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Unformatted text preview: CONSTITUTIONAL MANDATES ON LABOR
What are the Constitutional provisions that specifically touch on labor?
1. Article II, Section 18 of the 1987 Constitution provides that “The State
affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.”
2. Article XIII, Section 3 of the 1987 Constitution provides that “The State shall
afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for
It shall guarantee the rights of all workers to self-organizations, 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 on investments, and to
expansion and growth.
What are the Constitutional Provisions Related to Labor?
Section 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people from
poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for all.
Section 10. The State shall promote social justice in all phases of national
Section 11. The State values the dignity of every human person and
guarantees full respect for human rights.
Section 13. The State recognizes the vital role of the youth in nationbuilding and shall promote and protect their physical, moral, spiritual, intellectual,
and social well-being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.
Section 14. The State recognizes the role of women in nation-building, and
shall ensure the fundamental equality before the law of women and men.
Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
Section 20. The State recognizes the indispensable role of the private
sector, encourages private enterprise, and provides incentives to needed
Section 1. No person shall be deprived of life, liberty, or property without
due process of law, nor shall any person be denied the equal protection of the laws.
Section 4. No law shall be passed abridging the freedom of speech, of
expression, or of the press, or the right of the people peaceably to assemble and
petition the government for redress of grievances.
Section 8. The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.
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.
Sec. 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 selforganization, 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 setting disputes,
including conciliation, and shall enforce their mutual compliance therewith to foster
“The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the right
of enterprises to reasonable returns on investments, and to expansion and growth.”
(Section 3 (Labor), Article XIII [Social Justice and Human Rights] of the 1987).
Article II, Section 18
“The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.”
What are the State Policies on Labor Relations?
Article 211, Labor Code provides:
1. Promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes;
2. Promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;
3. Foster the free and voluntary organization of a strong and united labor
4. Promote the enlightenment of workers concerning their rights and
obligations as union members and as employees;
5. Provide an adequate administrative machinery for the expeditious
settlement of labor or industrial disputes;
6. Ensure a stable but dynamic and just industrial peace; and
7. Ensure the participation of workers in decision and policy-making
processes affecting their rights, duties and welfare.
What are the basic principles in the constitution and labor-related laws on
protection to labor? The state shall afford full protection to labor, promote full
employment, equal work opportunities without bias or
discrimination, regulate the relations of employers and employees,
and assure workers rights. (A-PER-A) In case of doubt or ambiguity, labor laws and rules are to be construed
in favor of labor (Art. 4, Labor Code)
o In interpreting the Constitution’s protection to labor and social justice
provisions and the labor laws and rules and regulations implementing
the Constitutional mandate, the SC adopts the liberal approach which
favors the exercise of labor rights. (Meralco vs. NLRC, G.R. No. 78763.
Jul.12, 1989) o While the Constitution is committed to the policy of social justice
and the protection of the working class, it should not be
supposed that every labor dispute shall be automatically
resolved in favor of labor. It is mandated that there be equal
protection and respect not only the laborer’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. (Colgate Palmolive Philippines vs Ople, G.R. No.
73681. June 30,1988) To whom does the Labor Code apply?
General Rule: The Code applies to all workers, whether agricultural or nonagricultural, including employees in a government corporation incorporated
under the corporation code;
1. Government employees;
2. Employees of government Corporations created by special or original
3. Foreign governments;
4. International Agencies, employees of intergovernmental or international
5. Corporate officers/Intra-corporate disputes which fall under PD 902-A and
now fall under the jurisdiction of, the Regular Courts pursuant to the
Securities Regulation Code; and
6. Local water districts except where NLRC jurisdiction is invoked.
Who is a worker/employee?
Article 13 – A worker is any member of the labor force, whether employed or
A person who works for an employer for a fee; a person working for salary or wages. Note the term employee under Article 212 of the Labor Code: Not limited to
the employees of a particular employer, it shall include any individual whose
work has ceased as a result of or in connection with any current labor dispute
or because of any unfair labor practice if he has not obtained any other
substantially equivalent or regular employment. What is the doctrine of Management Prerogatives? Under the doctrine of management prerogative, every employer has
the inherent right to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work assignments,
working methods, the time, place and manner of work, work supervision,
transfer of employees, lay-off of workers, and discipline, dismissal, and recall
of employees (Rural Bank of Cantilan . v. Julve, GR No. 169750, February 27,
2007.) It is however subject to limitations provided by (1) law; (2) contract or
collective bargaining agreements; and (3) general principles of fair
play and justice. (Mendoza v. Rural Bank of Lucban, GR No. 155421, July 7,
2004.) EMPLOYER-EMPLOYEE RELATIONSHIP
1. FOUR FOLD TEST
In determining whether a given set of circumstances constitute or exhibit an
employer-employee relationship, the accepted rule is that the elements or
circumstances relating to the following matters shall be examined and considered: selection and engagement of the employees payment of wages power of dismissal power to control the employees’ conduct 2.
