Unit

IV
LABOR LAWS AND EMPLOYEES RIGHT

 INTENDED LEARNING OUTCOMES

By the time the students finish the learning experience, they should be able to:

1. Explain the key provisions of the Labor Code of the Philippines.

2. Analyze the responsibilities of employers and recruitment agencies under
the regulations.

Introduction:

The Labor Code of the Philippines stands as the cornerstone of the country's labor legislation,
meticulously designed to protect the rights of workers and define the obligations of employers. This
comprehensive code governs employment practices, working conditions, and labor relations, all
aimed at promoting social justice and fostering industrial peace. Central to this code are the
regulations on recruitment and placement, which play a pivotal role in safeguarding job seekers
from exploitation and ensuring fair and transparent hiring processes. These regulations impose
strict standards on recruitment agencies, mandating proper licensing, ethical practices, and
adherence to legal protocols when facilitating employment both domestically and overseas. By
diligently regulating recruitment and placement, the Labor Code not only empowers the workforce
but also cultivates a reliable and equitable labor market in the Philippines. It's intriguing to see how
these provisions have evolved to address modern challenges, like combating illegal recruitment and
adapting to the complexities of overseas employment. Did you know that the Philippines has one of
the most robust legal frameworks in Southeast Asia for protecting migrant workers? The Labor
Code plays a significant role in this, reflecting the nation's commitment to uplifting the welfare of its
people at home and abroad.
Lesson 1: Labor Code of the Philippines

The Labor Code of the Philippines (Presidential Decree No. 442, as amended) is the primary
legislation governing labor relations in the country. It aims to provide protection to labor, promote
employment, ensure equal work opportunities, and regulate the relations between workers and
employers. Key provisions include:

 General Provisions: The Code outlines the basic policy of the State to afford protection to
labor, promote full employment, and ensure equal work opportunities regardless of sex,
race, or creed.
 Security of Tenure: Employees are entitled to security of tenure, meaning they cannot be
terminated without just cause.
 Wages and Benefits: The Code sets standards for minimum wage, overtime pay, holiday
pay, and other benefits.
 Working Conditions: It mandates humane working conditions, including limits on working
hours and provisions for rest days and leaves.
 Self-Organization and Collective Bargaining: Workers have the right to self-organization,
collective bargaining, and peaceful concerted activities.

The Labor Code of the Philippines (Presidential Decree No. 442, as amended) is a comprehensive
legal framework that governs labor relations in the country. It was enacted on May 1, 1974, and
aims to provide protection to labor, promote employment, ensure equal work opportunities, and
regulate the relations between workers and employers. The Code is built on the principles of social
justice, industrial peace, and human resources development.

Key Provisions of the Labor Code:

General Provisions: The Code outlines the basic policy of the state to 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. It also emphasizes the rights of workers to
self-organization, collective bargaining, security of tenure, and just and humane conditions of
work1.

Construction in Favor of Labor: All doubts in the implementation and interpretation of the
provisions of the Code, including its implementing rules and regulations, shall be resolved in favor
of labor.
Rules and Regulations: The Department of Labor and other government agencies are responsible
for promulgating the necessary implementing rules and regulations, which become effective fifteen
days after their announcement in newspapers of general circulation.

Applicability: The rights and benefits granted to workers under the Code apply to all workers,
whether agricultural or non-agricultural.

Emancipation of Tenants: The Code includes provisions for the emancipation of tenant-farmers,
transferring lands to tenant-workers to ensure they become owners of a portion constituting a
family-size farm.

Recent Amendments and Updates:

The Labor Code has undergone several amendments to address evolving labor issues and to align
with international labor standards. These amendments aim to enhance worker protection, improve
working conditions, and promote fair labor practices.

Importance of the Labor Code:

The Labor Code plays a crucial role in ensuring fair treatment of workers, preventing labor
disputes, and fostering a harmonious work environment. It provides a legal basis for resolving
labor-related conflicts and promotes the welfare of both employers and employees.

