, 
b 
THIRTEENTH CONGRESS OF THE REPUBLIC 
’) 
OF THE PHILIPPINE 
’) 
First Regular Session 
1 
S E N A T E  
S. No. 
introduced by Senator S. R. OsmeAa 111 
EXPLANATORY NOTE 
Labor is one of the vital factors of any economic enterprise. For this 
economic activity to be productive and successful, manpower must be skilled 
and well-motivated. To achieve this, new approaches and arrangements that will 
yield adequately skilled manpower for the country’s requirement must be 
generated. 
Apprenticeship is one such approach/ arrangement. Although not a new 
labor concept, it having gained official recognition with the enactment of the 
Minimum Wage Law (Republic Act No. 6302) on April 6, 1951, the contribution of 
apprentices may further be explored by redefining the concept as well as the 
program’s objective. 
Under present laws, an apprentice is any worker, at least 14 years of age 
who possesses vocational aptitude and capacity for appropriate tests, covered 
by a written apprenticeship occupation arrangement, i.e. any trade, form of 
employment which requires 3 months of practical training on the job 
supplemented by a related theoretical instruction (in no case more than 6 
months). 
Only employers in the highly technical industry may employ 
apprentices. 
Participating 
companies in the 
apprenticeship 
programs provide 
apprentices with training on the standards of trade in individual enterprises, 
thereby reducing the burden of the government for skills training. However, the 
inadequacies of the present system have to be corrected to address the 
exploitative practice of many companies that take in apprentices to save on 
labor costs but are hardly concerned with training at all. A framework must be 
created to delineate the role of government and private enterprises for an 
effective apprenticeship program implementation. 
In view of the imperative to promote and sustain the high degree of skills 
and efficiency of our workforce, the passage of this bill is earnestly sought. 
h, 
SERGIO OSMENA 111 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
1 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
UI 
S E N A T E  
A’, 
S. No. 
Introduced by Senator S. R. OsmeFia 111 
AN ACT 
AMENDING TITLE II OF BOOK II OF THE LABOR CODE OF THE 
PHILIPPINES 
Be it enacted by the Senate and fhe House of Representatives of the 
Philippine in Congress assembled: 
1 
SECTION 1. Title. - This Act shall be known as the “Apprenticeship Act 
2 
of 2004.” 
3 
SEC. 2. Article 57 of the Labor Code of the Philippines is hereby 
4 
amended to read as follows: 
5 
“ART. 57. Statement of Objectives. - This title aims: 
6 
(1) To help meet the demand of the economy for trained manpower; 
7 
(2) [To establish a national apprenticeship program through the 
8 
participation of employers, workers, and government and non- 
9 
government agencies;] TO PROVIDE THE ESTABLISHMENT OF A 
NATIONAL APPRENTICESHIP SYSTEM THAT INCLUDES ON AND 
10 
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OFF-THE-JOB TRAINING COMPONENTS AND WITH TRIPARTITE 
12 
INVOLVEMENT; and 
13 
(3) [To establish apprenticeship standards for the protection of 
14 
apprentices.] 
TO PROVIDE FOR THE ESTABLISHMENT AND 
15 
CONTROL OF TRAINING APPRENTICES ON OCCUPATIONS AND 
16 
FOR MATTERS CONNECTED THEREWITH.” 


1 
SEC. 
3. 
Article 58 of the Labor Code of the Philippines is hereby 
2 
3 
“ART. 58. Definition of Terms. - As used in this Title: 
4 
(a) “Apprenticeship means [practical training on the job supplemented by 
5 
related theoretical instruction.] 
ENTERPRISE-BASED PRACTICAL 
amended to read as follows: 
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TRAl NI NG 
WITH 
COMPULSORY 
RELATED 
THEORETICAL 
INSTRUCTIONS IN OR OUTSIDE THE ENTERPRISE INVOLVING A 
CONTRACT BETWEEN AN APPRENTICE AND A FIRM OWNER ON 
AN APPROVED APPRENTICEABLE OCCUPATION. 
(b) An “apprentice” is a [worker who is covered by a written 
apprenticeship agreement with an individual employer or any of the 
entities recognized under this Chapter] 
PERSON UNDERGOING 
TRAINING FOR AN APPROVED APPRENTICEABLE OCCUPATION 
DURING 
AN 
ESTABLISHED 
PERIOD 
ASSURED 
BY 
AN 
APPRENTICESHIP AGREEMENT. 
