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

Fifteenth Congress
Second Regular Session

nouse Bitl'no,__ GOSS

Introduced by HON. RENE LOPEZ RELAMPAGOS
1 District, Bohol

EXPLANATORY NOTE

This bill seeks to enact a law providing full satisfaction of monetary awards to
complainants/awardees in labor cases in the Philippines.

‘The 1987 Constitution of the Philippines builds on previous provisions and elaborates on

its policy on labor in Article II, Section 18 and Article Xill, Section 3.

Article Il, Section 18, in affirming labor as a “primary” social economic force, proclaims
the primacy of the human factor over the non-human factors of production. Commissioner
Bacani, one of the members of the 1986 Constitutional Commission, puts it thus:

“It is really an assertion of the supremacy of human dignity over things.

In the process of production, labor is always a primary and efficient cost
{sic] while capital remains a mere instrumental [cost]. We will notice that all the
means by which a person appropriates natural resources and transforms them in
accordance with his need are the result of the historical heritage of human labor.
Besides, it is clear that every person sharing in the production process is the real
efficient subject, while the collection of instruments, no matter how perfect they
are, is only a mere instrument subordinate to human labor.

In our present system, capital is sometimes given more weight than
labor. Let me give an illustration: Sometimes when there is an increase in price
of raw materials, we automatically increase the price of goods and there is no
question about that because the price of raw materials has been increased. Yet,
when the workers ask for corresponding increase in their wages, they are told:
“Wait, the price of raw materials is already very high and you ask in the
price of labor?”

So in actual consideration, it seems that labor takes the last place in the
consideration and computation of the things that must be increased . ...

| believe Commissioner Aquino caught the thrust very well when she said
that this is really an assertion of the primacy of human dignity over things.” (J.
Bernas, The 1987 Constitution of Republic of the Philippines, 93-94 [2009 ed.])


Article Xill, Section 3 (Social Justice and Human Rights) of the 1987 Constitution, on the
other hand, provides that “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.”

Section 3 of Article Xill elaborates on the provision in Article Il by specifying who are
protected by the Constitution, what rights are guaranteed, and what positive measures the
state should take in order to enhance the welfare of labor. Under the Constitution, labor and
management are not completely free to decide between themselves how their relationship
should go even in the matter so personal as wages. (Employers Confederation v. National Wage
and Productivity Commission, G.R. No. 9619, September 24, 1991)

The Labor Code of the Philippines, otherwise known as Republic Act No. 442, as
amended, including its Implementing Rules and Regulations as well as the New Rules of
Procedure of the National Labor Relations Commission (NLRC) have provided some safeguards
to ensure full satisfaction to complainants/awardees in the execution of labor case awards,
including the setting up of time-frames within which to execute said awards.

It has been observed that many complainants in whose favor decisions in labor cases
were issued had spent time, efforts and money in attending to their labor cases, specially at the
execution stage thereof confident that there will be an effective, efficient and expeditious
satisfaction of monetary awards in their favor only to be dejected and frustrated in the end as
they cannot be fully or partially paid of their money claims.

Moreover, many respondents in labor cases, such as corporations, partnerships and
single proprietorships, through their legal counsel, resort to clever legal maneuvers and
sometimes illegal means to evade payment or satisfaction of the monetary awards rendered in
favor of their employees-complainants for various reasons which the latter could neither
understand nor comprehend.

In fact, even before the filing of labor cases as well as during the pendency thereof and
even after the rendition of favorable but are not yet final and executory decisions to the
employees-complainants, the respondents concerned, sensing that they will lose these cases
and eventually have to pay the money claims of their employees-complainants, will resort to
various legal and illegal means, strategies and tactics to defeat, frustrate or avoid payment
thereof, such as, but not limited to transferring the ownership particularly of a single
proprietorship to a third party to muddle the issue of ownership of leviable assets as well as
executing fictitious or simulated sale of real property, such as buildings, lands and other assets
‘owned by respondent corporations, partnerships, and single proprietorships whereby the poor
employees-complainants have no means or will encounter great difficulty in contesting the
validity of such transfer of ownership or purported sale in a court of law as they had already
‘exhausted their resources in attending to and prosecuting their labor cases where during such
time most of them were out of jobs or not gainfully employed.

Many respondents concerned will also resort to mortgaging their real and personal
property and even unbelievably securing a second or third mortgage thereon where the hapless
complainants/awardees cannot lay their claims on said mortgage property as they are not
preferred creditors under the law and jurisprudence.

Furthermore, many respondents concerned will likewise resort to some pre-emptive
measures, such as, but not limited to, withdrawal of bank deposits or hiding of leviable assets,
of respondent corporations, partnerships or single proprietorships to avoid a lien, levy or
attachment thereon arising out of labor case awards.


