Labor law is basically civil law

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. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.You may surprised to know that the above paragraph is not taken from the Labor Code of the Philippines (Presidential Decree 442). The first part is from Article 1700 of the Civil Code of the Philippines (Act 386) while the last sentence is from Article 1701.

Prior to the Labor Code of the Philippines and other special labor laws, the primary law that governed the relations between employers and employees was the Civil Code. The reality is, before the special branch of law called "labor law" was born, employment relationship was a contractual relationship, albeit impressed with public interest.

Let's define civil law first. Civil law is that branch of law which regulates the relations between persons, including their family, their property and their obligations. It covers the rules on civil liability for damages for injury suffered by one person due to the act or omission of another. From this definition, it can be inferred that the components of civil law are:

[1] Persons law;
[2] Family law;
[3] Property law;
[4] Obligations law;
[5] Contracts law (under which are sales law, credit transactions, etc.);
[6] Torts law; and
[7] Family law.

The employer's enterprise is his property. The employee's job is also treated as a property right. The relationship between them is contractual, i.e., they are free to stipulate terms and conditions of the arrangement so long as such stipulations are not contrary to law, morals, good customs, public order and public policy. However, as earlier pointed out, 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.

Due to the policy around the world on protection to labor as a primary social economic force and on protection of workers and their welfare recognized under Article II of our Constitution, including those policies under Section 3 of Article XIII, the special branch of civil law called "labor law" slowly emerged throughout the years. Due to special rules that have developed in labor law such as "speedy labor justice," it has successfully separated itself completely from civil law. Nevertheless, in the Philippines, the Supreme Court still cites civil law provisions in labor law cases because they are logically and historically inseparable.

Being impressed with public policy, there are aspects of employment relations not subject to stipulation such as the existence of employer-employee relationship. According to the Supreme Court, the existence of such relationship is a question of law. This means that, even if the parties stipulate in their employment contract that there is no such relationship, the juridical tie exists as a matter of law, not as a matter of stipulation.

The character of the relationship between the parties is not whatever they call it in their contract but what the law calls it after examination of the facts. If the facts show an employer-employee relationship, this conclusion shall stand even if the contract states otherwise. The recognition of the existence of employer-employee relationship is not dependent upon the agreement of the parties. The characterization by law prevails over that in the contract. In this sense, the existence of an employer-employee relationship is not a matter of stipulation; it is a question of law.

But the existence of an employer-employee relationship depends upon the facts of each case. In one case, an employer-employee relationship may be said to be present, but in another case, with different facts, it may be absent. In this sense, the existence of an employer-employee relationship is a question of fact. (Page 155 of Azucena on Labor Standards, citing G.R. No. 80680, January 26, 1989 and G.R. No. 100388, December 14, 2000.)

Labor law is basically civil law, albeit a special type because of the public and constitutional policy behind it.

SECTION 3 OF ARTICLE XIII: 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.