ARTS. 1-2 PRELIMINARY TITLE “Labor” in “Labor Gade’ is better viewed in its broad ordinary sense 48 Work and Workrelationship, referring toany economically productive applications of'physical, mental and imaterialiresourees. In this sense, the term business ownersandimanagers:Labor Code articles repeatedly show the interplay of owners of mental, physical and material resources. Their interdependence permeates the Code:! © ‘Thus, the Labor Code speaks of myriad conceptssuch as employment | employment termination relationship, collective bargaining, and g both employers and employees. Even only on these three «. it is obvious that the employee is not alone — he is employed by and he bargains with another. ‘That other is the employer. The Labor Code will become unintelligible ifit is concerned only with theneeds and rights of employees as if there were no employers. Indeed, as Harvard's John Dunlop confirms, oe there are three actors: thé'employers, the ‘and the governmentagenics.’ The Labor Code, which embodies our industrial lav, deals with the concerns of the three industrial actors. The contextofthe Labor Code issoeietal particularly the problems arising from unequal distribution of economic power and wealth, Although the Code’s language is legalistic, in terms of rigid prescriptions, prohibitions, and exceptions, stheswell- beingofthe people. This has to be so because the Labor Code and the labor laws are instruments of socio-economic development. The Court ‘has said that the state is concerned that wages are distributed evenly and, TAsGill of Harvard asserts: “Economic developments nota mechanical process itisnota simple adding up of assorted factors. Ultimately, tis a human enterprise ‘And like all human enterprises, its outcome will depend finally on the skill, quality and attitudes of the men who undertake it... There must be what economists call entrepreneurs: men who possess the drive, ambition, foresight, and imagination break through traditional barriers, overcome social inertia, and transform theory imo practice... Capital accumula ndispensable for expanding production and providing employment for the growing labor force.” (Richard T. Gill, Bano Development, (Prentice-Hall, 1963}, pp. 12 and 19). Gonformably, Sharp, etal inthe very successful book, affirms that “all goods and services that make up an econom) * real GDP are produced from labor and capital resources. Without labor and capi production could not take place.” (Ansel M. Sharp, Charles A. Register, and Patt Grimes, Economics of Socal Issues [McGraw-Hill, 2006, 17th ed.], p. 359) “Industrial Relations System, Harvard Business School, 1958, p. 47- 16sass tbeadnentncutiend a emmtnenccadaemamentacnnenna SRR, GENERAL PROVISIONS ARTS. 1-2 more importantly, that social justice is subserved,! The Labor Code will be hardly relevant if tis not imbued with the mission to uplift the living condition of the masses. It is definitely not meant to make the rich richer wwe the poor floundering in poverty. and I labor law should not punish the rich just because they are rich, but the law should temper greed or rechannel excessive wealth. It and equality. One of the elements of the New Consensus on economic developm “shared growth” or “inclusive growth” byreducing povertyand ensuring thatthe poor share substantially in the benefits of economic growth.” Indeed, any ardent student of law will realize that law cannot be divorced from economics and ethics. While economics is concerned with scarce resources or the production and distribution of goods and services, law is concerned with the dispensation of justice or the vanishment of iniquities in societal life. As Lord Lloyd asserts, “Law without justice is a mockery, if not a contradiction.” Of what good is labor law if it does not address the maldistribution of wealth? Economic injustice is indeed a matter of social ethics too. Studying the Labor Code therefore requires a liberal dose of social awareness particularly of the problems of the working people. It should be studied notas cold and lifeless set of rules but as dynamic humanistic prescriptions for achieving a decent quality of life — decent for both the rich and the poor.