THIRTEENTH CONGRESS OF TKE REPUBLIC ) 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
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1
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Introduced by Senator Panfilo M, Lacson .:.;i. 
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EXPLANATORY NOTE 
The 1987 Constitution provides in Article I1 Section 18 that: 
“Sec. 18. The State affirms labor as a primary social economic 
force, It shall protect the rights of workers and promote their welfare.” 
It likewise provides in Article XI11 Section 3 that: 
“Sec. 3. The State shall afford hll 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 workers to self-organization, 
collective bargaining and negotiations, and peacehl 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 participate in policy and decision-making 
processes affecting their rights and benefits as may be provided by 
law.” 
For a number of years, the Philippine labor force is made to suffer the cost of 
underdevelopment and backwardness. Existing economic policies, the lack of genuine 
agrarian reform and nationalist industrialization programs and the onslaught of 
globalization has given rise to high rates of unemployment and underemployment. 
Underemployment, unemployment and substandard labor conditions have pushed 
many of our countrymen to leave our country and seek greener pastures abroad. Those 
who opted to remain are left with no choice but to work under employment conditions 
that do not provide them with the full rights to which they are entitled. 
Unscrupulous employers particularly in export-oriented industries and wholesale 
and retail businesses have resorted to devious schemes to subvert their employees’ right 
to security of tenure and other labor rights. The most prevalent of these practices is the 
contractualization of job opportunities and the creation of “workers’ cooperatives’’ to 
prevent the application of employer-employee relationship between the company and 
their workers thereby depriving the workers the protection to which they are entitled 
under the Labor Code. 
Some of the big department stores it is reported, almost ninety percent (90%) of 
its entire workforce, most of them salesladies and store personnel, are employed on a 
contractual basis for a period of five to six months after which, their services will be 
terminated and will be rehired for another five to six months contract a few days 
thereafter. This practice is being resorted to evade the intent and spirit of the provisions 
of our Labor Code thus preventing these employees from acquiring security of tenure and 
enjoy the benefits appertaining to them. 


In view of this blatant disregard of our workers rights, it becomes a matter of 
utmost urgency and necessity for Congress to enact a law that will adequately and 
effectively put a stop to this pernicious practice lest we be accused of tolerating the 
exploitation of the working masses. 
The proposed measure seeks to discourage this practice by increasing the salary of 
contractual workers by fifty percent of their monthly and/or daily compensation with a 
proviso that if they are rehired and allowed to work for a period of one year, they will be 
considered as regular employees of the company where they are working. 
It is for this reason that the early approval of this bill is earnestly sought. 
PA 
SON 
U s ’  
enator 


c 
THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
S.B. No. 
Introduced bv Senator Panfilo M. Lacson 
AN ACT 
INCREASING THE MONTHLY SALARY OF CONTRACTUAL WORKERS BY 
FIFTY 
PERCENT 
(50%) 
OF 
THEIR 
MONTHLY 
AND/OR 
DAILY 
COMPENSATION AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. The Constitutional mandate that the State affirms labor as a 
primary social economic force and that it shall protect their rights and promote their 
welfare, is hereby affirmed and recognized. 
The State shall endeavor every means possible to protect all workers, whether 
regular, contractual, casual, seasonal, project employees and fixed term employees, from 
the exercise of their rights under existing law including but not limited to the right to self- 
organization, collective bargaining and negotiation, to engage in peacefbl and concerted 
activities including the right to strike within the bounds recognized by law, to security of 
tenure and a just, reasonable and humane wages. 
Toward this end, the State expresses its antipathy to the pernicious practice of 
employers of hiring contractual employees working for a fixed period of time and 
rehiring them afterwards to prevent them from acquiring the status of regular employees 
and enjoy the benefits accruing to the same. Said practice prevents these employees not 
only from acquiring security of tenure but also the enjoyment of other rights appertaining 
to regular employees. 
SEC. 2. 
The provision of existing laws to the contrary notwithstanding, 
upon the effectivity of this Act, all employers shall be required to pay all their contractual 
employees a monthly compensation equivalent to the total amount of their monthly and 
or daily compensation plus fifty percent (50%) thereof for the duration of their 


contractual undertaking; Provided, That, contractual employees who have been rehired 
and who have served for a cumulative period of at least one (1) year, whether the said 
period be continuous or broken shall be considered regular employees; Provided further, 
That, the status of regular employee shall immediately be conferred to the said 
contractual employee on the day corresponding to the last day of the one year period that 
he/she is supposed to render. 
SEC. 3. 
All laws, executive orders, decrees, rules and regulations, or any 
part thereof inconsistent with the provisions of this Act are deemed repealed or modified 
accordingly. 
SEC. 4. 
This Act shall take effect fifteen days after the completion of its 
publication in the Official Gazette or in a newspaper of general circulation. 
Approved