Republic of che Philippines
HOUSE OF REPRESENTATIVES
(Constérusion Hille, Quezon City

FIFTEENTH CONGRESS
First Reguler Session

COMMITTEE REPORT NO. 1234

‘Submitted by the Commifigggoag abor and Employment on __ QS. UN 2011
Re: House-Bal No. 8532" -
Recommending its approval in substitution of t..use Bills No, 303, 691, 892, 1049, 1060,
1453, 2983, and 3402

Sponsors: Representatives Emil L. Ong, Walden F. Bello, Emmeline Y. Aglipay, Joseph
Victor G, Ejercito, Magtanggol T. Gunigundo |, Raymond Demoorito C. Mendoza, and Rufus
B. Rodriguez

Mr. Speaker:

‘The Committee on Labor and Employment to which were referred House Bill No. 303,
introduced by Reps. Waiden F. Belio and Ariene J. Bag-20, entitied:

AN ACT
STRENGTHENING THE SECURITY OF TENURE OF WORKERS IN THE
PRIVATE SECTOR, AMENDING FOR THE PURPOSE ARTICLES 248, 279,
280, 281, AND 288, AND INTRODUCING NEW ARTICLES 19¢, 106-A, 106-
B, 106-C, 106-D, 106-E, 280-A AND 280-B TO PRESIDENTIAL NG. 442, AS
AMENDED, OTHERWISE KNOWN A! THE LABQR CODE OF THE
PHILIPPINES,

‘House Bill No. 891, introduced by Rep. Raymond Democrito C. Mendoza, entitled:

AN ACT a
CRIMINALIZING LABOR-ONLY CONTRACTING, AMENDING FOR THAT
PURPOSE CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 442,
AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES”, AUTHORED 8Y REP. RAYMOND DEMOCRITO c.
MENDOZA,

House Bit No. 892, introduced by Rep. Raymond Democrito C. Mendoza and Augusto
Boboy Syjuco, Ph.D., entitled:

AN ACT
STRENGTHENING SECURITY OF YENURE, AMENDING FOR THAT
PURPOSE CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 442,
AS AMENDED, OTHERWISE KNOWN. AS THE LABOR CODE OF THE
PHILIPPINES,


House Bilt No.1049, introduced by Reps. Rufus B. Rodriguez, Maximo 8, Rodriguez, Jr, !
Bea P. Ebardone, and Mary Mitzi L. Cajayon, entitled:

AN ACT.

PROVIDING FOR THE REGULARIZATION OF EMPLOYEES,
PROHIBITING CONTRACTUAL OR LABOP-ONLY CONTRACTING FOR
REGULAR POSITIONS, PROVIDING PENALTIES FOR VIOLATION
THEREOF,

House Bill No. 1060, introduced by Reps. Rufus 8. Rodriguez and Maximo 6. Rodriguez.
Jr., entitied:

AN ACT
PRESCRIBING WORK ARRANGEMENTS BASED ON SECURITY OF
TENURE, AMENDING FOR THIS PURPOSE, ARTICLES 156, 157, 158,
159, 160, 161, 162, 163, 164, 165 OF PRESIDENTIAL DECREE NUMBER
FOUR HUNDRED FORTY TWO (PD 442), AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES,

House Bill No. 1451, introduced by Rep. Magtanggol T. Gunigundo |, entitled:

AN ACT
STRENGTHENING THE SECURITY O© TENURE OF WORKERS IN THE
PRIVATE SECTOR, AMENDING FOR THE PURPOSE ARTICLES 248, 279,
280, 281 AND 288, AND INTRODUCING NEW ARTICLES 106, 196-A, 106-
B, 106-C, 106-D, 108-2, 280-A AND 280-8 TO PRESISENTIAl. OECREE
NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF
THE PHILIPPINES,

House Bill No. 2983, introduged by Rep. Joseph Victor G. Ejercito, enlitied:

AN ACT
TO STRENGTHEN SECURITY OF TENURE AND FOR THAT PURPOSE,
AMENDING CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO.
442,

and House Bill No. 3402, intrcduced by Rep Emmeline Y. Aglipay, Teodoro Brawner
., Rachel Marguerite B. det Mar, Romeo M. Acop, Imelda G. Calixto-Rubiano,
Sharon S. in, Rosenda Ann Ocampo, Jesus F. Celeste, Winston Castelo, Angelo B.
Palmones, Joseph Victor G. Ejercita, Mark Apron H. Sambar, Aifredo Garbin, Jr, Scott
Davies S. Lanete, M.D., Abigael Faye C. Ferric:, Rodel M. Batocabe, Romeo Jr. M. Jalosjos,
Juseta R. Cortuna, Sherwin N. Tugna, Nancy A. Catamco, Lord Allan Jay Q. Velasco,
Ronald M. Coasalan, and Jose Ping-Ay, entitled: . :

: ANAT
STRENGTHENING THE SECURITY Gr TENURE OF EMPLOYEES,
AMENDING FOR THIS PURPOSE ARTICLES 106, 109, 260, AND 281 OF
PRESIDENTIAL DECREE NUMBER 442, OR THE LABOR CODE OF THE
PHILIPPINES; AND ADDING ARTICLES ARTICLE 108-A ON THE


DEFINITION OF CONTRACTING, ARTICLE 108-8 ON THE PROHIBITION
OF LABOR-ONLY CONTRACTING, ARTICLE 108-C ON THE EXISTENCE
OF AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE
CONTRACTOR AND CONTRACTUAL EMPLOYEE, ARTICLE 108-D ON
THE RIGHTS OF CONTRACTUAL EMPLOYEES, ARTICLE 108-E ON THE
CONTRACT BETWEEN CONTRACTOR OR SUBCONTRACTOR AND
CONTRACTUAL EMPLOYEE, ARTICLE 108-F ON THE EFFECT OF
TERMINATION OF CONTRACTUAL EMPLOYMENT, ARTICLE 108-G ON
LICENSING OF CONTRACTORS AN:* SUBCONTRACTORS, ARTICLE
108-4 ON GOOD FAITH CONTRACTING, ARTICLE 280-A, DEFINING
FIXED TERM EMPLOYMENT; AND ARTICLE 280-5, DEFINING PROJECT
EMPLOYMENT TO PRESIDENTIAL DECREE NUMBER 442, OR THE
LABOR CODE OF THE PHILIPPINES
4853

has considered the same and recommends that the attached House Bill
entitled:

