FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
EXPLANATORY NOTE 
Even as the Constitution provides in no unclear terms the right of workers to 
security of tenure, employment practices that abrogate this right persist. Preventing 
workers from becoming regular employees and the denial by employers of the existence 
of employee-employer relationship are but two of the grave employment practices 
inconsistent with the workers' right to security of tenure. Such practices are usually 
effected through the classification of regular employees as "casual", "renewal" of 
employment contract every six months; firing of employees and hiring of new ones 
every five or six months; labor-only contracting; and hiring of "agency workers". 
In general, these unfair labor practices violate the right of workers to just and 
humane employment terms and conditions, to self-organization and collective 
bargaining. The non-recognition of workers as regular employees, for instance, is 
tantamount to withholding from them benefits accorded to regular employees, including 
the right to join unions and engage in collective bargaining. Similarly, these labor 
practices violate the right of regular members in the sense that they weaken the latter's 
bargaining unit because they cannot recruit workers who should have been regular 
employees. 
Unfortunately, the legal provisions at present do not deter unscrupulous 
employers from committing anti-labor practices. Furthermore, the law on subcontracting 
is even vague and admits interpretation inconsistent with the provision of the law on 
regular employment. 
This legislation therefore intends to correct the significant omissions and 
loopholes in our laws by amending relevant sections in our Labor Code. Specifically, it 
seeks to: 
(1) render the misclassification of regular employees into other kinds of 
employees as an unfair labor practice and provide penalties thereof; and (2) harmonize 
the laws on subcontracting and regular employment. Through these, we hope to secure 
and strengthen the constitutionally guaranteed right of our workers to security of tenure. 
Hence, support of this bill is earnestly sought. 


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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
AN ACT 
STRENGTHENING THE CONSTITUTIONAL RIGHT TO SECURITY OF TENURE, 
AMENDING FOR THE PURPOSE 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 "SECURITY OF 
TENURE ACT OF 2007." 
SECTION 2. Labor-only contracting. Art 106 of the Labor Code shall be 
amended to read as follows: 
"Art. 106. 
Contractor or sub-contractor. - Whenever an employer 
enters into a contract with another person for the performance of the former's 
work, the employees of the contractor and of the latter's subcontractor, if any, 
shall be paid in accordance with the provisions of this Code. 
In the event that the contractor or sub-contractor fails to pay the wages 
of his employees in accordance with this Code, the employer shall be jointly 
and severally liable with his contractor or sub-contractor to such employees to 
the extent of the work performed under the contract, in the same manner and 
extent that he is liable to employees directly employed by him. 
The Secretary of Labor and Employment may, by appropriate 
regulations, restrict or prohibit the contracting out of labor to protect the rights 
of workers established under this Code. In so prohibiting or restricting, he may 
make appropriate distinctions between labor-only contracting as well as 
differentiation within these types of contracting, and determine who among the 
parties involved shall be considered the employer for purposes of this Code, to 
prevent any violation or circumvention of any provision of this Code. 


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There is “labor-only’’ contracting where the person supplying workers to 
an employer does not have substantial capital [or] AND investment in the form 
of tools, equipment, machinery, work premises, among others, and the 
workers recruited and placed by such person are performing activities which 
are directly related to the principal business of such employer or WHERE THE 
PRINCIPAL EMPLOYER HAS THE RIGHT OF CONTROL OVER MEANS BY 
WHICH THE PURPORTED AGENCY OR CONTRACTUAL EMPLOYEE 
PERFORMS THE ACTIVITIES, NOTWITHSTANDING THE FACT THAT THE 
AGENCY OR CONTRACTOR HAS SUBSTANTIAL CAPITAL AND/OR 
INVESTMENT IN THE FORM OF TOOLS, EQUIPMENT, MACHINERIES, 
WORK PREMISES, AMONG OTHERS. 
In such cases, the person or 
intermediary shall be considered merely as an agent of the employer who shall 
be responsible to the workers in the same manner and extent as if the latter 
were directly employed by SUCH PRINCIPAL EMPLOYER. 
IN THE 
PERFORMANCE OF ITS JOB, 
THE 
LEGITIMATE 
SUBCONTRACTOR MUST USE ITS OWN EQUIPMENT, FACILITIES, 
MACHINERIES AND TOOLS AND CANNOT RELY ON THE PRINCIPAL 
CONTRACTO. 
THE USE OF THE SUBCONTRACTOR OF THE 
EQUIPMENT, 
FACILITIES, 
MACHINERIES AND 
TOOLS 
OF 
THE 
PRINCIPAL IS AN INDICATION THAT THE SUBCONTRACTOR HAS NO 
SUBSTANTIAL CAPITAL AND INVESTMENT. 
