LABOR LAW – GENERAL PRINCIPLES BY ATTY. AMADO ADQUILEN

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General Principles

LABOR AND SOCIAL LEGISLATION: DEFINITION

Labor and Social legislation are those laws that are enacted to protect the rights of workersand promote their welfare.

Labor legislation is broadly classified into labor standards and labor relations. Laborstandards law sets out the minimum terms, conditions and benefits of employment that theemployer must provide or comply and to which employees are entitled as a matter or right.Labor relations law on the other hand defines the rights duties, as well as the institutionalmechanisms, that govern the individual and collective interactions between employers,employees and their representatives.

SOCIAL JUSTICE: DEFINED

Social justice is the humanization of laws and the equalization of social and economicforces by the State so that justice in its rational and objectively secular conception may atleast be approximated. 1

NOTES: While social justice is the raison d’ etre of the labor law, their basis or foundationis the police power of the state. It is the power inherent in a Government to make laws, withinconstitutional limits to promote the order, safety, health, morals, and general welfare of society.

The power of the state acting, through government, derives itself from the obligation to protect itscitizens and to keep society in safe and good order. On the wise exercise of this power dependsthe security of the social order, the beneficial use of property, the enjoyment of social life, the wellbeing of the community, and the health and life of the citizens. 2

CONSTITUTIONAL PROVISIONS ON LABOR

Article II, Section 18:

The state affirms labor as a primary social economic force. It shall protect the rights ofworkers and promote their welfare.

Article XIII, Section 3:

The state shall afford full protection to labor, local and overseas, organized andunorganized, and promote full employment and equality of employment opportunities forall.

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

The state shall promote the principle of shared responsibility between workers andemployers and the preferential use of modes in settling disputes, including conciliation,and shall enforce their mutual compliance therewith to foster industrial peace.

1 Social Justice as defined by Mr. Justice Laurel2 Martin, Philippine Labor and Social Legislation [1970]

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The state shall regulate the relations between workers and employers recognizing theright of labor to its just share in the fruits of production and the right of enterprise toreasonable returns on investments, and to expansion and growth

Article III, Section 8:

The right of the people, including those employed in the public and private sectors, toform unions, associations, or societies for purposes not contrary to law shall not beabridged.

Article XIII, Section 14:

The state shall protect working women by providing safe and healthful workingconditions, taking into account their maternal functions, and such facilities andopportunities that will enhance their welfare and enable them to realize their full potentialin the service of the nation.

Article XII, Section 12:

The state shall promote the preferential use of Filipino labor, domestic materials andlocally produced goods, and adopt measures that help make them competitive.

ARTICLE 13 ON SOCIAL JUSTICE PROVIDES AMONG OTHERS:

A. PROTECTION OF LABOR:

The state shall:

1. afford full protection to labor, local and overseas, organized andunorganized;

2. promote full employment and equality of employment opportunities for all.

B. WORKER’S RIGHTS:

It shall:

1. guarantee the rights of all workers to self-organization;2. collective bargaining and negotiations; and3. peaceful concerted activities, including the right to strike in accordance with

law.

They shall be entitled to:

1. security of tenure;2. humane conditions of work; and a3. living wage.

C. WORKERS’ PARTICIPATION:

They shall also:

1. participate in policy and decision making processes affecting their rights andbenefits as may be provided by law.

The state shall:

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1. promote the principle of shared responsibility between workers and employersand the

2. preferential use of voluntary modes of settling disputes, including conciliationand

3. shall enforce their mutual compliance therewith to foster industrial peace.

D. LABOR-MANAGEMENT RELATIONS

The state shall:

1. Regulate the relations between workers and employer recognizing: i. the rights of labor to its just share in the fruits of production; ii. and the right of enterprise to reasonable return on investments and

to expansion and growth.

WHO ARE EXEMPTED FROM THE COVERAGE OF PD 442, AS AMENDED?

a. Government employees under the Civil Service Law;b. Government corporations covered under a special charter;c. International agencies covered by the Grant of Immunity based on the

convention on the Privileges of Specialized Agencies of the UN (1947);d. Religious Institutions engaged in purely ecclesiastical matters;e. Schoolteachers but only with respect to acquiring permanent status in

employment and security of tenure, which is governed by the Manual ofRegulations for Private Schools.

WHAT IS THE SPECIAL NATURE OF A CONTRACT OF EMPLOYMENT BETWEEN LABORAND CAPITAL?