AN ACT
STRENGTHENING THE SECURITY OF TENURE OF WORKERS IN THE
PRIVATE SECTOR, AMENDING FOR THE PURPOSE ARTICLES 248, 279,
280, 281, AND 288, AND INTRODUCING NEW ARTICLES 106, 406-A, 106-
8, 106-C, 106-0, 106-€, 280-A AND 280-8 TO PRESIDENTIAL NO. 442, AS
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES

be approved in substitution of House Bills No. 303, 891, 892, 1049, 1060, 1451, 2983,
and 2402 with Reps. Walden F. Bello, Arlene. Sag-a0, Raymond Democtito C. Mendoza,
‘Augusto Boboy Syjuco, Ph.D, Rufus B, Rodriguez, Maximo 8, Rodriguez, Jr., Magtanggol
‘T. Gunigundo |, Joseph Victor G. Ejercita, Emmeline Y. Agtipay, Teodoro Brawner Baguilat,
dr, Ben P. Ebardone, Mary Mitzi L. Cajayon, Rachel Marguerite B. del Mar, Romeo M.
‘Acop, Imelda G. Calixto-Rubiano, Sharon S, Garin, Rosenda Ann Ocampo, Jesus F.
Celeste, Winston Castelo, Angelo 8. Paimones, Mark Aeron H. Sambar, Alfredo Garbin, Jr.,
Scott Davies S. Lanete, M.D., Abigael Faye C. Ferriol, Rodel M. Batocabe, Romeo Jr, M.
Jatosjos, Julieta R. Cortuna, Sherwin N. Tugna, Nancy A. Catamco, Lord Alan Jay Q.
Velasco, Ronald M. Cosalan, and Jose Ping-Ay as authors thereof.

*
Respectfully submitted;

EMIL f.
Chair
Committee on Labor and Employment

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES,
QUEZON CITY


2

awe we

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 4853

Introduced by Reps. Walden F. Bello, Arlene J. Bag-ao, Raymond Democrito C.
Mendoza, Augusto Bboy Syjuco, Ph.D. Rufus B. Rodriguez, Maximo B. Rodriguez,
Jr, Magtanggol T. Gunigundo |, Joseph Viclor G. Ejercito, Emmeline Y. Aglipay,
Teodoro Brawner Baguilat, Jr, Ben P Ebardone, Mary Mitzi L. Cajayon, Rachel
Marguerite B. del Mar, Romeo M, Acop, Imelda G. Calixto-Rubiano, Sharon S. Garin,
Rosenda Ann Ocampo, Jesus F. Celeste, Winston Castelo, Angelo B. Palmones,
Mark Aeron H. Sambar, Alfredo Garbin, Jr, Scott Davies S. Lanete, M.D., Abigael
Faye C. Feriol, Rodel M. Batocabe, Romeo Jr. M. Jalosjos, Julieta R. Cortuna,
Sherwin N. Tugna,, Nancy A. Catamco, Lord Allan: Jay Q. Velasco, Ronald M.
Coasalan, and Jose Ping-Ay

AN ACT
STRENGTHENING THE SECURITY OF TENURE OF WORKERS IN
THE PRIVATE SECTOR, AMENDING FOR THE PURPOSE ARTICLES:
248, 279, 280, 281 AND 288, AND ..JTRODUCING NEW ARTICLES
106, 106-A, 106-8, 106-C, 106-D, 1€6-E, 280-A AND 280-8 TO
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES

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

SECTION 1. Article 106 of the Labor Code is hereby repealed and
substituted as follows:

“TART. 108. Contractor or Subcontractor. - Whenever an employer
enters into a contract with another person for the performance of the
former's work, the employees of the contractor and of the fatter’s
subcontractor, if any, shall be pa-t in accordance with. the
provisions of this Code.



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*{n_ the event that the contractor or suibcontractor fails to pay the wages
of his employees in accordance with this Code, the employer shali be
jointly afd severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in
the same manner and extent that he is liable to employees directly

employed by him, - = 7 ~
. 2

“The Secretary of Labor and Employment may, by appropriate
regulations, restrict or prohibit the contracting out of labor to protect the
rights of workers established under this Code. In so prohibiting oF
restricting, he may make appropriate distinctions between tabor-only
contracting and job contracting as well as differentiations within these
types of contracting and determine who among the parties involved ‘shall
be considered the employer for purposes of this Code, to prevent any
violation of circumvention of any provision of this Code.

“There is ‘tabor-only’ contracting where the persons supplying workers ta
an employer does not have substantial capital or investment in the forn
of tools, equipment, machineries, work premises, among others, and the
workers recruited and placed by such persons Are performing activities
which are directly rejated to the principal pusiness of such employer. In
such cases, the person or intermediary shalt be considered merely as
an agent of the employer who shail be responsible to the workers in the
same manner and extent as if the latter were directly employed by hyd

“aRT. 106. CONCEPT AND NATURE. OF SUBCONTRACTING
ARRANGEMENTS. — iN LEGITIMATE SUBCONTRACTING, THERE
EXISTS A TRILATERAL RELATIONSHIP UNDER WHICH THERE ISA
CONTRACT FOR A SPECIFIC JOB, WORK OR SERVICE BETWEEN
THE PRINCIPAL AND THE SUBCGITRACTOR, AND A CONTRACT
OF EMPLOYMENT BETWEEN THE SUBCONTRACTOR AND its
WORKERS. HENCE, THERE ARE THREE PARTIES INVOLVED IN
THESE ARRANGEMENTS: THE PRINCIPAL WHICH DECIDES TO



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FARM OUT A JOB OR SERVICE TO A SUBCONTRACTOR, THE
SUBCONTRACTOR WHICH HAS THE CAPACITY TO
INDEPENDENTLY UNDERTAKE AND ACTUALLY UNDERTAKES THE
PERFORMANCE OF THE JOB, WORK OR SERVICE, AND THE
CONTRACTUAL WORKERS ENGAGED BY THE SUBCONTRACTOR
TO ACCOMPLISH THE JOB WORK OR SERVICE.

“FOR PURPOSES OF THIS CODE, ‘SUBCONTRACTING’ REFERS
TO AN ARRANGEMENT WHEREBY:

{A} A PRINCIPAL AGREES TO PUT OUT OR FARM OUT WITH A
SUBCONTRACTOR THE PERFORMANCE OR COMPLETION OF A
SPECIFIC JOB, WORK OR SERVICE WITHIN A DEFINITE OR
PREDETERMINED PERIOD; REGARDLESS OF WHETHER sucH
JOB, WORK OR SERVICE IS TO BE PERFORMED OR COMPLETED
WITHIN OR OUTSIDE THE PREMISES.OF THE PRINCIPAL; OR *

{B) A PERSON, PARTNERSHIP, ASSOCIATION OR CORPORATION
WHICH, NOT BEING A PRINCIPAL, CONTRACTS WITH A
SUBCONTRACTOR FOR THE PERFORMANCE OF ANY WORK,
TASK, JOB OR PROJECT.”

