Labor Laws &

Social Legislation
FUNDAMENTAL PRINCIPLES & CONCEPTS
Lecture 1
LABOR CODE
Presidential Decree No. 442 otherwise known as the Labor Code of the
Philippines is a decree instituting a Labor Code, thereby revising and
consolidating labor and social laws to AFFORD protection to labor,
PROMOTE employment and human resources development and ENSURE
industrial peace based on social justice.

LABOR CODE is a charter of human rights and a bill of obligations for

every working man.

Effectivity date: November 1, 1974. The writing of the labor code began
under the leadership of the Minister of Labor, Mr. Blas Ople; - [who deserves
to be regarded as the “Father of the Labor Code”.]
SOURCES OF LABOR LAWS

Primary Source: Auxiliary Source:

1. Philippine Constitution
2. Legislations passed by Congress
3. Decisions of the Supreme Court
4. Implementing Rules and
Regulations of DOLE
5. Decisions of quasi-judicial bodies
such as NLRC
6. ILO conventions
Article 8. Judicial decisions applying or interpreting
the laws or the Constitution shall form a part of the
legal system of the Philippines. (n) New Civil Code
1. Opinions of the Secretary of Labor
and employment
2. Opinions of the Secretary of Justice
3. Reports, debates, hearings made and
conducted by Congress
4. Labor law reviews
5. Labor law and social legislation
textbooks
6. Opinions of legal luminaries
7. Foreign laws and decisions
Applicability of the labor code
GENERAL RULE: All rights and benefits
granted to workers under the Labor Code shall
apply alike to all workers, whether agricultural or
non-agricultural. (LC, Art. 6)
Labor Dispute between Government Employees
- The Public Sector Labor-Management Council,
not the DOLE shall hear the dispute (E.O. 180,
Sec.15, June 1, 1987)
EXCEPTIONS
● Government Employees
● Employees of government corporations created
by special or original charter. - [Government Owned and
Controlled Corporation]
● Foreign governments
● International agencies [Recruitment and Selection]
● Corporate officers/ intra-corporate disputes
which fall under P.D. 902-A. now fall under the jurisdiction of
the regular courts pursuant to the Securities Regulation Code.
● Local water district [except where National
Labor Relation Commission’s jurisdiction is
invoked.]
● As may otherwise be provided by the Labor
Code. (others which the labor code defined
Definition of Terms:
LABOR It is the exertion by human beings of physical or mental efforts,
or both, towards the production of goods and services. It may include
labor force.
[Labor Force - who are employed or those who are able and willing to work but are temporarily or involuntarily
unemployed.]
MANPOWER it is the portion of a nation’s population that has actual or
potential capability to contribute to the production of goods and
services.
LABOR LAWS are all the rules of law governing the conditions under
which persons may work under the control of other person called
employers.
LABOR LAW
LABOR LAW defines State policies on labor and employment and
governs the rights and duties of the employer and employees with
respect to:
1. The terms and conditions of employment, and
2. Labor disputes arising from collective bargaining or other concerted
activity respecting such terms and conditions.
Recognition of the Constitution to LABOR. - The State affirms labor as a
primary social economic force. It shall protect the rights of workers and
promote their welfare. (1987 Constitution, Art. II, Sec. 18)
Administrative Agency - DOLE

Agency that exercises the “rule-making LIMITATIONS to the “rule-making power”

power” granted by the labor code. granted to the Secretary of Labor and
Employment and other government
The Dept Of Labor and Employment through agencies:
the Secretary of Labor & Employment and
other Government agencies charged with the 1. It must be issued under the authority
administration and enforcement of the Labor of law.
Code or any of its parts shall promulgate the 2. It must not be contrary to law and
necessary Implementing Rules & Regulations the Constitution.
3. Must not go beyond the law itself.
Effectivity of Rules: Such rules and regulations shall
become effective 15 days after announcement of their
adoption in newspapers of general circulation.
Coverage of Labor Laws in the Philippines

The term “LABOR LAW” covers the following:

1. Statutes (Laws enacted) passed by the State to promote the
welfare of the workers and employees and regulate their relations
with their employers.
2. Judicial decisions (Supreme Court Decision Jurisprudence)
applying and interpreting the aforesaid statutes. Article 8. Judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the legal system of the
Philippines. (n) New Civil Code.
3. Rules and regulations (IRR) issued by administrative agencies,
within their legal competence, to implement labor statutes.
CONSTRUCTION IN FAVOR OF LABOR
All doubts in the implementation and
interpretation of the provisions of this Code
(labor code) , including its implementing
rules and regulations (IRR), shall be
resolved in favor of labor. (Labor Code, Art. 4)
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.
(New Civil Code, Art. 1702)
Scope of the Liberal Interpretation of
Labor Law
1. Labor Law
1. Implementing Rules Regulations
2. Labor or Employment Contract
3. Evidence in a labor proceeding
NOTE: In case of doubt in the
interpretation or application of laws, it is
presumed that the lawmaking body
intended right and justice to prevail. (New
Civil Code, Art. 10) - the reason why some law are
repealed or amended.
Employee is not just a worker but a partner.

