CHAPTER 2.

THE CONSTITUTIONAL AND LEGAL FRAMEWORK

Managing human resources is of ten times fraught with legal implications. One
cannot just ignore the protection of the rights of labor that are enshrined in our Constitution
and statutes principally the Labor Code. Ignoring the legal aspects of human resources
can result in legal suits that could cost a lot of money to your company and to your
company's reputation. Worse is, the human resource manager, the Chief Executive Officer
and other executives responsible in ignoring the law are also personally accountable and
liable for the company's violation.
Jurisprudence in our country is replete with countless examples of companies at
the losing end of legal suits. Some of these cases could have been averted if employers
were a little bit circumspect in observing the law. Companies have the benefit of in-house
or outside legal counsel but “preventive lawyering” could be a good policy in dealing with
human resource problems. By preventive lawyering we mean it is better to prevent
litigation unless it is extremely unavoidable. As the old adage says: An ounce of
prevention is better than a pound of cure.
The benefit of legal counsel notwithstanding, it is the responsibility of management
to become educated in labor laws. Should violation of the law occur, ignorance is no
excuse. The company and management may still be held liable. The Latin maxim applies:
“Ignorantia legis, nimenem excusat.” Ignorance of the law excuses no one.
It is therefore important for all man- pertinent provisions of the Constitution man
Resource Manager.
The Constitutional and Statutory provisions protecting labor are derived from the
“Police Power" of the State-the right of the state to regulate labor relations for the general
welfare and to maintain industrial peace. It is also based on social justice to ensure
protection of the weaker social partner-labor.
THE CONSTITUTIONAL BASIS
The Philippine Constitution laid the basis for protecting the rights and welfare of
employees. In the Declaration of Principles and State Policies° the Constitution provides:
The State affirms labor as a primary socio-economic force. It shall protect the right
of workers and promote their welfare. (Article II, Section 18)
Along this line, the Constitution protects the right of employees to form unions,
association or societies for purposes not contrary to law.
Also, pursuant to this Declaration of Principles, Article XIlI, Section 3 expands its labor
policy by providing that:
  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.
STATUTORY AND INTERNATIONAL BASIS OF RIGHT TO SELF-ORGANIZATION
The Labor Code reinforces this Constitutional right to self-organization (Art. 211). Also,
two Geneva Conventions ratified by our Senate and thus, become part of the law of the
land, guarantee workers the right to self-organization:
 ILO Convention 87 (Freedom of Association)
 ILO Convention 98 (Right to Collective Bargaining)
THE LABOR CODE
Originally, the Labor Code of the Philippines was enacted during Martial Law by
virtue of Presidential Decree 442.
Since then, it has undergone several amendments.

It is divided into six major parts. Book One deals with Pre-Employment; Book Two,
Human Resources Development Program; Book Three, Conditions of Employment; Book
Four, Health, Safe- ty, and Social Welfare Benefits; Book Five, Labor Relations; and Book
Six, Post-Employment.
It is not our intention to discuss the provisions of the Labor Code in detail. To meet
the objectives of this Chapter, suffice it to say that the Labor Code serves as the omnibus
enabling statute that gives flesh and meaning to the Labor Policy enunciated in the
Philippine Constitution.
Be that as it may, it is worthwhile to discuss some salient provisions of the Labor
Code and some important laws amending the Labor Code and special laws that people
managers should be aware of.
KINDS OF EMPLOYEES-DEFINITIONS

 Employer - includes any person acting in the interest of the employer directly or
indirectly.
 Employee - includes any person in the employ of an employer.
The two definitions above seem to give some confusion because a person can be an
employee but at the same time can be an employer if he acts “in the interest of the
employer directly or indirectly." So, to a layman, when will his classification as employee
end and when will his classification as employer begin? The succeeding classifications13
are more specific.
1. Managerial Employee is one who is vested with powers or prerogatives to lay
down and execute management policies and/or hire, transfer, suspend, layoff,
recall, discharge, assign, or discipline employees.
2. Supervisory Employee is one who, in the interest of the employer, effectively
recommends such managerial actions if the exercise of such authority is not merely
routinely or clerical in nature but requires the use of independent judgment. The key
words in the above definition of a supervisory employee are "effectively
recommends such managerial actions." The actions referred to are: to execute
management policies, hire, transfer, suspend, layoff, recall, discharge, assign, or
discharge employees. The definition further clarifies that the exercise of such
authority is not merely routinary or clerical but re- quires the use of independent
judgment.
3. Rank and File Employee, is one not falling under any of the preceding definitions
of managerial or supervisory employee.
The Labor Code therefore classifies employees into three categories: Managerial,
Supervisory and Rank and File. In actual negotiations, however, management may
bargain for the exclusion of confidential positions such as secretary, and other
professional and technical positions in the bargaining unit.