(c) An “[apprenticeship] 
APPRENTICEABLE occupation” [means any 
trade, form of employment or occupation which requires more than 
three (3) months of practical training on the job supplemented by 
related theoretical instruction] IS AN OCCUPATION OFFICIALLY 
ENDORSED 
BY 
A 
TRIPARTITE 
BODY, 
WITH 
EQUAL 
REPRESENTATION FROM FIRM OWNERS, WORKERS AND 
TRAIN I NG 
INSTITUTIONS, 
AND 
APPROVED 
FOR 
APPRENTICESHIP BY THE TECHNICAL EDUCATION AND SKILLS 
DEVELOPMENT AUTHORITY, HEREINAFTER REFERRED TO AS 
TESDA, WHICH REQUIRES A MINIMUM DURATION OF FOUR (4) 
MONTHS: 
PROVIDED, HOWEVER, THAT THE TESDA BOARD 
MAY PRESCRIBE A LONGER TRAINING PERIOD DEPENDING ON 
ITS APPROVED OCCUPATIONAL SKILLS STANDARDS. 
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(d) “Apprenticeship agreement” is [an employment contract wherein the 
employer binds himself to train the apprentice and an apprentice in 
turn accepts the terms of training] A CONTRACT WHEREIN A FIRM 
OWNER BINDS HIMSELFIHERSELF TO TRAIN THE APPRENTICE 
WHO IN TURN ACCEPTS THE TERMS OF TRAINING FOR A 
RECOGNIZED APPRENTICEABLE OCCUPATION EMPHASIZING 
THE RIGHTS, DUTIES AND REPOSNDlBlLlTlES OF EACH PARTY. 
(e) “OCCUPATIONAL 
SKILLS 
STANDARDS” 
ARE 
WRITTEN 
SPECIFICATIONS SETTING OUT THE REQUIREMENTS OF 
KNOWLEDGE AND SKILLS WITH RESPECT TO A PARTICULAR 
TRADE. 
(9 “OCCUPATIONAL 
SKILLS 
CERTIFICATION” IS 
A 
FORMAL 
RECOGNITION OF A WORKER’S SKILLS QUALIFICATION FOR A 
PARTICULAR TRADE. 
(9) APPRENTICESHIP FEE” IS A TAX IMPOSED ON FIRM OWNERS 
AND/OR WORKERS WITH THE VIEW IN MIND OF FINANCING 
APPRENTICESHIP TRAl N I NG ACTlVlTl ES. 
SEC. 4. Article 59 of the Labor Code of the Philippines is hereby 
amended to read as follows: 
“ART. 59. 
apprentice, a person shall: 
(a) Be at least [fourteen (14)] FIFTEEN (15) years of age; 
(b) Possess vocational aptitude and capacity for apprenticeship as 
Qualifications of an apprentice. - To qualify as an 
established through appropriate tests; and 
(c) Possess the ability to comprehend and follow oral and written 
instructions. 
2 


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“Trade, [and] industry and LABOR ORGANIZATIONS [associations] may 
2 
recommend to the [Department of Labor and Employment] TESDA 
3 
a p p ro p ria t e e d u cat i on a I re q u ire m e n t s for d iff e re n t o c c u p at i o n s . ” 
4 
SEC. 
5. 
Article 60 of the Labor Code of the Philippines is hereby 
5 
6 
“ART. 
60. 
[Employment] TRAINING of apprentices. - Only 
7 
[employers in the highly technical industries may employ apprentices and 
8 
only in apprenticeable occupation approved by the Secretary of Labor and 
9 
Em p Io y ment] 
CERTIFIED 
OWNER§ 
MAY 
ENTER 
INTO 
10 
APPRENTICEHSIP 
AGREEMENT§ 
OR 
OTHERWISE 
TRAIN 
I 1  
12 
SEC. 
6. 
Article 61 of the Labor Code of the Philippines is hereby 
13 
14 
“ART. 
61. 
Contents of 
apprenticeship agreements. 
- 
15 
Apprenticeship agreements [, wage rates of apprentices, shall conform to 
16 
the rules issued by the Secretary of Labor and Employment. The period 
17 
of apprenticeship shall no exceed six months.] 
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JESDA AND SHALL INCLUDE: 
25 
(A) 
THE NATURE, SYLLABUS, TIMETABLE AND PURPOSE OF 
26 
TRAl N I NG; 
27 
(B) 
THE PERIOD OF TRAINING DEPENDING ON THE APPROVED 
28 
OCCUPATIONAL SKILLS STANDARDS; 
amended to read as follows: 
APPRENTICES IN APPROVED APPRENTICEABLE OCCUPATIONS.” 
amended to read as follows: 
[“Apprenticeship agreements providing for wage rates below the 
legal minimum wage, which in no case shall start below 75 percent of the 
applicable minimum wage, may be entered ino only in accordance with 
apprenticeship programs duly approved by the Secretary of Labor and 
Employment. The Department shall develop standard model programs of 
apprenticeship,] SHALL CONFORM WITH THE RULES ISSUED BY THE 
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(C) 
TRAINING 
ALLOWANCES 
PRESCRIBED 
BY 
INDUSTRY 
SUBSECTORS THROUGH TRIPARTITE CONSULTATIONS WHICH IN 
NO CASE SHALL START BELOW SEVENTY-FIVE PERCENT (75%) OF 
THE APLICABLE MINIMUM WAGE; 
(D) 
(E) 
TRAINING HOURS; 
(F) 
AND 
(G) 
THE 
GENERAL 
RIGHTS AND 
OBLIGATIONS 
OF 
BOTH 
PARTIES.” 
SEC. 
A SCHEDULE OF TRAINING ALLOWANCE PAYMENT; 
THE PROCESS FOR THE TERMINATION OF APPRENTICESHIP; 
7. Article 62 of the Labor Code of the Philippines is hereby 
amended to read as follows: 
“ART. 62. Signing of apprenticeship agreement. - Every apprenticeship 
agreement shall be signed by the FIRM OWNER of his/her agent, or by an 
authorized representative of any of the recognized organizations, associations or 
groups and the apprentice. 
“An apprenticeship agreement with a minor shall be signed in hidher 
behalf by hidher parent or guardian or, if the latter is not available, by an 
authorized representative of the [Department of Labor and Employment] TESDA, 
and the same shall be binding during its lifetime, SUBJECT TO THE RIGHT OF 
THE APPRENTICE TO TERMINATE THE SAME AFTER A MONTH’S NOTICE. 
“Every apprenticeship agreement entered into under this Title shall be 
ratified by the [appropriate] BIPARTITE PLANT apprenticeship committee 
INVOLVING THE FIRM OWNER AND REPRESENTATIVES OF THE FIRM 
WORKERS, [if any], and [a copy] COPIES thereof shall be furnished the FIRM 
OWNER [employer] and the apprentice. 
SEC. 
8. Article 63 of the Labor Code of the Philippines is hereby 
amended to read as follows: 
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“ART. 
63. 
[Venue 
of 
apprenticeship 
program.] 
APPRENTICESHIP SCHEMES. - [Any firm, employer,] CERTIFIED FIRM 
OWNERS, group or association, industry organization or civic group 
wishing to organize an apprenticeship program OR WOULD BE AN 
APPRENTICE may choose from any of the following apprenticeship 
scheme 
WHICH 
MAY 
USE 
THE 
‘DUAL 
TRAINING 
SYSTEM 
APPROACH’: [as the training venue for apprentices.] 
(a) Apprenticeship [conducted entirely by and within the sponsoring firm, 
establishment or entity;] INVOLVING A COMPANY AND AN IDENTIFIED 
TRAl N I NG INSTITUTION; 
(b) Apprenticeship 
[entirely within the Department of Labor and 
Employment training center or other public training institution; or] 
INVOLVING A 
GROUP 
OF 
COMPANIES 
AND 
A 
TRAINING 
INSTITUTION; 
(c) [Initial training in trade fundamentals in a training center or other 
institution with subsequent actual work participation with the sponsoring 
firm or entity during the final stage of training.] 
APPRENTICESHIP 
INVOLVING AN INDUSTRY TRAINING CENTER AND A COMPANY OR 
A GROUP OF COMPANIES; OR 
(d) OTHER SCHEMES TO BE ESTABLISHED BY THE JESDA IN 
CONSULTATION WITH FIRM OWNERS, LABOR AND TRAINING 
INSTITUTIONS AND SUBJECT TO THE APPROVAL OF THE TESDA 
BOARD . ” 
SEC. 
