Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
FIRST REGULAR SESSION

House BiLt Noo 130

Introduced by CIBAC Party-List Representative
Sherwin Tugna

AN ACT
PROMOTING THE SECURITY OF TENURE OF WORKERS IN THE PRIVATE
SECTOR, AMENDING FOR THE PURPOSES ARTICLES 248, 279, 280, 281, AND
288, AND INTRODUCING NEW ARTICLES 106-A, 106-B, 106-C, 106-D, 106-E,
280-A AND 280-8 TO PRESIDENTIAL DECRE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES

EXPLANATORY NOTE

Section 3 of the 1987 Constitution 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,

The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.

The State shall_requlate the relations between workers and
employers, recognizing the right of labor to its just share in the
fruits of production and the right of enterprises to reasonable returns
on investments, and to expansion and growth. (Emphasis and
Underscoring Supplied.)

Itis clear from the mandate of our Constitution that the labor sector should be
protected. Many employers have adopted the end of contract policy wherein
employees who by their nature of their work should have been regarded as regular
employees are considered only to be fixed-term employees. This is being done to

2D



prevent these employees to be regularized and avoid giving them the salaries and
benefits granted to regular employees such as minimum wage, 13" month pay,
overtime pay, night shift differential, retirement pay, maternity and paternity leaves,
as applicable, and payment of mandatory payment of SSS, PAG-IBIG and Philhealth
contributions. This widespread practice and the inadequacies in our current laws
have left many Filipinos with no choice but to accept the terms of employment given
to them in order to ensure that they still to be able to feed their families.

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

Sherwin Tugna


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILL no.9180

Introduced by CIBAC Parly-List Representative
Sherwin Tugna

AN ACT
PROMOTING THE SECURITY OF TENURE OF WORKERS IN THE PRIVATE
SECTOR, AMENDING FOR THE PURPOSES ARTICLES 248, 279, 280, 281, AND
288, AND INTRODUCING NEW ARTICLES 106-A, 106-B, 106-C, 106-D, 106-E,
280-A AND 280-B TO PRESIDENTIAL DECRE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES

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

SECTION 1. — Article 106 of the Labor Code is hereby repealed and substituted as
follows:

“ART. 106. tract f Subcontract sa, jer ploy Hters—int
contract—with. th ere forth Form: ¥_the—former' k—the
pi
empl #-the-contractor-and-of the atter’s-subsentractor,if- any,-shall_be-paid

‘dance with-the-pt fthis- Codi

“n-the-event-that_the-contractor_or_subsontractor_fallsto—pay-the-wages-of this

employee’ ‘dance-with this Cede, the-employer-shall-be jointly-and-severally
liable-with-his-contractor-and-subcontractor such-empl to-the-extent-of the-work
performed-under-the-contract,in-the-sam extend -that-he-is-tiable-to-his
employee's-directly-employed-by-him.

“The-Seeretary-of Labor and-Employment- may,-by-appropriate regulations,-restrictor
prohibit-the-contracting-out-ofaborto-protect-the-rights-of-workers-established-under
this-Gode--In-so-prohibiting-or restricting, he-may-make-appropriate-distinctions-within
thistypes-of-contracting—and-determine-who-among_the-parties involved-shall_be
considered_the—employer-for_purposes—of_this-Code,to-prevent_any—violation—-or
ciroumvention-of-any-provision-of this-Code.

“There is-atabor-only"-only-contracting-where-the-persons-supplying-the-workers-to

ployer-does-not-have-substantial-capital-or_investment-in-the form-of tools,
equipment, machineries, k ises, among others,and_the workers recruited
and laced by hp nd-parforma -activities- which are directly-related-t
of such-employer_t h-cases,-the-pers termediary

gaily merely-as-an_agent-of the-employer-who-shall be-respensibleto


the work the-samem: K-extend_as-iftheatt directly employed

by him

“ART. 106. CONCEPT AND NATURE OF SUBCONTRACTING ARRANGEMENTS.
~_IN_ LEGITIMATE SUBCONTRACTING, THERE EXISTS A TRILATERAL
RELATIONSHIP UNDER WHICH THERE IS A CONTRACT FOR SPECIFIC JOB,
WORK OR SERVICE BETWEEN THE PRINCIPAL AND THE SUBCONTRACTOR,
AND A CONTRACT OF EMPLOYMENT BETWEEN THE SUBCONTRACTOR AND.
ITS WORKERS. HENCE, THERE ARE THREE PARTIES INVOLVED IN THESE
ARRANGEMENTS: THE PRINCIPAL WHICH DECIDES TO FARM OUT A JOB OR
SERVICE TO A SUBCONTRACTOR WHICH HAS THE CAPACITY TO
INDEPENDENTLY UNDERTAKE AND ACTUALLY UNDERTAKES THE
PERFORMANCE OF THE JOB, WORK OF SERVICE, AND THE CONTRACTUAL
WORKERS ENGAGED BY THE SUBCONTRACTOR TO ACCOMPLISH THE JOB,
WORK OR SERVICE.