The beautifully worded provisions of law ensuring full satisfaction of labor case
decisions, including their monetary awards, have often times been rendered meaningless due
to dilatory strategies and tactics resorted to by respondents concerned, thus, compelling the
hapless employees-complainants to agree to onerous and disadvantageous settlement with
said respondents, out of sheer exhaustion and helplessness at the execution stage thereof.

In many instances, an employee-complainant would eventually succumb to agreeing at
the execution stage of his/her labor case to an onerous settlement in whatever amount he or
she could avail of arising out of a situation where almost nothing is left of respondent's real or
personal property brought about by skillful legal maneuvers of its legal counsel, which property
could have been the proper subject of execution sale to satisfy a monetary award.

The stark and unfortunate reality in the utter failure to secure effective, efficient, timely
and expeditious satisfaction of monetary awards to employees-complainants who obtained
favorable final and executory decisions in labor cases has resulted in the impoverishment of the
said employees-complainants who consequently lose their hope in the government's capability
to give justice to their valid causes thus creating social problems as they would resort or be
tempted to resort to do the unthinkable as they have nothing to tie themselves up for their
subsistence as well as to pursue the education of their children, not to mention that they
become vulnerable to the enticement of the radical elements in society who would promise
them a speedy solution to their frustration against the justice system prevailing in the country.

This representation submits and is of the firm belief that this bill, when it becomes a
law, shall afford full protection to labor and guarantee the rights of all workers to full
satisfaction of monetary awards to them in all labor cases adjudged in their favor.

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

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

Fifteenth Congress
Second Regular Session

Introduced by HON. RENE LOPEZ RELAMPAGOS
1* District, Bohol

AN ACT GUARANTEEING FULL SATISFACTION OF MONETARY AWARDS TO EMPLOYEES IN THE
PRIVATE SECTOR IN LABOR CASES ADJUDGED IN THEIR FAVOR AND FOR OTHER PURPOSES

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

SECTION 1. Title. - This Act shall be known as “The Law Providing Full Satisfaction of
Monetary Awards to Complainants/Awardees in Labor Cases in the Philippines.”

SEC.2. Declaration of Policy. — The State shall afford full protection to employees,
local and overseas, organized and unorganized, by guaranteeing full satisfaction of the
monetary awards granted to those who are recipients of favorable decisions in labor cases in
order to avoid failure at the execution stage of the said awards where the
complainants/awardees will be holding empty and unsatisfied judgments in their hands.

SEC. 3. Cash Bond Held in Escrow Deposit by Respondents’ Depository Banks. -

All respondent corporations, partnerships and single proprietorships whose paid-up
capital or capitalization, as the case may be, is at least ten million pesos (P10,000,000.00) in any
fiscal year and/or calendar year must set aside at least ten percent (10%) of said paid-up capital
or capitalization as cash bond and held in escrow by their depository bank(s) to guarantee and
answer for the monetary awards of their employees-complainants who have obtained
Judgments in labor cases against the said respondent corporations, partnerships and single
proprietorships. However, the said cash bond held in escrow shall be immediately released by
arbiter or commission or the court concerned in the event that the judgment in the labor case
is finally reversed and adjudged in favor of the respondents concerned.

Depository banks of respondent corporations, partnerships and single proprietorship
are mandated under this Act that before they can allow said respondents to withdraw from
their bank deposits at least one-half (1/2) thereof at any given time, the depository banks must
get a certification from the Department of Labor and Employment (DOLE) or its regional office
concerned as well as from National Labor Relations Commission (NLRC) and its regional
arbitration branch where the respondent or any of its branches is located relative to the
pendency of a labor case affecting any, some or all of its employees involving money claims in
order that whatever bank deposits are left can be made to answer or satisfy for any deficiency
in the payment of the monetary award taken from the said cash bond held in escrow by the
depository bank.

In the case of staggered withdrawals by respondent concerned, the depository bank,
upon noticing and determining that almost one-half (1/2) of the total deposits of the
respondent concerned has already been withdrawn, must require within twenty-four (24) hours
the latter to obtain the said certifications mandated in second paragraph of this section before


further withdrawals can be allowed by the depository bank and made by the respondent
concerned.

SEC. 4, Administrative Fines. - Any person, whether natural or juridical, who shall
violate any provisions of this Act shall, upon conviction, be punished by a fine of at least one
hundred thousand pesos (P100,000.00) to be imposed through the National Labor Relations
Commission, provided, that in the case of a juridical person, the penalty shall be imposed upon
its officials for such violation, and in case the guilty party is an alien, he/she shall immediately
be deported after payment of the fine imposed.

SEC. 5. Repealing Clause. — All laws, presidential decrees, executive orders and rules
and regulations, or parts thereof, inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SEC. 6. Separability Clause. — If for any reason any section or provision of this Act is
held unconstitutional or invalid, the other sections or provisions hereof shall not be affected
thereby.

SEC. 7. Effectivity Clause. — This Act shall take effect fifteen (15) days following the
completion of its publication in the Official Gazette or in two (2) national newspapers of general

circulation.

Approved,