LABOR LAW AND SOCIAL LEGISLATIONS

Preliminary Title
Chapter 1
General Provisions

What is the name of the decree/law?

This Decree shall be known as the “Labor Code of the Philippines.”

What is the Labor Code?

The Labor Code (P.D. No. 442, as amended) is a set of substantive and procedural laws
that prescribe the principal rights and responsibilities of employers, employees and other
industrial participants, as well as the role of Government, in employment and related
activities, so as to institute social justice. The Labor Code lays down the fundamental rights
and correlative obligations of employers and employees to each other, such as those
about work days and work hours, wage and wage protection, validity of dismissal as well
as the processes of unionization and collective bargaining. Those substantive rights are
enforceable through procedures prescribed in the Code, devised by either the parties
themselves or the government in its role as regulator of employment relations.

When did the Labor Code take effect?

The Code provides that it shall take effect six (6) months after its promulgation.

On May 1, 1974, it was signed into law as P.D. No. 442 and took effect after six months on
November 1, 1974.

What is the basic policy of the Labor Code?

Article 3 provides: The State shall afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the relations
between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of
work.

How should the provisions of the Code be interpreted?

Art. 4. Of the Code provides that all doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.

Why should the provisions of the Code, in case of doubt, be interpreted in favor of labor?
In the matter of employment bargaining, there is no doubt that the employer stands on
higher footing than the employee. First of all, there is greater supply than demand for labor.
Secondly, the need for employment by labor comes from vital, and even desperate,
necessity. Consequently, the law must protect labor, at least, to the extent of raising him to
equal footing in bargaining relations with capital and to shield him from abuses brought
about by the necessity for survival. It is safe to presume, therefore, that an employee or
laborer who waives in advance any benefit granted him by law does so, certainly not in his

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 interest or through generosity but under the forceful intimidation of urgent need, and
hence, he could not have so acted freely and voluntarily.

But 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

What government agency is charged with the enforcement of the Code?

The Department of Labor and Employment and other government agencies are charged
with the administration and enforcement of this Code or any of its parts and they shall also
promulgate the necessary implementing rules and regulations. Such rules and regulations
shall become effective fifteen (15) days after announcement of their adoption in
newspapers of general circulation.

However, a rule or regulation promulgated by an administrative body, such as the

Department of Labor, to implement a law, in excess of its rule-making authority, is void.
For instance, the Rules and Regulations implementing Article 94 of the Labor Code, and
the accompanying Policy Instructions No. 9 limited the entitlement to holiday pay to daily-
paid employees only thereby excluding monthly-paid employees. But the law itself states
that “every worker” shall be entitled to holiday pay.
The Court declared that those rules and regulations as well as the policy instructions are null
and void.

To whom shall the provisions of the Code be applied?

ART. 6 of the Code provide that all rights and benefits granted to workers under this Code
shall, except as may otherwise be provided herein, apply alike to all workers, whether
agricultural or non-agricultural.

The Labor Code also applies to a government corporation incorporated under the
Corporation Code.

The test in determining whether a government-owned or controlled corporation is subject

to the Civil Service Law is the manner of its creation. Government corporations created by
Congress are subject to Civil Service rules, while those incorporated under the general
Corporation Law are covered by the Labor Code.
The terms governmental “agency” or “instrumentality” are synonymous in the sense that
either of them is a means by which a government acts, or by which a certain government
act or function is performed. The word “instrumentality,” with respect to the state,
contemplates an authority to which the state delegates government power for the
performance of a state function.

For instance, the National Parks Development Committee is an agency of the government,
not a government-owned or -controlled corporation. Its employees are covered by civil
service rules and regulations, since they are civil service employees. While the National
Parks Development Committee employees are allowed under the 1987 Constitution to
organize and join unions of their choice, there is no law permitting them to strike. In case of
a labor dispute between the employees and the government, Section 15 of E.O. No. 180,
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 dated June 1, 1987 provides that the Public Sector Labor-Management Council, not the
Department of Labor and Employment, shall hear the dispute.

Similarly, employees of the Social Security System (SSS) are civil service employees. When
they went on strike, the Regional Trial Court, not the National Labor Relations Commission,
had jurisdiction to hear the petition to enjoin the strike. And, again, E.O. No. 180 applies,
not the Labor Code.

Note: Notwithstanding the above rulings, it should be noted that the Labor Code provisions
on the State Insurance Fund (Article 172, et seq.) do apply to government personnel
covered by the GSIS.

The Labor Code may apply even if the parties are not employers and employees of each
other. In other words, it is not correct to say that employment relationship is a pre-condition
to the applicability of the Code.
When one speaks of employment benefits (e.g., overtime pay or rest day premium) or of
unionization, then surely employment relationship is an essential element. But when the
issue, for instance, is an indirect employer’s liability, or illegal recruitment, or misuse of POEA
license, there is no employer-employee relationship between the complainant and the
respondent, and yet the pertinent Labor Code provisions may be invoked. In short, the
Labor Code applies with or without employment relationship between the disputants,
depending on the kind of issue involved.
The presence or absence of employer-employee relationship is itself a labor law question. It
is resolved by applying Labor Code provisions, the implementing rules, and interpretative
court rulings.

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means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 3