TYPES OF EMPLOYEES IN TERMS OF TENURE

The law protects employees in their security of tenure. Regardless of their term of
employment, employees can only be terminated for cause or authorized causes as
provided tenor coded period and the types of re ended. There are five types of
employment. Art.280 of the Labor code defines the first three types of employment.

1. Regular. Regardless of the written or oral agreement, ＂an employment shall

be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or
trade of the employer;
2. Project. “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 or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
 season."
3. Casual. “An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided That, any employee who has rendered at
least one-year service, whether such service is continuous or broken, shall be
considered a regular employee and his employment shall continue while such
activity exists."
4. Probationary. As defined in Art. 281 which provides "Probationary employment
shall not exceed six (6) months from the date the employee started working,
unless it is covered by an apprenticeship agreement stipulating a longer
period." His services "may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be
considered a regular employee.
5. Fixed contract employee as settled in jurisprudence. An "employment with a
fixed term, where there's a day certain agreed upon by the parties for the
commencement and termination of their employment relationship, a day certain
being understood to be that which must necessarily come, although it may not
be known when."

It is not the intention of this writer to look into the ramifications of the current practice
of hiring contractual employees through the services of manpower agencies or the hiring
of members of workers' cooperative. Suffice it to say that the pro- visions of Article 106 of
the Labor Code which empowers the Secretary of Labor to “restrict or prohibit the
contracting out of labor to protect the rights of workers" and the definition of “labor - only”
contracting as further clarified by D.O. 18-02 has spawned a lot of controversies in the
matter of contracting out or outsourcing services.
HEALTH, SAFETY AND SOCIAL WELFARE PROVISIONS
It is the responsibility of the Employer to provide safe and healthy working conditions
in the workplace. Articles 156 to 161 of the Labor Code require employers to provide
medical and dental services. Here are some important requirements.
1. To keep in the employer's establishment such first-aid medicines and equipment
as the nature and conditions of work may require, in accordance with such
regulations at the DOLE shall provide. Employer shall take steps in training of
sufficient number of employees in first-aid treatment.
2. To have services of a full-time registered nurse when number of employees
exceeds 50 but not more than 200.When employer does not maintain hazardous
workplaces, he can get the services of a graduate of first-aid where no registered
nurse is available.
 3. When the number of employees exceeds 200 but not more than 300, the employer
shall get the services of a full-time registered nurse, a part-time physician and
dentist and an emergency clinic.
4. When the number of employees exceeds 300, the employer shall obtain the
services of a full-time physician and dentist and a full-time registered nurse as well
as a dental clinic and an infirmary or emergency hospital with one bed capacity for
every 100 employees. The requirement for an emergency hospital or dental clinic
shall not be required where there is a hospital or dental clinic which is accessible
from the employers' establishment provided the employer makes arrangement for
the reservation therein of necessary beds and dental facilities for the use of the
employees.
5. The physicians, nurses, and dentists employed shall have the necessary training
in industrial medicine and occupational safety and health.
6. It shall be the duty of the employer to provide all necessary assistance to ensure
the adequate and immediate medical and dental attendance and treatment to an
injured or sick employee in case of emergency.
Employee Compensation and State Insurance Fund
The State shall promote and develop a tax-exempt employee compensation