“FOR PURPOSES OF THIS CODE, ‘SUBCONTRACTING’ REFERS TO AN
ARRANGEMENT WHEREBY:

(A)A_PRINCIPAL AGREES TO PUT OUT OR FARM OUT WITH A
CONTRACTOR OR SUBCONTRACTOR THE PERFORMANCE OR
COMPLETION OF A SPECIFIC JOB, WORK OR SERVICE WITHIN A
DEFINITE OR PREDETERMINED PERIOD, REGARDLESSS WHETHER
SUCH JOB, WORK OR SERVICE IS TO BE PERFORMED OR
COMPLETED WITHIN OR OUTSIDE THE PREMISES OF THE
PRINCIPAL;OR

(B)A PERSON, PARTNERSHIP, ASSSOSIATION OR CORPORATION WHICH
NOT BEING A PRINCIPAL, CONTRACTS WITH A SUBCONTRACTOR FOR
THE PERFORMANCE OF ANY WORK, TASK, JOB OR PROJECT.”

SEC.2- A new Article 106-A is hereby inserted in the Labor Code to read as follows:

"ART. 106 — A. RIGHTS AND LIABILITIES OF PARTIES. - (A.) THE
SUBCONTRACTED EMPLOYEE. IN ALL CASES, SUBCONTRACTED
EMPLOYEES SHALL HAVE ALL RIGHTS AND PRIVILEGES DUE TO REGULAR
EMPLOYEES INCLUDING BUT NOT LIMITED TO THE FOLLOWING:

1, SAFE AND HEALTHFUL WORKING CONDITIONS;

2. LABOR STANDARDS SUCH AS SERVICE INCENTIVE LEAVES, REST
DAYS, OVERTIME PAY, HOLIDAY PAY, THIRTEENTH MONTH PAY AND
SEPARATION PAY;

RETIREMENT BENEFITS;

SOCIAL SECURITY AND WELFARE BENEFITS;

SELF-ORGANIZATION, AND COLLECTIVE BARGAINING; AND
. SECURITY OF TENURE.

DnRw

“IN ADDITION, SUBCONTRACTED EMPLOYEES SHALL HAVE THE RIGHT TO A
WRITTEN CONTRACT WHICH SHALL INCLUDE THE FOLLOWING TERMS AND
CONDITIONS:


1. THE SPECIFIC DESCRIPTION OF THE JOB, WORK, OR SERVICE TO BE
PERFORMED BY THE CONTRACTUAL EMPLOYEE;

2. THE PLACE OF WORK AND TERMS AND CONDITIONS OF
EMPLOYMENT, INCLUDING A STATEMENT OF THE WAGE RATE
APPLICABLE TO THE INDIVIDUAL CONTRACTUAL EMPLOYEE;

3. THE TERM OR DURATION OF EMPLOYMENT WHICH SHALL BE CO-
EXTENSIVE WITH THE CONTRACT OF THE PRINCIPAL OR
SUBCONTRACTOR OR WITH THE SPECIFIC PHASE FOR WHICH THE
SUBCONTRACTUAL EMPLOYEE IS ENGAGED, AS THE CASE MAY BE.

“THE SUBCONTRACTED EMPLOYEE SHALL BE INFORMED BY THE
SUBCONTRACTOR OF THE FOREGOING TERMS AND CONDITIONS ON OR
BEFORE THE FIRST DAY OF HIS EMPLOYMENT.

“(B.) THE PRINCIPAL AND THE SUBCONTRACTOR. THE LEGITIMATE
SUBCONTRACTOR SHALL BE CONSIDERED THE EMPLOYER OF THE
CONTRACTUAL EMPLOYEE FOR PURPOSES OF ENFORCING THE
PROVISIONS OF THE LABOR CODE AND OTHER SOCIAL LEGISLATION. IN ALL
CASES OF SUBCONTRACTING, HOWEVER, THE PRINCIPAL SHALL BE
SOLIDARILY LIABLE WITH THE CONTRACTOR IN THE EVENT OF ANY
VIOLATION OF ANY PROVISION OF THE LABOR CODE, INCLUDING THE
FAILURE TO PAY WAGES.

“THE PRINCIPAL SHALL BE DEEMED THE EMPLOYER OF THE CONTRACTUAL
EMPLONEE IN ANY OF THE FOLLOWING CASES:
WHERE THERE IS LABOR-ONLY CONTRACTING; OR
i IN THE ABSENCE OF THE WRITTEN CONTRACT REQUIRED BY
ARTICLE 106-A;
le IN CASES OF VIOLATION OF ARTICLE 106-B; OR
Iv. IN CASES OF VIOLATION OF ARTICLE 106-C.

