LABOR STANDARDS AND WELFARE

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LABOR W1-W2 REVIEWER

 CONSTITUTIONAL BASIS:
 ARTICLE II: Declaration of Principles and State policies
 Sec. 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.
 Sec. 10: The State shall promote social justice in all phases of national development.
 Sec. 11:  The State values the dignity of every human person and guarantees full respect
for human rights.
 Sec. 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.
 Sec. 14:  The State recognizes the role of women in nation-building, and shall ensure the
fundamental equality before the law of women and men.
 - Sec. 18: The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.
 Sec. 20: The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments.
 Notes:
o Acknowledges the role of the private sector.
o Creation of opportunities has to be based on initiatives.
o Recognizes the right of enterprises to reasonable returns of investment and to
expansion and growth.
o Private enterprise – including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their ownership.
 ARTICLE III: Bill of rights
 Sec. 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.
 Sec. 4: No law shall be passed abridging the freedom of speech, of expression, or of the
press, or the right of the people peaceably to assemble and petition the government for
redress of grievances.
 Notes:

o Right to peacefully assemble and petition for redress of grievances is, together
with freedom of speech, of expression, and of the press, a right that enjoys
primacy in the realm of constitutional protection. [BAYAN, et al. v. Ermita, G.R.
No. 169838, (2006)]

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o Wearing armbands and putting up placards to express one’s views without

violating the rights of third parties, are legal per se and even constitutionally
protected
 Sec. 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.
 Sec. 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.
 Note:
o The right to form associations shall not be impaired except through a valid
exercise of police power.
 Sec. 10:  No law impairing the obligation of contracts shall be passed.
 Notes:
o A law which changes the terms of a legal contract between parties, either in the
time or mode or performance, or imposes new conditions, or dispenses with those
expressed, or authorizes for its satisfaction something different from that provided
in its terms, is a law which impairs the obligation of a contract and is null and
void.
o The prohibition to impair the obligation of contracts is not absolute and
unqualified. In spite of the constitutional prohibition and the fact that both parties
are of full age and competent to contract, it does not necessarily deprive the State
of the power to interfere where the parties do not stand upon an equality, or where
the public health demands that one party to the contract shall be protected against
himself.
 Sec. 16: All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies.
 Sec. 18(2): No involuntary servitude in any form shall exist except as a punishment for a
crime whereof the party shall have been duly convicted.

 Article XIII: Social Justice and Human Rights

 Sec.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.

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 Sec. 2:  The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.
 Sec. 3.:
o Par. 1: 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.
o Par. 2: guarantee the rights of all workers: (1) self-organization; (2) collective
bargaining and negotiations; (3) peaceful concerted activities, including the right
to strike in accordance with law; (4) security of tenure; (5) humane conditions of
work; (6) living wage; (7) participate in policy and decision-making processes
affecting their rights and benefits.
o Par. 3: 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.
o Par. 4: 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 on investments, and to expansion and
growth. (Constitutional balance between the rights of workers and employers)
 Sec. 13: The State shall establish a special agency for disabled persons for rehabilitation,
self-development and self-reliance, and their integration into the mainstream of society.
 Sec. 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.

 Constitution
 Prescribes the boundaries of labor and social law.
 The fundamental conception of a constitution is that of a supreme law, expressed in
written form, in accordance which all private rights must be determined and all public
authority administered.

 LABOR LAW
 Labor legislation - statues, regulations & jurisprudence governing relations between
capital & labor, by providing for certain employment standards and a legal framework for
defining, adjusting, and administering the standards and other incidents of employment or
related productive work relationship.
 2 Divisions of Labor Legislation
 Labor Standards
o Terms and conditions of employment that employers must comply with and to
which employees are entitled as a matter of legal right.