‘ The true task of labor law students, therefore, is to examine how the law hinders or helps the attainment of socio-economic TECOP 1s. NWPG, ete., GAR. No, 96169, September 24, 1991 ‘Michael P, Todaro and Stephen C. Smith, Economic Development (Pearson Education, 2009), p. 555, SDennis Lloyd, The Idea of Law (Penguin, 1987), p. 117, ‘T have not forgotten this reminder from Kilpatrick, the noted educator and. coprofessor of John Dewey: “In no controversial issue should the teacher assume to give “the answer,” and so close off the necessity for further study, Instead, the aim is to encourage each leaner to do his own thinking, but not in such a way as to direct the process toward our answer. No indoctrination tuly educa independence of personality, and itis this true democratic edu What the students are to think, what decisions they will reach in these controve areas is for them to decide. The result we seek isa person able and disposed to think himselfand actin accordance with his best thinking.” (William Kilpatrick, Philosophy of Education, pp. 418-419) 17ARTS. 1-2 PRELIMINARY TITLE Boals, how it helps or fails to help improve the quality of life of the masses. This task perfectly accords with a school’s mission to form men and women “imbued with a burning passion for justice and the fervent desire to serve others.” Hopefully, when their proper time comes, these students will make a difference, as they remember their graduation pledge to be guided “not only by what is legal but by what is moral, not only by what is permissible but by what is equitable.” 7.1 Labor Laws as an Equalizing Economic Force Repeatedly, we stress that labor laws may be regarded as a force to equalize economic opportunities and thus improve our quality of life, ‘That our labor laws strongly affect our standards of living is a fact too basic to admit debate. In his Basic Economics, Professor Sowell asserts; “Economics studies the consequences of decisions that are made about the use of land, labor capital and other resources that go into produciny the volume of output which determines a country’s standard of living . Among the major decisions affecting economic outcomes are decisions about what kind of enduring institutions a society has for making those decisions — what kind of economic system operating within what kind of legal system, and controlled by what kind of political system.' In fact our sets of labor laws can be viewed asa large “safety net” of governmental program or strategy to distribute wealth, to alleviate the people's poverty. The laws onsminimum:wageyonel8-month payor SSS c fe. Even labor unions — the genuine labor unions —‘andthe promotion ‘in dispersal of wealth instead of its being amassed by billionaires and oligaréhs. 8. RELATED LAWS Although the Labor Code contains most of the laws on labor, there are other labor laws that are not found in the Code. The most pertinent ones are mentioned below to serve as background in viewing the Labor Code. “Thomas Sowell, Basic Economics [New York: Basic Books, 2011]. p-3 18GENERAL PROVISIONS ARTS. 1-2 8.1 The Civil Code The Civil Code, not the Labi of labormanagement relations. It states “The relations between capital and labor are not merely y are so impressed with public inter esc Therefore, suchteomtraets bor unions, collective bargaining, ee soa lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.” (Article 1700) This being so, “Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.” (Article 1701) r Code, describes basically the nature Being a branch of civil law,’ laborlawdoes mot conflict with the Givil Cieqummisionsombumansslationsinamedaialasdaaeie Immediately pertinent are these three: Art. 19. Every person must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Art. 20. Every person who contrary to law, willfully or negligently causes damage to another, shall compensate the latter "for the same. 7 Art. 21. Any person who willfully causes loss or another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. jury to Dode Also applicable to labor cases are other provisions of the Civil such as those about wages, contracts, waivers, preference of workers’ ns, damages, and fixed-period employment. 8.2 The Revised Penal Code The laws that define and penalize offenses are general laws and therefore apply to all human interactions, whether the persons involved are employers, employees, or otherwise. Of those named in the Revised Penal Code, the crimes against public order, against persons, against property, or against honor come into play, alongside labor laws, especially in case of labor disputes. Article 289 of the Revised Penal Code punishes the use of violence orthreats by either employer or employee. It says: “The penalty of arresto "Tolentino, Civil Code of the Philippines, Vol. I, p. 8 cla 19ARTS. 1-2 PRELIMINARY TITLE. mayorand a fine not exceeding P300 pesos shall be Person who, for the purpose of organ coalitions of capital or labor, strike imposed upon any zing, maintaining or preventin, of laborers or lockout of employers 'aborers or emplovers in the free and legal exercise of their industry o, works if theact shall not constitute a more serious offens in accordance with the provisions of this Code.’ 8.3. Special Laws Other laws related to the subject of the Labor Code inchude the ss las, the GSIS lav, the Agrarian Reform law, the 13th-month pay lav, the Magna Carta for Public Health Workers, and so forth." 