REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

nouse sino. 028

Introduced by Representative Raymond Democrito C. Mendoza, Party List, TUCP

EXPLANATORY NOTE

The informal sector has been a large emerging segment of the labor force
brought about by both the forces of globalization and the local reality of the failure to
attract investments to expand industries. The Intemational Labor Organization (ILO)
focused on the specific needs of the informal sector at the beginning of the 1970's and
realize the need to have to have a policy that provides both social protection and
institutional support that recognizes gainful employment that the sector generates.

The ILO refers to the informal sector as units engaged in the production of goods
or services with the primary objective of generating employment and incomes to the
Persons concerned. These units typically operate at a low level of organization, with little
‘or no division between labor and capital as factors of production.

The informal sector or the informal economy is heterogeneous in character in
terms of activities and actors. These can be found in every sector of the economy
including commerce, agriculture, construction, transportation, manufacturing and
services. The activities of the informal sector contribute significantly to the country's
economy. National Statistics Office data estimated that in the period of 1994 to 2003 the
informal sector activities accounted for 1/3 of the country’s non-agricultural GDP. The
‘same data showed that the sector accounts for 99.2% of all establishments in the
country, and the share of employment is accounted to almost 16 million in 2005 and is
estimated to significantly contribute to employment and revenues to the succeeding
years.

Given the significant role of the informal sector in our economy, it nevertheless is
the most neglected sector in the society. The informal sectors are more easily found in
exploitative conditions. By the very nature of this, the sectors are mostly excluded from
the protective scope of laws and regulations. Those workers that are subsumed under
this condition are more easily exploited as well. Moreover, this process of increasing


informalisation of the labor market is creating a gap between organized labor and a
growing number of workers who have no forms of collective representation at their
places of work, labeled as representational gap’.

This bill therefore, the proposed Magna Carta for Workers in the Informal
Economy seeks to afford full protection to the workers in the informal economy and to
established institutional mechanisms. In this light, the recognition and inclusion of
informal sector in the bounds of law will uplift the plight of this once vulnerable and
invisible sector of our society into a potential contributor of steady growth,

In view of the foregoing, the immediate passage of the bill is earnestly sought

* 2008, “Closing the Representational Gap in Micro and Small Enterprises, GLU working papers.


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS:
Second Regular Session

HOUSE BILL NO._U1 52

Introduced by Representative Raymond Demoerito C. Mendoza, Party List, TUCP

AN ACT PROVIDING FOR A MAGNA CARTA FOR WORKERS IN THE INFORMAL
ECONOMY, INSTITUTIONALIZING MECHANISMS FOR IMPLEMENTATION
THEREOF AND FOR OTHER PURPOSES.

TITLE!
GENERAL PROVISIONS

Chapter |
Framework and Principles

SEC. 1. Short Title. - This Act shall be known as the “Magna Carta of Workers in the
Informal Economy.”

SEC. 2, Declaration of Policy. - It is hereby declared the policy of the State:
(a) To promote the total well-being of all workers in the informal economy;

(b) To ensure their human dignity, economic advancement and access to justice
by providing timely services including social, political, economic and legal
interventions and assistance;

(c) To recognize, promote, protect and fulfill the right to decent work of every
worker in the informal economy, including: the right to self-organization; just
and humane working conditions, access to social protection; the right to
Tepresent their organizations in a continuing process of consultation and
dialogue towards maximizing the provision of a comprehensive package of
reforms, interventions, and services in accordance with their articulated
needs and interests;

(d) To recognize the roles, give proper value to the contributions of workers in the
informal economy, and make them visible in the national and local statistics;

(e) To develop and enhance their technical, entrepreneurial and other skills and
capabilities necessary so they can become more productive and self-reliant
citizens, thereby ensuring participation in mainstream economic activities;

(f) To promote gender equity and equality and protect women workers in the
informal economy against gender-based discrimination, exploitation and
abuse; to advance women's social, economic, political, and reproductive
fights; and improve their access to social protection and participation in
decision-making bodies;

(9) To protect vulnerable groups in the informal economy such as children,
differently-abled persons, indigenous peoples, and people living with HIV
from discrimination, exploitation, abuse and harassment as well as from


performing work hazardous to their occupational, physical, mental, emotional,
reproductive and spiritual health; and

(h) To progressively eliminate child labor in the informal economy through the
creation of more quality jobs for adults, effective enforcement of laws against
child labor, elimination of gender-based discrimination against girl child
workers; improved access to universal education and social protection, and
elimination of cultural factors that tolerate or even accept child labor.

SEC. 3. Framework and Principles — Article ||, Section. 9 of the Philippine Constitution
declares that “The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation and free the people from poverty through
Policies that provide adequate social services, promote full employment, a rising
standard of living, and an improved quality of life for all.” Towards this end, the
government shall pursue a comprehensive, rights-based, participatory and gender-
Tesponsive framework for workers in the informal economy including but not limited to’

(a) Policies and programs that will bring marginalized workers and economic
units into the economic and social mainstream, thereby reducing their
vulnerability and exclusion

(b) Structural reforms in all relevant levels of government by creating committees.
special offices for development and protection of workers in the informal
economy and supporting their representational rights through their legitimate
organizations.

(c) Accessible and affordable social protection, including labor market
interventions, social insurance coverage, basic health care, occupational
safety and health, reproductive health services, social welfare programs and
safety nets;

(d) Minimum and simplified regulations to encourage the development of
ingenuity and entrepreneurial spirit among workers in the informal economy.

(e) Mechanisms for the growth and expansion of the various business activities
or enterprises in the informal economy preferably with the cooperation and
support of the private sector.

(f) Applicable labor standards.
(g) Recourse mechanisms to address violations of informal workers’ rights.

(h) Mechanisms that prioritize the provision of services to the poorest and the
most vulnerable workers,

‘SEC. 4. Definition of Terms. — As used in this Act, the following terms shall mean

(a) Informal Economy — Based on International Labor Conference (ILC) 2002a,
this refers to “all economic activities by workers and economic units that are —
in law or in practice — not covered or insufficiently covered by formal
arrangements”.

The Informal Economy also includes a wide variety of activities, enterprises
and workers. Self- employment consists of employers of informal enterprises
who hire other workers and own-account workers. Wage-employment
includes informal employees of both formal and informal firms, subcontracted
workers, wage workers for households (domestic workers), and wage
workers with no fixed employer (casual day workers). The working conditions,
Opportunities and risks faced by these different categories of informal workers
are very diverse.

Informal employment is often casual, irregular or seasonal implying frequent
changes of workplaces and employers.


