SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Seoond Regular Session 
) 
) 
) 
SENATE 
Senate Bill No. 2651 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
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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 
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 eamestly solioited. 
GOY EJERCITO ESTRADA 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Second Regular Session 
SENATE 
) 
) 
) 
Senate Bill No. 2651 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
16 
AID 
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 assembled: 
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SECTION 1. Article 287 of Presidential Decree No. 442, as amended, 
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otherwise known as the Labor Code of the Philippines, is hereby amended to 
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read as follows: 
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"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 earned 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 8S 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 (112) 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. 


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"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 operatiol1s 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 Artiole shall deprive any employee of benefits 
to which he may be entitled under existing laws or company 
policies or practices." 
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SEC. 2. This Act shall take effect fifteen (15) days after its complete 
24 publication in the Official Gazette or in at least two (2) national papers of general 
25 circulation, whichever comes earlier. 
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Approved,