Republic of the Philippines
HOUSE OF REPRESENTATIVES RECEIVED
Quezon City as
EIGHTEENTH CONGRESS,

First Regular Session

House Bill No. paze

Introduced by CIBAC Party-List Representatives
Eduardo “Bro. Eddie” C. Villanueva and Domingo C. Rivera

AN ACT ENHANCING THE REGULATION ON EMPLOYMENT OF
FOREIGN NATIONALS AND TRANSFER OF TECHNOLOGY,
AMENDING FOR THE PURPOSE ARTICLES 40, 41, AND 42 OF
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES
AND FOR OTHER PURPOSES

EXPLANATORY NOTE

The alarming increase of foreign nationals illegally working in the Philippines
over the years backed by the discoordination and lack of accountability among
government agencies has been the basis for the proposed amendments to Articles
40, 41, and 42 of the Philippine Labor Code. The suggested modifications will embody
good faith to other countries, regions, and intemational bodies and will show the
country's commitment to honor the WTO-GATS, ASEAN Economic Community
(AEC), and other bilateral, regional and multilateral agreements in reviewing the
restrictions in hiring of foreign nationals, or the Labor Market Test (LMT), which
determines 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.

The amendments seek to: (1) update the provisions and reflect the terms used
by the country in trade negotiations and in its bilateral, regional, and multilateral
agreements’ commitments; (2) provide flexibility in the Labor Market Test in cases
where there are shortage of skilled workers in specific industries, occupations, and

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professions; (3) provide training of Filipino understudies to transfer skills and
technology from the foreign nationals through understudy programs; (4) emphasize
that the Department of Labor and Employment is the sole issuing authority of
employment permits all over the country including those working or employed in
enterprises in preferred areas of investments or in economic zones; and (5) update
the fines and sanctions for violations which was set several decades ago.

Therefore, as the Philippines strives to meet its obligations in the WTO-GATS,
AEC, and other bilateral, regional, and multilateral agreements, the proposed
amendments will not only improve but also reiterate the restrictive policy on
employment of foreign nationals.

The immediate passage of this bill is earnestly sought.

Se Hu
HON. EDUARDO “BRO. EDDIE” C. VILLANUEVA

MING: ERA


COVAHRON=

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS.
First Regular Session

House Bill No. pale

Introduced by CIBAC Party-List Representatives
Eduardo “Bro. Eddie” C. Villanueva and Domingo C. Rivera

AN ACT ENHANCING THE REGULATION ON EMPLOYMENT OF
FOREIGN NATIONALS AND TRANSFER OF TECHNOLOGY,
AMENDING FOR THE PURPOSE ARTICLES 40, 41, AND 42 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 House of Representatives of the Philippines in
Congress assembled

SECTION 1. Title II, Book | of the Labor Code is hereby amended to read as follows:
Title I! - Employment of Non-Resident [Aliens] FOREIGN NATIONALS
SECTION 2. Article 40 of the Labor Code is hereby amended to read as follows:

ARTICLE 40. Employment permit of non-resident [aliens] FOREIGN
NATIONALS — [Any alien] ALL NON-RESIDENT 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
FOREIGN NATIONAL [o

non-resident


the] SUBJECT TO THE LABOR MARKET TEST BASED ON THE non-
availability of a [pe 1
QUALIFIED AND willing

es LPI INO. acon

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
REGULATIONS, AS WELL AS IN INDUSTRIES OR OCCUPATIONS OR
PRACTICE OF PROFESSIONS WHERE THERE IS SHORT SUPPLY, AS.
DETERMINED THROUGH TRIPARTITE CONSULTATION

For an enterprise registered in preferred areas of investments OR IN
DESIGNATED ECONOMIC ZONES, THE employment permit SHALL ONLY
BE ISSUED BY THE DEPARTMENT OF LABOR AND EMPLOYMENT, [may
be issued] upon recommendation [of] BY the government agency charged with
the supervision of said registered enterprise OR LOCATOR.

SECTION 3. A new Article 40-A of the Labor Code is hereby provided to read as
follows:

ARTICLE 40-A. UNDERSTUDY PROGRAM — FOREIGN NATIONALS
ISSUED EMPLOYMENT PERMITS SHALL TRANSFER TECHNOLOGY TO.
AT LEAST TWO (2) FILIPINO UNDERSTUDIES WITHIN THE PRESCRIBED
PERIOD AS INDICATED IN THE DEPARTMENT OF LABOR AND
EMPLOYMENT-APPROVED UNDERSTUDY PROGRAM OF THE

ENTERPRISE.
SECTION 4. Article 41 of the Labor Code is hereby amended to read as follows:

ARTICLE 41. Prohibition against transfer of employment.

(@) After the issuance of an employment permit, the [alien] FOREIGN NATIONAL
shall not transfer to another job or change his/HER employer without prior

approval of the Secretary of Labor AND EMPLOYMENT.

(b) Any non-resident [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 [in accordance with the
provisions of Articles 289 and 290] WITH A FINE of [the Labor Code] 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 MONTHS NOR MORE THAN SIX 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/HER sentence.


COVOHRON=

IN ADDITION, THE SECRETARY OF LABOR AND EMPLOYMENT SHALL
IMPOSE A FINE OF FIFTY THOUSAND PESOS (P50,000.00) FOR EVERY
YEAR OR FRACTION THEREOF OF CONTINUING VIOLATION TO BOTH THE
FOREIGN NATIONAL FOUND WORKING WITHOUT VALID EMPLOYMENT
PERMIT AND TO THE EMPLOYER.

SECTION 5. Article 42 of the Labor Code is hereby amended to read as follows:

ARTICLE 42. Submission of List — Any employer employing non-resident foreign
nationals [on the effective date of this Code] shall submit a list of such nationals
to the REGIONAL DIRECTOR OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT WHICH HAS JURISDICTION ON THE EMPLOYER [Secretary
of Labor and Employment] within 30 days after HIRING, [such date] 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]

SECTION 6. Implementing Rules and Regulations. — Within ninety (90) days from
the effectivity of this Act, the Secretary of Labor and Employment, in coordination with
concemed agencies and in consultation with the relevant stakeholders, shall formulate
the necessary rules and regulations to implement the provisions of this Act.

SECTION 7. Repealing Clause. — All statutory laws, orders and issuances, rules and
regulations and/or parts thereof inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SECTION 8. Effectivity. — This Act shall take effect after fifteen (15) days from the
date of its publication in Official Gazette or in a newspaper of general circulation.

Approved