(b) Informal Sector, herein otherwise referred to as IS, refers to units engaged in
the production of goods and services with the primary objective of generating
employment and incomes to the persons concerned. It consists of
households unincorporated enterprises that are market and non-market
producers of goods as well as market producers of services.

‘These enterprises are operated by own-account workers, which may employ
unpaid family workers as well as occasional, seasonally hired workers.

These enterprises may also be owned and operated by employers which may
employ less than ten (10) employees on a continuous basis.

(©) Workers in the Informal Economy - include but are not limited to the
following:

¢.1, small farmers owning land not more than three (3) hectares;

©.2. rural and agricultural workers who are tenants or sharecroppers,
laborers;

¢.3. small fisherfolk/operators owning boats of three (3) gross tons or less
and other fishing equipment;

¢.4, fisherfolk who are without fishing equipment and market their catch
directly;

¢.5. home-based workers who are independent producers of goods or
services;

6.6. industrial homeworkers — workers involved in a system of production
under which work for an employer or contractor is carried out by a
homeworker at his/her home and where materials may or may not be
furnished by the employer or contractor;

7. self-employed who are engaged by other enterprises through
subcontracting arrangements;

©.8. vendors, whether with stalls or without permanent workplace including
street hawkers or those plying their goods and trades in the streets and
those engaged in sari-sari stores with operating capitalization of not
more than one million pesos (P1,000,000.00) excluding land and
building;

¢.9. drivers of modes of transportation on land and sea whether motorized
oF Not, including two (2) wheels such as calesa, three (3) wheels such
as pedicabs, tricycles, four (4) wheels such as jeepneys, multicabs and
buses, and boats one (1) ton and below; ‘barkers’, fare collectors,
dispatchers and other workers who share income with self-employed or
unincorporated operators;

¢.10. operators of jeepneys, tricycles, pedicabs, taxi, and other vehicles or
transportation whose capitalization is not more than one million pesos
(P1,000,000.00) excluding land and building;

6.11. domestic workers which refer to persons who provide service to
households such as maids, cooks, family drivers, gardeners and baby
sitters on a live-out basis and “on-call” arrangement only;

€.12. non-corporate construction workers;
¢.13. small scale miners doing their own product processing; including those

involved in small scale mining and quarrying with capitalization of below
‘one million pesos (P1,000,000.00);


¢.14. workers of Barangay Micro Business Enterprises (BMBES);
¢.15. non-corporate cargo handlers and allied workers;

¢.16. waste pickers and recyclers;

¢.17. workers engaged in producing seasonal products;

¢.18. own account workers including but not limited to those engaged in the
maintenance and repair of equipment and appliances, clothing and
footwear, as well as those providing services such as beauticians,
barbers, masseuses;

¢.19, “on-call” workers in the entertainment, movie, production checkers and
media such as bit players, stuntmen and women, crew, make-up artists,
etc.;

¢.20. volunteer workers in government and non-government entities who only
receive allowances or honoraria, including but not limited to but are not
limited to: barangay health workers (BHW), barangay tanod, barangay
nutrition scholars (BNS), barangay daycare workers, and volunteers in
non-government or people's organizations;

¢.21. unpaid family members, or workers receiving allowances and
seasonally hired workers who are engaged in micro-enterprises or
assist unincorporated household enterprises; and

¢.22, other similar economic activities that are not criminal and life
threatening in nature.

(d) Worker is a general term referring to either or both the self-employed or paid
employee covered under the provisions of this Act.

(e) Self-employed Worker refers to any person whether male or female, who has
no employer and who works for himself/herself by producing goods or
services for the market.

(f) Worker of minor age refers to children fifteen (15) to seventeen (17) years of
age who are engaged in productive employment under a valid contract of
employment.

(9) Employer refers to a natural person or group or partnership of people for
whom a paid worker renders productive employment or service.

(hn) Hazardous Work Condition refers to any activity or circumstance where a
worker is exposed to any risk which constitutes imminent danger to his/her
health and safety.

(i) Working Hours refers to the period of time within which a worker is required to
be on call to perform any and all tasks that may be designated, regardless of
whether there are actual tasks being undertaken.

@) Daily Basis refers to the per day mode of paying a private worker as bilaterally
agreed upon by both the employer and the worker.

(k) Monthly Basis refers to the per month mode of paying a private worker as
bilaterally agreed upon by both the employer and worker.

(l) “Pakyaw” Basis refers to the pre-contracted wholesale mode of paying a
worker as bilaterally agreed upon by both the employer and worker.

(m) Social protection refers to policies, programs, and all other interventions from
public, private and voluntary organizations and informal networks, to support
communities, households and individuals, both women and men, in their


efforts to reduce poverty, and to prevent, manage and overcome risks and
vulnerabilities throughout their life cycle, and to realize their rights as citizens
participating fully and equally in all decision making which affects their access
to and control over resources necessary to maintain and sustain a decent
and secure life. These interventions shall promote and sustain livelihood and
employment, protect against hazards and sudden loss of income, and shall
include, among others, labor market interventions, social insurance, basic
health care, social welfare and safety nets

(n) Community Contracting refers to the process of concluding an agreement
between a community and a contracting authority, whereby the community
(or a section of the community) is responsible for the implementation of the
work and therefore functions as contractor.

Chapter I
Coverage, Qualifications, and Accreditation

SEC. 5. Coverage. This shall include individual workers in the informal economy (IE), as
defined in Section 4 of this Act, IE businesses and enterprises, and organizations of
workers in the informal economy.

SEC. 6. Accreditation. There shall be a simple and standard system of accreditation in
accordance with the framework and principles of this Act. | workers shall, upon
accreditation, pay not more than Fifty pesos (P50.00). IE business activities or
enterprises and organizations shall pay not less than One Hundred pesos (P100.00) to
the municipality or city where they intend to operate.

Any IE worker meeting the necessary qualifying requirements provided for in this
Act shall be listed in the centralized database system, and shall be issued an identity
card signifying eligibility to avail of development programs for workers in the informal
economy, provided that the poorest and the most vulnerable shall be given priority. Any
IE business activity or enterprise, or organization of workers in the informal economy, if
qualified under this Act, shall be issued a certificate of accreditation.

