LABOR LAW

References: Azucena; UP reviewer

I. General Provisions
a. Labor Law – body of statutes, rules and doctrines that:
i. D – defines state policies on labor and employment, and
ii. G – governs the rights and duties of workers and employers respecting the terms
and conditions of employment by:
a. Prescribing certain standards therefor, or
b. Establishing a legal framework
iii. T – in order to obtain better terms and conditions of work through collective
bargaining or other concerted activity
b. Labor Law Consist of:
i. Labor Policies – principles and guidelines that define State policies concerning
labor and employment
ii. Labor Standards Law – body of statutes, rules and doctrines that governs rights
and duties of workers and employers respecting terms and conditions of
employment by prescribing certain standards thereof.
1. Minimum requirements prescribed by existing laws, rules and regulations
relating to wages, hours of work, cost-of-living allowance, and other
monetary and welfare benefits, including occupational, safety and health
hazards.
iii. Labor Relations Law – body of statutes, rules, principles and doctrines that govern
rights and duties of workers and employers by establishing a legal framework
within which better terms and conditions of work could be obtain through
collective bargaining or other concerted activity.
c. Constitutional provisions concerning Labor
i. If there should be a conflict between constitutional provisions and those of the
Labor code, the constitution shall prevail as it is the highest law of the land.
ii. Art II, Section 18 declares as a state policy “The state affirms labor as primary
social economic force. It shall protect the rights of workers and promote their
welfare.” “the state shall afford protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
oppurtunities for all.”
iii. Guaranteed basic rights of workers, namely:
1. To organize themselves
2. To conduct collective bargaining or negotiating with management
3. To engage in peaceful concerted activities, including to strike in
accordance with the law
4. To enjoy security of tenure
5. To work under humane conditions
6. To receive a living wage
 7. To participate in policy and decision-making process affecting their rights
and benefits may be provided for by law
d. Three Aggregate Powers Against which Labor Needs Protection
i. Collective Labor – directed by union
ii. Collective Capital – directed by management
iii. Collective Bargaining Relationship
e. Construction of Labor and Social Legislation Laws
i. Should be construed liberally in order to promote their purpose
ii. All doubts in the implementation and interpretation of the provisions of the Labor
Code, including its implementing rules and regulations, shall be resolved in favour
of labor (LC Art 4)
iii. In case of doubt, all labor legislation and all labor contracts shall be construed in
favour of the safety and decent living for the labourer (Art 1702, New Civil Code)
iv. Tripartism – participation and cooperation among government, labor and
management in the evolution and formulation of labor policies and standards.
f. Balancing of Rights in the Private Enterprise System
i. Private Enterprise System – economic system under which property of all kinds
can be privately owned and in which individuals; alone or in association with
another, can embark in a business activity. This includes industrial, agricultural,
or agro-industrial establishments engaged in the production, manufacturing,
processing, repacking or assembly of goods including service-oriented enterprise.
ii. While labor is entitled to a just share in the fruits of production, the enterprise
has an equally important right not only to reasonably returns on investment but
also to expansion and growth
g. Social Justice (next subtitle)
h. Police Power
i. The basic or foundation of Labor Laws is Police power
ii. It is the power of the government to enact laws within the constitutional limits,
to promote the order, safety, health, morals and general welfare.
i. Management prerogative- limitation
i. Law
ii. Collective bargaining agreement or contracts
iii. General principles of fair play and justice
j. Employee-Employer Relationship
i. GR: not a pre-condition (depending on the issue involved)
ii. Elements of Employer and Employee relationship
1. Selection and engagement of employees
2. Payment of wage
3. Power of dismissal; and
4. Power to control the employee with respect to the means and methods
by which the work is to accomplished
k. Applicability of the Labor Code
i. GR: All rights and benefits granted to workers (whether agricultural or non
agricultural)
 ii. Exceptions
1. Government corporations
a. Chartered Corporation – Civil Service Rules shall apply
b. Those incorporated under the general corporation law – Labor
code shall apply