"IN ADDITION, THE PRINCIPAL SHALL BE SOLIDARILY LIABLE WITH THE
SUBCONTRACTOR IN CASE THE CONTRACT BETWEEN THE PRINCIPAL AND
SUBCONTRACTOR IS PRE-TERMINATED FOR REASONS NOT ATTRIBUTABLE
TO THE FAULT OF THE SUBCONTRACTOR.”

"ASIDE FROM THE CONSEQUENCES ABOVE,
SEC.3.- A new Article 106-B is hereby inserted in the Labor Code to read as follows:

ART. 106-B. PROHIBITION AGAINST LABOR-ONLY SUBCONTRACTING.-
ENGAGING IN LABOR-ONLY CONTRACTING OR CONTRACTING WITH A
LABOR-ONLY IS STRICTLY PROHIBITED. FOR THIS PURPOSES, LABOR-ONLY
CONTRACTING REFERS TO AN ARRANGEMENTS WHERE THE
SUBCONTRACTOR MERELY RECRUITS, SUPPLIES OR PLACES WORKERS TO
PERFORM A JOB, WORK SERVICE FOR A PRINCIPAL, INCLUDING INSTANCES
WHERE ANY OF THE FOLLOWING IS PRESENT:


9

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OR COOPERATIVE, SUPPLIES WORKERS TO AN EMPLOYER WITH
OR WITHOUT ANY MONETARY OR OTHER CONSIDERATION,
WHETHER IN THE CAPACITY OF AN AGENT OF THE EMPLOYER, OR
AS AN OSTENSIBLE INDEPENDENT CONTRACTOR;

(D)TAKING UNDUE ADVANTAGE OF THE ECONOMIC SITUATION OR
LACK OF BARGAINING STRENGTH OF THE CONTRACTUAL
EMPLOYEE, OR UNDERMINING HIS SECURITY OF TENURE OR
BASIC RIGHTS, OR CIRCUMVENTING THE PROVISIONS OF
REGULAR EMPLOYMENT, IN ANY OF THE FOLLOWING INSTANCES:

Is IN ADDITION TO HIS ASSIGNED FUNCTIONS, REQUIRING THE
CONTRACTUAL EMPLOYEE TO PRFORM FUNCTIONS WHICH
ARE CURRENTLY BEING PERFORMED BY THE REGULAR
EMPLOYEEES OF THE PRINCIPAL OR OF THE CONTRACTOR
OR SUBCONTRACTOR;

{Il REQUIRING HIM TO SIGN, AS A PRECONDITION TO
EMPLOYMENT OR CONTINUED EMPLOYMENT, AN
ANTEDATED RESIGNATION LETTER, A BLANK PAYROLL, A
WAIVER OF LABOR STANDARDS INCLUDING MINIMUM
WAGES AND SOCIAL WELFARE BENEFITS, OR A QUITCLAIM
RELEASING THE PRINCIPAL OR SUBCONTRACTOR FROM
ANY LIABILITY AS TO THE PAYMENT OF FUTURE CLAIMS;AND

ML REQUIRING HIM TO SIGN A CONTRACT FIXING THE PERIOD
OF EMPLOYMENT TO A TERM SHORTER THAN THE TERM OF
THE CONTRACT BETWEEN THE PRINCIPAL AND THE
CONTRACTOR, UNLESS THE LATER CONTRACT !S DIVISIBLE
INTO PHASES FOR WHICH SUBSTANTIALLY DIFFERENT
SKILLS ARE REQUIRED AND THIS IS MADE KNOWN TO THE
EMPLOYEE AT THE TIME OF ENGAGEMENT.

(E)CONTRACTING OUT OF A JOB OR SERVICE THROUGH AN IN-

HOUSE AGENCY WHICH REFERS TO A:

| SUBCONTRACTOR ENGAGED IN THE SUPPLY OF LABOR
WHICH IS OWNED, MANAGED AND CONTROLLED BY THE
PRINCIPAL; OR

iT SUBCONTRACTOR IN WHICH THE PRINCIPAL OWNS OR
OTHERWISE REPRESENTS ANY SHARE OF STOCK;OR

Ml. SUBCONTRACTOR WHICH OPERATES SOLELY FOR THE
PRINCIPAL.

(F.) CONTRACTING OUT OF A JOB, WORK OR SERVICE THAT IS
NECESSARY AND DESIRABLE OR DIRECTLY RELATED TO THE
BUSINESS OR OPERATION OF THE PRINCIPAL BY REASON OF A
LOCKOUT OR STRIKE WHETHER ACTUAL OR IMMINENT;

(G.) CONTRACTING OUT OF A JOB, WORK OR SERVICE BEING
PERFORMED BY OR PREVIOUSLY PERFORMED BY REGULAR
EMPLOYEES AND/OR MEMBERS OF THE BARGAINING UNIT."