THE EMPLOYER AND THE LABOR-ONLY CONTRACTOR OR 
SUBCONTRACTOR WHO VIOLATE THE FOREGOING PROVISION SHALL 
BE SOLIDARY LIABLE TO PAY INDEMNITY OF NO LESS THAN P50,OOO.OO 
TO EACH EMPLOYEE UNDER THE LABOR-ONLY CONTRACTOR OR 
SUBCONTRACTO, WITHOUT PREJUDICE TO THE OTHER MONETARY 
AWARDS SUCH AS BACKWAGES, MONETARY CLAIMS, AND CBA 
BENEFITS. 
SECTION 3. Lawful classification of regular employment. Art. 280 of the 
Labor Code shall be amended as follows: 
“ART. 280. 
Regular and Casual Employment; Penalty in Case of 
Violation - The provisions of written contract to the contrary notwithstanding 
and regardless of the oral agreement of the parties, an employee shall be 
deemed to be regular where the employee has been engaged to perform 
activities which are usually necessary and desirable in the usual trade or 
business of the employer, except where the employment has been fixed for a 
specific project or undertaking the completion or termination of which has been 
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determined at the time of engagement of the employee, or where the work or 
services to be performed is seasonal in nature and the employment is for the 
duration of the season. 
SEASONAL AND PROJECT EMPLOYEES SHALL HAVE THE RIGHT 
TO SECURITY OF TENURE, SUBJECT TO THE PROVISIONS ON 
PROBATIONARY EMPLOYMENT, AND ARE ENTITLED TO RESUME 
THEIR EMPLOYMENT IN THE SAME OR SIMILAR POSITION UPON THE 
START OF THE NEXT SEASON OR PROJECT, AS THE CASE MAY BE; 
PROVIDED THAT, DURING THE TIME THAT THEIR SERVICES ARE NOT 
ACTUALLY AVAILED OF BY THE ESTABLISHMENT, THEY SHALL BE 
CONSIDERED TO BE ON AUTHORIZED LEAVE WITHOUT PAY. 
An employment shall be deemed to be casual if it is not covered by the 
preceding paragraph. [Provided, That any employee who has rendered at 
least one year of service, whether such service is continuous or broken, shall 
be considered a regular employee with respect to the activity in which he is 
employed and his employment shall continue while such activity exists.] 
CASUAL EMPLOYMENT SHALL HAVE THE RIGHT TO SECURITY OF 
TENURE AND MAY BE TERMINATED ONLY FOR JUST OR AUTHORIZED 
CAUSES. HOWEVER, THEIR POSITION, NOT BEING NECESSARY OR 
DESIRABLE TO THE USUAL TRADE OR BUSINESS OF THE EMPLOYER, 
MAY BE ELIMINATED IF THE SERVICES ATTACHED THERETO ARE NO 
LONGER AVAILED OF BY THE EMPLOYER. PROVIDED THAT IF THE 
POSITION HAS BEEN IN EXISTENCE FOR MORE THAN ONE YEAR, IT 
SHALL BE CONSIDERED AS REGULAR IN NATURE, SUBJECT TO THE 
PROVISIONS ON PROBATIONARY EMPLOYMENT. TERMINATION WILL 
THEN BE ALLOWED ONLY IF THERE IS JUST OR AUTHORIZED CAUSE. 
THE PRINCIPAL EMPLOYER MUST DIRECTLY HIRE WORKERS 
WHO ARE PERFORMING ACTIVITIES WHICH ARE USUALLY NECESSARY 
OR DESIRABLE TO THE USUAL TRADE OR BUSINESS OF THE 
EMPLOYER, WITHOUT PREJUDICE TO THEIR PROPER CLASSIFICATION 
AS REGULAR, SEASOSNAL, PROJECT, OR EMPLOYEES HIRED FOR A 
SPECIFIC 
UNDERTAKING, AS 
PROVIDED FOR 
IN THE 
FIRST 
PARAGRAPH. THE PRINCIPAL EMPLOYER CANNOT HIRE THROUGH 
SUBCONTRACTORS, LABOR CONTRACTORS, OR OTHER SIMILAR 
AGENCIES AND "MANPOWER SERVICE PROVIDERS, WORKERS 
PERFORMING ACTIVITIES WHICH ARE USUALLY NECESSARY OR 
DESIRABLE TO THE USUAL TRADE OR BUSINESS OF THE EMPLOYER, 
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REGARDLESS OF THE AMOUNT OF INVESTMENT AND CAPITAL OF THE 
SUBCONTRACTOR OR LABOR CONTRACTOR. 