program whereby employees and their dependents, in the event of work-connected
disability or death, may promptly secure adequate income benefit, and medical or related
benefits.
A State Insurance Fund is created out of monthly contributions by the employer for
the employee. The agency in charge of the administration of this fund is the Employees
Compensation Com- mission which is composed of five ex-of- ficio members, namely, the
Secretary of Labor and Employment, the GSIS General Manager, the SSS Administrator,
the Chairman of the Philippine Medical Care Commission, and the Executive Director of
the ECC secretariat and two appointee members, one of whom shall represent the
employees and the other, the employers to be appointed by the President of the
Philippines for a term of six years.
The State Insurance Fund shall be liable for compensation to the employee or his
dependents, except when the dis- ability or death was occasioned by the employee's
intoxication, willful intention to injure or kill himself or another, or notorious negligence.16
In case the employee's injury or death was due to failure of the employer to comply
with any law, or to install and maintain safety devices, or take other precautions for the
prevention of injury, said employer shall pay to the State Insurance Fund a penalty of
twenty-five percent of the lump sum equivalent of the income benefit payable by the
System to the employee.
LABOR RELATIONS
Labor-management relations central to the provisions of the Labor Code. This
particular aspect resource management will be human discussed extensively in the
chapters on Managing a non-unionized environment.
Labor relations can be defined as the aspect or quality that holds together the social
partners, labor and capital in the attainment of their mutual goal-just and equitable pay
and treatment and fair return on investments. Strictly speaking, itis the interaction
between a company's upper management and the rest of its employees.
Labor relations refer to the relationship between employers and employees in
industry, and the political decisions and laws that affect it.18 This definition infers that
labor relations between employers and employees are somehow influenced by a third
party which is the State that makes political decisions and provide laws affecting such
relationship.
Sources of conflicts in labor relations can be attributed to any or a combination of any
of the following causes:
1. Manner by which hierarchical demands are made or executed;
2. Clash between Management Prerogatives and Labor Rights; 3
3. Just share in the fruits of production;
4. Fair return in investments, expansion and. Growth
Manner by which Hierarchical Demands are Made or Executed
The basic definition of management is getting things done through people. A
manager's function is to plan, lead, organize, direct and control. He performs these
functions smoothly if he gets the full support and cooperation of his subordinates.
Directing and controlling do not mean barking an order to a subordinate. That is only done
in the military hierarchy.
It is the manner a directive is done that hurts the sensibilities of a subordinate and
causes friction in labor-management relations. As stated in the previous chapter, the days
of Command and Control is gone. You can get things done without shouting an order and
hurting the feelings of your people. A request can be more effective if your people know
the dire consequences if they don't comply with your request.
The highhanded manner these orders are made could lead to ruffled feelings,
resulting in deliberate disobedience, dismissal, grievance, industrial dispute and
sometimes strikes.
Management Prerogatives versus Labor Rights
There is always the built-in clash between management prerogatives and labor
rights. Management should not surrender its rights for the sake of industrial peace. But it
must also understand and respect the rights of employees. In the management of human
resources, somehow there must be a happy balance between management prerogatives
and workers' rights. Both are not necessarily mutually exclusive.
The first step is for both parties to understand their respective rights and to know
where one ends and the other begins. Let's make an eyeball-to-eyeball comparison of
the prerogatives of management and rights of labor.