SEC. 5.- A new 106-D is hereby inserted in the Labor code to read as follows:

7


“ ART.106-D, REGISTRATION OF SUBCONTRACTOR.- (A.) MANDATORY
REGISTRATION. IT SHALL BE MANDATORY FOR ALL PERSONS OR ENTITIES
ACTING AS CONTRACTORS OR SUBCONTRACTORS TO REGISTER UNDER A
REGISTRATION HEREBY ESTABLISHED TO GOVERN CONTRACTING
ARRANGEMENTS AND TO BE IMPLEMENTED BY THE REGIONAL OFFICES OF
THE DEPARTMENT OF LABOR AND EMPLOYMENT.

"NON-REGISTERED PERSONS OR ENTITIES ACTING AS
CONTRACTORS OR SUBCONTRACTORS SHALL BE DEEMED AS LABOR-ONLY
CONTRACTORS. MERE REGISTRATION WITHOUT A SHOWING OF A
COMPLIANCE, WITH ALL REQUIREMENTS FOR LEGITIMATE
SUBCONTRACTING AND AVOIDANCE OF ALL PROHIBITIONS OF
SUBCONTRACTING SHALL NOT INDICATE LEGITIMATE SUBCONTRACTING.

“(B) REQUIREMENTS FOR REGISTRATION. A SUBCONTRACTOR MAY
BE LISTED IN THE REGISTRY OF SUBCONTRACTORS UPON COMPLETION
AND SUBMISSION OF AN APPLICATION FORM PROVIDED BY THE
DEPARTMENT. IN THE APPLICATION FORM, THE APPLICANT
SUBCONTRACTOR SHALL PROVIDE THE FOLLOWING INFORMATION:

| THE NAME AND BUSINESS ADDRESS OF THE APPLICANT AND THE
AREA OR AREAS WHERE IT SEEKS TO OPERATE;

I THE NAMES AND ADDRESS OF OFFICERS, IF THE APPLICANT IS A
CORPORATION PARTNERSHIP, COOPERATIVE OR UNION;

i. THE NATURE OF THE APPLICANT'S BUSINESS AND THE INDUSTRY
OR INDUSTRIES WHERE THE APPLICANT SEEKS TO OPERATE;

IV. THE NUMBER OF REGULAR WORKERS, THE LIST OF CLIENTS, IF
ANY, THE NUMBER OF PERSONNEL ASSIGNED TO EACH CLIENT, IF.
ANY, AND THE SERVICES PROVIDED TO THE CLIENT;

V. THE DESCRIPTION OF THE PHASES OF THE CONTRACT AND THE
NUMBER OF EMPLOYEES COVERED IN EACH PHASE, WHERE
APPROPRIATE; AND

Vi A COPY OF AUDITED FINANCIAL STATEMENTS IF THE APPLICANT
IS A CORPORATION, PARTNERSHIP, COOPERATIVE OR A UNION,
OR A COPY OF THE LATEST INCOME TAX RETURN IF THE
APPLICANT IS A SOLE PROPRIETORSHIP.

“THE APPLICATION SHALL BE SUPPORTED BY THE FOLLOWING:

| ACERTIFIED COPY OF A CERTIFICATE OF REGISTRATION OF FIRM OR
BUSINESS NAME FROM THE SECURITIES AND EXCHANGE
COMMISSION (SEC), DEPARTMENT OF TRADE AND INDUSTRY
(DT!),COOPERATIVE DEVELOPMENT AUTHORITY (CDA), OR FROM THE
DOLE IF THE APPLICANT IS A UNION; AND

i A CERTIFIED COPY OF THE LICENSE OR BUSINESS PERMIT ISSUED
BY THE LOCAL GOVERNMENT UNIT OR UNITS WHERE THE
SUBCONTRACTOR OPERATES.


“THE APPLICATION SHALL BE VERIFIED AND SHALL INCLUDE AN
UNDERTAKING THAT THE SUBCONTRACTORS SHALL ABIDE BY ALL
APPLICABLE LABOR LAWS AND REGULATIONS.

"(C.) FILLING AND PROCESSING OF APPLICATIONS. THE APPLICATION AND
ITS SUPPORTING DOCUMENTS SHALL BE FILLED IN TRIPLICATE IN THE
REGIONAL OFFICES WHERE THE APPLICANT PRINCIPALLY OPERATES. NO.
APPLICATION FOR REGISTRATION SHALL BE ACCEPTED UNLESS ALL THE
FOREGOING REQUIREMENTS ARE COMPLIED WITH. THE CONTRACTOR OR
SUBCONTRACTOR SHALL BE DEEMED REGISTERED UPON PAYMENT OF A
REGISTRATION FEE TO BE DETERMINED BY THE REGIONAL OFFICE.

“WHERE ALL THE SUPPORTING DOCUMENTS HAVE BEEN SUBMITTED, THE.
REGIONAL OFFICE MAY DENY OR APPROVED THE APPPLICATION WITHIN
SEVEN (7) WORKING DAYS AFTER ITS FILING.

