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Lecture Notes on Labor Law Review

September 14, 2023

Fundamental Principles

Q1. How does the State view labor?

A. Section 18, Article II of the 1987 Constitution, “The State affirms labor
as a primary social economic force. It shall protects the rights of workers
and promote their welfare.”

Q2. Is the State affirmed management also as a social economic force?

A. No, the State does not affirm management as a social economic force, as
well. There should be partnership between labor and management.
Q3. Does it mean to say that the Constitution is just pro labor or is just
concern with the welfare of labor?
A. No, because Section 20 of Article II of the 1987 Constitution provides
“The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investments.”

Section 18 and Section 20 provides the Balance Approach of Labor

Management Relations. Others called it the Partnering Approach.

The mainstream concept is the Balance Approach in labor management

relations

Concept of Full Protection

What is the full protection clause of the Constitution?

Two main features that is assured by the State:

1. Promotion of full employment

Example:

Maria, a nurse, has been working at XYZ Company, a BPO. Maria is

working from 8:00 o’clock in the morning up to 5:00 o’clock in the
afternoon. For her work, Maria is receiving Php35,000.00.
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Based on the concept of full employment, would you agree with me if I

say that Maria is fully employed? What is the concept of full
employment?

Do not mistake the concept of full employment with the concept of

security of tenure. They are 2 different things.

Do not equate receipt of all benefits under the law as tantamount to

full employment.

Answer: Maria in this case is NOT fully employed.

Full employment as concept means that an employee or worker is

employed in a job for which he/she has been trained for.

Maria, in the example, is a nurse working in a BPO. Maria maybe

receiving Php35,000.00 but is it commensurate to her skills?

2 things:
1. Is the employee employed in a job for he/she has been trained
for?
2. Is that employee being paid in an amount commensurate to
his/her skills and training?

If answer to both question is YES, then we have FULL

EMPLOYMENT!

Section 3, Article XIII of the 1987 Constitution

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.

Other aspect of Full Protection Clause is Equality of Employment

Opportunities. It is covered by the full protection clause of the
Constitution.
No equality in employment. Equality in employment is a utopia. It is a dream!
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How would you show me that the OFWs who are working abroad are also
covered by the full protection clause?

There are many Labor Law that are being borrowed from Civil Law.
There are many concepts from the Constitutional or Political Law that can be
used correctly with respect to Labor Law.
It is correct to say that it is the Nationality Principle.
RA 8042 as amended by RA 10022 which guarantees protection to OFWs, are
special laws that are part of Labor Law.
For purposes of protecting our migrant workers, the main stream answer is the
principle of Lex Loci Contractus. The principle of Lex Loci Contractus which
tells us that OFWs are covered by the contract that they have signed in the
Philippines.
Before an OFW can leave the country, he/she must have a POEA approved
employment contract. In the POEA approved employment contract, there is a
provision there to the effect that “It is the law of the Philippines that would
apply, in case of disputes.” So we could invoke the principle of Lex Loci
Contractus or the Law of the place where the contract was executed.
Another indicator that could be invoked. The Incorporation Clause of the
Constitution where the Constitution provides that all international law shall
form part of the law of the land. We adopt international law, except those that
are contrary to our laws, morals, customs and public policies.
Example:
An OFW is working in a country that does not respect our laws, then it would
still the Philippine Law that would be applicable to that OFW.

The full protection clause can be shown by the principle of lex loci
contractus but that would only be applicable to documented OFWs. OFWs
whose contract have been processed and approved by the POEA.

Undocumented OFWs are not covered by the full protection clause because
Section 3 Article XIII of the 1987 Constitution covers local and overseas. It does
not exclude undocumented OFWs.
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Section 3, Article XIII, Section 18 and Section 20 of Article II of the 1987

Constitution are considered the full protection clause.

Different guarantees of the Constitution:

1. Right to Self-Organization
Are all employees entitled to exercise their right to self-organization?

All employees whether public or private sector employees regardless of

their status or designation are entitled to exercise their right to self-
organization. (basic premise)

Answer: Yes, because the right to self-organization should not be

conceived with unionism. It is in broader concept.

Can all employees bargain collectively?

Answer: No, only employees who are member of the collective bargaining
agent can engage in collective bargaining.

The State guarantees the exercise of the collective bargaining and

negotiations.

Collective bargaining in Labor Law has a technical meaning. Because

collective bargaining can only be availed of by a collective bargaining
agent. The members of the collective bargaining agent are able to bargain
collectively with the employer.

A union cannot become a collective bargaining if the union is NOT a

legitimate labor organization. (Possess legitimate personality)

Only employees who are members of a collective bargaining agent are

given by the law the right to bargain collectively.

Negotiation is for others who are NOT members of the collective

bargaining agent. Individual employees can bring their grievances to the
employer for the employer to address them.

Negotiation > Labor Management Councils as concept > Art. 267 of the
Labor Code
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Even employees cannot bargain collectively they can participate in policy

decision making through the labor management councils.

