DE LA SALLE UNIVERSITY COLLEGE OF LAW

Lasallian Commission on Bar Operations

Academics Committee

TRANSCRIPT OF DEAN ANNA MARIA D. ABAD’S

ONLINE LECTURE ON LABOR LAW [PART 1]

DISCLAIMER: DLSU College of Law’s LCBO Academics Committee does not take credit for the
online lecture conducted by Dean Anna Maria D. Abad and hosted by the Philippine Association
of Law School’s (PALS) Facebook page on April 15, 2020. This written transcript was made in order
to aid law students in their review and for those students who may have had difficulty in watching
the said online lecture. The contents of this transcript are based solely on the said online lecture.

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DEFINITION OF LABOR

 In the context of LABOR LAW: Service or work rendered by a person to another, which is
compensated by the latter.

 As a NOUN: May refer to work personnel.

 Labor Law is very FLUID: In SC cases, SC brings up social justice and equity.

BASIC PRINCIPLES OF LABOR LAW

 BALANCING OF INTEREST between the employer and the employee.

 Note: Human element

 Labor Law = governance of relationship between ER and EE

 Interests of EE and ER are very contradictory BUT we should now BALANCE them.

 Because bad relationship = losses.

 There is a symbiotic relationship; they should rely on each other to succeed (Toyota
Motor Case

 NATURE OF EMPLOYMENT

(1.) Contractual Relationship

(2.) Property Right

 Because EE is engaged in gainful livelihood.

 “Take not from the mouth of the labor the bread that it has earned.”

 FRAMEWORK OF LABOR LAW

 Tension of Opposite Interests and Balancing of Interests

 TWO SIDES:

(1.) EMPLOYER

 Management Prerogative - Right of management on how to operate its business

provided it is in accordance with law.

 Discretionary.

 REASON: Since employer puts out capital, so they have right to some profits

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  Chu v. NLRC: Management has a right to tweak the variables of the operation of
the business so that it would gain some profits for itself.

 SCOPE: Hiring to Firing. Example: Work assignments, discipline, supervision, etc.

(2.) EMPLOYEE/LABORER

 Does NOT need to put out capital.

 Employees only have their labor.

 But they are entitled an equitable share in the profits.

 At the time of HIRING: employee is already economically dependent on

employers.

 Also, terms and conditions cannot be bargained.

 There are only a few times when employees can bargain with the employers.

 The lack of bargaining leverage = inherent inequality between employer and

employee.

 The law knows about this and, through the State, tries to balance the two interests.

 How does the State step in? State implements legislation which is designed to
protect employees and employers (but more on employees).

 Examples: Labor standards laws, minimum wage laws, 8 hour working law, service
incentive leave pay, labor laws on political rights of employees, right to unionize,
right to vote, etc.

 Note:

 Employers are only obligated to provide the minimum provided Labor Law. They are
not obliged to go beyond that.

 Inflexible rule: You cannot address the labor dispute with justice without balancing
the interest of the employer and the interest of employees in order to achieve an
equitable solution.

 Labor Code steps in once a person becomes an employee.

 No need for employment contract for an employee-employer relation to exist.

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ARTICLE 3 OF LABOR CODE

 Declaration of Policy

 Provides the basic framework of labor law

 When things are in the balance, one must give full protection to labor

 The decision which fully protects labor is the correct decision.

GENERAL RULES

GENERAL RULE NO. 1

EMPLOYER - EMPLOYEE Relationship

 Existence of employer and employee relation is a condition sine qua non for the applicable
of labor laws.

 So if there is no such relationship, another law will apply.

 Employer - any person acting directly or indirectly in the interest of an employer. (Art. 219
of the Labor Code) Not a good definition.

 Book 5 Rule 1 Par. S - any person who hires or employs the services of others and
who pays for the wages of the people.

 Employee - any person employed by an employer in exchange for remuneration and it

shall not be limited to the employees of a particular employer except when the code
explicitly states.

 Note: It includes one whose work has ceased because of any labor dispute or unfair labor
practices. Even if he was dismissed and he questioned the legality of the dismissal in the
NLRC. (Art. 219 (f) )

Q: Jimmy was earning minimum wage and needed more money cause he has 10 kids. So
he decided to moonlight after office hours with a competitor cafe. The General Manager
found out and there is a non-compete clause. He investigated and after due process,
Jimmy was terminated. Jimmy filed with the NLRC for illegal termination. The Cafe
through the GM alleged that there is no illegal termination because Jimmy is no longer an
employee and therefore NLRC has no jurisdiction? Is Jimmy still considered an employee?

A: Yes. Under the Labor Code includes one whose work has ceased because of any labor
dispute or unfair labor practices. Even if he was dismissed he questioned the legality of
the dismissal in the NLRC. (Art. 219 (f))

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 Q: Why is it there are instances that you find someone working in a café, but they are not
considered employees?

A: Because of contracting.

INDEPENDENT CONTRACTING OR JOB CONTRACTING

 Not all who work for the company need to be its employees.

 Right to contract and right of agency to accept the contract is a contractual relationship
born out of free will.

