusionary rule
under said provision of the Bill of Rights applies only to admissions made in a criminal investigation but not
to those made in an administrative investigation.
In the case at bar, the admission was made by petitioners during the course of the
investigation conducted by private respondents' counsel to determine whether there is sufficient ground to
terminate their employment. Petitioners were not under custodial investigation as they were not yet accused
by the police of committing a crime. The investigation was merely an administrative investigation
conducted by the employer, not a criminal investigation. The questions were propounded by the employer's
lawyer, not by police officers. The fact that the investigation was conducted at the police station did not
necessarily put petitioners under custodial investigation as the venue of the investigation was merely
incidental. Hence, the admissions made by petitioners during such investigation may be used as evidence to
justify their dismissal.
c. Effect of failure of employer to inform employee of his right to counsel.
But would the failure of the employer to inform the employee who is undergoing
administrative investigation of his right to counsel amount to deprivation of due process?
This was answered in the affirmative in Punzal v. ETSI Technologies, Inc. ,107 where
petitioner’s contention that she was denied due process was upheld because the records do not show
that she was informed of her right to be represented by counsel during the conference with her
employer. The protestations of respondent-employer that the right to be informed of the right to
counsel does not apply to investigations before administrative bodies and that law and jurisprudence
merely give the employee the option to secure the services of counsel in a hearing or conference, fall in
the light of the clear provision of Article 277(b) of the Labor Code that “the employer xxx shall afford
[the worker whose employment is sought to be terminated] ample opportunity to be heard and to
defend himself, with the assistance of his representatives, if he so desires, in accordance with company
rules and regulations pursuant to guidelines set by the Department of Labor and Employment,” and the
Supreme Court’s explicit pronouncement that “[a]mple opportunity connotes every kind of assistance
that management must accord the employee to enable him to prepare adequately for his defense,
including legal representation. ” Consequently, the petitioner was awarded nominal damages in the
amount of P30,000.00 for violation of her right to statutory due process.
In the 2011 case of Lopez v. Alturas Group of Companies,108 the NLRC, citing Salaw v.
109
NLRC , held that petitioner should have been afforded or at least advised of the right to counsel. It
thus held that “any evaluation which was based only on the explanation to the show-cause letter and
any so-called investigation but without confrontation of the vital witnesses, do not suffice. ” In
reversing this ruling, the Supreme Court pronounced that:
“Parenthetically, the Court finds that it was error for the NLRC to opine that
petitioner should have been afforded counsel or advised of the right to counsel. The
right to counsel and the assistance of one in investigations involving
termination cases is neither indispensable nor mandatory, except when the
 employee himself requests for one or that he manifests that he wants a formal
hearing on the charges against him. In petitioner‟ s case, there is no
showing that he requested for a formal hearing to be conducted or that he be
assisted by counsel. Verily, since he was furnished a second notice informing him
of his dismissal and the grounds therefor, the twin-notice requirement had been
complied with to call for a deletion of the appellate court‟ s award of nominal damages
to petitioner. ”110
6. RIGHT AGAINST UNREASONABLE SEARCHES AND SEIZURES AND RIGHT TO
PRIVACY OF COMMUNICATION AND CORRESPONDENCE.
The question of whether the right against unreasonable searches and seizures111 and right to
privacy of communication and correspondence112 guaranteed under the Constitution may be invoked by
an employee against his employer has been answered in the case ofWaterous Drug Corporation v.
NLRC and Antonia Melodia Catolico. 113 In this case, private respondent Catolico was a pharmacist
at petitioner company. She was charged and investigated for an irregularity involving her and a
supplier, Yung Shin Pharmaceuticals, Inc. (YSP) , consisting in the overpricing of certain medicines.
Catolico received a check issued in her name corresponding to the amount of the refund for the
overprice. The check was placed in an envelope which, when received by Catolico, was already open.
Catolico asked Saldaña. the pharmacy clerk who received the envelope, if she opened it to which the
clerk answered “talagang ganyan, bukas. ” Because Catolico pocketed the amount of the refund for
the overprice which was covered by the check, she was asked to explain her side and was placed under
preventive suspension. In Catolico’s reply, she protested Saldaña’s invasion of her privacy when
Saldaña opened the envelope addressed to her. She further explained, through her counsel, that the
check she received from YSP was a Christmas gift and not a “refund of overprice. ” Consequently, she
was terminated on the ground of dishonesty.
The Labor Arbiter declared her dismissal and preventive suspension illegal because
petitioners failed to “prove what [they] alleged as complainant’s dishonesty,” and to show that any
investigation was conducted. On appeal, the NLRC affirmed the findings of the Labor Arbiter on the
ground that petitioners were not able to prove a just cause for Catolico’s dismissal. It found that
petitioners’ evidence consisted only of the check for P640.00 drawn by YSP in favor of private
respondent, which Saldaña, her co-employee, saw when the latter opened the envelope. But, it declared
that the check was inadmissible in evidence pursuant to Sections 2 114 and 3115 of Article III of the
Constitution. The NLRC thus concluded: “With the smoking gun evidence of respondents116 being
rendered inadmissible, by virtue of the constitutional right invoked by complainant,117 respondents’
case falls apart as it is bereft of evidence which cannot be used as a legal basis for complainant’s
dismissal. ”
While the Supreme Court affirmed the ruling of the NLRC that Catolico’s dismissal was
illegal, it disagreed with the NLRC’s reason for upholding the Labor Arbiter’s decision, viz. , that the
evidence against private respondent was inadmissible for having been obtained in violation of her
constitutional rights of privacy of communication and against unreasonable searches and seizures. It
reasoned: “As regards the constitutional violation upon which the NLRC anchored its decision, we find
no reason to revise the doctrine laid down in People v. Andre Marti,118 that the Bill of Rights does not
protect citizens from unreasonable searches and seizures perpetrated by private individuals. It is not
true, as counsel for Catolico claims, that the citizens have no recourse against such assaults. On the
contrary, and as said counsel admits, such an invasion gives rise to both criminal and civil liabilities. ”
In the said Marti case, the following principles were emphasized:
(1) In all the cases where the rights against unreasonable searches and seizures and to privacy
of communication and correspondence were affirmed, the evidence obtained were invariably procured
by the State acting through the medium of its law enforcers or other authorized government agencies.
On the other hand, the case at bar assumes a peculiar character since the evidence sought to be
excluded was primarily discovered and obtained by a private person, acting in a private capacity and
without the intervention and participation of State authorities. Under the circumstances, can
accused/appellant validly claim that his constitutional right against unreasonable searches and seizure
has been violated? Stated otherwise, may an act of a private individual, allegedly in violation of
appellant's constitutional rights, be invoked against the State? The answer is in the negative. In the
absence of governmental interference, the liberties guaranteed by the Constitution cannot be invoked
against the State.
 (2) That the Bill of Rights embodied in the Constitution is not meant to be invoked against acts of
private individuals finds support in the deliberations of the Constitutional Commission. True, the liberties
guaranteed by the fundamental law of the land must always be subject to protection. But protection against
whom? Commissioner Joaquin Bernas in his sponsorship speech in the Bill of Rights answers the query which
he himself posed, as follows:
“First, the general reflections. The protection of fundamental liberties is the essence of
constitutional democracy. Protection against whom?Protection against the state. The Bill
of Rights governs the relationship between the individual and the state. Its concern is not
the relation between individuals, between a private individual and other individuals. What
the Bill of Rights does is to declare some forbidden zones in the private sphere
119
inaccessible to any power holder.”
The constitutional proscription against unlawful searches and seizures therefore applies as a
restraint directed only against the government and its agencies tasked with the enforcement of the law. Thus,
it could only be invoked against the State to whom the restraint against arbitrary and unreasonable
exercise of power is imposed.
(3) Corollarily, alleged violations against unreasonable search and seizure may only be
invoked against the State by an individual unjustly traduced by the exercise of sovereign authority. To
agree with appellant that an act of a private individual in violation of the Bill of Rights should also be
construed as an act of the State would result in serious legal complications and an absurd interpretation
of the constitution. Similarly, the admissibility of the evidence procured by an individual effected
through private seizure equally applies, in pari passu,120 to the alleged violation, non-governmental as it
is, of appellant's constitutional rights to privacy and communication.

