Basics On Labor Laws

THE BASICS ON LABOR LAWS:
A LECTURE ON RESPONSIBLE
MANAGEMENT AND RIGHTS OF
EMPLOYEES
Justification of Labor Law
Article 3. Declaration of basic policy. The state shall promote

full employment, ensure equal work opportunities regardless of
sex, race or creed and regulate 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.
The 1987 Constitution
Some constitutional tenets with Labor Law Implications:
a) “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”. (Sec. 9, Article II – Declaration of
Principles and State Policies)
b) “The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare”
(Section 18, Article II – Declaration of Principles and State Policies)
c) “The right of 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”. (Section 8, Article III Bill
of Rights)
d) “The goals of the national economy are a more equitable distribution of
opportunities, income and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the
underprivileged.” (Section 1, Article XII [National Economy and Patrimony])
e) “The State shall protect working women by providing safe and healthful working
conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential
in the service of the nation.” (Section 14 [Women], Article XIII, [Social Justice and
Human Rights])
Management Prerogatives
Books 6 & 7 of the Labor Code
Employers have the freedom and prerogative, according to their discretion and
best judgment, to regulate and control all aspects of employment in their business
organizations. Such aspects of employment include hiring, work assignments,
working methods, time, place and manner of work, tools to be used, processes to
be followed, supervision of workers, working regulations, transfer of employees,
work supervision, lay-off of workers and the discipline, dismissal and recall of
workers. (Philippine Airlines, Inc. vs. NLRC, G. R. No. 115785, Aug. 4, 2000)
Extent of the Rights and Prerogatives of Management
Our laws recognize and respect the exercise by management of certain rights and
prerogatives. For this reason, courts often decline to interfere in legitimate
business decisions of employers. In fact, labor laws discourage interference in
employers’ judgment concerning the conduct of their business. (Philippine
Industrial Security Agency Corporation vs. Aguinaldo, G. R. No. 149974, June 15,
2005; Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004)
An employer can regulate, generally without restraint, according to its
own discretion and judgment, every aspect of its business.
(Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000)
This privilege is inherent in the right of employers to control and manage

their enterprise effectively.
(Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, 07 July 2004)
Limitations on the Exercise of Management Prerogatives
Needless to state, the exercise of management prerogative is not absolute. The

exercise of management prerogative is subject to the limitations imposed by
law or by CBA, employment contract, employer policy or practice and general
principles of fair play and justice.
(The Philippine American Life and General Insurance Co. vs. Gramaje, G. R.
No. 156963, Nov. 11, 2004)
Extent of the Employer’s Prerogative to Discipline
and/or Dismiss Erring Employees
The employer’s right to conduct the affairs of his business, according to its own discretion and
judgment, includes the prerogative to instill discipline in its employees and to impose penalties,
including dismissal, upon erring employees. This is a management prerogative where the free
will of management to conduct its own affairs to achieve its purpose takes form. The only
criterion to guide the exercise of its management prerogative is that the policies, rules and
regulations on work-related activities of the employees must always be fair and reasonable and
the corresponding penalties, when prescribed, commensurate to the offense involved and to the
degree of the infraction
(St. Michael’s Institute vs. Santos, G. R. No. 145280, Dec. 4, 2001; Consolidated Food
Corporation vs. NRLC, 315 SCRA 129, 139 [1999])
Instilling discipline among its employees is a basic management right
and prerogative. Management may lawfully impose reasonable
penalties such as dismissal upon an employee who transgresses the
company rules and regulations.
(Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000)
Due Process of Termination
Due process under the Labor Code, like Constitutional due process, has
two aspects: Substantive, i.e., the valid and authorized causes of
employment termination under the Labor Code; and Procedural, i.e., the
manner of dismissal. Procedural due process requirements for dismissal
are found in the Implementing Rules of P.D. 442, as amended, otherwise
known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as
amended by Department Order Nos. 9 and 10.
 Department Order No. 9 took effect on 21 June 1997
 Department Order No. 10 took effect on 22 June 1997
- Breaches of these due process requirements violate the Labor
Code.
Statutory Due Process found in the Labor Code and Implementing

Rules protects employees from being unjustly terminated without just
cause after notice and hearing.
JUST CAUSES and AUTHORZIED CAUSES of Termination
Just causes and Authorized causes. - As mentioned in Article 279, there

are two (2) kinds of causes or grounds to terminate employment by
employer, to wit:
A) Just causes which refer to those instances enumerated under Article