“UPON REGISTRATION, THE REGIONAL OFFICE SHALL RETURN ONE SET OF
THE DULY-STAMPED APPLICATION DOCUMENTS TO THE APPLICANT,
RETAIN ONE SET FOR ITS FILE, AND TRANSMIT THE REMAINING SET TO THE
BUREAU OF LOCAL EMPLOYMENT. THE BUREAU SHALL DEVICE THE
NECESSARY FORMS FOR THE EXPEDITIOUS PROCESSING OF ALL
APPLICATIONS FOR REGISTRATION

“(D.) ANNUAL REPORTING OF REGISTERED _ CONTRACTORS. _THE
SUBCONTRACTOR SHALL SUBMIT IN TRIPLICATED COPIES AN ANNUAL
REPORT USING A PRESCRIBED FORM TO THE APPROPRIATE REGIONAL.
OFFICE NOT LATER THAN THE FIFTEENTH OF JANUARY OF THE FOLLOWING
YEAR. THE REPORT SHALL INCLUDE THE FOLLOWING DOCUMENTS:

| A LIST OF CONTRACTS ENTERED WITH THE PRINCIPAL DURING.
THE SUBJECT REPORTING PERIOD;

I THE NUMBER OF WORKERS COVERED BY EACH CONTRACT WITH
THE PRINCIPAL;

Ml. A SWORN STATEMENT SIGNED BY THE HIGHEST EXECUTIVE
OFFICER AND THE CHIEF FINANCIAL OFFICER THAT THE
CONTRACTOR OR SUBCONTRACTOR HAS REMITTED ALL KINDS OF
PAYMENTS AND PREMIUMS TO THE SOCIAL SECURITY SYSTEM
(SSS), THE HOME DEVELOPMENT MUTUAL FUND (HDMF),
PHILHEALTH, EMPLOYES COMPENSATION COMMISSION (ECC),
AND THE BUREAU OF INTERNAL REVENUE (BIR) FOR ALL THE
CONTRACTUAL EMPLOYEES PERTAINING TO THE REPORTING
PERIOD.

“THE REGIONAL OFFICE SHALL RETURN ONE SET OF DULY-STAMPED
REPORT TO THE SUBCONTRACTOR, RETAIN ONE SET FOR ITS FILE, AND
TRANSMIT THE REMAINING SET TO THE BUREAU OF LOCAL EMPLOYMENT
WITHIN FIVE (5) DAYS FROM RECEIPT THEREOF.


“(E.) DELISTING OF CONTRACTORS OF SUBCONTRACTORS. THE REGIONAL
DIRECTOR SHALL CANCEL THE REGISTRATION OF CONTRACTORS OR
SUBCONTRACTORS BASED ON ANY OF THE FOLLOWING GROUNDS:

| NON-SUBMISSION OF CONTRACTS BETWEEN THE PRINCIPAL AND.
THE SUBCONTRACTORS WHEN REQUIRED TO DO SO;

M NON-SUBMISSION OF THE ANNUAL REPORT INCLUDING THE
DOCUMENTS LISTED UNDER ARTICLE 106 (D);

MW ENGAGEMENT IN LABOR-ONLY CONTRACTING;

IV, VIOLATION OF THE PROHIBITED ACTIVITIES PROVIDED BY THIS
CODE;

V. NON COMPLIANCE WITH LABOR STANDARDS AND WORKING
CONDITIONS.

“(F.) RENEWAL OF REGISTRATION OF _ SUBCONTRACTORS. ALL
REGISTERED SUBCONTRACTORS MAY APPLY FOR RENEWAL OF
REGISTRATION EVERY TWO (2) YEARS. FOR THIS PURPOSE, THE
TRIPARTITE INDUSTRIAL PEACE COUNCIL (TIPO) AS CREATED UNDER
EXECUTIVE ORDER NO. 49, SHALL SERVE AS THE OVERSIGHT COMMITTEE
TO VERIFY AND MONITOR THE FOLLOWING:

I ENGAGING IN ALLOWABLE CONTRACTING ACTIVITIES; AND
IL COMPLIANCE WITH ADMINISTRATIVE REPORTING REQUIREMENTS;

SEC. 6.- Anew Article 106-E is hereby inserted in the labor Code to read as follows:

“ART. 106-E. DUTY TO PRODUCE COPY OF CONTRACT.-THE PRINCIPAL OR
SUBCONTRACTOR SHALL PRODUCE A COPY OF THE CONTRACT BETWEEN
THE PRINCIPAL AND THE CONTRACTOR IN THE COURSE OF INSPECTION.
THE SUBCONTRACTOR SHALL ALSO PRODUCE A COPY OF THE CONTRACT
OF EMPLOYMENT OF SUBCONTRACTED WORKERS WHEN DIRECTED TO DO
SO BY THE REGIONAL DIRECTOR OR HIS AUTHORIZED REPRESENTATIVE

“A COPY OF THE CONTRACT BETWEEN THE SUBCONTRACTED EMPLOYEE
AND THE SUBCONTRACTOR SHALL BE FURNISHED TO THE CERTIFIED
BARGAINING AGENT, IF THERE IS ANY.