Chapter One
FUNDAMENTAL PRINCIPLES AND POLICIES

TOPICS PER SYLLABUS

B. New Civil Code

1. Article 19
2. Article 1700
3. Article 1702

B.
NEW CIVIL CODE
1. On Article 19.
Article 19 of the Civil Code provides:
“Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith. ”
Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live virtuously, not to
injure others and to give everyone his due. These supreme norms of justice are the underlying
principles of law and order in society.1
Mata v. Agravante. 2 - It was held here that Article 19, known to contain what is commonly
referred to as the principle of abuse of rights, is not a panacea for all human hurts and social
grievances. The object of this article is to set certain standards which must be observed not only in the
exercise of one's rights but also in the performance of one's duties. These standards are the
following: act with justice, give everyone his due, and observe honesty and good
faith. Its antithesis is any act evincing bad faith or intent to injure. 3 Article 21 refers to acts contra
bonos mores and has the following elements: (1) an act which is legal; (2) but which is contrary to
morals, good custom, public order or public policy; and (3) is done with intent to
injure. The common element under Articles 19 and 21 is that the act complained of must
beintentional,4 and attended with malice or bad faith. There is no hard and fast rule which can be
applied to determine whether or not the principle of abuse of rights may be invoked. The question of
whether or not this principle has been violated, resulting in damages under Articles 205 or 216 of the
Civil Code or other applicable provision of law, depends on the circumstances of each case.7
Application to labor cases.
The principle enunciated in Article 19 is often invoked in labor cases. The following may be cited
by way of illustration:
Divine Word University of Tacloban, v. Secretary of Labor and Employment,8 where, by
reason of the bad faith of petitioner university in its bargaining with the union, it was declared that it
violated its duty to bargain collectively prescribed under the Labor Code9 and the mandate under
Article 19 of the Civil Code.10 The bad faith on the part of the university is exemplified by the fact that
an hour before the start of the May 10, 1988 conference,11 it surreptitiously filed the petition for
certification election. And yet during said conference, it committed itself to “sit down” with the union.
Obviously, the university tried to pre-empt the conference which would have legally foreclosed its
right to file the petition for certification election. In so doing, the university failed to act in accordance
with Article 252 of the Labor Code which defines the meaning of the duty to bargain collectively as
“the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith.
” Moreover, by filing the petition for certification election while agreeing to confer with the bargaining
union, the University violated the mandate of Article 19 of the Civil Code that “(e)very person must, in
the exercise of his rights and in the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith. ”
Czarina T. Malvar v. Kraft Food Phils. , Inc. 12 - This 2013 case initially concerned the
execution of a final decision of the Court of Appeals (CA) in a labor litigation, but has mutated into a dispute
over attorney's fees between the winning employee and her attorney after she entered into a compromise
agreement with her employer under circumstances that the attorney has bewailed as having been designed
to prevent the recovery of his just professional fees.
While a client has an undoubted right to settle her litigation without the intervention of the
attorney, for the former is generally conceded to have exclusive control over the subject matter of the
litigation and may at any time, if acting in good faith, settle and adjust the cause of action out of court
before judgment, even without the attorney’s intervention, it is important for the client to show,
however, that the compromise agreement does not adversely affect third persons who are not parties to
the agreement. By the same token, a client has the absolute right to terminate the attorney-client
relationship at any time with or without cause. But this right of the client is not unlimited because good
faith is required in terminating the relationship. The limitation is based on Article 19 of the Civil Code,
which mandates that “[e]very person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith. ” The right is also
subject to the right of the attorney to be compensated. This is clear from Section 26, Rule 138 of the
Rules of Court.13
In fine, it is basic that an attorney is entitled to have and to receive a just and reasonable
compensation for services performed at the special instance and request of his client. The attorney who has
acted in good faith and honesty in representing and serving the interests of the client should be reasonably
compensated for his service.
On considerations of equity and fairness, the Court disapproves of the tendencies of clients
compromising their cases behind the backs of their attorneys for the purpose of unreasonably reducing or
completely setting to naught the stipulated contingent fees. Thus, the Court grants the Intervenor’s Motion for
Intervention to Protect Attorney’s Rights filed by the attorney as a measure of protecting his right to the
stipulated professional fees that would be denied under the compromise agreement. The Court does so in
the interest of protecting the rights of the practicing Bar rendering professional services on contingent fee
basis.
Becmen Service Exporter and Promotion, Inc. v. Spouses Simplicio and Mila
Cuaresma,14 where petitioner recruiter never rendered immediate aid to the daughter15 of respondents
who died in Saudi Arabia. Thus, more than just recruiting and deploying OFWs to their foreign
principals, recruitment agencies have equally significant responsibilities. In a foreign land where
OFWs are likely to encounter uneven if not discriminatory treatment from the foreign government, and
certainly a delayed access to language interpretation, legal aid, and the Philippine consulate, the
recruitment agencies should be the first to come to the rescue of our distressed OFWs since they know
the employers and the addresses where they are deployed or stationed. Upon them lies the primary
obligation to protect the rights and ensure the welfare of our OFWs, whether distressed or not. Who
else is in a better position, if not these recruitment agencies, to render immediate aid to their deployed
OFWs abroad?
Citing Articles 19, 21 and 2416 of the Civil Code, petitioner Becmen and its principal in Saudi
Arabia, Rajab & Silsilah Company (Rajab) , were held solidarily liable to the Cuaresmas for the death
and insurance benefits, as well as moral and exemplary damages for Jasmin’s death. Their acts and
omissions are against public policy because they undermine and subvert the interest and general
welfare of our OFWs abroad, who are entitled to full protection under the law. They set an awful
example of how foreign employers and recruitment agencies should treat and act in regard to their
distressed employees and workers abroad. Their shabby and callous treatment of Jasmin’s case; their
uncaring attitude; their unjustified failure and refusal to assist in the determination of the true
circumstances surrounding her mysterious death, and instead finding satisfaction in the unreasonable
insistence that she committed suicide just so they can conveniently avoid pecuniary liability; placing
their own corporate interests above the welfare of their employee’s - all these are contrary to morals,
good customs and public policy, and constitute taking advantage of the poor employee and her family’s
ignorance, helplessness, indigence and lack of power and resources to seek the truth and obtain justice
for the death of a loved one. Giving in handily to the idea that Jasmin committed suicide, and
adamantly insisting on it just to protect Rajab and Becmen’s material interest - despite evidence to the
contrary - is against the moral law and runs contrary to the good custom of not denouncing one’s
fellowmen for alleged grave wrongdoings that undermine their good name and honor.
2. On Article 1700.
Article 1700 of the Civil Code provides:
“Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject
to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working
17
conditions, hours of labor and similar subjects. ”
Application to labor cases.
In the same 2009 case of Becmen, 18 it was further held that the relations between capital and
labor are so impressed with public interest,19and neither shall act oppressively against the other, or
impair the interest or convenience of the public.20 In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for the laborer.21
Innodata Philippines, Inc. v. Quejada-Lopez,22 - In the interpretation of contracts, obscure
words and provisions shall not favor the party that caused the obscurity. Consequently, the terms of the
contract of employment23 should be construed strictly against petitioner, which prepared it. Indeed, a
contract of employment is impressed with public interest. For this reason, provisions of applicable
statutes are deemed written into the contract. Hence, the “parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply contracting
with each other. ”24 Moreover, in case of doubt, the terms of a contract should be construed in favor of
labor.25
Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v. Philippine
National Oil Company-Energy Development Corporation,26 involving the issue of whether the
