GENERAL STRUCTURE OF THE LABOR CODE

The Labor Code is composed of a Preliminary Title and seven (7) books as follows:

 Preliminary Title

Chapter I - General Provisions (Articles 1 to 6)

Chapter II - Emancipation of Tenants (Articles 7 to 11)

 Book I- Pre-Employment (Article 12)

Title I - Recruitment and Placement of Workers

Chapter I - General Provisions (Articles 13 to 24)
Chapter II - Regulation of Recruitment and Placement Activities (Articles 25 to 35)
Chapter III - Miscellaneous Provisions (Articles 36 to 39) Title II - Employment of Non-
Resident Aliens (Articles 40 to 42)

 Book II - Human Resources Development Program

Title I - National Manpower Development Program

Chapter I - National Policies and Administrative Machinery for Their Implementation
(Articles 43 to 56)
Title II - Training and Employment of Special Workers
Chapter I - Apprentices (Articles 57 to 72)
Chapter II - Leamers (Articles 73 to 77)
Chapter III – Handicapped Workers (Articles 78 to 81)

 Book III - Conditions of Employment

Title I - Working Conditions and Rest Periods

Chapter I - Hours of Work (Articles 82 to 90)
Chapter II - Weekly Rest Periods (Articles 91 to 93)
Chapter III – Holidays, Service Incentive Leaves and Service Charges (Articles to 96)
Title II - Wages
Chapter I - Preliminary Matters (Articles 97 to 98)
Chapter II - Minimum Wage Rates (Articles 99 to 101)
Chapter III - Payment of Wages (Articles 102 to 111)
Chapter IV - Prohibitions Regarding Wages (Articles 112 to 119)
Chapter V - Wage Studies, Wage Agreements and Wage Determination (Articles
120 to 127)
Chapter VI - Administration and Enforcement (Articles 128 to 129)
Title III - Working Conditions for Special Groups of Employees
Chapter I - Employment of Women (Articles 130 to 138)
Chapter II - Employment of Minors (Articles 139 to 140)
Chapter III - Employment of Househelpers (Articles 141 to 152)
Chapter IV - Employment of Homeworkers (Articles 153 to 155)

 Book IV - Health, Safety and Social Welfare Benefits

Title I - Medical, Dental and Occupational Safety

Chapter I - Medical and Dental Services (Articles 156 to 161)
Chapter II - Occupational Health and Safety (Articles 162 to 165)
Title II - Workmen's Compensation and State Insurance Fund
Chapter I - Policy and Definitions (Articles 166 to 167)
Chapter II - Coverage and Liability (Articles 168 to 175)
Chapter III- Administration (Articles 176 to 182)
Chapter IV - Contributions (Articles 183 to 184)
Chapter V-Medical Benefits (Articles 185 to 190)
Chapter VI - Disability Benefits (Articles 191 to 193)
Chapter VII - Death Benefits (Article 194)
Chapter VIII - Provisions Common to Income Benefits (Articles 195 to 204)
Chapter IX - Records, Reports and Penal Provisions (Articles 205 to 208)
Title III - Medicare (Article 209)
Title IV - Adult Education (Article 210)

 Book V-Labor Relations

Title I - Policy and Definitions

Chapter I - Policy (Article 211)
Chapter II - Definitions Article 212)
Title II - National Labor Relations Commission
Chapter I - Creation and Composition (Articles 213 to 216
Chapter II - Powers and Duties (Articles 217 to 222)
Chapter III - Appeal (Articles 223 to 225)
Title III - Bureau of Labor Relations Articles 226 to 233)
Title IV - Labor Organizations
Chapter I - Registration and Cancellation (Articles 234 to 240)
Chapter II – Rights and Conditions of Membership (Article 241)
Chapter III - Rights of Legitimate Labor Organizations (Article 242)
Title VI - Unfair Labor Practices
Chapter I - Concept (Article 247)
Chapter II - Unfair Labor Practices of Employers (Article 248)
Chapter III - Unfair Labor Practices of Labor Organizations (Article 249)
Title VII - Collective Bargaining and Administration of Agreements (Articles 250 to 259)
Title VII-A-Grievance Machinery and Voluntary Arbitration (Articles 260 to 262-B)
Title VIII - Strikes and Lockouts and Foreign Involvement in Trade Union Activities
Chapter I - Strikes and Lockouts (Articles 263 to 266)
Chapter II - Assistance to Labor Organizations (Articles 267 to 268)
Chapter III - Foreign Activities (Articles 269 to 271)
Chapter IV - Penalties for Violation (Article 272) Tide LX-Special Provisions (Articles 273
to 277)