9. 
Article 64 of the Labor Code of the Philippines is hereby 
amended to read as follows: 
“ART. 64. APPRENTICESHIP ADM I N ISTRATION/Sponsoring of 
apprenticeship program. - OVERALL POLICY FOR APPRENTICESHIP 
SHALL 
BE 
THE 
FUNCTION 
OF 
THE 
TESDA 
BOARD. 


1 
RESPONSIBILITY 
FOR 
APPRENTICESHIP 
ADMINISTRATION, 
2 
MONITORING AND VALUATION OF ON AND OFF-THE-JOB TRAINING 
3 
SHALL 
BE THE 
CONCERN 
OF THE 
TESDA 
SECRETARIAT 
4 
5 
“ I  D E NTI F I CAT1 0 N AN D P R IO R IT IZAT I 0 N 0 F AP P RE NT I C EAB LE 
6 
OCCUPATIONS AND THE DEVELOPMENT OF STANDARDS AND 
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CURRICULA SHALL BE THE RESPONSIBILITY OF TRIPARTITE 
8 
INDUSTRY TRAINING BOARDS, AND INDUSTRY ASSOCIATIONS IN 
9 
CONSULTATION WITH LABOR GROUPS. 
BIPARTITE PLANT 
10 
APPRENTICESHIP 
COMMITTEES SHALL BE ESTABLISHED IN 
11 
PARTICIPATING 
FIRMS 
TO 
ENSURE 
THAT 
PROGRAM 
12 
IMPLEMENTATION IS IN ACCORDANCE WITH POLICIES. 
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apprentices may be undertaken: 
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(a> 
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(b) 
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(c> 
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SEC. 
10. Article 65 of the Labor Code of the Philippines is hereby 
25 
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“ART. 65. Investigation of violation of apprenticeship agreement. - 
27 
[Upon complaint of any interested person or upon its own initiative,] THE 
28 
BIPARTITE 
PLANT 
APPRENTICESHIP 
COMMITTEE, 
UPON 
PARTICULARLY THE OFFICE OF APPRENTICESHIP (OA). 
“Any of the apprenticeship schemes recognized herein may be 
undertaken or sponsored by a single [employer or] firm OWNER or by a 
group or association thereof, or by a civic organization. Actual training of 
In the premises of the sponsoring [employer] FIRM OWNER in the 
case of individual apprenticeship programs; 
In the premises of one or several designated firms in the case of 
programs sponsored by a group or association of [employers] FIRM 
OWNERS or by a civic organization; or 
In a [Department of Labor] TESDA training center or other [public][ 
t ra in in g institutions . ” 
amended to read as follows: 
6 


1 
COMPLAINT OF ANY INTERESTED PARTY OR MOTU PROPRIO, 
2 
SHALL 
HAVE 
INITIAL 
RESPONSIBILITY 
FOR 
SETTLING 
3 
DIFFERENCES ARISING OUT OF APPRENTICESHIP AGREEMENTS. 
4 
IN CASE IT IS NOT ABLE TO SETTLE SUCH DIFFERENCES, [the 
5 
appropriate 
agency of the Department of 
Labor] THE TESDA 
6 
SECRETARIAT or its authorized representative shall investigate [any 
7 
violation of an apprenticeship agreement] AND RENDER A DECISION 
8 
pursuant to [such] PERTINENT rules and regulations, [as may be 
9 
prescribed by the Secretary of Labor.]” 
10 
SEC. 
11. Article 66 of the Labor Code of the Philippines is hereby 
I 1  
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“ART. 66. Appeal to the TESDA Board [Secretary of Labor and 
13 
Employment]. - The decision of the [authorized agency of the Department 
14 
of Labor and Employment] TESDA SECRETARIAT may be appealed by 
15 
any aggrieved person to the TESDA BOARD [Secretary of Labor and 
16 
Employment] within five (5) days from receipt of the decision. 
The 
17 
decision of the TESDA BOARD [Secretary of Labor and Employment] 
18 
shall be final and executory.” 
19 
SEC. 
