1 Introduction To Labor Laws PDF
1 Introduction To Labor Laws PDF
PART 1
1. 2. 3. 4. 5. 6. 7.
Adam Smith and the Invisible Hand Government regulation in the Philippines: PD 442 Classifications of labor laws What labor laws encompasses Foundation of labor laws: Police Power Aim, reason, justification for labor laws: Social Justice Constitutional basis of social justice
8. Constitutional basis of labor laws 9. Balancing the interest of the employer and the employees 10. International Labor Organization 11. Construction in favor of labor 12. Existence of Employer-Employee relations
A. Four-fold test B. Economic Reality Test C. Two-tiered test (Multi-factor test)
Historically, the U.S. government policy toward business was summed up by the French term laissez-faire -- "leave it alone." The concept came from the economic theories of Adam Smith, the 18th-century Scot whose writings greatly influenced the growth of American capitalism. Smith believed that private interests should have a free rein. As long as markets were free and competitive, he said, the actions of private individuals, motivated by self-interest, would work together for the greater good of society. Smith did favor some forms of government intervention, mainly to establish the ground rules for free enterprise. But it was his advocacy of laissez-faire practices that earned him favor in America, a country built on faith in the individual and distrust of authority.
categories -- economic regulation and social regulation. Economic regulation seeks, primarily, to control prices. Designed in theory to protect consumers and certain companies (usually small businesses) from more powerful companies, it often is justified on the grounds that fully competitive market conditions do not exist and therefore cannot provide such protections themselves. In many cases, however, economic regulations were developed to protect companies from what they described as destructive competition with each other. Social regulation, on the other hand, promotes objectives that are not economic -- such as safer workplaces or a cleaner environment _faire.htm
http://economics.about.com/od/governmenttheeconomy/a/laissez
ambition benefits society, even if the ambitious have no benevolent intentions directly linked to the concept of the market: specifically that it is competition between buyers and sellers that channels the profit motive of individuals on both sides of the transaction such that improved products are produced and at lower costs. For example, the inhabitants of a poor country will be willing to work very cheaply, so entrepreneurs can make great profits by building factories in poor countries. Because they increase the demand for labor, they will increase its price; further, because the new producers also become consumers, local businesses must hire more people to provide the things they want to consume. As this process continues, the labor prices eventually rise to the point where there is no advantage for the foreign countries doing business in the formerly poor country. Overall, this mechanism causes the local economy to function on its own.
argument against protectionism and government regulation of markets, but it is based on very broad principles developed by Bernard Mandeville, Bishop Butler, Lord Shaftesbury, and Francis Hutcheson. In general, the term "invisible hand" can apply to any individual action that has unplanned, unintended consequences, particularly those that arise from actions not orchestrated by a central command, and that have an observable, patterned effect on the community. [Source: Wikipedia)
QUERY
laissez-faire doctrine of capitalism works well to stabilize industrial relations, is there still a need for government regulation?
As amended:
PRESIDENTIAL DECREE Nos. BATAS PAMBAN SA Blg. EXECUTIV E ORDER Nos. REPUBLIC ACT Nos.
570-A, 626, 643, 32, 70, 823, 819, 849, 130, 227 850, 865-A, 891, 1367, 1368, 1391, 1412, 1641, 1691, 1692, 1693, 1920, 1921
47, 111, 126, 179, 180, 203, 247, 251, 252, 307, 797
6640, 6657, 6715, 6725, 6727, 7641, 7655, 7700, 7730, 7796, 8042, 8188, 8558, 9177, 9256, 9347, 9481
Defines the status, right and duties as well as the institutional mechanism governing EE-ER interactions Benefits provided for the wellbeing of a segment of society in furtherance of social justice and provides for the EE while he cannot work by reason of sickness or other hazard
welfare of workers and employees and regulate their relations with their employees JUDICIAL DECISIONS applying and interpreting the aforesaid statutes RULES AND REGULATIONS issued by the administrative agencies, within their legal competence, to implement labor statutes
safety and health of employees as an exercise of their police power. The right of every person to pursue a business, occupation or profession is subject to the paramount right of the government as a part of its police power to impose such restrictions and regulations as the protection of the public may require.
