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An Introduction to Philippine Labor Laws

Topic: An Introduction to Philippine Labor Laws

Welcome Notes:
WELCOME BSBA STUDENTS!!!
Get ready to be challenged…
Learn something new every day by adapting the
‘New Normal’

I. INTRODUCTION:
This lesson allows you to understand how Philippine labor laws are framed within civil and
constitutional boundaries. It is of great importance to take into account the productive members of
society to be informed and well equipped with the laws pertaining to labor and handworks.
II. OBJECTIVES:
At the end of this module, you should be able to:
1. define Labor Laws;
2. recognize the civil and constitutional provisions on labor and
3. expound the relationship of social justice to labor.

III. PRELIMINARY ACTIVITIES:

This video entitled,

“The Top Five
Before you proceed to the main lesson, test yourself with this activity.
Environmental

Instruction: Ponder on the following quotation below.

“No human masterpiece has been created without a great

labour.” – Andre Gide

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_____________________________________________________________________________________
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An Introduction to Philippine Labor Laws

GREAT!!!
You may now proceed to the main lesson.

IV. LESSON PROPER

Let’s begin!

Based on the preliminary activities, what did you notice about it?
________________________________________________________
CONGRATULATIONS!
You may now proceed to the lesson.

Lesson 1: An Introduction to Philippine Labor Laws

“Labor,” in ordinary signification, is understood as physical toil although it does not necessarily exclude the
application of skill, thus there is skilled and unskilled labor. “Skill,” by dictionary definition, is the familiar
knowledge of any art or science, united with readiness and dexterity in execution or performance or in the
application of the art or science to practical purposes”.(Azucena, C, 1999)
I. LABOR LAWS
Labor Laws in its broad sense refer to all laws which provide for the benefits of the employees and
their relationship with the employers including the welfare of workers' families. In its more specific
sense, Labor laws refer to such laws classified as follows:
A. Labor standard
B. Labor Relations
C. Social Legislation
D. Labor Jurisprudence
E. Implementing Rules and Regulations (IRR)
A. Labor Standard
Labor Standard refers to refers to that part of labor law which regulates the relations between
employers and workers. According to Penaflor (2016), these were the laws which provide
substantive rights and benefits for the workers such as the minimum wage; the eight hours working
time; time pay, etc
B. Labor Relations
Labor Relations refer to such laws which provide for the workers' right, organization aimed at
empowering them in order to effectively deal with the employers for the promotion of the industrial
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peace and or promoting the harmonious relationship between capital and labor.
C. Social Legislation
Social Legislation refers to such laws which provide benefits for the workers and their families at
the time of their retirement and or at the time of their disability from work whether temporary or
permanent.
D. Labor Jurisprudence
Labor jurisprudence refers to such decisions of the Supreme Court or the Court of Appeals as the
case may be applying and or interpreting the labor laws in a proper case. It is an integral parts of
the labor laws because the decisions of the courts applying or interpreting the laws or the
constitution shall form part of the legal system of the Philippines (Art.8 RA 386, Civil Code of the
Phil.).
E. Implementing Rules and Regulations
The Implementing Rules and Regulations promulgated by the Department of Labor likewise form
parts of the Labor Laws in the sense that they must also be complied with for the availment of the
rights and privileges provided for under the Labor Laws. The same is in consonance with the
regulatory powers of the Secretary of the Department of Labor and Employment (DOLE) under the
principles of delegated legislation.
The limitation, however is that the Implementing Rules and Regulations (IRR) shall not be violative
of the law it seeks to implement. Otherwise, said IRR is void for being contrary to law (Pase vs.
Drilon G.R. No. 81958, June 30, 1988).

Impressed with Public Interest

Public interest connotes the general welfare of people. In this sense, Labor or employment contract is not
an ordinary contract where parties can stipulate anything provided the same is not contrary to law, morals,
good customs, public order, or public policy (Art.1306 RA 386).

Labor or employment contract is impressed with public interest that they must yield to common good or the
so called "general welfare". The reason is that, Philippines is a third world country with citizens being part of
minimum wage earners. Hence, the genuine progress and development of the country can be achieved in
terms of alleviating the plight of the workers thru the application of social justice.

II. CIVIL CODE PROVISIONS ON LABOR

Republic Act 386 or also known as the “Civil Code of the Philippines” provides for the following
provisions on Contract of Labor (Section 2):

Article 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
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subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.

Article 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or
convenience of the public.

Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer.

Article 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever,
shall be valid.

Article 1704. In collective bargaining, the labor union or members of the board or committee signing the
contract shall be liable for non-fulfilment thereof.

Article 1705. The laborer's wages shall be paid in legal currency.

Article 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

Article 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.

Article 1708. The laborer's wages shall not be subject to execution or attachment, except for debts
incurred for food, shelter, clothing and medical attendance.

