FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —_)
First Regular Session )

HOUSE OF REPRESENTATIVES

1049

House Bill No.

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

EXPLANATORY NOTE

This bill seeks to expand the scope of regular workers under the law to extend
the benefits of regular employment to more workers in our country.

According to the Philippine Labor Force Survey released in April 2007, out of the
estimated 56.4 million population 15 years and over, approximately 36.4 million were in
the labor force, which places the labor force participation rate at 64.5%. In the same
period, the total employed population was 33.7 million, which implies a 92.6%
employment rate, while the unemployment rate was estimated at 7.4%.

Of the total employed population in April 2007, 51.1% were wage and salary
workers, most of them (38% of the total employed), working for private establishments.
These groups are most prone to working conditions without enjoying the benefits of
regularization. Employers usually resort to six-month probation period to. avoid
regularization, or resort to labor-only contracting, to escape from the responsibilities of
providing benefits and tenure that are mandatory for regular employees under the law.

Also, while the Labor Code considers any employee who has rendered at least
one year of service, whether the same is continuous or broken, as regular employee,
the law actually considers such worker a regular casual because he or she is
considered a regular employee only with respect to the activity in which he or she is
employed and his or her employment shall continue only while such activity exists. This
is yet another scheme to deprive workers who have rendered at least one year of
service the right to be considered regular employees.

This bill addresses those concems by expanding the definition of regular
employees to include those who has rendered at least one year of service, whether the
same is continuous or broken, and whether or not such service is usually necessary or


desirable in the usual trade or business of the employer. Moreover, this proposed

measure provides stiffer penalties for employers who deliberately deprive the benefits
of regularization when due to their employees.

The State must uphold at all times the rights of workers and promote their
welfare.

In view of the foregoing, the passage of this bill is earnestly sought.

RUFUS B. IRIGUEZ

We

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —_)
First Regular Session )

HOUSE OF REPRESENTATIVES

1043

House Bill No,

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

AN ACT
PROVIDING FOR THE REGULARIZATION OF EMPLOYEES, PROHIBITING
CONTRACTUAL OR LABOR-ONLY CONTRACTING FOR REGULAR POSITIONS,
PROVIDING PENALTIES FOR VIOLATION THEREOF

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. This Act shall be known as the “Employee
Regularization Act of 2010".

SEC. 2. Declaration of Principle. — Pursuant to Section 18 of Article Il of the
Constitution which affirms labor as a primary social economic force and in furtherance
of the constitutional policy of social justice which shalll afford full protection to labor and
promote full employment and equality of employment opportunities for all, it is hereby
the policy of the State to eliminate discriminatory practices to improve the material well-
being of all persons who are working. With the same objectives include the State's duty
to ensure that all persons who are working are able to fully realize the rights, security
and benefits accorded to them by law.

SEC. 3. Scope of regular employment. - For purposes of this law, employment
shall be deemed regular if one is:

a. Engaged in any activity that is usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or determination of which has
been determined at the time of the engagement of the employee or where the
Job, work or service to be performed is seasonal in nature and the employment is
for the duration of the season;

b. An employee who has rendered at least one year of service, whether such
service is continuous or broken, and whether or not such service is usually
necessary or desirable in the usual business or trade of the employer;


c. An employee who is allowed to continue working after a probationary period
whether continuous or broken shall be considered a regular employee;

d. Employed seasonally or for a specific project if the same is usually necessary or
desirable in the regular business or trade of the employer.

SEC. 4, Rights of Regular Employees — The regular employees defined under
the provisions of this Act shall have the right to security of tenure and shall likewise
enjoy all the benefits provided for regular employees prescribed under existing labor
laws, rules and regulations.

SEC. 5. Protection for Regular Employees — Regardless of any written or oral
agreement to the contrary, it shall be unlawful for an employer to engage a worker,
whether such worker is a professional or not, without a regular employment status for
an activity that is usually necessary or desirable in the usual trade or business of the
employer. It shall be illegal for employees to engage in contractual or “labor-only”
contracting for a limited period if the functions or duties and obligations to be performed
by the employee are usually necessary or desirable in the usual business or trade of
the employer.

Probationary employment shall not exceed six (6) months from the date of the
employee started working, Provided, that, this period may be shortened or, in
appropriate cases, extended by agreement between the employer and the employee,
which agreement shall be reduced into writing and based on reasonable standards
made known to the employee at the time of the engagement

A probationary employee can be legally terminated for a just cause or when the
employee fails to qualify as a regular employee in accordance with the reasonable
standards made known to him by the employer at the start of the employment, subject
to the following limitations: 1.) this must be exercised in accordance with the specific
requirements of the contract; 2.) dissatisfaction on the part of the employer must be real
and in good faith, not feigned so as to circumvent the contract or the law; and, 3.) there
must be no unlawful discrimination in the dismissal.

SEC. 6, Penalties — Any violation of the foregoing provisions shall be punished
with a fine of not less than one hundred thousand pesos (100,000 Php) nor more than
one million pesos (1,000,000 Php), or imprisonment of not less than three (3) years nor
more than six (6) years, or both, at the discretion of the court, as well as the cessation
of the business or trade in which the violation occurred.

If the violation is committed by the juridical person, the penalty shall be imposed
upon the President and the Personnel Manager of the corporation, trust, firm,
partnership, association or any other entity, or the owner of the trade or business in
which the violation was committed regardless of the nature or degree of their
participation in the hiring, control, supervision of the work, payment of salaries or
termination of the services of the employee concerned.

SEC. 7. Repealing Clause.- All republic acts, executive orders, rules and
regulations, and other issuances, or parts thereof, that are inconsistent with the
provisions of this Republic Act are hereby repealed or modified accordingly.


SEC. 8. Separability Clause.- {If for any reason or reasons, any part or
provision of this Act shall be declared or held to be unconstitutional or invalid other
parts or provisions hereof, which are not affected thereby shall continue to be in full
force and effect.

SEC. 9. Effectivity Clause.- 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