PART I: INTRODUCTORY MATERIALS
SECTION 1. LABOR LAW IN GENERAL1.01 Labor Law Defined
LABOR LAW: law governing the rights and duties of the employer and the employee with respect to the terms and conditions of employment, and with respect to labor disputes arising from collective bargaining respecting such terms and conditions
1.02 Law Classification (3 Branches)
LABOR STANDARDS LAW: sets out the minimum terms, conditions and benefits of employment that employers must provide or comply with and to which employees are entitled as a matter of legal right.
Labor standards, as defined by jurisprudence, are the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost-f-living allowance, and other monetary and welfare benefits, including occupational, safety and health standards (Maternity Children’s Hospital v Secretary of Labor, GR No. 78909, June 30,
1989).
LABOR RELATIONS LAW: defined the status, rights and duties, and the institutional mechanisms, that govern the individual and collective interactions of employers, employees or their representatives.
WELFARE LAWS (SOCIAL LEGISLATION): laws that provide particular kinds of protection or benefits to society or segments thereof in furtherance of social justice.
*SOCIAL JUSTICE: the aim, reason and justification of labor laws. Cases (Labor Standards)
Batong Buhay Goldmines, Inc. v De La Serna (312 SCRA 22)
Labor standards refers to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety and health standards.Labor standards cases are governed by Article 128(b) of the Labor Code.
Peñaranda v Baganga Plywood Corp. (489 SCRA 94)
Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and
premium pay for working on rest days. Under this provision, managerial employees are “those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision.”
1.03 Basis for Enactment of Labor Law 1. 1987 CONSTITUTION
ART. II. SEC. 5: “The maintenance of peace and order, the protection of life, liberty and property and promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.” 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. 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.
To this end, the State shall regulate the acquisition, ownership, use and disposition of property and its increments.”
Cases (Police Power)
CMS Estate, Inc. v SSS (132 SCRA 106)
The SSS Law implements the general welfare mandate of the Constitution and constitutes a legitimate exercise of the police power of the State, to which the principle of non-impairment of the obligation of contract is not a proper defense. It was enacted pursuant to the policy of the government “to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death (Sec. 2)
1.04 Sources of Law
A. Labor Code and Related Special Legislation (including Implementing Rules)
Cases
Mariveles Shipyard Corp. v CA (415 SCRA 573)
Petitioner cannot evade its liability by claiming that it had religiously paid the compensation of guards as stipulated under the contract with the security agency. Labor standards are enacted by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs of their basic needs. Labor laws are considered written in every contract. Stipulations in violation thereof are considered null. Similarly, legislated wage increases are deemed amendments to the contract. Thus, employers cannot hide behind their contracts in order to evade their (or their contractors’ or subcontractors’) liability for noncompliance with the statutory minimum wage.
B. Contract (Civil Code)
ART. 1305: “A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.”
ART. 1306: “The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy.”
Cases
Kasapian ng Malayang Manggagawa sa Coca-Cola v CA (487 SCRA 487)
The MOA, being a contract freely entered into by the parties, now constitutes as the law between them, and the interpretation of its contents purely involves an evaluation of the law as applied to the facts herein.
C. Collective Bargaining Agreement
BOOK 5, RULE I, SEC. 1 (J): CBA “refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit.” Cases
DOLE Phils., v Pawis ng Makabayang Obrero (395 SCRA 112)
The CBA is the norm of conduct between the parties and compliance therewith is mandated by the express policy of the law.
D. Past Practices (Company Practices) Requisites:
1. Freely, voluntarily and continuously given within a considerable length of time
2. Not just a single instance (not granted only once)
3. Should have been done over a long period of time and must be shown to have been consistent and deliberate
4. Not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer
Cases
Arco Metal Products Co. v Samahan (554 SCRA 111)
In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily and consistently granting full benefits to its employees regardless of the length of service rendered. True, there were only a total of seven employees who benefited from such a practice, but it was an established practice nonetheless. Jurisprudence has not laid down any rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary company practice.Thus, it can be six (6) years,three (3) years, or even as short as two (2) years. Petitioner cannot shirk away from its responsibility by merely claiming that it was a mistake or an error, supported only by an affidavit of its manufacturing group head.