 Book VI - Post Employment

Title I-Termination of Employment (Articles 278 to 286)

Title II - Retirement from the Service (Article 287)

 Book VII -Transitory and Final Provisions

Title I - Penal Provisions and Liabilities (Articles 288 to 289)

Title II - Prescription of Offenses and Claims (Articles 290 to 292)
Title III - Transitory and Final Provisions (Articles 293 to 302)
Labor standards law covers: Books One to Four of the Labor Code as well as Book VI
thereof which deal with working conditions, wages, hours of work, holiday pay and other
benefits, conditions of employment of women, minors, househelpers and homeworkers,
medical and dental services, occupational health and safety, termination of employment and
retirement.
Labor relations law covers: Book V of the Labor Code which deals with labor
organizations, collective bargaining, grievance machinery, voluntary arbitration, conciliation
and mediation, unfair labor practices, strikes, picketing and lockout.
 
*Please take note of the re-numbering of provisions.

7 SALIENT FEATURES OF THE LABOR CODE

The following are the salient features of the Labor Code at the time of its enactment:

1. It reorients labor laws towards development and employment goals

(a)   By purging laws with built-in leverages for graft and corruption on the part of labor law
enforcers and fly-by-night labor leaders,
(b) By removing archaic and unworkable provisions of labor laws, and
(c) By eliminating the permit system without impairing the substantive rights
and privileges and the umbrella of protection assured by law to the workers.

2. It institutionalizes the National Labor Relations Commission (NLRC) established

under P.D. No. 21 in place of the Court of Industrial Relations (CIR). Composed
of one representative of government who shall act as chairman and two
representatives each of labor and management, the NLRC is attached to the
Department of Labor rather than to the Supreme Court to make possible the
speedy settlement of labor disputes unhampered by legal and judicial
technicalities and to give the President of the Philippines a free hand in the
direction and control of the labor relations machinery under Marcos' New Society.
NLRC procedures are non-technical but they assure due process; hence, the
guaranty of swift justice for all.
3. It abolishes the workmen's compensation system which has become graft-ridden
and workable and integrates workmen's compensation into the social security
system to be administered by the SSS for the private sector and by the GSIS for
the government sector This will save the government at least P28 Million a year in
dubious workmen’s compensation claims, facilitate the prompt payment of
benefits, assure payment of more meaningful compensation, save the government
P12 Million in administrative expenses and enables a new major source of funds
for economic and social development,
4. It establishes an Overseas Employment Development Board (OEDB) and a
National Seamen Board (NSB) to undertake the systematic employment of
Filipinos overseas and optimize the national benefit therefrom in the form of
dollar remittances and improved skills and technology for the people. At the same
time, the establishment of these two bodies the Department of Labor will liberate
the recruitment and placement of Filipino workers from abuse and exploration
5. implements the provision of the 1973 Constitution, placing employees of
government-owned and controlled corporations under the Civil Service and
mandating the National Assembly to standardize salaries. The terms and
conditions of employees of government-owned and controlled corporations are
henceforth fixed by law rather than left to collective bargaining.
 6. It ends the wasteful energy-snapping anarchy and opportunism in the Philippine
labor movement by restructuring it by region and by industry. The aim is to stop
the interminable inter-union and intra-union rivalries which accounted for more
than fifty percent (50%) of all strikes, demonstrations and lockouts under the Old
Society. It is expected to transform unions into positive and responsible agents of
democracy, social justice and development.
7. It abolishes the wage-fixing function of the Wage Commission by transforming it
into a study and research body only with power to recommend adjustments in the
minimum wages to the Secretary of Labor who may adopt such recommendations
subject to the approval by the President of the Philippines.

