THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 
INTRODUCED BY HON. MANUEL B. VILLAR, JR. 
EXPLANATORY NOTE 
The Constitution mandates that the State shall afford full protection to labor, 
local and overseas, organized and unorganized, and promote full employment and 
equality of employment opportunities. It likewise guarantees certain basic rights of 
workers, one of which is security of tenure. 
Under Article 284 of the Labor Code, among the grounds for termination of 
employment are when an employee is found to be suffering form any disease and 
whose continued employment is prohibited by law or is prejudicial to his health as 
well as the health of his co-employees. The diseases contemplated under this Article is 
presumably not a sickness, injury or disability arising out of or in the course of 
employment since such are already compensable under the Employees’ Compensation 
Fund. 
Grave illnesses such as AIDS and cancer however, are not compensable under 
the Employees’ Compensation Fund. Under Article 284, an employee who is 
terminated on grounds of having serious disease shall be paid a separation pay 
equivalent to at least one month, or one-half month salary for every year ofsewice. 
It will be observed that under Article 283 of the same Code, employees who are 
terminated due to the installation of labor-saving device or redundancy shall be 
entitled to at least one month salary or one month salary for every year of service. 
Employees who were terminated due to grave illness should be treated with 
more compassion and be given more benefits since they may never be employed, thus 
would be without means of support for their family. 
This proposed measure seeks to increase the separation pay of workers who are 
terminated on ground of disease under Art. 284 of the Labor Code from one-half 
month to one month salary for every year of service, and to increase the minimum of 
such separation pay from one month to six months salary. 
Moreover, this bill also proposes to incorporate certain conditions for the 
termination of a seriously ill employee. In order to protect the rights of workers 
against unjust termination on ground of disease, condition and limitation should be 
integrated in the law. 
In light of the foregoing, the passage of this bill is strongly recommended. 


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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
INTRODUCED BY HON. MANUEL B. VILLAR, JR. 
AN ACT INCREASING THE SEPARATION PAY OF EMPLOYEES WHO ARE 
TERMINATED FROM EMPLOYMENT ON GROUNDS OF DISEASE, AND PROVIDING 
THE CONDITION FOR SUCH TERMINATION, AMENDING FOR THIS PURPOSE 
ARTICLE 284 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY 
TWO (PD 442), AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF 
THE PHILIPPINES, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Article 284 of Presidential Decree No. 442, as amended, otherwise 
known as “The Labor Code of the Philippines’’ is hereby amended to read as follows: 
“ART. 284. Disease as ground for termination; LIMITATION AND 
EXEPTION. - An employer may terminate the services of an employee 
who has been found to be suffering from any disease and whose 
continued employment is prohibited by law or is prejudicial to his health 
as well as the health of his co-employees: Provided That, THERE MUST 
BE A CERTIFICATION ISSUED BY A COMPETENT PUBLIC HEALTH 
AUTHORITY THAT THE DISEASE IS OF SUCH NATURE, OR AT SUCH 
STAGE THAT IT CANNOT BE CURED WITHIN A PERIOD OF SIX (6) 
MONTHS EVEN WITH PROPER MEDICAL TREATMENT; PROVIDED, 
FURTHERMORE, THAT [he is] THE EMPLOYEE SO TERMINATED SHALL 
BE paid separation pay equivalent to [at least one (1) month salary of 
one-halfl ONE month salary for every year of service, [whichever is 
greater] a fraction of at least six (6) months being considered as (1) one 
whole year; PROVIDED, FINALLY, THAT THE SEPARATION PAY HEREIN 
PROVIDED SHALL IN NO CASE BE LESS THAN SIX (6) MONTHS 
SALARY. 
“IF THE DISEASE OR AILMENT ABOVE REFERRED TO CAN BE 
CURED WITHIN A PERIOD OF SIX (6) MONTHS WITH PROPER 
MEDICAL TREATMENT, THE EMPLOYER SHALL NOT TERMINATE THE 
EMPLOYTEE BUT SHALL ASK THE LATTER TO TAKE A LEAVE OF 
ABSENCE. THE EMPLOYER SHALL REINSTATE THE EMPLOYEE TO 


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HIS FORMER POSITION IMMEDIATELY UPON HIS RESTORATION TO 
NORMAL HEALTH.” 
SECTION 2. All acts, laws, rules and regulations or parts thereof, inconsistent 
with the provisions of this Act are hereby repealed or modified accordingly. 
SECTION 3. This Act shall’ take effect fifteen [ 15) days after its publication in 
the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved,