FOURTEENTH CONGRESS OF THE 
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First Regular Session 
) 
REPUBLIC OF THE PHILIPPINES 
) 
7 JU.. - 3  P5 5>93 
S E N A T E  
S.B.NO. 
$87 
Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORY NOTE 
The liberalization of international economic trade has led to the advent 
of a globa1 economy that is fast becoming one integrated unit. As a result of 
better communication and transportation facilities, business opportunities 
abroad are now within closer reach of local business entities. However, these 
opportunities may be lost if the local economy fails to adjust and cope with 
the new demands of the international market. 
Thus, it is imperative that Government creates a business 
environment that allows the local economy to be more competitive in the 
global market. 
Undoubtedly, there is a need to amend certain provisions of our labor 
laws to spur productivity and employment, afford flexibility to investors, and 
assure our workers reasonable benefits and security. The economic conditions 
that prevailed during the time PD 442 (Labor Code of the Philippines) was 
passed have drastically changed. Our labor laws must allow business to 
become more efficient, competitive, and flexible in responding to client needs, 
and at same time protect the interest of the workforce by providing for an 
enhanced work-life balance. 
This bill, therefore, intends to strike a balance between the two 
competing interests. It will provide the necessary amendments to the Labor 
Code that will enable the local economy to be move competitive 
internationally while safeguarding the interests of the Filipino workers, to 
wit: 
1. Allowing compressed workweek/flextime arrangements; 
2. Revising the doctrine against the elimination/diminution of benefits 
under certain conditions; 
3. Restructuring the visitorial and enforcement power of the Labor 
Secretary to allow for self-regulation; and 
4. Excepting from the night work prohibition on women such industries 
or establishments operating on a continuous 24-hour schedule. 
In view of the foregoing, approval of this bill is earnestly sought. 
&7/ 
/4+ 
EDGARDO J. ANGARA 
Senator 


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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
‘4 
&I. 
-3 
j )  ‘.j 5 3  
S E N A T E  
s.B.N~. 
887 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT AMENDING ARTICLES 83,87,100,128, AND 131 
O F  PRESIDENTIAL DECREE 442, 
OR THE LABOR CODE OF THE PHILIPPINES 
Be it enacted by the Senate and the House of Representatives in 
Congress duly assembled: 
SEC. 1. Article 83, paragraph 1, of PD 442, as amended, is hereby 
amended to read as follows: 
“ART. 83. NORMAL HOURS OF WORK. - The normal hours of 
work of any employee shall not exceed eight (8) hours a day [.] , 
EXCEPT WHEN THE BUSINESS REQUIREMENTS OF THE 
EMPLOYER REQUIRE THE ADOPTION OF A COMPRESSED 
WORKWEEK 
ARRANGEMENT; 
PROVIDED, 
THAT 
THE 
EMPLOYEE SHALL NOT BE SUFFERED TO WORK BEYOND 
TWELVE (12) HOURS A DAY; PROVIDED FURTHER, THAT 
THE NUMBER OF REGULAR HOURS OF WORK IN A WEEK 
SHALL NOT EXCEED FORTY-EIGHT (48) HOURS. 
xxx ” 
SEC. 2. Article 87 of PD 442 is likewise hereby amended to read as 
follows: 
“ART. 87. OVERTIME WORK. - Work may be performed beyond 
[eight (8) hours a day] THE NUMBER OF HOURS A DAY 
ALLOWED BY LAW provided that the employee is paid for the 
overtime work an additional compensation equivalent to his regular 
wage plus at least twenty-five percent (25%) thereof. Work performed 
beyond [eight (8) hours] THE NUMBER OF HOURS A DAY 
ALLOWED BY LAW on a holiday or rest day shall be paid an 
additional compensation equivalent to [the rate of the first eight hours 
on a holiday or rest day plus at least thirty percent (30%) thereof] 
130% OF THE RATE FOR SUCH NUMBER OF HOURS 
ALLOWED BY LAW.” 
