REFERENCE MATERIALS
WORKPLACE RELATIONS:
CONCEPTS AND
APPLICATION
Bureau of Labor Relations
OVERVIEW OF PHILIPPINE LABOR RELATIONS SYSTEM
LEGAL BASES
Article XIII, Section 3, 1987 Constitution
o 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.
International Labor Standards – refer to conventions agreed upon by international actors,
resulting from a series of value judgments, set forth to protect basic worker rights, enhance
workers’ job security, and improve their terms of employment on a global scale. The intent of
such standards, then, is to establish a worldwide minimum level of protection from inhumane
labor practices through the adoption and implementation of said measures.
Labor Code, as amended
o Article 3: Declaration of Policy: 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.
o
Art. 211. Declaration of Policy:(1) It is the policy of the State:
a. 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;
b. To promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;
c. To foster the free and voluntary organization of a strong and united labor
movement;
d. To promote the enlightenment of workers concerning their rights and obligations
as union members and as employees;
e. To provide an adequate administrative machinery for the expeditious settlement
of labor or industrial disputes;
f. To ensure a stable but dynamic and just industrial peace; and
g. To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.
(2) 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)
o
Rules Implementing Book V of the Labor Code – DOLE Department Order No. 40-03
o
Other issuances of the Department of Labor and Employment – this refers to Advisories,
Department Orders, Department Circulars, etc. issued by DOLE for the guidance of the public
o
ILO Conventions - This refers to the conventions ratified by the State
o
Contracts
 Pertinent Civil Code provisions
 Article 1305 – meaning of contract
A contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service.
 Article 1306 – autonomy of contract
The contracting parties may establish such stipulations, clauses, terms and conditions
as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
 Article 1308 – mutuality of contract
The contract must bind both contracting parties; its validity or compliance cannot be
left to the will of one of them.
 Article 1159 – obligatory force of contract
Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
 Article 1700 – employment contract impressed with public interest
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 lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.
 Article 1702 – doubt resolved in favor of the safety and decent living of the laborer
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.
 In the absence of a contract, or whenever the existence of employer-employee
relationship is in issue, we use the four fold test. These are:
 Selection and engagement of employee;
 Payment of wages;
 Power of dismissal; and
 Power of control (the most important test). - Control over the means and manner of
work done by the employee and over the results of the work
Factors Affecting the Philippine Labor Relations System (laws, economy, stakeholders’ attitude)
Tripartism - refers to economic corporatism based on tripartite contracts of business, labor, and
state affiliations within the economy. Each is to act as a social partner to create economic policy
through cooperation, consultation, negotiation, and compromise.
o
Labor Code: Art. 275. Tripartism and tripartite conferences.
a. Tripartism in labor relations is hereby declared a State policy. Towards this end, workers
and employers shall, as far as practicable, be represented in decision and policy-making
bodies of the government.
b. The Secretary of Labor and Employment or his duly authorized representatives may, from
time to time, call a national, regional, or industrial tripartite conference of representatives of
government, workers and employers for the consideration and adoption of voluntary codes
of principles designed to promote industrial peace based on social justice or to align labor
movement relations with established priorities in economic and social development. In
calling such conference, the Secretary of Labor and Employment may consult with
accredited representatives of workers and employers. (As amended by Section 32, Republic
Act No. 6715, March 21, 1989)
o
Republic Act No. 10395: “An Act Strengthening Tripartism, Amending for the purpose Article
275 of the Labor Code
Tripartism Law was signed on 14 March 2013. It aims to promote broader social dialogue,
promoting industrial peace and incorporating the twenty (20) labor and employer
representatives each to be designated by the President at a regular interval in using the
most representative organization criterion as stated in ILO Convention 144.
o
Tripartite components and their roles
Components
Workers representatives
1.
2.
Employers representatives
1.
2.
Roles
To represent workers sector during consultations by
decision and policy-making bodies of the
government; and
To contribute during tripartite conferences for
purposes of consideration and adoption of
voluntary codes of principles for the promotion of
industrial peace
To represent the employers sector during
consultations by decision and policy-making bodies
of the government; and
To contribute during tripartite conferences for
purposes of consideration and adoption of
voluntary codes of principles for the promotion of
industrial peace
Government
1. To consult representatives of workers and employers
in decision and policy-making bodies of the
government; and
2. To facilitate tripartite conferences for purposes of
consideration and adoption of voluntary codes of
principles for the promotion of industrial peace
TOPIC I: EMPLOYER-EMPLOYEE RELATIONSHIP
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 (Book V, Labor Code).
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 (Book V, Labor Code).
Establishing Existence of Employer-Employee Relationship
Employment contract - the starting point for the application of the Philippine Labor Code. It
refers to the consent of both the employer and the employee whereby the latter agrees to
provide services to the former in consideration of payment of salary or wage.
Four-fold test
o
o
o
o
Selection and engagement of employee;
Payment of wages;
Power of dismissal; and
Power of control (the most important test). Control over the means and manner of work
done by the employee and over the results of the work
Note: This test is applied in case there is no contract or there is an issue on whether an
employer-employee relationship exists.
Economic Reality Test
In view of today’s highly specialized workforce, the court are often faced with situations
where the right-of-control-test alone can no longer adequately determine the existence of
employer-employer relationship. Subsequently, another test has been devised to fill the gap, known
as the economic reality test.
In Sevilla v. Court of Appeals, the Court observed the need to consider the existing economic
conditions prevailing between the parties, in addition to the standard of right-of-control, to give a
clearer picture in determining the existence of an employer-employee relationship based on an
analysis of the totality of economic circumstances of the worker.
Economic realities of the employment relations help provide a comprehensive analysis of
the true classification of the individual, whether as employee, independent contractor, corporate
officer or some other capacity.
Under economic reality test, the benchmark in analyzing 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
latter’s line of business.
Applying this test, if the putative employee is economically dependent on putative employer
for his continued employment in the latter’s line of business, there is employer-employee
relationship between them. Otherwise, there is none.
Contracting/Subcontracting Arrangements (DOLE Department Order No. 18-A)
Contracting and subcontracting arrangements are expressly allowed by law and are subject
to regulations for the promotion of employment and the observance of the rights of workers to just
and humane conditions of work, security of tenure, self-organization and collective bargaining
agreement.
“Contracting” or “subcontracting” refers to an arrangement whereby a principal agrees to
put out of farm out with the contractor the performance or completion of a specific job, work or
service within a definite or predetermined period, regardless of whether such job or service is to be
performed or completed within or outside the premises of the principal. In legitimate contracting or
subcontracting arrangement there exists:
a) An employer-employee relationship between the contractor and the employees it engaged
to perform the specific job, work or service being contracted; and
b) A contractual relationship between the principal and the contractor as governed by the
provisions of the Labor Code.
In the event of any violation of any provision of the Labor Code, including the failure to pay
wages, there exists a solidary liability on the part of the principal and the contractor for purposes of
enforcing the provisions of the Labor Code and other social legislation, to the extent of the work
performed under the employment contract. However, the principal shall be deemed the direct
employer of the contractor’s employee in cases where there is a finding by a competent authority of
labor-only contracting, or commission of prohibited activities as provided in Section 7, or a violation
of either Sections 8 or 91.
TOPIC 2: RIGHTS AND OBLIGATION OF EMPLOYEES AND EMPLOYERS
Employee
RIGHTS
Security of tenure
Just and humane condition of work
Living wage
Just share in the fruits of production
1
OBLIGATIONS
To obey
o Contract of employment
o Company rules and policies
o Union Constitution and By-laws
o Labor Code, IRR, particularly in the
Section 7. Other prohibitions; Section 8. Rights of contractor’s employees; Section 9. Required contracts
under these Rules (Employment contract between contractor and employee, and Service Agreement between
contractor and principal)
Association/organization
Peaceful concerted activities
Collective bargaining or negotiation with
management
Participate in policy and decision making
processes affecting their rights
exercise of right to self
organization
To observe good faith and loyalty
To exercise skill and care (diligence) in the
performance of his or her job
Statutory rights
o Labor standards
o Safe and healthful conditions of work
o Labor education through seminars, dialogues and information, education and
communication materials
Note: These are provided under the Labor Code. This list is not inclusive as there are other
statutes which give certain rights to workers (e.g. 13th month pay, paternity leave, maternity
leave, solo parent leave, etc.)