SEC. 2, Anew Articie 106-A is hereby inserted in the Labor Code to read as

follows:

a
“ART. 106 — A. RIGHTS AND LIABILITIES OF PARTIES. — (A.) THE
SUBCONTRACTED EMPLOYEE, IN ALL CASES, SUBCONTRACTED

EMPLOYEES SHALL BE ENTITLED TO ALL THE RIGHTS AND
PRIVILEGES DUE REGULAR EMPLOYEES INCLUDING THE
FOLLOWING:

4. SAFE AND HEALTHFUL WORKING CONDITIONS;
2. LABOR STANDARDS SUCH AS SERVICE
INCENTIVE LEAVES, REST DAYS, OVERTIME PAY,



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HOLIDAY PAY, THIRTEENTH MONTH PAY AND
SEPARATION PAY,

3. RETIREMENT BENEFITS;

4. SOCIAL SECURITY ANC WELFARE BENEFITS;

5. SELF-ORGANIZATION, COLLECTIVE BARGAINING AND
PEACEFUL CONCERTED ACTIVITIES; AND

&. SECURITY OF TENURE.

“IN ADDITION, SUBCONTRACTED EMPLOYEES SHALL HAVE THE
RIGHT TO A WRITTEN CONTRACT WHICH SHALL INCLUDE THE
FOLLOWING TERMS AND CONDIT:ONS:

4. THE SPECIFIC DESCRIPTION OF THE JOB, WORK OR
SERVICE TO BE PERFORMED BY THE CONTRACTUAL
EMPLOYEE;

2, THE PLACE OF WORK AND TERMS AND CONDITIONS OF
EMPLOYMENT, INCLUDING A STATEMENT OF THE WAGE
RATE APPLICABLE TO THE INDIVIDUAL CONTRACTUAL
EMPLOYEE;

3. THE TERM OR DURATION OF EMPLOYMENT WHICH
SHALL BE COEXTENSIVE WITH THE CONTRACT OF THE
PRINCIPAL AND SUBCONTRACTOR OR WITH THE
SPECIFIC PHASE FOR WHICH THE CONTRACTUAL.

EMPLOYEE IS ENGAGED, AS THE CASE MAY BE. b

“THE SUBCONTRACTED EMPLOYEE SHALL BE tNFORMED BY THE
SUBCONTRACTOR OF THE FOREGOING TERMS AND CONDITIONS
ON OR BEFORE THE FIRST DAY OF HIS EMPLOYMENT.

“(B.) THE PRINCIPAL AND THE SUBCONTRACTOR. THE LEGITIMATE
SUBCONTRACTOR SHALL BE CONSIDERED, THE EMPLOYER OF

THE CONTRACTUAL EMPLOYEE FOR PURPOSES OF ENFORCING
THE PROVISIONS OF THE LABOR CODE AND OTHER SOCIAL
LEGISLATION. IN ALL CASES OF SUBCONTRACTING, HOWEVER,

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1 THE PRINCIPAL SHALL SE SOLIDARILY LIASLE WITH THE
CONTRACTOR IN THE EVENT OF ANY V:0LATION OF ANY

2

3 PROVISION OF THE LABOR CODE, INCLUDING THE FAILURE TO
4 PAY WAGES. :

5 “THE PRINCIPAL SHALL BE DEEMED THE EMPLOYER OF THE
6 CONTRACTUAL EMPLOYEE IN ANY OF THE FOLLOWING CASES:

7 1. WHERE THERE 1S LABOR-ONLY CONTRACTING; OR

8 1. IN THE ABSENCE OF THE WRITTEN CONTRACT
9 REQUIRED BY ARTICLE 106-A; OR
10 Mi, IN CASES OF VIOLATION OF ARTICLE 106 — B.

nt 4IN ADDITION, THE PRINCIPAL SHALL BE SOLIDARILY LIABLE WITH

12 THE SUBCONTRACTOR IN CASE THE CONTRACT BETWEEN THE
13 PRINCIPAL AND SUBCONTRACTOR IS PRE-TERMINATED FOR
14 REASONS NOT ATTRIBUTABLE TO THE FAULT OF THE
15 SUBCONTRACTOR.”
16 SEC. 3. Anew Article 106-8 is hereby inserted in the Labor Code to read as
17 foliows: :
18 “ART. 106-B. PROHIBITION «= AGAINST ~—- LABOR-ONLY
.19 SUBCONTRACTING. - ENGAGING IN LABOR-ONLY CONTRACTING
20 OR CONTRACTING WITH A LABOR-ONLY CONTRACTOR !S
2 STRICTLY PROHIBITED. FOR’ THIS PURPOSE CABORENLY
2 CONTRACTING REFERS TO AN ARRANGEMENT WHERE THE
23 SUBCONTRACTOR MERELY REC2UITS, SUPPLIES OR PLACES
24 WORKERS TO PERFORM A JOB, WORK OR SERVICE FOR A

- 25 PRINCIPAL, INCLUDING INSTANGES WHERE ANY OF THE
26 FOLLOWING IS PRESENT.
27 {A) THE SUBCONTRACTOR DOES NOT HAVE SUBSTANTIAL
8 CAPITAL AND INVESTMENT WHICH, RELATES TO THE JOB, WORK

2 OR SERVICE TO BE PERFORMED;

3



(B) THE EMPLOYEES RECRUITED, SUPPLIED OR PLACED BY SUCH
SUBCONTRACTOR ARE PERFORMING ACTIVITIES WHICH ARE
USUALLY NECESSARY OR DESIRASLE OR DIRECTLY RELATED TO
4 THE USUAL BUSINESS OF THE PRINCIPAL; OR

(c) THE PRINCIPAL HAS THE RIGHT TO CONTROL, WHETHER

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6 EXERCISED OR NOT. NOT ONLY THE END TO BE ACHIEVED, BUT
7 ALSO THE MANNER AND MEANS TO BE USED IN REACHING THAT
8 —ND. .

9

10 “AS USED iN THIS CODE, ‘SUBSTANTIAL CAPITAL AND
nv INVESTMENT’ IN SUBCONTRACTING ARRANGEMENTS REFERS TO
v3 TOOLS, EQUIPMENT, jMPLEMENTS, MACHINERIES AND WORK
3 PREMISES ACTUALLY AND , DIRECTLY USED BY THE
4 . SUBCONTRACTOR IN THE PERFURMANCE OR COMPLETION OF
15 THE JOB, WORK OR SERVICE CONTRACTED OUT. THE USE OF
16 THE SUBCONTRACTOR” OF THE EQUIPMENT, FACILITIES,
7 MACHINERIES, AND TOOLS OF THE PRINCIPAL 1S AN INDICATION
8 THAT THE SUBCONTRACTOR HAS NO SUBSTANTIAL CAPITAL AND
wo INVESTMENT. THE EXISTENCE OF CAPITAL STOCKS AND
20 SUBSCRIBED CAPITALIZATION IN RELATION TO CORPORATIONS
21 ENGAGED IN SUBCONTRACTING DOES NOT BY \TSELF
22 CONSTITUTE SUBSTANTIAL CAPITAL AND INVESTMENT.