McLeod v NLRC (512 SCRA 222)
That at one time PMI reimbursed McLeod for his and his wife’s plane tickets in a vacation to London could not be deemed as an established practice considering that it happened only once. To be considered a "regular practice," the giving of the benefits should have been done over a long period, and must be shown to have been consistent and deliberate.
Davao Fruits Corporation v Associated Labor Union (225 SCRA 562)
The Supplementary Rules and Regulations put to rest all remaining doubts as to the computation of the 13th months pay. Yet, DFC freely, voluntarily
and continuously computed and paid the 13th month pay including its items,
which were supposed to be excluded, payments for sick/vacation/maternity leave; premiums for work done on rest days and special holidays; and pay for regular holidays.
Samahang Manggagawa etc v NLRC (295 SCRA 171)
No benefits or privileges previously enjoyed by petitioner union and the other employees were withdrawn as a result of the manner by which private respondent implemented the wage orders. Granted that private respondent had granted an across-the-board increase pursuant to Republic Act No. 6727, that single instance may not be considered an established company practice.
American Wire and Cable Daily Rated Employees Union v American Wire and Cable Co., Inc. (457 SCRA 684)
The giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. The 35% premium pay, notwithstanding the fact that it was deliberately given in excess of that required by law, did not ripen into a company practice on account of the fact that it was only granted for 2 years and with respondent corporation’s express reservation that it cannot continue to grant the same in view of the company’s current financial situation.
Pag-asa Steel Works, Inc. v CA (486 SCRA 475)
To ripen into a company practice that is demandable as a matter of right, the giving of the increase should not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer. Hence, even if the company continuously grants a wage increase as mandated by a wage order or pursuant to a CBA, the same would not automatically ripen into a company practice. In this case, petitioner granted the increase under Wage Order No. NCR-07 on its belief that it was obliged to do so under the CBA.
E. Company Policies Cases
Suico v NLRC (513 SCRA 375)
Employers are allowed, under the broad concept of management prerogative, to adopt company policies that regulate all aspects of personnel administration including the dismissal and recall of workers.
Company policies or practices are binding on the parties. Some can ripen into an obligation on the part of the employer, such as those, which confer benefits on employees or regulate the procedures and requirements for their termination.
China Banking Corporation v Borromeo (440 SCRA 622)
Company policies are generally binding and valid on the parties and must be complied with until finally revised/amended unilaterally or preferably through negotiation by competent authority unless shown to be grossly oppressive or contrary to law.
Maneja v NLRC (290 SCRA 603)
“Company personnel policies” are guiding principles stated in broad, long-range terms that express the philosophy or beliefs of an organization’s top authority regarding personnel matters. They deal with matters affecting efficiency and wellbeing of employees and include, among others, the procedure in the administration of wages, benefits, promotions, transfer and other personnel movements, which are usually not spelled out in the
collective agreement. The usual source of grievances, however, is the rules and regulations governing disciplinary actions.
1.05 Law and Worker Cases
Amkor Technology v Juangco (512 SCRA 325)
While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be expected that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play.
Cebu Royal Plant v Hon. Deputy Minister of Labor (153 SCRA 38)
Bias in favor of labor: We take this opportunity to reaffirm our concern for the lowly worker who, often at the mercy of his employers, must look up to the law for his protection. Fittingly, that 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. It is error to take him for granted. He deserves our abiding respect. How society treats him will determine whether the knife in his hands shall be a caring tool for beauty and progress or an angry weapon of defiance and revenge. The choice is obvious, of course. If we cherish him as we should, we must resolve to lighten "the weight of centuries" of exploitation and disdain that bends his back but does not bow his head.
