Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. _____________ 
--------------------------------------------------------------------------------------------------------------------- 
Introduced by Representative 
BRIAN DANIEL POE LLAMANZARES, PhD, MNSA 
--------------------------------------------------------------------------------------------------------------------- 
AN ACT ERADICATING ABUSIVE CONTRACTUALIZATION PRACTICES AND 
PENALIZING EMPLOYERS AND CONTRACTORS WHO COMMIT SUCH ABUSES, 
BY AMENDING FOR THIS PURPOSE BOOK THREE, TITLE TWO AND BOOK SIX, 
TITLE I OF PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES, AS AMENDED 
EXPLANATORY NOTE 
Several provisions of the 1987 Philippine Constitution safeguard the rights of laborers. 
The most unequivocal of these provisions is Article XIII, Section 3, which states: 
"The State shall afford full protection to labor, local and overseas, organized and 
unorganized, and promote full employment and equality of employment 
opportunities for all. 
It shall guarantee the rights of all workers to self-organization, collective 
bargaining and negotiations, and peaceful concerted activities, including the right 
to strike in accordance with law. They shall be entitled to security of tenure, 
humane conditions of work, and a living wage. They shall also participate in 
policy and decision-making processes affecting their rights and benefits as may be 
provided by law..." (emphasis supplied) 
July 10, 2025
10:31 am
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Security of tenure is included among the rights of laborers and is operationalized in 
Article 294 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of 
the Philippines. 
Contractualization is a perceived threat to a worker's right to security of tenure. 
Contractualization in the Philippine context has many meanings. On one hand, it can refer to the 
act of "contracting" under Articles 106 to 109 of the Labor Code.1 Under these provisions, "there 
exists a trilateral relationship under which there is a contract for a specific job, work or service 
between the principal and the contractor or subcontractor, and a contract of employment between 
the contractor or subcontractor and its workers.” 2 This form of contractualization emerged in the 
1980s as a response of firms to globalization.3 It "allows establishments to reduce costs by 
concentrating on their core business and outsourcing non-core activities."4 
On the other hand, contractualization may also commonly refer to a wide spectrum of 
non-regular or illegitimate arrangements, which include "cabo" "job orders", "consultancies" and 
other forms of contractual arrangements that are purposefully designed to avoid or preempt the 
full application of security of tenure laws and the attendant benefits that flow from regular 
employment. 
Part of the latter category of contractualization is the term known in our lingua franca as 
"Endo" or "5-5-5". It involves an arrangement wherein workers are made to work within a 
five-month timeframe so that they will not qualify as regular employees under the Labor Code.5 
Endo is a highly abusive practice. First, the practice of repeated hiring for 5 months at a 
time reduces their value as laborers, as substantial experience cannot be gained in a five-month 
period. Second, such practice removes any possibility for career advancement Third, It destroys 
any semblance of stability and security on the part of workers, many of whom are forced to hunt 
for jobs several times a year 
5 Bernabe, Kirstin, Endonzo, Penelope P., & Pacia, Sara Isabelle. (01 May 2014). "Worker Hired, Fired Every 5 
Months". Philippine Daily Inquirer. Accessed from: https://newsinfo.inquirer.net/598582/worker-hired-fired- 
every-5-months 
4 Ibid 
3 Ibid 
2 Section 3, Department of Labor and Employment Department Order No. 18-02, series of 2002. 
1 Resurreccion, Pamela & Rosario, Ramon. (2012). Less-than-six-months contract periods: IS THE 
RETAIL INDUSTRY CIRCUMVENTING THE LAW? THE PHILIPPINE CASE. International Journal of 
Information Technology and Business Management. 7. 25-32. Accessed from: 
https://www.researchgate.net/publication/304169743_Less-than-six- 
months_contract_periods_IS_THE_RETAIL_INDUSTRY_CIRCUMVENTING_THE_LAW_THE_PHILIPPI 
NE_CASE 


