Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL no, 5879

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

EXPLANATORY NOTE

President Rodrigo Duterte recently signed the Executive Order 5 which
adopts the 25-year long term vision entitled AmBisyonNatin 2040 as a guide for
development planning. The AmBisyonNatin 2040, initiated by the National
Economic and Development Authority, represents the aspirations of the Filipino
people and describes the kind of life that people want to live, as well as how the
country will look like by 2040.

According to the studies supporting the AmBisyonNatin 2040, 79% of
Filipinos aspire for a simple and comfortable life which includes having
opportunities for good quality employment without leaving the country.
However, 48.5% of Filipinos are not fully confident that they can reach their
goals.

One of the challenges hindering the country from achieving the vision is
unemployment. As of January 2017, the Philippine Statistics Authority recorded
the Philippine unemployment rate at 6.6 percent!. While there are thousands of
jobs available for the Filipinos, many of them do not possess the required
qualifications for these opportunities.

This bill seeks address the job-skill mismatch in the country and reform
the existing national apprenticeship program by providing the youth with the
appropriate skills and access to employment. A worker who is at least 15 years
of age is qualified to be an apprentice. The proposed apprenticeship law
recognizes the advantages of work-based training which allows our young
workers to learn from experienced workers.

The proposal also sets the duration of the training according to the
complexity of the skills to be learned by the apprentices, thus expanding the
maximum training period of six months under the existing apprenticeship

programs.

* Retrieved from [https://psa.gov.ph/content/employment-rate-january-2017-estimated-934-percent]
‘on 5 June 2017


The proposed apprenticeship program provides young apprentices with
the opportunity to earn while they learn as they are entitled to a training
allowance which should not be below 75%.

The bill also introduces a provision on the issuance of training certificates
to apprentices who have completed the apprenticeship program comparable to
the completion of a training program in a Technical-Vocational Education and
Training institution, and the award of equivalent unit credits in the formal
system of education. The apprentice may use the National Certificate should he
desire to pursue tertiary education.

As for the participating enterprises, they are entitled to get an additional
deduction from the taxable income equivalent to one half of the value of training
expenses incurred for developing the productivity and efficiency of apprentices.

This initiative will not only increase the employability of the youth but

will also provide Philippine enterprises with a mechanism to ensure a
continuous supply of skilled workers. Thus, the immediate passage of this bill is

earnestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 5879

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

AN ACT
PROVIDING FOR A REVISED NATIONAL APPRENTICESHIP PROGRAM,
CLARIFYING THE STANDARDS FOR TRAINING AND ENGAGEMENT OF
APPRENTICES AND ACCREDITATION OF APPRENTICESHIP PROGRAMS,
REPEALING FOR THE PURPOSE CHAPTERS I AND II OF TITLE II, BOOK Il OF
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS
‘THE LABOR CODE OF THE PHILIPPINES, AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. - This Act shall be known as the “Apprenticeship
Training System Act.”

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the
State to establish an apprenticeship program that will ensure the availability of
qualified human resource in critical, in-demand and hard-to-fill occupations
through the participation of employers, workers and government agencies and
non-government agencies.

Sec. 3. Statement of Objectives. - This Act aims to:

(a) Help meet the demand of the economy for best-fit, competitive and
trained human resource;

(b) Have a national apprenticeship program that includes on and off-
the-job training components with tripartite involvement;

(©) Promote full employment of youth and young workers through
training and development;

(d) Enhance existing standards for the training, development and
employability of apprentices;

(e) Recognize the indispensable role of private enterprises in training
and development;


10)

(h)

Strengthen advocacy of the apprenticeship training program to
encourage enterprise and young workers’ participation;

Increase productivity and competitiveness of enterprises by
ensuring availability of skilled human resource; and

Harness Corporate Social Responsibility (CSR) towards the
development of skilled human resource to meet the requirements
of the industries.

‘SEC. 4. Definition of Terms. - For purposes of this Act, the following
terms are hereby defined:

fa)

(b)

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(4)

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(h)

Apprentice refers to a person undergoing training for an approved
apprenticeable occupation during an established period assured by
an apprenticeship contract.

Apprenticeable Occupation refers to an occupation specified by
an industry and approved for apprenticeship by TESDA subject to
the criteria set under Section 9 hereof.

Apprenticeship means training within an enterprise with
compulsory related theoretical instructions involving a contract
between an apprentice and an enterprise on an approved
apprenticeable occupation.

Apprenticeship Contract means an agreement wherein an
enterprise binds itself to train the apprentice who in turn accepts
the terms of training for the recognized apprenticeable occupation.
The Apprenticeship contract also contains the rights, duties and
responsibilities of each party.

Authority refers to the Technical Education and Skills
Development Authority or TESDA.

Bipartite Enterprise Apprenticeship Committee refers to a
group within the enterprise composed of the labor and the

management responsible for monitoring the program
implementation, settling differences between management and
apprentices and recommending measures for effective
implementation.

Board refers to the TESDA Board.
Certificate of Competency means a document issued by the

Authority to individuals who were assessed as competent in a
single unit or cluster of related units of competency.


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Certificate of Apprenticeship Program Registration refers to a
document issued by TESDA granting an authority to an enterprise
to offer a program in an apprenticeable occupation.

Cluster of Competencies refers to a group of competencies as
defined in the Training Regulations that corresponds to a
Certificate of Competency. A cluster of units of competency
includes the basic, common, and core competency that can be
offered as registered program.

Competency Assessment refers to the process of determining the
competency of a person undergoing apprenticeship based on
established standards of competency

Competency Standard refers to a written specification of the
knowledge, skills, attitude and values required for the performance
of a job, occupation or trade and the corresponding standard of
performance required for those in the workplace.

Enterprise refers to a participating establishment or organization
or the Government that directly engages an apprentice based on an
approved Enterprise Apprenticeship Program.

Industry Board /Body refers to industry organizations recognized
by the Authority according to set guidelines.

Methods of Competency Assessment refers to the different
means/ways of gatherings the required evidences and making
judgment whether the competency has been achieved.

National Certificate refers to a document issued to individuals
who have demonstrated achievement of all the required units of
competency of national qualification defined under the
promulgated Training Regulations.

On-the-Job Training refers to a course of study designed to
provide practical experiences applying previously studied theories
and aims to provide students an opportunity to understand
economic, social and cultural realities by allowing them to interact
and relate with the community.

Qualification refers to a formal certification that a person has
successfully achieved learning outcomes relevant to the identified
academic, industry or community requirements. A qualification
confers official recognition of value in the labor market and in
further education and training.

Training Plan refers to an Enterprise Apprenticeship Program
which described all the learning experience an apprentice must


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undergo, generally including the competencies to be acquired
within the program, the underpinning knowledge and skills,
theories and principles and the methods of competency
assessment.

Training Regulation refers to the package of competency
standard, national qualification, training standards, and assessment
and certification arrangements. These spell out the parameters for
ensuring the quality in delivery of a Technical-Vocational Education
and Training (TVET) program. They also serve as the bases for
competency assessment and certification, registration and delivery
of TVET programs, and development of curriculum and assessment
instruments,

Unit of Competency refers to an activity that comprises a
manageable component of work. In competency standards, each
unit of competency is described in terms of elements, performance
criteria, range of variables and evidence guide.

SEC. 5, Apprenticeable Occupation. - An apprenticeable occupation is
‘one which is specified by the Industry Board/Body, approved by the TESDA
Board and which must:

(a)

(b)

()

Involve skills that are customarily learned through a structured,
systematic program of on-the-job supervised learning and involves
the progressive attainment of manual, mechanical or technical
skills and knowledge which in accordance with the industry
standard for the occupation, would require the completion of at
least six (6) months of on-the-job and off-the-job learning;

Be clearly identified and commonly recognized throughout an
industry;

Require related theoretical instruction to supplement the on-the-
job learning.

Provided, however, that apprenticeship does not include On-The-Job
‘Training (OJT) required by education and training institutions as part of their

curriculum.

SEC. 6. Apprenticeship Period. - The apprenticeship period shall be
based on the duration of training required in the Training Plan and on the
complexity of the skills to be learned by the apprentices, provided, that the period
shall not be less than six months.