Such a relation is not merely contractual. It is so impressed with public interest that laborcontracts must yield to the common good. 3 Therefore, the law says that labor contractsshall be subject to special laws on labor unions, collective bargaining, strikes, lockout,closed shop, wages, working conditions, hours of labor and similar subjects.

HOW SHOULD LABOR AND CAPITAL TREAT EACH OTHER?

They should not act oppressively against each other or impair the interest or convenienceof the public. 4

IN CASE OF DOUBT, HOW MAY A LABOR LEGISLATION AND/OR LABOR CONTRACTS BECONSTRUED?

In case of doubt, labor contracts and/or labor legislations shall be construed in favor ofthe safety and decent living of the laborer. In other words, doubts shall be resolved infavor of labor.

A contract freely entered into shall be respected since a contract is the law between theparties. The principle of autonomy in contracts is not, however, an absolute principle.The rule in Art 1306 of the Civil Code is that the contracting parties may establish suchstipulations as they may deem convenient, provided that they are not contrary to law,morals, good customs, public order, or public policy. Thus, counter balancing theprinciple of autonomy of contracting parties is the equally general rule that provisions of

3 Article 1700, Civil Code of the Philippines4 Article 1701, Civil Code of the Philippines

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applicable law, especially provisions relating to matters affected with public policy is thatthe parties may not contract away applicable provisions of law especially in peremptoryprovisions dealing with matters heavily impressed with public interest. The law relating tolabor and employment is clearly such an area and parties are not at liberty to insulatethemselves and their relationships from the impact of labor laws and regulations bysimply contracting with each other. 5

NOTES: The Constitution is committed to the policy of social justice and the protection ofthe working class. But it should not be supposed that every labor dispute will be automaticallydecided in favor of labor. Management also has its own rights and prerogatives which, as such,are entitled to respect and enforcement in the interest of simple fair play. 6

The basic doctrine underlying the provisions of the Constitution so solicitous of labor as well asthe applicable statutory norms is that both the working force and management are necessarycomponents of the economy. The rights of labor have been expanded. Concern is evident for itswelfare. The advantages thus conferred, however, call for attendant responsibilities. The ways ofthe law are not to be ignored. Those who seek comfort from the shelter that it affords should bethe last to engage in activities which negates the very concept of a legal order as antithetical toforce and coercion.

NOTES: (cont’d) What is equally important is that in the steps to be taken by it in thepursuit of what it believes to be its rights, the advice of those conversant with the requirements oflegal norms should be sought and should not be ignored. It is even more important that reasonand not violence should be its milieu. 7

WHAT IS THE DOCTRINE ENUNCIATED IN THE LANDMARK ALMIRA VS. BF GOODRICHCASE?

The doctrine enunciates that: “x x x Where a penalty less punitive would suffice, whatevermissteps may be committed by labor ought not to be visited with a consequence sosevere. It is not only because of the law's concern for the workingman. There is, inaddition, his family to consider, unemployment brings untold hardships and sorrows onthose dependent on the wage-earner. The misery and pain attendant on the loss of jobsthen could be avoided if there be acceptance of the view that under all the circumstancesof this case, petitioners should not be deprived of their means of livelihood. Nor is this tocondone what had been done by them. From the strictly juridical standpoint, it cannot betoo strongly stressed, to follow Davis in his masterly work, Discretionary Justice, thatwhere a decision may be made to rest an informed judgment rather than rigid rules, allthe equities of the case must be accorded their due weight. Finally, labor lawdeterminations to quote from Bultmann, should be not only SECUNDUM RATIONEMBUT ALSO SECUNDUM CARITATEM. “ 8

ARTICLE 5 OF PD 442, AS AMENDED, PROVIDES THAT THE DEPARTMENT OF LABORAND EMPLOYMENT AND OTHER GOVERNMENT AGENCIES CHARGED WITH THEADMINISTRATION AND ENFORCEMENT OF THIS CODE OR ANY OF ITS PARTS SHALLPROMULGATE THE NECESSARY IMPLEMENTING RULES AND REGULATIONS. SUCHRULES AND REGULATIONS SHALL BECOME EFFECTIVE FIFTEEN (15) DAYS AFTERANNOUNCEMENT OF THEIR ADOPTION IN NEWSPAPERS OF GENERAL CIRCULATION.