The other new features of the draft of the Labor Code are those embodied in PDs 143, 148
and 173 adjusting labor standards laws to the requirements of development and employment
earlier approved by the President. In sum, the enactment of the draft Labor Code into law
aligns labor laws, labor-management relations and the trade union movement to the urgent
goals and aspirations of the people under the New Society. (pgs. 2-3, Chan Labor Code)

Relevant Civil Code provisions

I. INTERPRETATION OF THE LABOR CODE

Art. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions, collective bargaining, strikes
and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.
Relevant Cases for Art. 1700:
G.R. NOS. 182978-79: Becman vs. Cuaresma
The relations between capital and labor are so impressed with public interest, and neither
shall act oppressively against the other, or impair the interest or convenience of the public. In
case of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer.
G.R. No. 162839: INNODATA PHILIPPINES vs. QUEJADA-LOPEZ
In the interpretation of contracts, obscure words and provisions shall not favor the party that
caused the obscurity. Consequently, the terms of the present contract should be construed
strictly against petitioner, which prepared it.
Indeed, a contract of employment is impressed with public interest. For this reason,
provisions of applicable statutes are deemed written into the contract. Hence, the "parties are
not at liberty to insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other." Moreover, in case of doubt, the terms of a
contract should be construed in favor of labor.
Leyte Geothermal vs. PNOC-EDC
Kinds of Labor Contracts
The employment contracts referred to in Article 1700 may either be:

1. Employment contract; or
2. Collective Bargaining Agreement (CBA)

Leyte Geothermal vs. PNOC-EDC, illustrates a case involving an employment contract.

The issue here is whether the member of petitioners are project employees. The court
pronounced that Article 295(280) of the Labor Code, as worded, establishes that the nature of
the employment is determined by law, regardless of any contract expressing otherwise. The
supremacy of the law over the nomenclature of the contract and the stipulation contained
therein is to bring to life the policy enshrined in the Constitution to “afford full protection to
labor.” Thus, labor contracts are placed on a higher plane than ordinary contracts; these are
imbued with public interest and therefore subject to the police power of the State. However,
notwithstanding the foregoing iterations, project employment contracts which fix the
employment for a specific project or undertaking remain valid under the law. In the case at
bar, the records reveal that the officers and the members of petitioner union signed
employment contracts indicating the specific project or phase of work for which they were
hired, with a fixed period of employment. As clearly shown by petitioner union’s own
admission, both parties had executed the contracts freely and voluntarily without force,
duress or acts tending to vitiate the worker’s consent. Thus, there is no reason not to honor
and give effect to the terms and conditions stipulated therein.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer.
Arts. 1703-1712 have labor law signification and implication.

RELEVANT RPC PROVISIONS

It is settled that a person may be charged and convicted separately of illegal recruitment
under Republic Act No. 10022 in relation to the Labor Code, and estafa under Art. 315,
paragraph 2(a) of the Revised Penal Code.
The crime of Simple Illegal Recruitment, as a general rule, is committed when two essential
elements concur:

1. that the offender has no valid license or authority required by law to enable him to
lawfully engage in the recruitment and placement of workers, and/ or
2. that the offender undertakes any activity within the meaning of recruitment and
placement defined under Republic Act No. 10022 or any prohibited practices
enumerated thereunder.

Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by a non-
licensee or non-holder of authority contemplated under Article 13(f) of the Labor Code of the
Philippines (Links to an external site.): Provided, That any such non-licensee or non-holder
who, in any manner, offers or promises for a fee employment abroad to two or more persons
shall be deemed so engaged. It shall likewise include the enumerated acts, whether
committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:
Article 13(b) of the Labor Code defines recruitment and placement as:
Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referrals, contract services, promising or advertising for employment,
locally or abroad, whether for profit or not: Provided, that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement.
Arts. 272-274, 278, 288, 289, 291, 292, 310, 316 [5]