II. Fundamental Principles

a. Constitutional Provisions
i. Art II, Section 9. The State shall promote a just and dynamic social order that will
endure 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 improved quality of life for all.
ii. Art II, Section 10. The state shall promote social justice in all phases of social
development.
1. Social Justice is 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
a. The aim, reason and justification of Labor Laws is social justice.
“raison d’etre”
2. Welfare State concept is found in the constitutional clause on the
promotion of social justice to ensure the well-being and economic
security of all the people, and the pledge of protection to labor with
specific authority to regulate the relations between landowners and
tenants and between labor and capital. (Alalayan vs National Power Corp,
1968)
iii. Art II, Section 11. The State values the dignity of every human person and
guarantees full respect for human rights.
iv. Art II, 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.
v. Art II, 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.
vi. Art II, Section 18. The state affirms labor as a primary social economic force. It
Shall protect the rights of workers and promote their welfare.
vii. Art II, Section 20. The state recognizes the indispensable role of the private sector,
encourages private enterprise, and provides Incentives to needed investments.
1. Limitation of Social Justice
a. Used only to correct social injustice
b. Must be founded on the recognition of the necessity
interdepence among diverse units of society, and of the
protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life.
 c. Balancing of the rights and welfare of both employee and
employer
2. Liberty of Contract/Laissez Faire
a. Prohibition to impair the obligation of contracts in not
absoluteand unqualified.
b. It does not deprive the State of the power to interfere where the
parties do not stand upon an equality, or where public health
demands that one party to the contract shall be protected
against himself. (Leyte Land Transportation Co. vs Leyte Farmers
and Workers Union, 1948)
viii. Art III, Section 1. No person shall be deprived of life, liberty and property without
due process of the law, nor shall any person be denied the equal protection of
the law
1. Due process requirements (two-fold requirement)
a. Substantive - dismissal should be for a valid and authorized cause
as provided for by law.
b. Procedural – due notice and hearing
2. Labor as a property right – one’s employment is a property right, and the
wrongful interference therewith is an actionable wrong. (Sibal vs Notre
Dame of Manila, 1990)
ix. Art III, Section 4. No law shall be passed abridging the freedom of speech, of
expression, or of the press, of the right of the people peaceably assemble and
petition the government for redress of grievances.
x. Art III, Section 8. The right of the people, including those employed in the public
or private sectors, to form unions, associations, or societies for purpose not
contrary to law shall not be abridged.
xi. Art XIII, 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.

xii. Art XIII, Section 2. The promotion of social justice shall include the commitment
to create economic opportunities based on freedom of initiative and self-reliance.
xiii. Art XIII, 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
foster industrial 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.
1. Participation in the decision making process
a. Management should see to it that its employees are at least
properly informed of its decisions or modes of action.
b. Management prerogatives vs rights of employees
2. Management Prerogative
a. The law in protecting the rights of the employees authorize
neither oppression nor self-destruction of the employer.
i. Never should the scale be so tilted if the result is injustice
to the employer. (Phil. Geothermal Inc. vs NLRC, 1994)
b. Management Prerogative, Defined
i. It is the free will of management to conduct its own
affairs to achieve its purpose taken from. (Torreda vs
Toshiba)
1. Without grave abuse of discretion
2. Justice and fairplay
3. Exception:
a. When the Sec of Labor assumes
jurisdiction over labor disputes involving
industries indispensable to national
interest under Art 263 (g) LC (University
of Immaculate Conception Inc vs Sec of
Labor, 2005)
xiv. Art II, 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.
xv. Art XIII, 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.
b. Civil Code Provisions
 i. Art 19. Every person must in the exercise of his right and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith.
ii. 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 lockoouts, closed shop, wages, working
conditions,, hours of labor and similar subjects.
iii. Art 1702. In case of doubt, all labor contracts shall be construed in favour of the
safety and decent living for laborers.
1. 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. (PAL Employees Savings and Loan Assn., Inc vs NLRC, 1996)
2. Liberal Construction
a. CBA must yield to the common good. It 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
purpose which it is intended to serve (Cirtek EmployLabor Union-
FFW v Cirtek Electronics, 2010)

III. Recruitment and Placement of Workers

a. Definitions
i. Worker – any member of the labor force, whether employed or unemployed
ii. Recruitment and placement –
1. Any act of
a. Canvassing,
b. enlisting,
c. contracting,
d. transporting,
e. utilizing,
f. hiring or
g. procuring workers, and
2. also includes
a. referrals,
b. contract services,
c. promising
d. or advertising for employment
3. Locally or abroad, whether for profit or not;
4. Provided that any person or entity Which in any manner, offers or
promises for a fee
5. Employment to two or more persons
iii. License v Authority
 a. License – Document issued by the Department of Labor and
Employment authorizing a person or entity to operate a private
employment agency; authorized to collect fees
b. Authority – document issued by the DOLE authorizing a person
or association to engage in recruitment and placement activities
as a private recruitment agency; does not entitle a private
recruitment entity to collect fees
iv. Private Employment Agency (PEA) v Private Recruitment Entity (PRE)
1. PEA – any person or entity engaged in the recruitment and placement of
workers for a fee
2. PRE – Any person or assoc engaged in the recruitment and placement of
workers, locally or overseas, without charging, directly or indirectly, any
fee
3. PEA – license
4. PRE – Authority
b. Requirements for License
i. Citizenship requirements
1. Only Filipino citizens or
2. Corporations, Partnership or entities at least 75% of the authorized and
voting capital of which is owned and controlled by Filipino citizens
ii. Capitalization requirements
1. Substantial capital determined by Sec of Labor
a. Based on POEA Rules the following are substantial capital
requirements:
i. Single Proprietorship or partnership : minimum
capitalization of 2M
ii. Corp: paid-up capital of 2M
iii. Non-transferability of license or authority
1. USE: cannot be used directly or indirectly by any person other than to
whom it was issued.
2. TRANSFER: cannot be conveyed, transfer or assigned
3. CHANGE OF BUSINESS ADDRESS or DESIGNATION OF AN AGENT: needs
prior approval of the Sec of Labor.
a. Licensed agencies are prohibited from any recruitment activities
of any form outside the business address without the prior
authority of the POEA
4. VALIDITY OF LICENSE: 4 years
iv. Entities disqualified from being issued a license T-O-C-D-A
1. T – Travel agencies and Sales agencies of airline companies (Art. 26)
2. O – Officers or members of the Board of any corporation or members in
partnership engaged in the business of a travel agency.
3. C – Corporations and Partnerships, when any of its officers, members of
the board or partners, is also an officer or member of the board of
 partner of a corporation or partnership engaged in the business of a
travel agency.
4. D – Derogatory records; Persons, Partnerships, Corporations who have
5. A – Any official or employee of the DOLE, POEA, OWWA, DFA and other
government agencies directly involved in the implementation of R.A.
8042 as amended or his/relatives within the 4th civil degree of
consanguinity and affinity
c. Recruitment
i. What constitutes recruitment
1. CASE: People v. Panis, 1988
a. Number of persons dealt with is not essential ingredients of the
act of recruitment
b. Any acts mentioned in Article 13(b) will constitute recruitment
and placement even if only one prospective worker is involved
c. RULE OF EVIDENCE: where a fee is collected in consideration for
a promise or offer of employment to two or more prospective
workers – prima facie evidence of recruitment and placement
2. Acts of Referral (CASE: Rodolfo v People, 2006)
a. Definition: the act of passing along or forwarding an applicant
for the employment after an initial interview of a selected
applicant for an employment to a selected employer, placement
officer or bureau
3. Promising employment CASE: People v Saulo, 2000)
a. Relying completely upon such representations, complainants
entrusted their hard-earned money to accused-appellant in
exchange for what they would later discover to be a vain hope
of obtaining employment abroad.
b. The absence of necessary license or authority renders all of the
accused-appellant’s recruitment activities criminal.
d. Illegal Recruitment
i. Simple Illegal recruitment
1. Elements (1st kind)
a. Person charged must have undertaken recruitment activities
defined under Art 13(b), or prohibited activities under Art 34;
and
b. The said person does not have a license or authority to do so
(Art 38©)
2. Elements (2nd kind)
a. Person charged commits any of the enumerated acts under Sec
6 of R.A. 8042 as amended.
b. It is immaterial whether he is a holder or not of any license or
authority
3. Profit or lack thereof, Immaterial (CASE: C.F. Sharp v Espanol, 2007)