LAISSEZ FAIRE (DOCTRINE OF FREE ENTERPRISE) GOVERNMENT REGULATION
shall protect the rights of workers and promote their welfare. RIGHTS OF WORKERS: A. To organize themselves and collectively bargain B. To engage in peaceful concerted activities (strike, picket, etc.) C. To enjoy security of tenure D. To work under humane conditions of work E. To receive a living wage F. To participate in policy and decision-making processes affecting their rights and benefits as may be provided by law
Ex. Department Order No. 1 (1988) which temporarily suspended deployment of female domestic workers abroad
A petition was filed by an association of service exporters
challenging the constitutional validity of the order because it does not apply to ALL Filipino workers but only to domestic helpers and females with similar skills and is violative of the right to travel. RULING: The Court denied the petition. Based on police power, the State can legislate laws that may interfere with the personal liberty or property to promote the general welfare. Even if the order pertains to female workers only, the same is not discriminatory since it is based on valid distinctions and applicable to all those belonging in the same class.
labor, it does not mean that capital will not be protected. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments. The State shall regulate the relations between workers and employers. While labor is entitled to a just share in the fruits of production, the enterprise is also entitled to a reasonable return on investment, expansion and growth. The State shall promote shared responsibility between ER & EE and voluntary modes of settling disputes
subscribes to the following principles: 1. Labor is not a commodity 2. Freedom of expression and of association are essential to sustained progress 3. Poverty anywhere constitutes a danger to property everywhere 4. War against want requires to be carried on with unrelenting vigor within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments (tripartite), join with them in free discussion and democratic decisions with a view to the promotion of the common welfare.
TRIPARTISM
Govt
ILO EEs ERs
provisions of the Code, including its implementing rules and guidelines, shall be resolved in favor of labor.
Reasons: The ER stands on a higher footing because there is more supply of labor than capital and usually, the urgency of the need of the laborer gives him less bargaining choices.
arises from the agreement of the parties, e.g., for one to render service to another in exchange for remuneration or compensation. Such relationship is impressed with the public interest that labor contracts must yield to the common good [Civil Code, Art 1700]. Employment contracts are subject to laws on minimum standards of wages, hours of work, right to self-organization, CB, strikes, picketing and other collective actions.
existence of employer-employee relationship, viz.: Four-fold test Economic reality test Two-tiered test (or Multi-factor test)
Source: http://www.laborlaw.usc-
law.org/2009/08/06/tests-of-employmentrelations/
EMPLOYER/EMPLOYEE DEFINED
EMPLOYER one for whom employees work in
consideration of wages or salaries; may be natural or juridical; includes any person acting for the interest of the ER EMPLOYEE one who works for an ER and received salary or wages for work rendered; any person in the service of another under a contract for hire, express or implied, oral or written; always a natural person
FOUR-FOLD TEST
Right to hire or to the selection and engagement of
the employee. Payment of wages and salaries for services. Power of dismissal or the power to impose disciplinary actions. Power to control the employee with respect to the output and the means and methods by which the work is to be accomplished. This is known as the right-of-control test.
FOUR-FOLD TEST
THE CONTROL TEST:
The power of control is the most crucial indication of the existence of the ER-EE relationship.
The existence of the power is what is required and not necessarily the actual exercise thereof. It is not essential for the ER to actually supervise the performance of duties of the EE; it is enough that the ER has the right to wield that power.
and their operators or owners of the jeepneys as they perform jobs usually necessary to the business of the employers Between the university professor and the university they served Between musicians providing the background music of a moving picture and the film company Between janitors and the commercial school, even if the janitorial services were furnished by another where it appears that the person in charge of the school supervised the janitor and had control over the manner he performed the work Between cargadores and pahinantes working in the glass factory who were loading and unloading , piling and palleting empty bottles from the company truck and warehouse
even if personal services are involved, since the latter is not under the control of the former except as to the result of the work Between an industrial partner and the partnership Between a farm worker who farms the agricultural land of the owner under a share-crop arrangement but not if the farmer is employed Volunteer workers for religious, civic and community purposes whose reporting is not compulsary or controlled Fishermen and crew aboard a fishing vessel paid on commission basis Caddies are not employees of the golf clubs
lounges, disco houses and similar establishments have been considered employees of the person or establishment they serve. This is for the protection of the said employees in line with social justice
whether employment relation exists between the parties is the economic dependence of the worker on his employer. That is, whether the worker is dependent on the alleged employer for his continued employment in the latters line of business.
economically dependent on putative employer for his continued employment in the latters line of business, there is employer-employee relationship between them. Otherwise, there is none.
right of control test. Rather, these two test are often use in conjunction with each other to determine the existence of employment relation between the parties. This is known as the two-tiered test, or multi-factor test. This two-tiered test involves the following tests: The putative employers power to control the employee with respect to the means and methods by which the work is to be accomplished; and The underlying economic realities of the activity or relationship.
arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal as hereafter qualified.