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SEC. 3. Article 100 of PD 442, as amended, is hereby amended to read 
as follows: 
“ART. 100. PROHIBITION AGAINST ELIMINATION OR 
DIMINUTION OF BENEFITS. - Nothing in this Book shall be 
construed to eliminate or in any way diminish supplements, or other 
employee benefits being enjoyed at the time of promulgation of this 
Code: PROVIDED, 
THAT SUPPLEMENTS OR OTHER 
BENEFITS THEREAFTER GIVEN MAY NOT BE ELIMINATED 
OR DIMINISHED AFTER HAVING BEEN CONTINUOUSLY 
GRANTED FOR AT LEAST FOUR (4) YEARS; PROVIDED 
FURTHER, THAT SUPPLEMENTS OR BENEFITS MAY BE 
SUBSTITUTED FOR OTHER SUPPLEMENTS OR BENEFITS 
OF EQUIVALENT VALUE; PROVIDED FINALLY, 
THAT 
SUPPLEMENTS OR BENEFITS MAY BE ELIMINATED IF 
THESE 
RESULTED 
FROM 
AN 
ERRONEOUS 
INTERPRETATION OF A DIFFICULT QUESTION OF LAW, 
WITHIN A PERIOD OF ONE (1) YEAR FROM THE DISCOVERY 
OF THE ERROR.” 
SEC. 4. Art 128 (0) of PD 442, as amended, is hereby amended to read 
as follows: 
“ART. 128. VISITORUL AND ENFORCEMENT POWER . . 
x x x  
(f) The Secretary of Labor may by appropriate regulations, 
require employers to keep and maintain such employment records as 
may be necessary in aid of his visitorial and enforcement powers under 
this Code. WHERE AN EMPLOYER HAS NOT BEEN CITED 
FOR ANY VIOLATION OF LABOR STANDARDS LAWS OVER A 
PERIOD OF TEN (10) YEARS, THE SECRETARY MAY, 
PURSUANT 
TO 
SUCH REGULATIONS, 
EXEMPT 
SAID 
EMPLOYER FROM INSPECTION FOR THE SUCCEEDING 
YEAR: 
PROVIDED, 
THAT 
THE 
EMPLOYER 
SUBMITS 
REPORTS, AS MAY BE REQUIRED BY THE SECRETARY OF 
LABOR, TO VERIFY COMPLIANCE WITH LABOR AND 
SOCIAL LEGISLATION. 
SEC. 5. Art. 131 of PD 442, as amended is hereby amended, to read as 
follows : 
“ART. 131. EXCEPTIONS. - The prohibitions prescribed by the 
preceding Article shall not apply in any of the following cases: 
(a) In cases of actual or impending emergencies caused by 
serious accident, fire, flood, typhoon, earthquake, epidemic or other 


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disasters or calamity, to prevent loss of life or property, or in cases of 
force majeure or imminent danger to public safety; 
(b) In case of urgent work to be performed on machineries, 
equipment or installation, to avoid serious loss which the employer 
would otherwise suffer; 
(c) Where the work is necessary to prevent serious loss of 
perishable goods; 
(d) Where the woman employee holds a responsible position of 
managerial or technical nature, or where the woman employee has 
been engaged to provide health and welfare service; 
(e) Where the nature of the work requires the manual skill and 
dexterity of women workers and the same cannot be performed with 
equal efficiency by male workers; 
(g) WHERE THE ESTABLISHMENT IS OPERATING ON A 
24-HOUR SCHEDULE; 
(h) [Under] Other analogous cases exempted by the Secretary of 
Labor in appropriate regulations.” 
SEC. 6. Separability Clause. If any part or provision of this Act 
shall be held unconstitutional or invalid, other provisions thereof that are not 
affected thereby shall remain in full force and effect. 
SEC. 7. Repealing Clause. All laws, presidential decrees, executive 
orders, presidential proclamations, rules and regulations or parts thereof 
inconsistent with the provisions of this Act are hereby repealed, amended, or 
modified accordingly. 
SEC. 8. Effectivity Clause. This Act shall take effect fifteen (15) days 
after its complete publication in the Official Gazette or in at least two (2) 
newspapers of general circulation, whichever comes first. 
Adopted, 
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11 January 2006 
MEMORANDUM FOR THE SENATOR 
FROM 
LOREEN 
RE 
Sir, 
PROPOSED AMENDMENTS TO THE LABOR CODE 
Here is ACCRA‘S proposed bill on Labor Code amendments. 
There were eight (8) provisions of the Code which were proposed to be 
amended, they are: 
1. Compressed Workweek / Flextime Arrangements (ART. 83) 
NORMAL HOURS OF WORK. - The normal hours of 
work of any employee shall not exceed eight (8) hours a day [.I , 
EXCEPT WHEN THE BUSINESS REQUIREMENTS OF 
THE EMPLOYER REQUIRE THE ADOPTION OF A 
COMPRESSED 
WORKWEEK 
ARRANGEMENT; 
PROVIDED, THAT THE EMPLOYEE SHALL NOT BE 
SUFFERED TO WORK BEYOND TWELVE (12) HOURS A 
DAY; PROVIDED FURTHER, THAT THE NUMBER OF 
REGULAR HOURS OF WORK IN A WEEK SHALL NOT 
EXCEED FORTY-EIGHT (48) HOURS. 