SEC. 7. Apprenticeship Program Registration. ~The Apprenticeship
Program shall be submitted for approval to, and registered with, TESDA. If may

()

For a qualification;


(b) For cluster of competencies; or

(c) For a bundled set of qualifications as contained in the Training
Regulations as applicable, or based on industry specific standards.

The application for registration shall include, among others, the Certificate
of Undertaking, the Training Plan and the creation of the Bipartite Enterprise
Apprenticeship Committee.

A Certificate of Apprenticeship Program Registration shall be issued to the
enterprise to signify authorization for specific qualification or competency
clusters.

Prior to registration, an enterprise shall execute an undertaking to:

(a) Implement the Apprenticeship Program with fairness, honesty and
good faith;

(b) Ensure that it will not employ any practice that will violate, impair,
or abuse the rights of apprentices; and

(©) Submit material information on its Apprenticeship Program,
including regulatory compliance and apprenticeship contracts, to
an industry association which shall make such information
available to the public.

TESDA shall provide technical assistance to the applying and
implementing enterprises to be able to comply with the provisions of this
Section.

SEC. 8, Bipartite Enterprise Apprenticeship Committee. - There shall
be established in every enterprise applying for an Apprenticeship Program, a
Bipartite Enterprise Apprenticeship Committee composed of labor and
management. The Committee shall be responsible for monitoring the program
implementation, settling differences between management and apprentices and
recommending measures for effective program implementation.

For unionized enterprises, the employees' representative shall come from
the existing labor unions, while employees’ representatives in non-unionized
enterprises shall be elected by the employees of the enterprise.

SEC. 9. Apprenticeship Training Program Content and Delivery. - All
existing qualifications with Training Regulations (TRs) shall undergo mandatory
review by the TESDA Board before they are reclassified as apprenticeable. All
‘Training Regulations shall be based on set criteria, which must include, but not be
limited to (a) priority needs of the industry/sector; (b) nationwide application in
terms of public interest/welfare; (c) employment generation and investment
opportunities; and (d) need for standardization and certification.


To meet the immediate requirements of enterprises for skilled workers,
the TESDA Board may approve apprenticeable occupations endorsed by the
industry board/body upon consultation with workers’ groups and industry
representatives.

The apprenticeship program shall emphasize the need for theoretical
instruction. The enterprise may seek partnership with a recognized education
and training institution in the design and delivery of theoretical instruction.

SEC. 10. Training of Apprentices. - Only enterprises with Apprenticeship
Programs registered with TESDA can enter into apprenticeship contracts and
train apprentices in approved apprenticeable occupations.

The enterprises shall be responsible for the following:

(a)

(b)
(o)

(d)

10)

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(h)

Ensure that the necessary abilities and knowledge for the
apprentice to achieve the purpose of the training are imparted to
the apprentice and shall provide such training systematically in
accordance with an approved Training Plan;

Appointment the training officer to implement the Training Plan;

Make available, free of charge, the consumable materials and basic
hand tools and equipment necessary for the training:

Allow the apprentice to attend in-school training and to sit for the
competency assessment;

Require the apprentice to keep an update report book and inspect
such books;

Ensure that the apprentice Is encouraged to develop personality;

Ensure that the apprentice is protected from physical or moral
danger; and

Entrust to the apprentice such jobs as are related to the purpose of
the training and are commensurate with the apprentice's
capabilities.

SEC. 11. Qualifications of an Apprentice. To qualify as an apprentice, a

person shall:

fa)

Be at least fifteen (15) years of age, provided, that an apprentice
below eighteen (18) years of age shall not be exposed to dangerous
or hazardous occupations;


(b) Possess good moral character, vocational aptitude and capacity for
apprenticeship as determined by the enterprise; and

(©) Possess the ability to comprehend and follow oral and written
instructions.

Trade, industry and labor organizations may recommend to TESDA
appropriate educational requirements for different occupations.

SEC, 12. Aptitude Testing of Applicants. - Any person to be engaged as
apprentice shall undergo the appropriate aptitude examinations which shall be
administered by the Bipartite Enterprise Apprenticeship Committee.

SEC. 13. Signing of Apprenticeship Contract. - Every apprenticeship
contract shall be signed by the enterprise owner or his/her authorized
representative and the apprentice.

