ABCs of Labor Law

Updated: Feb 19

Barrista Solutions lists key concepts in Labor Law. This will help you memorize important terms in the subject.

Key Concepts of Philippine Labor Law
ABCs of Labor Law

1. Agency shop agreement- the employer binds itself to check off from those who are not union members of the collective bargaining representative a reasonable fee equivalent to the dues and other fees paid by union members if the non-union members accept the benefits of the CBA.


2. Automatic renewal clause- refers to the provision of the Labor Code (Art. 253) which states that “it shall be the duty of both parties (to a CBA) to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day (freedom) period and/or until a new agreement is reached by the parties.





3. Bargaining representative- a legitimate labor organization whether or not employed by the employer.


4. Casual employee- engaged to perform a job, work or service which is incidental to the business of the employer. Moreover, the definite period of his employment is made known to him at the time of his engagement. His continued employment after the lapse of one (1) year makes him a regular employee.


5. Certification election- refers to the process of determining through secret ballot the sole and exclusive representative of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiation. A certification election is ordered by the Department of Labor and Employment.


6. Closed shop- a union security clause in a collective bargaining agreement where the employer agrees not to employ any person who is not a member of the exclusive bargaining representative of the employees in a bargaining unit.


7. Community of Interest Rule- states that in choosing the appropriate bargaining unit, there must be a determination of the community of interests of employees.


8. Company union- union of employees dominated or under the control of the employer of said employees.


9. Consent election- when the process of determining through secret ballot the sole and exclusive representative of the employees in an appropriate bargaining unit is voluntarily agreed upon by the parties with or without the intervention of the Department of Labor and Employment.


10. Contract bar rule- a certification election cannot be held if there is in force and effect a collective bargaining agreement that has been duly registered with the Department of Labor and Employment except during the freedom period of such CBA which is the 60-day period prior to the expiry date of said CBA.





11. Deadlock bar rule- a certification election cannot be held if a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or mediation or had become the subject of a valid notice of strike or lockout.


12. Employee- includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment. (Article 212 Book V- Labor Code)


13. 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. (Article 212 Book V- Labor Code)


14. Freedom Period- last sixty days (freedom period) before the expiration of the five-year Collective Bargaining Agreement.


15. General strike- workers go on a strike to publicly protest a certain policy or action taken by the government.





16. Globe Doctrine- the bargaining units may be formed through separation of new units from existing ones whenever plebiscites had shown the workers’ desire to have their own representatives. (Globe Machine and Stamping Co. 3 NLRB 294, applied in Democratic Labor Union v. Cebu Stevedoring Co., 103 Phil. 1103 [1958]


17. Holiday Pay- refers to payment of the regular daily wage for any unworked regular holiday. (Wage and Wage Related Benefits- Bureau of Working Conditions)


18. Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. (Article 107 Book 3 of the Labor Code)


19. Job contracting- when a person, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.


20. Labor organization- means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.


21. Labor only contracting- when a person supplies workers to an employer and said person does not have substantial capital or investments in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities related to the principal business of the employer to who the workers are supplied.


22. Large Scale (Illegal recruitment)- exists when committed against three (3) or more persons, individually or as a group.


23. Legitimate labor organization- any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof. (Article 212 Book V- Labor Code)


24. Lockout- temporary refusal of an employer to furnish work as a result of a labor or industrial dispute.


25. Managerial employee- 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 212 Book V- Labor Code)





26. Night Shift Differential- refers to the additional compensation for work performed from 10:00 in the evening to 6:00 in the morning. (Wage and Wage Related Benefits- Bureau of Working Conditions)


27. Overtime Pay- refers to the additional pay for work performed in excess of 8 hours a day. (Wage and Wage Related Benefits- Bureau of Working Conditions)


28. Payroll reinstatement- a form of reinstatement which an employee may opt to exercise in lieu of an actual reinstatement. Here, the illegally dismissed employee is to receive his basic pay without the obligation of rendering any service to the employer. This occurs when a Labor Arbiter decides that an employee was illegally dismissed and as a consequence, awards reinstatement.


29. Principle of co-determination- the workers have a right to participate in the decision making process of employers on matters affecting their rights and benefits through collective bargaining agreements, grievance machineries, voluntary modes of settling disputes and conciliation proceedings mediated by the government.


30. Project worker- employed for a specific project or undertaking, the completion or termination of which is determined at the time of his engagement. His work need not be incidental to the business of the employer. His employment may exceed one (1) year without necessarily making him a regular employee.





31. Rank and file employees- all employees who are neither managerial or supervisory employees.


32. Regular employee- one engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.


33. Redundancy- exists when a position has become and excess or superfluous, which, in turn, may be caused by reorganization, closure of a section or department, or adoption of labor-saving arrangements.


34. Run-off- occurs when an election which provides for three (3) or more choices results in no choice receiving a majority of the valid votes cast and no objections or challenges have been presented which, if sustained, can materially change the results. The election officer shall motu propio conduct a run-off election within ten (10) calendar days from the close of the election proceedings between the labor unions receiving the two (2) highest number of votes provided that, the total number of votes for all contending unions is at least fifty (50%) of the number of votes cast.


35. Social security laws- those labor statutes that provide protection not only to a worker but also to members of his family in case of loss of income or when there is a need for medical care brought about by contingencies like sickness, disability, death and old age.


36. Supervisory employees- 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.


37. Syndicate (Illegal recruitment)– exists when three or more persons conspire or confederate with one another in carrying out any unlawful or illegal transaction, enterprise or scheme.


38. Sympathy strike- workers go on a strike to show their sympathy for certain workers who are on strike.


39. Tripartism- policy of the State which is implemented by consulting with representatives of workers and employers in the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with priorities in economic and social development.


40. Unfair labor practice- any act committed by an employer or by a labor organization, its officers, agents or representatives which has the effect of preventing the full exercise by employees of their rights to self-organization and collective bargaining.





41. Union shop- refers to a union security clause in a collective bargaining agreement where the employer agrees to terminate the employment of an employee who has not become a member of the union which is the exclusive collective bargaining representative of the employees in the bargaining unit within a certain period after the employment of said employee or has ceased to become a union member.


42. Voluntary recognition- when in an unorganized establishment with only one legitimate labor organization, the employer voluntarily recognizes the representation status of such a union. Within thirty (30) days from such recognition, the employer and union shall submit a notice of voluntary recognition with the Regional Office of the Department of Labor and Employment which issued the recognized labor union’s certificate of registration or certificate of creation of a chartered local.


43. Wage- paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. “Fair and reasonable value” shall not include any profit to the employer, or to any person affiliated with the employer. (Article 97 (f) Labor Code)


44. Wage distortion- when there is an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service or other logical bases of differentiation.


45. Wildcat strike- a strike that is declared by a group of workers without formal union approval.







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