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o minimum requirements prescribed by existing laws, rules & regulations relating

to wages, hours of work, cost-of-living allowance and other monetary & welfare
benefits, including occupational safety & health standards.
o Books 1,2,3.
o Employer cannot give benefits lower than what is prescribed here.
o Standards – all matters required or established by law.
 Labor Relations
o Covers the status, rights & duties and the institutional mechanisms, that govern
the individual & collective interactions of employers, employees or their
representatives.
o Issues about employment tenure and termination fall in the area of labor
relations.
o Books 5,6,7.
 Labor management relations – cover a broad spectrum of activities which concern
relationship of employees to employers both union and non-union.

 Terms and Definitions:

a.) Labor – physical toil although it does not necessarily exclude the application of skill
(thus “skilled” & “unskilled” labor)
b.) Skill – the familiar knowledge of any art/science, united w/ readiness & dexterity in
execution/performance or in the application of the art/science to practical purposes.
c.) Work – (broader than labor) – covers all forms of physical/mental exertion, or both
combined, for the attainment of some obj other than recreation/amusement per se.
d.) Worker – (broader than EE) – may refer to self-employed people & those working in the
service & under the control of another, regardless of rank, title, or nature of work.
- any member of the labor force whether employed/unemployed.
e.) Employee – a salaried person working for another who controls or supervises the means,
manner or method of doing the work.

 Employer-Employee Relationship
 Entitlement to protection of our benefits from labor laws requires the existence of
employer-employee relationship.
 Worker has to be an employee, but not every worker is an employee.

 Labor law and Social Legislation

 Social legislation – laws that provide particular kind of protection or benefits to society
or segments thereof in furtherance of social justice. Promote public welfare.
 Labor laws are necessarily social legislation.
 Labor laws directly affect employment while social legislation governs effects of
employment.
 Labor laws are social legislation but not all social legislation are labor laws.
 Social legislation as a concept is broader, labor is narrower.

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 Labor Law objectives

 Social justice
 aim and reason, and the justification of labor laws.
 Neither communism nor despotism nor atomism, nor anarchy.
 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.
 The promotion of the welfare of the people, the adoption by the government of measures
calculated to insure economic stability of all the component elements of society through
the maintenance of proper economic and social equilibrium.
 Best seen in poverty alleviation.
 Guarantees: (OPLVS)
o Equality of opportunity
o Equality of political rights
o Equality before the law
o Equality between values given and received
o Equitable sharing of the social and material goods on the basis of efforts exerted
in their production.
 Both a juridical principle and a societal goal.
o Juridical principle: prescribes equality of the people, rich or poor, before the
law.
o As a goal: means the attainment of decent quality of life of the masses through
humane productive efforts.
 Art. II: Free the people from poverty. How?
o Through policies that: (AFRI)
 Provide adequate social services
 Promote full employment
 A rising standard of living
 Improved quality life for all.

 PHILIPPINE ECONOMIC SYSTEM

 Follows a capitalist economic system with many features of regulation and welfare laws.
 Economics’ fundamental concern: material standard of living of society as a whole and
how that is affected by particular decisions made by individuals and institutions.
 Economic policy – a government policy that weakens or strengthens the managing
ability of businesses.
 Law and economics are not two separate coins.

 LABOR LAW AS CIVIL LAW

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 Labor laws – part of civil law as it applies to civil rights and relationships in work
situations. (Further information are on the succeeding pages.)
 Work relations – economic and human relations.
 Civil law – broad branch of legal system dealing with the rights and relations of persons
as individuals or as members of society.
 Article 1700: Relations between labor and capital. The relations between capital and
labor are not merely contractual.
 They are impressed with public interest that labor contracts:
a. Must yield to the common good
b. Are subject to special laws on
o Labor unions
o Collective bargaining,
o Strikes and lockouts,
o Closed shop,
o Wages,
o Working conditions,
o Hours of labor
o Similar subjects

 Article 1701: Neither capital nor labor shall:

o Act oppressively against the other, or
o Impair the interest or convenience of the public.
 Art. 1702: No contract which practically amounts to involuntary servitude, under any
guise whatsoever, shall be valid.
 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.
 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 contrary function of
courts is to give force and effect to the intention of the parties

