Overhaul the Labor Code–now!

THE overhaul of the labor Code is long overdue. The Code was issued in 1974, or 48 years ago. President Ferdinand Marcos Sr., exercising extraordinary legislative power under a martial law government, issued Presidential Decree 442 to promulgate the Code.

The Labor Code is not aligned with the Constitution and the UNHRD. Why? The Labor Code, under Article 3 (“Declaration of policy”), fails to specify that the labor rights outlined in the Code are universal or for everyone, that is, without any exception.

The Code, essentially a compilation of pre-martial law labor legislations, is focused on the protection of the rights of paid employees in the formal or organized sector of the economy. However, the interpretation and implementation of the labor relations and labor standard laws (Books III to VI) have been narrow. Only a minority of workers, the regulars or permanent employees, are able to enjoy union formation and collective bargaining rights. As a result, the number of workers covered by registered collective bargaining agreements today is estimated to be over 200,000 only, a puny number compared to the 47 million reported by PSA as employed as of October 2022.

Who are the excluded? In the formal sector, these are the“endos”, casuals, project employees, shortterm hires, “job-order” government workers, “sacadas,” “pakiao” and other categories of non-regular paid employees. They have difficulties organizing themselves into unions or workers’ organizations that can assist employees in negotiating for job security, higher benefits, social protection coverage and redress for grievances.

And yes, the Labor Code is silent on the rights of the workers in the vast “informal economy.” The informals include the migrant workers, home-based workers, street vendors, jeepney/tricycle drivers, micro worker-entrepreneurs, unregistered service workers, agricultural tenants, landless rural workers, fisherfolks, informal construction workers, etcetera, etcetera.

Under the 1987 Constitution, the workers in both the formal and informal sectors of the economy are guaranteed equal protection and support from the government. The charter labor clause is clearly aligned with the 1948 UN Human Rights Declaration (UNHRD), which states that all humans should be recognized as “born free” and “equal in dignity and rights”.

The Labor Code is not aligned with the Constitution and the UNHRD. Why? The Labor Code, under Article 3 (“Declaration of policy”), fails to specify that the labor rights outlined in the Code are universal or for everyone, that is, without any exception. In contrast to the labor clause of the Constitution (Section 3, Article XIII) and the UNHRD, the Code omits the word “all ” when referring to workers. The Code simply states in a vague and general way that the “The State shall afford protection to labor, promote full employment, ensure equal work opportunities” and so on.

The non-universal character of the Code’s policy declaration on labor rights becomes clearer with the kind of laws that the Code provides. The various provisions of the Code, especially those dealing with labor standards and labor relations, are applicable mainly to the paid workers in the formal economy.

And when it comes to the formation of unions and collective bargaining, only the regulars or permanent workers are able to enjoy these rights. This is reinforced by labor jurisprudence that supports the contention of employers and their lawyers that only regular employees who are able to pass the four-way test on the existence of employer-employee relations can enjoy the unionism/ bargaining rights outlined in the Labor Code. The four-way test poses the following litigious questions in establishing the legal status of an employee: Who hires the worker? Who pays the worker? Who disciplines the worker? Who controls the work process?

In summary, the Labor Code is far from being inclusive. It is not a Labor Code for all workers.

This is why we welcome the declaration by Senators Sonny Angara and Jinggoy Estrada on their commitment to have the Labor Code revamped or overhauled. The two also happen to be long-time sponsors of the proposed Magna Carta for Workers in the Informal Economy (MCWIE), which failed to get the nod of the 13th, 14th, 15th, 16th, 17th and 18th Congresses. For two decades, the two legislative chambers had managed to ignore the demand of the numerous informals for equal treatment under the law.

Hopefully, this time it will be different. Senators Angara and Estrada, together with Congressmen Raymond Mendoza and Dan Fernandez in the House, are in a good position to lead Congress in the passage of a historic “magna carta” for the most numerous: the informals.

The two senators have also articulated additional reasons on the urgency of having a Labor Code overhaul. First, there is a need to recognize the rise of the digital work force and the absence of protective legislations for these workers, especially the gig workers and the online delivery boys and girls. Second, some of the old provisions of the Labor Code such as the night differential for women workers have become meaningless with the 24-7 transformation of the economy and the labor market.

Former DOLE Undersecretary Josephus Jimenez, who has been campaigning for a new, inclusive and forward-looking Labor Code, has also raised other arguments in support for a Labor Code overhaul. He describes the present Labor Code as “anti-development, anti-people and anti-business”. He wrote that the total development of the work force or “human capital development” (HCD) of all should be the overall guide in the crafting of a new Labor Code.

The HCD framework means, among other things, the overhaul of Books One and Two (on preemployment and human resource development) by putting emphasis on the nurturing of home-grown talents and high-level professional work force to boost the country’s own socio-economic development. This means less promotion of and dependence on outward migration, which divides families, weakens national economic capacity and benefits mainly host countries in need of Filipino skills and talents.

Jimenez also questions the way the Books dealing with labor standards and labor relations have been formulated. In particular, he labeled Book Five as being “topsy-turvy, hodge-podge, incoherent and has been subjected to a series of disjointed amendments.” Of course, a Labor Code that is “topsy-turvy, hodge-podge, incoherent” is good for certain labor law practitioners, who prosper in a highly confusing and legalistic labor situation. Atty. Jimenez is clearly not one of them.

At any rate, the Labor Code’s overhaul is truly long overdue.