An apprenticeship contract with an apprentice of below eighteen (18)
years old shall be signed in his/her behalf by his/her parent or guardian, subject
to the right of the apprentice to terminate the same after thirty (30) days’ prior
notice,

Every apprenticeship contract entered into under this Section shall be
approved by the Bipartite Enterprise Apprenticeship Committee and copies
thereof shall be furnished the management and the apprentice.

No enterprise shall be allowed to engage apprentices more than twenty
percent (20%) of the total number of its regular employees, provided, that the
TESDA Board may, upon recommendation of the Industry Board/Body may
Increase the cap, if necessary; provided further, that any person who shall be
engaged as an apprentice in excess of the threshold herein provided shall be
considered as a regular employee of the enterprise concerned.

SEC. 14, Contents of Apprenticeship Contract. - The Apprenticeship
contract shall conform with the rules issued by TESDA and shall include:

(a) Competencies that will be acquired within the apprenticeship
program based on the Training Plan and the method of
competency assessment;

(b) The period of training depending on the approved Training Plan;

(Q) Training allowance, which is no case shall be below seventy-five
percent (75%) of the applicable minimum wage,provided, that the
allowance shall be increased in an amount to be set by the TESDA
Board upon recommendation of the recognized Industry
Board/Body based on acquired competency of the apprentice;
provided further, that contributions to the training allowance by
government agencies and/or non-governmental organizations


shall be considered in computing the said seventy-five percent
(75%);

(a) Aschedule of training allowance payment; and

(e) An undertaking from the enterprise that it shall provide a
disability and/or accident insurance policy in favor of the
apprentice during the apprenticeship period; and

(The general rights and obligations of both parties, grounds for
termination of the contract and the process for the termination of
the apprenticeship contract.

‘The approved training plan shall be attached in the contract.

SEC. 15. Apprenticeship Schemes, - Enterprises with approved
apprenticeship program may choose from any of the following apprenticeship
schemes:

(a) Involving a company or group of companies and an identified
education and training institution;

(b) Conducted entirely by a company with demonstrated capacity to
conduct theoretical instruction;

(c) Other schemes to be established by the TESDA in consultation with
enterprise management, labor and training institutions and subject
to the approval of the TESDA Board;

SEC. 16, Competency Assessment and Certification. - The apprentice
shall undergo competency assessment for qualifications within the
apprenticeship period and shall be issued the appropriate competency certificate
after he/she has demonstrated achievement of the competency standards.

SEC. 17. Training Certificate and System of Equivalency. - A Training
Certificateshall be issued by the authorized enterprise to signify completion of
the apprenticeship program in accordance with the approved training program.
The Certificate shall contain a list of the units of competency acquired and shall
be comparable to completion of a training program in a Technical-Vocational
Education and training institution.

Apprenticeship graduates shall likewise be awarded equivalent unit
credits in the formal system of education that can be used in pursuing tertiary
degree courses subject to the integrated policies, standards and guidelines on
equivalency and adult education acceleration program of the TESDA,
Commission on Higher Education (CHED) and the Department of Education
(DepEd).

SEC. 18, Apprenticeship Administration. - TESDA shall be responsible
for the implementation of the apprenticeship program as provided for in this Act.


For this purpose, TESDA shall conduct a regular compliance audit of enterprises
with registered apprenticeship program.

The TESDA Board shall set up the overall apprenticeship policy and
standards.

The TESDA Secretariat shall be responsible for apprenticeship
administration, monitoring and evaluation of the training.

There shall be TESDA recognized Industry Boards/Bodles which shall
determine and recommend to the TESDA Board whether an occupation {s
apprenticeable and perform such other function as may be necessary.

SEC. 19. Violation and Termination of Apprenticeship Contract. - The
Bipartite EnterpriseApprenticeship Committee shall have authority to settle
differences arising out of apprenticeship contracts upon complaints of any
interested person or upon its own initiative. In the event that the Bipartite
Enterprise Apprenticeship Committee shall be unable to settle such differences,
the TESDA Secretariat or its authorized representative shall investigate and
render a decision pursuant to pertinent rules and regulations as may be
prescribed by the TESDA Board.