Article 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer.

Article 1710. Dismissal of laborers shall be subject to the supervision of the Government, under special
laws.

Article 1711. Owners of enterprises and other employers are obliged to pay compensation for the death of
or injuries to their laborers, workmen, mechanics or other employees, even though the event may have
been purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and
in the course of the employment. The employer is also liable for compensation if the employee contracts
any illness or disease caused by such employment or as the result of the nature of the employment. If the
mishap was due to the employee's own notorious negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation. When the employee's lack of due care contributed to his
death or injury, the compensation shall be equitably reduced.

Article 1712. If the death or injury is due to the negligence of a fellow worker, the latter and the employer
shall be solidarily liable for compensation. If a fellow worker's intentional or malicious act is the only cause
of the death or injury, the employer shall not be answerable, unless it should be shown that the latter did
not exercise due diligence in the selection or supervision of the plaintiff's fellow worker.
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III. CONSTITUTIONAL PROVISIONS ON LABOR

The supreme law of the land, 1987 Philippine Constitution enshrined labor in its provisions to wit:

Article XIII Social Justice and Human Rights

Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its
increments.

Section 2. The promotion of social justice shall include the commitment to create economic opportunities
based on freedom of initiative and self-reliance.

Labor
Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to 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.

AGRARIAN AND NATURAL RESOURCES REFORM

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers
and regular farm workers who are landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In determining retention limits, the State
shall respect the right of small landowners. The State shall further provide incentives for voluntary land-
sharing.
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Section 5. The State shall recognize the right of farmers, farm workers, and landowners, as well as
cooperatives, and other independent farmers’ organizations to participate in the planning, organization, and
management of the program, and shall provide support to agriculture through appropriate technology and
research, and adequate financial, production, marketing, and other support services.

Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in
accordance with law, in the disposition or utilization of other natural resources, including lands of the public
domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small
settlers, and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farm workers in its own agricultural estates which shall be
distributed to them in the manner provided by law.

Section 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to
the preferential use of the communal marine and fishing resources, both inland and offshore. It shall
provide support to such fishermen through appropriate technology and research, adequate financial,
production, and marketing assistance, and other services. The State shall also protect, develop, and
conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen
against foreign intrusion. Fish workers shall receive a just share from their labor in the utilization of marine
and fishing resources.

(Available @ https://www.officialgazette.gov.ph/1974/05/01/presidential-decree-no-442-s-1974/)

IV. SOCIAL JUSTICE

Social justice, according to Dr. Jose P. Laurel in Calalang vs. Williams, 70 Phil. 726 [1940], is “neither
communism, nor despotism, nor atomism nor anarchy, but 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. 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 component
elements of society through the maintenance of 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.”

Simply as Peñaflor (2016) states, “Social Justice means giving more in law those who have less in life.”

Courts Vigilance over the Right of Labor

The Supreme Court further says in this respect: "Courts should be ever vigilant in the preservation
of the constitutionally enshrined rights of the working class. Without the protection accorded by our laws
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and the tempering of courts, the natural and historical inclination of capital to ride roughshod over rights of
labor would run unabated." (Mabeza vs. NLRC, 271 SCRA 670 (1997))

Labor Contracts Interpreted in Favor of Labor

Again, in consonance with the social justice principles, Art. 4 of the Labor Code (PD 442) as amended
provides: 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.
Thus the Court declared: "In carrying out and interpreting the Labor code's provisions and its
implementing regulations, the working man's welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate
spirit of the law as provided for in Article 4 of the Labor Code as amended, which states that "all doubts in
the implementation and interpretation of the Labor Code including its implementing rules and regulations
shall be resolved in favor of labor".
As well as the constitutional mandate that the state shall afford full protection to labor and promote
full employment opportunities for all. (PLDT v. NLRC,276 SCRA 1.)

Doubts in Evidence is Resolved in favor of Labor

Meanwhile, when there is doubt of evidence between the employer and the employee, the same
shall be resolved in favor of the latter. Hence, in one case it was said "In this case, there are serious doubts
in the evidence on records as to the factual basis of the charges against the employee. These doubts shall
be resolved in her favor in line with the policy under the Labor Code to afford protection to labor and
construe doubts in favor of labor. The consistent rule is that if doubt exists between the evidence presented
by the employer and the employee, the scales of justice must be tilted in favor of the latter.
The employer must affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause. Not having satisfied its burden of proof, the court concluded that the employer dismissed
the employee without just cause. Hence, the termination is illegal (Asuncion vs. NLRC, 362 SCRA 56
(2001); Peñaflor vs. Outdoor Clothing manufacturing Corp. G.R. No. 177114, January 21, 2010)

Burden of Proof Lies with the Employer in the Dismissal Case

This policy of protection to labor likewise imposed upon the employer to prove the valid exercise of
its right to dismiss an employee. The Court says in this wise: "When there is no showing of a clear, valid
and legal cause for the termination of employment, the law considers the matter a matter of illegal dismissal
and the burden is on the employer to prove that the termination was for a valid or authorized cause and the
quantum of proof which the employer must discharge is substantial evidence. An employee's dismissal due
to serious misconduct must be supported with substantial evidence. Substantial evidence is that amount of
relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other
minds,equally reasonable, might conceivably opine otherwise" (Aler Gurango us. Best chemicals and
Plastics Inc. and Moon Pyo Hong, G.R. No. 174598. 25 August 2010).

