REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

House Bill No.__79

Introduced by HONORABLE RAMON JOLO B. REVILLA III,
HONORABLE LANI MERCADO-REVILLA, and
HONORABLE BRYAN B. REVILLA

EXPLANATORY NOTE

This legislative measure seeks to amend and prepend several provisions in
Presidential Decree No. 442, otherwise known as the “Labor Code of the
Philippines,” as amended, to succinctly prohibit labor-only contracting of
employees. It shall also mandate job contractors to obtain a license from the
Department of Labor and Employment (DOLE) to prove it has substantial capital
and classified as an independent business which complies with labor laws and
adhere to payment of social security benefits of its employees. Moreover, where
labor-only contracting is currently present, the worker shall outright be deemed
as regular employees in accordance with existing laws and shall apply

retroactively.

No less than the Constitution provides for the guiding principles of labor

and affirms it as a primary social economic force.' It shall promote a just and

' Section 18, Article II of the 1987 Constitution


dynamic social order that promote full employment, a rising standard of living,

and an improved quality of life for all.?

While our fundamental law enshrines the cornerstone in guaranteeing a
stable job and secured employment for everyone, most Filipinos are aware that it
is far from reality. The prevalent practice of businesses in hiring employees under
a fixed-term contract — mostly for a span of five months at a time, also known in
colloquial terms as “endo”, short for “end-of-contract,” still hounds various job
industries. After such period of contract, employers rehire employees for another

fixed-term, and the abusive labor cycle continues.

Under Article 296 of the Labor Code, as amended, employees who
continue to work after a six-month probationary period must be regularized, and
as such, given benefits like medical insurance, paid leaves, and security of tenure.
Such protection was meant to protect workers, but companies learned to
circumvent the law to save money and resources, usually by outsourcing contract
workers from an agency. It is a cause of concern, especially for the plight of low-

income Filipino workers.

According to the 2025 Global Rights Index’ by the International Trade
Union Confederation (ITUC), the country remains one of the 10 worst places in
the world for workers. It marks the 9" consecutive year that the Philippines has
been given a rating of 5 in the list which indicates as “no guarantee of rights” for

workers.‘

2 Section 9, Article II of the 1987 Constitution

2 The Global Rights Index evaluates labor conditions in 151 countries using 97 indicators based on International
Labour Organization (ILO) conventions

“International Trade Union Confederation. Philippines. Information retrieved from huips:/Avww.ituc-
csi.org philippines. Dated June 2025


Echoing the Credo of the late President Ramon Magsaysay “That those
who have less in life should have more in law,” this legislative measure will give
our labor sector the opportunity to collectively voice out their concerns in

presenting our dire reality from achieving a just society.

In view of the foregoing, the immediate passage of this bill is earnestly

RAMON aM
LANI .CADO-REVILLA ke z B. REVILLA

sought.

REVILLA II



REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

House Bill No. 719

Introduced by HONORABLE RAMON JOLO B. REVILLA III,
HONORABLE LANI MERCADO-REVILLA, and
HONORABLE BRYAN B. REVILLA

AN ACT STRENGTHENING WORKERS RIGHT TO SECURITY OF
TENURE, AMENDING FOR THE PURPOSE ARTICLES 106, 107, 108,
AND 109 OF BOOK III, AND ARTICLES 294 [279], 295 [280], 296 [281],

AND 297 [282] OF BOOK VI OF PRESIDENTIAL DECREE NO. 442,

OTHERWISE KNOWN AS THE “LABOR CODE OF THE
PHILIPPINES,” AS AMENDED

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 “Security of Tenure
Act”.