At first blush, the management prerogatives and labor rights cited from previous
page seem to be diametrically opposed to each other. But a give and take attitude of both
parties can reconcile these seemingly contradictory powers and rights. It is in the desire
of both parties in arriving at a win-win situation where these opposing forces can be
reconciled. For one thing, none of the powers of management is absolute; nor are any of
the labor rights. For example, the power to discipline is subject to rules of substantive and
procedural due process. Conversely, the right to strike is not absolute. It is subject to the
conditions provided for by law.
Just Share in Fruits of Production. This is one of the most contentious issues in
labor- management relations. The law does not specify how much of the fruits of
production will be shared between labor and capital. Employer sometimes complains that
labor does not share in the burden of losses. Workers on the other hand, complain, not
some- times without justification, that employer through "creative accounting" reports
losses when in truth it has operating prof- its.
This charge and counter charge could sometimes make the dispute emotional and
counterproductive. That's why the law requires management, upon demand of the
employees thru the union, to show the financial statements of the company.
Fair Return in Investments, Expansion and Growth
This is corollary to the immediately preceding issue of just share in the fruits of
production. The Constitution and the enabling law give allowance in the allocation of the
fruits (profits) of production, a fair return in investment and a reserve for expansion and
growth. But what's the ratio in proportion to just share to employees is left to the judgment
of both social partners. Again, this issue can be a source of serious industrial dispute that
could lead to slowdown in work stoppage and strike.
UNFAIR LABOR PRACTICE (ULP)
Unfair labor practices are those covered under Articles 247,248 and 249 of the
Labor Code. It can be committed by the Employer or by the Employee al. though usually
ULP is always charged against the Employer. Here are some of the concepts of Unfair
Labor Practice: 1 Violates constitutional right of workers to self-organization Is inimical to
the legitimate interests of both labor and management and labor's right to bargain
collectively with freedom and mutual respect Disrupts industrial peace Hinders promotion
of healthy labor- management relations Violates civil rights of the parties Is a criminal
offense Unfair Labor Practice by Employer （Art.248, Labor Code) An employer commits
ULP when he/she:
1. Interferes, restrains, coerces employees in the exercise of their right to self-
organization;
2. Requires as a condition of employment that a person or an employee shall not join
a labor organization of shall withdraw from which he one belongs;
3. Services or functions being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their rights to self-
organization;
4. Initiates, dominates, assists or otherwise interferes with the formation/
administration of labor organization including giving of financial or other support to
its organizers or supporters;
5. Discriminates in regard to wages, hours of work, and other terms and conditions
of employment in order to encourage or discourage membership in labor
organizations;
6. Dismisses. discharges, or otherwise prejudice or discriminate against an employee
for having given or being about to give testimony under the Labor Code;
7. Violates the duty to bargain collectively as prescribed by the Labor Code;
8. Pays negotiation or attorney's fees to the Union or its officers or agents as part of
the settlement of any is- sue in Collective Bargaining Agreement; and 9 Violates a
Collective Bargaining Agreement.
Note: Under Art. 261 of the Labor Code, violations of the Collective Bargaining
Agreement shall no longer be treated as unfair labor practices but as grievances subject
to the grievance machinery and ultimately voluntary arbitration unless the violations are
gross in character, i.e., flagrant and/or malicious refusal to comply with economic pro-
visions of the CBA.
The grounds for unfair labor practice by labor organizations are almost the same as
in those committed by employers except those found in item nos. 3,4, 5.6 above.
 Since ULP is a criminal offense, only officers and agents of corporations,
associations or partnerships who have actually participated in, authorized or ratified unfair
labor practices shall be held liable.
STRIKES AND WORK STOPPAGES/LOCKOUTS
The right to strike is guaranteed by the Constitution and the law. But the right to strike
is not absolute. Neither is the right of employer to lockout. Employees can only strike on
two grounds:
1. Deadlock in Collective Bargaining Negotiations
2. Unfair Labor Practice (ULP)
Further conditions before a strike can be staged:
1. A strike notice must be filed with the Department of Labor and Employment 30
days before intended strike in case of deadlock in CBA negotiations; 15 days in
case of ULP;
2. Strike must be approved through secret balloting by the majority of the members
in the bargaining unit in a meeting called for the purpose. The National Conciliation
and Mediation Board (NCMB) of DOLE must be notified 24 hours before such
meeting as well as the results of the voting at least seven (7) days before the
intended strike.
Lockout is a weapon that can be availed of by the company under the above
conditions. It must be approved by two-thirds vote of the Board of Directors. Lockout,
however, is rarely used, if ever, by employers.
In the course of a strike, if an improved offer is made by the employer, the Union is
obliged to submit it to the general membership for approval or not.
The purpose of the 30- or 15-day period of strike notice is to provide a so- called
"cooling off" period to allow the NCMB to conciliate/mediate to avert a strike or lockout
and work for an amicable settlement of the dispute.
Can the Union Stage a Wildcat Strike?
Yes, in case of ULP involving the dismissal of a Union officer duly elected according
to its Constitution and By- Laws which amounts to union busting provided a strike vote is
conducted and results submitted to the regional branch of NCMB.
Illegal Strikes
A strike is a right guaranteed by our Constitution and law. But it is not a right that is
absolute. As indicated earlier, it is limited to two grounds: deadlock in collective
bargaining; and unfair labor practice act committed by the employer. There are also
procedures to be followed before the union can strike. Short of any of these conditions,