members of petitioners are project employees or regular employees. It was pronounced that Article 280
of the Labor Code, as worded, establishes that the nature of the employment is determined by law,
regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of
the contract and the stipulations contained therein is to bring to life the policy enshrined in the
Constitution to "afford full protection to labor. "27 Thus, labor contracts are placed on a higher plane
than ordinary contracts; these are imbued with public interest and therefore subject to the police power
of the State.28 However, notwithstanding the foregoing iterations, project employment contracts which
fix the employment for a specific project or undertaking remain valid under the law. In the case at bar,
the records reveal that the officers and the members of petitioner union signed employment contracts
indicating the specific project or phase of work for which they were hired, with a fixed period of
employment. As clearly shown by petitioner union’s own admission, both parties had executed the
contracts freely and voluntarily without force, duress or acts tending to vitiate the workers’ consent.
Thus, there is no reason not to honor and give effect to the terms and conditions stipulated therein.
 Davao Integrated Port Stevedoring Services v. Abarquez. 29 - The CBA in Article 252 of
the Labor Code, refers to a contract executed upon request of either the employer or the exclusive
bargaining representative incorporating the agreement reached after negotiations with respect to wages,
hours of work and all other terms and conditions of employment, including proposals for adjusting any
grievances or questions arising under such agreement. While the terms and conditions of a CBA
constitute the law between the parties, it is not, however, an ordinary contract to which is applied the
principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of
Article 1700 of the Civil Code, is not merely contractual in nature but impressed with public interest,
thus, it must yield to the common good.30
3. On Article 1702 of the Civil Code,
in relation to Article 4 of the Labor Code.
Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak of the rule on
interpretation and construction provisions of law and labor contracts. Because of their close
interrelation, these two important provisions will be discussed herein jointly.
Article 1702 of the Civil Code provides:
“Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of
the safety and decent living for the laborer. ”31
Congruently, Article 4 of the Labor Code states:
“Article 4. Construction in Favor of Labor. - All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor. ”
a. Article 4 vs. Article 1702.
Article 4 of the Labor Code enunciates the time-honored principle that all doubts in the
implementation and interpretation of its provisions should be resolved in favor of labor.32 This rule
applies not only in the interpretation of the provisions of the Labor Code but also of its Implementing
Rules.33 It applies to all workers - whether in the government or in the private sector - in order to give
flesh and vigor to the pro-poor and pro-labor provisions of the Constitution.34
It is in keeping with the constitutional mandate of promoting social justice and affording
protection to labor.35 Thus, when conflicting interests of labor and capital are to be weighed on the
scales of social justice, the heavier influence of the latter should be counter-balanced by sympathy and
compassion the law must accord the underprivileged worker.36
Compared to the provision of Article 4 of the Labor Code, it appears that Article 1702 is broader
in scope in that it pertains to “all labor legislation and all labor contracts” and not merely to the
“implementation and interpretation of the provisions of the Labor Code, including its implementing rules and
regulations,” as enunciated in Article 4. Moreover, the Civil Code mentions a standard which would
justify the invocation of the rule of interpretation in favor of labor in that the same should be done “in favor of
the safety and decent living for the laborer. ”
Having made the foregoing observation, it may well be said that the provisions of the Civil
Code and the Labor Code do not really differ in essence since the policy of the law is clear - any doubt
should always be interpreted or construed in favor of labor - which means, in more specific terms, the
safety and decent living for the laborer.37
This is, of course, not a harsh rule. The framers of the law (Labor Code and the Civil Code)
had fully taken cognizance of the disparity in terms of resources and standing between labor and
capital. In any legal controversy between them, the former always suffers the most. Hence, the
common adage that those who have less in life should have more in law is best exemplified and made
real in Articles 4 and 1702 of the Labor Code and Civil Code, respectively. The worker must look up to
the law for his protection. The law regards him with tenderness and even favor and always with faith
and hope in his capacity to help in shaping the nation’s future. He must not be taken for granted.38
In the area of employment bargaining, the employer stands on higher footing than the
employee. The law must protect labor to the extent, at least, of raising him to equal footing in
bargaining relations with capital and to shield him from abuses brought about by the necessity to
survive.39
Certainly, this rule of interpretation and construction in favor of labor does not mean that
capital should, at all times, be at the losing end of a controversy. The law does not say so. For while the
Constitution and the law tend to favor the working man, protection to the employer is also assured.
Protection of the rights of the laborer authorizes neither the oppression nor self-destruction of the
employer. While the Constitution is committed to the policy of social justice and the protection of the
working class, it should not be supposed that every labor dispute will be automatically decided in favor
of labor. Management also has its own rights, which, as such, are entitled to respect and enforcement in
the interest of simple fair play. Out of its concern for those with less privilege in life, the Supreme
Court has inclined more often than not towards the worker and upheld his cause with his conflicts with
the employer. Such favoritism, however, has not blinded the Court to rule that justice is, in every case,
for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.40
The Philippine Constitution, while inexorably committed towards the protection of the
working class from exploitation and unfair treatment, nevertheless mandates the policy of social justice
so as to strike a balance between an avowed predilection for labor, on the one hand, and the
maintenance of the legal rights of capital, the proverbial hen that lays the golden egg, on the other. The
Supreme Court, in Philippine Long Distance Telephone Co. v. NLRC,41 underscored that although it
is bound by the social justice mandate of the Constitution and the laws, such policy of social justice is not
intended to countenance wrongdoing.
b. Doubt or ambiguity in labor contracts.
In case of doubt or ambiguity, labor contracts should be interpreted liberally in favor of the
worker.42 Article 1702 of the Civil Code and Article 4 of the Labor Code should be applied in resolving
such doubt or ambiguity in contracts between management and the union.43 Contracts which are not
ambiguous are to be interpreted according to their literal meaning and not beyond their obvious
intendment.44 In Colegio de San Juan de Letran - Calamba v. Villas,45 the Supreme Court re-
affirmed the rule that the ambiguity in labor contracts should be strictly construed against whoever is
the author thereof.46
In the case of a CBA, the Highest Court laid down the rule that while its terms and conditions
constitute the law between the parties, it is not an ordinary contract to which is applied the principles of
law governing ordinary contracts. Not being an ordinary contract as it is impressed with public interest,
a CBA must be construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in which it is
negotiated and the purpose for which it is intended to serve.47
c. Doubt or ambiguity in evidence.
The rule enunciated in Article 4 of the Labor Code likewise applies in the appreciation of
evidence in labor proceedings. Consequently, when there is a doubt between the evidence presented by
the employer and the employee, such doubt should be resolved in favor of the latter.48 Time and again,
the Supreme Court has pronounced that “if doubt exists between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter. ”49 The policy is to
extend the doctrine to a greater number of employees who can avail themselves of the benefits under
the law, which is in consonance with the avowed policy of the State to give maximum aid and
protection to labor.50
In illegal dismissal cases, the consistent rule is that the employer must affirmatively show
rationally adequate evidence that the dismissal was for a justifiable cause, failing in which makes the
termination illegal.51 As aptly stated in Century Canning Corporation v. Ramil :52
“xxx Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal
justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor,
53
pursuant to the social justice policy of labor laws and the Constitution. ”
Consequently, if the employer failed to adduce substantial evidence to prove that the
employees’ dismissal from their employment was for a just or authorized cause, the conclusion is
inescapable that they were illegally dismissed.54
------------oOo---------