Ey

23 “AS USED IN THIS CODE, THE ‘RIGHT TO CONTROL’ IN
24 SUBCONTRACTING ARRANGEMER IS SHALL REFER TO THE RIGHT
25 RESERVED TO THE PERSON FOR WHOM THE SERVICES OF THE
26 CONTRACTUAL, WORKERS ARE PERFORMED TO DETERMINE NOT
27 ONLY THE END TO BE ACHIEVED BUT ALSO THE MANNER AND
28 MEANS TO BE USED IN REAGHING THAT END.”

29
30 SEC. 4. A new Article 106-C is hereby inserted if the Labor Code to read as

31 follows:



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Sear Er rE

“ART. 406-C. PROHIBITIONS IN SUBCONTRACTING
ARRANGEMENTS. — REGARDLESS OF COMPLIANCE WITH THE
IMMEDIATELY PRECEDING ARTICLE, THE FOLLOWING ACTS
SHALL BE PROHIBITED FOR BEING CONTRARY TO LAW oR
PUBLIC POLICY:

{A) ENGAGING OR MAINTAINING BY THE PRINCIPAL OF
SUBCONTRACTED EMPLOYEES IN EXCESS OF TWENTY
PERCENT (20%) OF THE PRINCIPAL'S TOTAL WORKFORCE
PROVIDED THAT SUCH SUBCONTRACTED EMPLOYEES DO NOT
PERFORM WORK THAT IS NECESSARY OR DESIRABLE OR
DIRECTLY RELATED TO THE USUAL BUSINESS OR YRADE OR
BUSINESS OF THE EMPLOYER, ©

{B) CONTRACTING OUT OF AJOB, WORK OR SERVICE WHEN THE
SAME RESULTS IN THE TERMINATION OF REGULAR EMPLOYEES
AND REDUCTION OF WORK HOURS OR REDUCTION OR SPLITTING
OF THE BARGAINING UNIT,

(C) CONTRACTING OUT OF WORK WITH A ‘CABO’. FOR THIS
PURPOSE, ‘CABO’ REFERS TO A PERSON OR GROUP OF
PERSONS OR TO A LABOR GROUP WHICH, IN THE GUISE OFA
LABOR ORGANIZATION OR COOPERATIVE, SUPPLIES WORKERS
TO AN EMPLOYER WITH OR WITHOUT ANY MONETARY OR OTHER
CONSIDERATION, WHETHER: IN THE CAPACITY OF AN AGENT OF
THE EMPLOYER, ‘OR AS AN OSTENSIBLE INDEPENDENT
CONTRACTOR; .

(D)TAKING UNDUE ADVANTAGE OF THE ECONOMIC SITUATION OR
LACK OF BARGAINING STRENGTH OF THE CONTRACTUAL
EMPLOYEE, OR UNDERMINING HIS SECURITY OF TENURE OR
BASIC RIGHTS, OR CIRCUMVENTING THE PROVISIONS OF
REGULAR EMPLOYMENT IN ANY oF THE FOLLOWING INSTANCES:



IN ADDITION TO HIS ASSIGNED FUNCTIONS, REQUIRING
THE CONTRACTUAL EMPLOYEE TO PERFORM
FUNCTIONS WHICH ARE CURRENTLY BEING PERFORMED
BY THE REGULAR EMPLOYEES OF THE PRINCIPAL OR OF
THE SUBCONTRACTOR:

REQUIRING HIM TO SIGN, AS A PRECONDITION TO
EMPLOYMENT OR CONTINUED EMPLOYMENT, AN
ANTEDATED RESIGNATION LETTER, A BLANK PAYROLL, A
WAIVER OF LABOR STANDARDS INCLUDING: MINIMUM
WAGES AND SOCIAL OR WELFARE BENEFITS, OR A
QUITCLAIM RELEASING THE PRINCIPAL, oR
SUBCONTRACTOR FROM ..NY LIABILITY AS TO PAYMENT
OF FUTURE CLAIMS; AND

REQUIRING Him TO SIGN A CONTRACT FIXING THE
PERIOD OF EMPLOYMENT TOA TERM SHORTER THAN
THE TERM OF THE CONTRACT BETWEEN THE PRINCIPAL
AND THE SUBCONTRACTOR, UNLESS THE LATTER
CONTRACT IS DIVISIBLE INTO PHASES FOR WHICH
SUBSTANTIALLY DIFFERENT SKILLS ARE REQUIRED AND
THIS IS MADE KNOWN TO THE EMPLOYEE AT THE TIME
OF ENGAGEMENT.

(E} CONTRACTING OUT OF A JOB. WORK OR SERVICE THROUGH
AN IN-HOUSE AGENCY WHICH REFERS TO A: &

SUBCONTRACTOR ENGAGED IN THE SUPPLY OF LAGOR
WHICH IS OWNED, MANAGED OR CONTROLLED BY THE
PRINCIPAL; OR

SUBCONTRACTOR IN WHICH THE PRINCIPAL OWNS OR
OTHERWISE REPRESENTS ANY SHARE OF STOCK; OR
SUBCONTRACTOR WHICH OPERATES SOLELY FOR THE
PRINCIPAL.



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(F) CONTRACTING OUT OF A JOB, WORK OR SERVICE THAT 1S
NECESSARY OR DESIRABLE OR DIRECTLY RELATED TO THE
BUSINESS OR OPERATION OF THE PRINCIPAL;

(G} CONTRACTING OUT OF A JOB, WORK OR SERVICE BEING
PERFORMED BY OR PREVIOUSLY PERFORMED BY REGULAR
EMPLOYEES AND/OR MEMBERS OF THE BARGAINING UNIT.”

SEC. 8, A new Article 106-D is hereby inserted in the Labor Code to read

follows:

“ART. 106 — D, REGISTRATION OF SUBCONTRACTORS, — (A.)
MANDATORY REGISTRATION. IT SHALL BE MANDATORY FOR ALL
PERSONS OR ENTITIES ACTING AS SUBCONTRACTORS TO
REGISTER UNDER A REGISTRATION SYSTEM HEREBY
ESTABLISHED TO GOVERN CONTRACTING ARRANGEMENTS AND
TO BE IMPLEMENTED BY THE REGIONAL OFFICES OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT.

“NON-REGISTERED PERSONS OR ENTITIES ACTING AS
SUBCONTRACTORS SHALL BE DEEMED AS LABOR-ONLY
CONTRACTORS, MERE REGISTRATION WITHOUT A SHOWING OF
COMPLIANCE WITH ALL REQUIREMENTS FOR LEGITIMATE
SUBCONTRACTING AND AVOIDANCE OF ALL PROHIBITIONS OF
SUBCONTRACTING SHALL NOT INDICATE LEGITIMATE
SUBCONTRACTING.