9. INTERNATIONAL ASPECT Not to be overlooked is the international aspect of our labor lav considering that the Philippines isa member of the ILO. ‘The International Labour Organization (ILO) is the UN specialize agency which seeks the promotion of social justice and! internationally recognized human and labour rights. The ILO was created in 1919, at the end of the First World War, a hhich convened first in Paris, then a ‘ou, ‘The need for such an organization had been advocated in the 19th century by two industrialists, Robert Owen (171-1853) of Wales and Daniel Legrand (1783-1859) of France. ILO is the only surviving major creation of the treaty of Versailles which broughvthe League of Nations into being and itbecamelthé fir specialized agency of the UN in 1946, The ILO f Is in the form of Conventions and ic laboursrights: freedom of association, the right to organize, collective bargaining, abolition of forced Jabour, equality.of opportunity and teatment, and other standards regulating conditions across the entite spectrum of work-related issues, An essential characteristic of ILO istripartism, that is, itiseompostd The principle of tripartism permeates the 'Most of the spe book “Special Labor Laws.” 20 labor laws, which are bar subjects are explained in theGENERAL PROVISIONS ARTS. 1-2 composition of ILO’s deliberative bodies and influences in many respects the contents of ILO instruments! The route to Philippine membership in the ILO started with its membership in the UN on June 26, 1945. On March 19, 1948, the Philippine Senate passed Resolution No. 44 concurring to the country's and By-laws. acceptance of obligations under the ILO Constitution | Succeeding President Roxas, 7 on May 19, 1948. Finally, during the ILO Conference in San Francisco, the Philippines signed in as a member of the ILO on June, 15, 1948. 9.1 International Commitments Being an ILO member, the Philippines subscribes to the fundamental _ principles on which the ILO is based and, in particular, that — (a) laborisnotacommodity; (b) freedom of expression and of association are essential to sustained progress; (c)_ that poverty"anywhere!constitutes a danger to prosperity everywhere; (d) the ‘war against want requires to be carried on with unrelenting ‘vigor within each nation, and "i d ‘international effortin which the and pre ith those of government ‘ ston enn a Furthermore, as ILO member, the Philippines'is'committed to ‘pursue programmes'that will achieve certain objectives, including: (a) fullemployment and the raising of standards of living; (b) policies in regard to wages and earnings, hours and other conditions of workcalculated to ensure a just share of the fruits of progress to all, and a minimum living wage to all employed. and in need of such protection; |N, Valticos and G. von Potobsky, Intemational Labour Law (Kluwer Law and Taxation, 1995), p. 34. Also Neville Rubin (ed.), Code of International Labour Law (Cambridge, 2005), p. 28. 21ARTS. 1-2 PRELIMINARY TITLE of social and economic measures (d) the extension of social security measures to provide abasic The principle and objectives quoted above are recited in the Declaration adopted by the General Conference in Philadelphia on May 10, 1944, which is annexed to the ILO Constitution: 9.2 ILO Core Conventions versal ratification of seven Tn May 1995, a campaign to achieve un was ‘was launched by the ILO. Ap 1g Body, these eight core core Conventions added in 1999. As identified by the Governinj Conventions are S comed fundamental tothe rights of human beings vat work, i L it is deemed These rights are in fact ‘2 precondition for all other rights ensure that the “necessary the responsibility of each membersSiate * implements” for the improvement ‘ofindividual and collective conditions or eork are embedded in their respective national legislation.! The 29): Organize Conventior |, 1948 (No. 87) «_Rightto Onganizeand Goleeve Bargaining Convention, 1°19 (No. 98); « EqualRemuneration Convention, 1951 (No. 100); + AbolitionofForced/Labour Convention, 1957 (No. 105); ‘Employment and Occupation) Convention, 1958 (No. 111); © MinimumeAge Convention, 1973 (No. 138); and 1999 (No. 182). * Worst Forms of Child Labour Convention, ial Conscience in Asia: International Industrial 1004, p. 750 yurnal, March 2 Hans Leo L. Cacdac, Barned So “Relations Standards in National Legislation; in Ateneo Lav Jo 22 — |Ree GENERAL PROVISIONS ART. 3 9.3 Ratification Generally Needed; Exception Asarule, ILO conventionsare binding only for those member-states The Philippines has ratified more than 30 ILO Conventions, ‘ht “core” conventions mentioned above. including, significantly, the Accordingly, Froilan C, Bacungan, a labor law expert, asserted that the Philippines could claim with some pride that it belongs to the upper 25% of the ILO members on the basis of governmental efforts taken to approximate the international labor