Labor Day 2026: Time to abrogate the Labor Code

The Philippine Labor Code, PD 442, is a Presidential Decree promulgated by a dictator, who abolished Congress. It’s time to craft a new law to repeal that anachronistic piece of a martial law decree.

Last Congress, a member of the House from the north engaged my services as consultant and, pursuant to our contract of services, I drafted a complete New Magna Carta For Filipino Human Capital containing 12 Books, instead of the current seven of PD 442. My draft includes an overhaul of the recruitment system that will not drive away Filipino human capital to work abroad.

The present Labor Code is both anti-labor and anti-management. It favors the government and infringes on both the fundamental rights of workers and management prerogatives of employers. The Labor Code has no provision on the definition of employer-employee relationship and leaves labor tribunals and the court to dictate when workers become employees.

The law on labor-only contracting is a denial of the realities of the global labor markets. The Philippine Labor Code enshrines bias against service contractors that promote employment and human resources development. The law allowing inspections of enterprises is killing the proverbial goose that lays the golden eggs.

DOLE inspectors were reprimanded by the Supreme Court several times, including the PLDT case last year where thousands of employees of licensed agencies were ordered absorbed by PLDT as regular employees, infringing management fundamental prerogatives to manage their businesses. These undue interferences push investors away and make us the lowest in ASEAN in direct foreign investments.

Imagine inspectors entering company premises even at night, having access to company records notwithstanding the Date Privacy Law, and under threat of criminal prosecution. Imagine them interrogating a few workers and without a hearing, DOLE issues a compliance order that leads small companies to produce millions in surety bonds only to seek redress through appeals.

Government doesn’t have moral authority to compel companies to absorb as regular employees workers hired by licensed agencies, while the bureaucracies, including DOLE, the Office of the President, the courts, and LGUs employ millions of casuals, contractuals, job-order workers who aren’t protected by SSS or GSIS. Government is the number one violator of the Labor Code by exempting itself from its own impositions.

The NLRC should be overhauled, the BLR streamlined, and more budgets and cases transferred to the NCMB and more support given to voluntary arbitration, conciliation, and mediation, to LMCs and grievance machineries because, under the Constitution, there’s a mandated preference for voluntary modes of labor dispute resolution.

In the draft I prepared, I proposed to abolish DOLE inspections except only on health, safety, and security-related labor standards. I also proposed the overhaul of the dispute resolution system by transferring jurisdiction of labor cases from the NLRC to the NCMB and to enforce with penal clauses for arbiters and commissioners who decide cases beyond 30 calendar days from date of filing.

I proposed abolishing job-order schemes and other forms of contractualization by government agencies. And I proposed only two levels of labor adjudication, from arbiters direct to the Supreme Court and for commissioners to be considered applicants for the Court of Appeals. I also proposed all forms of executions pending appeals, with a caveat that arbiters and arbitrators decide the cases within 30 calendar days. Any decision not reversed within the next 30 days shall be deemed affirmed.

It’s time Congress abrogates the 1974 vintage Labor Code. It delays economic development, infringes on labor rights, and stifles management prerogatives. Government should become faithful to free collective bargaining including voluntary arbitration and bury compulsory arbitration outside the penumbra of the state's fundamental principles favoring free enterprise and voluntary modes of dispute settlement.

The martial law Constitution of Marcos circa 1972 had been dismantled by the 1987 Constitution after the EDSA Revolution. But the martial law Labor Code has continued to oppress both labor and management and make huge law firms in Makati and Fort Bonifacio prosper relentlessly. This is unfair and should be stopped. The sooner Congress opens its eyes, the better for us all.

The present Labor Code promotes an adversarial labor relations system that makes lawyers very wealthy and workers very poor. We need to tap conciliation and mediation and voluntary arbitration and abandon antagonism between employees and employers. The current system promotes conflicts so lawyers can collect millions in attorney's fees while poor workers earn a pittance and employers are forced to spend in useless and protracted litigations.