Action: Adopted. 
Rationale: This shall now incorporate the compressed workweek 
scheme adopted by many establishments, including the Senate, as a 
capital-saving strategy in handling its business affairs. 
2. “ART. 87. OVERTIME WORK. - Work may be performed beyond [eight 
(8) hours a day] THE NUMBER OF HOURS A DAY ALLOWED BY 
LAW provided that the employee is paid for the overtime work an 
additional compensation equivalent to his regular wage plus at least 
twenty-five percent (25%) thereof. Work performed beyond [eight (8) 
hours] THE NUMBER OF HOURS A DAY ALLOWED BY LAW on 
a holiday or rest day shall be paid an additional compensation 
equivalent to [the rate of the first eight hours on a holiday or rest day 
plus at least thirty percent (30%) thereof] 130% OF THE RATE FOR 
SUCH NUMBER OF HOURS ALLOWED BY LAW.” 
Action: Adopted. 
Rationale: To be consistent with the adoption of a new definition of 
‘normal hours of work as put forth in No 1). 
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Relaxation of the non-diminution rule (ART. 100.) 
PROHIBITION 
AGAZNST 
ELIMINATION 
OR 
DIMINUTION OF BENEFITS. - Nothing in this Book shall be 
construed to eliminate or in any way diminish supplements, or 
other employee benefits being enjoyed at the time of 
promulgation 
of 
this 
Code: 
PROVZDED, 
THAT 
SUPPLEMENTS OR OTHER BENEFITS THEREAFTER 
GIVEN MAY NOT BE ELIMINATED OR DIMINISHED 
AFTER HAVING BEEN CONTINUOUSLY GRANTED FOR 
AT LEAST FOUR (4) YEARS; PROVIDED FURTHER, 
THAT 
SUPPLEMENTS 
OR 
BENEFITS 
MAY 
BE 
SUBSTITUTED 
FOR 
OTHER 
SUPPLEMENTS 
OR 
BENEFITS 
OF EQUIVALENT 
VALUE; 
PROVZDED 
FZNALLY, THAT SUPPLEMENTS OR BENEFITS MAY BE 
ELIMINATED 
IF 
THESE 
RESULTED 
FROM 
AN 
ERRONEOUS INTERPRETATION OF A DIFFICULT 
QUESTION OF LAW, WITHIN A PERIOD OF ONE (1) 
YEAR FROM THE DISCOVERY OF THE ERROR." 
Action: Adopted 
Rationale: This will afford employers the option to give supplements or 
benefits to their employees other than those normally given provided 
the substitution involve items of equal value, like cash for study 
grants, or goods / gift certificates for cash and at the same time afford 
employees the certainty that they will receive the benefits or 
supplements received as practiced in the past. 
4. Lifting the labor contractingprohibition (ART 106). 
Action: Not Adopted. You have deleted this in the proposal. 
5. Ensuring due process in labor inspections and allowing self- 
regulation (ART. 128 @) and (0. 
(b) Notwithstanding the provisions of Articles 129 and 
217 of this Code to the contrary, and in cases where the 
relationship of employer-employee still exists, the Secretary of 
Labor and Employment or his duly authorized representatives 
shall have the power to issue compliance orders to give effect to 
the labor standards provisions of this Code and other labor 
legislation based on the findings of labor employment and 
enforcement officers or industrial safety engineers made in the 
course 
of 
inspection; 
PROVIDED, 
THAT 
THE 
RESPONDENTS IN SUCH CASES SHALL BE ALLOWED 
A REASONABLE PERIOD TO SUBMIT EVIDENCE TO 
REFUTE THE FINDINGS OF THE SECRETARY OF 
LABOR 
OR 
HIS 
. DULY 
AUTHORIZED 
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REPRESENTATIVES 
BEFORE 
ANY 
COMPLIANCE 
ORDER IS ISSUED. The Secretary or his duly authorized 
representatives shall issue writs of execution to the appropriate 
authority for the enforcement of their orders, except in cases 
where the employer contests the findings of the labor 
employment and enforcement officer and raises issues supported 
by documentary proofs which were not considered in the course 
of inspection. 
Action: Not Adopted. 
Rationale: 
The demands of due process have already been met by the 
succeeding line of the same section: “The Secretary or his duly 
authorized representatives shall issue writs of execution to the 
appropriate authority for the enforcement of their orders, except in 
cases where the employer contests the findings of the labor 
employment and enforcement officer and raises issues 
supported by documentary proofs which were not considered 
in the course of inspection.” (emphasis supplied) 
The principles of immediacy, efficacy and effectivity in handling 
labor standards issues will be compromised if the proposal is adopted. 
