REVIEW OF

FUNDAMENTA
L PRINCIPLES
AND POLICIES
Labor Law
LEARNING
OUTCOMES
At the end of this module, the students are expected
to:
1. Explain the importance and rationale of studying
Labor and Employment Law from the perspective of
the learners and its applicability to their respective
work.

2. Explain the fundamental principles and policies of

Labor Law and the prevailing jurisprudence relating
thereto.

3. Exhibit critical thinking by recognizing and

reflecting upon the ethical issues in dealing with any
problem involving the application of basic provisions
of the laws on labor and employment.
PRELIMINARY CHAPTER
CONSTITUTIONAL PROVISIONS ON
LABOR
PROMOTION OF FULL EMPLOYMENT
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 to policies that provide adequate
social services, promote full employment,
arising standard of living, and an improved
quality of life for all. (Sec9, Art. II)
PROMOTION OF SOCIAL JUSTICE

The state shall promote social

justice in all phases of national
development. (sec.10, Art. II)

*justice in terms of the distribution of wealth, opportunities, and privileges within a society.
RECOGNITION OF LABOR AS A SOCIAL
ECONOMIC FORCE
The state affirms labor as a primary
social economic force.
It shall protect the rights of the
workers and promote their welfare.
(Sec. 18, Art. II)
RIGHT AGAINST DEPRIVATION OF
PROPERTY WITHOUT DUE PROCESS OF LAW
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 law. ( Sec. 1, Art. III)
NOTE: Employment is deemed property within
the meaning of the constitutional guarantee,
hence, an employee cannot be deprive of his
employment without due process of law.
NON-IMPAIRMENT OF CONTRACTS
No law impairing the obligation of
contracts shall be passed. (sec. 10, Art.
III)

NOTE: A law impairs an obligation when

it takes from a party a right to which he is
entitled or deprives him of the means of
enforcing such a right.
FREEDOM OF SPEECH, PRESS, AND
PEACEFUL ASSEMBLY
No law shall be passed abridging the
freedom of speech, or the press, or the right of
the people peaceably to assemble and petition
the government for redress of grievances. (sec
4, Art. III)
NOTE: Peaceful picketing is included within
the scope of freedom of speech.
RIGHT TO FORM ASSOCIATIONS

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. (Sec 8, Art III)
RIGHT AGAINST INVOLUNTARY SERVITUDE
No involuntary servitude in any form shall exist except for a
punishment for a crime whereof the party shall have been duty
convicted. (sec18,[2], Art. III)
NOTE: Unless falling under the exceptional circumstances
enumerated in the Labor Code, a covered employee cannot
be compelled to render overtime work or render service
during his rest day because that would run counter to the
constitutional injunction against involuntary servitude. The
same holds true to an employee who voluntarily resigns from
his employment with out giving 30-day notice to the
employer.
PROTECTION TO LABOR

The state shall afford full protection to

labor, local and overseas, organized and
unorganized, and promote full
employment and equality of employment
opportunities for all.
 It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the rights to strike in accordance with
law. They shall be entitled to security of tenure,
humane condition of work and a living wage.
They shall also participate in policy and
decision-making process affecting the rights and
benefits as may be provided by law.
 The state shall promote the principle of shared
responsibility between workers and employer and the
preferential use of voluntary modes in settling
disputes, including the conciliation, and shall enforce
their mutual compliance therewith to foster industrial
peace.
The state shall regulate the relations between
worker 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. (Sec 3,
Art. XIII)
PROTECTION OF WORKING WOMEN
The state shall promote working women by
proving safe and healthful working condition,
taking into account their maternal function, and
such facilities and opportunities that will
enhance their welfare and enable them to realize
their full potential in the service of the nation.
(Sec 14, Art. XIII)
LABOR LAW
DEFINITION

Labor Law is that branch of law

that governs and regulates the
relationship between employers and
employees.
Who are considered as employers?
As defined in Article 218(e) of the Labor Code, the term
“employer” “includes any person acting in the interest of an
employer, directly or indirectly.” The law, in defining the term
“employer” does not use toward “means.” Instead, it uses the
word “includes.”
In using the word “includes,” and not “means,” the framers
of the law did not intend to give a complete definition of
“employer” but rather that such definition should be
complementary to what is commonly understood as
employer. The term was intended to be understood in a broad
meaning because:
a) The statutory definition includes not only a
“principal employer but also a person acting in
the interest of the employer”
b) The law itself specifically enumerates those
who are not included the term “employer,”
namely:
i. A labor organization (expect when acting as
an employer), and
ii. Anyone acting in a capacity of officer or
agent of such labor organization. [FEATI
University v. Bautista, 18 SCRA 1191]
CAN A LABOR ORGANIZATION BE AN
EMPLOYER?

