FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 
"1 3 0 
) 
) 
) 
11 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
In the absence of a retirement plan or agreement providing for retirement 
benefits of employees in an establishment, the Labor Code provides that an 
employee upon reaching the age of sixty (60) years or more, but not beyond 
sixty-five (65) years, which is declared as the compulsory retirement age, who 
has served at least five (5) years in the said establishment, may retire and shall 
be entitled to retirement pay equivalent to at least one-half (1/2) month salary for 
every year of service, a fraction of at least six (6) months being considered as 
one whole year. 
However, an employee who is unable to serve for at least five years is 
entitled to nothing upon his retirement. This is the same situation for retiring 
employees of retail, service and agricultural establishments or operations 
employing not more than ten (10) employees or workers since their employers 
are exempted from the coverage of the retirement provision under the Labor 
Code. 
This bill seeks to address this inequity in the law without however unduly 
burdening the employers. 
Hence, the immediate passage of this bill is therefore earnestly solicited. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regufar Session 
) 
SENATE 
A30 
Senate Bill No. _-",'j.=.",,-
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO. 442, AS 
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE 
PHILIPPINES, BY PROVIDING FINANCIAL ASSISTANCE TO EMPLOYEES 
WHO REACHED THE AGE OF SIXTY-FIVE BUT ARE NOT ENTITLED TO 
ANY RETIREMENT PAY 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembfed: 
SECTION 1. Article 287 of Presidential Decree No. 442, as amended, 
otherwise known as the Labor Code of the Philippines, is hereby amended to 
read as .follows: 
"ART. 287. Retirement. - Any employee may be retired upon 
reaching the retirement age established in the collective bargaining 
agreement or other applicable employment contract. 
"In case of retirement, the employee shall be entitled to receive 
such retirement benefits as he may have eamed under existing laws and 
any collective bargaining agreement and other agreements: Provided, 
however, That an employee's retirement benefits under any collective 
bargaining and other agreements shall not be less than those provided 
herein. 
"In the absence of a retirement plan or agreement providing for 
retirement benefits of employees in the establishment, an employee upon 
reaching the age of sixty (60) years or more, but not beyond sixty-five (65) 
years which is hereby declared the compulsory retirement age, who has 
served at least five (5) years in the said establishment, may retire and 
shall be entitled to retirement pay equivalent to at least one-half (1/2) 
month salary for every year of service, a fraction of at least six (6) months 
being considered as one whole year. PROVIDED THAT AN EMPLOYEE 
WHO IS NOT ABLE TO SERVE SUCH ESTABLISHMENT FOR AT 
LEAST FIVE (5) YEARS SHALL BE ENTITLED TO A REASONABLE 
FINANCIAL ASSISTANCE. 
"Unless the parties provide for broader inclusions, the term one-half 
(1/2) month salary shall mean fifteen (15) days plus one-twelfth (1112) of 
the 13th month pay and the cash equivalent of not more than five (5) days 
of service incentive leaves. 


• 
"An underground mining employee upon reaching the age of fifty 
(50) years or more, but not beyond sixty (60) years which is hereby 
declared the compulsory retirement age for underground mine workers, 
who has served at least five (5) years as underground mine worker, may 
retire and shall be entitled to all the retirement benefits provided for in this 
Article. "Retail, service and agricultural establishments or operations 
'employing not more than ten (10) employees or workers are exempted 
from the coverage of this provision. PROVIDED THAT AN EMPLOYEE 
OF SUCH ESTABLISHMENT WHO HAS REACHED THE AGE OF 
SIXTY-FIVE (65) YEARS, MAY BE RETIRED; PROVIDED FURTHER, 
THAT SUCH EMPLOYEE WHO RETIRES SHALL BE ENTITLED TO A 
REASONABLE FINANCIAL ASSISTANCE COMMENSURATE TO THEIR 
LENGTH OF SERVICE. 
"Violation of this provision is hereby declared unlawful and subject 
to the penal provisions provided under Article 288 of this Code." Nothing in 
this Article shall deprive any employee of benefits to which he may be 
entitled under existing laws or company policies or practices." 
SEC. 2. This Act shall take effect fifteen (15) days after its complete 
publication in the Official Gazette or in at least two (2) national papers of general 
circulation, whichever comes earlier. 
Approved,