THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
S E N A T E  
Senate Bill No. __ 79 
INTRODUCED BY SEN. MANNY VILLAR 
EXPLANATORY NOTE 
It may be surprising to note that notwithstanding the strides made in the 
legislative arena to advance the interest of the workers, our present labor laws 
and social legislations do not amply provide benefits to an employee whose 
employment status is terminated due to the installation of power-saving devices, 
redundancy, retrenchment, or the closure of cessation of business operation. 
Parenthetically, a legislative proposal to further improve the lot of the employees 
under the aforesaid circumstances is not wanting of constitutional derivations. 
The pertinent constitutional provisions mandate thus: 
"The State affirms labor as a primary social economic force. 
It shall protect the riqhts of workers and promote their welfare." 
(Section 18, Article II, 1987 Constitution) 
"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 right of all workers to self-organization, 
collective bargaining and negotiations, and peaceful concerted 
activities, including their 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 employees 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 
employees, 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.” (Section 3, 
Article XIII, 1987 Constitution) 
“The use of property hears a social function and all 
economic agents shall contribute to the common good. Individuals 
and private groups, including corpbrations, cooperatives, shall have 
the right to own, establish and operate economic enterprises 
subject to the duty of the State to promote distributive justice and to 
intervene when the common good so demands”. (Section 6, Article 
XII, 1987 Constitution) 
This bill seeks a longer notice requirement for the abovementioned 
entrepreneurial undertakings resulting in the termination of the employment 
status to afford the employees ample opportunity to examine the grounds on 
which these prerogatives are anchored. The Bill also provides a bigger 
separation pay as an expanded financial safety net to the dislocated employees 
who will invariably scout for other means of livelihood. 
The foregoing premises considered, early passage if this Bill is earnestly 
requested. 


THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
S E N A T E  
Senate Bill No. - 
79 
INTRODUCED BY SEN. MANNY VILLAR 
AN ACT 
TO FURTHER STRENGTHEN THE RIGHTS OF WORKERS IN CASES OF 
CLOSURE OF ESTABLISHMENT AND OTHER SIMILAR CAUSES, 
AMENDING FOR THIS PURPOSE ARTICLE 283 OF PRESIDENTIAL DECREE 
NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF 
THE PHILIPPINES AND FOR OTHER PURPOSES 
i+ 
Be,enacted 
by fhe Senate and House of Representatives of the 
Philippines in Congress assembled: 
SECTION I. 
Article 283 of Presidential Decree No. 442. as amended, 
otherwise known as the Labor Code of the Philippines, is hereby further 
amended to read as follows: 
“ART. 283. Closure of Establishment and [Reducfion of 
Personneu OTH€R SIM/LAR CASES. - The employer may also 
terminate the employment of any employee due to the installation 
of labor-saving devices, redundancy, retrenchment to prevent 
losses or the closing or cessation of operation of the establishment 
or undertaking unless the closing is for the purpose of 
circumventing the provision of this Title, by serving a written notice 
on the workers and the [Ministry] Department of Labor and 
Employment at least [one (I)] TWO (2) months before the intended 
date thereof. [In case of termination due to the installation of labor- 
saving devices or redundancy,] IN ANY OF THESE CASES, the 
worker affected thereby shall be entitled to a separation pay 
equivalent to at least his [one (I)] TWO (2) months pay or to at 
least [one (I)] TWO (2) months pay for every year of service, 
whichever is higher. [In case of retrenchment to prevent losses and 
in cases of closure or cessation of operations of establishment or 
undertaking not due to serious business losses or financial 
reverses, the separation pay shall be equivalent to one (1) month 
pay or at least one-half (1/2) month pay for every year of service, 
whichever is higher. A fraction of at least six (6) months shall be 
considered one (1) whole year. 


SECTION 2. Non-Diminufion of Benefifs. - Nothing in this Act shall be 
construed to reduce any benefit, interest, right or participation enjoyed by the 
workers under existing laws, decrees, issuances, executive orders and/or under 
any contract or agreement between the Workers and employers at the time of the 
enactment of this Act. 
SECTION 3. Repeahg C/ause. - All laws, decrees, executive orders and 
rules and regulations or parts thereof inconsistent with any provision of this Act 
are hereby repealed, modified, superseded or amended accordingly. 
SECTION 4. Effectivity Clause. - This Act shall take effect fifteen (95) days 
after its complete publication in the Official Gazette or in at least two (2) national 
newspapers of general circulation, whichever comes earlier. 
Approved,