Under the article 218(e) of the Labor

Code, the term “employer” includes a
labor organization that act as an
employer. This situation arises when a
labor organization hires employees to
work for it.
UNREGISTERED ASSOCIATION AS
EMPLOYER
An unregistered association can be
considered as an employer. The law does
not require an employer to be registered
before he may come within the purview of
the Labor Code.
WHO ARE CONSIDERED AS
EMPLOYEES?
The term “employees” as defined in article
218(f) of the Labor Code, embraces not only
those who are usually and ordinarily
considered as employees as a consequence of
labor dispute or because of unfair labor
practice “if he has not obtained any other
substantially equivalent and regular
employment.”
MEANING OF SUBSTANTIANLLY
EQUIVALENT EMPLOYMENT
Substantially equivalent employment means
a job similar to that which the employee held
of the time of his dismissal. The determining
factor is not necessarily the amount of
compensation received by the employee but
the nature of the job itself and the career that
it can offer the employee.
STATUTORY CLASSIFICATION OF
EMPLOYEES

The Labor Code classifies employees

in this manner:
a) According to rank; and
b) According to nature of
engagement.
CLASSIFICATION OF EMPLOYEES
ACCORDING TO RANK
(a) Managerial employees – those
vested with powers or prerogatives to lay
down and execute management policies,
and/or to hire, trans, suspend, lay-off, recall,
discharge, assign, or discipline employees.
 (b) Supervisory employees – those who
are in the interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature, but requires the
use of independent judgment.
(c) Rank-and-file employees – those who
are neither managerial nor supervisory.
 Significance of the Classification –
This classification is significant for
purposes of determining:
(a) eligibility to form, join, or assist in
the formation of labor organization; and
(b) degree of their culpability in
disciplinary cases.
 As to Eligibility to Form, Join, or Assist of a Labor
Organization –
Managerial employees are not eligible to form, join,
or assist on the formation of any labor organization.
Supervisory employees can form, join, or, assist in
the formation of their own labor organization, but they
are not eligible for membership in the rank-and-file
union.
Rank-and-file employees can form, join, or assist in
the formation of any labor organization.
 As to degree of Culpability in Disciplinary Cases -
Managerial employees and supervisory employees
are subject to stricter norm of discipline than
rank-and-file employees. Managerial employees and
supervisory may be dismissed by the mere existence of
a basis for believing that such employee has breached
the trust of his employer. In the case of rank-and-file
employees, proof of involvement in the questioned acts
is required. Mere uncorroborated assertions and
accusations by the employer will not suffice [Caoile v.
NLRC, 299 SCRA 76].
CLASSIFICATION OF EMPLOYEES ACCORDING
TO NATURE OF ENGAGEMENT
(a) Regular employees – those engaged to
perform activities usually necessary or
desirable in the usual business or trade of the
employer.
(b) Non-regular employees – those
engaged:
•For specific project or undertaking,
(i.e., project employees);
 •On a seasonal basis, (i.e., seasonal
employees);
•For a fixed-term, (i.e., fixed- term
employees); or
•On trial basis, (i.e., probationary
employees.)
(c) Casual employees – those engaged to
perform activities not usually necessary or
desirable in the usual business or trade of the
employer.
 Significance of the Classification –
This classification is significant for the purpose of
determining their tenure of employment.
Employees holding regular employment enjoy security of
tenure by express provision of article 283 of the Labor Code.
On the other hand, employees holding non-regular
employment are entitled only to qualified tenure of
employment, in the sense that they cannot be dismissed
without just cause or authorized cause prior to the
expiration of the term of their employment [Sec. 2 (c), Rule
1, Book VI, Rules and Regulations Implementing the Labor
Code].
 Casual employees who have rendered at
least on (1) year of service are entitled to
security of tenure, in the sense that then
employment cannot be terminated without
just cause or authorized cause, as long as the
activity in which they were employed exists
[Art. 285, Labor Code].
LABOR STANDARDS

Labor standards is that branch of

labor law that prescribes the minimum
requirements for wages, hours of
work, monetary benefits, welfare
benefit, and occupational health and
safety standards
LABOR RELATIONS