the strike can be declared illegal.
 Even if the legal conditions of the strike are satisfied, a strike can be declared illegal
if it was attended to in picketing “by violence, coercion, or intimidation or obstruct the free
ingress to or egress from the employer's premises for lawful purposes or obstruct the
public thoroughfares.” This happened in one major bank in Makati where managers
including foreign executives were barred from getting out of the building. The illegal strike
was dismissed.
THE LAW ON TERMINATIONS
The security of tenure of employees is guaranteed by the Constitution and by law.
Employers should not be trigger happy in dismissing employees. What is at stake is not
only the employee's livelihood but the ability to support his family in terms of food,
clothing, shelter, education, and health.
The state always regards workers with compassion as unemployment can bring
untold hardships and sorrow upon the worker and his dependents. An employee unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and
other privileges and his full back wages inclusive of allowances, or other benefits or their
monetary equivalent computed from the time his compensation. was withheld up to time
of reinstatement.
The law allows terminations due to Just Causes or Authorized Causes.
Just Causes
Art.282 of the Labor Code enumerates the following just causes of termination:
1. Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed on him by his employer
or duly authorized representative; Commission of a crime or offense
4. by the employee against the person of his employer or any immediate member of
his family or his duly authorized representative; and
5. Other causes analogous to the fore- going.
Can an employer preventively suspend an erring employee with pending
investigation? Yes, if there is imminent danger to life of the employer or his duly
authorized representative or his property.
Authorized Causes
Art. 283 of the Labor Code, employers can terminate employees due to authorized causes
under the following conditions:
1. Installation of labor-saving devices or redundancy provided the terminated
employee is given one (1) month pay for every year of service.
 2. Retrenchment to prevent losses or closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing
the law, provided, that the employee to be retrenched is given one-half (1/2) month
pay per year of service.
A fraction of at least six (6) months service is considered as one (1) whole year for
purposes of computing the separation pay.
Other Authorized Causes
Art. 284 of the Labor Code allows disease as a ground for termination un- der the
following conditions:
1. When one suffers a disease wherein his continued employment is prohib- ited by
law or prejudicial to his health or to the health of his co-employees provided there
is certification by a competent public health authority that the disease is of such
nature or stage that it cannot be cured with- in a period of six (6) months even with
proper medical treatment. The terminated employee is entitled to one half (1/2)
month pay per year of service. A fraction of at least six (6) months shall be
considered as one （1) whole year.
2. The Retirement Pay Law (R.A. 7641), amending Art.287 of the Labor Code,
authorizes an employer to terminate services of employees upon reaching the age
of 60 but not beyond 65 years of age provided he receives retirement pay - if the
company has no retirement plan of its own -equivalent to 22 days’ pay per year of
service.
If the company has its own retirement plan and its benefits are below that required by
law, it has to pay for the difference. The 22 days is the total of 15 days retirement pay
plus 1/12 of 13th month pay and cash equivalent of 5 days incentive leave pay per year
of service.20 Due Process Requirement the Bill of Rights of the Constitution provides that
no person shall be deprived of life, liberty or property without due process of law. The job
of a person is considered as his property and therefore he cannot be deprived of that
property with- out due process.
Due Process means that an erring employee is entitled to a "day in court," with the
assistance of counsel if he so desires, to confront the witnesses against him.
The "twin notice" requirement on termination due to just causes simply means that the
employer should give the worker two written notices before terminating his employment.
1. A notice served on the employee specifying the particular acts or omissions that
may cause his dis- missal and giving the employee reasonable opportunity within
which to explain his side.
2. A notice of termination served upon the employee, indicating that upon due
consideration of all the circumstances, grounds have been established to justify
his termination.
 At the hearing or conference, the employee concerned, with the assistance of counsel
if he so desires, is given the opportunity to respond to the charge, confront the witnesses
against him and to present his evidence or to rebut the evidence presented against him.
Note that a formal hearing (as in the manner of regular courts) is not required. Only
substantial evidence is necessary to warrant dismissal.
Failing to observe this twin notice requirement could subject the employer to monetary
sanction in the amount fixed by the labor arbitral body, National Labor Relations
Commission or by the courts.
However, in cases where the employee expressly admitted his infractions, no formal
administrative investigation is necessary. All that is needed of to inform the employee of
the findings of management.
In the case of termination due to Authorized Causes, the "twin notice" is satisfied by
informing the employee and the Department of Labor and Employment of his termination
one month in advance. Failing to do so will also subject the employer to monetary
sanction. SUMMARY OF
THE SALIENT POINTS OF THE LABOR CODE
 Primacy of free collective bargaining and negotiations
 Free trade unionism for promotion of social justice Free and voluntary organization
of strong and united labor movement
 Adequate machinery for expeditious settlement of disputes
 Workers' participation in decision and policy-making processes affecting their
rights, duties and welfare
 Dynamic and just industrial peace
 Encourage free trade unionism and free collective bargaining
 Right to engage in concerted activities including the right to strike
 Security of tenure - cannot be terminated except for just or authorized causes
 All doubts in implementation and interpretation of the Labor Code pro- visions
including the implementing rules shall be resolved in favor of labor