TYPES OF CONTRACTING/SUBCONTRACTING
LABOR-ONLY CONTRACTING
Mere recruitment; finds and supplies people; contractor is pseudo-contractor only; regarded as just an agent of the principal
Places recruits with principal and has no right to control the performance of the work of the recruits Considered wrong and prohibited because it is an attempt to evade the obligations of an employer Contractor does not have substantial capital or investment relating to the job to be performed and the recruits perform jobs directly related to the main business of the principal
JOB-CONTRACTING
Requires completion/delivery of a job, work or service within a given period
Employs, supervises and pays the detailed recruits Registered with the DOLE
Substantial capital or investment referring to capital stocks in the case of a corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor/subcontractor in the performance or completion of the job, work or service contracted.
JOB CONTRACTING: A Trilateral Relationship: Sec 3, Dept. Order No. 18, s 2002
Principal
JC
Contractor or Subcontractors
Laborers
PROJECT EMPLOYEES
SEASONAL EMPLOYEES
CASUAL EMPLOYEES
recognized in jurisprudence is term or fixed-period employment. This is based on art. 1193 of the CC, which states that obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain understood to be a day that must necessarily come. The decisive determinant in term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of the employment relationship. Stipulations in employment contracts providing for term employment or fixedperiod employment are valid when the period has been agreed upon knowingly and voluntarily by the parties, without force, duress or improper pressure exerted on the employee, and when such stipulations were not designed to circumvent the laws on security of tenure.
REGULAR EMPLOYMENT
Regular employees are those who are hired for activities which are necessary or desirable in the usual trade or business of the employer.
Repeated rehiring and the continuing need for the employees services are sufficient evidence of the necessity and indispensability of the ees services to the ers business or trade.
PROJECT EMPLOYMENT
Principal test:
(a) ees were assigned to carry out a specific project or undertaking (b) the duration or scope was specified at the time the ees were engaged for that project Sec 2.2 & (f) of DOLe Dept. Order No. 19, s 1993, gives indicators of Project Employment: 1. duration of undertaking is reasonably determinable 2. such duration is made clear to the ee at time of hiring 3. the work performed by the ee is in connection with that particular undertaking 4. the ee, while not employed, is free to offer his services to another er 5. the termination of his employment is reported to the DOLE within 30 days after separation from work 6. an undertaking in the employment contract by the er to pay completion bonus to the project ee as practiced by most construction companies
PROJECT EMPLOYMENT
POLICY INSTRUCTION No. 20 (Governing Construction Industry), recognizes two kinds of ees 1. Purely project EEs hired on project to project basis A. Not entitled to separation pay if terminated as result of completion of project or phase thereof B. No prior clearance for termination is necessary but terminations must be reported to DOLE 1. EEs part of the construction corporations labor pool EEs are not free to offer their services to another while not at work
A. Regular B. Probationary
SEASONAL EMPLOYMENT
Seasonal workers who work for more than
one season for the same work are deemed to have acquired regular employment and will be considered on leave during off-season ,
CASUAL EMPLOYMENT
Irregular, unpredictable, sporadic and brief in nature and
outside the usual business of the ER. An EE who has rendered at least 1 yr of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Casual EEs dismissed before expiration of 1 yr period cannot claim illegal dismissal. The status of regular employment attaches to the causal EE on the day immediately after the end of his first year of service
PROBATIONARY EMPLOYEES
Those generally hired for regular employement but are placed
Exceptions: A. Learnership/apprentice period* B. 3 yrs in case of teachers C. When agreed period is longer/different due to nature of job or when ee failed to qualify or per company policy
reasonable standards made known to him at the time of hiring. The ee is considered regular if allowed to work beyond the probationary period. Training period plus probationary period is circumvention.
LEARNERSHIP/APPRENTICESHIP
APPRENCTICESHIP ART 58 & 62 LC More than 3 months EE needs special skill Wage is 75% of minimum wage Only in highly technical industries ART 73 LC Not more than 3 months No need for special skill Wage is 75% of the min wage May only be hired if there are no experienced workers available, provided that: (a) employment of learners is necessary to prevent curtailment of employment opportunities and (b) it does not create unfair competition in terms of labor costs or impair labor standards If already worked 2 months & terminated by ER before end of agreed period with no fault of EE, deemed regular LEARNERSHIP
Qualifications: at least 14 yrs old; possesses vocational aptitude and capacity for appropriate tests; and possesses ability to comprehend and follow oral and written instructions
lay down and execute managerial policies and/or to hire, transfer, suspend, lay-off, or recall EEs. They are not entitled to benefits relating to hours of work and other conditions of employment if: A. Their primary duty consists of management B. They customarily/regularly direct the work of two or more EEs therein C. They have the authority to hire or fire EEs of lower rank or their suggestions for hiring and firing carry great weight.
