LABOR LAW GENERAL PRINCIPLES BY ATTY.

AMADO ADQUILEN

General Principles
LABOR AND SOCIAL LEGISLATION: DEFINITION
Labor and Social legislation are those laws that are enacted to protect the rights of workers
and promote their welfare.
Labor legislation is broadly classified into labor standards and labor relations. Labor
standards law sets out the minimum terms, conditions and benefits of employment that the
employer must provide or comply and to which employees are entitled as a matter or right.
Labor relations law on the other hand defines the rights duties, as well as the institutional
mechanisms, that govern the individual and collective interactions between employers,
employees and their representatives.
SOCIAL JUSTICE: DEFINED
Social justice is the humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational and objectively secular conception may at
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least be approximated.
NOTES: While social justice is the raison d etre of the labor law, their basis or foundation
is the police power of the state. It is the power inherent in a Government to make laws, within
constitutional limits to promote the order, safety, health, morals, and general welfare of society.
The power of the state acting, through government, derives itself from the obligation to protect its
citizens and to keep society in safe and good order. On the wise exercise of this power depends
the security of the social order, the beneficial use of property, the enjoyment of social life, the well
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being of the community, and the health and life of the citizens.
CONSTITUTIONAL PROVISIONS ON LABOR
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.
Article XIII, Section 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 self-organization, collective bargaining and
negotiation, 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 modes in settling disputes, including conciliation,
and shall enforce their mutual compliance therewith to foster industrial peace.
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Social Justice as defined by Mr. Justice Laurel

Martin, Philippine Labor and Social Legislation [1970]

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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 enterprise to
reasonable returns on investments, and to expansion and growth

Article III, 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, Section 14:
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.
Article XII, Section 12:
The state shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitive.
ARTICLE 13 ON SOCIAL JUSTICE PROVIDES AMONG OTHERS:
A. PROTECTION OF LABOR:
The state shall:
1.
2.

afford full protection to labor, local and overseas, organized and

unorganized;
promote full employment and equality of employment opportunities for all.

B. WORKERS RIGHTS:
It shall:
1.
2.
3.

guarantee the rights of all workers to self-organization;

collective bargaining and negotiations; and
peaceful concerted activities, including the right to strike in accordance with
law.

They shall be entitled to:

1.
2.
3.

security of tenure;
humane conditions of work; and a
living wage.

C. WORKERS PARTICIPATION:
They shall also:
1.

participate in policy and decision making processes affecting their rights and
benefits as may be provided by law.

The state shall:

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1. promote the principle of shared responsibility between workers and employers

and the
2. preferential use of voluntary modes of settling disputes, including conciliation
and
3. shall enforce their mutual compliance therewith to foster industrial peace.
D. LABOR-MANAGEMENT RELATIONS
The state shall:
1.

Regulate the relations between workers and employer recognizing:

i. the rights of labor to its just share in the fruits of production;
ii. and the right of enterprise to reasonable return on investments and
to expansion and growth.

WHO ARE EXEMPTED FROM THE COVERAGE OF PD 442, AS AMENDED?

a.
b.
c.
d.
e.

Government employees under the Civil Service Law;

Government corporations covered under a special charter;
International agencies covered by the Grant of Immunity based on the
convention on the Privileges of Specialized Agencies of the UN (1947);
Religious Institutions engaged in purely ecclesiastical matters;
Schoolteachers but only with respect to acquiring permanent status in
employment and security of tenure, which is governed by the Manual of
Regulations for Private Schools.

WHAT IS THE SPECIAL NATURE OF A CONTRACT OF EMPLOYMENT BETWEEN LABOR

AND CAPITAL?
Such a relation is not merely contractual. It is so impressed with public interest that labor
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contracts must yield to the common good. Therefore, the law says that labor contracts
shall be subject to special laws on labor unions, collective bargaining, strikes, lockout,
closed shop, wages, working conditions, hours of labor and similar subjects.
HOW SHOULD LABOR AND CAPITAL TREAT EACH OTHER?
They should not act oppressively against each other or impair the interest or convenience
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of the public.
IN CASE OF DOUBT, HOW MAY A LABOR LEGISLATION AND/OR LABOR CONTRACTS BE
CONSTRUED?
In case of doubt, labor contracts and/or labor legislations shall be construed in favor of
the safety and decent living of the laborer. In other words, doubts shall be resolved in
favor of labor.
A contract freely entered into shall be respected since a contract is the law between the
parties. The principle of autonomy in contracts is not, however, an absolute principle.
The rule in Art 1306 of the Civil Code is that the contracting parties may establish such
stipulations as they may deem convenient, provided that they are not contrary to law,
morals, good customs, public order, or public policy. Thus, counter balancing the
principle of autonomy of contracting parties is the equally general rule that provisions of
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4