Such accreditation shall be reviewed, revalidated and reassessed every two (2)
years from the date of last accreditation by the LGUs where the IE worker, business,
enterprise, or organization operates. Renewal of eligibility shall be in accordance with
the merit and fitness principle, and with the condition that no child labor shall be used
and no activities harmful to the environment shall be implemented,

SEC. 7. Annual Dues —\E workers, business activities or enterprises, and organizations
shall pay annual dues which shall accrue to the municipality or city and shall be
exclusively used for IE development programs approved by the municipal or city council
as recommended by the Workers in the Informal Economy Local Development Office
(WIELDO) referred to in Chapter VII of this Act. Such dues, which shall cover the cost of
the issuance of licenses to operate, shall be paid to the municipal or city treasurer in the
area where they are accredited, starting on their second year of operations, based on
the following schedule:

(a) Those with assets amounting to not more Two Thousand Pesos (P2,000.00)
P 100.00

(b) Those with assets of more than Two Thousand Pesos (P2,000.00) up to Five
Thousand Pesos (P5,000.00)....P 200.00

(c) Those with assets of more than Five Thousand Pesos (P5,000.00) up to Fifty
Thousand Pesos (P50,000.00)...P 300.00

(d) Those with assets of more than Fifty Thousand Pesos (P50,000.00) up to
One Hundred Fifty Thousand Pesos (P150,000.00)... P 500.00


(e) Those with assets of more than One Hundred Fifty Thousand Pesos
(P150,000.00) up to Three Hundred Thousand Pesos (P300,000.00)... P
600.00

(f) Those with assets of more than Three Hundred Thousand Pesos
(P300,000.00) up to Five Hundred Thousand Pesos (P500,000.00)... P
700.00

() Those with assets of more than Five Hundred Thousand Pesos
(P500,000.00) up to One Million Pesos (P1,000,000.00)... P1,000.00

Chapter tt
Basic Rights

SEC. 8. Workers in the informal economy enjoy the same basic rights accorded to alll
workers, as enshrined in the fundamental law of the land and in international
instruments:

a) The right to work, which includes the right to make a living by work freely
chosen or accepted, and the right to avail of technical and vocational
guidance and training programs;

'b) The right to the enjoyment of just and favorable conditions of work;

©) The right to a living wage and equal remuneration for work of equal value
without distinction of any kind, in particular for women who shall be
guaranteed conditions of work not inferior to those enjoyed by men;

d) Equal opportunity for promotion to an appropriate higher level, subject to no
considerations other than those of seniority and competence;

@) The right to safe and healthy working conditions, safeguarding general,
‘occupational and reproductive health;

f) The right to rest, leisure and reasonable limitation of working hours, and
periodic holidays with pay, as well as remuneration for public holidays.

g) Maternity protection, including paid leave during a reasonable period before
and after childbirth.

h) The right of workers and their families to an adequate standard of living,
primarily adequate food, clothing, and shelter, and the continuous improvement
of such standard.

i) The right to education, especially of children and young persons, without any
discrimination.

j) The right to social protection, comprising mainly of, but not limited to labor
market programs, social security, health care and insurance, and social welfare
interventions;

k) The right to self-organization to, among others, collectively negotiate with other
parties in the promotion of their welfare and advancement of their interests;

|) The right to participate in policy- and decision-making processes, including
access to information and other necessary resources relevant to the promotion
and protection of their rights and welfare;

m) The right to be free from any form of discrimination, violence, sexual
exploitation, harassment and abuse;

n) The right to equal treatment before the law; and


©) The right to equal access to justice though appropriate mechanisms, including,
but not limited to, alternative dispute resolution mechanisms and processes.

SEC. 9. Own account workers as well as marginal economic enterprises in the informal
economy, being the working poor’s primary instruments to address and overcome
Poverty, shall be accorded by the State the following rights:

a) Infrastructure support such as farm to market roads, common, affordable and
secure workplaces and facilities, merchandising centers, and inventory bulk-
buying centers;

b) Policy support to promote and protect locally/domestically produced products;
c) Access to markets, including capacity building to access E-marketing facilities;

d) Access to affordable, appropriate and adequate financial services, including,
among others, credit facilities at low interest;

e) Access to appropriate and adequate machinery, equipment, and other
technologies, with the end in view of increasing productivity and growth;

f) Protection from unjust dislocation from places where economic activities are
conducted;

9) Special measures against racketeering, extortion, and harassment, by both
State and non-State elements; and

h) Fiscal relief, including among others exemption from taxes, fees and other
assessments, to be put into place by concemed national agencies and local
government units 60 days after the effectivity of this Act.

SEC. 10. Organizations of workers in the informal economy shall have the right:

a) To freely function and act as the representatives of their members in policy-
and decision-making processes, collective negotiations, and other similar
bodies and processes;

b) To establish national federations or confederations and the right of the latter to
form or join international trade-union organizations;

C) To be furnished by concerned government institutions and other parties, upon
written request, with information pertinent to the protection and promotion of
the rights and welfare of their members;

4) To own property, real or personal, for the use and benefit of the organizations
and their members;

) To sue and be sued under their registered names;

f) To undertake all other activities, not contrary to law, designed to benefit the
organizations and their members;

9) Notwithstanding any provision of a general or special law to the contrary, the
income and the properties of legitimate labor organizations, including grants,
endowments, gifts, donations and contributions they may receive from
fraternal and similar organizations, local or foreign, which are actually, directly
and exclusively used for their lawful purposes, shall be free from taxes, duties
and other assessments. The exemptions provided herein may be withdrawn
only by a special law expressly repealing this provision; and

h) To be accorded preferential option in the awarding of contracts for the
undertaking of national and local projects funded by either the National
Government or any local government , unit including foreign-assisted projects,


the guidelines of which shall be put into place by concemed national
agencies and local government units within 60 days after the effectivity of this
Act.

Chapter IV
COMPONENTS OF SOCIAL PROTECTION

Social protection as defined in Section 4 of this Act shall cover labor market programs,
social security, health care, social welfare and social safety nets.

SEC.11. Labor Market Programs. The state shall provide adequate resources to
sustain labor market programs following decent work standards, including emergency
and guaranteed employment schemes, to ensure livelihood security and prevent or
mitigate the effects of sudden loss of income in the context of sustainable development
and developing local economies in both rural and urban areas.

a. The state shall ensure that these schemes shall be labor-intensive,
developmental, and sustainable, engaging both women and men, youth and
older people, in building infrastructure, socialized housing, social forestry
focusing on the planting of traditional trees, , organic farming, and food
production programs.

b. In pursuit of decent work, the State in all its labor market programs shall
adopt a comprehensive framework and plan on occupational safety and
health that covers all workers, formal and informal, and implemented at both
national and local levels.

c. The state shall encourage entrepreneurship among the disadvantaged,
especially women and young people in the informal economy, through the
simplification and facilitation of business registration procedures in one-stop
action centers, and the provision of adequate and affordable marketing
facilities such as economic freedom parks

d. The State through local government units shall promote community
contracting to give preference to informal workers and their organizations in
accessing employment opportunities and related benefits.

