Labor Law: Book V; Title I; Chapter I Policy and Chapter II Definitions (Art. 218)

Book V

Labor Relations

Title I

Policy and Definitions

Chapter I

Policy

Art. 218

Q: Is it government policy to promote enlightenment of workers regarding their rights and obligations. Does a similar policy exist for employers? 
Q: Do employees have the right to participate in formulating a code of conduct which they will be obliged to observe?

Art. 218. Declaration of Policy.

A. It is the policy of the State:
  1. To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
  2. To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;
  3. To foster the free and voluntary organization of a strong and united labor movement;
  4. To promote the enlightenment of workers concerning their rights and obligations as union members and as employees;
  5. To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;
  6. To ensure a stable but dynamic and just industrial peace; and
  7. To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare.
B. 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. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)


Notes:
  • The State policy emphasizes:
    • Promoting free collective bargaining, voluntary arbitration, mediation, and conciliation to settle labor disputes.
    • Supporting free trade unionism to enhance democracy, social justice, and development.
    • Encouraging the voluntary organization of a strong labor movement.
    • Educating workers about their rights and obligations.
    • Establishing efficient administrative mechanisms for quick dispute resolution.
    • Ensuring stable, dynamic, and just industrial peace.
    • Guaranteeing worker participation in decision and policy-making processes.
  • Additionally, the policy prohibits courts or administrative bodies from setting wages, pay rates, work hours, or employment terms through collective bargaining, except as provided by the law.
Nature of Labor Relations
  • The government labor relations policy, declared in this Article 218, is a focused elaboration of the basic labor policy announced in Article 3 which, in turn, echoes constitutional mandates. 
  • The policy is intended to install industrial democracy centered on collective bargaining, leading to social justice as the end goal.
  • Labor relations is essentially inter-party, which means that, basically,  the employer and employees themselves must deal with their problems in a manner that mutually suits them best. 
    • This is the reason the policy promotes "free" bargaining and negotiation between employers and employees. 
    • The law encourages a democratic and self-devised method of regulating labor-management relations. 
    • General Rule: Free agreement between the parties;
    • Exception: Government intervention. 
    • This basic philosophy is reinforced in the last sentence, of this article. This law, regrettably, is disregarded by legislation or regulations that prescribe terms and conditions of employment without meeting the exception required in the final clause. 
  • The inter-party character of labor relations is likewise the reason the policy prefers voluntary instead of compulsory modes of dispute settlement. 
    • The government steps in only when the parties themselves fail to reach an agreement to the prejudice of public interest or when one disregards the defined rights of the other. 
  • For instance when the employer busts the union blockades other form of "unfair labor practice" (ULP) or when the union blockades the company gate ー in short, when the legal boundaries are transgressed ー the injunctive power of the State may be invoked.
  • The legal parameters serve to balance the rights and obligations of the parties, and questionably legal limitations are needed in the industrial setting.
    • But in fine, the labor labor relations field is human relations. 
    • It is not a lawyers' invention and need not be lawyer's game. 
  • The prescriptions for industrial peace will naturally follow if the parties would only adhere to the civil law precepts of human relations  ー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. (Article 19, Civil Code)
    • It may be helpful to note that this civil law precept, the first article of the chapter on Human Relations, is called the "abuse of right principle."
    • It means essentially that a right though recognized by law, can be exercised only in a legitimate manner.
    • A legal right, if abused, becomes a legal wrong, the principle applies with a diminished force to relationship at the workplace. 
  • Accordingly, the highest court has declared repeatedly that the right to manage is never absolute. It is limited by law by contract and the basic principles of equity and fair play.
Worker's Participation
  • The policy about workers' participation in policy making was applied by the Supreme Court in ruling that employees or their union should be allowed to participate in the formulation of the code of discipline which the employees will be told to observe. In a Philippine Airlines case, the NLRC directed the company "to share [with the union] the prerogative to formulate a Code of Discipline." The company, charging NLRC "With grave abuse of discretion, elevated the case to the Supreme Court The Court turned down the employer's appeal. It upheld the union's objection to the implementation of the code which the management had revised without the union's participation. (Philippine Airlines,August 13, 1993
  • The worker's participatory right is again taken up in Article 267.
  • Philippine Airlines, Inc. (PAL) revised its 1966 Code of Discipline in 1985, leading to a complaint by the Philippine Airlines Employees Association (PALEA) before the National Labor Relations Commission (NLRC) for unfair labor practice.
  • PALEA argued that PAL's unilateral implementation of the Code without prior discussion with the union constituted unfair labor practice.
  • Labor Arbiter: Ruled in favor of PALEA, ordering PAL to furnish all employees with the new Code of Discipline, reconsider cases of employees penalized under the new Code, and discuss objectionable provisions with PALEA.
  • NLRC: Affirmed the dismissal of PALEA's charge but emphasized the need for cooperation and participation of the union in formulating rules affecting employees' rights.
  • PAL filed a petition for certiorari, challenging the directive to share its management prerogative of formulating the Code of Discipline with the union.