SEC. 7.- Article 248 of the Labor code is hereby amended to read as follows:

“Art.248, Unfair Labor Practices of Employers.- It shall be unlawful for an employer to
commit any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercises of their right
to self-organization;

(b) To require as a condition of employment that a person or an employee shall
not join a labor organization or shall withdraw from one to which he belongs;

(c) To ENGAGE A LABOR-ONLY CONTRACTOR OR TO contract out services,
function being performed by {union} MEMBERS OF, OR POSITION
COVERED BY, THE BARGAINING UNIT AND/OR REGULAR RANK-AND —
FILE AND SUPERVISORY EMPLOYEES { when such will interfere with,

10


restrain or coerce employees in the exercise of their rights to. self-
organization};

(d) To initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or
other support to its organizers or supporters;

(e) To discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership in
any labor organization. Nothing in this Code or in any other law shall stop the
parties from requiring membership in a recognized collective bargaining agent
as a condition of employment, except those employees who are already
members of another union at the time of the signing of the collective
bargaining agreement.

Employees of an appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members of the recognized
collective bargaining agent, if such non-union members accept the benefits
under the collective bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (0) of this Code shall not
apply to the non-members of the recognized collective bargaining agent;

(f) To dismiss, discharge or otherwise prejudice or discriminate against an
employee for having given or being about to give testimony under this Code:

(g) To violate the duty to bargain collectively as prescribed by this Code;

(h) To pay negotiation or attorney's fees to the union or its officers or agents as
part of the settlement of any issue in collective bargaining or any other
dispute; [or]

(i) To violate a collective bargaining agreement [..J; OR

(j) TO DENY THE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP
AND/OR TO CLASSIFY AS CASUAL, CONTRACTUAL, SUBCONTRACTED
EMPLOYEES, AGENCY EMPLOYEES, OR OTHER NON-REGULAR
CLASSIFICATION THOSE EMPLOYEES WHO ARE REGULAR
EMPLOYEES BY VIRTUE OF ARTICLE 280 OF THIS CODE

“The provisions of the preceding paragraph notwithstanding, only the officer and
agents of corporation, associations or partnership who have actually participated
in, authorized or ratified unfair labor practices shall be held criminally liable.”

SEC.8.- Article 279 of the Labor Code is hereby amended to read as follows:

“ART.279 Security of Tenure,-[1n-case-s-of regular-employment,-employer-shall
not_terminate-the-services-of-an-employee] ALL EMPLOYERS SHALL ENJOY
SECURITY OF TENURE AND SHALL NOT BE TERMINATED except for a just
cause or when authorized by this Title. ALSO, THE RIGHT TO NOTICE IN
EMPLOYMENT RELATIONS REQUIRES ANY EMPLOYER WHO SEEKS TO
DISMISS A WORKER TO FURNISH HIM A WRITTEN NOTICE STATING THE.
PARTICULAR ACTS OR COMMISSIONS CONSTITUTING THE GROUNDS
FOR HIS DISMISSAL. IN CASE OF ABANDONMENT OF WORK, THE
WRITTEN NOTICE SHALL BE SERVED AT THE WORKER'S LAST KNOWN
ADDRESS. DUE PROCESS ENTITLES THE WORKER TO AN OPPORTUNITY
TO ANSWER THE ALLEGATIONS STATED AGAINST HIM IN THE NOTICE OF

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DISMISSAL WITHIN A PERIOD OF FIVE (5) CALENDAR DAYS FROM
RECEIPT OF SUCH NOTICE AND WITH THE ASSISTANCE OF A
REPRESENTATIVE IF HE SO DESIRES. THE RIGHT TO NOTICE REQUIRES
THE EMPLOYER TO AFFORD THE WORKER AMPLE OPPORTUNITY TO BE
HEARD AND TO DEFEND HIMSELF WITH THE ASSISTANCE OF HIS
REPRESENTATIVE IF HE SO DESIRES.

“An employee who is {unjustly} dismissed from work IN VIOLATION OF ANY OF
THIS RIGHTS UNDER THIS ARTICLE, INCLUDING THE RIGHT TO NOTICE
AS ELABORATED IN THE PRECEDING PARAGRAPH shall be entitled to
IMMEDIATE reinstatement without loss of seniority rights and other privileges
and to hid full back wages, inclusive of allowances, and to his other benefits of
their monetary equivalent computed from the time his compensation was withheld
from him up to time of his actual reinstatement.”