Labor relations is that branch of labor

law that regulates the activities of labor
organizations and prescribes the
procedures on collective bargaining and
the modes and machinery for the
settlement of labor disputes and
termination of employment.
TIME BASIS POLICIES OF THE STATE ON
LABOR
•Protect labor,
•Promote full employment,
•Ensure equal work opportunities regardless of sex,
race or creed,
•Regulate the relations between workers and
employers,
•Assure the right of workers to security of tenure, and
humane conditions of work,
•Assure the rights of workers to self-organization and
collective bargaining. [ Art. 3, Labor Code]
REASON FOR AFFORDING PROTECTION TO
LABOR
Protection to labor is intended to raise the worker to
equal footing with the employer and shield him from abuses
brought about by the necessity for survival [Sanchez v. Harry
Lyons, 87 Phil. 532]. In this connection, Article 24 of the Civil
Code ordains that “(i)n all contractual property or other
relations, when one of the parties is at a disadvantage on
account of his moral dependence, ignorance, indigence,
mental weakness, tender age or other handicap, the courts
must be vigilant for his protection.”
EXTENT OF THE PROTECTION ACCORDED
TO LABOR
All employees are entitled to protection, whether:
•Local and overseas,
•Organized and unorganized,
•Public or private [Lopez v. MWSS,462 SCRA 428].
Employees are protected against:
•Oppressive employers, and
•Unscrupulous union leaders [Heirs of Teodulo Cruz
v. CIR, 30 SCRA 917]
LIMITATIONS
While the state is mandated to protect
labor, it is also required safeguard the
prerogatives of employers. The law, in
protecting the rights of labor authorizes
neither oppression nor self-destruction of the
employer [Manila Trading and Supply Co. v.
Zulueta, 69 Phil. 485, Pantranco North
Express v. NLRC, 314 SCRA 740].
THE LABOR CODE

The Labor Code is the principal

repository of our labor laws. It was
promulgated on May 1, 1974 and look
effect on November 1, 1974, sex (6)
months after its promulgation
CONSTRUCTION OF THE LABOR CODE
Under Article 4 of the Labor Code, all doubts in the
implementation and interpretation of the provision of the
Labor Code including its implementing rules and
regulations shall be resolved in favor of labor. This is in
line with the principle that those who have less in life
should have more in law. When conflicting interest
heavier influence of the latter must be counterbalanced by
the sympathy and compassion the law must accord the
underprivileged worker [Eastern Shipping Lines v. POEA,
166 SCRA 523].
APPLICABILITY OF THE LABOR CODE

Article 6 of the Labor provides that:

“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”
 There are two (2) important points that must be
considered here, to wit:
(a) First, is the coverage clause, i.e., “shall , xxx
apply alike to all workers.” The workers referred to
are employees in the private sector. The Labor
Code does not apply to employees of the
government because they are governed by the Civil
Service Law. With regard to employees of
government-owned or controlled corporations, the
applicability of the Labor Code will depend upon the
manner of their creation. Thus:
 i. If created by special charter – not
covered by the Labor Code because
they are governed by the Civil
Service Law and by their respective
charters.
ii. If organized under the Corporation
Law – covered by the Labor Code
[PNOC v. Leogardo, 175 SCRA 26;
PNOC v. NLRC, 201 SCRA 487].
 (b) Second, is the exclusionary clause, i.e.,
”except as may otherwise be provided herein.”
This means that:
(i) some provisions of the Labor Code are
applicable to government employees and
employee of government owned or
controlled corporation with special charters,
and
(ii) Some employees in the private sector
are not entitled to certain rights and benefits
accorded by the Labor Code.
LABOR CODE PROVISIONS THAT ARE APPLICABLE
TO GOVERNMENT EMPLOYEES