The “control test” is the most crucial and determinative indication of the
presence or absence of an employer-employee relationship. Absence of such
despite the presence of the other three elements will not suffice for the
relationship to exist.
Not every form of control will have the effect of establishing an employeremployee relationship. A line should be drawn between: Rules that merely serves as guidelines, which only promote the result.
In such case, no employer-employee relationship exist. Rules that fix the methodology and bind or restrict the party hired
to the use of such means of methods. These address both the
result and means employed to achieve it and hence, employeremployee relationship exist.
3. Cases where employer-employee relationship EXISTS: Jeepney drivers on boundary system (Martinez vs. NLRC, 272 SCRA 793) Drivers or helpers of salesman (Alhambra Industries vs. CIR, 355 SCRA
553) Handicraft workers on “pakyaw system” (Dy Keh Beng vs. Int’l. Labor, 90
SCRA 161) Musicians who were engaged by musical director for background music
in making of movies (LVN vs. Phil. Musicians Guild, 1 SCRA 132) Tailors, pressers and stitchers in COD tailoring department (Rosario Bros
4. Cases where employer-employee DOES NOT EXIST: Insurance company vis-à-vis commission agents (Insular Life vs. NLRC,
179 SCRA 459) Company vs. Collecting agents on commission basis (Singer Sewing
Machine vs. Drilon, 193 SCRA 270) Softdrinks company vs. independent contractors selling softdrinks
(Mafinco vs. Ople, 70 SCRA 139) Shoe shine boys (Besa vs. Trejano, 146 SCRA 501)
PROBATIONARY EMPLOYMENT Probationary employment exists where the employee, upon his
engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular
employment based on reasonable standards made known to him
at the time of his engagement (Art 282, LC). In all cases involving employees on probationary status, the employer
shall make known to the employee at the time he is hired, the
standards by which he will qualify as a regular employee (A.M.
Oreta & Co., Inc. vs. NLRC). As a general rule, in the event the employer
neglects or fails to inform the employee at the time of engagement the
standard for him to qualify as a regular employee, he cannot be
terminated for failure to comply with the criteria for regularship. The
employee concerned can only be removed for just or authorized causes. A probationary employee may be terminated on two grounds:
a. for just cause
b. when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the
employer to the employee at the time of his engagement
An employee who is allowed to work after a probationary period shall
be considered a regular employee (Art.281, LC). However, the employer and
employee may, by agreement, extend the probationary period of employment
beyond six (6) months (Mariwasa Manufacturing, Inc. vs. Leogardo).
Voluntary Resignation, ONCE ACCEPTED, cannot be withdrawn without
the consent of the employer.
KINDS OF EMPLOYMENT
1. REGULAR EMPLOYMENT An employee is deemed to be regular where he has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of
the employer, the provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties (Art. 280, LC)
The primary standard is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the
employer. The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety.
2. TERM EMPLOYMENT
It is a contract of employment for a definite period which terminates by its
own terms at the end of such period (Brent School vs. Zamora, 181 SCRA 702).
Criteria for fixed term employment contracts so that the same will not
circumvent security of tenure (Phil. National Oil Company-Energy Development Corp.
vs. NLRC, et.al., 239 SCRA 272): The fixed period of employment was knowingly and voluntarily agreed
upon by the parties, without any force, duress or improper pressure
being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or It satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms with no moral dominance whatever
being exercised by the former on the latter.
3. PROJECT EMPLOYMENT
It is one wherein the employee is assigned to carry out a “specific project or
undertaking,” the duration and scope of which were specified at the time the
employees were engaged for that project.