SEC. 2. Article 106, Title II, Book III of the Labor Code, as amended, is

hereby amended to read as follows:

“ARTICLE 106. [ContractororSubcontractor] PROHIBITION ON
LABOR-ONLY CONTRACTING. — [Whenever-an-employerenters—a



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LABOR-ONLY CONTRACTING IS PROHIBITED. There is "labor-
only" contracting where the [persen-supplyingwerkerste-an-empleyer
does-not-have] JOB CONTRACTOR, WHETHER LICENSED OR
NOT, MERELY RECRUITS AND SUPPLIES OR PLACES
WORKERS TO A CONTRACTEE AND SUPPLIES OR PLACES
WORKERS TO A CONTRACTEE REGARDLESS OF WHETHER
OR NOT HE/SHE HAS substantial capital or investment in the form of

tools, equipment, machineries, work premises, among others, [and] OR the
workers recruited and SUPPLIED OR placed by such person are
performing activities which are directly related to the principal business of
such [employer] CONTRACTEE OR ARE UNDER THE CONTROL,


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AND SUPERVISION OF THE CONTRACTEE. In such cases, the
[persen—orintermediary] JOB CONTRACTOR shall be considered
merely as an agent [ef] AND the [empleyerwhe] CONTRACTEE shall
be responsible to the workers in the same manner and extent as if the latter

were directly employed by him[-]/HER.

FURTHER, THAT FOR THE PURPOSES OF THIS ARTICLE,
THE SPECIFIC JOB, WORK OR SERVICE THAT ARE DEEMED
DIRECTLY RELATED TO THE PRINCIPAL BUSINESS OF A
CONTRACTEE SHALL BE DETERMINED BY THE
APPROPRIATE INDUSTRY TRIPARTITE COUNCIL WHICH
SHALL BE ISSUED THROUGH REGULATIONS BY THE
SECRETARY OF LABOR AND EMPLOYMENT. IN THE
ABSENCE OF A DETERMINATION BY THE APPROPRIATE
COUNCIL, THE SECRETARY OF LABOR AND EMPLOYMENT
SHALL DETERMINE THE STANDARD CRITERIA AFTER
CONSULTATION WITH THE NATIONAL TRIPARTITE
INDUSTRIAL PEACE COUNCIL.

IN ALL CASES WHERE LABOR-ONLY CONTRACTING IS
PRESENT, THE WORKERS SHALL OUTRIGHT BE DEEMED
REGULAR EMPLOYEES OF THE CONTRACTEE IN
ACCORDANCE WITH LAW, RETROACTIVE TO THE DATE
THEY WERE FIRST DEPLOYED TO SAID CONTRACTEE,
WITHOUT PREJUDICE TO ANY CRIMINAL, CIVIL, OR
ADMINISTRATIVE CASE AGAINST THE LABOR-ONLY
CONTRACTOR AND THE CONTRACTEE.


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COMPLIANCE ORDERS AFFIRMED BY THE SECRETARY
OF LABOR AND EMPLOYMENT SHALL BE IMMEDIATELY
EXECUTORY UNLESS RESTRAIEND BY AN APPROPRIATE
COURT.

IN CASE THE COMPLIANCE ORDER INVOLVES A
DIRECTIVE TO REGULARIZE WORKERS, THE
EMPLOYMENT OF THE LATTER SHALL NOT BE
TERMINATED PENDING APPEAL OF SUCH ORDER EXCEPT
FOR JUST OR AUTHORIZED CAUSE. ANY TERMINATION OF
WORKERS PENDING APPEAL SHALL RENDER THE
COMPLIANCE ORDER INVOLVING THE REGULARIZATION
OF WORKERS EXECUTORY.

IN CASE THE COMPLIANCE ORDER INVOLVES A
DIRECTIVE TO REGULARIZE WORKERS, THE
EMPLOYMENT OF THE LATTER SHALL NOT BE
TERMINATED PENDING APPEAL OF SUCH ORDER EXCEPT
FOR JUST OR AUTHORIZED CAUSE. ANY TERMINATION OF
WORKERS PENDING APPEAL SHALL RENDER THE
COMPLIANCE ORDER INVOLVING THE REGULARIZATION
OF WORKERS EXECUTORY.

ADDITIONALLY, THE SECRETARY OF LABOR AND
EMPLOYMENT SHALL IMPOSE A FINE UP TO FIVE MILLION
PESOS = (P5,000,000.00) AGAINST ANY LABOR-ONLY
CONTRACTOR. THE SECRETARY OF LABOR AND
EMPLOYMENT SHALL ALSO HAVE THE POWER TO


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PREVENTIVELY OR PERMANENTLY CLOSE THE
OPERATIONS OF ANY LABOR-ONLY CONTRACTOR.”

