2nd Year Manresa
Labor Relations
SY 2024-2025
STATUTORY CLASSIFICATION OF EMPLOYEES
❑ The Labor Code classifies employees in the following manner:
1.) Managerial;
2.) Supervisory; and
3.) Rank-and-file.*
*Article 219(m) of the Labor Code.
STATUTORY CLASSIFICATION OF EMPLOYEES
❑ Managerial Employees
➢ Managerial employees are those vested with powers or
prerogatives to lay down and execute management
policies and/or hire, transfer, suspend, lay-off, recall,
discharge, assign, or discipline employees.
❑ Supervisory Employees
➢ Supervisory employees are those who, in the interest of
the employer, effectively recommend managerial actions if
the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent
judgment.
*Article 255 of the Labor Code: Re Managerial vs Supervisory Eligibility to form
a labor organization.
STATUTORY CLASSIFICATION OF EMPLOYEES
❑ Rank-and-file Employees
➢ Rank-and-file employees are those who are neither
managerial nor supervisory. They can either be daily-paid
or monthly-paid.
➢ Daily-paid employees are those who are paid only on the
day/s they actually worked and on unworked regular
holidays. Monthly-paid employees are those who are paid
every day of the month, including unworked rest days,
special holidays, and regular holidays.
STATUTORY CLASSIFICATION OF EMPLOYMENT
❑ The Labor Code classifies employment in the following
manner:
1.) Regular employment;
2.) Non-regular employment; and
3.) Casual employment.*
*Article 295 of the Labor Code.
STATUTORY CLASSIFICATION OF EMPLOYMENT
❑ Regular Employment
➢ Regular employment is a job where the employee was
engaged to perform activities necessary or desirable in the
usual business or trade of the employer.
STATUTORY CLASSIFICATION OF EMPLOYMENT
❑ Non-regular Employment
➢ Regular employment is a job where the employee was
engaged for a specific period or undertaking, for a
particular season, for a trial period, or for an activity that
is not usually necessary or desirable to the business or
trade.
It may be classified into:
1.) Project employment;
2.) Seasonal employment;
3.) Fixed-term employment;
4.) Probationary employment; and
5.) Casual employment.
CLASSIFICATION OF NON-REGULAR EMPLOYMENT
❑ Project Employment
➢ Project employment is a job where the employee was
engaged for a specific undertaking, the completion or
termination of which has been determined at the time of
the engagement.
❑ Seasonal Employment
➢ Seasonal employment is a job where the employee was
engaged to work during a particular season.
❑ Fixed-term Employment
➢ Fixed-term employment is a job where the parties by free
choice have assigned a specific date of termination.
CLASSIFICATION OF NON-REGULAR EMPLOYMENT
❑ Probationary Employment
➢ Probationary employment is a job where the employee
upon his engagement, is made to undergo a trial period to
enable the employer to determine his fitness for regular
employment on the basis of reasonable standards made
known to him at the time of engagement.*
❑ Casual Employment
➢ Casual employment is a job where the activities performed
by the employee are not usually necessary or desirable in
the usual business or trade of the employer.
*Article 296 of the Labor Code: shall not exceed 6 (six) months.
WHY IS IT IMPORTANT TO DETERMINE THE
CLASSIFICATION OF EMPLOYMENT?
ANSWER: SECURITY OF TENURE
➢ Regular employee = services cannot be terminated except
for just or authorized causes.*
*Article 294 of the Labor Code.
DEFINITION OF EMPLOYER
❑ The Labor Code defines the term “employer” in the following
manner:
"Employer" includes any person acting in the interest of
an employer, directly or indirectly. The term shall not
include any labor organization or any of its officers or
agents except when acting as employer.”
Note: The law used the word “includes” and not “means”. Intended to give
a broad meaning.
*Article 219(e) [formerly 212] of the Labor Code.
DEFINITION OF EMPLOYER
❑ Can an unregistered association be an employer independent of the
respective members it represents?