12. Article 68 of the Labor Code of the Philippines is hereby 
20 
21 
“ART. 68. Aptitude testing of applicants. - Consonant with the 
22 
minimum qualifications of apprentice-applicants required under this 
23 
Chapter, [employers of entities with duly recognized apprenticeship 
24 
programs] THE BIPARTITE PLANT APPRENTICESHIP COMMITTEES 
25 
shall have primary responsibility for providing appropriate aptitude tests in 
26 
the selection of apprentices. [If they do not have adequate facilities for 
27 
the purpose, the Department of Labor and Employment may perform the 
28 
service free of charge.]” 
amended to read as follows: 
amended to read as follows: 
7 


I 
SEC. 
13. Article 70 of the Labor Code of the Philippines is hereby 
2 
3 
“ART. 
70. 
Voluntary Organization of apprenticeship program: 
4 
Exemptions. - 
5 
(a) 
6 
7 
(b) When national security or particular requirements of economic 
8 
development so demand, the President of the Philippines may 
9 
require compulsory training of apprentices in certain trades, 
10 
occupations, jobs or employment levels where shortage of training 
11 
manpower is deemed critical as determined by the [Secretary of 
12 
Labor and Employment] TESDA. 
Appropriate rules in this 
13 
connection shall be promulgated by the [Secretary of Labor and 
14 
Employment] TESDA UPON THE RECOMMENDATION OF ITS 
15 
16 
(c) 
Whereas services of foreign technicians are utilized by private 
17 
companies in apprenticeable trades, said companies are required to 
18 
set up appropriate apprenticeship programs.” 
19 
SEC. 
14. Article 71 of the Labor Code of the Philippines is hereby 
20 
21 
“ART. 71. APPRENTICESHIP TRAINING FUND: Deductibility of 
22 
training 
costs 
and 
EXEMPTIONS. - THERE 
SHALL 
BE AN 
23 
APPRENTICESHIP TRAINING FUND WHICH SHALL BE DERIVED 
24 
FROM THE APPRENTICESHIP FEE PAID BY EVERY FIRM OWNER IN 
25 
INDUSTRIES EMPLOYING WORKERS IN APPRETICEABLE TRADES. 
26 
WORKERS 
WHO 
ARE 
GRADUATES 
OF 
APPRENTICESHIP 
amended to read as follows: 
The organization of apprenticeship programs shall be primarily a 
voluntary undertaking of FIRM OWNERS. 
SECRETARIAT as the need arises. 
amended to read as follows: 
27 
PROGRAMS SHALL LIKEWISE PAY A ONE-TIME APPRENTICESHIP 
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FEE 
UPON 
EMPLOYMENT 
AS 
CONTRIBUTION 
TO 
THE 
AP P RE NTI C ES H I P TRAl N I NG FUND . 
THE APPRENTICESHIP FEE RATES AND GUIDELINES TO BE 
APPLIED SHALL BE APPROVED BY THE TESDA BOARD AFTER A 
PUBLIC HEARING WITH THE MANAGEMENT AND LABOR SECTORS. 
THE FEE SHALL BE COLLECTED AND PAID THROUGH THE SOCIAL 
SECURITY SYSTEM AND TRANSFERRED TO THE APPRENTICESHIP 
TRAINING FUND TO BE ADMINISTERED BY THE TESDA. 
THE 
APPRENTICESHIP FEE RATE MAY BE INCREASED BY THE TESDA 
SUBJECT TO THE REQUIREMENTS OF PUBLIC HEARING. 
THE APPRENTICESHIP TRAINING FUND SHALL BE DEEMED 
DISTINCT AND SEPARATE FROM THE TESDA DEVELOPMENT FUND 
UNDER SECTION 31 OF REPUBLIC ACT 7796 OR THE TESDA LAW, 
AND AS SUCH, SHALL NOT BE SUBJECT TO ITS IMPLEMENTING 
RULES AND REGULATIONS. SUCH APPRENTICESHIP FUND MAY BE 
USED TO 
DEFRAY EXPENSES OF THE TRAINEES 
IN THE 
INSTITUTION OR TRAINING CENTER AS WELL AS 
OTHER 
EXPENSES TO BE APPROVED BY THE TESDA BOARD TO IMPROVE 
IMPLEMENTATION OF THE PROGRAM. 