RELEVANT CONSTITUTIONAL PROVISIONS

Art. II, Sec. 18 - “The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.”
Art. III, Sec. 18, par. 2 –No involuntary servitude in any form shall exist except as a
punishment for a crime whereof the party shall have been duly convicted.
Art. IX-B, Sec. 2, Par. 1 and 3
(1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of
the Government, including government-owned or controlled corporations with original
charters.
(2) Appointments in the civil service shall be made only according to merit and fitness to be
determined, as far as practicable, and, except to positions which are policy-determining,
primarily confidential, or highly technical, by competitive examination.
(3) No officer or employee of the civil service shall be removed or suspended except for
cause provided by law.
(4) No officer or employee in the civil service shall engage, directly or indirectly, in any
electioneering or partisan political campaign.
(5) The right to self-organization shall not be denied to government employees.
(6) Temporary employees of the Government shall be given such protection as may be
provided by law.
Art. IX-B, Sec. 5 - The Congress shall provide for the standardization of compensation of
government officials and employees, including those in government-owned or controlled
corporations with original charters, taking into account the nature of the responsibilities
pertaining to, and the qualifications required for their positions.
Art. XII, Sec. 6 - The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to own, establish, and
operate economic enterprises, subject to the duty of the State to promote distributive justice
and to intervene when the common good so demands.
Art. XII, Sec. 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.
Art. XII, Sec. 14, par. 2 – The sustained development of a reservoir of national talents
consisting of Filipino scientists, entrepreneurs, professionals, managers, high-level technical
manpower and skilled workers and craftsmen in all fields shall be promoted by the State. The
State shall encourage appropriate technology and regulate its transfer for the national benefit.
The practice of all professions in the Philippines shall be limited to Filipino citizens, save in
cases prescribed by law.
Art. XII, Sec. 16 – The Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or controlled
corporations may be created or established by special charters in the interest of the common
good and subject to the test of economic viability.
Art. XIII, Sec. 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.
Art. XIII, Sec. 2- The promotion of social justice shall include the commitment to create
economic opportunities based on freedom of initiative and self-reliance.
Art. XIII, 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 self-organization, 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 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.

II. WHAT IS THE PROTECTION-TO-LABOR CLAUSE IN THE

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.
It shall 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 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.” (Section 3 (Labor), Article XIII
[Social Justice and Human Rights] of the 1987 Constitution)

III. WHAT ARE THE BASIC PRINCIPLES ENUNCIATED IN THE LABOR CODE
ON PROTECTION TO LABOR?

a. The State shall afford protection to labor, 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.
b. Labor contracts are not ordinary contracts as the relation between capital and labor
is impressed with public interest.
c. In case of doubt, labor laws and rules shall be interpreted in favor of labor.
d. Labor Code applies to all workers, whether agricultural or non-agricultural.

e. Applicability of Labor Code to government-owned or controlled corporations: 

• When created with original or special charter - Civil Service laws, rules and
regulations;
• When created under the Corporation Code - Labor Code applies.

