BOOK FIVE

LABOR RELATIONS

Title I
POLICY AND DEFINITIONS

Chapter I
POLICY

Art. 211. Declaration of Policy.

A. 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.

B. To encourage a truly democratic method of regulating the relations between the employers and employees by
means of agreements freely entered into through collective bargaining, no court or administrative agency or official
shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment,
except as otherwise provided under this Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)
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1. OVERVIEW AND VIEWPOINT

“Labor Standards” refers to the minimum terms and conditions of employment which employees are legally entitled
to and employers must comply with.

“Labor Relations” refers to the interactions between employer and employees or their representatives and the
mechanism by which the standards and other terms and conditions of employment are negotiated, adjusted and
enforced.

The government labor relations policy is declared in Art. 211 which is a focused elaboration of the basic labor policy
announced in Art.3 which, in turn, echoes the constitutional mandates. The policy intends to attain social justice
through industrial peace and progress. The latter is founded on employee participation and collective interactions
between employer and employees. In Management parlance, the input is the parties’ rights and duties, the process
is worker’s organization and collective bargaining, and the output is industrial peace and progress towards social
justice as the end goal.
Work stoppage—known as “strike” by employees or “lockout” by the employer—is not favoured in law. It is
recognized as a legal right but regulated as to the purpose and manner of doing it. Deviation from the mandatory
requirements has adverse consequences to the violators. Work stoppage, because it is counter-productive, is and
has to be considered a measure of last resort.

The principle behind labor unionism in private industry is that industrial peace cannot be secured through
compulsion by law. Relations between private employers and their employees rest on an essentially voluntary basis.
Subject to the minimum requirements of wage laws and other labor and welfare legislation, the terms and conditions
of employment in the unionized private sector are settled through the process of collective bargaining.

Because labor relations are primarily “domestic,” third parties, even the Government, shy away from meddling, as
much as it can be helped. This is why an in-house problem solving structure, called grievance machinery, is a
requirement in CBAs. If this machinery fails, the parties themselves are free to select any third party, called voluntary
arbitrator, to resolve their differences.

The laws, as a force that balances the parties’ rights and obligations, are admittedly necessary in the industrial
setting.1

2. WORKERS’ ORGANIZATION

A labor or trade union is a combination of workmen organized for the ultimate purpose of securing through united
action the most favourable conditions as regards wages, hours of labor, conditions of employment, etc., for its
members.

In the popular sense a labor union is understood to be a completely organized body of dues-paying members,
operating through elected officers and constituting a militant, vital and functioning organ. It may be said that while
every labor union is a labor organization, not every labor organization is a labor union. The difference is one of
organization, composition and operation.

3. WHY WORKERS ORGANIZE

Self-help through economic action necessarily requires increasing the bargaining power of employees; hence one of
the basic purposes of a labor union is to eliminate competition among employees in the labor market.

Three other human desires should be noted among the forces that led workers to organize:

(1) One is the desire for job security.

(2) Employees wished to substitute what we should term “the rule of law” for the arbitrary and often capricious
exercise of power by the boss.

(3) Finally, unions helped to give employees a sense of participation in the business enterprises of which they are
part—a function of labor unions which became important as organizations spread into mass production industries.

The union is the recognized instrumentality and mouthpiece of the laborers.

4. ILO CONVENTION NO. 87

1
Art. 1700. 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.

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.