An additional deduction from taxable income equivalent to one-half 
(1/2) of the value of labor training expenses incurred for developing the 
productivity and efficiency of apprentices shall be granted to the person or 
enterprise organizing an apprenticeship program AND SHALL BE 
EXEMPT FROM THE PAYMENT OF THE APPRENTICESHIP FEE: 
Provided, That such program is duly recognized by the [Department of 
Labor] TESDA: Provided, further, That such deduction shall not exceed 
ten percent (10%) of direct labor wage; and, Provided, finally, That the 
person or enterprise who wishes to avail himself or itself of this incentive 
9 


1 
should pay his apprentices the minimum wage. MICRO-COTTAGE AND 
2 
SMALL 
ENTERPRISES 
OR 
THOSE 
WITH 
LESS 
THAN 
100 
3 
EMPLOYERS SHALL ALSO BE EXEMPT FROM THE PAYMENT OF 
4 
THE APPRENTICEABLE FEE.” 
5 
SEC. 15. Article 72 of the Labor Code of the Philippines is hereby 
6 
7 
“ART. 
72. 
[Apprentices without compensation] EXEMPTION 
8 
FROM PROBATIONARY EMPLOYMENT; SYSTEM OF EQUIVALENCY. 
9 
- [The Secretary of Labor may authorize the hiring of apprentices without 
10 
compensation whose training on the job is required by the school or 
11 
training program curriculum or as a requisite for graduation or board 
12 
examination] CERTIFIED APPRENTICESHIP GRADUATES SHALL BE 
13 
EXEMPTED FROM PROBATIONARY EMPLOYMENT. THEY SHALL BE 
14 
EMPLOYED AS REGULAR WORKERS IF CHOSEN TO BE RETAINED 
15 
BY THE ENTERPRISE. 
16 
“APPRENTICES H I P 
GRADUATES 
S HALL 
L I K E WI S E 
BE 
17 
AWARDED EQUIVALENT UNTl CREDITS IN THE FORMAL SYSTEM 
18 
OF EDUCATION THAT CAN BE USED IN PURSUINMG TERTIARY 
19 
DEGREE COURSES, SUBJECT TO THE INTEGRATED POLICIES AND 
amended to read as follows: 
20 
GUIDELINES 
ON 
EQUIVALENCY 
AND 
ADULT 
EDUCATION 
21 
ACCELERATION PROGRAM OF THE TESDA, COMMISSION ON 
22 
HIGHER 
EDUCATION 
(CHED) 
AND 
DEPARTMENT 
OF 
23 
EDUCATION,(DepEd).” 
24 
SEC. 16. Article 75 of the Labor Code of the Philippines is hereby 
25 
26 
“ART. 
75. 
Learnership agreement. - Any FIRM OWNER 
27 
[employer] desiring to employ learners shall enter into a learnership 
28 
agreement with them, which agreement shall include: 
amended to read as follows: 
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(a) The names and addresses of the learners; 
(b) The duration of the learnership period, which shall not exceed three 
months; 
(c) The TRAINING ALLOWANCES [wages or salary rates] of the learners 
which shall begin at not less than [75 percent of] the applicable minimum 
wage FOR A SPECIFIC OCCUPATION AND SUBJECT TO TRIPARTITE 
CONSULTATION; and 
(d) A commitment to employ the learners] if they so desire, as regular 
employees upon completion of the learnership. All learners who have 
been allowed or suffered to work during the first two (2) months shall be 
deemed regular employees if training is terminated by the employer 
before the end of the stipulated period through no fault of the learner. 
“The learnership agreement shall be subject to inspection by the 
[Secretary of Labor and Employment] TESDA or [his] its duly authorized 
rep res e n t a t i ve s . I’ 
SEC. 17. The TESDA shall provide various enabling mechanisms as well 
as financial and technical assistance to small and medium enterprises to 
primarily encourage them to participate in the apprenticeship program. 
SEC. 
18. All laws, rules and regulations, or part or parts thereof, 
inconsistent with any provisions of this Act are hereby repealed, modified or 
amended accordingly. 
SEC. 19. This Act shall take effect fifteen (15) days after its complete 
publication in the Official Gazette or in at least two (2) national newspapers of 
general circulation, whichever comes earlier. 
Approved, 
11