Philippine Labor Law

History

• The Labor Code of the Philippines was established in 1974 on Labor Day by then current president Ferdinand Marcos. The Labor Code of the Philippines was created during a nine-year period of martial law as declared by Marcos in response to growing political unrest. Also known as Presidential Decree 442, several articles of the code have been amended since it was instated; the first several amendments were created in 1980. It took effect six months after its creation.
  
  

Format of the Labor Code

• The Labor Code consists of its preliminary title and a total of seven books, which include pre-employment; human resources development program; conditions of employment; health, safety and social welfare benefits; labor relations; post employment; and transitory and final provisions. Each book is then broken down into many chapters; chapters are then further subdivided by articles.
  
  

Important Points About the Labor Code

• The fundamental policy of the code, as paraphrased from the first chapter of the document, is to protect laborers from unscrupulous employers, encourage full employment, and guard against workplace discrimination. The Labor Code of the Philippines is a labor-friendly document; Article 4, Chapter 1 of the Preliminary Title section of the code states "All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor." Termination is also tightly regulated by the code, and can only occur legally under specific circumstances.
  
  

Enforcement of Philippine Labor Laws

• The Labor Code of the Philippines is enforced through a quasi-judicial organization called the National Labor Relations Commission, which was created by Marcos even before the Labor Code was enacted. The NLRC works in tandem with the Department of Labor and Employment to resolve employer/employee disputes and labor code violations. The five divisions of the NLRC have been region specific since 1986, following the EDSA revolution. The NLRC has been publicly dealing with a staggering backlog of cases for several years; however, its website does indicate a master plan to eliminate the backlog in the near future.
  
  

Information About Outsourcing to the Phillipines

• Due to low labor costs, the Philippines has become a popular destination for labor outsourcing, especially for call centers and information technology businesses. However, many of the labor laws in the Philippines may seem unusual to the outsourcing company, such as laws that prohibit women from working past midnight or stipulations to provide "thirteenth month" pay for employees who have worked a full year. Businesses are encouraged to research the labor code thoroughly before employing workers.