The decision of the TESDA Secretariat or its authorized representative
may be appealed by any aggrieved person to the TESDA Director General within
five (5) days from the receipt of the decision. The decision of the TESDA Director
General shall be final and executory.

The rules and procedures on the termination of Apprenticeship Contract
shall be promulgated by the TESDA Board.

The Apprenticeship Contract shall be terminated on any of the grounds
stipulated thereunder, subject to the rules on due process. The Notice of
Termination shall be filed with the Bipartite Enterprise Apprenticeship
Committee for conciliation and settlement of issues. In the absence of settlement
or agreement, the same shall be elevated to the TESDA Secretariat or its
authorized representative pursuant to the pertinent rules and regulations of the
‘TESDA Board.

SEC. 20. Violation of this Act. - Any violation of the provisions of this Act
shall be under the jurisdiction of TESDA through its regional offices. If the
violation constitutes deficiency of labor standards and other labors laws, TESDA,
through its regional offices, shall endorse the same to the appropriate regional
offices of the Department of Labor and Employment (DOLE).

SEC. 21. Violation of Labor Standards and Other Labor-Related Laws.
- Any violation of general labor standards, occupational safety and health
standards and other labor-related laws shall be under the jurisdiction of the
DOLE through its regional offices, pursuant to Article 128 of the Labor Code of
the Philippines, as amended.


SEC. 22. Compulsory Apprenticeship - When the national security of
particular requirements of economic development so demand, the President of
the Republic of the Philippines shall require compulsory training of apprentices
in certain trades, occupations, jobs or employment levels where shortage of
trained human resources deemed critical as recommended by the TESDA Board.

SEC. 23. Incentives. - An additional deduction from the taxable income
equivalent to one-half (1/2) of the value of training expenses incurred for
developing the productivity and efficiency of apprentices program shall be
granted to the person or enterprise organizing an apprenticeship program;
provided, that such program \s duly recognized by TESDA; provided further, that
such deduction shall not exceed ten percent (10%) of direct labor wage; and
provided finally, that the person or enterprise who wishes to avail of this
incentive shall pay the apprentices Training Allowance equivalent to the
applicable minimum wage.

SEC. 24. Exemption from Probationary Employment. - Certified
apprentices shall be exempted from probationary employment in the event that
they are employed in occupations requiring the same skills and qualifications
standards which they shall have obtained upon passing the competency
assessment as provided under Section 16 of this Act.

SEC. 25, Penalty Clause. - The TESDA Secretariat shall have the power to
initiate program closure proceedings of enterprises found offering unregistered
apprenticeship programs without prejudice to the filing of administrative,
criminal or civil liabilities, which may include any of the following causes;

(a) Fraud or deceit committed in connection with the application for
the opening of apprenticeship programs; and

(b) Failure to comply with conditions or obligations prescribed under
this Act or its implementing rules and regulations.

SEC. 26. Implementing Rules and Regulations. - The TESDA
Chairperson shall, after consultation with the National Tripartite Industrial
Peace Council (NTIPC) and other relevant stakeholders, issue the implementing
rules and regulations within ninety (90) days after the effectivity of this Act.

SEC. 27. Transitory Provision. - All existing apprenticeship programs
and Training regulations shall be valid until after the TESDA has conducted an
assessment and revalidation for consistency with the provisions of this Act and
its implementing rules and regulations.

‘SEC.28. Sunset Provision. - Four (4) years after the effectivity of this Act,
the TESDA Board shall conduct a review of its implementation and submit a
report to Congress within thirty (30) days after the conclusion of the review.

SEC. 29. 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.


SEC. 30. Repealing Clause. - Chapter | (Apprentices) and Chapter II
(Learners), Title Il, Book Il and other pertinent provisions of Presidential decree
442, or the Labor Code of the Philippines, as amended, Executive Order No. 1111,
Series of 1986, RA7796 or the TESDA Act of 1994, and all other laws, decrees,
executive orders and rules and regulations contrary to or in consistent with the
provisions of this Act are hereby repealed or modified accordingly.

SEC. 31. Effectivity. - This Act shall take effect after fifteen (15) days
from the date of its full and complete publication in the Official Gazette or in two
(2) newspapers of general circulations.

Approved,