Constitutional Protection to Labor is not designed to Oppress or Destroy Capital

The constitution, however while committed to the policy of social justice and the protection of the
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working class, should not be supposed that every labor dispute will be automatically decided in favor of
labor. Management also has its rights which are entitled to respect and enforcement in the interest of
simple fair play. Thus, where management right to transfer employees is validly exercised, as in this case,
Courts will decline to interfere (Best Wear Garments vs. De Lemos, G.R. No. 191281,05 Dec.2012)

Social Justice not a Countenance for Wrong Doing

Moreover, the cause of social justice is not served by upholding the interest of the employees in
disregard of the right of the company. Social justice ceases to be an effective instrument for the
"equalization of the social and economic forces" by the state when it is used to shield wrong doing. While it
is true that compassion and human consideration should guide the disposition of cases involving
termination of employment since it affects one's source or means of livelihood, it should not be overlooked
that the benefits accorded to labor do not include compelling an employer to retain the services of an
employee who has been shown to be a gross liability to the employer. It should be made clear that when
the law tilts the scale of justice in favor of labor, it is but recognition of the inherent economic inequality
between labor and management. The intent is to balance the scale of justice: to the two parties on relatively
equal positions. There may be cases where the circumstances warrant fin favor of labor over the interest of
management but never should the scale be so tilted if the result is an injustice to the employer, Justicia
nemini regada est (Justice is to be denied to none) (Jamer vs. NLRC 278 SCRA 632 (1997)).

Labor to Prove First the Fact of Dismissal

Thus, even if the burden of proof lies with the employer as regards its valid exercise of right to
dismiss an employee in case of illegal dismissal, the employee must first establish by substantial evidence
the fact of dismissal (Lilia Labadan vs. Forest Hills Academy, et al G.R. No. 172295, 23 Dec. 2008).

Courts urges for a Moderation in applying Sanction

However, even if the constitutional mandate of protection to labor does not countenance a wrong
doing, still the court urges for a moderation in applying sanction to the working man.
Thus, it says: "In holding the constitutional mandate of protection to labor, the rigid rules of procedures may
sometimes be dispensed with to give room for compassion. The doctrine of "compassionate justice” is
applicable under the premises, in view of the fact that the worker is the bread winner of his family. The
social justice policy mandates a compassionate attitude toward the working class in its relation to
management. In calling to the protection to labor, the Constitution does not condone wrong doing by the
employee, it nevertheless 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" (Gandara Mill Supply vs.
NLRC 300 SCRA 702 (1998)).
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We had just finished the discussion on An Introduction to Philippine Labor

Laws. Let’s move on to the next higher level of activity/ies or exercise/s that
demonstrates your potential skills/knowledge of what you have learned.

V. ANALYSIS, APPLICATION AND EXPLORATION

ACTIVITY 1
Name: ______________________________ Course & Section: __________________
Instruction: Identify whether the following statement is TRUE or FALSE. (10 items x 1 point each)
________1. Labor Relations refer to the workers' rights to self organization; promote industrial peace
by promoting harmonious relations between Capital and Labor.
________2. Employment contract is not an ordinary contract as it is impressed with public interest.
________3. In case of doubt, all labor laws and contract shall be interpreted in favor of labor.
________4. The state affirms labor as a primary social economic force.
________5. Workers are partners for the nation's progress and stability.
________6. Social Justice means giving more in law those who have less in life.
________7. Social Justice however is not meant to oppress capital.
________8. Burden of proof lies with the employer to prove that the dismissal is for just and or
authorized cause.
________9. Compassionate justice favors the workers under all circumstances.
________10. Labor Laws apply only in the industrial and commercial sectors since those
working in the agricultural sector are governed by the Law on Agrarian Reform.

ACTIVITY 2
Name: ______________________________ Course & Section: __________________
Instruction: Identify the provision on labor that is being discussed in the following statements. (5 items X 2
points each)

________1. In collective bargaining, the labor union or members of the board or committee signing the
contract shall be liable for non-fulfilment thereof.
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________2. If the death or injury is due to the negligence of a fellow worker, the latter and the employer
shall be solidarily liable for compensation. If a fellow worker's intentional or malicious act is the only
cause of the death or injury, the employer shall not be answerable, unless it should be shown that
the latter did not exercise due diligence in the selection or supervision of the plaintiff's fellow
worker.
________3. The laborer's wages shall not be subject to execution or attachment, except for debts
incurred for food, shelter, clothing and medical attendance.
________4. or also known as the “Civil Code of the Philippines”
________5. 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.