“(B.) REQUIREMENTS FOR REGISTRATION. A SUBCONTRACTOR
MAY BE LISTED IN THE REGISTRY ‘OF SUBCONTRACTORS UPON
COMPLETION AND SUBMISSION OF AN APPLICATION FORM
PROVIDED BY THE DEPARTMENT. tN THE APPLICATION FORM,
THE APPLICANT SUBCONTRACTOR SHALL PROVIDE THE
FOLLOWING INFORMATION:



commPRRRRETE:

THE NAME AND BUSINESS ADDRESS OF THE
APPLICANT AND THE AREA OR AREAS WHERE IT
SEEKS TO OPERATE;

THE NAMES AND ADDRESSES OF OFFICERS, IF THE
APPLICANT IS A CORPORATION, PARTNERSHIP,
COOPERATIVE OR UNION:

THE NATURE OF THE APPLICANTS BUSINESS AND
THE INDUSTRY OR INDUSTRIES WHERE THE
APPLICANT SEEKS TO OPERATE;

THE NUMBER OF REGULAR WORKERS, THE LIST OF
CLIENTS, IF ANY, THE NUMBER OF PERSONNEL
ASSIGNED TO EACH CLIENT, IF ANY, AND THE
SERVICES PROVIDED TO THE CLIENT,

THE DESCRIPTION OF THE PHASES OF THE
CONTRACT AND THE NUMBER OF EMPLOYEES
COVERED IN EACH PHASE, WHERE APPROPRIATE;
AND

A COPY OF AUDITED FINANCIAL STATEMENTS iF THE
APPLICANT 1S A CORPORATION, PARTNERSHIP,
COOPERATIVE OR A UNION, OR A copy OF THE
LATEST INCOME TAX RETURN IF THE APPLICANT 1S A
SOLE PROPRIETORSHIP.

“THE APPLICATION SHALL BE SUPPORTED BY THE couowin’:

A CERTIFIED copY OF A CERTIFICATE OF
REGISTRATION OF FIRM OR BUSINESS NAME FROM
THE SECURITIES AND EXCHANGE COMMISSION {SEC),
DEPARTMENT OF TRADE AND INDUSTRY (DT)
COOPERATIVE DEVELOPMENT AUTHORITY (COA), OR
FROM THE DOLE IF THE APPLICANT IS A UNION;
AND 7

A CERTIFIED COPY OF THE LICENSE OR BUSINESS



PERMIT ISSUED BY THE LOCAL GOVERNMENT UNIT
OR UNITS WHERE THE SUBCONTRACTOR OPERATES.

“THE APPLICATION SHALL BE VERIFIED AND SHALL INCLUDE AN
UNDERTAKING THAT THE SUBCONTRACTOR SHALL ABIDE BY
ALL APPLICABLE LABOR LAWS AND REGULATIONS.

“{C.) FILING AND PROCESSING OF APPLICATIONS... THE
APPLICATION AND ITS SUPPORTING DOCUMENTS SHALL BE
FILED IN TRIPLICATE IN THE REGIONAL OFFICES WHERE THE
APPLICANT PRINCIPALLY OPERATES. NO APPLICATION FOR
REGISTRATION SHALL BE ACCEPTED UNLESS ALL THE
FOREGOING REQUIREMENTS ARE COMPLIED WITH. THE
SUBCONTRACTOR SHALL BE DEEMED REGISTERED UPON
PAYMENT OF A REGISTRATION FEE TO BE DETERMINED BY THE~
REGIONAL OFFICE.

“WHERE ALL THE SUPPORTING DOCUMENTS HAVE BEEN
SUBMITTED, THE REGIONAL OFFICE MAY DENY OR APPROVE THE
APPLICATION WITHIN SEVEN (7) WORKING DAYS AFTER !TS
FILING, .

“UPON REGISTRATION, THE REGIONAL OFFICE SHALL RETURN
ONE SET OF THE DULY-STAMPED APPLICATION DOCUMENTS TO
THE APPLICANT, RETAIN ONE SET FOR ITS FILE, AND TRANSMIT
THE REMAINING SET TO THE BUREAU OF LOCAL EMPLOYMENT.
THE BUREAU SHALL DEVISE THE. NECESSARY FORMS FOR THE
EXPEDITIOUS PROCESSING OF ALL APPLICATIONS FOR
REGISTRATION,

“(D.) ANNUAL REPORTING OF REGISTERED CONTRACTORS.
THE SUBCONTRACTOR SHALL SUBMIT IN TRIPLICATE COPIES
AN ANNUAL REPORT USING A PRESCRIBED FORM TO THE



Sa

ore

APPROPRIATE REGIONAL OFFICE NOT LATER THAN THE
FIFTEENTH OF JANUARY OF THE FOLLOWING YEAR. THE
REPORT SHALL INCLUDE THE FOLLOWING DOCUMENTS:

L A LUST OF CONTRACTS ENTERED WITH THE
PRINCIPAL DURING THE SUBJECT REPORTING PERIOD;

IL THE NUMBER OF WORKERS COVERED BY EACH
CONTRACT WITH THE PF'NCIPAL;

A SWORN STATEMENT SIGNED BY THE HIGHEST
EXECUTIVE OFFICER AND THE CHIEF FINANCIAL
OFFICER THAT THE SUBCONTRACTOR HAS: REMITTED
ALL KINDS OF PAYMENTS. AND PREMIUMS TO THE
SOCIAL SECURITY SYSTEM (SSS), THE HOME
DEVELOPMENT MUTUAL FUND (HDMF), PHILHEALTH, «
EMPLOYEES COMPENSATION COMMISSION (ESC),
AND BUREAU OF INTERNAL REVENUE (BIR) FOR
ALL CONTRACTUAL EMPLOYEES PERTAINING TO THE
REPORTING PERIOD,

il

“THE REGIONAL OFFICE SHALL RETURN ONE SET OF THE DULY-
STAMPED REPORT TO THE SUBCONTRACTOR, RETAIN ONE SET
FOR ITS FILE, AND TRANSMIT THE REMAINING SET TO THE
BUREAU OF LOCAL EMPLOYMENT WITHIN FIVE (5) DAYS FROM
RECEIPT THEREOF. »

“(E.) DELISTING OF. CONTRACTORS OR SUBCONTRACTORS.
THE REGIONAL DIRECTOR SHALL CANCEL THE REGISTRATION
OF SUBCONTRACTORS BASED ON ANY OF THE FOLLOWING
GROUNDS:
1. NON-SUBMISSION OF CONTRACTS BETWEEN THE
PRINCIPAL AND THE . SUBCONTRACTOR WHEN
REQUIRED TO BO SO; 5



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eu au

Tek

follows:

SORE C2:

IL NON-SUBMISSION OF THE ANNUAL REPORT
INCLUDING THE DOCUMENTS LISTED UNDER ARTICLE
106 (D);

ill. ENGAGEMENT IN LABOR-ONLY CONTRACTING;

1V. VIOLATION OF THE PROHIBITED ACTIVITIES PROVIDED
BY THIS CCDE;

V." NON-COMPLIANCE WIT: LABOR STANDARDS AND
WORKING CONDITIONS.