Let's delve into the Termination of Employment and Security of Tenure under the Labor Code
of the Philippines, which is a crucial aspect affecting both employers and employees.

Termination of Employment and Security of Tenure

1. Security of Tenure

Security of tenure is a fundamental right of every employee in the Philippines. It guarantees that
an employee cannot be dismissed without just or authorized causes and due process.

 Legal Basis: Article 294 (formerly Article 279) of the Labor Code states: > "In cases of
regular employment, the employer shall not terminate the services of an employee except
for a just cause or when authorized by this Title."

2. Types of Employment
Understanding the types of employment helps clarify how termination applies:

 Regular Employment: An employee who has been engaged to perform activities usually
necessary or desirable in the usual business of the employer.
 Probationary Employment: A trial period not exceeding six months, during which the
employer assesses the employee's qualifications.
 Project Employment: Employment fixed for a specific project or undertaking.
 Seasonal Employment: Employment that is seasonal in nature.
 Casual Employment: Employment not covered by the above categories and for work that is
merely incidental.

3. Grounds for Termination

Termination can occur due to just causes (attributable to the employee) or authorized causes
(instigated by the employer due to business necessities).

A. Just Causes (Article 297)

These are reasons based on the employee's misconduct or negligence:

1. Serious Misconduct: Improper conduct that shows wrongful intent.

2. Willful Disobedience: Intentional disregard of lawful orders related to work.
3. Gross Neglect of Duties: Habitual failure to perform duties.
4. Fraud or Willful Breach of Trust: Deceitful actions undermining the employer's trust.
5. Commission of a Crime: Conducting a criminal act against the employer or their property.
6. Other Analogous Causes: Similar serious offenses.

B. Authorized Causes

These are based on business needs and circumstances beyond the employee's control:

1. Installation of Labor-Saving Devices (Article 298): Adoption of technology resulting in

redundancy.
2. Redundancy: Elimination of roles due to overstaffing.
3. Retrenchment to Prevent Losses: Reduction of workforce to prevent business losses.
4. Closure or Cessation of Business: Shutting down operations.
5. Disease (Article 299): Employee suffering from an illness not curable within six months.
4. Procedural Due Process

Proper procedure must be followed to ensure fairness:

A. For Just Causes

1. First Notice (Notice to Explain):

 Written notice stating the specific acts or omissions.
 Gives the employee an opportunity to respond within a reasonable period.
2. Employee's Explanation:
 Submission of a written explanation or attendance at a hearing.
3. Decision Making:
 Employer evaluates evidence and explanations.
4. Second Notice (Notice of Decision):
 Written notice of termination stating the reasons.

B. For Authorized Causes

1. Notice to DOLE and Employee:

 At least 30 days prior to the intended date, written notices are served to the
employee and the Department of Labor and Employment (DOLE).
2. Payment of Separation Pay:
 For Redundancy, Retrenchment, Closure:
 Separation pay equivalent to one month pay or one month pay per year of
service, whichever is higher.
 For Installation of Labor-Saving Devices or Disease:
 Separation pay equivalent to at least one month pay or one-half month
pay per year of service, whichever is greater.

5. Grounds Considered Illegal for Termination

 Termination based on discrimination (race, gender, religion).

 Dismissal due to union membership or activities.
 Retaliation for filing a complaint against the employer.

6. Remedies for Illegal Dismissal

If termination is deemed illegal due to lack of just cause or due process:

 Reinstatement: Employee is reinstated without loss of seniority rights.

 Full Back Wages: Payment from the time of dismissal to reinstatement.
 Separation Pay: If reinstatement isn't viable, separation pay may be granted.

7. Probationary Employment Termination

 May be terminated for just cause or if the employee fails to meet the reasonable standards
made known at the time of engagement.
 Requires due process similar to that of regular employees.