SEC. 9. — Article 280 of the Labor Code is hereby amended to read as follows

“ART. 280. Regular and Casual Employment.- The provisions of written
agreement to the contrary notwithstanding and regardless of the agreement of
the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
OR DIRECTLY RELATED TO the usual business or trade of the employer

fexcept_where—the—employment—has—been—fixedf pecific—project
undertaking the-completi R tion-of which-has-been-determined-at-th
time-of the engagement in-nat d-the-employment is for the-duration-of th
season},

“An employment shall be deemed to be casual if it is not USUALLY NECESSARY
OR DESIRABLE OR [eovered-by the-preceding-paragraph] RELATED TO THE
USUAL BUSINESS OF THE EMPLOYER: Provided, That any employee who has
rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity fin
which] he is employed IN and his employment shall continue fwhile-such-activity
exists} UNLESS HE IS TERMINATED FOR A JUST CAUSE OR WHEN
AUTHORIZED BY THIS TITLE.”

SEC. 10.- A new Article 280-A is hereby inserted in the Labor Code to read as
follows:

"ART. 280-A, PROJECT, EXTRA, AND SEASONAL EMPLOYMENT. —
PROJECT EMPLOYMENT REFERS TO THAT WICH HAS BEEN FIXED FOR A
SPECIFIC PROJECT OR UNDERTAKING THE COMPLETION OR
TERMINATION OF WHICH HAS BEEN DETERMINED AND MADE KNOWN TO
THE EMPLOYEE AT THE TIME OF HIS ENGAGEMENT.

“EXTRA EMPLOYMENT REFERS TO ADDITIONAL WORK TO BE
PERFORMED IN RESTAURANT AND HOTEL ESTABLISHMENTS
SPECIFICALLY FOR BANQUET FUNCTIONS, SEMINARS AND SIMILAR
FUNCTIONS WHERE THE REGULAR EMPLOYEES CANNOT REASONABLY
COPE WITH THE INCREASED DEMANDS OF SUCH EVENTS.

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“SEASONAL EMPLOYMENT REFERS TO THE PERFORMANCES OF
AGRICULTURAL WORK THAT IS SEASONAL IN NATURE AND THE
EMPLOYMENT IS FOR THE DURATION OF THE PLANTING OR
HARVESTING SEASON.

“PROJECT, EXTRA AND SEASONAL EMPLOYEES SHALL HAVE THE RIGHT
TO SECURITY OF TENURE AND ARE ENTITLED TO RESUME THEIR
EMPLOYMENT IN THE SAME OR SIMILAR POSITION UPON THE START OF
THE NEXT PROJECT OR OCCASION FOR EXTRA OR SEASONAL
EMPLOYMENT, AS THE CASE MAY BE: PROVIDED, THAT DURING THE
TIME THAT THEIR SERVICE ARE NOT ACTUALLY AVAILED OF, THEY
SHALL BE CONSIDERED TO BE ON AN AUTHORIZED LEAVE WITHOUT
PAY.”

SEC. 11.- A new Article 280-B is hereby inserted in the Labor Code to read as
follows:

“ART. 280-B. PROHIBITION AGAINST FIXED TERM EMPLOYMENT.- NO
EMPLOYER SHALL HIRE ANY EMPLOYEES; (2) EXTRA EMPLOYEES; (3)
SEASONAL EMPLOYEES, (4) IN INDUSTRIES THAT ARE CERTIFIED BY THE
PRESIDENT IN AN EXECUTIVE ORDER, AS ALLOWABLE, DUE TO EXISTING
AND SUBSTANTIAL LOSSES IN THE INDUSTRY AS A WHOLE BROUGHT
ABOUT BY AN INABILITY TO PRICE GOODS COMPETITIVELY IN THE
MARKET DESPITE RESORT TO ALL REASONABLE MEASURES; PROVIDED
THAT SUCH CERTIFICATION SHALL BE FOR A PERIOD OF AT MOST
THREE (3) YEARS: PROVIDED FURTHER, THAT THE PRESIDENT MAY
RENEW THE CERTIFICATION UPON EXPIRY SHOULD THE
CIRCUMSTANCES SUBSIST FOR A SIMILAR PERIOD AND SUBJECT TO.
SIMILAR RENEWALS; (5) OVERSEAS FILIPINO WORKERS; (6) THOSE
HIRED TO PLAY PROFESSIONAL SPORTS; (7) THOSE APPOINTED TO.
SENSITIVE POSITIONS IN EDUCATIONAL INSTITUTIONS SUCH AS DEAN,
ASSISTANT DEAN, PRINCIPAL AND COLLEGE, SECRETARY; AND (8)
THOSE EMPLOYED AS MEMBERS OF MANAGERIAL STAFF, OTHER THAN
THE FOREGOING EXCEPTIONS, ANY STIPULATION FIXING A PERIOD OF
EMPLOYMENT SHALL BE VOID."