 RULES OF EQUITY
 Article 10, CC: In case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail.
 Property ownership – in civil law, includes the right to use property or dispose of it as
the owner desires.
o This right does not apply to treatment to employees because they are not property.
Though they can be managed, they cannot be owned.
 Three principles of equity:

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o Article 19. Every person must, in the exercise of his rights and in the performance
of his duties, act with justice give everyone his dues and observe honesty and
good faith.
 Also known as Principle of Abuse of Right.
o Article 20. Every person who, contrary to law, willfully or negligently causes
damage to another, shall indemnify the latter for the same.
o Article 21. Any person who willfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the
latter for the damage.
 Civil code not the labor code describes the nature of labor-management relations.
o Relations between capital and labor are not merely contractual. They are
impressed with public interest that labor contracts must yield to the common
good. Such contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, wages, working conditions, hours of labor, and
other similar subjects.
o Neither capital nor labor shall act oppressively against the other or impair the
interest or convenience of the public.

 Special labor laws

 Other labor laws that are not found in the code.
 They include the SSS law, the sexual harassment law, and the kasambahay law, and
others.

 SIGNIFICANCE OF FOREIGN DECISIONS

 Where our labor statutes are based or patterned upon after statutes in foreign jurisdiction,
the decisions of high courts in those jurisdictions construing and interpreting the Act
should receive careful attention of this court in the application of our own law.
 Judicial decisions applying or interpreting the laws or the constitution form part of the
legal system of the Philippines.

 INTERNATIONAL ASPECT
 International Labour Organization
o Specialized agency which seeks the promotion of social justice and internationally
recognized human and labor rights.
o Formulates international labor standards in the form of Conventions and
recommendations setting minimum standards of basic labor rights.
o Fundamental principles:
 Labor is not a commodity.
 Freedom of expression and of association are essential to sustained
progress.
 Poverty anywhere constitutes a danger to prosperity everywhere.

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 War against want requires to be carried on with unrelenting vigor within

each nation, and by continuous and concerned international effort.
o ILO conventions are binding only for those member-states that ratify them
o In 1999, however, ILO adopted a Declaration of Fundamental Principles and
Rights at work concerning an obligation of all ILO members to respect and
promote the fundamental rights even if they have not ratified the conventions.

 GENERAL PROVISIONS OF LC:

 Article 1: Name of the Decree
 This Decree shall be known as the Labor Code of the Philippines.

 Article 2: Date of effectivity.

 November 1, 1974, six months after its promulgation on May 1, 1974.

 BIRTH OF THE LABOR CODE

 Mr. Blas F. Ople
o Father of the Labor code.
 Objective: not merely to consolidate existing pieces of labor legislation (60 pieces) but
to reorient them to the need of economic development and justice
 In line with Comprehensive Employment Strategy Mission of ILO.
o The elevation of real wages incomes, and living standards was a function of
employment generation and economic expansion.
 Approval of the code was long and torturous.
 Seven times of drafting and redrafting before ratified and submitted to Dictator-President.

 LABOR CODE (P.D. No. 442)

 Set of substantive and procedural laws that prescribe the principal rights and
responsibilities of the industrial participants, so as to institute justice.
 Lays down fundamental rights and correlative obligations of employers and employees.
 Not one sided, not meant to protect one sector and to oppress the other.
 Article III, Section of the Bill of rights.
 Labor in Labor code – any economically productive application of physical, mental, and
material resources.
 Labor law should not punish the rich because they are rich but should temper greed or
rechannel excessive wealth.
 Shared growth/Inclusive growth.
 Rationale: POLICE POWER of the state.

 SEVEN BASIC RIGHTS OF WORKERS AS GUARANTEED BY CONSTITUTION

(OCESHLP)
1. Right to organize.