“(F.) RENEWAL OF REGISTRATION OF SUBCONTRACTORS. ALL

REGISTERED SUBCONTRACTORS MAY APPLY FOR RENEWAL OF
REGISTRATION EVERY TWO (2) YEARS. FOR THIS PURPOSE, THE
TRIPARTITE INDUSTRIAL PEACE COUNCIL (TIPC) AS CREATED
UNDER EXECUTIVE ORDER NO. 49, SHALL SERVE AS THE
OVERSIGHT COMMITTEE TO VERIFY AND MONITOR THE
FOLLOWING:

1, ENGAGING IN ALLOWAELE CONTRACTING ACTIVITIES;

AND '
H. COMPLIANCE WITH ADMINISTRATIVE REPORTING
REQUIREMENTS.”

“ART. 106-E. DUTY TO PRODUCE COPY OF CONTRACT. — THE
PRINCIPAL OR SUBCONTRACTOR SHALL PRODUCE A COPY OF
THE CONTRACT BETWEEN THE PRINCIPAL AND THE
CONTRACTOR IN THE COURSE OF INSPECTION. THE
SUBCONTRACTOR SHALL ALSO PRODUCE A cOPY OF THE
CONTRACT OF EMPLOYMENT OF SUBCONTRACTED WORKERS
WHEN DIRECTED TO DO SO BY THE REGIONAL DIRECTOR OR
HIS AUTHORIZED REPRESENTATIVE.

SEC. 6. Anew Article 106-E is hereby inserted in the Labor Code to read as
a

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3

ig
19
20

2
23
24

26
27

“A COPY OF THE CONTRACT BETWEEN THE SUBCONTRACTED
EMPLOYEE AND THE SUBCONTRACTOR SHALL BE FURNISHED
THE CERTIFIED BARGAINING AGENT, IF THERE 1S ANY.”

SEC. 7. Article 248 of the Labor Cod: 5 hereby amended to read as follows:

“art, 248, Unfair Labor Practices of Employers. - It shall be untawiul
for an employer to commit any of the following unfair !abor practices:

{@) To interfere with, restrain or coerce employees in the exercise of

their right to self-organization;

(o}To require as a condition of employment that a person oF an
employee shall not join a labor organization oF shall withdraw from one
‘to which he belongs;

(c) To ENGAGE A LABOR-ONLY CONTRACTOR OR TO contract
out services or functons being —performed by — [unica]
MEMBERS OF, OR POSITIONS COVERED BY, THE BARGAINING
UNIT ANDIOR REGULAR RANK-AND-FILE AND SUPERVISORY
EMPLOYEES [when such will interiere with, restrain or coerce
employees in the exercise of their rights to self-organization};

{d) To initiate, dominate, assist or otherwise interfere with the formation
or administration of any labor o-ganization, including the giving of
financial or other support to it or its organizers or Supporters:

(e) To discriminate in regard to wages, hours of work and other terms
and conditions of employment in order to encourage oF discourage
membership in any labor organization. Nothing in this Code or in any
other law shall stop the parties from requiring membership in a
recognized collective bargaining agent as 4 condition for employrrent,
except those employees who are already members of another union at
the time of the signing of the collective bargaining agreement.



1 Employees of an appropriate bargaining unit who are not members of

2 the recognized collective bargaining agent may be assessed a

3 reasonable fee equivalent to the dues and other fees paid by members

4 ‘of the recognized collective bargaining agent, if such non-union

3 members accept the benefits under th> collective bargaining agreement:

6 Provided, That the individual authorization required under Article 242,

7 paragraph {0) of this Code shali not apply to the non-members of the

8 recognized collective bargaining agent,

9 (® To dismiss, discharge or otherwise prejudice or discriminate against

10 an employee for having given or being about to give testimony under

i this Code;

12 (g} To violate the duty to bargain collectively as prescribed by this

13 -* Code;

“4 (h) To pay negotiation or attomey’s fees to the union or its officers or-

5 agents as part of the settlement of any issue in collective bargaining ar

16 any other dispute: [or]

7 @ To violate a collective bargaining agreement []; OR

18 (J) TO DENY THE EXISTENCE OF ESMPLOYER-EMPLOYEE

19 RELATIONSHIP ANDIOR TO CLASSIFY AS CASUAL,

20 CONTRACTUAL, SUBCONTRACTED EMPLOYEES, AGENCY

21 EMPLOYEES, OR OTHER NON-REGULAR CLASSIFICATION THCSE

2 EMPLOYEES WHO ARE REGULAR EMPLOYEES BY VIRTUEZpDF

23 ARTICLE 280 OF THIS CODE.

24 “The provisions of the preceding paragraph notwitss.anding, only the

25 officers and agents of corporations, ~sscciations or partnerships why
. 26 have actually participated in, authorized:or ratified unfair labor practices

27 shall be heid criminally liabie.”

28 SEC. 8, Article 279 of the Labor Code is hereby amended to read as

29 follows:

30



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CJ

29
30

“ART. 279. Security of Tenure, — Dn cases of regular employment, the
employer shall not terminate the services of an employee} ALL
EMPLOYEES SHALL ENJOY SECURITY OF TENURE AND SHALL
NOT BE TERMINATED except for a ust cause OF when authorized by
thig Tite. ALSO, THE RIGHT TO NOTICE IN EMPLOYMENT
RELATIONS REQUIRES ANY EMPLOYER WHO SEEKS TO DISMISS
A WORKER TO FURNISH HIM A WRITTEN NOTICE STATING THE
PARTICULAR ACTS OR OMISSION CONSTITUTING THE GROUNDS
FOR HIS DISMISSAL. IN CASES OF ABANDONMENT OF WORK,
THE WRITTEN NOTICE SHALL BE SERVED AT THE WORKERS’
LAST KNOWN ADDRESS. DUE PROCESS ENTITLES THE WORKER
[AN OPPORTUNITY TO ANSWER THE ALLEGATIONS STATED
AGAINST HIM IN THE NOTICE OF DISMISSAL WITHIN A PERIOD OF
FIVE (5) CALENDAR DAYS FROM RECEIPT OF SUCH NOTICE AND é
WITH THE ASSISTANCE OF A REPRESENTATIVE IF HE SO
DESIRES. THE RIGHT TO NOTICE REQUIRES THE EMPLOYER TO
AFFORD THE WORKER AMPLE OPPORTUNITY TO BE HEARD AND
JO DEFEND HIMSELF WITH THE ASSISTANCE OF HIS
REPRESENTATIVE 1F HE SO. DESIRES.

an employee who is [unjustiy] dismissed From work IN VIOLATION OF
ANY OF HIS RIGHTS UNDER THIS ARTICLE, INCLUDING THE
RIGHT TO NOTICE AS ELABORATED IN THE PRECEDING
PARAGRAPH shall be entitled to IMMEDIATE reinstatement witféut
tose of seniority rights and other privileges and to his full back wages,
inclusive of allowances, and to nis other benelits or their monetary
equivalent computed from the time his zompensation W2s withheld from
hum up to the time of his actuat reinstatement.”

SEC. 9. Article 280 of the Labor Code is hereby amended to read as follows:

MART, 280. Regular and Casual Empioyment. - The provisions of
written agreement to the contrary notwithstanding and regardless of the

reir’ AREER vo



28
29
30

oral agreament of thé parties, an employment shali be deemed to be
regular where the employee has been engaged to: perform activities
which are usually necessary or desircble OR DIRECTLY RELATED TO
the usual business or trade of the employer [except where the
‘employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service ta be
performed is seasonal in nature and the employment is for the duration

of the season).

“An employment shall be deemed to be casual if it is not USUALLY
NECESSARY OR DESIRABLE OR [covered by the preceding
paragraph] RELATED YO THE USUAL BUSINESS OF, THE
EMPLOYER: Provided, That any employee who has rendered at leaste
‘one year of service, whether such seivice is continuous or broken, shatt
be considered a regular employee with respect to the activity fin which]
he is employed IN and his employment shall continue [while such
activity exists] UNLESS HE IS TERMINATED FOR A JUST CAUSE OR
WHEN AUTHORIZED BY THIS TITLE.”

i lll aT

SEC. 10. Anew Article 280-A is hereby inserted in the Labor Code to read as

follows:

“ART. 280-A. PROJECT, EXTRA AND SEASONAL, EMPLOYMERT. -
PROJECT EMPLOYMENT REFERS TO THAT WHICH KAS BEEN
FIXED FOR A SPECIFIC PRO.SCT OR UNDERTAKING THE
COMPLETION OR TERMINATION OF WHICH HAS BEEN
DETERMINED AND MADE KNOWN: TO THE EMPLOYEE AT THE
TIME OF HIS ENGAGEMENT.

“EXTRA EMPLOYMENT REFERS TO ADDITIONAL WORK TO BE
PERFORMED IN RESTAURANT. AND HOTEL ESTABLISHMENTS
SPECIFICALLY FOR BANQUET FUNCTIONS, SEMINARS AND



Sewn

SIMILAR FUNCTIONS WHERE THE REGULAR EMPLOYEES
CANNOT REASONABLY COPE WITH THE iNCREASED DEMANDS
OF SUCH EVENTS. , Ne

“SEASONAL EMPLOYMENT REFERS TO THE PERFORMANCE OF
AGRICULTURAL WORK THAT IS SEASONAL IN NATURE AND THE
EMPLOYMENT IS FOR THE OURATION OF THE PLANTING OR

HARVESTING SEASON.

“PROJECT, EXTRA AND SEASONAL EMPLOYEES SHALL HAVE
THE RIGHT TO SECURITY OF TENURE AND ARE ENTITLED TO
RESUME THEIR EMPLOYMENT IN THE SAME OR SIMILAR
POSITION UPON THE START OF THE NEXT PROJECT oR

OCCASION FOR EXTRA OR SEASONAL

EMPLOYMENT, AS THE...”

CASE MAY BE: PROVIDED, THAT DURING THE TIME THAT THEIR,
SERVICES ARE NOT ACTUALLY AVAILED OF, THEY SHALL BE
CONSIDERED TO BE ON AUTHORIZED LEAVE WITHOUT PAY.”

SEC. 11. Anew Article 280-B is hereby irserted in the Labor Code to read as

follows:

“ART, 280-8. PROHIBITION AGAINST FIXED TERM
EMPLOYMENT, - NO EMPLOYER SHALL HIRE ANY EMPLOYEE
FOR A FIXED PERIOD, EXCEPT: (1) PROJECT EMPLOYEES#t2)
EXTRA EMPLOYEES; 8) SEACONAL EMPLOYEES; (4) Iw

INDUSTRIES THAT ARE CERTIFIED BY

THE PRESIDENT IN AN

EXECUTIVE ORDER, AS ALLOWABLE, DUE TO EXISTING AND
SUBSTANTIAL LOSSES IN THE INOUSTRY AS A WHOLE
BROUGHT ABOUT BY AN INABILITY TO PRICE GOODS
COMPETITIVELY IN THE MARKET. DESPITE RESORT TO ALL
REASONABLE MEASURES: PROVIDED, THAT SUCH
CERTIFICATION SHALL BE FOR A PERIOD OF AT MOST THREE
(3) YEARS: PROVIDED FURTHER, THAT THE PRESIDENT MAY



follows:

RENEW THE CERTIFICATION UPON EXPIRY SHOULD THE
CIRCUMSTANCES SUBSIST FOR’ A SIMILAR PERIOD AND
SUBJECT TO SIMILAR RENEWALS; (5) OVERSEAS FILIPINO
WORKERS; (6) THOSE HIRED TO PLAY PROFESSIONAL SPORTS;
(7) THOSE APPOINTED TO SENSITIVE POSITIONS IN
EDUCATIONAL INSTITUTIONS SUCH AS DEAN, ASSISTANT DEAN,
PRINCIPAL AND COLLEGE SECRETARY; AND, (8} THOSE
€MPLOYED AS MEMBERS OF THE MANAGERIAL STAFF. OTHER
THAN THE FOREGOING EXCEPTIONS, ANY STIPULATION FIXING
APERIOD OF EMPLOYMENT SHALL BE VOID.”

SEC. 12. Article 281 of the Labor Code is hereby amended to read as

“ART. 281. Probationary Employment. - Probationary employment =
shall not exceed six (6) months from the date the employee started
working [unless it is covered by an apprenticeship agraement
stipulating a longer period). The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or [when he fails] UPON FAILURE to qualify as a regular
employee in accordance with reasonable standards made known by
the employer to the employee at the time of his engagement. An
employee who is allowed to work after a prabationary pericd, EVEN
UNDER THE GUISE OF AN EXTENSION, shall be consideredla

regular employee.”

THE TERMINATION OF PROBATIONARY EMPLOYEES SHALL NOT
BE VALID IF DONE TO PRECLUDE ACQUISITION OF SECURITY OF
TENURE BY THE EMPLOYEE. THE PRESENCE OF ANY OF THE
FOLLOWING CIRCUMSTANCES SHALL CREATE A REBUTTABLE
PRESUMPTION OF THE INTENT TO CIRCUMVENT THE RIGHT TO.
SECURITY OF TENURE OF PROBATIONARY EMPLOYEES:



2
1 4, TERMINATION OF ALL OR ALMOST ALL OF THE
PROBATIONARY EMPLOYEES AT THE END OF THE
PROBATIONARY PERIOD AND THE SUBSEQUENT HIRING OF
EMPLOYEES PERFORMING THE SAME WORK OR TASK ANDIOR
OCCUPYING THE SAME POSITION AS THOSE VACATED BY THE
6 PREVIOUS: PROBATIONARY EMPLOYEES.

aun

7

8 2. MAINTAINING PROBATIONARY EMPLOYEES IN EXCESS OF
9 THIRTY PERCENT (30%) OF THE TOTAL WORKFORCE.
oO HOWEVER, NEWLY-CREATED COMPANIESIEMPLOYERS ARE
M1 EXEMPTED FROM OBSERVING THE FOREGOING PERCENTAGE

12 RESTRICTION WITHIN ONE (1) YEAR FROM THE START OF THEIR
13 BUSINESS OPERATIONS.

4 SEC. 13. Article 288 of the Labor Code ig hereby amended to read as
15 follows:

16 “ART. 288. Penalties. - Except 2s otherwise provided in this Code, or
7 unless the acts complained of hinge on a question of interpretation or
is implementation of ambiguous provisions of an existing collective
9 bargaining agreement, any violation of the provisions of this Code
20 declared to be unlawful or penal in nature shall be punished with a fine
21 of not less than One Thousand Pes (P1,000 00) nor more than Ten
n Thousand Pesos (P10,000.00) or imprisonment of not less than tree
23 months nor more than three years, oF both such fine and imprisonment
24 at the discretion of the court.