Survey of doctrinal cases in Labor based on Constitutional provisions

Waterous drugs and Andre Marti cases on unreasonable search and seizure
***WON the right against unreasonable searches and seizures and right to privacy of
communication guaranteed under the Constitution may be invoked by an employee
against her employer.
---------SC reasoned: "As regards the constitutional violation upon which the NLRC
anchored its decision, we find no reason to revise the doctrine laid down in People v. Andre
Marti, that the Bill od Rights does not protect citizens from unreasonable searches and
seizures perpetrated by private individuals. It is not true, as counsel for Catolico claims, that
the citizens have no recourse against such assaults. On the contrary, and as said counsel
admits, such an invasion gives rise to both criminal and civil liabilities". Alleged violations
against unreasonable search and seizure may only be invoked against the State by an
individual unjustly traduced by the exercise of sovereign authority. To agree with appellant
that an act of a private individual in violation of the Bill of Rights should also be construed as
an act of the State would result in serious legal complications and an absurd interpretation of
the Constitution. Similarly, the admissibility of the evidence procured by an individual
effected through private seizure equally applies, in pari passu, to the alleged violation, non-
governmental as it is, of appellant's constitutional rights to privacy and communication.
Lopez v. Alturas Group of Companies on right to counsel
***Would the failure of the employer to inform the employee who is undergoing
administrative investigation of his right to counsel amount to deprivation of due process?
-------NO. The SC held that "the right to counsel and the assistance of one in investigations
involving termination cases is neither indispensable nor mandatory, except when the
employee himself request for one or that he manifests that he wants a formal hearing on the
charges against him. In petitioner's case, there is no showing that he requested for a formal
hearing to be conducted or that he be assisted by counsel".
THE CONFERENCE OF MARITIME MANNING AGENCIES, INC., CASE:
CONSTITUTIONA PROHIBITION AGAINST IMPAIRING CONTRACTUAL
OBLIGATIONS IS NOT ABSOLUTE.
The constitutional prohibition against impairing contractual obligations is not absolute and is
not to be read with literal exactness. It is restricted to contracts with respect to property or
some object of value and which confer rights that maybe asserted in a court of justice; it has
no application to statutes relating to public subjects within the domain of the general
legislative powers of the State and involving the public rights and public welfare of the entire
community affected by it. It does not prevent a proper exercise by the State of its police
power by enacting regulations reasonably necessary to secure the health, safety, morals;
comfort, or general welfare of the community, even though contracts may thereby be
affected, for such matters cannot be placed by contract beyond the power of the State to
regulate and control them.
Serrano doctrine , Ineffectual Dismissal
The rule on the extent of the sanctions was changed in the en banc decision in Serrano vs.
NLRC. The Court held that the violation by the employer of the notice requirement in
termination for just and authorized causes was not a denial of due process that will nullify the
termination. However the dismissal is declared ineffectual and the employer must pay full
back wages from the time of the termination until it is judicially declared that the dismissal
was for a just and authorized cases.
Anucension case on religious sects exemptions
“ The right to refrain from joining labor organizations recognized by section 3 of the
industrial peace Act is however limited. The legal protection, granted to such right to refrain
from joining is withdrawn by operation of law, where a labor union and an employer have
agreed on a closed shop by virtue of the collective bargaining unit, and the employess must
continue to be members of the union for the duration of the contract  in order to keep their
jobs. RA 3350, provides that although it would be an unfair labor practice for an employer to
discriminate in regard to hire or tenure of employment or any term or condition of
employment to encourage or discourage membership in any labor organization, the employer
is however not precluded from making an agreement with the labor organization to require a
condition of employment  membership therein.
“ The constitutional provision not only prohibits legislation for the support of any previous
tenets or the modes of worship of any sect, thus forestalling compulsion by law of the
acceptance of any creed or the practice of any form of worship but also assures the free
exercise of one’s chosen form of religion within the limits of utmost amplitude. It has been
said that religion clauses of religion clauses of the Constitution are all designed to protect the
broadest possible liberty of conscience, to allow each man to believe as his conscience
directs, to profess his beliefs, and to live as he believes he ought to live, consistent with the
liberty of others and the common good.
Any legislation whose effect or purpose is to impede the observance of one or all religions, or
discriminate invidiously between the religions, is invalid even though the burden may be
characterized as being only indirect.
Strike and picketing on publicizing the labor dispute
To strike is to withhold or to stop work by concerted action of the employees as a result of an
industrial or labor dispute. The work stoppage may be accompanied by the striking
employees outside the company accompanied by picketing by the striking employees outside
of the company compound. While a strike focuses on stoppage of work, picketing focuses on
publicizing the labor dispute and its incidents to inform the public of what is happening in the
company struck against.
 A picket simply means to march to and from the employers premises, usually accompanied
by the display of placards and other signs making known the facts involved in a labor dispute.
It is a strike activity separate and different from the actual stoppage of work.
BPI vs BPI employees union-involuntary servitude
In the case of BPI vs BPI Employees union, it involves the merger of BPI with FEBTC,
where the Voluntary Arbitrator ruled that, in accordance with Section 80 of the Corporation
Code, the employees of FEBTC from part of the assets and liabilities transferred to the
surviving bank, petitioner BPI, by virtue of the merger. The SC, however, did not agree to
this postulation. In legal parlance, human beings are never embraced in the term asset and
liabilities. It is contrary to public policy to declare the FEBTC employees as forming part of
the assets or liabilities of FEBTC that were transferred and absorbed by BPI on the Assets
and Liabilities. Assets and Liabilities, in this instance, should be deemed to refer only to
property rights and obligations of FEBTC and do not include the employment contracts of its
personnel. A corporation cannot unilaterally transfer its employees to another employer like
chattel. Certainly, if BPI as an employer had a right to choose who to retain among the
FEBTC’s employees, FEBTC employees had the concomitant right to choose not to be
absorbed by BPI. Certainly nothing prevented the FEBTC’s employees from resigning or
retiring and seeking employment elsewhere instead of going along with the proposed
absorption. Employment is a personal consensual contract and absorption by BPI of a former
FEBTC employee without the consent of the employee is in violation of an individual’s
freedom to contact. It would have been a different matter if there was an express provision in
the Articles of Merger that as a condition for the merger, BPI was being required to assume
all the employment contracts of existing FEBTC employees with the conformity of the
employees. In the absence of such a provision in the Articles of Merger, then BPI clearly had
the business management decision as to whether or not to employ FEBTC’s emplyees.
FEBTC employees likewise retained the prerogative to allow themselves to be absorbed or
not; otherwise, that would be tantamount to involuntary servitude.
 Marcopper and Adamson on protection to labor
When conflicting interests of labor and capital are to be weighed on the scales of social
justice, the heavier influence of the latter should be counter-balanced by sympathy and
compassion the law must accord the underprivileged worker (Marcopper vs NLRC). In
interpreting the protection to labor and social justice provisions of the Constitution and the
labor laws or rules and regulations implementing the constitutional mandates, we have
always adopted the liberal approach which favors the exercise of labor rights should always
be adopted (Adamson vs CIR).
  Central Bank Case on Equality
It is the fundamental policy of the State to promote social justice in all phases of national
development. Central bank pronounces that equality is one ideal which cries out for bold
attention and action in the constitution.
The disparity of treatment between BSP rank-and-file and the rank-and-file of the other seven
Government Financial Institutions definitely bears the unmistakable badge of invidious
discrimination - no one can, with candor and fairness, deny the discriminatory character of
the subsequent blanket and total exemption of the seven other GFIs from the Salary
Standardization Law when such was withheld from the BSP. Alikes are being treated as
unalikes without any rational basis.
Again, it must be emphasized that the equal protection clause does not demand absolute
equalitybut it requires that all persons shall be treated alike, under like circumstances
and conditions both as to privileges conferred and liabilities enforced. Favoritism and
undue preference cannot be allowed. For the principle is that equal protection and security
shall be given to every person under circumstances which, if not identical, are analogous. If
law be looked upon in terms of burden or charges, those that fall within a class should be
treated in the same fashion; whatever restrictions cast on some in the group is equally binding
on the rest.