328): 2 Distinguishable Types of Project Activities (ALU-TUCP vs. NLRC, 234 SCRA 1. A particular job or undertaking that is WITHIN THE REGULAR OR
USUAL BUSINESS of the employer company, but which is DISTINCT and
SEPARATE, and IDENTIFIABLE as such, from the other undertakings of the
company. Such job or undertaking begins and ends at determined or
e.g. A construction company which has construction projects in Manila,
Mandaluyong and Baguio. 2. A particular job or undertaking that is NOT WITHIN THE REGULAR
BUSINESS of the corporation. Such a job or undertaking must also be
IDENTIFIABLY SEPARATE and DISTINCT from the regular business. The job or
undertaking also begins and ends at determined or determinable times.
e.g. A steel-making company undertakes projects related to breeding
and production of fish or cultivation of vegetables.
General Rule: LENGTH OF SERVICE is not controlling in project employment
(Hilario Rada vs. NLRC, 205 SCRA 69).
Although the work to be performed is only for a SPECIFIC
PROJECT or SEASONAL, where a person thus engaged has been performing the job
for at least one year, even if the performance is not continuous or is merely
intermittent, the law deems the REPEATED and CONTINUING NEED FOR ITS
PERFORMANCE as being sufficient to indicate the necessity or desirability of that
activity to the business or trade of the employer. The employment of such person is
also then deemed to be REGULAR WITH RESPECT TO SUCH ACTIVITY and WHILE
SUCH ACTIVITY EXISTS (Magsalin, et.al. vs. National Organization of Working Men, et
al., May 9, 2003).
4. SEASONAL EMPLOYMENT
Seasonal workers are those who are called to work from time to time
according to the occurrence of varying need during a season, and are laid off after
completion of the required phase of work. Seasonal workers who works for more than one season are deemed to
have acquired regular employment. Seasonal workers during the off season are merely considered on leave. They are also entitled to separation pay. 5. CASUAL EMPLOYMENT
It is one wherein an employee is engaged to perform activities which are not
necessary or desirable in the usual trade or business of the employer. Pre-week in Labor Law and Social Legislation - JOBL NOTES
JOB CONTRACTING AND LABOR-ONLY CONTRACTING
1. Labor-only contracting
1) the person supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment, machineries, work premises,
among others; and
2) the workers recruited and placed by such person are performing activities
which are directly related to the principal business of such employer (Baguio, et.al
vs. NLRC, et al., 202 SCRA 465)
2. Job Contracting
1) the contractor caries on an independent business and undertakes the
contract work on his own account and under his own responsibility according to his
own manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work except as to the
results thereof; and
2) the contractor has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials which are necessary in
the conduct of his business.
3. What is the effect of a finding that a contractor is a labor-only contractor?
A finding that a contractor is “LABOR-ONLY” contractor is equivalent to
declaring that there is an employer-employee relationship between the principal and
employees of the labor-only contractor.
In such cases, the person or intermediary shall be considered merely as an
agent of the employer, who shall be responsible to the workers for a more
comprehensive purpose, not only for unpaid wages but for all claims under the Labor
Code and ancillary Laws (San Miguel Corp. vs. MAERC Integrated Service, Inc., et al.,
G.R. No. 144672, July 10, 2003).
In contrast, the liability of a principal in LEGITIMATE JOB CONTRACTING is for
a limited purpose, where he becomes jointly and severally liable with the job
contractor only for the payment of the employees’ wages but subject to
reimbursement from the independent job contractor.
4. What is the effect for failure of owner of project to require the contractor to post
The owner of the project must answer for whatever liabilities the contractor
may have incurred to his employees; without prejudice on the part of the project
owner to seek reimbursement from the contractor. (Baguio, et al. vs. NLRC)\
NEW: THE LAW ON LABOR-ONLY CONTRACTING (PROHIBITED) AND INDEPENDENT
OR JOB CONTRACTING (PERMITTED)
Arrangements) Order 18-A (Rules on Contracting and Subcontracting Department Order No. 18-A
Series of 2011
RULES IMPLEMENTING ARTICLES 106 TO 109 OF THE LABOR CODE, AS AMENDED
By virtue of the power vested in the Secretary of Labor and Employment under
Articles 5 and 106 to 109 of the Labor Code of the Philippines, as amended, the
following regulations governing contracting and subcontracting arrangements are
Section 1. Guiding principles. Contracting and subcontracting arrangements are
expressly allowed by law and are subject to regulations for the promotion of
employment and the observance of the rights of workers to just and humane conditions of work, security of tenure, self-o...
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