The likely scenario is that a statute will be giving future respondents 
the necessary time to address their shortcoming before they be cited 
for violation of labor standards laws, which run counter of the objective 
of the visitorial power of the Secretary of Labor. 
(0 The Secretary of 
Labor may by 
appropriate 
regulations, require employers to keep and maintain such 
employment records as may be necessary in aid of his visitorial 
and enforcement powers under this Code. 
WHERE AN 
EMPLOYER 
HAS 
NOT 
BEEN 
CITED 
FOR 
ANY 
VIOLATION OF LABOR STANDARDS LAWS OVER A 
PERIOD OF TEN (10) YEARS, THE SECRETARY MAY, 
PURSUANT TO SUCH REGULATIONS, EXEMPT SAID 
EMPLOYER 
FROM 
INSPECTION 
FOR 
THE 
SUCCEEDING 
YEAR: 
PROVIDED, 
THAT 
THE 
EMPLOYER 
SUBMITS 
REPORTS, 
AS 
MAY 
BE 
REQUIRED BY THE SECRETARY OF LABOR, TO 
VERIFY COMPLIANCE WITH LABOR AND SOCIAL 
LEGISLATION. 
Action: Adopted, with modification. 
Rationale: I propose a ten-year period of non-violation of labor 
standards laws, instead of three (3) years, as minimum requirement to 
be exempted from the inspection of the Secretary of Labor for the 
succeeding year. 
With or without a complaint, job inspection is a routinary task 
for the Secretary of Labor or his representatives in the observance of 
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8. 
labor standards laws, exception should thus be as restrictive as 
possible. 
Excepting establishments operating 24 hours a day from the 
nightwork prohibition. (ART. 131.) 
Action : Adopted. 
Rationale of the proposal: We have a proliferation of 2417 businesses in 
the country. To inhibit prospective female employees to take the job 
because of the nightwork prohibition would unduly decrease their 
employment opportunities. 
Legitimizing Fixed-Term Employment (ART. 280.) 
REGULAR AND CASUAL EMPLOYMENT. - The 
provisions of written agreement to the contrary notwithstanding 
and regardless of the oral agreement of the parties, an 
employment shall be deemed to be regular where the employee 
has been engaged to perform activities which are usually 
necessary or desirable in the usual business or trade of the 
employer, except: 1) 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 the engagement of the 
employee, or 2) where the work or service to be performed is 
seasonal in nature and the employment is for the duration of the 
season [.] , OR 3) WHERE THE EMPLOYMENT IS FOR A 
FIXED OR DEFINITE PERIOD, WHEREBY BOTH THE 
EMPLOYER AND THE EMPLOYEE 
FREELY AND 
KNOWINGLY AGREED TO ENTER INTO A TERM 
EMPLOYMENT CONTRACT. 
Action: Not Adopted. 
Rationale: No 3) proposal is the same as the existing no l), and the 
language runs smack of contractualization. It implies that an employee 
of any economic activity or profession, if covered by a mutually agreed 
contract of employment, can be a casual employee, whether or not he is 
performing tasks or activities necessary or desirable to the business or 
trade of the employer. 
We have not been able to come up with tangible solution to the 
proliferation of contractualization in Philippine labor environment, to 
put this to our existing statute would be to legalize contractualization 
instead. 
Additional cause for termination of an employee (ART. 282): 
GROSS INEFFICIENCY OR CONSISTENT FAILURE TO 
PERFORM IN ACCORDANCE WITH SET REASONABLE 
STANDARDS, OVER AT LEAST TWO (2) SUCCESSIVE 
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PERFORMANCE RATING 
PERIODS 
COVERING 
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Action : NOT Adopted. 
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Rationale: Prone to abuse, as since there are no counter-measures that 
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would ensure that the standards set by the company are indeed 
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reasonable, the company may place subjective variables as standards 
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for overall employee performance. 
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At pEesent, former and current employees of the GSIS expressly 
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denounce the new standards set by the GSIS management for 
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employee performance. They felt that those who rallied against the 
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present GSIS president were deliberately being given failed rating 
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successively in two rating periods to have a valid cause to terminate 
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the rallying employees. 
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the proposal. 
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TOTAL PERIOD OF NOT LESS THAN ONE (1) YEAR. 
If placed in the statute as a cause for dismissal, the scenario in 
the GSIS would be widespread no doubt. 
Summing thus, we have adopted five of the proposed amendments in 
For your consideration and approval. 
8