68. Century Canning Corp vs. Ramil -doubt or ambiguity in evidence

The law mandates that the burden of proving the validity of the termination of employment
rests with the employer. Failure to discharge this evidentiary burden would necessarily mean
that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions,
accusations, and conclusions of employers do not provide for legal justification for
dismissing employees. In case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of labor laws and the Constitution.
 COLEGIO DE SAN JUAN DE LETRAN VS VILLAS
In the case of Colegio De San Juan De letran v. Villas, the Supreme Court found that the
provisions of the Faculty Manual is ambiguous as the term employment connotes a number of
meanings. Employment in its general sense connotes any work or service in exchange for
money. The loose connotation of employment may therefore cover jobs without an employer-
employee relationship. However, inasmuch as in this case, petitioner School drafted the said
policy, the term “employment” should be strictly construed against it. Moreover, it is settled
rule that in controversies between a labourer and his master, doubts reasonably arising
from the evidence, or in the interpretation of agreements and writings should be
resolved in the former’s favour. The act of respondent in selling insurance and cookware
was not the “employment” prohibited by the Faculty Manual. The prohibition against outside
employment was enacted to prevent the teacher from using the study leave period for
unsanctioned purposes since the School pays the teacher while pursuing further studies. That
rationale was not violated by respondent for the reason that her part-time activity of selling
insurance and cookware could not have prevented her in any way from studying and, more
importantly, she was not being paid by the School while on leave. How did the School expect
her and her family to survive without any income for one whole year?
Philippine Long Distance Telephone Co., v. NLRC (page 6)
The Philippine Constitution, while inexorably committed towards the protection of the
working class from exploitation and unfair treatment, nevertheless mandates the policy of
social justice so as to strike a balance between an avowed predilection for labor, on the one
hand, and the maintenance of the legal right of capital, the proverbial hen that lays the golden
egg, on the other. The Supreme Court, in PLDT v. NLRC, underscored that although it is
bound by the social justice mandate of the Constitution and the laws, such policy of social
justice is not intended to countenance wrongdoing.
International School Alliance case on inequality and discrimination (page 21, Chan
2019)
International School Alliance of Educators (ISAE) vs. Quisumbing, G.R. No. 128845, June 1,
2000
 In the workplace, where the relations between capital and labor are often skewed in favor of
capital, inequality and discrimination by the employer are all the more reprehensible. Section
3 specifically provides that labor is entitled to “humane conditions of work.” These
conditions are nor restricted to the physical work place – the factory, the office or field – but
include as well the manner by which employers treat their employees. The same provision of
the Constitution also directs the state to promote “equality of employment opportunities for
all.” Similarly, the Labor Code provides that the state shall “ensure equal work opportunities
regardless of sec, race or creed.” It would be an affront both to the spirit and letter of these
provisions if the State, in spite of its primordial obligation to promote and ensure equal
employment opportunities, closes its eyes to unequal and discriminatory terms and conditions
of employment.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article
133(135), for example, prohibits and penalizes the payment of lesser compensation to a
female employee as against a male employee for work of equal value. Article 259(248)
declares it an unfair labor practice for an employer to discriminate in regard to wages in order
to encourage or discourage membership in labor organization.