THE WAGE RATIONALIZATION LAW（R.A.6727)

This law was passed in 1989, among others, to "rationalize wage fixing of minimum
wages and to promote productivity improvement and gain-sharing measures." Whereas
during Martial Law, after "consultation" through government- organized tripartite meetings
with labor and employers' representatives, wage fixing was done by the President through
presidential decrees and later on, after EDSA, by Congress, wage fixing under R.A. 6727
has been delegated to the Regional Tripartite Wages and Productivity Boards (RTWPB).
The idea was to regionalize wage fixing to reflect the pre- vailing cost of living in a
particular region.
 Congress, however, may on its own volition, enact a bill to fix minimum wages.
Although there were some serious attempts to fix wages by Congressional initiative,
so far, they have not succeeded.
The RTWPB is composed of the Regional Director of the Department of Labor
and Employment as chairman, the Regional directors of the National Economic and
Development Authority and the Department of Trade and Industry as vice-chairmen
two
(2) members each from workers and employers’ sectors who shall be appointed by
the President of the Philippines, upon the recommendation of the DOLE secretary,
who shall serve for a term of five (5) years.
A National Wages and Productivity Commission was created whose function,
among others, is to exercise technical and administrative supervision over the
RTWPB. The Commission is composed of the Secretary of Labor and Employment
as ex-officio chairman, the Director General of the National Economic and
Development Authority (NEDA) as ex-officio vice-chairman and two (2) members
each from workers and employers sec- tors who shall be appointed by the President
of the Philippines, upon recommendation of the DOLE Secretary who shall serve for
a term of five (5) years.
The standard criteria for minimum wage fixing are the following:
1. The demand for living wages;
2. Wage adjustment vis-à-vis the consumer price index;
3. The cost of living and changes or increases therein;
4. The needs of workers and their families
5. The need to induce industries to invest in the countryside;
6. Improvements in the standard of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and capacity to pay of employers;
9. Effects on employment generation and family income; and
10. The equitable distribution of income and wealth along the imperatives of
economic and social development.
Any distortion of wage structure within any establishment resulting from a wage
order shall be resolved through the grievance procedure under the CBA and if it
remains unresolved, the issue shall be submitted to voluntary arbitration. In non-
unionized companies, distortion disputes shall be settled through the Nation- al
Conciliation and Mediation Board. If it remains unresolved, it shall be referred to the
appropriate branch of the National Labor Relations Commission (NLRC) for
compulsory arbitration.
The rules of the National Wages and Productivity Commission provide that no new
wage order shall be issued by any RTWPB within one (1) year from the last issuance
of a wage increase order unless there are supervening circumstances that warrant
such issuance of a new wage order.
ANTI-SEXUAL HARASSMENT LAW （R.A. 7877)
This law was enacted on February 14, 1995. Some companies previously took
a cavalier attitude on complaints of sexual harassment committed by superiors. Under
this law, companies could not just ignore the complaints because “the employer or
head of office, educational or training institutions shall be solidarity liable for damages
arising from the acts of sexual harassment committed in the employment, institution
or training environment if the employer or head of office, educational or training
institution is informed of such acts by the offended party and no immediate action is
taken thereon."
In fact, employers and heads of offices are required to promulgate appropriate
rules and regulations in consultation with and jointly approved by the employees or
students or trainees, through their duly designated representatives, pre- scribing the
procedure for the investigation of sexual harassment cases and the administrative
sanctions therefor.
Sexual harassment is defined as any work, education or training-related sexual
harassment committed by an employer, employee, manager, supervisor, agent of the
employer, teacher, instructor, professor, coach, trainer, or any other person who,
having authority, influence or moral ascendancy over another in a work or training or
education environment, demands, requests or otherwise requires sexual favor from
other, regardless of whether the demand, request or requirement for submission is
accepted by the object of said act.
Sexual harassment is a criminal offense punishable, upon conviction, by
imprisonment of not less than one (1) month nor more than six (6) months, or a fine
of not less than P10,000 nor more than P20,000 or both such fine and imprisonment
at the discretion of the court. This is without prejudice to filing a separate and
independent action for damages against the respondent.