SEC. 3. Article 107, Title II, Book III, of the Labor Code, as amended, is

hereby repealed, and in lieu thereof, a new Article 107 is inserted to read as

follows:

[Asticle-107_Indireet-employer—The-provisions-of the immediately
preceding —article—shall—likewise—apply—te—any—person—partnership,

project}

“ARTICLE 107. LICENSING OF JOB CONTRACTORS. IT
SHALL BE MANDATORY FOR ALL PERSONS OR ENTITIES
ACTING AS JOB CONTRACTOR TO OBTAIN A LICENSE FROM
THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE)
THROGH ITS REGIONAL OFFICES.

FOR PURPSOES OF ARTICLES 106-109, “JOB
CONTRACTOR” REFERS TO A SOLE PROPRIETORSHIP,
CORPORATION, ASSOCIATION, COOPERATIVE OR OTHER
ORGANIZATION THAT PERFORMS A SPECIFIC WORK, JOB,
OR SERVICE TO A CONTRACTEE. “CONTRACTEE” REFERS
TO THE PERSON OR ENTITY, WHICH SHALL INCLUDE THE
GOVERNMENT, THAT CONTRACTED OUT A SPECIFIC WORK,
JOB, OR SERVICE.


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FURTHER, THAT THE LICENSE SHALL BE ISSUED TO

QUALIFIED TO A JOB CONTRACTOR UPON COMPLIANCE
WITH THE REQUIREMENTS AS FOLLOWS:

(A)

()

©

(D)

HAS AN INDEPENDENT BUSINESS, SEPARATE, AND
DISTINCT FROM THE CONTRACTEE;

HAS A PAID-UP CAPITAL OR NET WORTH OF AT LEAST

FIVE MILLION PESOS (P5,000,000.00), WHICH MAY BE
INCREASED AS DEEMED APPROPRIATE THROUGH
TRIPARTITE CONSULTATION;

AN EXPERT OR SPECIALIST IN THE JOB, WORK, OR
SERVICE BEING CONTRACTED THAT SHALL NOT BE
DIRECTLY RELATED TO THE PRINCIPAL BUSINESS OF
THE CONTRACTEE FOR. FOR THIS PURPOSE,
EXPERTISE OR SPECIALIZATION SHALL BE
ESTABLISHED BY SHOWING, AMONG OTHERS, A CORE
OF COMPETENT PROFESSIONALS, OR SKILLED
WORKERS, ESPECIALLY TRAINED TO CARRY OUT THE
JOB, WORK, OR SERVICE OR POSSESS A TRACK
RECORD IN SUCH FIELD OF SPECIALIZATION;

AN EMPLOYER WITH REGULAR EMPLOYEES AND
HAVE EQUIPMENT, MACHINERIES, OR TOOLS
NECESSARY TO PERFORM OR COMPLETE THE JOB,
WORK, OR SERVICE CONTRACTED OUT;


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(E) EXERCISE CONTROL OVER THE PERFORMANCE AND
COMPLETION OF THE JOB, WORK, OR SERVICE
CONTRACTED OUT;

(F) CERTICIATION OF COMPLIANCE WITH LABOR AND
SOCIAL WELFARE LAWS, INCLUDING PROOF OF
PAYMENT OF SOCIAL SECURITY (SSS), PHILIPPINE
HEALTH INSURANCE CORPORATION (PHILHEALTH),
AND HOME DEVELOPMENT MUTUAL FUND (PAG-IBIG)
CONTRIBUTIONS; AND

(G) PAYMENT OF LICENSE FEE, WHICH SHALL NOT BE
LOWER THAN ONE HUNDRED THOUSAND PESOS
(P100,000.00).