When the conflicting interests of labor and capital are weighed on the scales
of SOCIAL JUSTICE, the heavier influence of the latter (capital = employer) must
be counterbalanced by the sympathy and compassion the law must accord
the underprivileged worker.

“This is only fair if he is to be given the opportunity and the right to assert and
defend his cause not as a subordinate but as a peer of management, with which he can
negotiate on even plane. Labor is not a mere employee of capital but its active and equal
partner.” (Eastern Shipping Lines v. POEA, G.R. No. 76633, October 18, 1988)
Definition of Social Justice
Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but
the humanization of laws and the equalization of social and economic force by the
State so that justice in its rational and objectively secular conception may at least be
approximated.

Social Justice means the promotion of the welfare of all the people, the adoption by
the government of measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principle of salus populi est suprema lex (the
welfare of the people is the supreme law).
(Calalang v. Williams, G.R. No. 47800, December 2, 1940)
Social Justice
❖ The aim of Labor law is social justice.
❖ The State shall promote social justice in all phases of national
development. (1987 Constitution, Art. II, Sec. 10)
❖ The promotion of social justice shall include the commitment to
create economic opportunities based on freedom of initiative and
self-reliance. (1987 Constitution, Art. XIII, Sec. 2)
Limitations in invoking the principle of social justice
1. Not to undermine property rights resulting in confiscation. (Guido v. Rural
Progress Adm, L-2089, October 31, 1949) It should not tolerate usurpation of
property, public or private.
2. May only protect the laborers who come to court with clean hands (Phil.
Long Distance Telephone Co. v. NLRC, G.R. No. 80609, August 23, 1988) and
their motives blameless (Gustilo v. Wyeth Phils., G.R. No. 149629, October 4,
2004).
3. Never result in an injustice or oppression of the Er. (Phil. Geothermal Inc. v.
NLRC, G.R. No. 106370, September 8, 1994)
4. If it is used to shield wrongdoings, it cannot be permitted to be the refuge of
scoundrels. (PNCC v. NLRC, G.R. No. 83320, Feb. 9, 1989)
CONSTRUCTION IN FAVOR OF LABOR

It is a well-settled doctrine that if doubts exist between the evidence presented

by the employer and the employee, the scales of justice must be tilted in favor of
the latter. It is a time-honored rule that in controversies between a laborer and his
master, doubts reasonably arising from the evidence, or in the interpretation of
agreements and writing, should be resolved in the former’s favor. 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. (Lepanto Consolidated
Mining Co. v. Moreno Dumapis, et. al., G.R. No. 163210, August 13, 2008)
Concept of liberal approach in interpreting the Labor
Code and its Implementing Rules and Regulation

The Labor Code and its Implementing Rules & Regulation, being remedial in
character must be accorded the broadest scope and most beneficial
interpretation. It is only in this way that their purpose, which is to remedy evils of
exploitation, manipulation and oppression, may be achieved. Strict adherence to
the letter of labor law is not allowed; the spirit thereof prevails and must be given
effect. Under Art. 4 of the LC, all doubts in the implementation and
interpretation of the provisions thereof, including its Implementing Rules
& Regulation, are to be resolved in favor of labor.
Classification of Labor Laws in the Philippines
LABOR STANDARDS prescribes the terms and conditions of employment, such as wages or
monetary benefits, hours of work, cost of living allowances, and occupational health, safety and
welfare of the workers. It provides economic benefits to the workers who are actually working.

LABOR RELATIONS defines and regulates the status, rights and duties, and the institutional
mechanisms, that govern the individual and collective interactions of employers, employees or
their representatives. It is concerned with the stabilization of relations of Ers and Ees and seeks
to forestall and adjust the differences between them by the encouragement of CB and the
settlement of labor disputes through conciliation, mediation, and arbitration.