1.06 Labor Case Cases
Enriquez v BPI (544 SCRA 593)
While it is true that rules of procedure are intended to promote rather than frustrate the ends of justice, and the swift unclogging of court dockets is a laudable objective, it nevertheless must not be met at the expense of substantial justice. This Court has time and again reiterated the doctrine that the rules of procedure are mere tools aimed at facilitating the attainment of justice, rather than its frustration. A strict and rigid application of the rules must always be eschewed when it would subvert the primary objective of the rules, that is, to enhance fair trials and expedite justice. Technicalities should never be used to defeat the substantive rights of the other party. Every party-litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. Considering that there was substantial compliance, a liberal interpretation of procedural rules in this labor case is more in keeping with the constitutional mandate to secure social justice.
Smart Communications v Astorga (542 SCRA 435)
Contrary to the CA’s ratiocination, the RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in denying Astorga’s motion to dismiss. SMART’s demand for payment of the market value of the car or, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the relationship of debtor and creditor rather than employee-employer relations. As such, the dispute falls within the jurisdiction of the regular courts.
Emmanuel v BPI (544 SCRA 590): case cannot be located Pioneer Concrete Products, Inc. v Todaro (524 SCRA 153)
Where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction.In the present case, no employer-employee relationship exists between petitioners and respondent. In fact, in his complaint, private respondent is not seeking any relief under the Labor Code, but seeks payment of damages on account of petitioners' alleged breach of their obligation under their agreement to employ him. It is settled that an action for breach of contractual obligation is intrinsically a civil dispute. In the alternative, respondent seeks redress on the basis of the provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear that the present action is within the realm of civil law, and jurisdiction over it belongs to the regular courts.
Villamaria v CA (487 SCRA 571)
The rule is that, the nature of an action and the subject matter thereof, as well as, which court or agency of the government has jurisdiction over the same, are determined by the material allegations of the complaint in relation to the law involved and the character of the reliefs prayed for, whether or not the complainant/plaintiff is entitled to any or all of such reliefs.A prayer or demand for relief is not part of the petition of the cause of action; nor does it enlarge the cause of action stated or change the legal effect of what is alleged. In determining which body has jurisdiction over a case, the better policy is to consider not only the status or relationship of the parties but also the nature of the action that is the subject of their controversy.
An employer-employee relationship is an indispensable jurisdictional requisite. The jurisdiction of Labor Arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes or their collective bargaining agreement. Not every dispute between an employer and employee involves matters that only the Labor Arbiter and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. Actions between employers and employees where
the employer-employee relationship is merely incidental is within the exclusive original jurisdiction of the regular courts. When the principal relief is to be granted under labor legislation or a collective bargaining agreement, the case falls within the exclusive jurisdiction of the Labor Arbiter and the NLRC even though a claim for damages might be asserted as an incident to such claim.
Lapanday Agricultural Development Corp v CA (324 SCRA 77)
Where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists.
1.07 Case Decision Cases
Philmore v Suganob (557 SCRA 439)
The policy of our judicial system is to encourage full adjudication of the merits of an appeal. Procedural niceties should be avoided in labor cases, as the provisions of the Rules of Court are applied only in a suppletory manner. In addition, averments in the pleadings, not the title, are controlling in determining the nature of the proceedings.
EDI Staff Builders International Inc. v Magsino (359 SCRA 212)
It has been settled that no undue sympathy is to be accorded to any claim of a procedural misstep in labor cases. Such cases must be decided according to justice and equity and the substantial merits of the controversy.
Anino v NLRC (290 SCRA 489)
This case is an exception to the general rule that findings of fact of the NLRC are to be accorded respect and finality on appeal. It is equally well-settled that this Court will not uphold erroneous conclusions of the NLRC when it reverses decisions of the labor arbiters or when the findings of facts, from which its conclusions were based, are nor supported by substantial evidence.
The Court finds occasion to remind courts and quasi-judicial bodies that "[a] decision should faithfully comply with Section 14, Article VIII of the Constitution which provides that no decision shall be rendered by any court
[or quasi-judicial body] without expressing therein clearly and distinctly the facts of the case and the law on which it is based. . . . It is a requirement of due process and fair play that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court [or quasi-judicial body]. A decision that does not clearly and distinctly stare the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court [or quasi-judicial body] for review by a higher tribunal."