WoN the management may be compelled to share with the union or its employees its prerogative of formulating a code of discipline. YES

Republic Act No. 6715, enacted on March 2, 1989, emphasized the participation of workers in decision-making processes affecting their rights, duties, and welfare.

Management prerogatives should be transparent, especially when they impact employees' rights, and employees should be properly informed of decisions affecting them. The objectionable provisions of the Code affected employees' right to security of tenure and their means of livelihood, infringing upon constitutional rights.

The provision in the collective bargaining agreement recognizing the company's right to make and enforce rules does not negate employees' participation in matters affecting their rights, such as formulating a code of discipline.

PAL's position that it was not obligated to share management prerogatives due to the absence of Republic Act No. 6715 during the formulation of the Code is not sustained; transparency in managerial decisions is necessary for a harmonious labor-management relationship.

Labor Education
  • Enlightenment of workers concerning their rights and obligations is a State policy. Conducting labor education is an obligation of labor organizations under Article 250.
  • The policy is laudable and indeed necessary. Upon it depends ultimately the attainment of industrial peace. 
  • But employers must likewise be enlightened. This need is acknowledged, rather belatedly and faintly, in Article 292(h).

Chapter II

Definitions

Art. 219


Art. 218. Definitions

  1. “Commission” means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code.
  2. “Bureau” means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor.
  3. “Board” means the National Conciliation and Mediation Board established under Executive Order No. 126.
  4. “Council” means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.
  5. “Employer” includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.
  6. “Employee” includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.
  7. “Labor organization” means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.
  8. “Legitimate labor organization” means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.
  9. “Company union” means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.
  10. “Bargaining representative” means a legitimate labor organization whether or not employed by the employer.
  11. “Unfair labor practice” means any unfair labor practice as expressly defined by the Code.
  12. “Labor dispute” includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.
  13. “Managerial employee” is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, 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. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.
  14. “Voluntary Arbitrator” means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute.
  15. “Strike” means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.
  16. “Lockout” means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.
  17. “Internal union dispute” includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.
  18. “Strike-breaker” means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.
  19. “Strike area” means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (As amended by Section 4, Republic Act No. 6715, March 21, 1989)

Notes:
  1. “Commission” 
    • National Labor Relations Commission or any of its divisions (NLRC)
  2. “Bureau” 
    • Bureau of Labor Relations and/or the Labor Relations Divisions (BLR)
  3. “Board” 
    • National Conciliation and Mediation Board (NCMB)
  4. “Council” 
    • Tripartite Voluntary Arbitration Advisory Council (TVAAC)
  5. “Employer”
    • person acting in the interest of an employer, directly or indirectly
    • does not include any labor organization except when acting as employer
  6. “Employee” 
    • person in the employ of an employer
    • not be limited to the employees of a particular employer
    • include any individual whose work has ceased due to labor dispute or unfair labor practice if he has not obtained employment.
  7. “Labor organization” 
    • union or association of employees for the purpose of collective bargaining or of dealing with employers
  8. “Legitimate labor organization” 
    • labor organization duly registered with the Department of Labor and Employment (DOLE)
  9. “Company union” 
    • labor organization whose formation, function or administration has been assisted by unfair labor practice 
  10. “Bargaining representative”
    • legitimate labor organization whether or not employed by the employer
  11. “Unfair labor practice” 
    • unfair labor practice as expressly defined by the Code.
  12. “Labor dispute” 
    • controversy or matter concerning terms and conditions of employment
  13. “Managerial employee”
    • vested with the powers or prerogatives to lay down and execute management policies 
    • authority is not merely routinary or clerical in nature but requires the use of independent judgment.
    • rank-and-file employees
  14. “Voluntary Arbitrator” 
    1. person accredited by the Board as such 
    2. person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator or chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, 
    3. official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement
  15. “Strike” 
    • temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.
  16. “Lockout” 
    • temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.
  17. “Internal union dispute” 
    • all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership
  18. “Strike-breaker” 
    • person who obstructs any peaceful picketing affecting conditions of work or in the exercise of the right of self-organization or collective bargaining
  19. “Strike area”
    • establishment of the employer struck against, as well as the immediate vicinity actually used by picketing strikers

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