8. Recent Developments and Jurisprudence

 Endo and Contractualization:

 "Endo" refers to "end of contract" practices where employers avoid granting regular
status to employees.
 The government has intensified efforts to eliminate illegitimate contractualization
and enforce employers' compliance in granting regular employment status.
 Supreme Court Rulings:
 Various rulings have reinforced employees' rights against illegal dismissal and
clarified the application of due process.

9. Role of DOLE

 The Department of Labor and Employment monitors compliance and handles disputes.
 Implements programs to educate employers and employees about their rights and
obligations.

10. Importance for Employers and Employees

 For Employers:
 Ensures lawful and fair termination processes.
 Prevents legal disputes and penalties.
 Promotes a positive workplace environment.
 For Employees:
 Protects against unjust dismissal.
 Provides avenues for redress in cases of illegal termination.
 Enhances job security.
11. Best Practices

 Documentation: Maintain detailed records of employee performance and disciplinary

actions.
 Policies and Procedures: Establish clear company policies aligned with the Labor Code.
 Training: Provide management and HR personnel with training on labor laws.
 Legal Consultation: Seek legal advice when in doubt about termination matters.

Conclusion

Understanding the intricacies of termination and security of tenure under the Labor Code is
essential for both employers and employees. It ensures that the rights of workers are protected
while allowing employers to make legitimate business decisions. Adhering to the prescribed legal
procedures not only promotes fairness but also mitigates the risk of disputes and fosters a
harmonious employer-employee relationship.

The Labor Code of the Philippines (Presidential Decree No. 442) is the principal law governing
employment practices and labor relations in the country. Enacted on May 1, 1974, it consolidates
labor and social laws to protect workers' rights, promote their welfare, and regulate the relations
between workers and employers for industrial peace [Department of Labor and Employment
[DOLE], 2021a].

Key Provisions

1. Declaration of Basic Policy

The State shall afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race, or creed, and regulate relations between workers and
employers [Labor Code, Art. 3].

2. Right to Self-Organization

Workers have the right to form and join labor unions for the purpose of collective bargaining
[Labor Code, Art. 243].

3. Employment Conditions
  Working Hours: Normal working hours shall not exceed eight hours a day [Labor Code,
Art. 83].
 Overtime Pay: Work beyond eight hours is considered overtime and must be compensated
accordingly [Labor Code, Art. 87].
 Night Shift Differential: Employees working between 10 PM and 6 AM are entitled to a
night shift differential of not less than 10% of their regular wage [Labor Code, Art. 86].
 Rest Days: Employees are entitled to a weekly rest period of not less than 24 consecutive
hours after every six consecutive normal workdays [Labor Code, Art. 91].

4. Wages and Monetary Benefits

 Minimum Wage: Set by the Regional Tripartite Wages and Productivity Boards to ensure
workers receive a living wage [DOLE, 2021b].
 Thirteenth-Month Pay: Rank-and-file employees are entitled to a thirteenth-month pay
not later than December 24 every year [Presidential Decree No. 851].

5. Leaves and Other Benefits

 Service Incentive Leave: Five days of paid leave after one year of service [Labor Code, Art.
95].
 Maternity Leave: 105 days of paid leave for female workers, extended under the Expanded
Maternity Leave Law (Republic Act No. 11210) [Official Gazette, 2019].
 Paternity Leave: Seven days of paid leave for married male employees [Republic Act No.
8187].

Termination of Employment

1. Security of Tenure

Employees enjoy security of tenure and cannot be dismissed without just or authorized cause and
due process [Labor Code, Art. 294].

2. Just Causes for Termination

Per Article 297, an employer may terminate an employee for:

 Serious Misconduct
 Willful Disobedience
 Gross and Habitual Neglect of Duties
 Fraud or Willful Breach of Trust
  Commission of a Crime against the Employer or His Family

[Labor Code, Art. 297]

3. Authorized Causes for Termination

Under Article 298, an employer may terminate employment due to:

 Installation of Labor-Saving Devices

 Redundancy
 Retrenchment to Prevent Losses
 Closure or Cessation of Operation

[Labor Code, Art. 298]

Employees terminated under authorized causes are entitled to separation pay.

