Pi$) 
, ,~ 
* W 8 . ~ ~  
..., 
I ,i ,,t:~~;p.&
FOURTEENTH CONGRESS OF THE REPUBLIC 
1 
1 
i
‘
 
JUi. -.% 
6 : 
I 
OF THE PHILIPPINES 
First Regular Session 
1 
S E N A T E  
Senate Bill No. 580 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
Section 9 of RA 6727, otherwise known as the Wage Rationalization Act, 
provides that the Department of Labor and Employment shall conduct 
inspections as often as possible within its manpower constraint of the payroll and 
other financial records kept by the company or business to determine whether 
the workers are paid the prescribed wage rates and other benefits granted by law 
or any Wage Order. 
However, there are only about 100 labor inspectors tasked to inspect 
almost 1,000,000 establishments nationwide. The lack of labor inspectors partly 
explains the low rate of compliance with existing wage orders and labor laws. 
Their low salaries lends credence to the perennial accusations by the labor 
sector, and sometimes, even by the employer sector, that some labor inspectors 
are prone to corruption and extortion. 
It has been posited that the Philippines has enough labor laws and social 
legislation. The problem is purportedly in their implementation and enforcement. 
This bill seeks to ensure that existing labor laws and social legislations are 
complied with, even as new ones are being enacted. 
Hence, the urgent passage of this bill is fervently requested 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 7 ,]Ui" .-2 I) {; 
:.i 
First Regular Session 
) 
S E N A T E 
Senate Bill No. 580 
I ~\I:CE!WEI> iiY: 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
STRENGTHENING THE INSPECTION FUNCTION OF THE 
DEPARTMENT OF LABOR AND EMPLOYMENT, AMENDING FOR THIS 
PURPOSE REPUBLIC ACT NO. 6727, OTHERWISE KNOWN AS THE 
WAGE RATIONALIZATION ACT, AND FOR OTHER PURPOSES 
Be if enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 9 of Republic Act No. 7627, otherwise known as the 
Wage Rationalization Act, is hereby amended to read as follows: 
"Sec. 9. The Department of Labor and Employment shall conduct 
inspections as often as possible within its manpower constraint of the 
payroll and other financial records kept by the company or business to 
determine whether the workers are paid the prescribed wage rates and 
other benefits granted by law or any Wage Order. In unionized companies, 
the Department of Labor and Employment inspectors shall always be 
accompanied by the president or any responsible officer of the recognized 
bargaining unit of any interested union in the conduct of the inspection. In 
non-unionized companies, establishments or businesses, the inspection 
shall be carried out in the presence of a worker representing the workers 
in the said company. The workers' representative shall have the right to 
submit his own findings to the Department of Labor and Employment and 
to testify on the same if he cannot concur with the findings of the labor 
inspector. 
"FOR THIS PURPOSE, THE FORMER POSITION OF LABOR 
INSPECTOR IS HEREBY ABOLISHED, AND A NEW POSITION OF 
LABOR INSPECTOR, WITH THE SALARY GRADE OF 21, IS HEREBY 
CREATED IN THE FOLLOWING RATIO: ONE (1) LABOR INSPECTOR 
FOR EVERY MUNICIPALITY, AND AT LEAST TWO (2) LABOR 
INSPECTORS FOR EVERY CITY. 
"IN ADDITION TO THEIR REGULAR FUNCTIONS, LABOR 
INSPECTOR SHALL HAVE THE AUTHORITY TO INITIATE AND FILE 
CRIMINAL ACTIONS AGAINST PERSON, CORPORATION, TRUST, 
FIRM, PARTNERSHIP, ASSOCIATION OR ENTITY WHICH REFUSES 
OR FAILS TO PAY ANY OF THE PRESCRIBED INCREASES OR 
ADJUSTMENTS IN THE WAGE RATES MADE IN ACCORDANCE WITH 
THIS ACT. THEY SHALL ALSO HAVE THE POWER TO ISSUE 


SUBPOENA, ADMINISTER OATH OR AFFIRMATION, AND CALL UPON 
LAW ENFORCEMENT AGENCIES TO ASSIST THEM IN CONDUCTING 
INSPECTIONS. 
“THE FUNDS NECESSARY TO CREATE THE NEW POSITION 
OF LABOR INSPECTOR SHALL BE TAKEN FROM THE INTERNAL 
REVENUE ALLOTMENT OF THE LOCAL GOVERNMENT UNITS 
CONCERNED. 
“ALL PERSONNEL OF THE ABOVE ABOLISHED POSITION 
SHALL CONTINUE TO FUNCTION IN A HOLDOVER CAPACITY AND 
SHALL BE PREFERENTIALLY CONSIDERED FOR APPOINTMENTS 
TO OR PLACEMENT IN THE NEW POSITION OF LABOR INSPECTOR; 
PROVIDED THAT THEY QUALIFY UNDER THE CRITERIA TO BE 
PRESCRIBED BY THE SECRETARY OF LABOR AND EMPLOYMENT. 
“ANY LABOR INSPECTOR SEPARATED FROM THE SERVICE 
AS A RESULT OF THE ABOLITION OF POSITION PURSUANT TO THIS 
ACT SHALL BE ENTITLED TO APPROPRIATE SEPARATION PAY AND 
RETIREMENT AND OTHER BENEFITS ACCRUING TO THEM UNDER 
EXISTING LAWS. IN LIEU THEREOF, AT THE OPTION OF THE 
EMPLOYEE, HE SHALL BE PREFERENTIALLY CONSIDERED FOR 
EMPLOYMENT IN THE GOVERNMENT OR 
IN ANY OF ITS 
SUBDIVISIONS, INSTRUMENTALITIES, OR AGENCIES, INCLUDING 
THEIR SUBSIDIARIES.” 
SECTION 2. This Act shall take effect fifteen (15) days after its complete 
publication in the Official Gazette or in at least two (2) national papers of general 
circulation, whichever comes earlier. 
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND 
Approved,