Article 1700, Civil Code of the Philippines

Article 1701, Civil Code of the Philippines

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applicable law, especially provisions relating to matters affected with public policy is that
the parties may not contract away applicable provisions of law especially in peremptory
provisions dealing with matters heavily impressed with public interest. The law relating to
labor and employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by
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simply contracting with each other.
NOTES: The Constitution is committed to the policy of social justice and the protection of
the working class. But it should not be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its own rights and prerogatives which, as such,
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are entitled to respect and enforcement in the interest of simple fair play.
The basic doctrine underlying the provisions of the Constitution so solicitous of labor as well as
the applicable statutory norms is that both the working force and management are necessary
components of the economy. The rights of labor have been expanded. Concern is evident for its
welfare. The advantages thus conferred, however, call for attendant responsibilities. The ways of
the law are not to be ignored. Those who seek comfort from the shelter that it affords should be
the last to engage in activities which negates the very concept of a legal order as antithetical to
force and coercion.
NOTES: (contd) What is equally important is that in the steps to be taken by it in the
pursuit of what it believes to be its rights, the advice of those conversant with the requirements of
legal norms should be sought and should not be ignored. It is even more important that reason
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and not violence should be its milieu.
WHAT IS THE DOCTRINE ENUNCIATED IN THE LANDMARK ALMIRA VS. BF GOODRICH
CASE?
The doctrine enunciates that: x x x Where a penalty less punitive would suffice, whatever
missteps may be committed by labor ought not to be visited with a consequence so
severe. It is not only because of the law's concern for the workingman. There is, in
addition, his family to consider, unemployment brings untold hardships and sorrows on
those dependent on the wage-earner. The misery and pain attendant on the loss of jobs
then could be avoided if there be acceptance of the view that under all the circumstances
of this case, petitioners should not be deprived of their means of livelihood. Nor is this to
condone what had been done by them. From the strictly juridical standpoint, it cannot be
too strongly stressed, to follow Davis in his masterly work, Discretionary Justice, that
where a decision may be made to rest an informed judgment rather than rigid rules, all
the equities of the case must be accorded their due weight. Finally, labor law
determinations to quote from Bultmann, should be not only SECUNDUM RATIONEM
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BUT ALSO SECUNDUM CARITATEM.

ARTICLE 5 OF PD 442, AS AMENDED, PROVIDES THAT THE DEPARTMENT OF LABOR

AND EMPLOYMENT AND OTHER GOVERNMENT AGENCIES CHARGED WITH THE
ADMINISTRATION AND ENFORCEMENT OF THIS CODE OR ANY OF ITS PARTS SHALL
PROMULGATE THE NECESSARY IMPLEMENTING RULES AND REGULATIONS. SUCH
RULES AND REGULATIONS SHALL BECOME EFFECTIVE FIFTEEN (15) DAYS AFTER
ANNOUNCEMENT OF THEIR ADOPTION IN NEWSPAPERS OF GENERAL CIRCULATION.