THE LICENSE SHALL BE VALID FOR A PERIOD OF
THREE (3) YEARS AND MAY BE RENEWED UPON
COMPLIANCE WITH THE REQUIREMENTS PRESCRIBED BY
THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE).
IN ALL CASES, THE JOB CONTRACTOR SHALL
DEMONSTRATE THAT IT HAS FINANCIAL CAPACITY TO
CARRY ON ITS BUSINESS BASED ON FACTORS SUCH AS, BUT
NOT LIMITED, TO THE NUMBER OF ITS EMPLOYEES AND
THE NATURE OF ITS BUSINESS.

FURTHER, THAT ANY LEGITIMATE LABOR
ORGANIZATION SHALL HAVE ACCESS TO COPIES OF
LICENSES ISSUED TO JOB CONTRACTORS AND ALL
SUBMISSIONS MADE IN CONNECTION WITH SUCH LICENSE.


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FOR THIS PURPOSE, THE SECRETARY OF LABOR AND
EMPLOYMENT, IN CONSULTATION WITH THE NATIONAL
TRIPARTITE INDUSTRIAL PEACE COUNCIL (NTIPC), SHALL
ISSUE THE APPROPRIATE REGULATIONS FOR THE
LICENSING, RENEWAL, SUSPENSION, AND REVOCATION OF
LICENSES OF JOB CONTRACTORS, INCLUDING THE
ACCOUNTABILITIES OF THE LICENSING OFFICER IN CASE
THE LICENSE IS ISSUED IN VIOLATION OF, OR IN
SIMULATION OF ANY OF THE REQUIREMENT FOR
LICENSING UNDER PARAGRAPHS (A) TO (G) ABOVE, OR
UPON FINDING OF LABOR-ONLY CONTRACTING
COMMITTED BY A DULY-LICENSED JOB CONTRACTOR.

IN NO CASE SHALL PRIVATE RECRUITMENT AND
PLACEMENT AGENCIES (PRPA) OR PRIVATE EMPLOYMENT
AGENCIES (PEA) UNDER ARTICLE 25 OF THE LABOR CODE,
AS AMENDED, BE ALLOWED TO ENGAGE IN JOB
CONTRACTING AND/OR THE PROHIBITED LABOR-ONLY
CONTRACTING.”

SEC. 4. A new Article 107-A, Title II, Book III of the Labor Code, as

amended, is hereby provided to read as follows:

“ARTICLE 107-A. RIGHTS OF EMPLOYEES OF JOB
CONTRACTORS. THE TERMS AND CONDITIONS OF
EMPLOYMENT OF THE EMPLOYEES OF JOB CONTRACTORS
SHALL NOT BE LOWER THAN THE MINIMUM STANDARDS
SET BY LAW AND REGULATIONS.”


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SEC 5. Article 108, Title II, Book III of the Labor Code, as amended, is

hereby amended to read as follows:

“Article 108. Posting of bond. [An-empleyer-orindirect-employer]
THE CONTRACTEE may require the contractor or subcontractor to

furnish a bond equal to the cost of labor under contract, on condition that

the bond will answer for the wages due the employees should the contractor

or subcontractor, as the case may be, fail to pay the same.

SEC 6. A new article 108-A, Title II, Book III of the Labor Code, as

amended, is hereby provided to read as follows:

“ARTICLE 108-A. TRANSITION SUPPORT PROGRAM
(TSP) - A TRANSITION SUPPORT PROGRAM FOR JOB
CONTRACTING SHALL BE ESTABLISHED BY THE DOLE

‘WHICH:

(A)

(B)

SHALL PROVIDE A THREE-MONTH FINANCIAL
SUPPORT FOR EMPLOYEES IN BETWEEN JOB
PERIODS AND IS CONDITIONED ON UNDERGOING
SKILLS TRAINING OR UPGRADING UNDER TESDA
OR TESDA ACCREDITED TRAINING INSTITUTION
DURING THE PERIOD OF UNEMPLOYMENT,
PROVIDED THAT THE FREQUENCY OF
AVAILMENT SHALL NOT BE MORE THAN ONCE A
YEAR;

THE AMOUNT OF FINANCIAL SUPPORT SHALL
NOT BE LOWER THAN THE APPROPRIATE


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MINIMUM WAGE AND SHALL BE RELEASED AT
THE END OF EVERY MONTH; AND

(C) SHALL BE MANAGED BY THE APPROPRIATE
BUREAU OF THE DEPARMENT OF LABOR AND
EMPLOYMENT, WHICH SHALL REPORT TO THE
NATIONAL TRIPARTITE INDUSTRIAL PEACE
COUNCIL.

FURTHER, THAT THE FUNDS FOR THE
IMPLEMENTATION OF THE PROGRAM SHALL BE SOURCED
FROM THE FOLLOWING:

(A) ONE HUNDRED PERCENT (100%) OF THE
REGISTRATION/ RENEWAL FEES PAID BY
CONTRACTORS;

(B) ALL FINES COLLECTED UNDER ARTICLE 106 OF
THIS CODE; AND

(C) FUNDS FROM THE ADJUSTMENT MEASURE
PROGRAM OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT.”

SEC 7. Article 109, Title II, Book III of the Labor Code, as amended, is

hereby amended to read as follows:

“Article 109. Solidary liability. The provisions of existing laws to
the contrary notwithstanding, [every—employer—or—indireet_employer]
CONTRACTEE shall be held [responsible] SOLIDARILY LIABLE
with [his] THE JOB contractor [er-subeentracter] for any violation of any


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provision of this Code. For purposes of determining the extent of their civil
liability under this Chapter, they shall be considered as direct employers.
SEC 8. Article 294 [279], Title 1, Book VI of the Labor Code, as amended,

is hereby further amended to read as follows:

“Article [279]. Security of tenure. - [}n-case-or- regular employment,

the-employer—shall_not—terminate] [t]The services of an employee,
IRRESPECTIVE OF EMPLOYMENT STATUS OR POSITION,

SHALL NOT BE TERMINATED except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his/HER full backwages, inclusive of allowances, and to
his/HER other benefits or their monetary equivalent computed from the
time his/HER compensation was withheld from him/HER up to the time
of his/HER actual reinstatement.

THE EMPLOYER SHALL HAVE THE BURDEN OF
PROVING THAT THE TERMINATION IS WITH CAUSE AND
DUE PROCESS.”

SEC 9. Article 295 [280], Title I, Book VI of the Labor Code, as amended,

is hereby repealed, and in lieu thereof, a new Article 295 is provided to read as

follows:



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worker serviee-te-be performed is seasonal i andthe employment
ie fe ion of. 4

“ARTICLE 295. STATUS OF EMPLOYMENT. ALL
EMPLOYEES, EXCEPT THOSE UNDER PROBATIONARY
EMPLOYMENT, ARE DEEMED REGULAR, INCLUDING
PROJECT AND SEASONAL EMPLOYEES.

PROJECT AND SEASONAL EMPLOYEES ARE REGULAR FOR
THE DURATION OF THE PROJECT OR SEASON, AS THE CASE
MAY BE. FOR THIS PURPOSE, PROJECT EMPLOYMENT IS
EMPLOYMENT IN AN EXISTING PROJECT OR UNDERTAKING
THE COMPLETION OR TERMINATION OF WHICH HAS BEEN
DETERMINED AND MADE KNOWN TO THE EMPLOYEE AT
THE TIME OF THE ENGAGEMENT WHILE SEASONAL IS AN
EMPLOYMENT BASED ON THE EXISTENCE OF A SEASON IN
AGRICULTURAL WORK OR ESTABLISHED PERIODS OF
INCREASED WORK DEMANDS AND/OR INHERENT INDUSTRY
FLUCTUATIONS. IN PROJECT AND SEASONAL
EMPLOYMENT, WORKERS ARE CALLED TO WORK FROM
TIME TO TIME AND TEMPORARILY LAID-OFF DURING THE
COMPLETION OF THE PROJECT OR OFF SEASON BUT ARE IN
THE WORK POOL ON LEAVE WITH OR WITHOUT PAY STATUS
IN BETWEEN PROJECTS OR SEASONS.

ALL OTHER FORMS OF EMPLOYMENT ARE PROHIBITED
AND WORKERS UNDER SUCH ARRANGEMENTS ARE


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DEEMED REGULAR EMPLOYEES RECKONED FROM THE
FIRST DAY OF EMPLOYMENT.

FOR THE AVOIDANCE OF DOUBT, AN EMPLOYER-
EMPLOYEE RELATIONSHIP EXISTS WHEN THE WORKER IS
ENGAGED TO RENDER WORK OR SERVICE UNDER THE
CONTROL OF THE EMPLOYER, NOT ONLY AS TO THE END TO
BE ACHIEVED, BUT ALSO THE MANNER, MEANS AND
METHOD IN REACHING THE END.”

SEC 10. Article 296 [281], Title I, Book VI of the Labor Code, as amended,

is hereby amended to read as follows:

“Article 296 [281]. Probationary employment. Probationary
employment shall not exceed six (6) months from the [date-the-empleyee
stipulating by—a—lenger—peried.] FIRST DAY OF SERVICE
REGARDLESS OF THE NATURE OF WORK TO BE
PERFORMED. THE JOB DESCRIPTION AND QUALIFICATION
STANDARDS TO QUALIFY FOR REGULAR EMPLOYMENT
SHALL BE MADE KNOWN BY THE EMPLOYER TO THE
EMPLOYEE AT THE TIME OF HIS/HER ENGAGEMENT.

SEC 11. Article 297 [282], Title 1, Book VI of the Labor Code, as amended,

is hereby amended to read as follows:

“ARTICLE 297 [282]. JUST CAUSES OF Termination [by
employer]. An employer may terminate an employment for any of the

following causes:


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(a)

(b)

(©

(d)

()

Serious misconduct or willful disobedience by the employee
of the lawful orders of his/HER employer or representative in

connection with his/HER work;

Gross and habitual neglect by the employee of his/HER

duties;

Fraud or willful breach by the employee of the trust reposed
in him/HER by his/HER employer or duly authorized

representative;

Commission of a crime or offense by the employee against
the person of his/HER employer or any immediate member
of his/HER family or his/HER duly authorized

representatives; and

(e) [Other-eauses] ACT OR OMISSION analogous to the
foregoing, EXPRESSLY SPECIFIED AS GROUND FOR
DISMISSAL IN THE COMPANY RULES AND
REGULATIONS FORMULATED IN OBSERVANCE OF
WORKERS RIGHT TO PARTICIPATE IN POLICY
AND DECISION-MAKING PROCESSES AFFECTING
THEIR RIGHTS AND BENEFITS, OR AS PROVIDED
IN THE DULY REGISTERED COLLECTIVE
BARGAINING AGREEMENT.”

SEC 12. A new Article 298-A, Title I, Book VI of the Labor Code, as

amended, is hereby provided to read as follows:


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“ARTICLE 298-A. PROOF OF AUTHORIZED CAUSE AND
PAYMENT OF SEPARATION PAY. WITHIN THE PRESCRIBED
ONE (1) MONTH PERIOD REQUIRED UNDER ARTICLE 298,
THE EMPLOYER SHALL SUBMIT TO THE DOLE FOR
VALIDATION PROOF AND UNDERTAKING ON THE
EXISTENCE OF THE AUTHORIZED CAUSE IN ACCORDANCE
WITH THE RULES AND REGULATIONS AS MAY BE SET BY
THE SECRETARY OF LABOR AND EMPLOYMENT.”

SEC. 13. Implementing Rules and Regulations. — The Secretary of Labor
and Employment shall promulgate the necessary implementing rules and
regulations within one hundred and twenty (120) days from the effectivity of this
Act.

SEC. 14. Separability Clause. — If any provision of this law or the
application thereof to any person or circumstance, is held invalid, the remainder
of this law, or the application of such provision or part to other persons of

circumstances, shall not be affected thereby.

SEC. 15. Repealing Clause. — All laws, decrees, rules, and regulations or
parts thereof, which are contrary to or inconsistent with this Act are hereby

repealed or modified accordingly.

SEC. 16. Effectivity. — This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation.

Approved,