SEC. 12. Social Security. - In the spirit of promoting social justice, the state shall
endeavor to extend social security protection to all workers and their beneficiaries
against the hazards of disability, sickness, maternity, old age, death, unemployment, and
other contingencies resulting in loss of income or financial burden.

a. The Social Security System (SSS) shall cover all workers, including the
working poor who mostly belong to the informal economy, and shall
customize products and services that are accessible to and affordable for
them with the participation of their representatives. In the interest of equity,
the state shall cover what should have been the employers’ share for
contributions of self-employed had they been formally employed.

b. The SSS shall also develop schemes involving government subsidies and
sponsorship programs to enable those who cannot afford to enroll and
sustain their membership.

¢. To achieve universal membership, the SSS shall facilitate the accreditation of
cooperatives, women’s and people's organizations, trade unions and informal
workers’ associations, microfinance and micro-insurance institutions and
similar groups as collecting agents of premiums and facilitators of claims with
the least burdensome conditions and with appropriate incentives. It shall
develop effective partnerships with these organized groups.

d. The SSS Commission, in the spirit of democracy, transparency, accountability,
and equity, shall be required to provide information and reports to its
membership, and shall conduct regular consultations with its members. Both


formal and informal workers shall be represented in the SSS Commission,
where gender balance shail also be observed.

e. State agencies dealing with social security particularly SSS shall support
indigenous and community-based social protection schemes such as
damayan, tulungan, saranay, small mutual benefit associations, and micro-
finance organizations initiated or participated in by workers in the informal
economy in cooperation with other concerned national agencies and LGUs so
that these can be sustained, systematized and upscaled.

f. An enabling environment for such organizations and schemes shall be
developed. Towards this end, the Insurance Commission (IC) and other
relevant regulatory agencies are hereby mandated to review its policies and
framework to make them more developmental and supportive of the
alternative schemes outlined above,

SEC. 13. Social Security for Volunteers of Government Instrumentalities. Volunteer
workers of government instrumentalities as defined in Sec. 4 of this Act, shall be covered
by the Government Service Insurance System (GSIS) and be entitled to at least a
minimum package of customized products, services and benefits to be designed with
their participation and with government subsidy

SEC. 14, Universal Health Insurance. The Philippine Health Insurance Corporation
(PhilHealth) shall ensure and substantiate universal, actual, active, and up to date
coverage of all Filipinos by 2010. To achieve this, PhilHealth with the participation of all
stakeholders shall critically review its current operations. It shall also ensure that it can
provide a minimum benefit package which can be periodically upgraded to meet the goal
of universal coverage which is affordable, accessible and appropriate to the needs of all

a. Government subsidies for PhilHealth sponsorship programs shall be
‘expanded to cover not only the ultra poor but also the working poor who
mostly belong to the informal economy. For the working poor who are self-
employed, what should have been contributed by employers if they were
enrolled as formally employed shall be covered by government subsidies in
the interest of equity.

PhilHealth programs for indigents and the working poor shall be expanded
and improved in order to develop effective partnerships with organized
groups, especially those composed and led by informal workers, women,
senior citizens, persons with disabilities,persons with HIV/AIDS and other
marginalized sectors, to better serve increasing numbers of those in need.
Organized groups with at least 500 members shall be allowed to be collecting
agents of premiums with incentives.

b. PhilHealth shall immediately extend its services to underserved areas by
facilitating and accelerating accreditation of hospitals and clinics, and by
ensuring that these service providers remain viable through immediate
reimbursement.

¢. PhilHealth, in accordance with its guiding principles, shall promote maximum
community participation and shall recognize the roles and strengths of the
Public and private sectors in health care, including people's organizations and
community based health organizations. PhilHealth shall extend appropriate
recognition, technical assistance, and other forms of material support to
mutual benefit associations, microfinance organizations, community-based
health insurance and indigenous schemes initiated and participated in by
workers in the informal economy.

d. PhilHealth shall review its benefit package with maximum participation of all
stakeholders in order to cover informal workers, senior citizens, indigenous
peoples, persons with disabilities: persons with HIVAIDS and other
marginalized groups sustainably; emphasize preventive measures such as
annual physical and medical check-ups and other outpatient services;


coverage of workplace-related injuries and illnesses affecting both formal and
informal workers, treatment of chronic ailments such as hypertension and
diabetes; and inclusion of reproductive health services, commodities and
supplies based in hospitals

SEC.15. Social Welfare and Safety Nets. The state shall implement programs whereby
beneficiaries of social assistance are able to exchange their labor or any other resources
for the benefits received, and are assisted to progress out of poverty through self-
‘empowering measures.

a. Existing cash transfer programs shall be reviewed, improved, and expanded
to enable the poor to work and capacitate themselves out of poverty in an
empowering and dignified manner. Such programs shall benefit not only
children of poor families, but also senior citizens, especially older women,
persons with disabilities, and other marginalized groups with little or no
assets.

b. Barangay Day Care Centers shall provide 8-10 hour services to enable
parents, especially mothers, to work.

c. Community-based, gender-responsive, and participatory disaster
preparedness and management schemes shall be established in every
barangay to address and mitigate the effects of climate change and other
catastrophic risks

Chapter V
Special Allocations for Development Initiatives

SEC. 16. Special Allocations for this Act —The national and local government units
shall work shoulder to shoulder in support of this integrated and convergent approach to
maximize meager resources.

(a) At least ten percent (10%) of the annual national budget shall be
appropriated for programs and services for workers in the informal economy
to be implemented by the Informal Economy Development Authority (IEDA)
and Workers in the Informal Economy Local Development Office (WIELDO)
as created by Chapters VI and VII of this Act.

() The Implementing Rules and Regulations (IRR) of this Act shall determine
additional guidelines and the use of such finances to ensure that programs
and services truly benefit workers in the informal economy.

SEC. 17. Sourcing and Adopting Development Initiatives — Other existing sources of
funds can be used for initiatives addressing the needs and empowerment of workers in
the informal economy shall be identified in the Implementing Rules and Regulations
(IRR) of this Act and may include the following, subject to guidelines issued by the
Agency concerned:

(@) Government financial institutions and mechanisms such as the Land Bank of
the Philippines, Development Bank of the Philippines, National Livelihood
Support Fund, Quedan Rural Credit and Guarantee Corporation shall set
aside a specific percentage of their loan portfolio to informal economy
enterprises and shall give priority to women-led informal economy enterprises
by providing loans at an interest of not more than twelve percent (12%) per
annum consistent with the spirit of R.A. 7882.

(b) The Small Business Guarantee and Finance Corporation (SBGFC) created
under Republic Act (R.A.) No. 8289, shall assist in the sourcing and adopting
of development initiatives for competitive enterprises in terms of finance,
technology, production, management and business linkages. It shall also
provide and promote, develop and widen in both scope and service reach
various alternative modes of financing for informal economy business
activities or enterprises, including but not limited: to direct and indirect project
lending, venture capital, financial leasing, secondary mortgage and/or


rediscounting of loan papers to such business activities or enterprises, and
crop production financing.

(c) The Department of Trade and Industry (DT!) shall contribute to enable the
development of a business environment that shall include initiatives such as
supply chain and market outlets, and schemes to develop Special Credit
Windows to upscale informal enterprises.

(d) The Department of Science and Technology (DOST) shall support
technology-related initiatives of workers and enterprises in the informal
economy.

Chapter VI
Informal Economy Development Authority (IEDA)

SEC. 18. Creation of the Informal Economy Development Authority (IEDA). ~ There
is hereby created an Informal Economy Development Authority, herein otherwise
referred to as the IEDA, which shall be attached to the Office of the President and shall
be constituted within thirty (30) days after the drafting and approval of the IRR of this Act.

The IEDA shall be the primary agency responsible for the promotion, growth,
development and empowerment of the workers in the informal economy as well as their
enterprises and organizations in the country. It shall be a one-stop shop that will facilitate
and closely coordinate national efforts to promote the informal economy's viability and
growth, including the provision of an integrated program for skills enhancement, literacy
and education, health services, social welfare and services and assistance in tapping of
local as well as foreign funds. It shall also perform regulatory and quasi-judicial and
other functions relative to the attainment of the objectives of this Act.

SEC. 19. Mandate and Functions of IEDA. —- The mandate and functions of IEDA
shall include the following:

{a) Develop and ensure implementation of a system of accreditation for the IE
workers, enterprises, and organizations in accordance with the standards and
provisions of this Act;

(b) Provide guidelines for the implementation by LGUs of a fair and credible
system of evaluation, accreditation, review and assessment, merit promotion,
rendering of grant and incentive awards and other policies relative to the
effective and efficient implementation of this Act;

(c) Develop and ensure implementation of annual, long-term and medium term
plans for the informal economy, the last of which should form part of the
Medium Term Philippine Development Plans (MTPDP) towards
institutionalizing comprehensive, rights-based, gender-responsive and child-
friendly programs and policies for the IE;

(d) Develop and ensure implementation of labor standards;

(e) Develop and ensure implementation of gender-based monitoring and
evaluation mechanisms, efficient and effective programs and policies, and
gender-responsiveness of interventions toward hamessing the full potentials
of women workers in the informal economy;

(f) Coordinate with LGUs for the development and implementation of periodic
evaluation of all accredited IE members, enterprises and organizations —
taking into account their accomplishments, capabilities and potentials — the


results of which shall be used as bases for evaluation, accreditation, the grant
of awards and incentives, training and retraining;

(g) Establish a performance appraisal system for all accredited workers,
enterprises and organizations in the informal economy which shall be the
basis for granting or renewal of incentives, rewards and recognition, training
and development, including adequate mechanisms to ensure their active
participation and involvement;

(h) Ensure effective participation of the workers in the informal economy through
the establishment of regular consultative mechanisms and processes. Annual
national, regional and provincial consultations among the organizations of
workers in the informal economy shall be conducted to determine specific
issues and problems affecting their sector, and monitor and evaluate
implementation of programs and policies.

(i) Establish and develop a centralized and sex-disaggregated database system
to effectively guide policy formulation relative to the workers in the informal
economy. The databank shalll be available for public use and shall include but
not be limited to the following:

i.1. Sex-disaggregated statistical profile of various informal economy
workers based on age, location, type of work, average monthly income,
number of hours worked, and other statistical information;

i.2. Sex-disaggregated data on informal enterprises, including
capitalization and sources of capital, number and status of workers,
average income,

3. List and contact information of government and non-government
organizations which provide educational, socio-economic and legal
services to workers in the informal economy;

i4. Inventory of upheld and pending cases involving activities of
workers in informal economy;

i.5. Database on the needs and problems of women and children in the
informal economy nationwide aimed at strengthening policies and
programs against child labor; and

i.6. Compilation of existing laws and programs affecting the interest and
welfare of informal economy workers and information on how these
workers may use or avail of such laws and programs.

() Develop and ensure implementation of a communication plan including
massive information dissemination activities targeting workers in the informal
economy, their enterprises and organizations, in the various regions towards
making them understand and appreciate the benefits this Act may bring them;

(k) Consistent with letter h Section 2 of the Declaration of Policy, to develop and
ensure implementation of a comprehensive plan to eliminate child labor;

() Monitor and coordinate implementation of policies and programs through the
Regional IEDA officers;

(m) Coordinate all informal economy related policies, programs, projects and
activities of various government agencies towards greater efficiency and
effectiveness;

(n) After consultations with WIE organizations, develop and ensure
implementation of policies and programs that will address specific needs and
ensure rights of workers in the informal economy subsectors including but not
limited to vendors, small transport, non-corporate construction workers,
home-based workers, etc.; and


(0) Develop and ensure implementation of accessible conflict resolution and
adjudication systems and mechanisms to promote dialogue, conciliation,
mediation and redress of grievances to protect the rights of workers in the
informal economy.

SEC. 20. Composition. - The Chair of the IEDA shall be appointed by the President
based on recommendations of IEDA members and shall have the rank of a Secretary.
IEDA members may elect from among themselves a Vice-Chair to preside over
meetings in the absence of the Chair. The members shall be the following:

(a) Secretary of Department of Labor and Employment (DOLE);

(b) Secretary of the Department of Trade and Industry (DTI)

(©) Director General of the National Economic and Development Authority
(NEDA);

(d) Secretary of Department of Agriculture (DA);

(e) Secretary of Department of Agrarian Reform (DAR);

(f) Secretary of Department of Social Welfare and Development (DSWD);
(g) Secretary of Department of Health (DOH);

(h) Secretary of the Department of Interior and Local Government (DILG);
() Secretary of the Department of Finance (DOF);

()) Lead Convenor of the National Anti-Poverty Commission (NAPC);

(k) Director General of Technical Education and Skills Development Authority
(TESDA);

() President of Development Bank of the Philippines (DBP);

(m) President of Land Bank of the Philippines (LBP);

(n) Chair of the Social Security System (SSS);

(0) Chair of PhilHealth;

(p) Chair of the National Commission on the Role of Filipino Women (NCRFW);

(q) Head of the Housing and Urban Development Coordinating Council
(HuDCC); :

(0) Three (3) representatives from the private sector at large, all Filipino citizens ,
proven to have been active in assisting informal economy workers, to represent
Luzon, Visayas and Mindanao; provided that at least one (1) is a woman;

(s) One (1) representative each from the League of Cities, League of
Municipalities, League of Provinces and League of Councilors;

(t) Five (5) representatives from organizations of workers in the informal
economy, provided that, one (1) shall be the Sectoral Representative of the
NAPC-Workers in the Informal Sector , provided moreover, that the other four
shall be chosen from workers in the informal economy organizations themselves
following a process to be determined in the IRR and provided finally, that at least
two (2) of the five (5) representatives are women; and


(u) Two (2) representatives of women’s organizations actively involved in
women's and informal economy issues from among those recommended by
these organizations.

The private sector, informal economy and women's organizations’
representatives to the IEDA shall be entitled to receive per diem of at least Two
Thousand Five Hundred Pesos (P2,500.00) per meeting. The IEDA members
shall meet once every two (2) months and imay call for special meetings as the
need arises; provided, that the frequency of such special meetings shall not
exceed four (4) times annually.

Ten million pesos (P10,000,000.00) shall be allocated from the Presidential
discretionary fund for the initial operating expenses of the IEDA.

SEC. 21. Executive Committee of the IEDA - An Executive Committee of seven (7)
members shall be convened. Besides the Chair and Vice-Chair, the following shall be
elected by the IEDA members from among themselves or their duly designated alternate
representatives: two (2) representatives of workers in the informal economy, one (1)
from the different leagues of local officials, one (1) from the private sector, and one (1)
from a national government agency, provided, that at least two (2) members of the
Executive Committee are women.

The Executive Committee shall have the authority to act for and in behalf of IEDA
during intervals of meetings, and within the specific authority granted by the IEDA.

SEC. 22. IEDA Secretariat. - The Executive Committee shall create a secretariat that
will have the following duties and functions:

(a) Prepare and recommend, in coordination with LGUs and other government
agencies, annual, medium-term, and long-term Informal Economy
Development Plans for approval of the IEDA;

(b) Coordinate the preparation of position papers and background materials for
discussion or approval during IEDA meetings;

(0) Assist in coordinating and monitoring policies, programs and activities of all
government agencies with respect to the implementation of this Act;

(d) Prepare, collate, integrate all inputs to the IEDA’s yearly report on the status
of informal economy workers, business activities or enterprises in the country;

(e) Submit periodic reports to IEDA on the progress and accomplishments of its
work programs; and

(f) Perform other functions as authorized by the IEDA.

SEC. 23. Authority of the IEDA to Solicit Assistance from Various Agencies. ~ The
IEDA may, from time to time, call for the participation of any government agency or
bureaucracy in its deliberations especially when such agency is directly or indirectly
concerned with andlor affecting the growth and development of the IE in any particular
area or manner.

SEC 24. Regional IEDA Officer — Regional IEDA officer shall be appointed and shall
have functions that include: monitoring and coordinating IEDA initiatives in the regions;
evaluation of policies programs for workers in the informal economy; providing technical
assistance in the development of local plans and programs; as well as other
administrative functions necessary for the success of IEDA initiatives in their jurisdiction.
IEDA Regional Officers shall have automatic seats in all Regional Development Councils.

Chapter VII
Workers in the Informal Economy Local Development Office (WIELDO)


SEC. 25. Workers in the Informal Economy Local Development Office (WIELDO)-
The Workers in the Informal Economy Local Development Office (WIELDO) shall be
established in every province, city or municipality to perform functions that shall include
but not be limited to the following:

(a) Prepare an overall development plan and work program that will address the
needs of the workers in the informal economy and incorporate them in their
respective provincial, regional, city, municipal and barangay development
plans;

(b) In consultation with organizations of workers in the informal economy in the
area, identify specific needs of various subsectors of the IE and recommend
appropriate measures to be taken;

(c) Ensure accreditation of the workers in the informal economy;

(d) Monitor, assess and evaluate implementation of the plans and programs as
well as the performance of the sector in the areas;

(e) Identify and designate, in coordination with representatives of WIE affected
communities and other sectors or groups, and with the approval of the
relevant local authority, accessible and secure workplaces for registered IE
workers including but not limited to vendors, small transport operators, home-
based workers, small fisherfolk;

(f) Coordinate with other local offices, private sector and other organizations with
existing programs for the workers in the informal economy towards
integration and convergence;

(g) Conduct training programs which will provide new ideas to the IE workers and
upgrade the technical and entrepreneurial skills of others who are already in
the field:

(h) Implement consciousness-raising and capability building activities whch
include information on workers’, women's and children’s rights and leadership
training;

(i) Provide technical support and access to credit, market, technology, social
protection schemes, and training for micro-entrepreneurs and those in service
industry, small transport, non-corporate construction workers, etc.;

() Train pools of community trainers in business counseling and awareness-
raising on occupational safety and health hazards, risks and social protection;

(k) Support organizing activities among workers in the informal economy;

(I) Establish sex-disaggregated data banks on human resources and skills
registry to be used as tools for LGU planning and budgeting;

(m) Provide offices and other necessary resources to support organizing,
advocacy, training and other activities of local organizations of workers in the
informal economy;

(n) Train workers in the informal economy on negotiation skills and on the
conduct of time and motion studies to determine proper wages; and

(0) Provide services, which shall include but not be limited to counseling,
conciliation, mediation, and legal assistance for the furtherance of this Act.

In addition to fund allocations specified in this Act, the LGUs shall annually
allocate at least One Hundred Thousand Pesos (P100,000.00) or at least 5% of the
twenty percent (20%) Development Fund of their respective IRA whichever is higher for
the establishment and initial operations of WIELDO.


Following the principle of merit and equity, LGUs that fulfill such allocations may
receive additional assistance from the national government as recommended by IEDA;
provided, that they have formulated their local development plan for workers in the
informal economy.

SEC. 26. Composition. The local chief executives shall act as the primary overseers to
the overall operation of WIELDO. Composition of WIELDO shall be determined by the
Implementing Rules and Regulations (IRR) of this Act; provided that, workers in the
informal economy shall be equitably represented; and provided further, that concerned
LGUs maintain their right to include additional members as needed.

TITLE It
EMPLOYMENT OF WORKERS IN THE INFORMAL ECONOMY

Chapter |
Requisites for Employment Agreement

SEC. 27. Minimum Standards — All working arrangements entered into by workers in
the informal economy shall be in accordance with the minimum applicable labor and
social standards as contained in Title II of this Act.

These standards shall be strictly enforced in informal economic enterprises supplying or
doing outsourcing work for exporters, investors-locators in export processing zones or
industrial parks licensed by the Export Processing Zone, and domestic formal sector
manufacturers and retailers-distributors.

For workers engaged by independent informal economic enterprises, DOLE and other
agencies under the IEDA shall audit the capacity of these enterprises to comply with
these standards. Those incapable of meeting the standards shall be assisted to upgrade
their capacity to improve their businesses side by side with capacity upgrading in
‘complying with relevant labor and social standards.

SEC. 28. Provisions of the Employment Agreement. The employment contract shall
be in written form. However, the absence of a written agreement does not mean the
absence of an employment relationship. Informal economy workers can insist on a
written agreement based on minimum standards as a matter of right.

In cases wherein minors are contracted with, the said negotiated contract shall
be signed on his/her behalf by either parent or legal guardian, with the expressed written
consent of the said minor.

In cases wherein illiterate workers are contracted with, the said contract shall be

explained to the worker concerned and attested to by a representative from the LGU or

an elected Barangay official in the city or municipality where the worker is designated to
work.

In every contract entered into, each contracting party shall be provided with a full
set of the duly signed agreement, the basic provisions of which shall include:

(a) working arrangementimode;
(©) period/duration of employment;

(c) compensation, which shall not be below the minimum standard, and mode of
payment;

(d) computation of contributions for social security and medical insurance;

(e) computation of contributions for social security and medical insurance for
those who fall under DOLE Department Order No. 5;


(f) duties and responsibilities;

(9) working hours and day-off schedules;

(h) living quarters or sleeping arrangements (for live-in workers);
(j) the date, term and mode of delivery or date of completion;

() minimum of twenty percent (20%) down payment for labor cost and services
‘and minimum of 50% for inventory of raw materials used in the production for
homeworkers per DOLE Order No.5.

Minimum standard compensation referred to above shall be determined by the Regional
Wage Boards per subsector of IE workers , and in the case of piece rates, shall be
based on the conduct of time and motion studies facilitated by the DOLE Bureau of
Working Conditions. While there are no standardized rates for workers in informal
economy jobs, the basis of computation shall not be below the applicable minimum
wage of the region where they are covered.

Enforcement of the standard compensation rates shall be in accordance with the
capability to comply as explained in Section 33,

SEC. 29. Payment of Wages — Payment derived from negotiated agreement shall be
made directly to the workers according to the agreement. No deductions from such
payments shall be made by the employer except those provided by law. The expressed
written consent of the worker shall be first secured before the deduction is made.

Chapter I!
IE Workers of Minor Age

SEC. 30. Allowable Employment of Workers of Minor Age — Children fifteen (15)
years up to seventeen (17) years of age may be employed; provided, that parental or
legal guardian consent be presented and attested by any representative of the LGU or
duly elected Barangay official where the work is to be done. In no instance however,

shall children below fifteen (15) years old be engaged in whatever form of productive
services.

Workers of minor age shall not be allowed to render work for more than four (4) hours,
five (5) days a week, exclusive of one (1) hour break for breakfast or lunch whichever is
applicable.

Chapter It
Prohibited Acts

SEC. 31. Prohibition Against Forced Night Work — It is unlawful to force, threaten,
intimidate or otherwise harass workers in the informal economy to engage in night work.
Moreover, workers of minor age shall not be allowed to render work between eight
o'clock in the evening and six o'clock in the morning of the following day.

SEC. 32. Prohibition Against Work to be Undertaken — Workers of minor age shall
not be allowed to render work beyond their physical and mental capabilities,

SEC. 33. Prohibition Against Bonded Labor - A worker shall not be allowed to use
his/her future services as collateral for any loan or advances made to or to be made by
said worker with the employer. Likewise, no employer shall be allowed to bind the
worker to his/her continued employ as a form of payment for any loan or advances which
he/she may have made with the employer. Should there be an outstanding loan incurred
and he/she decides to unilaterally terminate the contract of employment, said loan or
advance shall be paid by him/her to the employer under terms and conditions specified
in a duly executed promissory note between parties.


SEC. 34. Prohibition Against Labor-Only Contracting — In no instance shall the
employer sub-contract the services of a worker to any third party, unless such activity
falls within the purview of an employment arrangement for which the necessary permits
and licenses had been priory secured.

Labor only contracting means that the contracting agency or party does not provide any
raw materials, inputs, or other forms of investment in the enterprise, , does not have any
control over the work process, merely supplies labor to a principal, and yet makes the
false claim that the contracting party is the employer.

SEC. 35. Prohibition Against Recruitment and Finders Fees - Regardless whether
the worker was sourced either through an employment agency or a third party, said
worker shall neither be charged nor levied a share in the recruitment fees or finder’s fees
by the aforementioned employment agency or third party.

SEC. 36. Prohibition Against Hazardous Work and Conditions - Any worker shall not
be employed in any hazardous work, activity or undertaking, and neither shall he/she be
exposed to hazardous working conditions.

For purposes of this Section, hazardous work or conditions shall include, but not be
limited to the following

(a) Any work which requires workers to render services beyond ten (10) hours;

(b) Any work, employment or activity which exposes the worker to physical,
emotional or sexual abuse;

(c) Any work which involves manual handling or transport of heavy loads;

(d) Any work in an unhealthy environment which exposes workers to hazardous
substances, agents or processes, or to temperature, noise levels, or
vibrations damaging to their health;

(e) Any work which requires workers to continuously render service during late
nights;

(f) Any or all forms of slavery or practices similar to slavery, such as the sale and
trafficking of persons, forced or compulsory labor, debt bondage and
serfdom;

(g) Any use, procuring or offering of the worker for prostitution or pornography;

(h) Any use, procuring or offering of the worker for the commission of any offense
or crime, particularly for the production and trafficking of narcotic drugs and
substances as defined in the Dangerous Drugs Act;

(i) Any other type of work or activity which, by its nature or the circumstances in
which it is carried out, is likely to jeopardize the health, safety, or morals of
the worker; and

(@) _ Any other type of work, activity, condition or undertaking that maybe
hereinafter be defined as hazardous by the DOLE.

SEC. 37. Prohibition Against Interference and Coercion ~ Any person is prohibited
from committing any of the following acts of interference and coercion:

(a) To prevent a worker from upholding or exercising his/her rights;

(b) To prevent workers from joining or assisting organizations or unions for
Purposes not contrary to law, in order to protect and defend their mutual

interests and to obtain redress of grievances through peaceful concerted
efforts;


(©) To prevent a worker from carrying out his/her duties or functions in an
organization or union, or to penalize the same for any lawful action performed
in that capacity;

(4) To make calculated harassment and interference with the intention of
intimidating or preventing the worker from performing his/her duties and
functions;

(e) To make calculated harassment against, or to transfer, penalize or terminate
the services of a worker who is carrying out his/her function or role for and in
behalf of his/her employer; and

(f) To perform acts calculated to diminish the independence and freedom of
workers’ union or organization to direct its own affairs.