LIKEWISE, IN NO CASE SHALL REGULAR EMPLOYMENT BE 
SUBJECT TO A TERM, EXCEPT WHERE THE EMPLOYMENT HAS BEEN 
FIXED FOR A SPECIFIC PROJECT OR UNDERTAKING THE COMPLETION 
OR TERMINATION OF WHICH HAS BEEN DETERMINED AT THE TIME OF 
ENGAGEMENT OF THE EMPLOYEE, OR WHERE THE WORK OR 
SERVICE TO BE PERFORMED IS SEASONAL IN NATURE AND THE 
EMPLOYMENT IS FOR THE DURATION OF THE SEASON SUBJECT TO 
PARAGRAPH 2 HEREOF. 
HOWEVER, TERM EMPLOYMENT SHALL BE ALLOWED FOR 
OVERSEAS FILIPINO WORKERS, SHOULD THE VALID CONTRACT OF 
EMPLOYMENT SO PROVIDED FOR A TERM. 
EMPLOYEES WHO ARE REGULAR, REGARDLESS OF THE ORAL 
OR 
WRITTEN AGREEMENTS TO 
THE 
CONTRARY, SHALL 
BE 
CONSIDERED PART OF THE APPROPRIATE COLLECTIVE BARGAINING 
UNIT AND MAY EXERCISE THE RIGHT TO SELF-ORGANIZATION AND 
COLLECTIVE BARGAINING. 
AN EMPLOYER WHO VIOLATES THE FOREGOING SHALL BE 
LIABLE TO PAY AN INDEMNITY OF P50,OOO.OO TO EACH EMPLOYEE, 
WITHOUT PREJUDICE TO THE OTHER MONETARY AWARDS SUCH AS 
BACKWAGES, MONETARY CLAIMS, AND CBA BENEFITS. 
SECTION 4. Non-recognition of regular status as unfair labor practice. Art. 
248 (Unfair labor practices of employers) shall be amended as follows: 
“ART. 248. Unfair labor practices of employers. - It shall be unlawful for an 
employer to commit any of the following unfair labor practices: 
(a) To interfere with, restrain or coerce employees in the exercise of their right 
to self-organization; 
(b) To require as a condition for employment that a person or an employee 
shall not join a labor organization or shall withdraw from one to which he 
belongs; 
(c) To contract out services or functions being performed by union members 
when such will interfere with, restrain or coerce employees in the exercise of 
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their right to self-organization; 
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(d) To initiate, dominate, assist or otherwise interfere with the formation or 
administration of any labor organization, including the giving of financial or 
other support to it or its organizers or officers; 
(e) To discriminate in regard to hire or tenure of employment or any term or 
condition of employment in order to encourage or discourage membership in 
any labor organization. Nothing in this Code or in any other law shall prevent 
the parties from requiring membership in a recognized collective bargaining 
agent as a condition for employment, except of those employees who are 
already members of another union at the time of the signing of the collective 
bargaining agreement. Employees belonging to an appropriate bargaining unit 
who are not members of the recognized collective bargaining agent may be 
assessed a reasonable fee equivalent to the dues and other fees paid by 
members of the recognized collective bargaining agent, if such non-union 
members accept the benefits under the collective bargaining agreement. 
Provided, That the individual authorization required under Article 242, 
paragraph (o), of this Code shall not apply to non-members of the recognized 
collective bargaining agent: 
(f) To dismiss, discharge or otherwise prejudice or discriminate against an 
employee for having given or being about to give testimony under this Code; 
(9) To violate the duty to bargain collectively as prescribed by this Code; 
(h) To pay negotiation or. attorney's fees to the union or its officers or agents 
as part of the settlement of any issue in collective bargaining or any other 
dispute: or 
(i) To violate a collective bargaining agreement. 
The provisions of the preceding paragraph notwithstanding, only the officers 
and agent of corporations, associations, or partnerships who have actually 
participated in, authorized or ratified unfair labor practices shall be held 
criminally liable. 
(j) TO CLASSIFY AS CASUAL, CONTRACTUAL, SUBCONTRACTORS OR 
LABOR-ONLY CONTRACTORS EMPLOYEES, AGENCY EMPLOYEES, 
AND OTHER NON-REGULAR WORKERS THOSE EMPLOYEES WHO ARE 
REGULAR EMPLOYEES BY VIRTUE OF THE ACTIVITIES THEY PERFORM 
AND OTHER CIRCUMSTANCES WHICH MAKE THEIR EMPLOYMENT 
REGULAR. 
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SECTION 5. Repealing Clause. -Art. PD 442, as amended, otherwise known 
as the Labor Code of the Philippines, and all other acts, laws, rules and regulations 
are hereby repealed, modified, or amended accordingly. 
SECTION 6. Separability Clause. - If any part, section or provision of this Act 
shall be held invalid or unconstitutional, the other provisions shall not be affected 
thereby. 
SECTION 7. Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in at least two (2) newspapers of general 
circulation. 
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Approved, 
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