Pakistan International Airlines Corp. vs. Ople, 190 SCRA 99

Sosito vs. Aguinaldo Development Corp., GR No. 48926, December 24, 1987
7 Almira et.al, vs BF Goodrich, GR No. L-34974 July 25, 1974
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Almira et.al, vs BF Goodrich, Infra
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QUESTION: THE DEPARTMENT OF LABOR AND EMPLOYMENT ISSUED DEPARTMENT

ORDER NO. 1 S. 1998, TEMPORARILY SUSPENDING DEPLOYMENT OF FILIPINO
DOMESTIC AND HOUSEHOLD WORKERS FOR OVERSEAS EMPLOYMENT.
THE
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS (PASEI) ASSAILED THE ORDER; IN
THAT, AMONG OTHERS, IT IMPAIRS THE RIGHT TO TRAVEL. THE SOLICITOR GENERAL
JUSTIFIED THE VALIDITY OF THE ORDER ON POLICE POWER. WHICH POSITION IS
MORE TENABLE?
The position of the Solicitor General is more tenable. It is a valid police measure. The
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Honorable Supreme Court in PASEI vs. DRILON held:
The concept of police power is well-established in this
jurisdiction. It has been defined as the "state authority to enact
legislation that may interfere with personal liberty or property in
order to promote the general welfare." As defined, it consists of
(1) an imposition of restraint upon liberty or property, (2) in order
to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to
underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times,
even to anticipate the future where it could be done, provides
enough room for an efficient and flexible response to conditions
and circumstances thus assuring the greatest benefits."
xxx
xxx
"Protection to labor" does not signify the promotion of
employment alone. What concerns the Constitution more
paramountly is that such an employment be above all, decent,
just, and humane. It is bad enough that the country has to send
its sons and daughters to strange lands because it cannot satisfy
their employment needs at home. Under these circumstances,
the Government is duty-bound to insure that our toiling
expatriates have adequate protection, personally and
economically, while away from home. In this case, the
Government has evidence, an evidence the petitioner cannot
seriously dispute, of the lack or inadequacy of such protection,
and as part of its duty, it has precisely ordered an indefinite ban
on deployment.
NOTES: Remember this, class. It will give you an insight as to how the law protects your
workingman. It is but proper and it is our duty to protect them, especially our OFWs who are our
leading exports (like goods) thus they are hailed as our modern heroes because they contribute
largely to our dollar earnings. Overseas, if you work as a domestic helper with a foreign
employer, you will be called a Filipina, not because you are from the Philippines but because you
are a domestic helper. There, you are reminded of the term which nearly came out in the Lexicon
that a Filipina is a domestic helper. What a pity!
WHAT IS MANAGEMENT PREROGATIVE?
Management prerogative is the right of an employer to regulate according to their
discretion and best judgment all aspects of employment, including work assignment,

PASEI vs. Drilon, 163 SCRA 386, July 30, 1988

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working methods, processes to be followed, working regulations, transfer of employees,

work supervision, lay-off of workers, and the discipline, dismissal and recall of workers.
NOTES: Every business enterprise endeavors to increase its profits, In the process, it may
devise means to attain that goal,. Even as the law is solicitous of the welfare of the employees, it
must also protect the rights of an employer to exercise what are clearly MANAGEMENT
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PREROGATIVES.
WHAT IS COVERED BY A VALID EXERCISE OF MANAGEMENT PREROGATIVES?
A valid exercise of management prerogative is one which among others, covers:
1.
2.
3.
4.
5.

Work assignment;
Working method;
Time;
Work supervision;
Discipline, dismissal and recall of workers.

It is a recognized prerogative of the employer to transfer and reassign employees

according to the requirements of its business. For indeed, regulation of manpower by the
company clearly fall within the ambit of the management prerogative.
Except as provided for, or limited by special laws, an employer is free to regulate,
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according to his own discretion and judgment, all aspects of employment.
CITE SOME LIMITATIONS ON THE EXERCISE OF MANAGEMENT PREROGATIVES?
The limitations on the exercise of management prerogatives are as follows:
1.

They cannot be used as subterfuge to ease out undesirable employees for unjust
and unauthorized causes;

2.

They should be exercised in GOOD FAITH and in just, reasonable and fair manner;

3.

They must not be used to bust the union, to harass union officers or to commit unfair
labor practices;

4.

Its exercise must not be whimsical or arbitrary, nor despotic;

5.

It should yield to the higher consideration of public policy, statute, special laws, or
contractual stipulations.
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Example: In Master Iron Labor Union vs NLRC, The Supreme Court held that The
corporations insistence that the hiring of casuals is management prerogative betrays its attempt
to coat with legality the illicit curtailment of its employees rights to work under the terms of the
contract of employment and to a fair implementation of the CBA.