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2. Right to conduct collective bargaining and negotiations

3. Right to engage in peaceful concerted activities, including the right to strike in
accordance with law
4. Right to enjoy security of tenure
5. Right to work under humane conditions
6. Right to receive living wage
7. Right to participate in policy and decision-making processes affecting their rights and
benefits.

 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.

Should not be deduced that the basic policy is to favor labor and prejudice capital.
Basic policy balances the rights and interest of both workers and employees.
Forbids discrimination without mentioning the word.
Commands the state to ensure protection to labor and equal opportunities regardless of
sex, race or creed.
 Other provisions mention marital status, disability, union membership, and age.
 Correlated with Article XIII, section 3.
 Discrimination – any distinction or exclusion based on race, color, sex, religion, political
opinion, that has the effect of nullifying or impairing equality of opportunity, or treatment
in employment or occupation.
 Magna Carta of Women law (RA 9710)
o A measure is against women if: it fails to provide for mechanisms to offset or
address gender-based disadvantages or limitations of women.
 Exception: Bona fide Occupational Qualification
o Here, employer can justify why a quality/requirement is legal.
o Where exclusion or screening out can be justified.
o If such qualification can be shown to be reasonably necessary for the job, then
BFOQ can be made.
 Meiorin Test
o Additional justification of BFOQ exception.
o Under this, employer can justify standard by establishing balance of probabilities:
 Employer adopted the standard for a purpose rationally connected to the
performance of the job
 Employed adopted the standard in an honest and good faith belief that it
was necessary to the fulfillment of that legitimate work-related purpose.
 Standard was reasonably necessary to accomplish work-related purpose.

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 It must be demonstrated that it is impossible to

accommodate individual employees sharing the
characteristics of claimant w/o imposing undue hardship
upon the employer.

 Anti-Age discrimination Act (RA 10911)

 Prohibits discrimination against any individual in employment on account of age.
 Senior citizens remain employable and entitled to statutory monetary
benefits.
 Law shall apply to all employers, publishers, labor contractors or subcontractors, and
labor organizations, whether or not registered.
 Prohibitions:
a. It shall be unlawful for an employer to:
o Print or publish any notice of advertisement relating to employment suggesting
preferences, limitations specifications, and discrimination based on age.
o Require declaration of age or birth date during application process.
o Decline application because of age.
o Discriminate in terms of compensation, terms and condition, privileges, on
account of age.
o Deny promotion or opportunity for training because of age.
o Forcibly layoff because of old age.
o Impose early retirement on the basis of age.
b. It shall be unlawful for labor contractor or subcontractor to refuse to refer or
discriminate because of individual’s age.
c. It shall be unlawful for a labor organization to:
o Deny membership because of age.
o Exclude from membership because of age.
o Cause an employer to discriminate against an individual.
d. It shall be unlawful for publisher to print or publish ….
 Exceptions: It shall be lawful for an employer to set age limitation if:
o Age is BFOQ reasonably necessary in the normal operation of a particular
business.
o Intent is to observe a bonafide seniority system.
o Intent is to observe employee retirement or early retirement plan.
o Action is duly certified by DOLE.
 Employer who invokes the qualification provided, shall submit a report to
DOLE Regional office.
 Submission shall be a presumption that age limitation is in accordance with
the Rules unless proven otherwise.
 Failure to submit: presumption that employer is not allowed to set age
limitation.

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 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.

 To enable employees to avail benefits under the law and to give maximum aid and
protection to labor.
 Those who have less in life should have more in law.
 Courts adopt a liberal approach that favors the exercise of labor rights. The mandate
under Art. 4 is simply to resolve doubt, if any, in favor of labor.
 If there is no doubt in implementing and interpreting the law, labor will enjoy no built-in
advantage and the law will have to be applied as it is.
 The presumption is that the employer and the employee are on unequal footing, so the
State has the responsibility to protect the employee.
o There is greater supply than demand for labor.
o Need for employment by labor comes from vital and even desperate necessity.
 Law must protect labor to the extent of raising him to equal footing in bargaining relation
with capital to shield him from abuses.
 While labor laws should be construed liberally in favor of labor, we must be able to
balance this with the equally important right of the [employer] to due process.

