diff --git a/src/core/qgsvectorlayerlabelprovider.h b/src/core/qgsvectorlayerlabelprovider.h
@@ -94,8 +94,6 @@ class CORE_EXPORT QgsVectorLayerLabelProvider : public QgsAbstractLabelProvider
   protected:
     //! Layer's labeling configuration
     QgsPalLayerSettings mSettings;
-    //! Layer's ID
-    QString mLayerId;
     //! Geometry type of layer
     QGis::GeometryType mLayerGeometryType;
 

diff --git a/src/ui/qgsdiagrampropertiesbase.ui b/src/ui/qgsdiagrampropertiesbase.ui
diff --git a/src/ui/qgslabelingguibase.ui b/src/ui/qgslabelingguibase.ui
diff --git a/tests/src/core/testqgslabelingenginev2.cpp b/tests/src/core/testqgslabelingenginev2.cpp
@@ -41,6 +41,7 @@ class TestQgsLabelingEngineV2 : public QObject
     void testBasic();
     void testDiagrams();
     void testRuleBased();
+    void zOrder(); //test that labels are stacked correctly
 
   private:
     QgsVectorLayer* vl;
@@ -266,9 +267,124 @@ void TestQgsLabelingEngineV2::testRuleBased()
   engine.setMapSettings( mapSettings );
   engine.addProvider( new QgsRuleBasedLabelProvider( , vl ) );
   engine.run( context );*/
+}
+
+void TestQgsLabelingEngineV2::zOrder()
+{
+  QSize size( 640, 480 );
+  QgsMapSettings mapSettings;
+  mapSettings.setOutputSize( size );
+  mapSettings.setExtent( vl->extent() );
+  mapSettings.setLayers( QStringList() << vl->id() );
+  mapSettings.setOutputDpi( 96 );
+
+  QgsMapRendererSequentialJob job( mapSettings );
+  job.start();
+  job.waitForFinished();
 
+  QImage img = job.renderedImage();
+
+  QPainter p( &img );
+  QgsRenderContext context = QgsRenderContext::fromMapSettings( mapSettings );
+  context.setPainter( &p );
+
+  QgsPalLayerSettings pls1;
+  pls1.enabled = true;
+  pls1.fieldName = "Class";
+  pls1.placement = QgsPalLayerSettings::OverPoint;
+  pls1.quadOffset = QgsPalLayerSettings::QuadrantAboveRight;
+  pls1.displayAll = true;
+  pls1.textFont = QgsFontUtils::getStandardTestFont( "Bold" );
+  pls1.textFont.setPointSizeF( 70 );
+  //use data defined coloring and font size so that stacking order of labels can be determined
+  pls1.setDataDefinedProperty( QgsPalLayerSettings::Color, true, true, "case when \"Class\"='Jet' then '#ff5500' when \"Class\"='B52' then '#00ffff' else '#ff00ff' end", QString() );
+  pls1.setDataDefinedProperty( QgsPalLayerSettings::Size, true, true, "case when \"Class\"='Jet' then 100 when \"Class\"='B52' then 30 else 50 end", QString() );
+
+  QgsVectorLayerLabelProvider* provider1 = new QgsVectorLayerLabelProvider( vl, true, &pls1 );
+  QgsLabelingEngineV2 engine;
+  engine.setMapSettings( mapSettings );
+  engine.addProvider( provider1 );
+  //engine.setFlags( QgsLabelingEngineV2::RenderOutlineLabels | QgsLabelingEngineV2::DrawLabelRectOnly );
+  engine.run( context );
+  p.end();
+  engine.removeProvider( provider1 );
+
+  // since labels are all from same layer and have same z-index then smaller labels should be stacked on top of larger
+  // labels. Eg: B52 > Biplane > Jet
+  QVERIFY( imageCheck( "label_order_size", img, 0 ) );
+  img = job.renderedImage();
+
+  //test data defined z-index
+  pls1.setDataDefinedProperty( QgsPalLayerSettings::ZIndex, true, true, "case when \"Class\"='Jet' then 3 when \"Class\"='B52' then 1 else 2 end", QString() );
+  provider1 = new QgsVectorLayerLabelProvider( vl, true, &pls1 );
+  engine.addProvider( provider1 );
+  p.begin( &img );
+  engine.run( context );
+  p.end();
+  engine.removeProvider( provider1 );
+
+  // z-index will take preference over label size, so labels should be stacked Jet > Biplane > B52
+  QVERIFY( imageCheck( "label_order_zindex", img, 0 ) );
+  img = job.renderedImage();
+
+  pls1.removeAllDataDefinedProperties();
+  pls1.textColor = QColor( 255, 50, 100 );
+  pls1.textFont.setPointSizeF( 30 );
+  provider1 = new QgsVectorLayerLabelProvider( vl, true, &pls1 );
+  engine.addProvider( provider1 );
+
+  //add a second layer
+  QString filename = QString( TEST_DATA_DIR ) + "/points.shp";
+  QgsVectorLayer* vl2 = new QgsVectorLayer( filename, "points", "ogr" );
+  Q_ASSERT( vl2->isValid() );
+  QgsMapLayerRegistry::instance()->addMapLayer( vl2 );
+
+  QgsPalLayerSettings pls2( pls1 );
+  pls2.textColor = QColor( 0, 0, 0 );
+  QgsVectorLayerLabelProvider* provider2 = new QgsVectorLayerLabelProvider( vl2, true, &pls2 );
+  engine.addProvider( provider2 );
+
+  mapSettings.setLayers( QStringList() << vl->id() << vl2->id() );
+  engine.setMapSettings( mapSettings );
+
+  p.begin( &img );
+  engine.run( context );
+  p.end();
+
+  // labels have same z-index, so layer order will be used
+  QVERIFY( imageCheck( "label_order_layer1", img, 0 ) );
+  img = job.renderedImage();
+
+  //flip layer order and re-test
+  mapSettings.setLayers( QStringList() << vl2->id() << vl->id() );
+  engine.setMapSettings( mapSettings );
+  p.begin( &img );
+  engine.run( context );
+  p.end();
+
+  // label order should be reversed
+  QVERIFY( imageCheck( "label_order_layer2", img, 0 ) );
+  img = job.renderedImage();
+
+  //try mixing layer order and z-index
+  engine.removeProvider( provider1 );
+  pls1.setDataDefinedProperty( QgsPalLayerSettings::ZIndex, true, true, "if(\"Class\"='Jet',3,0)", QString() );
+  provider1 = new QgsVectorLayerLabelProvider( vl, true, &pls1 );
+  engine.addProvider( provider1 );
+
+  p.begin( &img );
+  engine.run( context );
+  p.end();
+
+  // label order should be most labels from layer 1, then labels from layer 2, then "Jet"s from layer 1
+  QVERIFY( imageCheck( "label_order_mixed", img, 0 ) );
+  img = job.renderedImage();
+
+  //cleanup
+  QgsMapLayerRegistry::instance()->removeMapLayer( vl2 );
 }
 
