ARTICLE II

Declaration of Principles and State Policies

SECTION 10. The State shall promote social justice in all phases of national development.
SECTION 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and
provides incentives to needed investments.

ARTICLE XIII
Social Justice and Human Rights

SECTION 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right
of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

SECTION 2. The promotion of social justice shall include the commitment to create economic opportunities based
on freedom of initiative and self-reliance.

Labor

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share
in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and
growth.
I. Introduction
Generally, in the US, the general practice is for each labor statute to define who is covered as an
“employee” according to the purposes for which the statute or doctrine were adopted.
 Respondeat Superior’s definition – one who is directed and controlled by employer
 Fair Labor Standards Act – economic realities test to see if that applying the law to the relation
would meet the purposes of the act.
 Workmen’s Compensation act – broad interpretation to effect purposes of the act.

Pros: court fully follow purpose of each statute.

Cons: problems of notice and uniformity when purpose unclear. People might find themselves as
employees under one statute but not for the next.

Exception to the rule that definitions follow purposes  the National Labor Relations Act. Under this act,
it was specifically provided that they follow the tort definition of employee. Also, there was an exception
for supervisory employees and managerial and confidential employees.
 Creates tension – purpose of act vs. congressional intent

II. Defining Employee to Effectuate the Purposes of an Act

A. Tort Law – Direct and Control Test
 Respondeat Superior – just as the employer is entitled to reap the benefits of the
employees conduct, so too must he bear responsibilities. Apply “direct and control test”
 The test looks at capacity of contractor to regulate means and manner of job
performance
i. Specifies final produce  not employee
ii. Specifies HOW + provides tools and materials  prolly employee
 Purpose of the test  Make sure proper party pays. Hence test meets purpose of the
law. y imposing liability on the employer, it is more likely that the employer will take a
proactive stance to prevent accidents by exercising considerable control over employees
in order to avoid such liability
B. Fair Labor Standards Act – Economic Realities Test
 “any individual employed by an employer” “to suffer or permit to work”
 the test was made by the SC in order to interpret vague definition – it focuses on the
“whole activity”
i. common law definitions and agreements notwithstanding
ii. W/N the individuals are economically dependent on the business for w/c they
labor – highly fact dependent!
1. Rutherford Food Case– equipment and facilities, workers not organized
to conduct business themselves, supervision, payment depended upon
work.
 Test consistent with purpose – protect those whose livelihood depends on the business
 Wide discretion because of vague definition. Problematic case: Donovan vs. Brandel
where pickle-pickers weren’t employees under the FLSA… still, better than control test.
C. Workmen’s Compensation Laws
 Based on common law master-servant concepts. The terms in various workmens
compensation laws are usually read broadly so as to encompass a wide range of workers
which are exluded in the common law. I.e, master-servant concept but broader.
 D. Problems with Notice and Uniformity (the cons)
 U don’t know if covered ka  raises litigation costs

III. Definition of Employee Under the National Labor Relations Act (NLRA)
NLRA – primary act governing union organizing and collective bargaining.
NLRA again goes against the grain by not providing a definition of employee which follows its particular
purposes. However, this was initially not the case as the Supreme Court interpreted it to be using the
economic realities test.
Congress later amended NLRA to exclude supervisors, independent contractors (common law def).

A. Hearst Case
“Newsboys” are employees protected under the NLRA. The court said that the NLRA does not
exclude “independent contractors”, and is not limited to traditional meaning of employees
according to common law. SC said newsboys were subject to the evils which the NLRA seeks to
protect against.

B. Exclusion of Independent Contractors – Congressional response to Hearst.

Now specifically excludes independent contractors and supervisors. Congress made mention na
SC erred in following the NLR Board’s interpretation.

C. Managerial and Supervisory exception

Purpose, undivided loyalty of supervisors to the management

Test of supervisoryship in NLRB vs. Health Care – authority to engage in 1 of 12 listed activities ??,
use of independent judgment? Authority in the interest of the employer?

Case by case facts distinction between supervisors and lead employees.

Managerial exclusion – virtue of a SC decision. Those who formulate and effectuate management
policies.

D. Problems of Exclusions
Willingness of court to make exclusions has deprived a number of workers the beenfits of the act.
Employers have been known to restructure their technical legal relationship in order to escape
NLRA coverage.
 Trucking firms “sell” trucks to their drivers with a lien on the truck and a service
agreement
 Full-time university faculty are managerial (therefore excluded) because of their roles in
the administration.
 Licensed Practical Nurses are supervisory employees as they supervise less skilled
workers.
Trend towards increasing exclusion contradictory with the stated purpose of the NLRA –
encourage the practice and procedure of collective bargaining by protecting the exercise by
workers of full freedom of association, self-org, representation, etc.