1.08 Management Function RECOGNITION
1. It is the employer’s prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders and instructions of the employer and willful or intentional disobedience thereof, as a general rule, justifies recission of the contract of service and the preemptory dismissal of the employee.
2. The Court has always respected a company’s exercise of its prerogative to devise means to improve its operations. Thus, it has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of employees, working methods, time, place and manner of work.
Cases
San Miguel Corp. v NLRC (551 SCRA 410)
An employer has the prerogative to prescribe reasonable rules and regulations necessary for the proper conduct of its business, to provide certain disciplinary measures in order to implement said rules and to assure that the same would be complied with. An employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees.
It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition. Thus, in the implementation of its rules and policies, the employer has the choice to do so strictly or not, since this is inherent in its right to control and manage its business effectively. Consequently, management has the prerogative to impose sanctions lighter than those specifically prescribed by its rules, or to condone completely the violations of its erring employees. Of course, this prerogative must be exercised free of grave abuse of discretion, bearing in mind the requirements of justice and fair play.
Norkis Trading Co., Inc. v Gnilo (544 SCRA 278)
Well-settled is the rule that it is the prerogative of the employer to transfer and reassign employees for valid reasons and according to the requirement of its business. An owner of a business enterprise is given considerable leeway in managing his business. Our law recognizes certain rights, collectively called management prerogative as inherent in the management of business enterprises. We have consistently recognized and upheld the prerogative of management to transfer an employee from one office to another within the business establishment, provided that there is no demotion in rank or diminution of his salary, benefits and other privileges and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprises effectively.
The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.
Punzal v ETSI Technologies Inc (518 SCRA 66)
It is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employers’ interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite.
Torreda v Toshiba (515 SCRA 133)
The employer’s right to conduct the affairs of his business, according to its own discretion and judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment, including 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 law, in protecting the rights of workers, authorizes neither oppression nor self-destruction of the employer.
Union Filipro v Nestle Phils. Inc. (449 SCRA 521)
Employers are accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. In this
connection, the rule is that good faith is always presumed. As long as the company’s exercise of the same is in good faith to advance its interest and not for purpose of defeating or circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld.
Star Paper Corp. v Simbol (487 SCRA 228)
This company policy was decreed pursuant to what the respondent corporation perceived as management prerogative. This management prerogative is quite broad and encompassing for it covers hiring, work assignment, working method, 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. Except as provided for or limited by special law, an employer is free to regulate, according to his own discretion and judgment all the aspects of employment.
LIMITATIONS
1. Law, CBA, fair play and justice
2. Even as the law is solicitous of the welfare of employees, it must also protect the rights of an employer to exercise what are clearly management prerogatives. As long as the company’s exercise of those rights and prerogatives is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.
Cases
Marival Trading Inc. v NLRC (525 SCRA 708)
Terminating employment is one of Marival’s prerogatives as an employer. As an employer, Marival has the right to regulate, according to its discretion and best judgment, work assignment, 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.
Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. This Court has upheld a company’s management prerogatives so long as they are exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements. Tinio v CA (524 SCRA 533)
The act of management in reorganizing as well as transferring its employees to achieve its stated objectives is a legitimate exercise of their management prerogatives, barring any showing of bad faith which is absent in the instant case.
1.09 Compromise and Waiver
The law frowns upon waivers and compromise as a general principle because it is subject to abuse (the law recognizes that the situation is not of even ad equal terms between the employer and the employee). However, not all compromise and waivers are void or contrary to law. Labor law is not meant to oppress employers. Just as it protects the employees, it also protects employers. There’s a shared responsibility—employees’ right to the fruits of their labor and the employers’ rights to the return of their capital/investment).
Test to determine the validity of compromise and waivers: 1. Voluntarily entered into
2. Proximate equality, no moral ascendancy over the other 3. Amount is reasonable and not unconscionable
ART. 227: “Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court, shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.” ART. 2028 (NCC): “A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.”
ART. 2036 (NCC): “A compromise comprises only those objects which are definitely stated therein, or which by necessary implication from its terms should be deemed to have been included in the same.