Can employees who are NOT members of the collective bargaining agent
bring their grievance to the management?

Yes, through the process of negotiation using the venue Labor

Management Councils as the concept is discussed in Article 267 of the
Labor Code.

Public sector can bargain collectively.

Case: GSIS Family Bank employees Union vs. Villanueva
Right of the public sector to bargain collectively and also the
limitation of the public sector to engage in bargaining collectively

2. The right to engage in peaceful concerted activity including the right to

strike

Can all employees stage a strike?

Public sector employees can stage a strike.

If they are compliant with the procedural and substantive requirements

then they can be legal. However, the precondition is that there is a union
that has a legitimate personality and the employees is a member of that
union (for the private sector)

What if there is a collective bargaining agent within the company, will

that union can still stage a strike legally even if they have complied with
the procedural and substantive requirements?

No more, it is only in the absence of an exclusive bargaining

representative that a legitimate labor union can stage a strike.

The Public Sector Employees

Executive Order No. 180 does not contain a prohibition with respect to
the public sector’s right to strike (concerted activity) It should not
paralyze the operation of the government.
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Summary:

Only legitimate labor organization and its members can validly stage a
strike. However, if this legitimate labor union is operating in a company
that has a collective bargaining agent, that legitimate labor organization
cannot validly stage a strike.

In the government, can the government employees stage a strike?

In a sense, yes, but it’s not called a strike. It’s called a concerted
activities. For it to be valid, it should not disturb governmental functions
because of the public interest in government service.

Is the right to strike absolute?

No, it must be in accordance with law. Articles 278 and 279 of the Labor
Code which provides us with a valid strike.

Are all employees entitled to security of tenure?

Yes, all employees regardless of their status because the Constitution

guarantees it.

All employees regardless of status, designation, position are entitled to

security of tenure. However, the regular employees are entitled to full
security of tenure while non-regular employees are entitled to limited
security of tenure, limited in the sense that their period of employment
may be limited by virtue of contract or by virtue of a term r by virtue of a
project or by virtue of a probationary employment.

OFWs or seafarers are entitled to security of tenure within the period of

their contract. If they are illegally dismissed without just authorized
cause within the term of their contract, then they can file a complaint for
illegal dismissal because that is a violation of their right to security of
tenure.

What do you mean by humane working conditions or decent work?

1. An employee is fully employed.

2. An employee is receiving a living wage.
3. Safety of the workplace.
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What is living wage?

It is the wage prescribed by the Regional Tripartite Wage and
Productivity Board.

Living wage means that a worker can afford all the living necessities that
he/she and his/her family needs and will have something left for education
and recreation.
Living wage is that kind of wage that can keep body and soul together.

Are the present wage orders prevailing in the different regions of the country
compliant with the concept of living wage?
No, because our wage orders are based on the poverty threshold an amount
slightly higher than the poverty threshold and therefore cannot be considered
as a living wage.
Full employment and living wage 2 components of decent conditions of work.
3. Safety of the workplace.
Occupational health and safety
These 3 should comprised what we viewed as humane conditions.
Are all employees allowed to participate in policy or decision making? If they
are, up to what extent? If they are not, why?
Answer:

A Contract of Employment
What is the nature of the contract of employment?
A contract of employment is not a mere contract. It is imbued with public
interest. The reason why Section 3 of Article XIII of the 1987 Constitution
guarantees that the State shall regulate the relations between labor and
management.
Characterization:
1. Contractual
It is a contract between an employer and an employee.
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2. Consensual
No one can be forced to work against his will, otherwise, that would be
involuntary servitude which is prohibited in the country.

3. In personam
What kind of contract is a contract of employment?
It is a contract of adhesion whether we like it or not even if the employer and
the employee have entered into a contract of employment, they do not enter
such contracts as equals. One is economically dependent on the other. In this
case, the workers are economically dependent on management.

The Principle of Shared Responsibility

Distinguish it from worker’s right to participate in decision making. They are 2
different concepts.
The worker’s right to participate in policy or decision making is also known as
the principle of co-determination. It is also known as the principle of
participatory in democracy. It does not follow that whatever suggestion or input
by the employee would be binding upon the employer. The essence of this right
is participation.
Case: PAL vs. NLRC, et al.

The principle of shared responsibility has 2 components

1. The workers under the concept of shared responsibility will have a share
in the fruits of the production while the employer on the other hand will
be entitled to its profitability and return of investment.
2. In any relationship no matter how smooth the relationship maybe in the
beginning, there are hitches along the way disputes may occur. Sec 3
Article XIII of the 1987 Constitution spouses the view that there is a
shared responsibility when workers and management are able to settle
their dispute by themselves.

The gold standard is they will be able to settle their disputes by collective
bargaining.
If they are not able to settle their dispute by collective bargaining
because there is no recognized collective bargaining agent in the company,
then they could go into negotiation.
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Negotiation is a process whereby parties are able to convert what they want
into interest. The ideal is principled negotiation.