not entitled to benefits relating to hours of work and other conditions of employment if: A. Their primary duty consists of work directly related to management policies B. They customarily/regularly exercise discretion and independent judgment C. They do not devote more than 20% of their hours of worked in a workweek to activities which are not directly and closely related to the performance of job in (a) and (b).
interest of management, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. Deemed a member of the managerial staff A foreman is a supervisor as the termforeman implies that the employee is the representative of management over the workers and the operation of the department.
are also considered confidential employees for purposes of self-organization and may not join the union of the rank-and-file.
RANK-AND-FILE EMPLOYEES - All other EEs not
falling within the definition of managerial or supervisory employees are considered rank-andfile
ER-EE RELATIONS
CASES: 1. The Manila Hotel Corp v NLRC, 343 SCRA 1 [2000] 2. LVN Pictures v LVN Musicians Guild, 1 SCRA 132 3. R.P. v SSS , G.R. No. 172101, 23 Nov 2007 4. Orozco v 5th Div of CA, 562 SCRA 36 [2008] 5. SSS vs CA, 348 SCRA 1 [2000] 6. Insular Life Assurance Co. Ltd v NLRC, G.R. No. 84484 7. Manila Golf Club Inc v IAC, 237 SCRA 207 8. Jardin et al v NLRC, 326 SCRA 299 [2000] 9. R. Transport Corp v Ejandra, G.R. No. 148508, 20 May 2004
ER-EE RELATIONS
CASES:
No. 167622, 29 June 2010 12. Mafinco v Ople, 70 SCRA 139 [1976] 13. Tan v Lagrama, 387 SCRA 393 [2002] 14. Jose Sonza v ABS-CBN Broadcasting Corp, G.R. No. 138051, 431 SCRA 583 [2004] 15. Farley Fulache et al v ABS-CBN Broadcasting Corp, G.R. No. 183810, 610 SCRA 567 [2010]
Dec 2009 2. Temic Automotive Phils v Temic Automotive Phils Inc Employees Union-FFW, G.R. No. 186965, 23 Dec 2009 3. Alviado et al v Procter & Gamble , G.R. No. 160506, 09 March 2010 4. Vinoya v NLRC, 324 SCRA 469 [2000] 5. Babas v Lorenzo Shipping Corp, G.R. No. 18609, 15 Dec 2010 6. San Miguel Corp v MAERC , 405 SCRA 579 [2003]
KINDS OF EMPLOYEES/EMPLOYMENT
CASES: 1. De Leon v NLRC, 176 SCAR 615 [2001] 2. Magsalin v Natl Organization of Working Men et al, G.R.
No. 148492, 09 May 2003 3. Prudential Bank & Trust Co v Reyes, 352 SCRA 316 [2001] 4. Baguio Country Club v NLRC, 206 SCRA 643 [1992] 5. Intl Catholic Migration Commission v NLRC, 169 SCRA 606 [1989} 6. Fr Pedro Escudero v Office of the President , 172 SCRA 783 7. Holiday Inn Manila v NLRC, 226 SCRA 417 [1993] 8. Robinsons Galleria v Ranchez, G.R. No. 177937, 19 Jan 2011
KINDS OF EMPLOYEES/EMPLOYMENT
CASES: 9. Woodbridge School v Pe Benito, 570 SCRA 164 [2008] 10. Lacuesta v Ateneo De Manila University, et al, 477
SCRA 217 [2005] 11. Paranaque v Austria, 538 SCRA 438 [2007] 12. Fabella v SMC, G.R. No. 150658, 09 Feb 2007 13. Hanjin Heavy Industries v Ibanez, 555 SCRA 537 [2008] 14. Cocomangas Hotel Beach Resort v Visca, 567 SCRA 269 [2008] 15. Abasolo et al v NLRC, 346 SCRA 293 [2000]
REFERENCES
Abad, Jr., Antonio H. (2011). (4th ed). Compendium
on labor law. 4th ed. Manila: Rex. Azucena, Jr. A. C. (2010). (7th ed.). The labor code with comments and cases. Manila: Rex. Azucena, C.A., Jr. (2007). (5th ed.). Everyone's Labor Code. Manila:Rex. Rex case digest. (2006). Labor law and social legislation, legal ethics, mercantile law. Quezon City: Rex. Salao, Ernesto C. (2009). Law dictionary. Manila: Rex.