A general renunciation of rights is understood to refer only to those that are connected with the dispute which was the subject of the compromise.” Cases
Universal Robina v Caballeda (560 SCRA 115)
Generally, the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees. They are frowned upon as contrary to public policy. A quitclaim is ineffective in barring recovery of the full measure of a worker's rights, and the acceptance of benefits therefrom does not amount to estoppel.
In exceptional cases, the Court has accepted the validity of quitclaims executed by employees if the employer is able to prove the following
requisites: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. In this case, petitioners failed to establish all the foregoing requisites.
Universal Staffing Services, Inc. v NLRD (559 SCRA 221)
Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer.
Flight Attendants and Stewards Association of the Phil. v PAL (559 SCRA 252)
Quitclaims executed as a result of PAL’s illegal retrenchment program are likewise annulled and set aside because they were not voluntarily entered into by the retrenched employees; their consent was obtained by fraud or mistake, as volition was clouded by a retrenchment program that was, at its inception, made without basis. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. The amounts already received by the retrenched employees as consideration for signing the quitclaims should, however, be deducted from their respective monetary awards.
Hanjin etc. v Ibanez (555 SCRA 537)
The Quitclaims which the respondents signed cannot bar them from demanding what is legally due them as regular employees. As a rule, quitclaims and waivers or releases are looked upon with disfavor and frowned upon as contrary to public policy. They are thus ineffective to bar claims for the full measure of a worker's legal rights, particularly when the following conditions are applicable: 1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face. To determine whether the Quitclaims signed by respondents are valid, one important factor that must be taken into account is the consideration accepted by respondents; the amount must constitute a reasonable settlement equivalent to the full measure of their legal rights. In this case, the
Quitclaims signed by the respondents do not appear to have been made for valuable consideration. Respondents, who are regular employees, are entitled to backwages and separation pay and, therefore, the Quitclaims which they signed cannot prevent them from seeking claims to which they are entitled.
Michael Press v Galit (545 SCRA 23)
Waiver is a voluntary and intentional relinquishment or abandonment of a known legal right or privilege.It has been ruled that a waiver to be valid and effective must be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. Hence, the management prerogative to discipline employees and impose punishment is a legal right which cannot, as a general rule, be impliedly waived.
Arellano v Powertech Corporation (542 SCRA 182)
We rebuke Powertech’s unscrupulous and despicable act of using an apparently valid compromise agreement to evade payment of its legal obligation to petitioners. We will not allow employers to make a mockery of our legal system by using legal means to perpetrate fraud. This should serve as a warning to parties in labor cases to endeavor to achieve a just and equitable resolution of their disputes and to enter into compromise agreements in good faith.
SECTION 2. LABOR AND THE CONSTITUTION
2.01 Historical Background/Rationale Cases
Antamok Goldfields Mining Co. v CIR (70 Phil. 340)
• It should be observed at the outset that our Constitution was adopted in the midst of surging unrest and dissatisfaction resulting from economic and social distress which was threatening the stability of governments the world over. General provisions were inserted in the Constitution which are intended to bring about the needed social and economic equilibrium between component elements of society through the application of what may be termed as the justitia communis advocated by Grotius and Leibnits many years ago to be secured through the counterbalancing of economic and social forces and opportunities which should be regulated, if not controlled, by the State or placed, as it were, in custodia societatis. • "The promotion of social justice to insure the well-being and
economic security of all the people' was thus inserted as vital principle in our Constitution. (Sec. 5, Art. II, Constitution.) And in order that this declaration of principle may not just be an empty
medley of words, the Constitution in various sections thereof has provided the means towards its realization.
o Section 6 of Articles XIII declares that the State "shall afford
protection to labor, especially to working women and minors, and shall regulated the relations between landowner and tenant, and between labor and capital in industry and in agriculture." It also states that "the State may provide for compulsory arbitration."
o In extraordinary cases mentioned in section 16, Articles VI, of the Constitution, the President of the Philippines may be authorized by law, for a limited period and subject to such restrictions as the National Assembly may prescribed, to "promulgate rules and regulations to carry out a declared
national policy."