 MANAGEMENT RIGHTS
 It should not be supposed that every labor dispute will be automatically decided in favor
of labor. Management has also its own rights which are entitled to respect and
enforcement in the interest of simple fair play.
 Supreme court has inclined more often than not toward the worker, such favoritism, has
not blinded the court.
 Law and jurisprudence extend recognition to the exercise by the employers their rights.
 Courts often decline to interfere in legitimate business decisions of employers. In fact,
labor laws discourage interference in employers’ judgment concerning the conduct of
their business
 Labor code does not vest managerial authority in the Labor arbiters or in different
divisions of the NLRC or the courts.
 As a rule: T&C of employment are determined by employer. Management role is not
vested in the government.
 Article 218: No court or administrative agency shall have the power to set or fix wages,
rates of pay, hours of work, or other terms and conditions of work.
 Secretary of labor – mandated to equally protect and respect not only the laborer but
also the employer’s side.
 Most fundamental management rights (RPST)
1. Right to Return of Investments (ROI)
 the employer has the right to recover his investments and to make profit.

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 The Constitution provides that the State shall regulate the relations
between workers and employers, recognizing the right of labor to its just
share... and the right of enterprises to reasonable returns on investments,
and to expansion and growth.
2. The Right to Prescribe Rules
 employers have the right to make reasonable rules and regulations for the
government of their employees, and when employees, with knowledge of
an established rule, enter the service, the rule becomes part of the contract
of employment.
3. The Right to Select Employees
 an employer has a right to select his employees and to decide when to
engage them.
 The State has no right to interfere in a private employment; it cannot
interfere with the liberty of contract with respect to labor except in the
exercise of the police power. If the employer can compel the employee to
work against the latter's will, this is servitude. If the employee can compel
the employer to give him work against the employer's will, this is
oppression
4. Right to Transfer or Discharge Employees
 the employer has the perfect right to transfer, reduce or lay off personnel
in order to minimize expenses and to insure the stability of the business,
and even to close the business, provided the transfer or dismissal is not
abused but is done in good faith and is due to causes beyond control. To
hold otherwise would be oppressive and inhuman.
 RESTRICTIONS to Management rights
 Law
 Contract
 General principles of fair play and justice
 Policies or practices established by the employer

 MANAGEMENT PEROGATIVE
 BASIS
o The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments. [Sec. 20, Art.
II, 1987 Constitution]
o 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.
[Sec. 3, pars. 4, Art. XIII, 1987 Constitution]
o The law in protecting the rights of the employees authorizes neither oppression
nor self-destruction of the employer. 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

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economic inequality between labor and management. Never should the scale be so
tilted if the result is an injustice to the employer
 Management Prerogative - the right of an employer to regulate all aspects of
employment.
 Except as limited by special laws, gives employers the freedom to regulate, according to
their discretion and best judgment, all aspects of employment, including:
o Hiring,
o Work assignment
o Working methods,
o Processes to be followed
o Working regulations,
o Transfer of employees,
o Work supervision, lay-off of workers and the discipline, dismissal and recall of
workers.
 Limits to Management Prerogative
1. Good faith
 So long as MP are exercised in good faith for the advancement of the employer’s
interest and not for the purpose of defeating or circumventing the rights of
employees under special law or valid agreements, it shall be upheld.
 It is incumbent upon the company to show that decisions made under
management prerogative are in good faith and not intended to circumvent
employees’ rights.
 The exercise of management prerogative is valid, provided it is not performed in a
malicious, harsh, oppressive, vindictive or wanton manner or out of malice or
spite.
2. Without grave abuse of discretion
 The managerial prerogative to transfer personnel must be exercised without grave
abuse of discretion, bearing in mind the basic elements of justice and fair play.
Having the right should not be confused with the manner in which the right is
exercised
3. Law
 The privilege of management prerogative is not absolute, but subject to
limitations imposed by law
4. Collective bargaining
 The CBA provisions agreed upon by the Company and the Union delimit the free
exercise of management prerogative. The parties in a CBA may establish such
stipulations, clauses, terms and conditions as they may deem convenient provided
these are not contrary to law, morals, good customs, public order or public policy.
5. Equity and/or Substantial Justice
 The Court should still ensure that the employer exercises the prerogative to
discipline humanely and considerately, and that the sanction imposed is
commensurate to the offense involved and to the degree of the infraction.