 There must be a trilateral relationship. [Company, independent contractor/agency, and

employees of the contracting agency]

KINDS OF CONTRACTING:

(1.) Bilateral Contacting - two parties are involved.

 Example: I am the cafe owner and I hire an accountant or lawyer as a retainer

(2.) Trilateral Contracting - three parties are involved.

 Example: Company hires manpower agency who deploys janitors and messengers to the
company or security guards .

 Remember: Companies must not have any control over the manner and method which the
manpower agency will do the job. Results oriented. If that is the arrangement, it is VALID.

 Department Order 18- A now 174 - issued by DOLE to address issues raised by the labor
sector that management and a lot of companies have abused contracting arrangements.
Applicable only to trilateral arrangements.

Q: How will you know if the person is already an employee?

A: The Supreme Court has made use of 4 tests: (1) Selection and Hiring; (2) Wages -
whoever pays your wages;(3) Dismissal - whoever has the right to terminate you; (4)
Control Test.

 Control Test - when the employer has reserved for himself the right to control not only the
ends to be achieved but also the manner and method which the ends will be achieved.
(LVN Pictures Inc., v. Philippine Musicians Guild, GR No. L-12582, January 28, 1961)

 “If I can control the manner by which you will do the work for me.”

Q: How do you determine control?

A: there are rules and regulations which the employees have to follow especially with
regard to procedures.

Q: How do you know if the rule will give control? You need to distinguish rules which serve
as guidelines between rules which fix the methodology.

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 A: Rules which fix the methodology - dictating how, when, where, what, and why. This is
considered control. Rules that serve as guidelines - not imposed, give parameters which
you can do the work. Not control.

GENERAL RULE No. 2:

PRINCIPLE OF AUTOMATIC INCORPORATION

 Principle of Automatic Incorporation - once the employee is hired and there is an

employer employee relationship, the Labor Code automatically steps into that
relationship in order to balance the inherent inequality at the time of hiring.

 This is true even absent a written employment contract.

 The minimum labor standards, benefits, and political rights found in the Labor Code are
considered inherent in that particular ER-EE relationship.

GENERAL RULE NO. 3:

BURDEN OF PROOF ON ER-EE RELATIONSHIP

 Once there is already an ER-EE relationship, who bears the burden of proof?

 Employee bears the burden of proof that he is an employee of the company. It is the
employee who bears the burden of proving the fact of hiring and firing.

 However, the burden of proof is placed upon the employer to show the validity of the
exercise of its management prerogatives especially as regards termination of
employment.

GENERAL RULE NO. 4:

PROOF REQUIRED

 If the burden of proof is placed upon the employer, what kind of proof is required? Only
substantial evidence is required.

 In administrative and quasi-judicial proceedings, these substantial evidence is such

amount of relevant evidence which will lead a reasonable mind to accept as adequate to
justify the conclusion.

Q: Are the sworn statements of the relatives and common friends of an employee and his
wife attesting to the existence of an extramarital affair considered sufficient evidence to
justify the termination for immorality? (Alilem Credit Cooperative v. Bandiola Jr., GR No.
173489, February 25, 2013)

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 A: Sworn statements attest to the fact that they have direct personal knowledge between
circumstances indicating the existence of an illicit relationship. Therefore, there is valid
termination.

GENERAL RULE NO. 5:

RETROACTIVITY OF LABOR LAWS

 General Rule: There is no retroactive effect of labor laws, laws are supposed to be applied
prospectively.

 Exception: Only if the law explicitly provides for such.

Q: As per the Bayanihan Law, whoever dies because of COVID will get 1M from the
government. It was effective today. Will a person that died 5 days ago be entitled to the
1M?

A: General rule says no, except when the law itself provides for retroactivity.

GENERAL RULE NO. 6:

INTERPRETATION OF LABOR LAWS

 In case of doubt, or ambiguity, interpret in favor of labor.

 If the law explicitly states the terms of the work, there is no need for interpretation. If the
terms are clear, there is no need for interpretation. It is only in the case of doubt and
ambiguity there is need for interpretation.

Q: In a CBA provision, if you die in the line of duty, you are entitled to Php 50,000. If you
die but not in the line of duty, you are entitled to Php 40,000. If a legal dependent dies,
you are entitled to Php 15,000.

A guy’s parents who live with him died unexpectedly, and he incurred a lot of hospital
expenses. So he went to the HR Department and asked for his Php 15,000 funeral benefits.
He was denied the benefits because the father is not a legal dependent. Since he is
married, his legal dependents are his wife, and children according to SSS. The union said
since there was no mention of who specifically are considered legal dependents, he is
entitled to the benefits. Who is correct in interpreting the words “legal dependent”?

A: The union and employee is correct. The company cannot interpret it in the manner of
SSS because the rules do not refer to the SSS in the first place. If the CBA provision is
silent, then the coverage of the legal term should be construed in such a manner that
social legislation would have set it. Meaning “kung pano naintindihan nung taong
nagbabasa”. (Philippine Journalist Inc., v. Journal Employees Union, GR No. 192601, June
3, 2013)

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 -TRANSCRIPT ENDS –

The online lecture may be accessed through this link:

https://www.facebook.com/103457951213625/videos/2976063282620308/

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