• In our Bill of Rights we now find the following provision "The right to form associations or societies for purposes not contrary to law shall not be abridged." (Par. 6, section 1, art. III, Constitution.)
• By and large, these provisions in our Constitution all evince and express the need of shifting emphasis to community interest with a view to affirmative enhancement of human values. In conformity with the constitutional objective and cognizant of the historical fact that industrial and agricultural disputes had given rise to disquietude, bloodshed and revolution in our country, the National Assembly enacted Commonwealth Act No. 103 (Minimum wage for laborers and maximum rental to be paid by tenants, and to enforce compulsory arbitration), and, later, Commonwealth Act. No. 213 (Regulation of labor organizations).
• The statute was enacted in pursuance of what appears to be deliberate embodiment of a new social policy, founded on the conception of a society integrated not by independent individuals dealing at arms' length, but by interdependent members of a consolidated whole whose interests must be protected against mutual aggression and warfare among and between divers and diverse units which are impelled by counter vailing and opposite individual and group interests, and this is particularly true in the relationship between labor and capital. Social and industrial disturbances which fifty years ago were feudal-like and of isolated importance may now well result in a serious strain upon the entire economic organism of the nation .
• The policy of laissez faire has to some extent given way the assumption by the government of the right of intervention even in contractual relations affected with public interests. • In Commonwealth Act No. 103, and it, our Government no longer
performs the role of a mere mediator or intervenor but that of the supreme arbiter.
2.02 Nature of Provision Cases
PCL Shipping Phils., Inc. v NLRC (511 SCRA 44)
In carrying out and interpreting the Labor Code's provisions and its implementing regulations, the employee's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided in Article 4 of the Labor Code which states that "[a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code including its implementing rules and regulations, shall be resolved in favor of labor", and Article 1702 of the Civil Code which provides that "[i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer."
Phil. Airlines, Inc. v Santos (218 SCRA 415)
It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes such sympathy, but because of the one-sided relation between labor and capital. The constitutional mandate for the promotion of labor is as explicit as it is demanding. The purpose is to place the workingman on an equal plane with management — with all its power and influence — in negotiating for the advancement of his interests and the defense of his rights.Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privileges in life should have more privileges in law.
2.03 1987 Constitution A. Labor Sector
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.” B. Protection of Labor
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 to investments, and to expansion and growth.”
7 Basic Rights of Labor—Right to… 1. Organize
2. Conduct collective bargaining or negotiation with management 3. Engage in peaceful concerted activities including strike in
accordance with law 4. Enjoy security of tenure 5. Work under humane conditions 6. Receive a living wage
7. Participate in policy and decision-making processes affecting their rights and benefits as may be provided by law
COMPARE
ART. XIV, SEC. 6 (1935): “The State shall afford protection to labor, especially to working women, and minors, and shall regulate the relations between the landowner and tenant, and between labor and capital in industry and in agriculture. The State may provide for compulsory arbitration.”
ART. II, SEC. 9 (1973): “The State shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relation 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 State may provide for compulsory arbitration.”
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.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.”
ART. XIII, SEC. 3: see above.
ART. II, SEC. 10: “The State shall promote social justice in all phases of national development.”
ART. II, SEC. 18: see above. Cases
Lopez v Metropolitan Waterworks and Sewerage Authority (462 SCRA )
The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to the labor class for no less than the Constitution dictates that “the State . . . shall protect the rights of workers and promote their welfare.” It is committed to this policy and has always been quick to rise to defense in the rights of labor, as in this case.
Protection to labor, it has been said, extends to all of labor--local and overseas, organized and unorganized, in the public and private sectors. Besides, there is no reason not to apply this principle in favor of workers in the government. The government, including government-owned and controlled corporations, as employers, should set the example in upholding the rights and interests of the working class.
C. Social Justice
ART. II, SEC. 10: “The State shall promote social justice in all phases of national development.”
ART. II, SEC. 5 (1935): “The promotion of social justice to insure the well-being and economic security of all the people should be the concern of the State.”