standards. ART. 3. DECLARATION OF BASIC POLICY ‘The State shall afford protection to labor, promote full employment, censure equal work opportunities regardless of sex, race or creed, and regu- late 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. COMMENTS 1. LABOR LAWS AND SOCIAL_ECONOMIC GOALS “Article'3 is not a statement of goals but a statement of policy directions towards the goals. The goals ofthe national economy, says the Constitution, are amore 's, income, and Wealth; asustained ii and an expanding productivity asthe key to especially the underprivileged? Those goals are the route’ to social justice, a route directed by laws. The laws ” according to Article XII of the cand political inequality” and those that equitably diffuse wealth and political power. Labor laws fall under these categories. ‘Christoph Scherer/Thomas Greven, Global Rules for Trade (Westfalisches Dampfboot, 2001), pp. 18-19. “Article XII, Section 1, Constitution, 23ART. 4 PRELIMINARY TITLE Labor laws, in other words, are a significant factor in a nation’s economic life. They explain, partly but weightily, why a nation is poor or prosperous, why a country is competitive or not in the global marker, Macroeconomists Gregory and Stuart maintain that the legal system, together with customs, business organizations, property ownership, ang other things, form part of the economi ons thatin turn define an economic stem. “The legal ystemafleatsthe choice ofomerinstinwion, and also ec Similarly, the classic The Idea of Lawasserts that any attempt by lay to regulate restrictive practices by industry and trade unions is likely prove unconstructive if the inquiries and evidence of economists ang sociologists are disregarded.* 2. NONDISCRIMINATION It but to ‘egardless of sex, race or creed, This, in the whole Labor Code, is the broad (and scanty) expression of anti-discrimination in the world of work. Supplementarily, however, ti id ‘Also to be added is the law prohibiting discrimination ‘Avery recent development in this area s the passage of the'Antiage Discrimination Act (RA. No. 10911), which passed into law on July 21, 2016. (The text is appended to this volume.) Tt should be noted, therefore, that Article 3/is\incompletein identi "as the three classes or qualities that cannot Ee inizaton rule is much broader than this. ART. 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. "Paul R Gregory and Robert C. Stuart, The Global Economic Sytem (Sos ‘Western, 2014), pp. 10, 25, 224 "Dennis Floyd, The Idea of Law, 1987, p. 332. 24(GENERAL PROVISIONS ART. 4 COMMENTS 1. INTERPRETATION AND CONSTRUCTION 1.1 Laborer’s Welfare; Liberal Approach In carrying out and its implementing regulatior 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 New Labor Code. The policy is to extend the decree’s applicability to a greater number of employees to enable them to avail of the benefits under the law, in consonance with the State’s avowed policy to give maximum aid and protection to labor:! In interpreting the Constitution's protection to labor and social justice provisions and the labor laws and rules and regulations implement- ing the constitutional mandate, the Supreme Court adopts the liberal ne ich f ise of 1.2. Concern for Lowly Worker The Supreme Court reaffirms its concern for the lowly worker who, often at his employer’s mercy, must look up to the law for his pestsion. That ny oars Hin ah ender ahd ee or ahd Ee rials nin negra: Haagen dadingninas How society treats him determines whether the knife in his hands shall be a caring tool for beauty and progress or an angry weapon of defiance and revenge. If we cherish him as we should, we must resolve to lighten “the weight of centuries: of exploitation and disdain that bends his back but does not bow his head.”* 1.3 Reason for According Greater Protection to Employees In the matter of employment bargaining, there is no doubt that the employer stands on higher footing than the employee. First of all, jon, GR, No. 71812, July 20, provisions and ‘Abella vs. National Labor Relations Com 1987, *Euro-Linea, Phils. Inc. vs. National Labor Relations Commission, G.R. No. 75782, December 1, 1987; Manila Electric Company vs, National Labor Relations ‘Commission, G.R. No. 78763, July 12, 1989. Cebu Royal Plant (San Miguel Corporation) vs. Minister of Labor, G.R. No. 58639, August 12, 1987. 