The provisions of the Labor Code that are

applicable to government employees and
employees of government-owned or controlled
corporation with special charters are:
(a) Articles 172 to 214-a on employees’
compensation, and
 (b) Article 109 which imposes solidarity
liability upon the principal fir failure of its
contractor to pay the wages of its employees
[Philippine Fisheries Development Authority v.
NLRC, 213 SCRA 621].
Illustrative Example: If the government or
government-owned or controlled corporation
with special charter engages a contractor to
perform a specific job or service, they could be
held jointly and severally liable for unpaid wages
of the contractor’s employees by virtue of Article
109 of the Labor Code.
RIGHTS AND BENEFITS UNDER THE LABOR CODE
THAT ARE NOT AVAILABLE TO EMPLOYEES IN THE
PRIVATE SECTOR
The rights and benefits which the Labor Code
does not accord to certain types of employees in
the private sector are as follows:
(a) The right to form, join, assist in the
formation of any labor organization is not
available to managerial employees by express
provision of article 250 of the Labor Code.
 (b) By express provision of Article 82 of the Labor Code, the
working conditions prescribed in Title 1, Book Three of the Labor
Code, particularly the normal hours of work (Art. 83), overtime
pay (Art. 87) night-shift differential (Art.86), weekly rest period
(Art. 91), premium pay for special holiday and rest day (Art. 93),
holiday pay (Art. 94), service incentive leave (Art. 95), and service
charges (Art. 96), are not available to:
•Managerial employees,
•Managerial staff,
•Field personnel,
•Family members of the employer who are dependent on him
for support,
 •Domestic helpers (except, weekly rest day and service
incentive leave),
•Persons in the personal service of another, and
•Workers paid by result.
(c) Employees of retail and service establishment regularly
employment less than ten (10) workers are not entitled to:
•Holiday pay by express provision of Article 94 of the Labor
Code;
•Service incentive leave, by express provision of Article 95 of
the Labor Code; and
•Retirement benefits, by express provision of Article 291 of the
Labor Code
EMPLOYER-EMPLOYEE RELATIONSHIP
Labor law is about employer-employee
relationship. Therefore, the applicability of
the Labor Code is dependent upon the
existence of employer-employee relationship.
If the relationship is something else other than
“employer-employee,” the principles of
ordinary civil law will apply.
THE TESTS OF EMPLOYER-EMPLOYEE
RELATIONSHIP
The Economic Facts of the Relation Test –
When a worker possesses some attributes of an
employee and others of an independent contractor
which make him fall within an intermediate area, he
may be classified under the category of an employee
when the economic facts of the relation make it more
nearly one of the employment than one of independent
business enterprise with respect to the ends sought to
be accomplished [Sunripe Coconut Products v. CIR83
phil. 518].
 The Control Test –
The relationship of employer-employee will be deemed
to exist where the person for whom the services are
performed reserves the right to control not only the end to
be achieved but also the means to be used in reaching
such end. Therefore, in order to fall within the ambit of
employer-employee relationship, control should be on
both the means and the end. If control is limited only to
the result of the work, employer-employee relationship
does not exist [LVN Pictures v. Philippine Musicians Guild,
110 Phil. 725].
ELEMENTS OF EMPLOYER-EMPLOYEE
RELATIONSHIP
In Viana v. Al-Lagadan, 99 Phil. 40s, the Supreme
Court laid down the following elements of
employer-employee relationship:
(a) Selection and engagement of the employee;
(b) Payment of wages;
(c) Power of dismissal; and
(d) Power to control the employees’ conduct.
THE MINIMUM AGE FOR EMPLOYEMENT

As a general rule, the minimum age for

employment is fifteen (15) years old. Children
below fifteen (15) years old ca be employed only in
two instances, namely:
(a) When a child works directly under his
parents or legal guardian, subject to the following
conditions:
•Only members of his family are employed
thereat;
•The employment does not endanger the
child’s life, safety, health, and morals, or
impair his normal development;
•The parent or legal guardian provides the
child with the prescribes primary or
secondary education; and
•A work permit is first obtained from the
Department of Labor and Employment.
 (b) When the employment of the child is
essential in public entertainment or information
such as cinema, theater, radio, television or
other forms of media, subject to the following
conditions:
•An employment contract , duty approved
by the Department of Labor and
Employment, must be executed by the
parents or legal guardian of the child;
• The employer must ensure the protection, health,
safety, morals and normal development of the child;
• The employer must institute measures to prevent
the child’s exploitation or discrimination;
• The employer must formulate and implement a
continuing program for training and skills
acquisition of the child, subject to the approval and
supervision of competent authorities; and
• A work permit must be obtained from the
Department of Labor and Employment.
COMMENCEMENT OF
EMPLOYER-EMPLOYEE RELATIONSHIP
Employer-employee relationship
commence upon hiring of a person as an
employee. In the absence of hiring, no actual
employer-employee relationship could exist
[Ruga v. NLCR 181 SCRA 267].
TERMINATION OF EMPLOYER-EMPLOYEE
RELATIONSHIP
Employer-employee relationship is terminated through
any of the following modes:
a) Voluntary resignation;
b) Involuntary resignation (constructive dismissal);
c) Abandonment of employment (constructive resignation);
d) Dismissal for cause;
e) Expiration of period of employment; or completion of
project; and
f) Retirement.
PROOF OF EMPLOYER-EMPLOYEE
RELATIONSHIP
No particular form of evidence is required
to prove the existence of employer-employee
relationship. Any competent and relevant
evidence will suffice. In the absence of time
sheets, time record, or payroll, testimonial
evidence may be introduced to prove
employer-employee relationship.