Employer
RIGHTS
Conduct business;
Prescribe rules;
Select and hire employees;
Discipline employees;
Transfer, or discharge employees; and
Return of investment and expansion of
business.
OBLIGATIONS
Pay the wages as well as give all other
benefits due them under the law and the
CBA;
Provide healthy and safe working places
Implement /enforce the company rules
and regulations;
Look into the welfare of the employees;
and
Respect the dignity of the work
TOPIC NO. 3: SECURITY OF TENURE
Security of tenure refers to the right of an employee to keep his job and not to be
terminated except only for causes allowed under the law.
Conditions for the right to security of tenure to apply
Existence of employer-employee relationship
Just and authorized causes
o Just Causes: Article 282- Termination by employer- An employer may terminate an
employment for any of the following cause:
 Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
 Gross and habitual neglect by the employee of his duties;
 Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
 Commission of crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and
 Other cause analogous to the foregoing.
o
Authorized Causes: Article 283. Closure of establishment and reduction of personnel. – The
employer may also terminate the employment of any employee due to the installation of
labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation
of operation of the establishment or undertaking unless the closing of for the purpose of
circumventing the provisions of this Title, and the Department of Labor and Employment at
least one (1) month before the intended date thereof. In case of termination due to
redundancy, the worker affected thereby shall be untitled to a separation pay equivalent to
at least his one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations or establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is greater, a fraction at least
six (6) months being considered as one (1) whole year.
o
Other Causes
 Article 284. Disease as ground for termination. – An employer may terminate the
services of an employee who has been found to be surfing from any disease and whose
continued employment is prohibited by law or is prejudicial to his health as well as to
the health of his so-employees: provided, That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6) months being considered as one (1)
whole year.
 Article 285. Termination by employee.- An employee may terminate without just cause
the employee- employer relationship by serving a written notice on the employer at
least (1) month in advance. The employer at whom no such notice was served may hold
the employee liable for damages. An employee may put an end the relationship without
serving any notice on the employer for any of the following just causes:
 Serious insult by the employer his representative on the honor and person of the
employee;
 Inhuman and unbearable treatment accorded the employer or his representative;
 Commission of a crime or offense by the employer or any of the immediate
members for his family; and
 Other causes analogous to any of the foregoing.
 Enforcement of Union Security Clause in the Collective Bargaining Agreement (CBA)
Due process
o Procedural Requirement: Twin-Notice Rule

The first written notice to be served on the employees should contain the specific
causes or grounds for termination against them, and a directive that the employees are
given the opportunity to submit their written explanation within a reasonable period.
“Reasonable opportunity” under the Omnibus Rules means every kind of assistance that
management must accord to the employees to enable them to prepare adequately for
their defense. This should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the accusation
against them, consult a union official or lawyer, gather data and evidence, and decide on
the defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should
contain a detailed narration of the facts and circumstances that will serve as basis for
the charge against the employees. A general description of the charge will not suffice.
Lastly, the notice should specifically mention which company rules, if any, are violated
and/or which among the grounds under Art. 282 is being charged against the
employees.

After serving the first notice, the employers should schedule and conduct a hearing or
conference wherein the employees will be given the opportunity to: (a) explain and
clarify their defenses to the charge against them; (b) present evidence in support of their
defenses; and (c) rebut the evidence presented against them by the management.
During the hearing or conference, the employees are given the chance to defend
themselves personally, with the assistance of a representative or counsel of their choice.
Moreover, this conference or hearing could be used by the parties as an opportunity to
come to an amicable settlement.