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 DISCIPLINE
 Management has the prerogative to discipline its employees and to impose
appropriate penalties on erring workers pursuant to company rules and
regulations.
 Among the employer’s management prerogatives is the right to prescribe
reasonable rules and regulations necessary or proper for the conduct of its
business or concern, to provide certain disciplinary measures to implement said
rules and to assure that the same would be complied with.
 Right to dismiss or otherwise impose disciplinary sanctions upon an employee for
just and valid cause, pertains in the first place to the employer, as well as the
authority to determine the existence of said cause in accordance with the norms of
due process.
 Corollary Duty of Employees: The employee has the corollary duty to obey all
reasonable rules, orders, and instructions of the employer; and willful or
intentional disobedience thereto, as a general rule, justifies termination of the
contract of service and the dismissal of the employee
 Criteria: The policies, rules and regulations on workrelated activities of the
employees must always be fair and reasonable and the corresponding penalties,
when prescribed, commensurate to the offense involved and to the degree of the
infraction.
 management prerogative must not curtail the basic right of employees to security
of tenure.
 Disciplinary action against an erring employee is a management prerogative
which, generally, is not subject to judicial interference. However, this policy can
be justified only if the disciplinary action is dictated by legitimate business
reasons and is not oppressive

 TRANSFER OF EMPLOYEES
 An employee’s right to security of tenure does not give him such a vested right in his
position, as would deprive the company of its prerogative to change his assignment or
transfer him where he will be most useful.
 The employer has the right to transfer or assign employees from one area of operation to
another, or one office to another or in pursuit of its legitimate business interest.
 Management has the prerogative on whether or not to renew the contract of a fixed-term
employee.
 Criteria: Provided there is no demotion in rank or diminution of salary, benefits and
other privileges and not motivated by discrimination or made in bad faith, or effected as a
form of punishment or demotion without sufficient cause.
 When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or diminution of salaries, benefits, and other
privileges, the employee may not complain that it amounts to a constructive dismissal.

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 Re-assignments:
o Re-assignments made by management pending investigation of irregularities
allegedly committed by an employee fall within the ambit of management
prerogative.
o The purpose of reassignments is no different from that of preventive suspension
which management could validly impose as a disciplinary measure for the
protection of the company's property, pending investigation of any alleged
malfeasance or misfeasance committed by the employee
 In cases of a transfer of an employee, the rule is settled that the employer is charged with
the burden of proving that its conduct and action are for valid and legitimate grounds
such as genuine business necessity and that the transfer is not unreasonable, inconvenient
or prejudicial to the employee.
o If the employer cannot overcome this burden of proof, the employee’s transfer
shall be tantamount to unlawful constructive dismissal.

 PRODUCTIVITY STANDARDS
 The employer has the right to demote and transfer an employee who has failed to observe
proper diligence in his work and incurred habitual tardiness and absences and indolence
in his assigned work.

 BONUS
 a gratuity or act of liberality of the giver which the recipient has no right to demand as a
matter of right.
 something given in addition to what is ordinarily received by or strictly due the recipient
 granting of a bonus is basically a management prerogative which cannot be forced upon
the employer "who may not be obliged to assume the onerous burden of granting bonuses
or other benefits aside from the employee's basic salaries or wages"
 The matter of giving a bonus over and above the worker’s lawful salaries and allowances
is entirely dependent on the financial capability of the employer to give it.