Sime Darby Filipinas vs. NLRC, GR No. 119205, April 15, 1998
Manila Electric Co. vs. NLRC, 263 SCRA 531 in relation to San Miguel Brewery Sales Force
Union vs. Ople, 170 SCRA 25
12 Master Iron Labor Union vs. NLRC, 219 SCRA 17
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ARTICLE XIII, SECTION 3 PROVIDES, AMONG OTHERS, THAT EMPLOYEES SHALL ALSO
PARTICIPATE IN POLICY AND DECISION-MAKING PROCESSES AFFECTING THEIR
RIGHTS AND BENEFITS AS MAY BE PROVIDED BY LAW.

QUESTIONS:
1.

IS MANAGEMENT DUTY BOUND TO OBTAIN EMPLOYEES

CONSENT BEFORE IT CAN EXERCISE ITS PREROGATIVES TO
EXECUTIVE MANAGEMENT POLICY? IN WHAT WAY SHOULD
ALLOWED TO PARTICIPATE? WHAT IS THE EFFECT OF
REFUSAL?

APPROVAL OR
LAY DOWN AND
EMPLOYEES BE
MANAGEMENTS

2.

ARE ALL COMPANY POLICIES SUBJECT TO WORKERS PARTICIPATION?

3.

ARE MANAGEMENTS DECISION NULLIFIED BY THE ABSENCE OF EMPLOYEES

PARTICIPATION?

4.

DOES MANAGEMENTS REFUSAL OF WORKERS PARTICIPATION CONSTITUTE

UNFAIR LABOR PRACTICE? IS IT A LAWFUL GROUND FOR FILING A NOTICE OF
STRIKE?

ANSWERS:
1.

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In PAL vs. NLRC, the Supreme Court in resolving held that: x x x consent or approval
by the UNION is required as a condition sine qua non to the implementation of
management policies. All that is required is DISCUSSION and REVIEW. It is humbly
submitted that when this is done, the next step to do is to distribute copies to all the
employees.
When such copies are so received, the POLICY becomes effective and enforceable. It is
thus clear that the requirement for WORKERS PARTICIPATION is sufficiently complied
with when DISCUSSION were done by management with the employees. Managements
refusal would remove the enforceability of the policy and the Union, acting in behalf of the
employees, or the workers themselves if there is no union, may initiate legal steps to
nullify the policy, or at least, postpone its enforcement.

2.

Insofar as BUSINESS OPERATIONS POLICIES are concerned, the employees have no

participation as a matter of demandable right. Operational decisions are reposed upon
the sole determination of the employer. The law should not allow undue interference on
this matter because It is deemed important to society, as a whole, that he should
succeed.
However, when the RIGHTS, WELFARE, and BENEFITS of employees are involved, the
Constitution demands WORKERS PARTICIPATION,

3.

In the PAL case, the Supreme Court ordered management to: 1) review and discuss the
policy with the union; 2) distribute a copy each to the employees; and 3) reconsider
previous disciplinary actions that were anchored on the policy to be reviewed.
In effect, the Court suspended the enforcement of the policy. It did not nullify it. But until
and unless the steps ordered are in fact, carried out, the policy could not be enforced.

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Philippine Airlines vs. NLRC, et.al., GR No. 85985, August 13, 1993

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Such a situation of unenforceability, if not altered, would, for all intents and purposes,
have the effects of annulment.
However, if the absence of workers participation was occasioned by the employees own
inaction or refusal to act, then it would be tantamount to a waiver. And so, there would be
no occasion for any adverse effect to the policy.
4.

Since the refusal does not partake of the nature of the acts or omissions referred to in
Article 247 of the Labor Code, nor specific instances enumerated in Article 248 and 249
therein, its stands to reason to conclude that it does NOT constitute UNFAIR LABOR
PRACTICE.
Even if such refusal is also a violation of a collective bargaining agreement, it would still
NOT be an UNFAIR LABOR PRACTICE because it is NOT a GROSS VIOLATION nor
flagrant violation of an economic provision.
Accordingly, the refusal cannot be a lawful ground for filing a NOTICE OF STRIKE. A
strike staged on that basis would be clearly illegal. And any illegal strikers may lose his
employment status.

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