INTERPRETATION OF THE LABOR CODE

Article 4 enunciates the time-honored principle that all doubts in the implementation and
interpretation of its provisions should be resolved in favor of labor. This rule applies not only
in the interpretation of the provisions of the Labor Code but also of its Implementing Rules.
It applies to all workers - whether in the government or in the private sector - in order to give
flesh and vigor to the pro-poor and pro-labor provisions of the Constitution. It is in keeping
with the constitutional mandate of promoting social justice and affording protection to labor.
Thus, when conflicting interests of labor and capital are to be weighed on the scales of social
justice, the heavier influence of the latter should be counterbalanced by sympathy and
compassion the law must accord the underprivileged worker.
The Labor Code is one of the rare laws which expressly mandate the appropriate rule of
interpreting or construing its provisions. This is one unique feature of the Labor Code. The
rules on legal hermeneutics applicable to most statutes are not followed. Consequently, from
the inception of a legal controversy or case, labor has already an upper hand over the
employer. Once the doubt is not effectively overturned by clear and convincing evidence
expected to be propounded by the employer who, in most cases, has the burden of proof, the
controversy should by clear directive of the law, be decided in favor of labor.
This is of course, is not a harsh rule. The framers of the law (Labor Code and the Civil Code)
had fully taken cognizance of the disparity in terms of resources and standing between labor
and capital in any legal controversy between them, the former always suffers the most.
Hence, the common adage that those who have less in life should have more in law is best
exemplified and made real in Articles 4 and 1702 of the Labor Code and Civil Code
respectively. The worker must look up to the law for his protection. The law regards him with
tenderness and even favor and always with faith and hope in his capacity to help in shaping
the nation’s future. He must not be taken for granted.

Art. 1702, CC and Art. 4, LC, harmonized

Article 1702 of the Civil Code ordains that "In case of doubt, all labor legislation and all
labor contracts shall be construed in favor of the safety and decent living of the laborer.
Compared to the provision of Article 4 of the Labor Code, it appears that Article 1702 is
broader in scope in that it pertains to "all labor legislation and all labor contracts" and not
merely to the implementation and interpretation of the provisions of one single code, the
Labor Code, as well as its implementing rules and regulations, as enunciated in Article 4.
Moreover, the Civil Code embodies a standard which would justify the invocation of the
labor-tilted rule of interpretation in that the same should be done "in favor of the safety and
decent living for the laborer."
Having made such observation, it may well be said that the provisions of the Civil Code and
the Labor Code do not really differ since the policy of the law is clear - any doubt should
always be interpreted or construed in favor of labor - which means, in more specific terms the
safety and decent living for the laborer.

WHEN ART. 4, LC DOES NOT APPLY

The provision that in case of doubt in the interpretation of the provisions of the Labor Code,
the doubt should be resolved in favor of the laborer does not apply where the pertinent
provisions of the Labor Code leave no room for doubt either in their interpretation or
application. (Bonifacio v. GSIS, G.R. no. 62207, Dec. 15, 1986, 146 SCRA 276)
The employer has the right to expect from the employee no less than adequate work,
diligence and good conduct. (Coca-Cola Bottlers Philippines Incorporated v. NLRC, G.R.
nos. 82580 & 84075, April 25, 1989, 172 SCRA 751; Firestone Tire and Rubber Co. of the
Phils. v. Lariosa, G.R. no. L-70479, February 27, 1987, 148 SCRA 187)

APPLICABILITY OF LC; EXCEPTED WORKERS

Employees covered:
The existence of employer-employee relationship is necessary. Without this relationship, the
Labor Code does not apply.

Applicable to all workers irrespective of the nature of their work, that is whether it be
agricultural or non-agricultural, whether operated for profit or not.
Employees not covered:
The Labor Code has, in certain specified cases, excepted certain groups of workers from the
application of the rights and benefits provided therein, such as the following:
Article 82, Title I, Book III, which excludes the following workers from the coverage of the
provisions on working conditions and rest periods, more specifically on normal hours of
work, meal periods, night shift differential, overtime work, weekly rest periods, holidays,
service incentive leaves and service charges:

1. Government employees;
2. Managerial employees;
3. Field personnel;
4. Members of the family of the employer who are dependent on him for support;
5. Domestic helpers;
6. Persons in the personal service of another; and
7. Workers who are paid by results, as determined by the Secretary of Labor in
appropriate regulations.