25ART. 4 PRELIMINARY TITLE e need for Secondly, th Consequently, the law must protect labor, at jeesieapital and to shield i ity for survival. It is safe to Jaborer who waives in advance ployer oF rainy notin his intrest o sntimidation of urgent need, Jy and voluntarily.” tion 18) declares as a state presume, therefore, that an em any benefit granted him by law through generosity but under the forceful and hence, he could not have so acted free The 1987 Constitution (Article Il, Secto 1 policy: “The state affirms labor asa. primary social sono foe, Ht seal protect the rights of workers and promote their welfare.” Ac gly; in the article on social justice, the Constitution comm a mot fl en ployment ancequaliyofemploymen’ Phone ties, forall.” This i mf found in the 1935 Constitution, preserved Fe caesar the present (1987) Constitution, in the 1973 Constitution well The ‘Conitution specifies the guaranteed basic rights of worke . ; (2) to conduct collective bargaining namely: (1) t or ; (8) to engage in petal concent activities, , including | in accordance with law; (4) toenjoy security of tenure ; (6) to receive a living $ 5 (5) to wage; and (7) to ps affecting their rights a Yet, the Constitution has not overlooked the rights of capital. It provides that: “the State recognizes the indispensable role of the private sectone! providesincentivestoneeded and ” The State is mandated to regulate the relations between workers and employers. While of production, th reasonable returns of investments but also to expansion and growth. 2, JUSTICE, THE INTENTION OF THE LAW Protection to labor and resolution of doubts in favor of labor cannot be pursued to the point of deliberately committing a miscarriage of 'Sanchez, et al. vs. Harry Lyons C i : 1-279, October 19,1950, 40 OF Ga. 605. ncOnPoratets ae ne 26GENERAL PROVISIONS ART. 4 justice. The right to obtain justice is enjoyed by all members of society, rich or poor, worker or manager, alien or citizen, Justice belongs to every ‘one. It is not to be blinded or immobilized by the fact of one’s being economically underprivileged. This Article 4, itis submitted, cannot be taken to have superseded Article 10 of the Civil Code (R.A. No. 386) that states: “In case of doubt in the interpretation or application of laws, itis presumed that the lawmaking body intended right and justice to prevail.” Justice, not expediency, is the higher end of law. And law does not favor favoritism amounting to injustice. 3. INTERDEPENDENCE CONSTITUTIONAL BALANCING OF RIGHTS The twosentence declaration of basic policy in Article 3 hardly mentions the employer except in the phrase “regulate the relations between workers and employers.” All other phrases pertain to rights of workers. Dutitshould ot be deduced that the base pole to favor labor toyprejudice capital. The plain reality is that both sectors need each other. They are interdependent — one is inutile without the other. Promotion of full employment, for instance, requires promotion of job opportunities through the success and expansion of private enterprises. Hence, the better understanding is that the iginlionimnbalcets te in P of the written in the early 1970s, should be viewed in the perspective of the 1987 Constitution which, as already stated, explicitly recognizes shared responsibility of employers and workers and the right of enterprise to reasonable returns on investment and to expansion and growth. 4. MANAGEMENT RIGHTS, BROADLY While the Constitution is committed to the policy of social justice and the protection of the working class, Management.also hasits own rights which, as such, areenti : Out of its concern ‘Adam Smith himself observed: “In the long run the workman may be as necessary to his master as his masters to him; but the necessity is not so immediate.” (The Weaith of Nations, 1776, p. 84.) 27ART. 4 PRELIMINARY TITLE for ‘ * those with less privilege in life, the Supreme Courthas inclined more fi Sith at Rt toward the worker and upheld his cause in his conflict with the employe however, I of ‘The Secretary of Labor is duly mandated to equally protect and Tespect not only the laborer or worker's side but also the management and/or employer’s side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer? 4.1 Right to ROI The ei and to make On Tce s Ra cis ats (rope called “surplus”) that creates jobs and improves the workers’ lot. Consistent with the policy of the State to bridge the gap between the underprivileged workingman and the more affluent employers, 4.2 Right to Prescribe Rules Employers have the right to make reasonable rules and regulations fonshusgemeenmentoficheinemnlatsey and when employees, with knowledge of an established rule, enter the service, the rule becomes a part of the contract of employment. ‘Company policies and regulations less shown to be grossly oppressive or contrary to law, generally banal pana TSU pando 'Sosito vs. Aguinaldo Development Corporation, G.R. No. 48926, December 24, 1987. ‘Colgate Palmolive Philippines, Inc. vs. Ople, G.R. No. 73681, June 30, 1988. 'Gelmart Industries Phils,, Inc. vs, National Labor Relations Commission, GR. No, 55668, August 10, 1989, = ‘31 Am. Jur,, Sec. 12, p. 839; Lagatic vs, NLRC, G.R. No. 121004, January 28, °China Banking Corp. vs. Borromeo, G.R. No. 156515, October 19, 2004. 