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.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.”
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.”
DEFINITION: Cases
Enriquez v BPI (544 SCRA 453)
While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own rights, which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.
PLDT v Bolso (530 SCRA 550)
Upholding the employee’s interest in disregard of the employer’s right to dismiss and discipline does not serve the cause of social justice. Social justice ceases to be an effective instrument for the “equalization of the social and economic forces” by the State when it is used to shield wrongdoing.
Calalang v Williams (70 Phil. 726)
Humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objective secular conception may at least be approximated.
LIMITS OF USE: Cases
Heirs of Jugalbot v CA (518 SCRA 202)
On one final note, it may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed against them. As the court of last resort, our bounden duty to protect the less privileged should not be carried out to such an extent as to deny justice to landowners whenever truth and justice happen to be on their side. For in the eyes of the Constitution and the statutes, EQUAL JUSTICE UNDER THE LAW remains the bedrock principle by which our Republic abides.
Agabon v NLRC (442 SCRA 573)
Constitutional policy for full protection of labor is not a sword to oppress employers.
PLDT v NLRC (164 SCRA 671)
Not intended to countenance wrongdoing simply because it is committed by the underprivileged. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege.
2.04 Constitutional Rights and Labor Law A. Management and the Constitution
General Rule: the Constitution protects and promotes the welfare of the employees.
Exception: When the employer is right and the employee is wrong. Cases
Sarocam v Interorient Maritime Enterprises, Inc. (493 SCRA 502)
We emphasize that the constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the right.cÐ
Dayan v Bayer of the Phil. Islands (369 SCRA 712)
Law, in protecting the rights of labor, authorizes neither oppression nor self-destruction of an employer company which itself is possessed of rights that must be entitled to recognition and respect.
B. Equal Work Opportunities Cases
Francisco v NLRC (500 SCRA 690)
In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development.
Star Paper Corp. v Simbol (487 SCRA 228)
Article 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, 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.
We note that since the finding of a bona fide occupational qualification justifies an employer’s no-spouse rule, the exception is interpreted strictly and narrowly by these state courts. There must be a compelling business necessity for which no alternative exists other than the discriminatory practice.To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislature’s silence that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative. Corollarily, the issue as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic.
C. Labor as Property Cases
Executive Secretary v CA (429 SCRA 81)
A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others.
Asuncion v NLRC (362 SCRA 56)
A worker’s employment is property in the constitutional sense. He cannot be deprived of his work without due process.
Maneja v NLRC (290 SCRA 603)
It bears stressing that a worker's employment is property in the constitutional sense. He cannot be deprived of his work without due process of law. Substantive due process mandates that an employee can only be dismissed based on just or authorized causes. Procedural due process requires further that he can only be dismissed after he has been given an opportunity to be heard. The import of due process necessitates the compliance of these two aspects.
D. Due Process Requirements Cases
Ang Tibay v CIR (59 Phil. 635)
Requirements:
1. Right to a hearing, includes the right of a party to present his own case and submit evidence in support thereof.
2. The tribunal must consider the evidence presented. 3. Decision must be supported by evidence.
4. Evidence must be substantial—more than a mere scintilla, such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable would opine otherwise.
5. Decision must be rendered on the evidence presented at the hearing or at least contained in the records and disclosed to the parties affected.
Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them.
6. Independent consideration of judge—must not simply accept the views of a subordinate in arriving at a decision.
7. Decision rendered in such a manner as to let the parties know the various issues involved and the reasons for the decision rendered.
Air Manila Inc. v Balatbat (38 SCRA 489)
Additional Requirement: A tribunal so constituted as to give him reasonable assurance of honesty and impartiality, and one of competent jurisdiction. Note: For termination cases, twin notice rule—Notice to Explain and Notice of Termination (Agabon v NLRC, 442 SCRA 573)
Century Textile Mills, Inc. v NLRC (161 SCRA 528)
The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer's intent to dismiss and the reason for the proposed dismissal; upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly to defend himself therefrom before dismissal is effected. Neither of these two requirements can be dispensed with without running afoul of the due process requirement of the 1987 Constitution.
