Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Fifteenth Congress

First Regular Session
329

HOUSE BILL NO.

Introduced by: Hon. MARY MITZI “MITCH” L. CASAYON

EXPLANATORY NOTE

This bill seeks to grant an annual productivity incentive bonus to workers in the private
sector in accordance to Article II, Section 9 of the 1987 Philippine Constitution which provides
for the promotion of a “just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provide
adequate social services, promote full employment, a rising standard of living and an improved
quality of life for all.”

‘The proposal is also in consonance with Article II, Section 10 of the Constitution which
commands the State to “promote social justice in all phases of national development.”

It seeks to help the workers improve their lives through policies that will effectively
contribute to greater economic gains and protection of their rights and welfare by tilting the
balance of the scales in favor of labor towards their just share in the fruits of production,
especially during these times when the country is beset with enormous economic difficulties.

This legislative initiative endeavors to champion the rights of workers to a living wage
without detriment to the fundamental right of employers to a reasonable return on investments
and the expansion and growth of their enterprises.

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

Satta

MARY MITZI “MITCH” L. CAJAYON



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Fifteenth Congress

First Regular Session

HOUSE BILL NO.

Introduced by Hon. MARY MITZI “MITCH” L. CAJAYON

AN ACT
GRANTING AN ANNUAL PRODUCTIVITY INCENTIVE TO ALL WORKERS IN THE
PRIVATE SECTOR, ESTABLISHING MECHANISMS FOR ITS IMPLEMENTATION,
AND FOR OTHER PURPOSES

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

SECTION 1. Title. - This Act shall be known as the “Workers Productivity Incentives
Act of 2007.”

SEC. 2. Statement of Policy. - It is hereby declared the policy of the State to
continuously empower Filipino workers in their continuing struggle to uplift and improve their
lives through policies that effectively contribute to greater economic gains, protection of their
rights and advancement of their welfare. The State shall, therefore, promote the rights of workers
in their just and fair share in the profits from the production of goods and services in all
endeavors where their labors and expertise are employed by virtue of a management-
labor/employer-employee relation.

SEC. 3. Extent of Grant. — All workers in the private sector not excluded by this Act
shall be granted an annual productivity incentive bonus which shall be equivalent to not less than
ten percent (10%) of net profits before taxes gained by any company or business establishment
for every fiscal year that engages their labor, skills and expertise for any period or duration and
regardless of the terms of the work contract and tenure of the worker or employee. The amount
of this incentive shall be determined by the external auditors enlisted by the company for such
purpose to be approved by the Department of Labor and Employment (DOLE).

SEC. 4. Non-Diminution of the Grant. ~ The productivity incentive bonus shall not
suffer any diminution nor deduction from any act of the employer, the company’s labor union
nor through the State’s power of taxation, except by lawful garnishment and any other legal court
order or process of the courts. It cannot be transferred or assigned to any other individual or
entity, except the legal heirs and representatives of the worker.

SEC. 5. Unlawful Interference or Restraint. — It shall be unlawful for an employer or
labor union or for any government official or employee and any other business enterprise or
entity to interfere with, restrain or coerce employees in the right to receive this grant and to
inquire as a condition of employment that the employee shall not collect this grant in his favor.

SEC. 6. Exemptions. — The provisions of this Act shall not apply to government
employees, including those in government-owned and controlled corporations; managerial
employees; house helpers; non-resident aliens; project employees; seasonal workers; piece-
rate/piece-work, pakiaw and other non-time workers; workers employed by retail service
establishments employing not more than ten (10) workers; employees or workers in companies
or enterprises only for a period of one (1) year from commencement of business operations.
Applications for exemption strictly in accordance with those exempted employers, enterprises ot


establishments herein stated shall be duly filed with the Office of the Regional Director of the
Department of Labor and Employment (DOLE) whose decision can be appealed to the DOLE
Secretary within ten (10) days from its promulgation.

SEC. 7. Compliance Order. — All Regional Directors of the DOLE shall issue an annual
compliance order for the payment of the grant as provided for in this Act. The order shall, among
other things, direct the employer or manager to pay the amount due to each worker or employee,
fifteen (15) days after the end of every fiscal year and shall also include the computation on
which the order was based.

SEC. 8. Penalties. — Any person, corporation, trust, firm partnership, association or entity
which refuses to pay the herein prescribed grant in accordance with this Act shall be punished by
a fine of at least thrice (3x) the accrued grant for every affected worker and the costs of litigation
including attorney’s fees.

If the violation is committed by a corporation, trust or firm, partnership, association or
any entity, the penalty of imprisonment shall be imposed on the entity’s responsible officers,
general manager, managing director or partner. If the violation is committed by a foreign
individual, he/she shall be summarily deported under applicable laws after complete satisfaction
of his adjudged liabilities.

Tn cases where a fine is decreed by the National Labor Relations Commission (NLRC)
against person/s who violated the provisions of this Act and cannot be immediately satisfied
because of the unavailability or inadequacy of funds, the assets of the owner, president or
manager of the corporation or any other entity, or fractions thereof, either movable and
immovable property, estimated to be capable of fully satisfying the imposed fines shall be the
subject of a summary forfeiture proceedings to be litigated by the same body which imposed the
said penalty,

SEC. 9. Saving Clause. - The provisions of this Act shall not prejudice existing
productivity agreements lawfully entered into by labor and management.

SEC. 10. Separability Clause. — If any provision of this Act shall be declared
unconstitutional, any other provision not affected thereby shall remain in full force and effect.

SEC. 11. Repealing Clause. — All laws, decrees, orders, rules and regulations, or parts
thereof inconsistent with this Act are hereby repealed or amended accordingly.

SEC. 12. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in
at least two (2) newspapers of general circulation.

Approved,