28GENERAL PROVISIONS: ART. 4 4.3. Right to Select Employees An employer has the right to select his employees and to decide when to engage them. He has a ri in i , and this, exceptas restricted by valid statute or valid contract, ata wage and under onditions agreeable to them. 44 Right to Transfer or Discharge Employees An of the business, and even to close the business. This right to transfer or discharge has been consistently upheld even in the present era of | reforms in the relationship of capital and labor, provided the transfer or dismissal is not abused but is done in good faith and is die 10 causes beyond contol. To hold otherwise would be oppressive and inhuman.* The rights of employers and employees will be detailed in ensuing chapters, particularly in Books III through VI. 8 5. RESTRICTIONS TO MANAGEMENT RIGHTS , however, like other rights, are never absolute, Not to abuse rights is itself a law, as expressed in Article 19 of the Givil Code, Acright) if abused, becomes'a legal wrong. Moreover, the Constitution says that the right to own and operate economic enterprises Te Management rights are subject to limitations provided by: (1) law, (2) contract, whether individual or collective, and (3) general principles of fair play and justice. Laws, either general or particular (special), prescribe rules of conduct that if transgressed, result in liability. Contracts too are laws, Whenever a person signs. contract, he in effect is signing a law. And even in the absence of violation of law or contract, fundamental $1 Am. Jur, Sec. 9, p. 837. "Gregorio Araneta Employees Union ys, Roldan, G.R. No. 6846, July 20, 1955; Phil. Sheet Metal Workers Union vs, CIR, G.R. No. L-2028, April 28, 1949; Tiong King 48. CIR, GR. No. L-9587, December 21, 1951; and Roldan vs, Cebu Portland Cement ©o,, etal, CAG.R, No. 24276-R, May 20, 1960. 29a ART. 5 PRELIMINARY TITLE Principles of justice and fair ” is itself “managemen, n — because © it 'y. Such notion neither inheres nor adheres play do apply. The term day i to the management rights, ART. 5, RULES AND REGULATIONS ‘The Department of Labor and Employment and other government Agencies charged with the administration and enforcement of this Code OF any of its parts shall promulgate the necessary implementing rules ang regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation, COMMENTS RULES AND REGULATIONS TO IMPLEMENT THE CODE ‘Under Article 5, the Department of Labor and Employment shall le. (Those rules are reproduced in Part Two of the present work.) It has been ruled that administrative regulations and policies enacted by administrative bodies ce of tt When Invalid ion promulgated by: ini ly, suchas che Deamon in excess of its rule-making authority, is void. For instance, the Rules and Regulations implementing Article 940 the Labor Code, and the accompanying Policy Instructions No. 9 limited the entitlement to holiday pay to daily-paid employees only thereby excluding monthly-paid employees. But the law itself states that: “every worker” shall be entitled to holiday pay. The Court declared that those rules and regulations as well 38 the policy instructions are null and void. By disentitling the monthly "Rizal Empire Insurance Group vs, National Labor Relations Commission, GR. No. 73140, May 29, 1987. 30GENERAL PROVISIONS ART. 6 employees, the Labor Secretary exceeded his rule-making authority. An administrative interpretation which takes away a benefit granted in the Jaw is ultra vires, that is, beyond one’s power:! ART. 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, COMMENTS: 1, APPLICABILITY TO GOVERNMENT CORPORATIONS The question has arisen whether the Code applies, and the jurisdic- tion of the Department of Labor extends, to government corporations. i Earlier, in the 1985 rul- ing in National Housing Cnporation vs Juco, 134 SCRA 178, the Supreme Court laid down the d -n supplanted by the present [1987] Constitution, which provides: “The Civil Service embraces all branches, subdivisions, instrumen ties and agencies of the Government, including government-owned or controlled corporations with original charters.” ‘The government-owned and controlled corporations “with original “charter” refer to corporations chartered by special law from Congress as distinguished from corporations organized under our general incorporation statute, the Corporation Code. Thus, “state of the law, the d o e mn. Government corporations created by Congress are subj , while those incorporated under the ent Ww are covered by the Labor Code.