5 Pakistan International Airlines Corp. vs. Ople, 190 SCRA 996 Sosito vs. Aguinaldo Development Corp., GR No. 48926, December 24, 19877 Almira et.al, vs BF Goodrich, GR No. L-34974 July 25, 19748 Almira et.al, vs BF Goodrich, Infra

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QUESTION: THE DEPARTMENT OF LABOR AND EMPLOYMENT ISSUED DEPARTMENTORDER NO. 1 S. 1998, TEMPORARILY SUSPENDING DEPLOYMENT OF FILIPINODOMESTIC AND HOUSEHOLD WORKERS FOR OVERSEAS EMPLOYMENT. THEPHILIPPINE ASSOCIATION OF SERVICE EXPORTERS (PASEI) ASSAILED THE ORDER; INTHAT, AMONG OTHERS, IT IMPAIRS THE RIGHT TO TRAVEL. THE SOLICITOR GENERALJUSTIFIED THE VALIDITY OF THE ORDER ON POLICE POWER. WHICH POSITION ISMORE TENABLE?

The position of the Solicitor General is more tenable. It is a valid police measure. TheHonorable Supreme Court in PASEI vs. DRILON 9 held:

The concept of police power is well-established in thisjurisdiction. It has been defined as the "state authority to enactlegislation that may interfere with personal liberty or property inorder to promote the general welfare." As defined, it consists of(1) an imposition of restraint upon liberty or property, (2) in orderto foster the common good. It is not capable of an exactdefinition but has been, purposely, veiled in general terms tounderscore its all-comprehensive embrace.

"Its scope, ever-expanding to meet the exigencies of the times,even to anticipate the future where it could be done, providesenough room for an efficient and flexible response to conditionsand circumstances thus assuring the greatest benefits."

x x x x x x

"Protection to labor" does not signify the promotion ofemployment alone. What concerns the Constitution moreparamountly is that such an employment be above all, decent,just, and humane. It is bad enough that the country has to sendits sons and daughters to strange lands because it cannot satisfytheir employment needs at home. Under these circumstances,the Government is duty-bound to insure that our toilingexpatriates have adequate protection, personally andeconomically, while away from home. In this case, theGovernment has evidence, an evidence the petitioner cannotseriously dispute, of the lack or inadequacy of such protection,and as part of its duty, it has precisely ordered an indefinite banon deployment.

NOTES: Remember this, class. It will give you an insight as to how the law protects yourworkingman. It is but proper and it is our duty to protect them, especially our OFW’s who are ourleading exports (like goods) thus they are hailed as our modern heroes because they contributelargely to our dollar earnings. Overseas, if you work as a domestic helper with a foreignemployer, you will be called a Filipina, not because you are from the Philippines but because youare a domestic helper. There, you are reminded of the term which nearly came out in the Lexiconthat a Filipina is a domestic helper. What a pity!

WHAT IS MANAGEMENT PREROGATIVE?

Management prerogative is the right of an employer to regulate according to theirdiscretion and best judgment all aspects of employment, including work assignment,

9 PASEI vs. Drilon, 163 SCRA 386, July 30, 1988

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working methods, processes to be followed, working regulations, transfer of employees,work supervision, lay-off of workers, and the discipline, dismissal and recall of workers.

NOTES: Every business enterprise endeavors to increase its profits, In the process, it maydevise means to attain that goal,. Even as the law is solicitous of the welfare of the employees, itmust also protect the rights of an employer to exercise what are clearly MANAGEMENTPREROGATIVES. 10

WHAT IS COVERED BY A VALID EXERCISE OF MANAGEMENT PREROGATIVES?

A valid exercise of management prerogative is one which among others, covers:

1. Work assignment;2. Working method;3. Time;4. Work supervision;5. Discipline, dismissal and recall of workers.

It is a recognized prerogative of the employer to transfer and reassign employeesaccording to the requirements of its business. For indeed, regulation of manpower by thecompany clearly fall within the ambit of the management prerogative.

Except as provided for, or limited by special laws, an employer is free to regulate,according to his own discretion and judgment, all aspects of employment. 11

CITE SOME LIMITATIONS ON THE EXERCISE OF MANAGEMENT PREROGATIVES?