just to provide food for their families. Hence, this proposed Bill.​
This measure seeks to amend the Labor Code in order to address, if not 
wholly eradicate, Endo. This Bill provides as follows: 
1. Stricter measures against labor-only contracting, including a fine of P5,000,000.00 for
those found to be labor-only contractors;
2. Any repeated hiring by an employer or contractor under an employment contract of
short duration shall be prohibited. Additionally, those vyhose contracts have expired and
have been re-hired under any arrangement, wiih or without written conTact, shall be
considered as regular if the initial contract was for a period of at least six (6) months, or
when the worker has accumulated an aggregate period of at least six (6) months from
prior contracts or arrangements of shorter duration. Engagements with new employers
shall also be covered by this provision under certain conditions, including if the previous
and subsequent employer belong to one conglomerate.
Non-compliance thereto or any act to circumvent the provision shall be meted out with a 
fine of Five million pesos (P5,000,000.00). 
For the future of our workers and employees who keep the economy afloat amidst these 
trying times. Immediate approval of this measure Is sought. 
HON. BRIAN DANIEL POE LLAMANZARES, PhD, MNSA 
Representative 
FPJ Panday Bayanihan Party-List 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. _____________ 
--------------------------------------------------------------------------------------------------------------------- 
Introduced by Representative 
BRIAN DANIEL POE LLAMANZARES, PhD, MNSA 
--------------------------------------------------------------------------------------------------------------------- 
AN ACT ERADICATING ABUSIVE CONTRACTUALIZATION PRACTICES AND 
PENALIZING EMPLOYERS AND CONTRACTORS WHO COMMIT SUCH ABUSES, 
BY AMENDING FOR THIS PURPOSE BOOK THREE, TITLE TWO AND BOOK SIX, 
TITLE I OF PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES, AS AMENDED 
Be it enacted by the Senate and the House ofRepresentatives of the Philippines in Congress 
assembled: 
Section 1. Book III, Title II, Chapter III, Article 106 of the Labor Code, as amended, is hereby 
further amended as follows: 
"ARTICLE 106. Contractor or Subcontractor. — Whenever an employer enters into a contract 
with another person for the performance of the former's work, the employees of the contractor 
and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this 
Code. 
In the event that the contractor or subcontractor fails to pay the wages of their employees in 
accordance with this Code, the employer shall be jointly and severally liable with the contractor 
or subcontractor to such employees to the extent that the employer is liable to employees directly 
employed by them. 
The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the 
contracting-out of labor to protect the rights of workers established under this Code. In so 
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prohibiting or restricting, the Secretary may make appropriate distinctions between labor-only 
contracting and job contracting, as well as determine who among the parties involved shall be 
considered the employer for purposes of this Code, to prevent any violation or circumvention of 
any provision of this Code. 
There is labor-only contracting when the person supplying workers to an employer does not 
have substantial capital or investment in the form of tools, equipment, machineries, work 
premises, among others, or if such capital or investment bears no direct relation to the 
performance of the desired activities by the employees supplied to the employer, and the workers 
recruited and placed by such person are performing activities which are directly related to the 
business of such employer. In such cases, the person or intermediary shall be considered merely 
as an agent of the employer, who shall be responsible to the workers in the same manner and 
extent as if the latter were directly employed by them. 
In all cases where labor-only contracting is present, the workers shall be deemed regular 
employees of the employer in accordance with law, retroactive to the date they were first 
deployed to said employer, without prejudice to any criminal, civil, or administrative case 
against the labor-only contractor and the employer. 
The Secretary of Labor and Employment shall impose a fine of up to Five Million Pesos 
(₱5,000,000.00) against any labor-only contractor. The Secretary of Labor and Employment shall 
also have the power to preventively or permanently close the operations of any labor-only 
contractor. 
Sec. 2. Book VI, Title I, Chapter III of the Labor Code, as amended, is hereby amended by 
adding a new article as follows: 
"ARTICLE 295-A. Initial and Subsequent Engagements. — Any repeated hiring by an 
employer or contractor under an employment contract of short duration shall be prohibited. 
An employee whose initial engagement has expired and has a subsequent engagement under any 
arrangement, with or without a written contract, shall automatically be considered a regular 
employee: 
1.​ When the initial contract that expired was for a period of at least six (6) months; or 
2.​ When the worker has accumulated an aggregate period of at least six (6) months from 
prior contracts or arrangements of shorter duration. 
Subsequent engagement of the employee with a new employer shall be deemed covered by the 
preceding paragraph, and the employee shall be considered to have attained regular employment 
in the proper cases when: 


1.​ The ownership of at least fifty percent (50%) of the total stockholding or other 
proprietary interest of the prior and the subsequent employers belong to one person or 
entity, natural or juridical, or any of the latter's subsidiaries, if any; 
2.​ One employer exercises control or domination of finances, policies, and business 
practices over the other employer; or 
3.​ The prior and subsequent employers are controlled by one person or entity, natural or 
juridical, or any of the latter's subsidiaries, if any. 
For purposes of this law, prior and subsequent employers belonging to a single conglomerate 
shall be deemed as covered by this provision. 
ARTICLE 280-B. Penalties for Non-Compliance. — An employer who fails to implement the 
preceding provision, or who intends to circumvent the preceding paragraph by indicating 
otherwise in their contract with their employee or by any other method, shall be penalized by up 
to Five Million Pesos (₱5,000,000.00). 
In addition, the employee shall be considered a regular employee retroactive to the date when 
they are deemed to have attained regular employment as per the immediately preceding 
provision. 
Sec. 3. Rules and Regulations. — The Secretary of Labor and Employment shall promulgate 
the necessary implementing rules and regulations within one hundred twenty (120) days from the 
effectivity of this Act. 
Sec. 4. Repealing Clause. — All laws, decrees, rules, and regulations, or parts thereof, which 
are contrary to, or inconsistent with, this Act are hereby repealed or modified accordingly. 
Sec. 5. Separability Clause. — If any clause, sentence, section, or part of this Act shall be 
adjudged by a court of competent jurisdiction to be invalid, such judgment shall not affect, 
impair, or invalidate the remainder of this Act, but shall be confined in its operation to the clause, 
sentence, paragraph, section, or part thereof directly involved in the controversy. 
Sec. 6. Effectivity. — This Act shall take effect fifteen (15) days after its publication in the 
Official Gazette or in at least two (2) national newspapers of general circulation. 
Approved. 
 
 
HON. BRIAN DANIEL POE LLAMANZARES, PhD, MNSA 
Representative 
FPJ Panday Bayanihan Party-List