SEC. 12. Article 280 of the Labor Code is hereby amended to read as follows:

“ART. 281.- Probationary Employment.- Probationary employment shall not
exceed six (6) months from the date the employee started working [unless it is
covered by an apprenticeship agreement stipulating a longer period]. The
services of an employee who has been engaged on a probationary basis may be
terminated for a just cause or [ when he fails] UPON FAILURE to qualify as a
regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is
allowed to work after a probationary period, EVEN UNDER THE GUISE OF AN
EXTENSION, shall be considered a regular employee,”

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THE TERMINATION OF PROBATIONARY EMPLOYEES SHALL NOT BE
VALID IF DONE TO PRECLUDE ACQUISITION OF SECURITY OF TENURE BY
THE EMPLOYEE. THE PRESENCE OF ANY OF THE FOLLOWING
CIRCUMCTANCES SHALL CREATE A REBUTABBLE PRESUMPTION OF THE
INTENT TO CIRCUMVENT THE RIGHT TO SECURITY OF TENURE OF
PROBATIONARY EMPLOYEES

1, TERMINATION OF ALL OR ALMOST ALL OF THE PROBATIONARY
EMPLOYEES AT THE END OF THE PROBATIONARY PERIOD AND THE
SUBSEQUENT HIRING OF EMPLOYEES PERFORMING THE SAME
WORK OR TASK AND/OR OCCUPYING THE SAME POSITION AS THOSE
VACATED BY THE PREVIOUS PROBATIONARY EMPLOYEES.

2. MAINTAINING PROBATIONARY EMPLOYEES IN EXCESS OF THIRTY
PERCENT (30%) OF THE TOTAL WORKFORCE, HOWEVER, NEWLY-
CREATED COMPANIES/EMPLOYERS ARE EXEMPTED FROM
OBSERVING THE FOREGOING PERCENTAGE RESTRICTION WITHIN
ONE (1) YEAR FROM THE START OF THEIR BUSINESS OPERATIONS.

SEC. 13.- Article 288 of the Labor Code is hereby amended to read as follows:

“ART. 288. Penalties. Except as otherwise provided in this Code, or unless the
acts complained of hinge on a question of interpretation or implementation of
ambiguous provisions of an existing collective bargaining agreement, any
violation of the provisions of this Code declared to be unlawful or penal in nature
shall be punished with a fine of not less than One Thousand Pesos (p1,000.00)
nor more than three years, or both such fine and imprisonment at the direction of
the court

“ANY PRINCIPAL OR SUBCONTRACTOR WHO ENGAGES IN LABOR ONLY
CONTRACTING AND/OR VIOLATES 106,106-A, 106-B, 106-C, 106-D AND 106-
E SHALL BE SOLIDARILY LIABLE TO INDEMNIFY EACH SUBCONTRACTED
EMPLOYEE NOT LESS THAN FIFTY THOUSAND PESOS (P50,000.00)
WITHOUT PREJUDICE TO OTHER MONETARY AWARDS TO WHICH SUCH
SUBCONTRACTED EMPLOYEE MAY BE ENTITLED SUCH AS BACKWAGES,
MONETARY CLAIMS AND BENEFITS UNDER AN APPLICABLE CERTIFIED.
BARGAINING AGREEMENT OR COMPANY POLICY, WHETER WRITTEN OR
OTHERWISE.

“ANY EMPLOYER WHO DELIBERATELY CATEGORIZES OR OTHERWISE
TREATS REGULAR EMPLOYEES TO BE ANY NON-REGULAR EMPLOYEE
SHALL BE LIABLE TO ENDEMNIFY EACH MISCLASSIFIED EMPLOYEE NO
LESS THAN FIFTY THOUSAND PESOS (P50,000.00) WITHOUT PREJUDICE,
TO OTHER MONETARY AWARDS TO WHICH SUCH EMPLOYEE MAY BE
ENTITLED SUCH AS BACKWAGES, MONETARY CLAIMS AND BENEFITS
UNDER AN APPLICABLE CERTIFIED BARGAINING AGREEMENT.

“In addition to such penalty, any alien found guilty shall be summarily deported
upon completion of service of sentence.

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“Any provision of law to the contrary notwithstanding, any criminal offense
punished in this Code, shall be under the concurrent jurisdiction of the Municipal
or City court's and Courts of First Instance. “

SEC.14, Implementing Rules and Regulations.. The Department of Labor and
Employment (DOLE) SHALL ISSUE, WITHIN SIXTY (60) days after the effectivity
of this Act, the rules and regulations for its effective implementation.

SEC.15. Separability Clause.- If for any person, any section or provision of this
Act is held unconstitutional or valid, the other section or provisions hereof shall
not be affected thereby and shall continue to be in full force and effect,

SEC.16. Repeating Clause.- All laws, decrees, executive orders, rules and
regulations, or parts thereof inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SEC.17. Effectively Clause.- This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in at least two (2) newspapers of general
publications.

Approved,

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