E. Liberty of Contract/Laissez-faire and State Interference Cases
Phil. Association of Service Exporters v Drilon (163 SCRA 386)
"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more paramount 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.
The Court finds furthermore that the Government has not indiscriminately made use of its authority. It is not contested that it has in fact removed the prohibition with respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targeted by the Government. Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this jurisdiction, where laissez faire has never been fully accepted as a controlling economic way of life.
Leyte Land Transportation Co. v Leyte Farmers and Workers Union (80 Phil. 842)
State still exercises control/power to interfere where the parties are not equal in standing
F. Welfare State Cases
Alalayan v NPC (24 SCRA 172)
The welfare state concept is not alien to the philosophy of our Constitution. It is implicit in quite a few of its provisions. There is the clause on the promotion of social justice to ensure the well-being and economic security of all the people, as well as the pledge of protection to labor with the specific authority to regulate the relations between landowners and tenants and between labor and capital.
G. Participation in Decision Making Process Cases
PAL v NLRC (225 SCRA 301)
Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to participate in the deliberation of matters, which may affect their rights and the formulation of policies
relative thereto. And one such mater is the formulation of a code of discipline.
Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To promote the enlightenment of workers concerning their rights and obligations . . . as employees." This was, of course, amplified by Republic Act No 6715 when it decreed the "participation of workers in decision and policy making processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic
Act No. 6715 had not yet been enacted (Petitioner's Memorandum, p. 44;
Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet
founded in law when the Code was formulated, the attainment of a harmonious labor-management relationship and the then already existing state policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves affecting employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly implemented in the absence of full cooperation of the employees. Such
cooperation cannot be attained if the employees are restive on account, of their being left out in the determination of cardinal and fundamental matters affecting their employment.
Phil. Association of Service Exporters v Drilon (163 SCRA 386)
The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and decision-making processes affecting their rights and benefits" is not well-taken. The right granted by this provision, again, must submit to the demands and necessities of the State's power of regulation.
The Constitution declares that:
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.
"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more paramount 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. The Court finds furthermore that the Government has not indiscriminately made use of its authority. It is not contested that it has in fact removed the prohibition with respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targeted by the Government. Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this jurisdiction, where laissez faire has never been fully accepted as a controlling economic way of life.
This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of the Government, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of Government regulation. The interest of the State is to provide a decent living to its citizens. The Government has convinced the Court in this case that this is its intent. We do not find the impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief prayed for.
SECTION 3. LABOR AND THE CIVIL CODE
3.01 Role of Law
ART. 1700: “The relation 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 special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.”
Cases
Phil. Telephone and Telegraph Co. v NLRC (272 SCRA 596)
While it is true that the parties to a contract may establish any agreements, terms, and conditions that they may deem convenient, the same should not be contrary to law, morals, good customs, public order, or public policy. Carried to its logical consequences, it may even be said that petitioner’s policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage.
Parenthetically, the Civil Code provisions on the contract of labor state that the relations between the parties, that is, of capital and labor, are not merely contractual, impressed as they are with so much public interest that the same should yield to the common good. It goes on to intone that neither capital nor labor should visit acts of oppression against the other, nor impair the interest or convenience of the public. In the final reckoning, the danger of just such a policy against marriage followed by petitioner PT&T is that it strikes at the very essence, ideals and purpose of marriage as an inviolable social institution and, ultimately, of the family as the foundation of the nation. That it must be effectively interdicted here in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of the laws of the land is not only in order but imperatively required.
Brew Master International, Inc. v NAFLU (271 SCRA 275)
While the employer is not precluded from prescribing rules and regulations to govern the conduct of his employees, these rules and their implementation must be fair, just and reasonable. It must be underscored that no less than our Constitution looks with compassion on the workingman and protects his rights not only under a general statement of a state policy, but under the Article on Social Justice and Human Rights,thus placing labor contracts on a higher plane and with greater safeguards. Verily, relations between capital and labor are not merely contractual. They are impressed with public interest and labor contracts must, perforce, yield to the common good.
