management prerogative

MANAGEMENT PREROGATIVEFRAMEWORK OF PHILIPPINE LABOR LAW

FOR EMPLOYERS & MANAGERS

©2015, Atty. Jericho B. del Puerto. All rights reserved. For permissions to use this material, send a request to this e-mail address: [email protected]

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Business Laws & Best Legal Practices

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Labor law can work for the advantage and benefit of the employer.

- ATTY. JERICHO B. DEL PUERTO

Business Lawyer & Legal ConsultantJDP Consulting Ltd. Co.

Business Law ProfessorSan Beda Graduate School of Business

Book Author, Legal Aspects of BusinessCentral Books Publishing

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Disclaimer

All statements, opinions, or information provided herein are for information purposes only. They should not be taken as professional/legal advice

and/or opinion on any matter for any purpose.

All opinions expressed by the speaker are solely his own.

They do not represent that of the organizations and associations which he may have any connection, association, or affiliation.

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What constitutes labor law?

Labor law is a body of laws regulating employment.

It primarily consists of: (a) the 1987 Constitution, (b) Labor Code, (c) Special laws (e.g. 13th Month Pay, SSS Law, Paternity Leave Law, VAWC Leave, etc.), (d) Jurisprudence (Supreme Court Decisions), (e) Omnibus

Rules Implementing the Labor Code, and (f) DOLE Advisories.

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What is the most important rule to know in labor law?

Full protection to labor

The 1987 Constitution itself requires the State to afford full protection to labor.

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What is the nextmost important rule to know in labor law?

Doubts in labor law and employment contract = Rule for Employees

Whenever there is doubt, all labor laws and employment contracts are construed in favor of the safety and decent living of the laborer.

- Article 1702, Civil Code

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What is the basis for labor law?

Social Justice

“The aim and the reason [and, as such,] the justification of labor laws is social justice.”

- Cesar Alvero Azucena, Jr., Former Supreme Court Justice

The basic tenet of social justice is that “those who have less in life must have more in law.”

The 1987 Philippine Constitution mandates the State to “afford full protection to labor, local and overseas, organized and unorganized, and

promote full employment and equality of employment opportunities to all.”

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What is the basis for labor law?

Social Justice

The State is required to “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.”

The workers are “entitled to security of tenure, humane conditions of work, and a living wage.” The constitutional right to security of tenure is “an act of

social justice.”

The State is mandated to “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.”

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Is labor law unfair to the employer?

No injustice to employer

While labor law is based on social justice, it does not necessarily mean that the employer is left to his/her own devices.

The Supreme Court itself has repeatedly mandated that injustice should not be done to the employer: “We cannot simply tolerate injustice to employers if only to protect the welfare of undeserving employees”.

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Supreme Court understands the problems of an employer…

“Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the management’s prerogative… to terminate his employment. Even as the law is solicitous of the welfare of employees, it must also protect the rights of an employer to exercise what are clearly management prerogatives. As long as the company’s exercise of those rights and prerogative is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.” (Emphasis supplied.)

- Rene P. Valiao v. The Hon. Court of Appeals, G.R. No. 146621, 30 July 2004.

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Supreme Court understands the problems of an employer…

Social justice is not one-sided.

“The law in protecting the rights of the employees, authorizes neither oppression nor self-destruction of the employer – there may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted as

to result in an injustice to the employer.”

Hence, the Supreme Court has correctly pointed out that social justice “is not one-sided.”

When is there a labor dispute?

Employment Relationship Labor Dispute

A labor dispute is “any controversy or matter concerning terms and conditions of employment or the association or representation of person in

negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in

the proximate relation of employer and employee.” Before any labor case may proceed, it is required first to establish the employer and employee

relationship between the parties.

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When is there an employer-employee relationship?

Four-fold Test of Employment

The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment

of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct.

The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the

means and methods to accomplish it.”

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What is the extent of control or power by the

employer?Management Prerogative

Management Prerogative is the wide freedom of the management “to regulate, according to its own discretion and judgment, all aspects of

employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of

workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.”

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Is there a limitation to management prerogative?

Management Prerogative

The exercise of management prerogative requires that it be done in good faith and with due regard to the rights of the employee.

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Proper use of management prerogative addresses labor concerns.- ATTY. JERICHO B. DEL PUERTO

For more information, contact:

JDP CONSULTING LTD. CO.Call: (+632) 479-5405, Fax: (+632) 479-5401Mobile: (+63) 917-622-0124E-mail: [email protected]: www.jdpconsulting.ph

You may also want to visit:

www.legalaspects.phBusiness Laws & Best Legal Practices

©2015, Atty. Jericho B. del Puerto. All rights reserved. For permissions to use this material, send a request to this e-mail address: [email protected]

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