Chapter One
FUNDAMENTAL PRINCIPLES AND POLICIES

TOPICS PER SYLLABUS

C. Labor Code

1. Article 3
 2. Article 4
3. Article 166
4. Article 211
5. Article 212
6. Article 255
7. Article 277
C.
THE LABOR CODE
1. On Article 3.
Article 3 of the Labor Code states:
“Article 3. Declaration of basic policy. - The State shall afford protection to
labor, promote full employment, ensure equal work opportunities regardless of sex, race or
creed and regulate the relations between workers and employers. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure, and just and humane
conditions of work.”
This article reflects certain basic principles enshrined in the Constitution aimed at protecting the
interest of labor, promoting full employment and equal work opportunities irrespective of sex, race or creed.
Substantially, it was based on Section 9, Article II of the 1973 Constitution which was the constitution in
force at the time of the enactment of the Labor Code.
In the 1987 Constitution, these principles were amplified and enshrined in Section 3, Article
XIII thereof. This provision crystallizes the fundamental law’s policies on labor, defines the parameters
of the rights granted to labor such as the right to security of tenure, and prescribes the standards for the
enforcement of such rights in concrete terms. While not infallible, the measures provided therein tend
to ensure the achievement of the constitutional aims.1
2. On Article 4.
(NOTE: See discussion on this provision in relation to Article 1702 of the Civil Code,
supra)
3. On Article 166.
Article 166 of the Labor Code states:
“Article 166. Policy. - The State shall promote and develop a tax-exempt employees‟
compensation program whereby employees and their dependents, in the event of
workconnected disability or death, may promptly secure adequate income benefit and medical
related benefits. ”
a. The Employees’ Compensation Program (ECP) .

The ECP is designed to provide public and private sector employees and their dependents
with income and other benefits in the event of a work-connectedinjury, sickness, disability or death.
It assures workers of total protection through the provision of a comprehensive benefit package
encompassing preventive occupational safety and health aspects, curative or medical and
compensatory grant, and rehabilitation of occupationally disabled workers.2
b. Attributes of the ECP.
The ECP is characterized as follows:
1. It is not subject to tax;
2. It is designed to ensure promptitude in cases of work-connected disability or death, in the
award to employees and their dependents of adequate income benefits and medical or
related benefits;
3. It is funded by monthly contributions of all covered employers;
4. It is compulsory on all employers and their employees whose age is not over sixty (60)
years old;
 5. It provides for benefits which are exclusive and in place of all other liabilities of the
employer to the employee, his dependents or anyone otherwise entitled to receive damages
on behalf of the employee or his dependents; and
6. It has its own adjudicatory machinery with original and exclusive jurisdiction to settle any
dispute with respect to coverage, entitlement to benefits, collection and payment of
contributions and penalties thereon, or any other matter related thereto, independent of
other tribunals, except the Supreme Court (and the Court of Appeals per Revised
Administrative Circular No. 1-95) .3
c. Compensable contingencies under the ECP.
Article 166 of the Labor Code makes reference to the promotion and development of a taxexempt
ECP whereby employees and their dependents, in the event of work-connected disability or death, may
promptly secure adequate income benefit and medical related benefits. The following contingencies are
compensable under the ECP:
1. Work-connected injury or accident;
2. Work-connected sickness; and
3. Any disability or death resulting from any work-connected injury or accident or work-
connected sickness.
(NOTE: See further discussion on this topic under “VI. SOCIAL WELFARE LEGISLATION (P.D.
626) xxx D. Employee’s compensation - coverage and when compensable”, infra)
4. On Article 211.
The provision of Article 211 of the Labor Code states:
“Article. 211. Declaration of Policy. - A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation,
as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;
(c) To foster the free and voluntary organization of a strong and united labor
movement;
(d) To promote the enlightenment of workers concerning their rights and
obligations as union members and as employees;
(e) To provide an adequate administrative machinery for the expeditious
settlement of labor or industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.
B. To encourage a truly democratic method of regulating the relations between the
employers and employees by means of agreements freely entered into through
collective bargaining, no court or administrative agency or official shall have
the power to set or fix wages, rates of pay,hours of work or other terms and
conditions of employment, except as otherwise provided under this Code. ”

a. State policy.

Article 211 is the first article of Book V of the Labor Code on Labor Relations. Both Article 211
and Article 3 are the letters that giveth life to the protection-to-labor policies in all the modern
constitutions in the Philippines.4

Noteworthy is the primordial policy of the State to promote collective bargaining, the
settlement of labor disputes through conciliation, mediation and arbitration, free trade unionism,
establishment of strong and united labor movement, education of workers on their rights and
obligations and participation of workers in decision and policy-making processes affecting their rights,
duties and welfare, to ensure a stable but dynamic and just industrial peace.