25 “ANY PRINCIPAL OR SUBCONTRACTOR WHO ENGAGES IN
26 LABOR ONLY CONTRACTING ANDIOR VIOLATES ARTICLES 106,
27 106-A, 106-B, 106-C, 108-D AND 106-E SHALL BE SOLIDARILY
28 LIABLE TO INDEMNIFY EACH SUBCONTRACTED EMPLOYEE NO
29 LESS THAN FIFTY THOUSAND PESOS {P50,000.00) WITHOUT
30 PREJUDICE TO OTHER MONETARY AWARDS T2 WHICH SUCH

20



16
7
18

19
20
24

2
2B
24

26
27

SUBCONTRACTED EMPLOYEE MAY BE ENTITLED SUCH AS
BACKWAGES, MONETARY CLAIMS AND SENEFITS UNDER AN
APPLICABLE CERTIFIED BARGAINING AGREEMENT OR
COMPANY POLICY, WHETHER WRITTEN OR OTHERWISE.

“ANY EMPLOYER WHO DELIBERATELY CATEGORIZES OR
OTHERWISE TREATS REGULAR EMPLOYEES TO BE ANY NON-
REGULAR EMPLOYEE SHALL BE LIABLE TO INDEMNIFY EACH
MISCLASSIFIED EMPLOYEE NO LESS THAN FIFTY THOUSAND
PESOS (P50,000.00} WITHOUT PREJUDICE TO OTHER MONETARY
AWARDS TO WHICH SUCH EMPLUYEE MAY BE ENTITLED SUCH
AS BACKWAGES, MONETARY CLAIMS AND BENEFITS UNDER AN
APPLICABLE CERTIFIED BARGAINING AGREEMENT,

“In addifion to such penalty, any alien found guilty shall be summarily
deported upon completion of service of sentence.

“Any provision of law to the contrary notwithstanding, any criminal
offense punished in this Code, shat! be under the concurrent jurisdiction

of the Municipal or City Courts and the Courts of First Instance. *

SEC. 14, Implementing Rules art Regulations. - The Department of
Labor and Employment (DOLE) shail issue, within sixty (60) days after the effectivity
of this Act, the rules and regulations for its effective implementation. s

SEC. 15, Separability Clause. - if, for any reason, any section or provision
of this Act is held unconstitutional or invalid, the other sections or provisions hereof
shail nat be affected thereby and shall continue to be in full force and effect.

SEC. 16. Repealing Clause. - All {aws, decrees, executive orders, rules and

regulations, or parts thereof inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

2k



take effect fifteen (45) days

This Act shalt
national newspapers

SEC. 17. Effectivity Clause. -
in at least two (2)

after its publication in the Official Gazette or

!
2
3

of general circutabon.

Approved,



FACT SHEET

House Bit No.___ 4853
____(&8 Approved by the Committee)
AN ACT

STRENGTHENING THE SECURITY OF TENURE OF
WORKERS IN THE PRIVATE SECTOR, AMENDING FOR THE
PURPOSE ARTICLES 248, 275, 286, 281, AND 288, AND
INTRODUCING NEW ARTICLES 106, 106-A, 406-B, 106-C, 106-
D, 106-E, 280-A AND 280-B TO PRESIDENTIAL NO. 442, AS
AMENDED, OTHERWISE KNOWN AS THE LABOR GODE OF
THE PHILIPPINES

Introduced by. REPS. WALDEN F. BELLO, ARLENE J. BAG-AO, RAYMOND
DEMOCRITO C, MENDOZA, AUGUSTO BOBOY SYJUCO, PH.D., RUFUS B-
RODRIGUEZ, MAXIMO B. RODRIGUEZ, JR, MAGTANGGOL 7. GUNIGUNDO |,
JOSEPH VICTOR G EJERCITO, EMMELINE Y. AGLIPAY, TEODORO BRAWNER
BAGUILAT, JR., BEN P. EBARDONE, MARY MITZI L. CAJAYON, RACHEL
MARGUERITE 8. DEL MAR, ROMEO M. A 2OP, MELDA G. CALIXTO-RUBIANO,
SHARON S. GARIN, ROSENDA ANN OCAMPO, JESUS F. CELESTE,
WINSTON CASTELO, ANGELO B. PALMONES, MARK AERON H. SAMBAR,
ALFREDO GARBIN, JR., SCOTT DAVIES S. LANETE, M.0., ABIGAEL FAYE c.
FERRIOL, RODEL M, BATOCABE, ROMEO JR. M. JALOSJOS- JULIETA R.
CORTUNA, SHERWIN N. TUGNA, NANCY A. CATAMCO, LORD ALLAN JAY Q.
VELASCO, RONALD M, COSALAN, AND JOSE PING-AY

Commitee Referral. COMMITTEE ON LABOR AND EMPLOYMENT
‘Committee Chairperson: REP. EMIL L. ONG

OBJECTIVE:

To balance the legitimate business interests of the empioyer with the ge
for protection of workers from the prejudice of non-regularization.

KEY PROVISIONS:

= Strictly prohibits labor-onty contracting .

Limits the number of subcontracted employees to 20% of the principal's
total workforce

+ Mandates registration of subcontractors

* Treats as unfair labor practice the act of a) engaging a tabor-only
contractor or contracting out ‘the services or functions
being performed by the employees within the bargaining unit and/or
regular rank-and-file and supetvisory employees: and, b) denying
the existence of employer-employee relationship and/or to classify as
casual, contractual, subcontracted employees, agency employees,
or other non-regular classification those employees who are regular
employees



= Mandates that the violation of the right to notice in termination makes
dismissal illegal and
‘entities the worker to immediate reinstatement and full back wages:
«Provides that the number of probationary employees should not be in excess
of thirty percent (30%) of the total workforce
Introduces the concepts of project, extra, and seasonal employment
«Prohibits fixed-term employment, with exceptions
= Penalizes the violation of contracting rules and other laws on security of
tenure by a fine and/or imprisonment

RELATED LAW:

Articles 248, 279, 280, 281, and 288 of P-D. 442, as amended, otherwise

known as the Labor Code of the Philippines: