, 
SIXTEENTH CONGRI;SS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No, 22 5 9 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
Senatr 
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'14 
MAY 28 P 6 :08 
RECEIVED BV: __ f-
PROTECTING EMPLOYEES IN CASES OF MERGER OR CONSOLIDATION, 
SALE OR TRANSFER OF ALL OR SUBSTANTIALLY ALL ASSETS OR 
BUSINESS OF THEIR EMPLOYERS AND OTHER PURPOSES 
EXPLANATORY NOTE 
In an economy where job opportunities remain limited in the midst of 
globalization, seourity of tenure, which is dearly valued by employees, should be 
protected by the State. This bill ensures that especially in cases of merger or 
consolidation of their employer with other entities, security of tenure should be 
protected together with the employees' wages, benefits and other employment 
terms and conditions. Such protection should also apply in case an employer 
acquire, transfer, sell, assign, oonvey. or lease all or substantially all assets, 
business enterprise or going concern to another employer or business entity. 
This measure seeks to oblige the acquiring or transferee employers to continue 
the employment of the transferor employer's employees during such instance. It 
likewise mandates that merger, consolidation or transfer of business shall not 
diminish the wages, benefits and other employment terms and conditions of the 
affected employees. 
Moreover, the bill sets out guidelines regarding termination of employment which 
determines the cireumstanees when there ean be a declaration of redundaney. 
Further, it ensures that existing bargaining agents, including collective bargaining 
agreements, will continuously be recognized, 
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In view of the foregoing, the immediate passage of this bill is earnestly sought. 
Senator 


SIXTEENTH CONGRI;ESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 
2259 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
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(tif,;, "f tq.j.rr"br~ 
'14 
MAY 28 P 6 :08 
RECEIVED B\':_t-
PROTECTING EMPLOYEES IN CASES OF MERGER OR CONSOLIDATION, 
SALE OR TRANSFER OF ALL OR SUBSTANTIALLY ALL ASSETS OR 
BUSINESS OF THEIR EMPLOYERS AND OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
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SECTION 1. Declaration of Policy. - It shall be the policy of the State to extend 
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utmost protection to the security of tenure, wages, benefits and other 
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employment terms and conditions of employees in cases of merger or 
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consolidation of the business of their employer with other entities. The protection 
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all or substantially all assets, business enterprise or going concern to another 
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employer or business entity. 
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SEC. 2. Definition' of Terms. - As defined under this Act The following terms 
shall have the following meaning: 
a) "Employer" "" shall include any person or entity, natural or juridical , 
acting in the interest of an employer as defined under the Labor Code 
or Presidential Decree No. 442, as Amended; 
b) "Merger andlor Consolidation" -
shall not merely refer to the 
process of merger and/or consolidation of two or more corporations 
under Section 76 of the Corporation Code, but likewise to the merger 
and/or consolidation of business, enterprises or operations, of all other 
juridical entities; 
c) "Transfer of Business" - shall refer to the transfer, sale, assignment, 
conveyance or lease of an employer of all substantially all assetI'!, 
business enterprise or going concern of the employer to another entity; 
d) "Going Concern" - shall refer to a branch, division, sanction, group, 
class, part or parcel of the entire business or enterprise of an 
employer; 
e) "Transferor' Employer" -
shall refer to the employer which sells, 
assigns, conveys or transfer its assets or business to another 
employer, or one of the corporations or entities that is a party to a 


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consolidation, or the 
corporation which was merged into another 
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oorporation; 
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f) "Transferee Employer" - means the employer which buys, acquires, 
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receives. Gains or leases the assts or business from another 
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employer, or the corporation into which one or more corporation was 
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merged, or the consolidated corporation; 
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g) "Lease" - shall not merely refer to the agreement allowing use of the 
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property by another for a specified period of time for consideration, as 
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defined under the Civil of the Philippines, but also to lease of the 
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business itself, a going concern or other aspects of the enterprise; 
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SEC. 3. Maintenance of Employer-Employee Relationship. -
in the 
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abovementioned cases of merger, consolidation or transfer of business, the 
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transferee employer shall have the obligation to continue the employment of the 
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transferor employer's employees, without loss of seniority rights and other 
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privileges. 
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SEC. 4. Protection on Wages and Other Benefits. - The occurrences of 
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merger, consolid<ltion or tr<lnsfer of business shall not diminish the wages, 
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benefits and other employment terms and conditions of the affected employees. 
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In case of differences in the employment levels, wage and benefit scales, and 
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other employment terms or conditions, the superior or most favorable to the 
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employees shall prevail. 
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SEC. 5. Liability of Transferee employer. - The transferor employer shall be 
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liable to such money claims pertaining to the period when the transferee 
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employer was still the employer. 
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SEC. 6. Termination of Employment. - The employment of any employee of 
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the transferee employer, or in some instances, the' transferor employer, may be 
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terminated only due to redundancy. In such a case, the transferee employer shall 
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be liable for separation payor other benefits as prescribed under the Labor 
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Code. 
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However, if in terms of finances, assets, among other economic indicators, the 
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transferee employer becomes a bigger entity than the transferor employer, the 
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presumption is that the business can absorb the employees and there can be no 
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declaration of redundanoy. 
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An employee declared to be redundant in a certain position shall always be 
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granted the first 0ppol'tUnity for employment in a newly ereated position, If he or 
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she possesses the minimum qualifications. 
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SEC. 7. Recognition of Existing Bargaining Agents. - In cases of mergers, 
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consolidations, or transfer of business, where both the transferor employer and 
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the transferee employer are organized establishments: 
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(tt) Tne. Union memOer$ or all atfie.i' employees enjoying oehefils Under tfieif 
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respective and prevailing Collective Bargaining Agreements shall continue 
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to enjoy the benefits thereon. If one CBA expires, while the other is still in 


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effect, the respective union shall be allowed to negotiate on the economic 
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provisions of their expired CBA. During the freedom period of the CBA 
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with s later expiration terms" a certification election would b labor 
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organizations. and other participating labor organizations, if any, 
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'Thereafter, the winner shall have a fresh mandate to represent the 
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merged bargaining unit. 
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(b) With majority vote of both unions voting separately, even pending the term 
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of either or both their CSA's, a certification election may immediately be 
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determine who shall have a fresh mandate to represent the merged 
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bargaining unit. 
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In cases or mergers, consolidation, or transfer of business where either of the 
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transferee or transferor employers unorganized, and a CSA is still in effect in the 
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organized establishment, a petition for certification election for the transferor 
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employer may be filed only by the legitimate labor organization existing in the 
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organil!ed establishmen~. Thertilafter, if said ICll:)or qrgani;;>;ation wins, it shall l:Ie 
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thebargairiing agent for the merged bargaining unit, but only for the remaining 
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term of the said CSA. In case the petition for certification elections is files during 
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the freedom period of the said CSA! the winner shall have a ,fresh mandate to 
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represent the merges bargaining unit. 
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SEC. 8. Implementing Rules. - Within sixty (60) days after the effectivity of this 
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Act, the Secretary of Labor and Employment id hereby mandated to issue its 
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Implementing Rules 
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SEC. 9. Separability' Clause. - If any prevision of this Act, Of any part thereof, 
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is declares unconstitutional, the same shall not affect the validity and effectivity of 
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the other portions. 
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SI:P.10. Repealing Clause. - All laws, executive orders, presidential decrees, 
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proclamations, rules regulations, issuances and enactments of parts thereof 
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InconSistent, whit this Act are hereby repealed or modified accordingly. 
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SEC. 11. EffectivIty. - This Act shall take effect fifteen (15) days from its 
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complete publication in the Official Gazette or in a newspaper of general 
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circulation in the Philippines, whichever comes earlier. 
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Approved,