FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 
[) 3 7 
.~ 
•. 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
This bill seeks to provide incentives to all industrial epterprises which grant 
proportionate bonuses to their employees and whose' employees voluntarily 
agree to maintain industrial peace. 
Under this measure, it is proposed that business enterprises establish a Labor-
Management Cooperation Committee to create an incentive program, initiated by 
both employers and unorganized employees. An Incentive Program is a three-
year pr.ogram whereby the employer agrees to grant proportionate salary 
bonuses based on production for the past three (3) consecutive years, cost, 
manpower and similar variables; and, the employees agree to maintain industrial 
peace. 
An incentives program duly decided upon by at least a majority of the members 
of the Labor-Management Cooperation Committee shall be granted the right of 
tax deduction double that of the bonuses given to the employees. 
The immediate approval of this bill is requested. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF, THE PHILIPPINES 
) 
First Re~ular Session 
) 
__ i 
SENATE 
Senate Bill No. 
537 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
TO PROVIDE FURTHER INCENTIVES TO LABOR AND INDUSTRIAL 
ENTERPRISES TO THE END THAT BOTH PRODUCTIVITY AND INCOME 
WILL BE INCREASED 
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 "Industrial Incentives 
Act of 2010". 
SEC 2. Declaration of Policy. - It is declared policy of the government to provide 
incentives to all industrial enterprises which grant proportionate bonuses to their 
employees and whose employees voluntarily agree to maintain industrial peace. 
SEC 3. Definition of Terms. - As used in this Act: 
1. 
"Industrial enterprise" refers to the business enterprise engaged in the 
production, manufacturing or processing of goods duly certified as such 
by the pertinent government offices; 
, 
2. 
"Labor-Management Cooperation Committees" refer to negotiating 
. bodies created by both employers and unorganized employees to 
establish an incentives program; 
3. 
"Incentives Program" refers to a three-year program whereby the 
employer agrees to grant proportionate salary bonuses based on 
production for the past three (3) consecutive years, cost, manpower and 
similar variables; and, the employees agree to maintain industrial peace; 
4. 
"Industrial Peace" refers to the state of labor and management relations 
wherein the parties thru the Labor-Management Cooperation Committee 
(LMMC) voluntarily decide, by at least a majority of all the members 
thereof, against strikes, lockouts or similar means which disrupt 
operations and production of the enterprise, except when an unfair labor 
practice is committed by other party; 


5. 
"Tax deductions" refer to deductions from gross income as determined 
by the National Internal Revenue Code, as amended; 
SEC 4. Labor-Management Cooperation Committee. - An industrial enterprise 
may establish a Labor-Management Cooperation Committee to create an 
incentive program; 
Provided, That such Labor-Management Cooperation 
Committee shall be composed of an equal number of representatives from 
employees and management duly chosen and agreed upon by both of them. 
SEC 5. Approval and Notification. - An industrial enterprise which adopts an 
incentives program shall submit copies of the same to the Department of Labor 
and Employment and to the Bureau of Internal Revenue for approval and 
notification, respectively. 
SEC 6. Benefits. - Subject to the provisions of Section 3 (3) and (4) hereof, and 
industrial'enterprise which adopts an incentives program duly decided upon by at 
least a. majority of the members of the Labor-Management Cooperation 
Committee shall be granted the right of tax deduction double that of the bonuses 
given to the employees. Manpower training and special studies abroad shall be 
granted to qualified employees of the industrial enterprises pursuant to a 
program prepared by the appropriate government agencies. 
SEC 7. Rule-Making Power. - The Secretary of the Department of Labor and 
Employment and the Commissioner of the Bureau of Internal Revenue are 
hereby authorized to promulgate such rules and regulations necessary to carry 
out the provisions of this Act. 
SEC 8. Penalty. - Any person who shall make any fraudulent claim under this 
Act, regardless whether a tax refund has been granted, shall, upon conviction, be 
punished with imprisonment of not less than six (6) months and not more than 
one (1) year, or a fine of not less than Ten thousand pesos (P10,OOO.OO) but not 
more than Twenty thousand pesos (P20,OOO.OO), or both, without prejudice to 
prosecution and punishment for any other offense punishable under the Revised 
Penal Code or any other penal statute. 
In case of partnerships or corporations, the managing partner, general manager, 
or chief executive officer, as the case may be, shall be held criminally liable. 
SEC 9. Separability Clause. - If any provision of this Act is held invalid, any 
other provision not affected shall continue to be valid and effective. 
SEC 10. Repealing Clause. - Any law, executive order, letter of instruction, or 
any part thereof, which is inconsistent with any provisions of this Act is hereby 
repealed or amended accordingly. 
SEC 11. Effectivity Clause. - This Act shall take effect fifteen (15) days following 
the completion of its publication in the Official Gazette or in at least two (2) 
national newspapers of general circulation. 
Approved, 
,