The limitations on the exercise of management prerogatives are as follows:

1. They cannot be used as subterfuge to ease out undesirable employees for unjustand unauthorized causes;

2. They should be exercised in GOOD FAITH and in just, reasonable and fair manner;

3. They must not be used to bust the union, to harass union officers or to commit unfairlabor practices;

4. Its exercise must not be whimsical or arbitrary, nor despotic;

5. It should yield to the higher consideration of public policy, statute, special laws, orcontractual stipulations.

Example: In Master Iron Labor Union vs NLRC, 12 The Supreme Court held that “Thecorporation’s insistence that the hiring of casuals is management prerogative betrays its attemptto coat with legality the illicit curtailment of its employees’ rights to work under the terms of thecontract of employment and to a fair implementation of the CBA. “

10 Sime Darby Filipinas vs. NLRC, GR No. 119205, April 15, 199811 Manila Electric Co. vs. NLRC, 263 SCRA 531 in relation to San Miguel Brewery Sales ForceUnion vs. Ople, 170 SCRA 2512 Master Iron Labor Union vs. NLRC, 219 SCRA 17

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ARTICLE XIII, SECTION 3 PROVIDES, AMONG OTHERS, THAT EMPLOYEES SHALL ALSOPARTICIPATE IN POLICY AND DECISION-MAKING PROCESSES AFFECTING THEIRRIGHTS AND BENEFITS AS MAY BE PROVIDED BY LAW.

QUESTIONS:

1. IS MANAGEMENT DUTY BOUND TO OBTAIN EMPLOYEES APPROVAL ORCONSENT BEFORE IT CAN EXERCISE ITS PREROGATIVES TO LAY DOWN ANDEXECUTIVE MANAGEMENT POLICY? IN WHAT WAY SHOULD EMPLOYEES BEALLOWED TO PARTICIPATE? WHAT IS THE EFFECT OF MANAGEMENT’SREFUSAL?

2. ARE ALL COMPANY POLICIES SUBJECT TO WORKER’S PARTICIPATION?

3. ARE MANAGEMENT’S DECISION NULLIFIED BY THE ABSENCE OF EMPLOYEE’SPARTICIPATION?

4. DOES MANAGEMENT’S REFUSAL OF WORKER’S PARTICIPATION CONSTITUTEUNFAIR LABOR PRACTICE? IS IT A LAWFUL GROUND FOR FILING A NOTICE OFSTRIKE?

ANSWERS:

1. In PAL vs. NLRC, 13 the Supreme Court in resolving held that: “ x x x consent or approvalby the UNION is required as a condition sine qua non to the implementation ofmanagement policies. All that is required is DISCUSSION and REVIEW. It is humblysubmitted that when this is done, the next step to do is to distribute copies to all theemployees.

When such copies are so received, the POLICY becomes effective and enforceable. It isthus clear that the requirement for WORKER’S PARTICIPATION is sufficiently compliedwith when DISCUSSION were done by management with the employees. Management’srefusal would remove the enforceability of the policy and the Union, acting in behalf of theemployees, or the workers themselves if there is no union, may initiate legal steps tonullify the policy, or at least, postpone its enforcement.

2. Insofar as BUSINESS OPERATIONS POLICIES are concerned, the employees have noparticipation as a matter of demandable right. Operational decisions are reposed uponthe sole determination of the employer. The law should not allow undue interference onthis matter because “ It is deemed important to society, as a whole, that he shouldsucceed.

However, when the RIGHTS, WELFARE, and BENEFITS of employees are involved, theConstitution demands WORKER’S PARTICIPATION,

3. In the PAL case, the Supreme Court ordered management to: 1) review and discuss thepolicy with the union; 2) distribute a copy each to the employees; and 3) reconsiderprevious disciplinary actions that were anchored on the policy to be reviewed.

In effect, the Court suspended the enforcement of the policy. It did not nullify it. But untiland unless the steps ordered are in fact, carried out, the policy could not be enforced.

13 Philippine Airlines vs. NLRC, et.al., GR No. 85985, August 13, 1993

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Such a situation of unenforceability, if not altered, would, for all intents and purposes,have the effects of annulment.

However, if the absence of worker’s participation was occasioned by the employee’s owninaction or refusal to act, then it would be tantamount to a waiver. And so, there would beno occasion for any adverse effect to the policy.

4. Since the refusal does not partake of the nature of the acts or omissions referred to inArticle 247 of the Labor Code, nor specific instances enumerated in Article 248 and 249therein, its stands to reason to conclude that it does NOT constitute UNFAIR LABORPRACTICE.

Even if such refusal is also a violation of a collective bargaining agreement, it would stillNOT be an UNFAIR LABOR PRACTICE because it is NOT a GROSS VIOLATION norflagrant violation of an economic provision.

Accordingly, the refusal cannot be a lawful ground for filing a NOTICE OF STRIKE. Astrike staged on that basis would be clearly illegal. And any illegal strikers may lose hisemployment status.