Finally, let us summarize the lesson of what we had discussed today.

VI. GENERALIZATION
Name: ______________________________ Course & Section: __________________
Instruction: Ponder on the following statements.
1. Explain Labor Laws
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
2. State at least two civil provisions to labor
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__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
3. State at least two constitutional to labor
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
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4. The relationship of Social Justice to labor

__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

KUDOS!
You have come to an end of Module 1.
OOPS! Don’t forget that you have still an assignment to do.
Here it is….

VII. ASSIGNMENT
Name: ______________________________ Course & Section: __________________
Instruction: Select the best answer of the following situational examples. (2 items)
____1. Ana signed an employment contract with ABC Inc., whereby she agreed to be dismissed
from her employment any time her services will no longer be essential. After 10 years, she was
dismissed from her employment because the company found her unfit for the job.
Ana filed an illegal dismissal case. The company invoked as a defense the stipulation in the
contract that she agreed to be dismissed any time.
If you will be the labor arbiter, what will be your decision?
A. The decision will be in favor only for ABC Inc., because the employment should be binding and
followed regardless of any circumstances.
B. The decision will be in favor for Ana, because the decision of ABC Inc is unjust and inhumane.
C. The decision will be in favor for both parties involved; this will serve as a source of laws in the
future.
D. All answers are correct.

____2. The contract states: “The parties do hereby agree to maintain industrial peace within the
company under all circumstances”.
The workers staged a strike in the exercise of their rights to self organization. Is the exercise of
their rights valid?
A. The workers’ action is valid because it is a privilege mandated by the constitution.
B. The workers’ action is invalid because it is inviolable under the contract.
C. The workers’ action is neither valid nor invalid; both parties have their own rights and
privileges.
D. All answers are correct.
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After your long journey of reading and accomplishing the module, let us now
challenge your mind by answering the evaluation part of this module.

VIII. EVALUATION
Name:______________________________ Course & Section: __________________

Direction/Instruction: Choose the letter that contains the best answer.

(This evaluation will be submitted on ________________.)
1. Which term refers to a physical toil although it does not necessarily exclude the application of skill,
thus skilled and unskilled still exists?
A. Labor
B. Skill
C. Labor Relations
D. Labor Standards
2. What term refers to all laws which provide for the benefits of the employees and their relationship
with the employers including the welfare of workers' families?
A. Labor Laws
B. Skill
C. Labor Relations
D. Labor Standards
3. What do you call the laws which provide benefits for the workers and their families at the time of their
retirement and or at the time of their disability from work whether temporary or permanent?
A. Social Regulations
B. Social Legislations
C. Social mandates
D. Social Strata
4. What is the term that refers to the general welfare of the people?
A. Public Figures
B. Public Politics
C. Public Interest
D. None of the above
5. Why was labor/employment contract impressed with the public interest that they must yield to the
common good?
A. It is the aim of social justice
B. It is the aim of private companies
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C. It is the aim of government employees
D. It is the aim of workers
6. Why does Article 1700 of RA 386 express the following: The relations between capital and labor are
not merely contractual?
A. Neither capital nor labor shall act oppressively against the other, or impair the interest or
convenience of the public.
B. 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
subjects.
C. No contract which practically amounts to involuntary servitude, under any guise whatsoever,
shall be valid.
D. All answers are correct.
7. What does social justice promote in Article XVIII Social Justice and Human Rights, Section 2?
A. The commitment to create economic opportunities based on freedom of initiative and self-
reliance.
B. The acquisition, ownership, use, and disposition of property and its increments.
C. The principle of shared responsibility between workers and employers.
D. All of the above
8. Which of the following statement is correct?
A. “Social Justice means giving less in law those who have less in life.”
B. “Social Justice means giving more in law those who have more in life.”
C. “Social Justice means giving more in law those who have less in life.”
D. No correct answer

9. What term is the familiar knowledge of any art or science, united with readiness and dexterity in
execution or performance or in the application of the art or science to practical purposes”?
A. Labor
B. Labor Relations
C. Skill
D. All answers are correct
10. What do you call the laws which provide for the workers' right organization aimed at empowering
them to effectively deal with the employers for the promotion of the industrial peace and or
promoting the harmony between capital and labor?
A. Labor
B. Labor Relations
C. Skill
D. All answers are correct
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CONGRATULATIONS on reaching the end of this module!

You may now proceed to the next module.
Don’t forget to submit all the exercises, activities and portfolio
on ___________________.
KEEP UP THE GOOD WORK.
Well Done!!!