282 [Termination by employer] of the Labor Code. A dismissal based on
JUST CAUSE means that the employee has committed a wrongful act or
omission;
B) Authorized causes mean that there exists a ground which the
law itself allows to be invoked to justify the termination of an
employee even if he has not committed any blameworthy act or
omission. In other words, it is the law which authorizes the
dismissal based on the existence of facts justifying the same.
Just Cause refers to any wrongdoing committed by an employee including:
a) Serious misconduct
b) Willful disobedience of employers’ lawful orders
c) Gross and habitual neglect of duty
d) Fraud or willful breach of trust
e) Commission of crime or offense against the employer
f) Other analogous cases
Authorized Cause refers to an economic circumstance not due to the
employee’s fault, including:
a) Introduction of labor-saving devices
b) Redundancy
c) Retrenchment to prevent losses
d) Closure or cessation of business
e) Disease
Management Obligations and Responsibilities
(Source: Quisumbing Torres)
Labor Standards
Employees generally have the right to self-organization and the right to form, join or assist
labor unions for purposes of collective bargaining. There are, however, certain limitations to
the right to form, join or assist labor unions. Managerial employees and confidential
employees are not eligible to form, join or assist labor unions. Supervisory employees are not
eligible for membership in the collective bargaining unit of rank-and-file employees, but may
join, assist or form separate collective bargaining units and/or labor unions of their own.
While the formation of labor unions is encouraged, the activities of labor
unions are regulated. For example, labor unions are NOT ALLOWED to
commit unfair labor practices. Labor unions are prohibited from, among
other things: (i) restraining or coercing employees in the exercise of their
right to self-organization; (ii) causing or attempting to cause an employer
to discriminate against an employee; and (iii) asking for or accepting
negotiation fees from the employer as part of the settlement of any issue in
collective bargaining.
A labor union has to be registered with the DOLE for it to enjoy all the
rights granted by law to labor unions. It may register as an independent
labor union or as a charter of a federation or national union. Also, it has to
be recognized or certified as the exclusive bargaining representative of
the employees of the bargaining unit for it to represent them in collective
bargaining.
The Labor Code and its implementing rules and regulations define the
registration process and specify the recognition or certification process
and the manner of collective bargaining. Republic Act No. 9481,
amending the Labor Code, made it simpler for a labor union to acquire a
legal personality for purposes of filing a petition for certification election.
(Guide to Philippine Employment Laws for the Private Sector –
Quisumbing Torres)
BASIC RIGHTS OF THE EMPLOYEES
Security of Tenure
Every employee shall be assured security of tenure. No employee

can be dismissed from work except for a just or authorized cause,
and only after due process.
Hours of Work
Normal working hours should be 8 hours.

Weekly Rest Day
Every employee shall have 1-day off (24 hours) for every 6
consecutive days worked.
Wage & Wage-Related Benefits
a) Minimum Wage f) Paternity Leave

b) Holiday Pay g) Maternity Leave
c) Premium Pay h) Separation Pay
d) Night Shift Differential i) Retirement Pay
e) 13th Month Pay
Payment of Wages
Every employee shall be paid in wages which must not exceed 16

days every period.
Safe and Healthful Working Conditions
Every employee shall be provided with a safe and healthy

working environment.
Self-Organization and Collective Bargaining
Every employee shall have the right to form, join, or assist labor
unions for purposes of collective bargaining.
Social Welfare Benefits
Every employee shall be covered with the mandatory social

welfare benefits including:
a) SSS
b) PHIC
c) HDMF
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THE BASICS ON LABOR LAWS:

Article 3. Declaration of basic policy. The state shall promote

c) “The right of people, including those employed in the public and

This privilege is inherent in the right of employers to control and manage

Needless to state, the exercise of management prerogative is not absolute. The

Statutory Due Process found in the Labor Code and Implementing

Just causes and Authorized causes. - As mentioned in Article 279, there

A) Just causes which refer to those instances enumerated under Article

Every employee shall be assured security of tenure. No employee

Normal working hours should be 8 hours.

Weekly Rest Day

Wage & Wage-Related Benefits

a) Minimum Wage f) Paternity Leave

Every employee shall be paid in wages which must not exceed 16

Safe and Healthful Working Conditions

Every employee shall be provided with a safe and healthy

Self-Organization and Collective Bargaining

Social Welfare Benefits

Every employee shall be covered with the mandatory social

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