 CHANGE OF WORKING HOURS

 Management retains the prerogative, whenever exigencies of the service so require, to
change the working hours of its employees.
o So long as such prerogative is exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid agreements, this Court
will uphold such exercise.

 BFOQ
 General Rule: Employment in particular jobs may not be limited to persons of a
particular sex, religion, or national origin unless the employer can show that sex, religion,
or national origin is an actual qualification for performing the job

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 Exception: The exception is called a bona fide occupational qualification (BFOQ)

 requirement of that nature would be valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.

 POST-EMPLOYMENT RESTRICTIONS
 In cases where an employee assails a contract containing a provision prohibiting him or
her from accepting competitive employment as against public policy, the employer must
adduce evidence to prove that the restriction is reasonable and not greater than necessary
to protect the employer’s legitimate business interests.
 The restraint may not be unduly harsh or oppressive in curtailing the employee’s
legitimate efforts to earn a livelihood and must be reasonable in light of sound public
policy.

 MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS

 We considered the prohibition against personal or marital relationships with employees
of competitor companies upon Glaxo’s employees reasonable under the circumstances
because relationships of that nature might compromise the interests of Glaxo. (Duncan
Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines,
Inc.,)

 Article 5. Rules and Regulations. The Department of Labor and other government agencies
charged with the administration and enforcement of this Code or any of its parts shall
promulgate the necessary implementing rules and regulations. Such rules and regulations
shall become effective fifteen (15) days after announcement of their adoption in newspapers
of general circulation.

 Vests the Department of Labor and Employment with rule-making powers in the
enforcement thereof.
 When invalid?
o A rule or regulation promulgated by an administrative body, to implement a law,
in excess of its rule making authority is void.
o An administrative interpretation which takes away a benefit granted in the law is
ultra vires that is, beyond one’s power.
 Rules and Regulations implemented by DOLE shall become effective 15 days after
announcement of their adoption in newspapers of general circulation.

 Article 6. Applicability. All rights and benefits granted to workers under this Code shall,
except as may otherwise be provided herein, apply alike to all workers, whether agricultural
or non-agricultural.

 Applicability and Non-applicability to government corporations

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 Labor code applies to government corporation incorporated under the Corporation Code.
 Civil service – embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government owned or controlled corporations with original
charters.
 Government owned or controlled corporations with original charters
o Refer to corporations chartered by special law from congress
 Test in determining whether government-owned or controlled corporation is subject
to Civil Service Law: the manner of its creation.
o Government corporations created by congress: subject to CSL.
 National parks Development committee. Agency of Government, not a
government owned or controlled corpo. Governed by CSL. Public Sector
Labor-Management Council hears the dispute.
 SSS. Regional Trial Court.
o Incorporated under the General corporation law: covered by the labor code.
 Ex: Philippine National Oil Corp. Energy Development Corp.
 Food terminal Inc. – government owned and controlled corpo. Without
original charter. DOLE has jurisdiction over dispute, T&C governed by
labor code.
 National Housing Corp.

 Applicability without EM-REL

 Labor code may apply even if parties are not employee and employer of each other
depending on the kind of issue involved.
 EMREL is not always a precondition to the applicability of the code,
 When required?
o When one speaks of employment benefits. (overtime pay or rest day premium)
o A prerequisite when: Rest day, overtime pay, SSS coverage, other monetary
benefits.
 When not essential?
o Issue is an indirect employer’s liability, or illegal recruitment or misuse of POEA
license.
 No EMREL between complainant and respondent but LC may be invoked.