After determining that termination of employment is justified, the employers shall serve
the employees a written notice of termination indicating that: (a) all circumstances
involving the charge against the employees have been considered; and (b) grounds have
been established to justify the severance of their employment.
o
Article 277 [b] - Observance of administrative due process and Right of workers to demand
proof that dismissal is for just authorized cause. – Subject to the constitutional right of
workers to security of tenure and their right to be protected against dismissal except for a
just authorized cause and without prejudice to the worker notice under Article 283 of this
Code the employer shall furnish the worker whose employment is sought to be terminated a
written notice containing a statement of the causes for termination and shall afforded the
latter ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations
promulgated pursuant to guidelines set by the employer shall be legality or his dismissal by
filling a complaint with the regional branch of the National Labor Relations Commission. The
burden of providing that the termination was for a valid or authorized cause shall rest on the
employer. The Secretary of the Department of Labor and Employment may suspend the
effects of the termination pending resolution of the dispute in the event of a prima-facie
finding by the appropriate official of the Department of Labor Employment before whom
such dispute is pending that the termination may cause a serious labor dispute or is in
implementation of a mass lay-off.
o
Article 279. - Right to contest dismissal and Right to reinstatement without loss of seniority,
full back wages and other benefits. - 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. An employee who is unjustly dismissed from work shall be entitled to re-instatement
without loss of seniority rights and other privileges and to his full back wages, inclusive of
allowances, and to his other benefits of their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement.
Kinds of employees according to security of tenure:
Regular Employment/Employee
o The employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer; OR
o The employee has rendered at least one year of service, whether such service is
continuous or broken, with respect to the activity in which he is employed and his
employment shall continue while such activity exists; OR
o The employee is allowed to work after a probationary period.
Casual Employment/Employee
o
Where an employee is engaged to perform a job, work or service which is merely
incidental to the business of the employer, and such job, work or service is for a definite
period made known to the employee at the time of engagement; provided, that any
employee who has rendered at least one year of service, whether such service is
continuous or not, 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.
Seasonal Employment/Employee
o Where an employee is engaged to work during a particular season on an activity which is
usually necessary or desirable in the usual business or trade of the employer.
Probationary Employment/Employee
o Where the employee is on trial by an employer during which the employer determines
the qualification of the employee for regular employment.
Project Employment/Employee
o Where the employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time of the engagement
of the employee.
Fixed-Term Employment/Employee
o Where employee is engaged to perform on a specific project or undertaking which is
usually necessary or desirable in the usual business or trade of the employer, the
completion of which has been determined at the time of the engagement of the
employee.
TOPIC NO. 4: MANAGEMENT PREROGATIVE
MANAGEMENT is any person or entity doing business for profit, with the use of labor and capital.
MANAGEMENT PREROGATIVES are the rights and privileges of decision and action flowing from
managerial control – embraces all aspects of the business.
Two Aspects of Management Prerogative:
1) Operational Aspect – which means the freedom of the employer to direct the operations of
its business as it sees fit
a. Impose reasonable conditions for hiring
b. Determine the size of the workforce.
c. Reasonable returns of investment and to expansion and growth.
d. Contract out the performance of some of its jobs or services.
e. Reduce his personnel or close his establishment in the following cases:
i. Introduction of labor-saving devices results in redundancy;
ii. Retrenchment is necessary to prevent losses or cessation of operation of the
establishment; and
iii. Total closure is justified due to substantial losses in business operations.
f. Suspend business operations in case of natural calamities that hit the area of
operations.
2) Personnel Aspect – which means the freedom to prescribe policies and rules regarding
personnel actions, discipline and organization, including the right to HIRE and FIRE.
Nature of Management Prerogative: Except as limited by special laws, an employer is free to
regulate, according to his own discretion and judgment, all aspects of employment.
General Rule: Management determines the direction and conduct of its business and regulates all
aspects of employment, including:
1) Hiring
2) Work assignments
3) Working methods
4) Time, place, manner of work
5) Tools and processes
6) Supervision of workers
7) Work regulations
8) Transfer of employees
9) Discipline, dismissal, lay- off, recall of employees
Exercise of management prerogative must be:
1) in good faith, not based on malice
2) for valid business reasons
3) not covered by any legal or contractual limitation
Limitations on the Exercise of Management Prerogative
1) Contractual limitation
a. Individual contracts
May specify agreed terms and conditions of employment and because of their
contractual nature, cannot be altered unilaterally by Management
b. Collective Bargaining Agreements (CBA)
May specify agreed terms and conditions of employment and because of their
contractual nature, cannot be altered unilaterally by Management
c. Implied terms and established practices (Company Practice)
Implied terms and conditions arise from company practices and usually become a
“vested right” on the part of the employee. Although not a contract, it still cannot be
altered unilaterally.
