HOUSE 9F REPRESENTAT
RECEIVED
pared O JUN 2018

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS, REGISTRATION UNIT
First Regular Session BUS AND INDEX SERVICE

m9
HOUSE BILL NO. an?

Introduced by: Hon, Karlo A, B, Nograles AND Hon, Jericho Jonas B. Nograles

EXPLANATORY NOTE

ne Labor Code of the Philippines, as amended, was enacted in 1974. Through the years, the trend
owards integration and interconnectedness of countries into a single global community has
nereased in the form of various political and economic agreements. In 1991, the Philippines
became a member of the World Trade Organization (WTO). As a member, the country is also a
signatory to the General Agreement on Trade in Services (GATS), a treaty of the WTO, which came
nto force in 1995, The GATS is a framework for a multilateral trading system in the service sector
which includes an annex on the movement of natural persons.

One of the Philippine commitments to the WTO-GATS is to review the restrictions in Title 11.
Article 40 of the Labor Code of the Philippines, as amended. The main restriction in the hiring of a
foreign national is the Labor Market Test (LMT) which is used to determine the non-availability of
a qualified. able and willing person in the Philippines to do the services for which the foreign
national is being hired, It is comparable to an Economics Needs Test implemented by other
countries.

In relation to this. the Philippines is also a member-state of the Association of Southeast Asian
Nations (ASEAN). and is likewise obliged to review the said provision in preparation for the
envisioned regional integration in 2015 as envisioned in the ASEAN Economie Community (AEC)
Blueprint. ASEAN member countries committed to the AEC in 2007,

Phe proposed amendment of the provision in the Labor Code is to facilitate uniformity by properly

stating the term used by the Philippines in its commitments entered into bilateral, regional and
multilateral agreements. It is a way for the country to determine if there is a short supply of workers
n specific industries. occupations and professions which probably inhibits the country fom
increased productivity and industry development. It inchides a provision for training of Filipino
understudies to transfer skills and technology from the foreign national

Increased fines and penalties for violations by foreign nationals are also updated to address inflation
since the law was enacted almost four decades ago.

in conclusion, as the Philippines strives to meet its commitments in the WIO-GATS. AEC. and
other bilateral. regional and multilateral agreements, it is expected to at least review the affected
national laws and policies. This proposed agreement is a timely initiative to update the said law as
the country modernizes as part of a global community. It is also a show of good faith to countries.



regions, and international bodies the Philippines has agreements with that the country is willing to
accommodate changes in order to meet its commitments. The proposed amendment is beneficial to
the country as it paves the way to an improved but still protective policy on employment of foreign
nationals.

Approval of this bill is therefore earnestly sought.

HON. KARLO A, B, NOGRALES HON. JERI AS B. NOGRALES.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

”
HOUSE BILL NO. 277

Introduced by: Hon. Karlo A. B. Nograles AND Hon. Jericho Jonas B. Nograles

AN ACT STRENGTHENING THE REGULATION OF EMPLOYMENT OF FOREIGN
NATIONALS. AMENDING FOR THE PURPOSE ARTICLES 40, 41, AND 42 OF TITL
ll. BOOK ONE OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWI:!
KNOWN AS THE “LABOR CODE OF THE PHILIPPINES”

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION I. Article 40 of the Labor Code is hereby further amended to read as follows:
“Title I

“EMPLOYMENT OF NONRESIDENT |ALIENS)
FOREIGN NATIONALS

ART. 40. Employment Permit for Nonresident [Aliens] | FOREIGN
NATIONALS. ~ {Any alien} ALL NONRESIDENT FOREIGN NATIONALS

seeking [admission to the Philippines for employment purposes and any domestic or

foreign employer who desires to engage an alien for] employment in the Philippines
shall obtain an employment permit from the Department of Labor AND
EMPLOYMENT.