It is not only industrial peace that the State is concerned about. Article 211 actually is an
amplification of the principles laid down in Article 3 of the Labor Code which mandates that it is a
basic policy of the State to protect labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between workers and employers. The
State is further mandated to assure the rights of workers to self-organization, collective bargaining,
security of tenure and just and humane conditions of work.
b. Labor relations.
The term “labor relations” refers to that part of labor law which regulates the relations between
employers and workers. Examples are the provisions of Book V of the Labor Code which deal with labor
organizations, collective bargaining, grievance machinery, voluntary arbitration, conciliation and mediation,
unfair labor practices, strikes, picketing and lockout and those found in Book VI on termination of
employment.
Broadly, “labor relations,” as understood within the ambit of Books V and VI of the Labor Code,
dwell on the broad and dynamic relationship between the employer and the employee, its ramifications
and implications insofar as their respective rights and interests are concerned as well as the modes of settling
and adjusting their differences and disputes and ultimately, the grounds and manner by which such
relationship will be terminated. Just like any relationship founded on mutual interest, the employer cannot
exist without the employee and vice versa. It is in this light that laws are enacted to delineate and govern their
relationship with the end in view of promoting industrial peace and harmony in the workplace.
c. Labor Relations vs. Labor Standards.
“Labor relations” may be distinguished from “labor standards” in that the latter is that part of labor
law which prescribes the minimum terms and conditions of employment which the employer is required to
grant to its employees. Examples of labor standards are the provisions embodied in the following Books of
the Labor Code:
(1) Book One on recruitment and placement of workers and employment of non-resident
aliens;
(2) Book Two on national manpower development program and training and employment of
special workers;
(3) Book Three on working conditions and rest periods, wages and working conditions for
special groups of employees; and
(4) Book Four on medical, dental and occupational safety, employees’ compensation and state
insurance fund, medicare (now PhilHealth) and adult education.
Labor relations and labor standards laws are not mutually exclusive. They are
complementary to, and closely interlinked with, each other. For instance, the laws on collective
bargaining, strikes and lockouts which are covered by labor relations law necessarily relate to the laws on
working conditions found in Book III.
5. On Article 212.
Article 212 of the Labor Code simply enumerates and defines the various important terms and
phrases used in the Code, to wit:
“Article. 212. Definitions. -
(a) "Commission" means the National Labor Relations Commission or any of its divisions,
as the case may be, as provided under this Code.
(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in
the regional offices established under Presidential Decree No. 1, in the Department of
Labor.
(c) "Board" means the National Conciliation and Mediation Board established under
Executive Order No. 126.
(d) "Council" Tripartite Voluntary Arbitration Advisory Council established under Executive
Order No. 126, as amended.
(e) “Employer” includes any person acting in the interest of an employer, directly or
indirectly. The term shall not include any labor organization or any of its officers or agents
except when acting as employer.
 (f) “Employee” includes any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer, unless the Code so explicitly states. It
shall include any individual whose work has ceased as a result of or in connection with any
current labor dispute or because of any unfair labor practice if he has not obtained any
other substantially equivalent and regular employment.
(g) “Labor organization” means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
(h) “Legitimate labor organization” means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.
(i) “Company union” means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by this
Code.
(j) “Bargaining representative” means a legitimate labor organization whether or not
employed by the employer.
(k) “Unfair labor practice” means any unfair labor practice as expressly defined by the
Code.
(l) “Labor dispute” includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of employer and
employee.
(m) “Managerial employee” is one who is vested with the powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
(n) “Voluntary Arbitrator” means any person accredited by the Board as such or any person
named or designated in the Collective Bargaining Agreement by the parties to act as
their Voluntary Arbitrator, or one chosen with or without the assistance of the National
Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in
the Collective Bargaining Agreement, or any official that may be authorized by the
Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written
request and agreement of the parties to a labor dispute.
(o) “Strike” means any temporary stoppage of work by the concerted action of employees
as a result of an industrial or labor dispute.
(p) “Lockout” means any temporary refusal of an employer to furnish work as a result of an
industrial or labor dispute.
(q) “Internal union dispute” includes all disputes or grievances arising from any violation of
or disagreement over any provision of the constitution and by-laws of a union, including
any violation of the rights and conditions of union membership provided for in this
Code.
(r) “Strike-breaker” means any person who obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any peaceful picketing affecting wages,
hours or conditions of work or in the exercise of the right of self-organization or
collective bargaining.
(s) “Strike area” means the establishment, warehouses, depots, plants or offices, including
the sites or premises used as runaway shops, of the employer struck against, as well
as the immediate vicinity actually used by picketing strikers in moving to and fro before
all points of entrance to and exit from said establishment. ”
The above terms and phrases are cited in the appropriate commentaries herein on the various topics
prescribed under the syllabus for Labor Law.
6. On Article 255.
Article 255 of the Labor Code contains the following provisions:
“Article 255. Exclusive bargaining representation and workers’ participation in policy and
decision-making. - The labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of collective bargaining.
However, an individual employee or group of employees shall have the right at any time to
present grievances to their employer.
 “Any provision of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and decision-making processes of the establishment
where they are employed insofar as said processes will directly affect their rights, benefits
and welfare. For this purpose, workers and employers may form labor-management
councils:Provided, That the representatives of the workers in such labor-management
councils shall be elected by at least the majority of all employees in said establishment. ”
a. Article 255 provides for two (2) separate concepts.
Article 255 is composed of two (2) paragraphs embodying different legal concepts, namely:
(1) The 1 paragraph enunciates the concept of exclusive bargaining representation; and
st

(2) The 2 paragraph enunciates the concept of co-determination.

nd

b. Different constitutional bases of the two concepts.