THE NEW LABOR RELATIONS LAW （R.A.9481)

Perhaps the most controversial labor and social legislation law in recent history
is R.A. No. 9481 that was passed in 2008. Otherwise known as "An act strengthening
the workers' constitutional right to self-organization, amending the Labor Code of the
Philippines," the law has altered the right to self-organization landscape.
No law has perhaps been loudly protested not only by local businessmen. But
by the foreign chambers as well.
The salient provisions of the law that raised a lot of serious concern by employers are:
1. Filing of petition for certification election by a federation or national union
issuing a charter certificate to an unregistered local participating in the
certification election.
 This means that an unregistered local union can acquire a so-called "limited/
conditional" legitimate personality for the purpose of filing the petition for
certification election. By the word "limited/conditional," it signifies that all other
rights of that local union shall accrue upon sub- mission of the charter
certificate and supporting documents. The effect of chartering is, it allows a
local union to "sneak” into the certification election without the usual right of
the employer to question its legitimacy or true existence.

2. Comingling of rank-and-file and supervisory unions operating within the same

establishment in. the same federation and national unions without
qualifications/ conditions.

Supervisors are superiors of rank- and-file members. There is therefore built-

in conflict of interest between the two as the former represents the interest of
the management. The co-mingling of the two under the same federation or
national union could impair the supervisor's capacity to represent the interest
of management, to discipline, and di- vide loyalty during strike of rank-and-file
union. Worse, there could a possibility of a sympathy strike by the supervisors
upon the instigation of the federation or national union. The comingling can
also affect the desired stages of a grievance procedure.

3. Employer as by-stander in certification election unlike before when the

employer is a legitimate party in the proceedings.

Since the employer is now a by- stander and is limited only to mere sub-
mission of the list of employees, an employer cannot challenge the eligibility of
employees from being a member of a union on the ground that they are holding
supervisory or confidential positions in case of rank-and-file certification
election. Neither can an employer participate in the determination of what is
the bar- gaining unit.

4. Non-disclosure of who are officers and members of the union.

By no longer requiring a union to disclose the list of officers and members f of

the union, again, the employer is pre- vented from challenging the membership
of some who are not qualified to join the union either because they are not
classified as rank-and-file or supervisors in the case of supervisor's union, or
considered as confidential employees.

The bottom line of the law is, it further strengthens the Constitutional right to
self- organization to the disadvantage of companies who want to maintain a
no- union status. It has also a bias towards federated approach to union
organizing.

SUMMARY

It has been said that law never is, it is always being. Law is never
constant; it is always changing. The rapidly-changing technology, norms and
standards of society in this Information Age demand that laws must respond
to these changes. This is especially true with the socialistic tendency of our
Congress to enact laws to protect and promote the welfare of workers. We can
expect more labor and social legislations to come.

It is not enough for the human re- source department to appreciate the
legal environment under which businesses operate. All managers of people
must have a solid knowledge and understanding of all laws that impact on their
power to manage. Organizations and their authorized representatives (officers
and managers) are accountable for illegal acts committed in the workplace
even if these individuals are ignorant of the law.

The human resource department is at the forefront of this education

campaign. It must ensure that all departments are properly educated about
these pertinent laws.