“{The] AN employment permit may be issued to a nonresident [alien]
FOREIGN NATIONAL [or to the applicant employer after a determination of the]
SUBJECT TO THE LABOR MARKET TEST BASED ON THE non-availability of
[a person in the Philippines who is competent, able] QUALIFIED and willing [at the
time of application to perform the services for which the alien is desired] FILIPINO
NATIONALS.

“THE SECRETARY OF LABOR AND EMPLOYMENT IS AUTHORIZED
TO GRANT EXEMPTIONS FROM THE LABOR MARKET TEST TO
FOREIGN NATIONALS AS PROVIDED FOR UNDER EXISTING LAWS AND


AGREEMENTS, AS WELL AS IN INDUSTRIES OR OCCUPATIONS OR
PRACTICE OF PROFESSIONS WHERE THERE IS SHORT SUPPLY, AFTER
TRIPARTITE CONSULTATION.

“FOREIGN NATIONALS ISSUED EMPLOYMENT PERMITS SHALL
‘TRANSFER TECHNOLOGY TO FILIPINO UNDERSTUDIES WITHIN A
PRESCRIBED PERIOD.

“For an enterprise registered in preferred areas of investments, said employment
permit may be issued upon recommendation of the government agency charged with the

supervision of said registered enterprise.”

SEC. 2. Arti
“ART. 4
issuance of an employment permit, the Jalien] FOREIGN NATIONAL shall not

41 of the Labor Code is hereby amended to read as follows:

Prohibition Against Transfer of Employment. - (A) After the

transfer to another job or change his employer without prior approval of the Secretary of
Labor AND EMPLOYMENT.

“(B)Any nonresident [alien] FOREIGN NATIONAL who shall take up
employment in violation of the provision of this Title and its implementing rules and
regulations, AS WELL AS THE EMPLOYER OR THE RESPONSIBLE PERSON
REPRESENTING THE EMPLOYER, shall be punished fin accordance with the
provisions of Articles 289 and 290 of the Labor Code] WITH A FINE OF NOT LESS
THAN FIFTY THOUSAND PESOS (P50,000.00) NOR MORE THAN ONE
HUNDRED THOUSAND PESOS (P100,000.00), OR IMPRISONMENT OF NOT
LESS THAN SIX (6) MONTHS NOR MORE THAN SIX (6) YEARS, OR BOTH
SUCH FINE AND IMPRISONMENT, AT THE DISCRETION OF THE COURT.

“In addition. the [alien worker] FOREIGN NATIONAL shall be subject to

deportation after service of his sentence.

“THE SECRETARY OF LABOR AND EMPLOYMENT IS AUTHORIZED
TO IMPOSE A FINE OF FIFTY THOUSAND PESOS (P50,000.00) FOR EVERY
YEAR OR FRACTION THEREOF TO BOTH THE FOREIGN NATIONAL
FOUND WORKING WITHOUT VALID EMPLOYMENT PERMIT AND TO
THE EMPLOYER.”


SEC. 3. Article 42 of the Labor Code is hereby amended to read as follows:

“ART. 42. Submission of List. - Any employer employing nonresident foreign
nationals [on the effective date of this Code] shall submit a list of such nationals to the
[Secretary] REGIONAL DIRECTOR OF THE DEPARTMENT of Labor AND
EMPLOYMENT WHICH HAS JURISDICTION OVER THE EMPLOYER
within thirty (30) days after [such date] HIRING, indicating their names, citizenship.
foreign and local addresses, nature of employment and status of stay in the country.

[The Secretary of Labor AND EMPLOYMENT shall then determine if they are

entitled to an employment permit.]”

SEC. 4. Implementing Rules and Regulations. ~ The Secretary of Labor and Employment,
in coordination with concerned agencies, shall formulate the necessary rules and regulations within
ninety (90) days from the effectivity of this Act.

Separability Clause. - If any provision of this Act is held invalid or

unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof.
6. Repealing Clause. — All laws, presidential decrees, issuances, executive orders.

letters of instruction, and rules and regulations contrary to or inconsistent with the provisions of this
Act are hereby amended accordingly.

SEC. 7. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in @ newspaper of general circulation.

Approved.