Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH (207) CONGRESS
First Regular Session

HOUSE BILL NO. 37

Introduced by KAMANGGAGAWA Pantylist
Representative ELIJAH R. SAN FERNANDO

EXPLANATORY NOTE

This bill seeks to institutionalize the right of private sector employees in the
Philippines to receive resignation pay under justifiable circumstances. While Book VI,
Articles 283 and 287 of the Labor Code of the Philippines provide mechanisms for
separation and retirement pay, respectively, it does not currently mandate any form of
compensation for employees who voluntarily resign, even in cases involving career
shifts, serious health issues, or relocation.

Throughout the years, worker groups have continuously pushed for higher wages,
better working conditions, and, more importantly, job security. It is imperative to provide
employees with resignation pay to help them support themselves and their families
during the period between jobs, especially if the resignation is due to forced
circumstances. It also allows employees to leave a job with dignity, reducing the
likelihood of conflict or legal disputes.

The proposed measure aligns with Article XIII, Section 3 of the 1987 Constitution,
to promote social justice in all phases of national development and enhance the welfare
and dignity of Filipino employees.

Notably, the spirit of our law is already realized in the Italian: Codice civile (Civil
Code), Article 2120, Section 1, stating that in the case of termination of an employment
relationship for any reason, the employee is entitled to severance pay, regardless of their
employment status (full-time, part-time, fixed-term, or open-ended), whether voluntarily
by resignation or due to dismissal by the employer.

To address the gap within our local labor conditions, the Resignation Pay Act of
2025 bill ensures that Filipino employees, who have rendered substantial service to a

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company, whether forced to resign or resigning under legally recognized grounds, are
given compensation fairly. The proposed half-month pay per year of service mirrors the
existing provisions of the Labor Code of the Philippines, and the measure includes clear
exclusions to prevent abuse.

The proposed legislation strengthens labor protection and promotes responsible
employment transitions while enhancing the welfare and dignity of Filipino workers.

In solidarity with the working class, the passage of this bill is earnestly sought.

EL, )AN FERNANDO
Representative
KAMANGGAGAWA ParTYLsT

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH (207) CONGRESS
First Regular Session

HOUSE BILL NO. $7

Introduced by KAMANGGAGAWA Partylist
Representative ELIJAH R. SAN FERNANDO

AN ACT
GRANTING EMPLOYEES IN THE PRIVATE SECTOR RESIGNATION PAY,
AMENDING FOR THE PURPOSE ARTICLE 300 OF PRESIDENTIAL DECREE NO.
442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Short Title. - This act shall be known as the “Resignation Pay Act of 2025.”

SEC. 2. Declaration of Policy. —The State shall afford full protection to labor, organized and
unorganized, and promote full employment and equality of employment opportunities
for all. Consistent with this, the State shall foster social justice through policies that
provide better working conditions and support mechanisms that preserve and enhance
the welfare and dignity of the Filipino working class.

SEC. 3. Objectives. - The Act shall have the following objectives:

(a) Ensure that employees who resign due to legitimate, justifiable reasons receive
remuneration despite their voluntary separation from service;

(b) Complement existing provisions of the Labor Code of the Philippines by
introducing protection for voluntary separations under compassionate
grounds;

(0) Establish clear mechanisms and consequences for situations where resignation
is forced or made under unlawful pressure, thereby deterring constructive
dismissal and promoting fair labor relations; and

(d) Promote social justice in employment by treating resignation as the right to
leave, and also a process that deserves recognition and humane treatment.

SEC. 4, Definition of Terms. - For purposes of this Act, the following terms are defined as
follows:

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@) Resignation shall refer to the voluntary act of an employee who is in a
situation where one believes that personal reasons cannot be sacrificed in favor
of the exigency of the service, and one has no other choice but to dissociate
oneself from employment; and

() Resignation pay shall refer to the payment to be received by qualified
employees if they voluntarily separate from employment under justifiable
circumstances.

SEC. 5. Resignation Pay. - There shall be incorporated after Article 300 of the Labor Code,
as amended, a new article to read as follows:

“ARTICLE 300-A. RESIGNATION PAY. - (A) THIS APPLIES TO ALL.
EMPLOYEES IN THE PRIVATE SECTOR, REGARDLESS OF STATUS,
WHETHER WORKING AS A REGULAR, CONTRACTUAL, OR CASUAL.
EMPLOYEE, INCLUSIVE OF BOTH NON-AGRICULTURAL AND
AGRICULTURAL EMPLOYMENT.

(B) AN EMPLOYEE SHALL BE ENTITLED TO RESIGNATION PAY IF
THE RESIGNATION IS DUE TO ANY OF THE FOLLOWING
JUSTIFIABLE GROUNDS:

1. WHEN THE HONOR AND PERSON OF AN EMPLOYEE IS
SUBJECTED TO SERIOUS INSULT BY THE EMPLOYER OR HIS
REPRESENTATIVE;

2. WHEN AN EMPLOYEE IS ACCORDED INHUMAN AND
UNBEARABLE TREATMENT BY THE EMPLOYER OR HIS
REPRESENTATIVES;

3. WHEN A CRIME OR OFFENSE IS COMMISSIONED BY THE
EMPLOYER OR HIS REPRESENTATIVE AGAINST THE PERSON
OF THE EMPLOYEE OR ANY OF THE IMMEDIATE MEMBERS OF
HIS FAMILY;

4. CAREER SHIFT, TRANSITION, OR TRANSFER OF THE
EMPLOYEE TO ANOTHER COMPANY WITH BETTER
WORKING CONDITIONS AND HIGHER PAY;

5. SERIOUS ILLNESS OF THE EMPLOYEE’S IMMEDIATE FAMILY
MEMBER, WITHIN THE THIRD DEGREE OF CONSANGUINITY
OR AFFINITY, INCLUDING COMMON-LAW SPOUSE, AS
CERTIFIED BY A LICENSED PHYSICIAN;

6. RELOCATION OF RESIDENCE TO A DISTANT AREA DUE TO
MARRIAGE, FAMILIAL OBLIGATIONS, OR OTHER
LEGITIMATE CAUSES; OR

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7. OTHER CAUSES ANALOGOUS TO ANY OF THE FOREGOING,
WHICH MAY COMPEL THE EMPLOYEE TO TERMINATE THE
EMPLOYER-EMPLOYEE RELATIONSHIP.”

SEC. 6. Implementing Rules and Regulations. - Within sixty (60) days from the effectivity of
this Act, the Department of Labor and Employment, in coordination with the Bureau of
Internal Revenue and other affected agencies, shall issue the Implementing Rules and
Regulations for the immediate implementation of this Act.

SEC. 7. Separability Clause. — If any provision of this Act is declared unconstitutional or
invalid, the remaining provisions shall remain in full force and effect.

SEC. 8. Repealing Clause. - All laws, decrees, executive orders, rules, and regulations
inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 9. Effectivity. - This Act shall take effect sixty (60) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,

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