The constitutional basis of the first is different from the second. The first paragraph is
anchored on the constitutional precept that the State “shall guarantee the rights of all workers to self-
organization [and] collective bargaining and negotiations. ”5 The second paragraph is based on the
constitutional grant to workers of the right to “participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law. ”6
These concepts are discussed herein seriatim.
I.
IN RE: FIRST PARAGRAPH OF ARTICLE 255
a. Exclusive bargaining representative; meaning.
“Exclusive bargaining representative” or “exclusive bargaining agent” refers to
a legitimate labor organization duly recognized7 or certified8 as the sole and exclusive bargaining
representative or agent of all the employees in a bargaining unit.
Once so recognized or certified, it shall remain as such during the existence of the CBA, to the
exclusion of other labor organizations, and no petition questioning its majority status shall be
entertained nor shall certification election be conducted outside of the 60-day freedom period
immediately before the expiry date of the 5-year term of the CBA.
What is represented by the bargaining agent are not only its members but also its non -
members who are included in the bargaining unit.
The terms “bargaining union” and “bargaining agent” may be used interchangeably to refer to the
union designated as the sole and exclusive bargaining representative not only of its members but of all the
members of the bargaining unit where it operates and which it represents.
b. Individual employee or group of employees cannot bring grievable issues for
voluntary arbitration without the participation of the bargaining union.
The designation of a bargaining agent, however, does not deprive an individual employee or group
of employees to exercise their right at any time to present grievances to their employer, with or without the
intervention of the bargaining agent.
Article 255 explicitly provides that an individual employee or group of employees may validly bring
grievances directly to the employer even if there is an existing exclusive bargaining representative.
Tabigue v. International Copra Export Corporation. 9 - The Supreme Court, however,
clarified in this case that an individual employee or group of employees cannot be allowed to submit or
refer unsettled grievances for voluntary arbitration without the participation of the bargaining union.
The petitioners in this case are members of INTERCO Employees/Laborers’ Union (the union) , the
bargaining agent in respondent company. Without the participation of the union, petitioners filed a
Notice of Preventive Mediation with the NCMB against respondent for violation of Collective
Bargaining Agreement (CBA) and failure to sit on the grievance conference/meeting. As the parties
failed to reach a settlement before the NCMB, petitioners requested to elevate the case to voluntary
arbitration. However, the president of the union of which petitioners are members wrote a letter stating
that petitioners “are not duly authorized by [the] board or the officers to represent the union, [hence] . .
. all actions, representations or agreements made by these people with the management will not be
honored or recognized by the union. ” The Supreme Court ruled that the right of any employee or group
of employees to, at any time, present grievances to the employer does not imply the right to submit the
same to voluntary arbitration. In this case, petitioners have not been duly authorized to represent the
bargaining union, hence, they cannot present their unsettled grievances for voluntary arbitration.10
Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao,11 reiterated the
said ruling in Tabigue. In this case, the Davao Insular Hotel Free Employees Union- National
Federation of Labor (DIHFEU-NFL) , the recognized labor organization in respondent hotel, entered into a
Memorandum of Agreement (MOA) with the respondent which superseded the affected provisions of the
existing CBA. The MOA was executed to effect the re-opening of the hotel which earlier suspended its
operation due to extreme business losses. Individual members of another union, the Insular Hotel Employees
Union-National Federation of Labor (IHEU-NFL) , petitioner in this case, which claimed to be affiliated also
with the same federation, questioned the validity of the MOA by filing a Notice of Preventive Mediation with
the NCMB.
On the issue of the identity of the duly recognized union, the respondent hotel contended that it is
DIHFEU-NFL which is the only recognized bargaining unit in the establishment, the other union named
IHEU-NFL being a non-entity since, as certified by the DOLE, it is not a registered labor organization. It
was held, however, that respondent is already estopped from questioning the same as it did not raise the said
issue in the proceedings before the NCMB and the Voluntary Arbitrator. A perusal of the records revealed that
the main theory posed by respondent was whether or not the individual employees had the authority to file the
complaint notwithstanding the apparent non-participation of the union. Respondent never put in issue the fact
that DIHFEU-NFL was not the same as IHEU-NFL. Consequently, it was declared already too late in the day
to assert the same.
Resolving the issue raised by respondent of whether the individual members of IHEU-NFL
have the requisite standing to question the MOA before the NCMB and the Voluntary Arbitrator, the
Supreme Court, invoking its 2009 ruling in Tabigue and Section 3, Rule IV of the NCMB Manual of
Procedure which provides that only a certified or duly recognized bargaining representative has the
right to file a notice or request for preventive mediation, declared that the individual members of the
union have no authority to file the case. Clearly, therefore, the NCMB and the Voluntary Arbitrator had
no jurisdiction to entertain the Notice of Preventive Mediation and the voluntary arbitration case,
respectively.
c. In order to have legal standing, the individual members should be shown to have been duly
authorized to represent the bargaining union.
In the same case of Insular Hotel, it was held that in order to acquire legal standing to initiate the
complaint (Notice of Preventive Mediation) , the individual employees should be shown to have been duly
authorized to represent the bargaining union. Petitioners have not, however, been duly authorized to
represent the union.
I.
IN RE: SECOND PARAGRAPH OF ARTICLE 255
a. Principle of co-determination.
This constitutional and legal right is the basis of the principle of co-determination where the
employees are given the right to co-determine or share the responsibility of formulating certain policies that
affect their rights, benefits and welfare.
Philippine Airlines, Inc. (PAL) v. NLRC and Philippine Airlines Employees Association
(PALEA) ,12 best illustrates this principle. The principal issue submitted for resolution in this case is
whether or not the formulation of a Code of Discipline among employees is a shared responsibility of
the employer and the employees. If in the affirmative, whether management may be compelled to share
with the union or its employees its prerogative of formulating said Code. On March 15, 1985,
petitioner PAL completely revised its 1966 Code of Discipline. The Code was circulated among the
employees and was immediately implemented, and some employees were forthwith subjected to the
disciplinary measures embodied therein. This led private respondent PALEA to file a complaint before
the NLRC on August 20, 1985, for unfair labor practice with the following remarks: “ULP with
arbitrary implementation of PAL’s Code of Discipline without notice and prior discussion with Union
by Management. ” It thus prayed that the implementation of the Code be held in abeyance; that PAL
should discuss the substance of the Code with PALEA; that employees dismissed under the Code be
reinstated and their cases subjected to further hearing; and that PAL be declared guilty of unfair labor
practice and be ordered to pay damages.
In affirming the decision of the NLRC which ordered that the New Code of Discipline should be
reviewed and discussed with the union, particularly the disputed provisions and that copies thereof be
furnished each employee, the Supreme Court ratiocinated as follows:
“A close scrutiny of the objectionable provisions of the Code reveals
that they are not purely business-oriented nor do they concern the management
aspect of the business of the company as in the San Miguel case. The provisions
of the Code clearly have repercussions on the employees‟ right to security of tenure.
The implementation of the provisions may result in the deprivation of an employee‟ s
means of livelihood which, as correctly pointed out by the NLRC, is a property
13
right. In view of these aspects of the case which border on infringement of
constitutional rights, we must uphold the constitutional requirements for the protection
of labor and the promotion of social justice, for these factors, according to Justice
Isagani Cruz, tilt „the scales of justice when there is doubt, in favor of the worker. ‟ 14
“Verily, a line must be drawn between management prerogatives
regarding business operations per se and those which affect the rights of the
employees. In treating the latter, management should see to it that its