SOCIAL LEGISLATIONS these are laws passed by the State to promote public welfare. It includes
statutes intended to enhance the welfare of the people even where there is no employee and
employer relationship. It provides economic benefits to workers who are at work because of the
hazards of employment.
Distinction Between Labor Legislation & Social Legislation
LABOR LEGISLATION
1. Refers to labor statutes like Labor
Relations Law and Labor Standards.
2. Focuses on the rights of the worker in the
workplace.
NOTE: All Labor laws are social legislations, but
not all social legislations are labor laws.
The (3) purposes of labor legislation are the ff:
[1] to afford protection to labor, [2] promote full
employment, ensure equal work opportunities
regardless of sex, race or creed and [3] regulate
the relations between workers and employers.
SOCIAL LEGISLATION
1. Refers to Social Security Laws.
2. Those laws that provide particular kinds of
protection or benefits to society or
segments thereof in furtherance of social
justice
The State shall ensure the rights of workers to
self-organization, collective bargaining (CB),
security of tenure and just and humane
conditions of work.
Ultimately, the primordial purpose is to promote
the welfare of the people based on the latin
maxim salus populi est suprema lex. (2006 Bar)
Legal Bases for Labor and Social Legislation

1. Police power of the state [1] Police Power of the State is the power vested
2. Social justice clause - Section 10, Article in the legislature by the Constitution to make,
II of the 1987 Constitution ordain, establish all manner of wholesome and
3. Protection to labor clause - Section 3, reasonable laws for the good and welfare of the
Article XIII of the 1987 Constitution State and its people. (ERMITA MALATE HOTEL VS. CITY
4. Doctrine of Incorporation clause MAYOR, July 31, 1967)

5. Social service clause Latin Maxims

6. Full employment clause
7. Freedom from poverty clause 1. Salus populi est suprema lex - the welfare of
8. Freedom of association clause the people is the supreme law
2. Sic utere tuo ut alienum non laedas –so use
9. Due process and equal protection your own as not to injure another’s property
clauses
Protection to Labor
In affording full protection to labor, this Court must ensure equal work
opportunities regardless of sex, race, or creed. Even as we, in every case,
attempt to carefully balance the fragile relationship between employee and
employer, we are mindful of the fact that the policy of the law is to apply
the Labor Code to a greater number of employees.
This would enable employees to avail of the benefits accorded to them
by law, in line with the constitutional mandate giving maximum aid and
protection to labor, promoting their welfare and reaffirming it as a
primary social economic force in furtherance of social justice and
national development. (In the case of Angelina Francisco v. NLRC. G.R. No. 170087,
August 31, 2006)
Protection or Oppression?

The constitutional policy to provide full protection to labor is not meant to be

a sword to oppress employers. The commitment under the fundamental law
(Constitution) is that the cause of labor does not prevent us from sustaining the
employer when the law is clearly on its side. (Estrellita G. Salazar v. Philippine Duplicators, Inc, G.R. No.
154628, December 6, 2006)

Recognition of management prerogative - The law also recognizes that

management has rights which are also entitled to respect and enforcement in
the interest of fair play. (St. Luke’s Medical Center Employees Ass’n v. NLRC, G.R. No. 162053, March 7,
2007)
Principle of Non-Oppression

The principle mandates capital and labor not to act oppressively against
each other or impair the interest and convenience of the public. The protection to
labor clause in the Constitution is not designed to oppress or destroy
capital.(Capili v. NLRC, G.R. No. 117378, March 26, 1997)

Neither capital nor labor shall act oppressively against the other, or impair
the interest or convenience of the public. (NCC, Art. 1701)
Principle of Non-Oppression

The law in protecting the rights of the Ees authorizes neither oppression nor
self-destruction of the Er. (Pacific Mills Inc. v. Alonzo, G.R. No. 78090, July 26, 1991)

It should be made clear that when the law tilts the scale of justice in favor of
labor, it is but a recognition of the inherent economic inequality between labor
and management. The intent is to balance the scale of justice; to put the two
parties on relatively equal positions. There may be cases where the
circumstances warrant favoring labor over the interests of management but
never should the scale be so tilted if the result is an injustice to the employer.
Justitia nemini neganda est (justice is to be denied to none). (Philippine Geothermal,
Inc. v. NLRC and Edilberto M. Alvarez, G.R. No. 106370, September 8, 1994)
 Compassionate Justice
The social justice policy mandates a compassionate attitude toward the working
class in its relation to management. In calling for protection to labor, the
Constitution does not condone wrongdoing by the employee.

However, it urges a moderation of the sanctions that may be applied to him in the
light of the many disadvantages that weigh heavily on him like an albatross on
his neck - burden.

It is disregarding rigid rules and giving due weight to all equities of the case.
(Gandara Mill Supply and Milagros Sy v. NLRC and Silvestre Germano, G.R. No. 126703, December 29, 1998)
Compassion and mercy subordinate to justice for all
Before there can be an occasion for compassion, sympathy and mercy, there
must be justice for all. Otherwise, Employees will be encouraged to steal and
misappropriate in the expectation that eventually, in the name of social justice
and compassion, they will not be penalized but instead financially rewarded.
These are not the values the society cherishes; these are the habits that it
abhors. (SMC v. NLRC, G.R. No. 117055, March 29, 2006)

The Employees Compensation Law (P.D. 626) operates on the principle of social
justice, but sympathy to the workers should also be placed in a sensible
equilibrium with the stability of the Employees’ Compensation Commission trust
fund. (Aquino v. SSS, G.R. No. 149256, July 21, 2006)

e.g. An employee who was validly dismissed may still be given severance pay.
Contract of Labor
It is a consensual, nominate, principal, and commutative contract whereby one
person, called the Er, compensates another, called the laborer, worker or Ee, for
the latter’s service. It is a relationship impressed with public interest in keeping
with our constitutional policy of social justice.

