Constitutional and Civil Law Foundations of Labor Law (September 2, 2023)

 I. CONSTITUTIONAL AND CIVIL LAW FOUNDATIONS OF LABOR LAW

How are labor laws contributing to poverty reduction? Potent force for economic justice. 

Labor Law - branch of law that governs and regulates the relationship between employees and employers. 

Legal Foundations of Labor Laws

1. 1987 Constitution

• Article II – Declaration of Principles and State Policies
• Sec. 9 – The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.
• Sec. 10 – The State shall promote social justice in all phases of national development.
• Sec. 14 - The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.
• Sec. 18 – The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.
• Sec. 20 – The State recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments.
• Article III – Bill of Rights
• Sec. 1 - No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. 
• Sec. 4 – No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.
• Sec. 8 – The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.
• Sec. 10 – No law impairing the obligation of contracts shall be passed.
• Sec. 16 – All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial or administrative bodies.
• Sec. 18(2) – No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted.
• Article XIII – Social Justice and Human Rights
• Sec. 2 – The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.
• 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.
• Sec. 13 – The State shall establish a special agency for disabled persons for their rehabilitation, self-development and self-reliance and their integration into the mainstream of society.
• Sec. 14 – The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

2. New Civil Code, RA. 386. June 18, 1949

• Principle of Abuse of Rights
• Art. 19 – Every person must, in the exercise of  his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.
• It justifies a judging authority to render justice as demanded by the circumstances of the case even in the absence of a written law squarely answering the question at hand. Even a legal right, such as a contract stipulation, if abused, becomes a legal wrong.
• Social Security System vs. Ubaña
• Debbie Ubana filed a civil case against Social Security System (SSS) alleging she was employed but not paid the proper salary for her position as a Processor for more than 5 years. The Regional Trial Court (RTC) initially dismissed the case for lack of jurisdiction, stating it was related to employer-employee relations. The RTC later reversed its decision, stating the case was rooted in abuse of rights under the Civil Code and was under the regular courts' jurisdiction. The Court of Appeals (CA) upheld the RTC's decision.
• Is the assailed CA dispositions are contrary to law and jurisprudence? NO.
• There being no employer-employee relation or any other definite or direct contract between respondent and petitioner, the latter being responsible to the former only for the proper payment of wages, respondent is thus justified in filing a case against petitioner, based on Articles 19 and 20 of the Civil Code, to recover the proper salary due her as SSS Processor.
• Human Relations
• Art. 20 – Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same.
• Art. 21 – Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
• Art. 24 – In all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.
• Art. 28 – Unfair competition in agricultural, commercial or industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby suffers damage.
• Principle of Equity
• Art. 9 – No judge or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. 
• Art. 10 – In case of doubt in the interpretation or application of the laws, it is presumed that the lawmaking body intended right and justice to prevail.
• In Philippine economic or work relations, may the precepts of equity, good faith or honesty be enforced as though they were formal laws? Are those precepts enforceable by court orders?
• Cases can be decided on the basis of law or equity. 
• Equity means a sense of justice or fairness, and Philippine courts are courts of law and/or equity. The two systems of jurisprudence - law and equity - have merged.
• Del Monte vs. Betonio
• Reynaldo P. Betonio was employed by petitioner Del Monte Fresh Produce (Phil.) Inc. (DMFPPI) as its manager for port operations. He was asked to explain 12 alleged infractions related to his job performance. An administrative committee was formed to investigate his case, which found him inefficient in port management but recommended against dismissal. Despite the committee's recommendation, top management issued a notice of disciplinary action terminating Betonio's employment. Betonio filed a complaint asserting illegal dismissal and money claims, alleging lack of due process in his termination.
• Whether or not Betonio was illegally dismissed on the ground of loss of trust and confidence and  was made without due process of law? Yes.
• Applying in this case the concept of equity or the principle of social and compassionate justice to the cause of labor, the Court agrees with the National Labor Relations Commission, that Betonio is entitled to separation pay as a measure of financial assistance— equivalent to one month salary for every year of service, a fraction of at least six months being considered as one whole year. This is in consideration of the fact that Betonio’s dismissal was not due to any act attributable to his moral character.
•  Principle of Non-Oppression
• Art. 1701 – Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.
• Others
• 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 lock outs, closed-shop, wages, working conditions, hours of labor, and similar subject.
• 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.
• Art. 1703 – No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.
• Art. 1704 – In collective bargaining, the labor union or members of the board or committee signing the contract shall be liable for non-fulfillment thereof.
• Art. 1708 – The laborer’s wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing, and medical attendance.
• Art. 1709 – The employer shall neither seize nor retain any tool or other articles belonging to the laborer. 
• Art. 1710 – Dismissal of laborers shall be subject to the supervision of the Government, under special laws.

Objectives of Labor Laws

• Presidential Decree No. 442; May 1, 1974
• No statement of objectives
• Protection to labor, Promote employment and human resources development, and Ensure industrial peace based on social justice. 
• 1987 Constitution
• Article XII, Sec. 1: The goals of the national economy are a more equitable distribution of opportunities, income, and wealth.
• Social Justice is the
• humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. (Justice Laurel).
• legal mandate and social economic goal.
• Police Power of the State
• Inherent power of  the State to make laws, within the constitutional limits, to promote order, safety, health, morals and general welfare of the society.
  

Private Enterprise

• 1987 Constitution
• Article XII, Sec. 1: In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.
• Article 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 II, Sec. 20: The State recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments.
• Right to Expand and Grow
• Art XIII, Sec. 2: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.
• Interdependence - If labor laws are to serve as labor's protectors, labor laws should as well serve as multipliers of employment opportunities.
• Is it legal and just to require the thirteenth-month pay from firms adversely affected by a pandemic?
• Right to Manage
• Private business is not managed by the government but by the enterprise itself. Government is a regulator, an umpire, but not the manager or the driver of the enterprise.
• Labor Code, Art. 218: To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code.
• Never Absolute
• Philippine Airlines, Inc. vs. Pascua
• Joselito Pascua, in his and on behalf of other 79 part-time station attendants, filed with the Department of Labor and Employment a complaint for regularization, underpayment of wages, benefits, and other claims. The Labor Arbiter dismissed some claims but found for private respondents, declaring them regular employees. The NLRC affirmed this decision and declared them regular employees with an eight-hour work-shift.
• Did the appellate court err when it upheld the decision of the NLRC to accord respondents regular full-time employment although petitioner, in the exercise of its management prerogative, requires only part-time services? NO.
• It must be borne in mind that the exercise of management prerogative is not absolute. While it may be conceded that management is in the best position to know its operational needs, the exercise of management prerogative cannot be utilized to circumvent the law and public policy on labor and social justice. That prerogative accorded management could not defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor and management, not to tilt the scale in favor of one over the other, but to guaranty that labor and management stand on equal footing when bargaining in good faith with each other. By its very nature, encompassing as it could be, management prerogative must be exercised always with the principles of fair play at heart and justice in mind.
• Management Prerogatives
• In workplaces, managers often cite "management prerogative" to defend an action or decision. 
• Does "management prerogative" have a legal standing? Yes.
• Does the abuse of rights principle exempt "prerogatives"? No.
• Restricted meaning and restricted by:
• provisions of law
• principles of justice and equity
• contractual stipulations
• Justifies the suspension of payment of salary but does not justify keeping an employee beyond six months in "'floating status," without work and without pay, without legal justification. 

Labor as Equalizing Force

• Create balancing devices within the enterprise 
• Representation, Organization and Participation of Employees