* 'CBTC Employees Union vs. Clave, G.R. No. 49582, January 7, 1986. *See National Service Corp. vs. NLRC, G.R. No. 1-69870, November 29, 1988, 31ART. 6 PRELIMINARY TITLE 1.1 PNOG-EDC, FTI, NHA The PNOC-EDC, (Philippine National Oil Corp. Energy Development Corp.) having been incorporated under the genera] Corporation Law, is a governmentowned or controlled corporation. Its je, among which are those on the rights to unionize and to strike. Similarly, the isa ‘d and a ithout ‘The Department of Labor and Employment, and not the Civil Service Commission has jurisdiction over the dispute arising from employment with FTL. The overned by the Labor terms and conditions of such employment are gover! Code and not by the Civil Service Rules and Regulations Finally, considering that the (National Housing Corp.) was the 4 le. The NHA is within the jurisdiction of the Department of Labor and Employment, it being a ‘government-owned and/or -controlled corporation without an original hharter. The workers or employees of the NHC (now NHA) have the right to form unions or employees’ organizations.! 2. NON-APPLICABILITY TO GOVERNMENT AGENCIES The terms governmental “agency” or “instrumentalit synonymous in the sense that either of them is a means by wl government acts, or by which a certain government act or function is performed. The word “instrumentality,” with respect to the state, com templates an authority to which the state delegates government power for the performance of a state function? "For instance, the National Parks Development Committee is at agency of the government, not a government-owned or -controlled ich a ogy, 60% NERC and National Housing Comp. G.R. No, 98107, August B 97 ___ “Luzon Development Bank vs. Association of Luzon Development Bank Employees, et al, G.R, No, 120819, October 6, 1995, 64 SCAD 918, 32GENERAL PROVISIONS ART. 6 corporation. Its employees are covered by civil service rules and regulations, since they are civil service employees." While the National Parks Development Committee employees are allowed under the 1987 Constitution to organize and join unions of their choice, there isno law permitting them to strike. In case of a labor dispute between the employees and the government, Section 15 of E.O, No. 180, dated June 1, 1987 provides that the Public Sector Labor Management - Gouncil, not the Department of Labor and Employment, shall hear the dispute Similarly, employees of the Social Security System (SSS) are civil magagpatorss ‘When they went on strike, the Regional Trial Court, n jot the National Labor Relations Commission, had jurisdiction to hear join the strike. And, again, E.O. No. 180 applies, not the Labor Code. Note: Notwithstanding the above rulings, it should be noted that the Labor Code provisions on the State Insurance Fund (Article 172, et seq.) do apply to government personnel covered by the GSIS. 3. APPLICABILITY WITHOUT EMPLOYER-EMPLOYEE RELA- TIONSHIP ‘When one speaks of (eg. overtime pay or rest day premium) or of ., then surely employment relationship . But when the issue, for instance, is an indireet employer's liability, or ilegal recruitment, or there is involved. Article 2, Section 2, 1987 Constitution; E.O. No. 180, Section *Republic vs. Court of Appeals, G.R. No, 87676, December 20, 1989. *Social Security System Employees Association [SSSEA], et al. vs. Court of Appeals, G.R. No. 85279, July 28, 1989, 33,ART.6 PRELIMINARY TITLE ‘The presence or absence of employer-employee relationship is itsei¢ a labor law question. It is resolved by applying Labor Code provisions, the implementing rules, and interpretative court rulings. Employmen, bap iexpintin Are .d contrasted to labor contracting 34Chapter II EMANCIPATION OF TENANTS? Box 2 Overview/Key Questions: 1, What law governs agrarian reform? 2, What are the objectives of agrarian reform? 3. What process and conditions are observed to make a tenant-farmer an owner under the agrarian reform program? ART. 7. STATEMENT OF OBJECTIVES Inasmuch as the old concept of land ownership by a few has spawned valid and legitimate grievances that gave rise to violent conflict and social tension and the redress of such legitimate grievances being one of the fundamental objectives of the New Society, it has become imperative to start reformation with the emancipation of the tiller of the soil from his bondage. ART. 8. TRANSFER OF LANDS TO TENANT-WORKERS Being a valid part of the labor force, tenantfarmers on private agricultural lands primarily devoted to rice and corn under a system of share crop or lease tenancy whether classified as landed estate or not shall be deemed owner of a portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated. In all cases, the landowners may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now culti- vate it. ART. 9. DETERMINATION OF LAND VALUE For the purpose of determining the cost of the land to be transferred to the tenant-farmer, the value of the land shall be equivalent to two and one-half (2-1/2) times the average harvest of three (3) normal crop years immediately preceding the promulgation of Presidential Decree No. 27 on October 21, 1972. "Amended by R.A. No. 6657, June 10, 1988. 35