UNREGISTERED ASSOCIATION AS AN EMPLOYER
❑ Orlando Farm Growers Association v. NLRC,
G.R. No. 129076, November 25, 1998
SC Ruling: The contention that OFGA, being an unregistered
association and having been formed solely to serve as an
effective medium for dealing collectively with Stanfilco, does not
exist in law and, therefore, cannot be considered an employer, is
misleading. This assertion can easily be dismissed by reference
to Article 212 (e) [now 219(e)] of the Labor Code, as amended,
which defines an employer as any person acting in the interest of
an employer, directly or indirectly.
UNREGISTERED ASSOCIATION AS AN EMPLOYER
❑ Orlando Farm Growers Association v. NLRC, G.R. No. 129076
November 25, 1998
SC Ruling:
xxx Following a careful scrutiny of the said provision, the Court
concludes that the law does not require an employer to be
registered before he may come within the purview of the Labor
Code, consistent with the established rule in statutory
construction that when the law does not distinguish, we should
not distinguish. To do otherwise would bring about a situation
whereby employees are denied, not only redress of their
grievances, but, more importantly, the protection and benefits
accorded to them by law if their employer happens to be an
unregistered association
RIGHTS OF WORKERS
1.) Right to Security of Tenure
➢ In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause
or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his
actual reinstatement.*
*Article 294 of the Labor Code.
RIGHTS OF WORKERS
2.) Right to a living wage
➢ Standards/Criteria for minimum wage fixing. The regional minimum
wages to be established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the minimum
standards of living necessary for the health, efficiency and general
well-being of the employees within the framework of the national
economic and social development program.*
*Article 124 of the Labor Code.
RIGHTS OF WORKERS
2.) Right to a living wage
➢ In the determination of such regional minimum wages, the Regional
Board shall, among other relevant factors, consider the following:
▪ The demand for living wages;
▪ Wage adjustment vis-à-vis the consumer price index;
▪ The cost of living and changes or increases therein;
▪ The needs of workers and their families;
▪ The need to induce industries to invest in the countryside;
▪ Improvements in standards of living;
*Article 124 of the Labor Code.
RIGHTS OF WORKERS
2.) Right to a living wage
➢ In the determination of such regional minimum wages, the Regional
Board shall, among other relevant factors, consider the following:
xxx
▪ The prevailing wage levels;
▪ Fair return of the capital invested and capacity to pay of
employers;
▪ Effects on employment generation and family income; and
▪ The equitable distribution of income and wealth along the
imperatives of economic and social development.
*Article 124 of the Labor Code.
RIGHTS OF WORKERS
2.) Right to a living wage
➢ The wages prescribed in accordance with the provisions of this Title
shall be the standard prevailing minimum wages in every region.
These wages shall include wages varying with industries, provinces
or localities if in the judgment of the Regional Board, conditions make
such local differentiation proper and necessary to effectuate the
purpose of this Title.
*Article 124 of the Labor Code.
RIGHTS OF WORKERS
3.) Right to humane conditions of work
➢ Every workingman is entitled to be protected against the dangers of
sickness or death through safe and healthful working conditions.*
*Rule 1001, Occupational Safety and Health Standards.
RIGHTS OF WORKERS
4.) Right to self-organization
➢ All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical,
or educational institutions, whether operating for profit or not,
shall have the right to self-organization and to form, join, or
assist labor organizations of their own choosing for purposes
of collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those
without any definite employers may form labor organizations
for their mutual aid and protection.
*Article 253 of the Labor Code.
RIGHTS OF WORKERS
5.) Right to engage in concerted activities*
➢ Non-abridgment of right to self-organization. It shall be unlawful for
any person to restrain, coerce, discriminate against or unduly
interfere with employees and workers in their exercise of the right to
self-organization. Such right shall include the right to form, join, or
assist labor organizations for the purpose of collective bargaining
through representatives of their own choosing and to engage in
lawful concerted activities for the same purpose for their mutual aid
and protection, subject to the provisions of Article 264 of this Code.