Chapter IV
Rights and Benefits of Employed Workers in Informal Economy

SEC. 38. Rights to Wages Earned — The employer shall pay directly to the workers on
time based agreement, any and all wages, remuneration or compensation eared by
him/her during the period of his/her employment.

No parent, guardian, relative or any other person shall be allowed to borrow against the
compensation of his/her relative -worker of minor age without the express written
consent of the concerned relative-worker. Neither shall the worker of minor age be
mandated to work in payment of loan or liability by a parent, guardian, relative, or any
other person.

SEC. 39. The Right to Privacy and Confidentiality — The employer shall respect the
privacy of all workers during the course of the latter's rest periods. This right to privacy
shall extend to any and all forms of personal communication, including letters of
correspondents issued or received. The worker shall be allowed communications
coursed through the private telephone of the employer ; provided that any additional
expense incurred in the course of communication shall be borne by the worker and shall
be deducted after the employer's due notice to the worker of the amount incurred due to
specific reasor/s, from the receivable wage of the worker.

The State, further guarantees the protection of the right of the worker to
communicate with relatives and other persons and to receive visitors subject to
reasonable limits prescribed in the employment contract agreed and entered into by both
the employer and the worker.

SEC. 40. Access to Education and Training — A worker shall not be deprived of formal
or non-formal education. In cases where he/she is productively employed, he/she shall
be allowed to attend or pursue any kind of educational program during free time or any
other time as agreed by the employer and the worker.

The Department of Education (DEP ED), CHED and other appropriate agencies,
whichever offices are applicable, shall extend its services of Study Now, Pay Later
Program to the workers in the IE.

SEC. 41. Access to Lawful Third Party Mediation - The LGUs shall provide workers
and their employers the names, addresses and telephone numbers of the designated
liaison officers of the following:

(a) DTI;

(b) DOLE;

(c) The Barangay office where he/she is productively working; and

(d) Duly registered non government organizations accredited to mediate the
disputes of their sector.

(e) IEDA


The employer guarantees the worker the access to all means of communication
for the purpose of contacting any of the above-enumerated institutions.

SEC. 42. Normal Hours of Work - The normal hours of work shall be set at eight (8)
hours per day, exclusive of one (1) hour breaks each for breakfast, lunch and dinner.
The worker shall be allowed at least eight (8) hours of continuous rest per day.
Otherwise, any work done by him/her beyond the normal hours of work per day shall be
duly compensated.

SEC. 43. Regular Working Days — No worker shall render work for more than six (6)
days per week.

SEC. 44. Longevity Pay - A longevity pay equivalent to five percent (5%) of his/her
latest monthly basic pay shall be paid to a worker for every two (2) years of continuous
and satisfactory service rendered.

SEC. 45. Clothing and Personal or Protection Equipment Allowance ~ A worker
shall be entitled to a minimum of One Thousand (P1,000.00) pesos clothing and
personal or protection equipment (PPE) allowance annually. Provided, that the worker
has rendered at least one (1) year of continuous service in the employment he/she is
currently in.

SEC. 46. Service Incentive Leave - A worker who has been employed for one (1) year
shall be entitled to a five (5)-day service incentive leave with pay, in addition to the one
(1) day per week designated as rest day.

Said leave may only commence at the end of the first year of employment and shall not
cumulate from year to year.

SEC. 47. Maternity Benefits. - A female worker who has been employed for one (1)
year shall be entitled to maternity benefits as provided for by law.

SEC. 48 13 Month Pay — A worker shall be entitled to 13m month pay equivalent to one
month's basic salary which shall be paid to the worker. Provided, that the worker has
reached the required minimum residency. Otherwise, the worker shall be entitled to
receive a 13m month pay on a pro-rated basis as provided for in DOLE D.O. No. 5.

SEC. 49. Allowing Subcontracting - A worker may enter into sub contractual
employment or may accept sub contractual jobs from any other enterprise or firm joining
or may join productive employment through a cooperative consortium; provided, that the
enterprise, firm, cooperative, or consortium meets the requirements of Articles 106-109
of the Labor Code and their Implementing Rules (DO 18-02), including registration
requirements under the said DO 18-02.

SEC. 50. Pre-Termination of Contract — The employer may, at his/her own discretion,
terminate the services of the worker, provided however, that the said employer provides
the worker with at least fifteen (15) day notice of termination, and termination pay
equivalent to at least one half (%4) month's salary. In lieu of the fifteen (15) day notice of
termination, the employer may immediately terminate the services of the worker,
provided that said employer provides the worker termination pay equivalent to one (1)
month's salary.

The employer may, for valid or just cause of loss of confidence, terminate the

services of the worker prior to the expiration of the contract without indemnifying the
latter with termination pay.

Should the worker decide, on his/her own volition, to unilaterally leave the
workplace prior to the expiration of the contract period, said worker shall forfeit any
separation pay that may be due him/her.

SEC. 51. Extent of Duty - The employer shall not require a worker to perform any task
or work outside what is stipulated in the agreement.


SEC. 52. Deployment Expenses — Deployment expenses of the worker, including
transportation and agency fees, shall be shouldered by the employer.

TITLE lll
FINAL PROVISIONS

SEC. 53. Penal Provision — Any person who shall wilifully interfere with, restrain or
coerce a worker in the exercise of his/her rights or shall in any manner commit any act in
violation of any of the provisions of this Act shall, upon conviction, be punished by a fine
of not less than Twenty Thousand Pesos (P20,000.00) or imprisonment of one (1) year
to six (6) years or both fine and imprisonment at the discretion of the Court.

If the offender is a public official, the Court, in addition to the penalties provided
in the preceding paragraph, may impose the additional penalty of disqualification from
Public office.

In the case of a private institution/company found to be violating any provision of
this Act, it shall be subject to a penalty ranging from suspension of license or revocation
of such at the discretion of the Court.

SEC. 54. Implementing Rules and Regulations (IRR) ~ The Implementing Rules and
Regulations of this Act shall be formulated by IEDA in consultation with organizations of
workers in the informal economy within three (3) months after the effectivity of this Act.

SEC. 55. Separability Clause - \f any provision of this Act is declared unconstitutional
or invalid, the provisions not affected shall continue to be in full force and effect.

SEC. 56. Repealing Clause - All laws, decrees, orders, rules and regulations or other
issuances inconsistent with the provisions of this Act are hereby repealed, amended or
modified accordingly.

‘SEC. 57. Effectivity — This Act shall take effect fifteen (15) days after its publication in at

least two (2) newspapers of general circulation or the Official Gazette, whichever comes.
first.

Approved.