+
 bool TestQgsLabelingEngineV2::imageCheck( const QString& testName, QImage &image, int mismatchCount )
 {
   //draw background

diff --git a/tests/testdata/control_images/expected_piediagram/expected_piediagram.png b/tests/testdata/control_images/expected_piediagram/expected_piediagram.png
diff --git a/...ontrol_images/expected_piediagram_expression/expected_piediagram_expression.png b/...ontrol_images/expected_piediagram_expression/expected_piediagram_expression.png
diff --git a/...es/labelingenginev2/expected_label_order_layer1/expected_label_order_layer1.png b/...es/labelingenginev2/expected_label_order_layer1/expected_label_order_layer1.png
diff --git a/...belingenginev2/expected_label_order_layer1/expected_label_order_layer1_mask.png b/...belingenginev2/expected_label_order_layer1/expected_label_order_layer1_mask.png
diff --git a/...es/labelingenginev2/expected_label_order_layer2/expected_label_order_layer2.png b/...es/labelingenginev2/expected_label_order_layer2/expected_label_order_layer2.png
diff --git a/...belingenginev2/expected_label_order_layer2/expected_label_order_layer2_mask.png b/...belingenginev2/expected_label_order_layer2/expected_label_order_layer2_mask.png
diff --git a/...ages/labelingenginev2/expected_label_order_mixed/expected_label_order_mixed.png b/...ages/labelingenginev2/expected_label_order_mixed/expected_label_order_mixed.png
diff --git a/...labelingenginev2/expected_label_order_mixed/expected_label_order_mixed_mask.png b/...labelingenginev2/expected_label_order_mixed/expected_label_order_mixed_mask.png
diff --git a/...images/labelingenginev2/expected_label_order_size/expected_label_order_size.png b/...images/labelingenginev2/expected_label_order_size/expected_label_order_size.png
diff --git a/...s/labelingenginev2/expected_label_order_size/expected_label_order_size_mask.png b/...s/labelingenginev2/expected_label_order_size/expected_label_order_size_mask.png
diff --git a/...es/labelingenginev2/expected_label_order_zindex/expected_label_order_zindex.png b/...es/labelingenginev2/expected_label_order_zindex/expected_label_order_zindex.png
diff --git a/...belingenginev2/expected_label_order_zindex/expected_label_order_zindex_mask.png b/...belingenginev2/expected_label_order_zindex/expected_label_order_zindex_mask.png