2) Legal limitation
a. Presumption in favor of labor
b. Security of tenure
c. Labor standards
d. Right to self - organization
e. Collective bargaining (if unionized)
TOPIC NO. 5: JURISDICTION ON LABOR DISPUTES
A labor dispute is any controversy or matter concerning the association or representation of
persons for purposes of collective bargaining, or concerning terms or conditions of employment;
including violations of labor standards, labor relations and welfare and social laws.
Types of Disputes
Labor standards – include non-payment or underpayment of wages and wage-related benefits
and violations of health and safety standards
Labor relations – include employee discipline or dismissals, unfair labor practice (ULP), disputes
arising from the right of unions to represent employees for purposes of bargaining, bargaining
deadlocks, strikes and lockouts, contract administration and policy disputes.
Welfare and social legislation disputes – refer to claims arising from failure of the employer to
comply with its social and welfare obligations under the law, such as remittance of SSS
premiums and ECC contributions, or failure to pay social benefits including maternity pay,
medical care and disability compensation.
Single Entry Approach (SEnA) Program
Issuances
o DOLE Department Order No. 107-10
 Signed by the Secretary on 05 October 2010, took effect on 26 October 2010, or 15 days
after its publication in the Philippine Star.
o Rules of Procedure on SEnA
 Issued on 25 February 2011, published on 19 March 2011 in the Philippine Star.
o Republic Act No. 10396: An Act Strengthening Conciliation-Mediation As A Voluntary Mode
Of Dispute Settlement For All Labor Cases, Amending For This Purpose Article 228 Of
Presidential Decree No. 442, As Amended, Otherwise Known As The "Labor Code Of The
Philippines"
The law provides that all issues arising from labor and employment shall be subject to
mandatory conciliation-mediation, proceedings which, may be pre-terminated by the parties
involved with a request for endorsement from the appropriate DOLE agency or office, or for
voluntary arbitration.
SEnA is a conciliation-mediation process to provide a speedy, impartial, inexpensive and
accessible settlement procedure of all labor issues or conflicts to prevent them from ripening
into full blown disputes.
Guiding Principles
o Speedy, impartial, inexpensive and accessible settlement services for unresolved
issues/complaints arising from employer-employee relations
o Conciliation-mediation as the primary mode in the settlement of all labor cases; and
o Strengthen cooperation and coordination between and among DOLE agencies involved in
dispute settlement.
Scope and Coverage: All cases falling under the administrative and quasi-judicial functions of all
DOLE offices and attached agencies including the NLRC
Exemptions:
o Notices of strikes/lockouts, or preventive mediation cases
o Issues arising from the interpretation or implementation of the collective bargaining
agreement and those arising from interpretation or enforcement of company personnel
policies
o C.E.
o OSH issues involving imminent danger;
o AEP;
o PRPA/POEA License;
o Working Child Permit;
o PRC License;
o TESDA Accreditations;
o Other similar permits/licenses/registrations
Process Flow
Jurisdiction of DOLE Offices
Labor Standards
o DOLE Regional Office
Labor Relations
Union representation
Intra-Union disputes and
Cancellation of Union
Registration
Bargaining deadlocks
needing conciliationmediation
CBA Administration
Disputes involving
personnel policies
Mediator Arbiter of the DOLE Regional Office
DOLE Regional Office or the Bureau of Labor Relations (BLR)
Regional branches of the National Conciliation and Mediation
Board (NCMB)
Grievance machinery of the establishment (if any) and Regional
branches of the National Conciliation and Mediation Board
(NCMB)
SUGGESTED READINGS
Book V Labor Code, as amended
Tripartism Law (Republic Act No. 10395)
Conciliation-Mediation Law (Republic Act No. 10395)
DOLE Department Order No. 107-10
o SEnA Rules of Procedure
DOLE Department Order No. 40-03