Article 98, Title 11, Book III, which excludes the following workers from the coverage of the
provisions on wages:

1. Farm tenancy or leasehold;

2. Domestic service; and
3. Persons working in their respective homes in needle work or in any cottage
industry duly registered in accordance with law.

Article 255 [245], Title V, Book V, which provides for the ineligibility of managerial
employees to join, assist or form any labor organization.
Article 302 [287], Title 11, Book VI, which excepts from the coverage of the retirement pay
benefit, employees of retail, service and agricultural establishments or operations employing
not more than ten (10) employees or workers.

4 ELEMENTS/TESTS OF EMPLOYEER-EMPLOYEE RELATIONSHIP

There is no uniform test of employment relationship but the four (4) elements of an
employer-employee relationship are as follows:
(a) Selection and engagement of the employee;
(b) Payment of wages;
(c) Power of dismissal; and
(d) Employer’s power to control the employee’s conduct with respect to the means and
methods by which the work is to be accomplished [Brotherhood Labor Unity Movement of
the Philippines et. al. v. Zamora, G.R. No. 48645, (1987)]
The most important element is the employer’s control of the employee’s conduct, not only as
to the result of the work to be done, but also as to the means and methods to accomplish it.
[Lirio v. Genovia, G.R. No. 169757, (2011)].
The control test calls merely for the “existence” of the right to control and not the “actual
exercise” of the right. [Zanotte Shoes v. NLRC, G.R. No. 100665, (1995)].
Not every form of control will have the effect of establishing ER-EE relationship. The line
should be drawn between:
(1) Rules that merely serve as guidelines towards the achievement of mutually desired results
without dictating the means or methods to be employed in attaining it. These aim only to
promote the result. In such case, NO EE-ER relationship exists.
(2) Rules that control or fix the methodology and bind or restrict the party hired to the use of
such means. These address both the result and the means used to achieve it and hence, EE-ER
relationship exists. [Insular Life Assurance Co, LTD v. NLRC, G.R. No. 84484, (1989)].

TWO-TIERED TEST AS A BETTER AND MORE COMPREHENSIVE TEST

TWO-TIERED APPROACH.
(1) First Tier: Control Test (refer to the Four-Fold Test)
(2) Second Tier: The underlying economic realities of the activity or relationship. [Sevilla v.
Court of Appeals, G.R. Nos. L41182-3, (1988)].
The economic realities prevailing within the activity or between the parties are examined,
taking into consideration the totality of circumstances surrounding the true nature of the
relationship between the parties. 
The benchmark of economic reality in analyzing possible employment relationships for
purposes of applying the Labor Code ought to be the economic dependence of the worker on
his employer. 
The standard of “economic dependence” is whether the worker is dependent on the alleged
employer for his continued employment in that line of business. [Orozco v. CA, G.R. No.
155207, (2008)]

CASES WHERE EMPLOYER-EMPLOYEE RELATIONSHIP IS SUSPENDED, NOT

TERMINATED

Note: Termination of employer-employee relationship will be discussed separately

In the following cases, the employment relationship is deemed suspended by express
provisions of the Labor Code or its implementing rules:

1. In case of preventive suspension of an employee who is undergoing an

administrative investigation for an offence and his presence in the company
premises poses a serious or imminent threat to the life or property of the employer
or of his co-employees.
2. In case of imposition of punitive suspension as a form of disciplinary penalty on
an employee who is found guilty of committing a wrongful act under Art 297 of
the Labor Code or under the Company Rules and Regulations.
3. During off-season, in case of regular seasonal employment. The nature of the
relationship of regular seasonal workers with their employer is such that during
the off-season, they are temporarily laid off but they are re-employed during next
season or when their services may be needed.They are not separated from the
 service but are merely considered as on leave of absence without pay until they
are re-employed. Their employment relationship during off-season is never
severed but only suspended.
4. Under the following circumstances, Article 301 of the Labor Code deems he
employment relationship not terminated but merely suspended:


o Bona-fide suspension by the employer of the employer of the
operation of his business or undertaking for a period not exceeding 6
months;
o Fulfillment by the employee of a military duty; or
o Fulfilment by the employee of a civic duty.