4. Procedural Due Process

 Just Causes: Requires two written notices—the notice of intent to dismiss specifying the
grounds, and the notice of dismissal after due deliberation [DOLE, 2020a].
 Authorized Causes: Requires a 30-day prior written notice to the employee and DOLE
[Labor Code, Art. 283].

Recent Developments and Amendments

1. Anti-Endo and Security of Tenure

The government has undertaken efforts to end the practice of "Endo" (end of contract) or labor-
only contracting, reinforcing employees' rights to security of tenure. While the proposed Security
of Tenure Bill was vetoed in 2019, DOLE has intensified enforcement of existing regulations
against illegal contractualization [DOLE, 2020b].

2. Expanded Maternity Leave Law

Republic Act No. 11210, enacted in 2019, extends maternity leave benefits from 60 to 105 days
with full pay, with an option to extend for an additional 30 days without pay. This law applies to all
female workers regardless of civil status or legitimacy of the child [Official Gazette, 2019].
3. Telecommuting Act

Republic Act No. 11165, or the Telecommuting Act, institutionalizes telecommuting as an

alternative work arrangement. Employers may offer telecommuting programs on a voluntary basis,
ensuring that telecommuting employees receive the same treatment as those working onsite
[DOLE, 2019].

4. Occupational Safety and Health Standards Law

Republic Act No. 11058 strengthens compliance with occupational safety and health (OSH)
standards and imposes penalties for violations. Employers are mandated to furnish workers a place
of employment free from hazardous conditions [DOLE, 2018].

Significant Aspects Affecting Employers and Employees

1. Working Hours and Overtime

Employers must adhere to regulations on working hours, overtime pay, and night shift differentials.
Failure to comply can result in legal disputes and penalties [DOLE, 2021c].

2. Employee Benefits

Understanding mandatory benefits is crucial. Employers are obliged to provide benefits such as SSS,
PhilHealth, and Pag-IBIG contributions, along with statutory leaves and bonuses [DOLE, 2021d].

3. Labor Relations

 Right to Unionize: Employees have the right to form or join labor unions for the purpose of
collective bargaining [Labor Code, Art. 243].
 Collective Bargaining Agreements (CBA): Establish terms and conditions of employment
through negotiation between the union and employer [Labor Code, Art. 252].

4. Dispute Resolution

The Code provides mechanisms for resolving labor disputes, including mediation, conciliation, and
arbitration through the National Labor Relations Commission (NLRC) [Labor Code, Art. 217].
Enforcement and Compliance

Role of DOLE

The Department of Labor and Employment is tasked with enforcing labor laws, conducting
inspections, and ensuring compliance. Employers are subject to inspections without prior notice
[DOLE, 2020c].

Penalties for Non-Compliance

Non-compliance with labor standards can result in:

 Administrative Penalties: Fines and orders to rectify violations.

 Criminal Liabilities: For serious offenses, such as child labor and OSH violations.
 Civil Liabilities: Payment of damages and back wages to aggrieved employees.

Challenges and Considerations

1. Informal Employment

A significant portion of the workforce is engaged in the informal sector, where enforcement of labor
laws is challenging [International Labour Organization [ILO], 2021].

2. COVID-19 Pandemic Impact

The pandemic has affected employment practices, with DOLE issuing guidelines on flexible work
arrangements, health protocols, and assistance programs for displaced workers [DOLE, 2021e].

3. Technological Advancements

The rise of the gig economy and digital platforms necessitates updates to existing labor laws to
protect freelancers and gig workers [ILO, 2021].

Conclusion

The Labor Code of the Philippines serves as the cornerstone for protecting workers' rights and
promoting fair labor practices. Its comprehensive provisions cover various aspects of employment,
ensuring that both employers and employees are aware of their rights and obligations. Recent
amendments reflect the government's commitment to adapting to changing work environments
and addressing current labor issues. Continuous education, enforcement, and dialogue among
stakeholders are essential to uphold the principles enshrined in the Labor Code.