What is the Labor Code?

The Labor Code (Presidential Decree No. [PD] 442, as amended) is a set of substantive and procedural laws that prescribe the principal rights and responsibilities of employers, employees and other industrial participants, as well as the role of Government, in employment and related activities, so as to institute social justice. The Labor Code lays down the fundamental rights and correlative obligations of employers and employees to each other, such as those about work days and work hours, wage and wage protection, validity of dismissal as well as the processes of unionization and collective bargaining. Those substantive rights are enforceable through procedures prescribed in the Code, devised by either the parties themselves or the government in its role as regulator of employment relations.

The definition above was taken from Azucena's (2013) popular book on labor standards. All his books are available in fine bookstores nationwide. SOURCE: Azucena, C. A. (2013). The Labor Code: with Comments and Cases (Vol. 1). National Book Store. https://www.rexestore.com/labor-standards/981-the-labor-code-with-comments-and-cases-volume-i-revised-edition.html.

The Labor Code is a piece of labor law. Labor law is that branch of law which deals with the minimum standards, minimum terms, minimum conditions and minimum benefits of employment. It also deal with the methods, mechanism and processes of negotiating, adjusting or administering those rights. From this, we can deduce that labor law has two (2) branches: labor standards and labor relations. Labor standards law deals with what employers ought to give their employees and labor relations law concerns bargaining, unionism, termination of employment and legal remedies.

It can be said that the Labor Code is also a piece of civil law because it regulates the relations between individuals. Before the birth of labor law as a separate branch of law, employer-employee relationship was viewed and treated as a human relations and contractual setup. This is why Articles 1700 to 1712 of the New Civil Code speak of labor contracts. In fact, Article 1700 says: "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."

Article 1700 does not say capital-labor relationship is not contractual. It says "not MERELY contractual" because it is impressed with public interest. At its core, employment relations are contractual; however, their stipulations should not go below the minimum set by law and doubts must be resolved in favor of the workers.

Because of the special rules that have evolved which are designed to protect workers from oppression by capital, labor grew and became a separate branch of law. The truth is, sometimes, there are concepts in civil law that can no longer strictly applied to capital-labor setups.

For example, in Garcia v. PAL, the Supreme Court held that the civil law concept of unjust enrichment is overridden by the labor law concept of social justice. In that case, the issue was whether workers have to reimburse what they have received via payroll reinstatement pending their employer's appeal. The employer won and wanted to get back the money given. The High Court said no; the refund doctrine laid down in Genuino v NLRC unduly favors management.

Another example would be the strict scrutiny used against quitclaims. Quitclaims are waivers of rights. As we all know, rights may be waived. However, in labor law, quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy.

It can likewise be said that the Labor Code is a piece of criminal law because it has provisions on penalties for Illegal Recruitment (an offense) and other violations of its provisions. It also has tax provisions such as incentive schemes for employers for training apprentices and learners.