 a. The fact that C.F. Sharp did not receive any payment during the
interviews is of no moment. The act of recruitment may for
profit or not.
b. Notably, it is the lack of necessary license or authority, not the
fact of payment that renders the recruitment activity unlawful.
4. Impression of the ability to send the complainant abroad
a. To prove illegal recruitment, it must be shown that the
appellant gave complainants the distinct impression that she
had the power or the ability to send the complainants abroad
for work such that the latter were convinced to part ways with
their money in order to be employed
ii. Prohibited Practices
1. It shall be unlawful for any individual, entity, licensee, or holder of
authority:
a. o charge or accept, directly or indirectly, any amount greater
than that specified in the schedule of allowable fees prescribed
by the Secretary of Labor, or to make a worker pay any amount
greater than that actually received by him as a loan or advance;
b. To furnish or publish any false notice or information or
document in relation to recruitment or employment;
c. To give any false notice, testimony, information or document or
commit any act of misrepresentation for the purpose of
securing a license or authority under this Code.
d. To induce or attempt to induce a worker already employed to
quit his employment in order to offer him to another unless the
transfer is designed to liberate the worker from oppressive
terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not
to employ any worker who has not applied for employment
through his agency;
f. To engage in the recruitment or placement of workers in jobs
harmful to public health or morality or to the dignity of the
Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary
of Labor or by his duly authorized representatives;
h. To fail to file reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation
from jobs, departures and such other matters or information as
may be required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and
verified by the Department of Labor from the time of actual
signing thereof by the parties up to and including the periods of
expiration of the same without the approval of the Secretary of
Labor;
 j. To become an officer or member of the Board of any
corporation engaged in travel agency or to be engaged directly
or indirectly in the management of a travel agency; and
k. To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other
than those authorized under this Code and its implementing
rules and regulations. (Art 34, LC)
iii. Offense involving economic sabotage
1. Illegal recruitment is considered economic sabotage when the
commission thereof is attended by the ff. qualifying cirmcumstances:
a. By syndicate – if carried out by a group of 3 or more persons
conspiring and confederating with one another;
b. Large scale – if committed against 3 or more persons
individually or as a group (Art 38(b), LC)
2. Illegal recruitment by a syndicate (CASE: People v Gallo, 2010)
a. Elements
i. Offender undertakes either any activity within the
meaning of recruitment and placement defined under
Art 13(b), or any prohibited practices enumerated
under Art 34 of the LC;
ii. No valid license or authority by law
iii. Committed by a group of three or more
iv. Conspiring or confederating with one another
3. Illegal recruitment in large scale
a. Elements
i. Offender undertakes either any activity within the
meaning of recruitment and placement defined under
Art 13(b), or any prohibited practices enumerated
under Art 34 of the LC;
ii. The accused has not complied with the guidelines
issued by the Secretary of Labor and Employment,
particularly with respect to the securing of license or an
authority to recruit and deploy workers, either locally or
overseas; and
iii. Accused commits unlawful acts against three or more
persons individually or as a group
1. Three or more complainants must be in a single
case (People v reyes, 1995)
4. Illegal Recruitment v Estafa (CASE: Rosita Sy v People, 2010)
a. No double Jeopardy – because illegal recruitment is malum
prohibitum, in which there is no necessity to prove criminal
intent, whereas estafa is malum in se, in the prosecution of
which, proof of criminal intent is necessary.
 b. A person who commits illegal recruitment may be charged and
convicted separately of estafa. (People v Cortez)
iv. Labor Code v RA 8042 as amended by RA 10022
1. Applicability
a. LC: local workers
b. RA 8042: Migrant Worker
2. Acts Punishable
a. LC: Art 13(b); Art 34
b. RA 8042: Art 13(b) LC: Prohibited acts under section 6
3. Who can be punished
a. LC: Art 13(b) non-licensee ; Art 34 non licensee
b. RA 8042: Art 13(b) LC non-licensee: Prohibited acts under
section 6 licensee or non-licensee