*Article 278 (b), Article 257 of the Labor Code.
RIGHTS OF WORKERS
6.) Right to collectively bargain
➢ It is the policy of the State to encourage free trade unionism
and free collective bargaining.
7.) Right to present grievances to the employer
➢ An individual employee or group of employees shall have the
right at any time to present grievances to their employer.*
*Article 267 of the Labor Code.
RIGHTS OF WORKERS
8.) Right to participate in policy and decision-making processes
➢ Any provision of law to the contrary notwithstanding, workers
shall have the right, subject to such rules and regulations as
the Secretary of Labor and Employment may promulgate, to
participate in policy and decision-making processes of the
establishment where they are employed insofar as said
processes will directly affect their rights, benefits and
welfare.*
*Article 267 of the Labor Code.
DEFINITION OF MANAGERIAL EMPLOYEE
➢ "Managerial employee" is one who is vested with the powers or
prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees. Supervisory employees are
those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not
falling within any of the above definitions are considered
rank-and-file employees for purposes of this Book.
*Article 219(m) of the labor Code
PREROGATIVES OF MANAGEMENT
❑ Philippine Span Asia v. Pelayo, G.R. No. 212003, February 28,
2018, citing Artificio vs. NLRC, G.R. No. 172988, July 26, 2010
➢ The employer has the right to regulate, according to its
discretion and best judgment, all aspects of employment,
including work assignment, working methods, processes to be
followed, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal
and recall of workers. Management has the prerogative to
discipline its employees and to impose appropriate penalties
on erring workers pursuant to company rules and regulations.
PREROGATIVES OF MANAGEMENT
❑ Philippine Span Asia v. Pelayo, G.R. No. 212003, February 28,
2018, citing Artificio vs. NLRC, G.R. No. 172988, July 26, 2010
➢ The Supreme Court has upheld a company's management
prerogatives so long as they are exercised in good faith for
the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements.
PREROGATIVES OF MANAGEMENT
❑ Isabela-I Electric Coop, Inc. v. Del Rosario Jr., G.R. No.
226369, July 17, 2019, citing Philippine Industrial Security
Agency Corporation v. Aguinaldo, G.R. No. 172988, July 26,
2010
➢ SC: The Court is fully aware of the right of management to
transfer its employees as part of management prerogative. But
like all rights, the same cannot be exercised with unbridled
discretion. The managerial prerogative to transfer personnel
must be exercised without grave abuse of discretion, bearing
in mind the basic element of justice and fair play.
PREROGATIVES OF MANAGEMENT
❑ Isabela-I Electric Coop, Inc. v. Del Rosario Jr., G.R. No. 226369, July
17, 2019, citing Philippine Industrial Security Agency Corporation v.
Percival Aguinaldo, G.R. No. 149974, June 15, 2005:
➢ While it is true that an employer is free to regulate, according to his
own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner
of work, tools to be used, processes to be followed, supervision of
workers, working regulations, transfer of employees, work
supervision, layoff of workers and the discipline, dismissal and recall
of workers, and this right to transfer employees forms part of
management prerogatives, the employee's transfer should not be
unreasonable, nor inconvenient, nor prejudicial to him. It should not
involve a demotion in rank or diminution of his salaries, benefits and
other privileges, as to constitute constructive dismissal. (Emphasis
supplied)
PREROGATIVES OF MANAGEMENT
❑ Ruben Serrano v. NLRC G.R. No. 117040, January 27, 2000:
➢ The hiring of an independent security agency is a business
decision properly within the exercise of management
prerogative. As such, this Court is denied the authority to
delve into its wisdom although it is equipped with the power
to determine whether the exercise of such prerogative is in
accordance with law. Consequently, the wisdom or soundness
of the management decision is not subject to the discretionary
review of the Labor Arbiter nor of the NLRC unless there is a
violation of law or arbitrariness in the exercise thereof, in
which case, this Court will step in.
-End of Presentation-