 LABOR AS PROPERTY RIGHT

 One’s employment is a property right, and the wrongful interference therewith is an
actionable wrong. The right is considered to be property within the protection of the
constitutional guarantee of due process of law

 DUE PROCESS
 Under the Labor Code, as amended, the requirements for the lawful dismissal of an
employee by his employer are two-fold: the substantive and the procedural.

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 The minimum requirements of due process are: notice and hearing intended as a
safeguard against official arbitrariness.
 There are exceptions, however, like the conclusive presumption barring admission of
contrary evidence if the presumption is based on human experience and there is a rational
connection between fact proved and the fact ultimately presumed, or abatement of a
nuisance per se, like a mad dog on the loose which must be killed immediately.
 In evaluating a due process claim, the first consideration must be whether life, liberty, or
property interest exists.
 A license authorizing a person to enjoy a certain privilege is not property or a property
right, it is only a permit to do what otherwise would be unlawful and not a contract
between the grantor and grantee. It does NOT create vested right.
 Due Process under the labor code has both substantive and procedural due process.

 SUBSTANTIVE
 asks whether the government has adequate reason to take away a person’s life,
liberty, or property.
 It looks to whether there is sufficient justification for governmental action. Whether
there is justification depends on the level of scrutiny used (rational basis, strict
scrutiny)
 Two requisites must
concur:
o the dismissal must
be for a just or
authorized cause
o the employee must
be afforded an
opportunity to be
heard and to defend
himself
 PROCEDURAL
 refers to the procedures that the
government must follow before it
deprives a person of life, liberty, or
property.

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 an opportunity to be heard and to defend oneself must be observed before an

employee may be dismissed.

 Supreme Court Rulings on cases wherein procedural due process was not followed in
cases of valid dismissals:

 Prior 1989
 If procedural due process is not followed, dismissal is illegal.
 1989 – Wenphil or Belated Due process Rule
 Dismissal is upheld but employer is penalized and must pay indemnity to employee
(P1000 in this case)
 Serrano Doctrine
 Ineffectual dismissal so employer must pay full back wages from the time of
termination until it is judicially declared that the dismissal was for a just or authorized
cause.
 2004 onwards (Agabon)
 Dismissal is upheld but employer
is penalized and must pay
indemnity (stiffer indemnity;
P30,000 in this case).

 EQUAL PROTECTION
 The guaranty of equal protection is
not violated by legislation based on
reasonable classification.
 The classification, to be
reasonable:
o must rest on substantial
distinctions
o must be germane to the
purposes of the law
o must not be limited to
existing conditions only
o must apply equally to all
members of the same class.
 Equal protection is not absolute but is subject to reasonable classification.
o If the groupings are characterized by substantial distinctions that make real
differences, one class may be treated and regulated differently from the other.
o It is against undue favor or class privilege and hostile discrimination, but not
intended to prohibit legislation limited either in its object or territory. It merely

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requires that all persons under like circumstances shall be treated alike both as to
privileges conferred and liabilities enforced. (Quinto vs Comelec)
 The equal protection of the laws is embraced in the concept of due process, as every
unfair discrimination offends the requirements of justice and fair play.
 requires that persons similarly situated should be treated alike as to rights conferred and
responsibilities imposed.
 The classification must include or embrace all persons who naturally belong to the class.
It is not necessary that the classification be made with absolute symmetry in the sense
that the members of the class should possess the same characteristics. SUBSTANTIAL
SIMILARITY will suffice.
o The mere fact that an individual belonging to a class differs from other members,
as long as that class is substantially distinguishable from all others, does not
justify the non-application of the law to him.
 It must not be based on existing circumstances only, or so constituted as to preclude
addition to the number included in the class. It must embrace all those who may
thereafter be in similar circumstances. It must not leave out or under include those that
should otherwise fall into a certain classification. (Biraogo vs Philippine Truth
Commission)

Sources:
Azucena (2021)
SBU Mem-Aid
UP BarOps 2019 Reviewer
University of Cordilleras Reviewer
Trust me bro
Basta
Syllabus ni Atty. Mike

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