What is a principled negotiation?

It is a kind of negotiation where wants are effectively transformed into
legitimate interest.
Conciliation:
If collective bargaining is not there, negotiation failed, then we can move on to
conciliation.
Conciliation is a facilitative process. It is an alternative mode dispute resolution
that facilitates. Conciliation is a good guy who persuades.
Mediation is an intrusive process because you bring in a third party who will
listen to all your grievances both of management and the workers and then will
offer solution in order for the dispute to be resolved.
Voluntary arbitration is an alternative mode of dispute resolution. Article 218
of the Labor Code.

The Principle of Shared Responsibility is two-fold.

1. Share in the fruits of production or profit sharing on the part of the
workers. Profitability or return of investment on the part of the
management.
2. Both parties would be able to settle their dispute using alternative modes
of dispute resolution.

The gold standard is collective bargaining, going to negotiation, going to

conciliation and then mediation and then pursuant to the Labor Code,
Voluntary Arbitration (Article 218)

The Constitution and the Law prefer Voluntary Modes of dispute resolution
NOT compulsory arbitration.
Compulsory arbitration is the mode of dispute settlement that is being used by
the Labor Arbiter and the National Labor Relations Commission.
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Does it mean to say that compulsory arbitration has been disfavored on

account of the Constitutional and statutory preference for alternative modes of
dispute resolution?
No, because Article 218 of the Labor Code also provides that the State shall
provide an adequate and administrative machinery that would resolve disputes
effectively and expeditiously.

The National Labor Relations Commission (NLRC) is a quasi-judicial body that

is considered as the official dispute resolver of the State.

Can Section 3, Article XIII of the 1987 Constitution be a source of action?

Example:
Jaime felt bad because he was bypassed for promotion. He thought he was due
for promotion but someone else got promoted. Aggrieved by this fact, he filed a
complaint and he denominated his complaint as violation of the full protection
clause of the Constitution. Would that cause of action be valid? Would that
cause of action give rise to a valid resolution?
These guarantees contained in Section 3, Article XIII of the 1987 Constitution,
as well as, those found in Article II of the 1987 Constitution on Declaration of
State Policies, as well as the Declaration of Policies found in the Labor Code, as
well as, those found in Article 218 of the Labor Code ARE NOT SELF-
EXECUTING provisions.
Case: Agabon & Agabon vs NLRC, the Supreme Court said, “No legislative
enactmens are necessary for their enforceability.”

Example:
Company ABC is a unionized company. After meeting on several occasions
decided that it would embark on a retrenchment program. Several meetings
were conducted informing the workers about their financial position. After a
while, retrenchment was indeed enforced. The union now is challenging the
validity of the retrenchment program saying that the workers were not
consulted and it’s violative of their right to participate in policy or decision
making.
Is it valid for the workers to claim that they should be allowed to participate on
a matter of retrenchment?
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In case of retrenchment is it necessary for the workers to be consulted so that

their right to participate in the policy or decision making will be respected?
Answer: No, because retrenchment is a management prerogative and
authorized cause for valid dismissal. It’s a cost-cutting measure and it’s related
to the business of the company.

The company is in the process of amending the company rules and regulations
have list of offenses and corresponding penalties. This is an act where the
workers should actively participate. It would affect their terms and conditions
of employment.
Example:
Management is amending its code of conduct. Whatever the workers say
will not be binding upon their employer. The operative word is participation.

What is doubt in favor of labor rule?

A principle enunciated in Article 4 of the Labor Code. (commit to mind) which
provides the doubt in the interpretation of the Labor Code and its
implementing rules and regulations shall be resolved in favor of labor.
In case of doubt in any articles, in any of the implementing rules, then the
doubt should be resolved in favor or labor.

Note:
Secure the latest copy of the Labor Code with the renumbering and its
Implementing Rules

Doubt in favor of labor is not exclusive in Labor Code. It is also mentioned in

the Civil Code and expanded its concept doubts in favor of labor because it
included doubts in the employment contracts or in other legislations.
Where can doubts arise from other than the Labor Code and Its Implementing
Rules or other special laws and employment contract?
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What are the different sources of doubt in favor of labor?

1. The Labor Code and its implementing rules and regulations
2. Special Laws/Special Labor Laws
3. Employment Contracts
4. Collective Bargaining Agreements (Interpretation of CBA)
5. Interpretation of Company Rules and Regulations
6. Interpretation of Code of Conduct of Companies
7. Interpretation of the Different Rules of Procedure (they may be internal
rules or the 2011 NLRC rules of procedure as amended)
The Procedural Guidelines for Voluntary Arbitration (The 2021
Procedural Guidelines on Voluntary Arbitration)

The Labor Standard Compliance System (2022)

What is the significance of the Labor Law Standard Compliance System?

About the exercise of visitorial and enforcement power of the regional

director while the procedural guidelines of the voluntary arbitration

I have what it takes to be a lawyer!

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