employees are at least properly informed of its decisions or modes of
action. PAL asserts that all its employees have been furnished copies of the Code.
Public respondents found to the contrary, which finding, to say the least is entitled to
great respect.
xxx
“Indeed, industrial peace cannot be achieved if the employees are
denied their just participation in the discussion of matters affecting their
rights. Thus, even before Article 211 of the Labor Code (P.D. 442) was amended by
R.A. No. 6715, it was already declared a policy of the State: „(d) To promote the
enlightenment of workers concerning their rights and obligations . . . as employees.
‟ This was, of course, amplified by R.A. No. 6715 when it decreed the
„participation of workers in decision and policy making processes affecting
their rights, duties and welfare. ‟ PAL‟ s position that it cannot be saddled with the
„obligation‟ of sharing management prerogatives as during the formulation of the
Code, R.A. No. 6715 had not yet been enacted (Petitioner‟ s Memorandum, p. 44;
Rollo, p. 212) , cannot thus be sustained. While such „obligation‟ was not yet founded
in law when the Code was formulated, the attainment of a harmonious labor-
management relationship and the then already existing state policy of enlightening
workers concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees‟ rights. ”15
b. Limitation: Grant of the right of participation does not mean co-management of business nor
intrusion into management prerogatives; This principle does not mean that workers should
approve management policies or decisions.
Although the law sets the standard that the participation of the workers in the policy and
decision-making processes of the employer is limited to policies and decisions which affect their rights,
benefits and welfare, there exists a question on the extent of such participation that may be afforded to the
workers in the said processes. The discussion of the 1986 Constitutional Commission on the provision
granting this right which was ultimately enshrined and designated as Section 3, par. 2, Article XIII, [Social
Justice and Human Rights] of the 1987 Constitution, indicates that it is only in the area of grievance
procedures and voluntary modes of settling disputes, and not in the area of corporate planning, charting
of corporate business, modes and procedures of corporate management and acquisition of property,
where workers may participate.
Manila Electric Company v. Quisumbing,16 instructs that the grant of this right is not an
intrusion into the employer’s management prerogative. The mandate of the Constitution and the law is
complied with when, for instance, the union is allowed to have representatives in the employer’s Safety
Committee, Uniform Committee and other committees of similar nature. Certainly, such participation by the
union in the said committees is not in the nature of a co-management control of the business of the employer.
What is granted therein is participation and representation. Thus, there is no impairment of management
prerogatives.
c. Labor-Management Council.
 (NOTE: A more extensive discussion of Labor-Management Council and its
distinctions from Grievance Machinery/Grievance Procedure is found under the
topic of “VII. LABOR RELATIONS LAW xxx B. Right to Collective Bargaining xxx
Mandatory Provisions of CBA xxx (iv) Labor-Management Council”, infra)
7. On Article 277.
Article 277 of the Labor Code states:
“Article 277. Miscellaneous Provisions. -
(a) All unions are authorized to collect reasonable membership fees, union dues,
assessments and fines and other contributions for labor education and research, mutual
death and hospitalization benefits, welfare fund, strike fund and credit and cooperative
17
undertakings.
(b) Subject to the constitutional right of workers to security of tenure and their
right to be protected against dismissal except for a just and authorized cause and
without prejudice to the requirement of notice under Article 283 of this Code, the
employer shall furnish the worker whose employment is sought to be terminated a
written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires, in accordance with company rules
and regulations promulgated pursuant to guidelines set by the Department of Labor
and Employment. Any decision taken by the employer shall be without prejudice to
the right of the worker to contest the validity or legality of his dismissal by filing a
complaint with the regional branch of the National Labor Relations Commission.
The burden of proving that the termination was for a valid or authorized cause shall
rest on the employer. The Secretary of the Department of Labor and Employment
may suspend the effects of the termination pending resolution of the dispute in the
event of a prima facie finding by the appropriate official of the Department of Labor
and Employment before whom such dispute is pending that the termination may
cause a serious labor dispute or is in implementation of a mass lay-off.18
(c) Any employee, whether employed for a definite period or not, shall, beginning on
his first day of service, be considered as an employee for purposes of membership in any
19
labor union.
(d) No docket fee shall be assessed in labor standards disputes. In all other disputes,
docket fees may be assessed against the filing party, provided that in bargaining deadlock, such
fees shall be shared equally by the negotiating parties.
(e) The Minister of Labor and Employment and the Minister of the Budget shall cause
to be created or reclassified in accordance with law such positions as may be necessary to
carry out the objectives of this Code and cause the upgrading of the salaries of the
personnel involved in the Labor Relations System of the Ministry. Funds needed for this
purpose shall be provided out of the Special Activities Fund appropriated by Batas
Pambansa Blg. 80 and from annual appropriations thereafter.20
(f) A special Voluntary Arbitration Fund is hereby established in the Board to
subsidize the cost of voluntary arbitration in cases involving the interpretation and
implementation of the Collective Bargaining Agreement, including the Arbitrator‟ s fees, and for
such other related purposes to promote and develop voluntary arbitration. The Board shall
administer the Special Voluntary Arbitration Fund in accordance with the guidelines it may adopt
upon the recommendation of the Council, which guidelines shall be subject to the approval of
the Secretary of Labor and Employment. Continuing funds needed for this purpose in the initial
yearly amount of fifteen million pesos ( P15,000,000.00) shall be provided in the 1989 annual
general appropriations act.
The amount of subsidy in appropriate cases shall be determined by the Board in
accordance with established guidelines issued by it upon the recommendation of the
Council.
The Fund shall also be utilized for the operation of the Council, the training and
education of Voluntary Arbitrators, and the Voluntary Arbitration Program.21
(g) The Ministry shall help promote and gradually develop, with the agreement of
labor organizations and employers, labor-management cooperation programs at
appropriate levels of the enterprise based on the shared responsibility and mutual respect
in order to ensure industrial peace and improvement in productivity, working conditions
22
and the quality of working life.
 (h) In establishments where no legitimate labor organization exists, labor-
management committees may be formed voluntarily by workers and employers for the
purpose of promoting industrial peace. The Department of Labor and Employment shall
endeavor to enlighten and educate the workers and employers on their rights and
23
responsibilities through labor education with emphasis on the policy thrusts of this Code.
(i) To ensure speedy labor justice, the periods provided in this Code within which
decisions or resolutions of labor relations cases or matters should be rendered shall be
mandatory. For this purpose, a case or matter shall be deemed submitted for decision or
resolution upon the filing of the last pleading or memorandum required by the rules of the
Commission or by the Commission itself, or the Labor Arbiter, or the Director of the Bureau of
Labor Relations or Med-Arbiter, or the Regional Director.
Upon expiration of the corresponding period, a certification stating why a decision or
resolution has not been rendered within the said period shall be issued forthwith by the
Chairman of the Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor
Relations or Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof
served upon the parties.
Despite the expiration of the applicable mandatory period, the aforesaid officials shall,
without prejudice to any liability which may have been incurred as a consequence thereof,
24
see to it that the case or matter shall be decided or resolved without any further delay.
Of this very long enumeration, the most important provision is that one found in paragraph
(b) above which constitutes the statutory due process that should be observed in cases of termination of
employment per Agabon doctrine.25
(NOTE: A more comprehensive discussion thereon is found in the topic: “IV.
TERMINATION OF EMPLOYMENT xxx B. Dismissal from employment xxx 3. Due
Process”, infra) .

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