Essential characteristics of a contract of labor

1. Employer freely enters into a contract with the employee;
2. Employer can select who his employee will be;
3. Employer can dismiss the employee; the employee in turn can quit his job;
4. Employee must give remuneration; and
5. Employer can control and supervise the conduct of the employee.
Prohibitions on contract of labor

1. No law impairing the obligation of contracts shall be passed. (1987

Constitution, Art. III, Sec. 10)
2. No involuntary servitude in any form shall exist except as a punishment for a
crime whereof the party shall have been duly convicted. [1987 Constitution,
Art. III, Sec. 18(2)]
3. No contract which practically amounts to involuntary servitude, under any
guise whatsoever, shall be valid. (NCC, Art. 1703)
Contracts are subject to police power of the State
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.” 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. (Leyte Geothermal Power Progressive
Employees Union-ALU-TUCP v. Philippine National Oil Company-Energy Development Corporation, G.R. No. 170351, March 30, 2011)

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
conditions, hours of labor and similar subject. (NCC, Art. 1700)
State policy on labor as found in the Constitution

1. Afford full protection to labor.

2. Promote full employment.
3. Ensure equal work opportunities regardless of sex, race, or creed.
4. Assure the rights of workers to self-organization, security of tenure, just and
humane conditions of work, participate in policy and decision-making
processes affecting their right and benefits.
5. Regulate the relations between employers and workers. (1987 Constitution,
Art. XIII, Sec. 3)
Basic rights of workers guaranteed by the constitution

1. Security of tenure
2. Living wage
3. Just and humane working conditions
4. Share in the fruits of production
5. Self-organization
6. Collective bargaining
7. Collective negotiations
8. Engage in peaceful concerted activities, including the right to strike
9. Participate in policy and decision making processes. (1987 Constitution, Art.
XIII, Sec. 3)
Other Laws Interrelated to Labor Laws
New Civil Code (NCC)
● 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.
● Art. 1704 - In collective bargaining, the labor
union or members of the board or committee
signing the contract shall be liable for
non-fulfillment thereof.
● Art. 1710 - Dismissal of laborers shall be
subject to the supervision of the
Government, under special laws.
Revised Penal Code (RPC) Art. 289
“Formation, maintenance and prohibition
of combination of capital or labor through
violence or threats. – Any person who, for the
purpose of organizing, maintaining or preventing
coalitions or capital or labor, strike of laborers or
lock-out of employees, shall employ violence or
threats in such a degree as to compel or force
the laborers or employers in the free and legal
exercise of their industry or work, if the act shall
not constitute a more serious offense in
accordance with the provisions of the RPC.”
Special Laws
● E.O. 180- Providing guidelines for the exercise
of the Right to Organize of Government
Employees, creating a Public Sector
Labor-Management Council, and for other
purposes
● R.A. 8291 - Government Service Insurance Act
of 1997
● 13th Month Pay Law
● Retirement Pay Law
● SSS Law
● Paternity Leave Act
● Anti – Child Labor Act
● Anti – Sexual Harassment Act
● Magna Carta for Public Health Workers
● Solo Parents Welfare Act of 2000
● National Health Insurance Act as amended by R.A.
9241
● Migrant Workers and Overseas Filipinos Act of
1995 as amended by RA 10022
● PERA Act of 2008
● Home Development Mutual Fund Law of 2009
● The Magna Carta of Women
● Magna Carta for Disabled Person
● Comprehensive Agrarian Reform Law as amended
by R.A. 9700
● Batas Kasambahay(RA No. 10361)
● Working “summer/Christmas” students as
amended by RA 9547 expanding the coverage of
the Special Program for Employment of Students
(SPES)
● Wage Rationalization Act (RA 6727)
Extra-territorial application of Labor Code

Whether employed locally or overseas, all Filipino workers enjoy the

protective mantle of Philippine labor and social legislation, contract stipulations
to the contrary notwithstanding.

This pronouncement is in keeping with the basic public policy of the State
to 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.

For the State assures the basic rights of all workers to self-organization,
collective bargaining, security of tenure, and just and humane conditions of work.
(PNB v. Cabansag, G.R. 157010, June 21, 2005)
End of Lecture 1