Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City, Metro Manila vn

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SIXTEENTH CONGRESS Hone 23 SEP 2013 Wt
First Regular Session I AEP

2955 Ser /

House Bill No.

Introduced by HON, LINABELLE RUTH R. VILLARICA,
4TH DISTRICT, BULACAN

EXPLANATORY NOTE

Presidential Decree No. 442, the “Labor Code of the Philippines”, was enacted to afford
protection to labor, promote employment and human resources development, and ensure industrial

peace based on social justice

The 2010 Bureau of Labor and Employment Statistics Integrated Survey (BITS) shows that,
out of total employment of 3,042,750 by non-agricultural establishments with 20 or more
workers in June 2010, a significant number, 850,085, were non-regular workers, including
= 179,384 probationary workers;
= 170,817 casual workers;
= 445,020 contractual/project-based workers.

The present Labor Code, while silent on term or fixed-period employment, does not
declare it per se illegal or against public policy. This silence has resulted in abuse and arbitrage on
the part of both employers and employees. The State can address this issue by amending pertinent

laws.
This bill therefore seeks to amend the present Labor Code so as to substantially implement
it by providing standards specific to term or fixed-period employment, including but not limited to

the following:
= A clear definition of term or fixed-period employment;

"  Requisites for validity of term or fixed-period employment;

* Conditions for regularization of term or fixed-period employment

Support for the enactment of this measure is earnestly sought,

REP. LINABELLE RUTH R. VILLARICA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

House Bill No. __ 295 5

Introduced by HON. LINABELLE RUTH R. VILLARICA.
4TH DISTRICT, BULACAN

AN ACT
ADDRESSING THE ISSUE OF LABOR CONTRACTUALIZATION
BY PROVIDING STANDARDS FOR TERM OR FIXED-PERIOD EMPLOYMENT,
AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442,
OTHERWISE KNOWN AS “THE LABOR CODE OF THE PHILIPPINE:

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

SECTION 1, Article 280 of Presidential Decree No. 442 is hereby amended as follows:

“ART, 280, R AL EMPLOYMENT. ~ ‘The provisions of wt
‘agreement to the contrary standing and regardless of the oral agreement of the parties,
employment shall be dceaed to be regular where the employee has been engaged to perfor
activities which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a TERM OR PERIOD, 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 services to be performed is seasonal in nature
and the employment is for the duration of the season,

‘An empl Shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of service, whether
such service is continuous or broken, shall be considered a regular employee with respect 10 the
activity in which he is employed and his employment shall continue while such activity exists.”

SECTION 2. A new Article 280-A of Presidential Decree No. 442 is hereby inserted as
follows:

“ART, 280-A. TERM OR FIXED-PERIOD EMPLOYMENT. ~ “TERM.
OR FIXED-PERIOD EMPLOYMENT” SHALL REFER TO ANY DOMESTIC
CONTRACT OF EMPLOYMENT, EXCEPT PROJECT OR SEASONAL, FOR
A DEFINITE PERIOD THAT TERMINATES BY ITS OWN TERMS AT THE,
END OF THE PERIOD.

TERM OR FIXED-PERIOD EMPLOYMENT SHALL NOT BE
PROHIBITED PROVIDED THE FOLLOWING REQUISITES CONCUR:

A, THERE MUST BE AN EMPLOYER-EMPLOYEE RELATIONSHIP,
B. IT MUST BE KNOWINGLY AND VOLUNTARILY AGREED UPON BY
THE PARTIES, WITHOUT ANY FORCE, DURESS OR IMPROPER


PRESSURE BEING BROUGHT TO BEAR UPON THE EMPLOYEE AND
ABSENT ANY OTHER CIRCUMSTANCES VITIATING HIS CONSENT;
c, IT MUST SATISFACTORILY APPEAR THAT THE EMPLOYER AND
EMPLOYEE DEALT WITH EACH OTHER ON MORE OR LESS EQUAL
TERMS WITH NO MORAL DOMINANCE WHATEVER BEING
EXERCISED BY THE FORMER ON THE LATTER; AND
D. IT MUST NOT BE USED TO CIRCUMVENT SECURITY OF

INURE.

TERMINATION OF TERM OR FIXED-PERIOD EMPLOYMENT
SHALL BE DEEMED EQUIVALENT TO THE COMPLETION OF THE
PROBATIONARY PERIOD. ANY EXTENSION OR SUBSEQUENT
CONTRACT BY THE SAME OR ANY ASSOCIATED ENTERPRISE OR
RELATED PARTY, REGARDLESS OF INTERVENING TIME, SHALL BE
DEEMED AS FOR REGULAR EMPLOYMENT.

“ASSOCIATED ENTERPRISES” OR “RELATED PARTIES” SHALL
REFER TO TWO OR MORE ENTERPRISES WHERE ONE PARTICIPATES,
DIRECTLY OR INDIRECTLY IN THE MANAGEMENT, CONTROL, OR
CAPITAL OF THE OTHER; OR IF THE SAME PERSONS PARTICIPATE,
DIRECTLY OR INDIRECTLY IN THE MANAGEMENT, CONTROL, OR
CAPITAL OF THE ENTERPRISES.

“CONTROL” SHALL REFER TO ANY KIND OF CONTROL,
DIRECT OR INDIRECT, WHETHER OR NOT LEGALLY ENFORCEABLE,
AND HOWEVER EXERCISED. MOREOVER,
CONTROL SHALL B INCOME OR DEDUCTIONS
HAVE BEEN ARBITRARILY SHIFTED BETWEEN TWO OR MORE
ENTERPRISES.”

SECTION 3. Article 281 of Presidential Decree No, 442 is hereby amended as follows:

“ART, 281, PROBATIONARY EMPLOYMENT. ~ Probationary employment shall not
exceed six (6) months from the date the employce started working, unless it is covered by an
apprenticeship agreement 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 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 employ lowed to work after a probationary
period shall be considered a regular employee. ‘I LOYER AND EMPLOYEE,
MAY, BY MUTUAL AGREEMENT PRIOR TO AND WITHOUT ALLOWING
THE LAPSE OF THE PROBATIONARY PERIOD, EXTEND ONCE ONLY,
THE PROBATIONARY PERIOD THAT SHALL IN TOTAL NOT EXCEED
THE ONE (1) YEAR PERIOD FOR CASUAL EMPLOYMENT UNDER ART.
280."

SECTION 4. Separability Clause. — Any portion or provision of this Act that may be
declared unconstitutional or invalid shall not have the effect of nullifying the other portions and
provisions hereof as long as such remaining portion or provision can still subsist and be given
effect in their entirety

SECTION 5. Repealing Clause. ~ Presidential Decree No. 442, otherwise known as the
“Labor Code of the Philippines” and all decrees, executive orders, proclamations and
administrative regulations or parts thereof inconsistent herewith are hereby repealed, amended or
modified accordingly.


Rone

SECTION 6. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
publication in any national paper of general circulation.

Approved,