Republic of the Philippines E
HOUSE OF REPRESENTATIVES \\s, TWE_IS
Quezon City XK! mean &

NINETEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. 1100 7

Introduced by
Akbayan Representative Percival Cendafia

Prefatory Statement

The impact of the COVID-19 pandemic on the labor market was devastating to say
the least. It sharply reversed previous economic gains, wiping out 1.7 Million wage
and salary jobs in the 12 months to January 2021. Consequently, employment in the
informal sector rose by about 435,000.! Not only was there a spike in the
unemployment rate, there was a reported fall in labor force participation and a large
swell in the fraction of workers who are currently employed but are absent from
work.

In order to rebound, the country needs to strengthen active labor market programs.
This entails supporting workers achieve income stability, through wage and hiring
subsidies, workplace skills funding schemes and industry-led apprenticeship
programs, among others.* However, these programs would not have long-term impact
in a highly contractualized employment system such as ours.

Contractualization or commonly refered to as ‘endo’ (end of contract), the illegal
practice of hiring fixed-term employees usually for a period of 5 months or less, and
continuously renewing their contracts to avoid giving them the benefits of regular

Philippines’ COVID-19 Employment Challenge: Labor Market Programs fo the Rescue. htpsflogs.adb.org/blogphippines-
covid-19-employment-challengeabor-market programs-tovescue. 4 June 2021

2 Intemational Labour Organization. COVID-19 Labour Market Impact in the Philippines: Assessment and National Policy
Responses. 2020.
Bird, ot. al



employment represents around 27-45 percent of total employment in the country.
These employees are suffering from poor working conditions, and are not given
benefits, such as options for a retirement fund, housing loans, healthcare insurance,
and other social protection measures. They are also unable to exercise their
Constitutional right to self-organization, collective bargaining and negotiations, and
right to concerted activities including the right to strike.

Contractualization is not only been abusive to laborers, it is also damaging to an
economy trying to recover from the pandemic. Without income stability, the labor
market economy would struggle to register growth.

In this proposed legislation, fixed term employment, contracting arrangement and
other schemes are going to be prohibited. Our Labor Code shall be amended
accordingly. This is in recognition of the State policy enshrined in our 1987 Philippine
Constitution—“[t]he State affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare.”5

The passage of this bill is a reminder that the strength of the Filipino worker is the
strength of our economy. The end to “endo” is hereby earnestly sought.

* Purugganan, Joseph, Precarious Road Ahead: The Continuing Struggle of Workers against Contractualization in the
Philippines. Focus on the Global South Dispatch. May 18, 2022
5 Aticle I, Section 18. 1987 Philippine Constitution.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
Third Regular Session

HOUSE BILL No. _11007

Introduced by
Akbayan Representative Percival Cendafia

AN ACT
AGAINST THE PRACTICE OF "ENDO" AND CONTRACTING, AMENDING FOR
THIS PURPOSE ARTICLES 106 TO 109, 294 TO 296 OF AND ADDING A NEW
PROVISION TO 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. Short Title. — This Act shall be known as the "Anti-ENDO and
Contracting Law".

SEC. 2. Article 106 is hereby deleted and replaced as follows:

"ART. 106. Prohibition Against Contracting or Subcontracting - CONTRACTING,
WHERE A PERSON OR ENTITY FARMS OUT THE PERFORMANCE OF ITS
BUSINESS OR ANY PART THEREOF TO ANOTHER, IS HEREBY STRICTLY
PROHIBITED EXCEPT AS PROVIDED IN THE FOLLOWING PARAGRAPH.

THE SECRETARY OF LABOR AND EMPLOYMENT MAY, BASED ON THE
UNANIMOUS RECOMMENDATION OF THE NATIONAL TRIPARTITE
INDUSTRIAL PEACE COUNCIL (NTTPC) UNDER ART. 290 (C) OF THE LABOR
CODE, AS AMENDED, DETERMINE BY APPROPRIATE REGULATIONS
SPECIFIC ACTTVITIES WHICH MAY BE CONTRACTED OUT.

NATURAL OR JURIDICAL PERSONS ENGAGED IN ANY ARRANGEMENT
ACTING AS PRINCIPALS IN VIOLATION OF THE PROHIBITION AGAINST
CONTRACTING OR SUBCONTRACTING SHALL AUTOMATICALLY BE


CONSIDERED THE WORKER'S DIRECT EMPLOYER AND THE LATTER SHALL
BE DEEMED AS DIRECT EMPLOYEES FOR ALL PURPOSES. NATURAL OR
JURIDICAL PERSONS ACTING AS CONTRACTORS IN VIOLATION OF THE
PROHIBITION AGAINST CONTRACTING OR SUBCONTRACTING SHALL BE
CONSIDERED MERELY AS AN AGENT OF THE EMPLOYER.

SEC. 3. Articles 107 is hereby deleted and replaced to read as follows:

ART. 107. CONDITIONS ON CONTRACTING. - CONTRACTING ALLOWED
UNDER THE PRECEDING ARTICLE SHALL BE DONE ONLY IF THE NATURAL
OR JURIDICAL PERSON ACTING AS CONTRACTOR OBTAINS A LICENSE
FROM THE DEPARTMENT OF LABOR AND EMPLOYMENT AND ONLY IF IT
PERFORMS A JOB, WORK OR SERVICE IDENTIFIED BY THE SECRETARY OF
LABOR AND EMPLOYMENT, BASED ON THE UNANIMOUS
RECOMMENDATION OF THE NATIONAL TRIPARTITE INDUSTRIAL PEACE
COUNCIL (NTIPC) UNDER ART. 290 (C) OF THE LABOR CODE.

SUCH LICENSE SHALL BE ISSUED AND MAINTAINED ONLY IF THE
APPLICANT FULFILLS ALL OF THE FOLLOWING:

(A) HAS A PAID-UP CAPITAL OR NET WORTH OF AT LEAST FIFTY MILLION
PESOS (P50,000,000.00), WHICH MAY BE INCREASED BY THE SECRETARY OF
LABOR AND EMPLOYMENT AS DEEMED APPROPRIATE THROUGH
TRIPARTITE CONSULTATION;

(B) HAS A CORE OF REGULAR EMPLOYEES CONSISTING OF COMPETENT
PROFESSIONALS OR SKILLED WORKERS ESPECIALLY TRAINED TO
PERFORM THE JOB, WORK OR SERVICE TO BE CONTRACTED OUT;

(©) HAS INVESTMENT IN THE FORM OF EQUIPMENT, MACHINERIES OR
TOOLS WHICH ARE REASONABLY NECESSARY TO PERFORM OR COMPLETE
THE JOB, WORK, OR SERVICE TO BE CONTRACTED OUT:

(D) EXERCISES EXCLUSIVE CONTROL OVER THE PERFORMANCE AND
COMPLETION OF THE JOB, WORK, OR SERVICE CONTRACTED OUT;

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

(F) PAYS A LICENSE FEE, WHICH SHALL NOT BE LOWER THAN FIVE
HUNDRED THOUSAND PESOS (P500,000.00).


THE LICENSE SHALL BE VALID FOR A PERIOD OF ONE (1) YEAR AND MAY
BE RENEWED UPON COMPLIANCE WITH THE REQUIREMENTS
PRESCRIBED ABOVE AND OTHER REQUIREMENTS AS MAY BE
DETERMINED BY THE DEPARTMENT OF LABOR AND EMPLOYMENT
PROVIDED THAT THE JOB, WORK, OR SERVICE TO BE PERFORMED
CONTINUES TO BE DETERMINED BY THE SECRETARY OF LABOR AND
EMPLOYMENT AS VALID FOR CONTRACTING BASED ON THE UNANIMOUS
RECOMMENDATION OF THE NATIONAL TRIPARTITE INDUSTRIAL PEACE
COUNCIL (NTIPC).

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

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 CONTRACTORS.
IN NO CASE SHALL PRIVATE RECRUITMENT AND PLACEMENT AGENQES
(PRPA) OR PRIVATE EMPLOYMENT AGENCIES (PEA) UNDER ARTICLE 25 OF
THE LABOR CODE, AS AMENDED, BE ALLOWED TO ENGAGE IN
CONTRACTING."

SEC. 4. Articles 108 of the labor Code is hereby deleted.

SEC. 5. Article 294 of the Labor Code Is hereby amended as follows:

"ART. 294. Security of Tenure. - [In 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. 6. Article 295 is hereby deleted and replaced to read as follows:

"ARTICLE 295. STATUS OF EMPLOYMENT. - EXCEPT THOSE UNDER VALID
WRITTEN PROBATIONARY CONTRACTS, ALL EMPLOYEES ARE DEEMED
REGULAR INCLUDING PROJECT AND SEASONAL EMPLOYEES, AND SHALL,
IN CASE OF RANK-AND- FILE OR SUPERVISORS, BE TREATED AS PART OF
THE APPROPRIATE BARGAINING UNIT FOR PURPOSES OF THE EXERCISE
OF THE CONSTITUIIONAL RIGHT TO SELF- ORGANISATION AND
COLLECTIVE BARGAINING, AND SHALL BE ENTITLED TO ALL THE
BENEFITS UNDER THE EXISTING CBA, IF ANY.

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. SEASONAL EMPLOYMENT IS BASED ON THE EXISTENCE OF
A SEASON IN AGRICULTURAL WORK AS DETERMINED BY THE
DEPARTMENT OF LABOR AND EMPLOYMENT AND BASED ON THE
UNANIMOUS RECOMMENDATION OF THE NATIONAL TRIPARTITE
INDUSTRIAL PEACE COUNCIL (NTIPC). WORKERS UNDER PROJECT AND
SEASONAL EMPLOYMENT ARE ENTITLED TO THE RIGHT OF FIRST
REFUSAL TO THE TASK, WORK, OR PROJECT WHICH IS THE SUBJECT
MATTER OF THEIR EMPLOYMENT.

ALL OTHER FORMS OF DISCONTINUOUS EMPLOYMENT ARE PROHIBITED.
CLAUSES IN EMPLOYMENT CONTRACTS PROVIDING FOR A FIXED TERM OR
DEFINITE PERIOD OF EMPLOYMENT ARE VOID FOR BEING CONTRARY TO
PUBLIC POLICY. WORKERS UNDER SUCH ARRANGEMENTS ARE DEEMED
REGULAR EMPLOYEES RECKONED FROM THE FIRST DAY OF
EMPLOYMENT AND SHALL, IN CASE OF RANK-AND-FILE OR SUPERVISORS,
BE TREATED AS PART OF THE APPROPRIATE BARGAINING UNIT FOR
PURPOSES OF THE EXERCISE OF THE CONSTTFUTIONAL RIGHT TO SELF-
ORGANISATION AND COLLECTIVE BARGAINING, AND SHALL BE ENTITLED
TO ALL THE BENEFITS UNDER THE EXISTING CBA, IF ANY.

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


SEC. 7. Article 296 is hereby amended to read as follows:

“Art. 296. Probationary employment - Probationary employment shall not exceed six
(6) months from the [date the employee 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 employee who is allowed to work after a probationary period shall
be considered a regular employee.) FIRST DAY OF SERVICE REGARDLESS OF
THE NATURE OF WORK TO BE PERFORMED PROVIDED THAT, THE
PROBATIONARY PERIOD OF SCHOOL TEACHING PERSONNEL IN PRIMARY
AND SECONDARY EDUCATION SHALL NOT EXCEED ONE (1) ACADEMIC
YEAR AND THE PROBATIONARY PERIOD OF SCHOOL TEACHING
PERSONNEL IN HIGHER EDUCATION SHALL NOT EXCEED ONE (1)
SEMESTER.

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 WHICH SHALL BE made known by the
employer to the employee IN WRITING at the time of his engagement. An employee
who is allowed to work after a probationary period shall be considered a regular
employee. EXCEPT WHEN THE TERMINATION IS FOR JUST CAUSE, A
PROBATIONARY EMPLOYEE WHO HAS RENDERED AT LEAST ONE (1)
MONTH OF SERVICE IS ENTITLED TO A TERMINATION PAY OF ONE-HALF
(1/2) MONTH SALARY."

SEC. 8. Insert a new Article 303-A to read as follows:

"ARTICLE 303-A. PENALTIES. - (A) THE DEPARTMENT OF LABOR AND
EMPLOYMENT SHALL IMPOSE THE FOLLOWING PENALTIES:

1. FOR EVERY PERSON OR ENTITY ENGAGED IN ANY ACTIVITY IN
VIOLATION OF THE PROHIBITION AGAINST CONTRACTING OR
SUBCONTRACTING, A FINE OF AT LEAST FIFTY THOUSAND PESOS
(PHP 50,000.00) ASSESSED PER EMPLOYEE ENGAGED UNDER A
PROHIBITED CONTRACTING ARRANGEMENT.

2. FOR EVERY PERSON WHO OR ENTITY WHICH MISCLASSIFIES AN
EMPLOYEE'S STATUS OF EMPLOYMENT IN DEROGATION OF THE
EMPLOYEE'S SECURITY OF TENURE, A FINE OF AT LEAST FIFTY
THOUSAND PESOS (PHP 50,000.00) ASSESSED PER MISCLASSIFIED
EMPLOYEE.

3. FOR EVERY PERSON OR ENTITY ENGAGED IN ANY ACTIVITY IN
VIOLATION OF THE PROHIBITION AGAINST FIXED TERM


EMPLOYMENT, A FINE OF AT LEAST ONE HUNDRED THOUSAND
PESOS (PHP 100,000.00) ASSESSED PER EMPLOYEE ENGAGED UNDER
SUCH PROHIBITED ARRANGEMENTS.

4, FOR EVERY PERSON OR ENTITY ENGAGED IN ANY ACTIVITY IN
VIOLATION OF THE PROVISION ON PROBATIONARY EMPLOYMENT, A
FINE OF AT LEAST ONE HUNDRED THOUSAND PESOS (PHP 100,000.00)
ASSESSED PER EMPLOYEE ENGAGED UNDER SUCH PROHIBITED
ARRANGEMENTS.

THESE PENALTIES SHALL BE IMPOSED WITHOUT PREJUDICE TO
OTHER DAMAGES AND PENALTIES THAT MAY BE IMPOSED UNDER THIS
CODE AND OTHER LAWS AND REGULATIONS.

(B) IMPRISONMENT OF NOT LESS THAN TWELVE (12) YEARS AND ONE (1)
DAY BUT NOT MORE THAN TWENTY (20) YEARS SHALL BE IMPOSED
UPON ANY PERSON FOUND GUILTY OF COMMITTING ANY OF THE
FOLLOWING:

1. ENGAGING IN ANY ACTIVITY IN VIOLATION OF THE PROHIBITION
AGAINST CONTRACTING OR SUBCONTRACTING;

2. MISCLASSIFYING AN EMPLOYEE'S STATUS OF EMPLOYMENT IN
DEROGATION OF THE EMPLOYEE'S SECURITY OF TENURE;

3. VIOLATING THE PROVISION ON PROBATIONARY EMPLOYMENT; OR

4, OTHER THAN THOSE ALLOWED IN ARTICLE 295 OF THIS CODE,
USING FIXED TERM EMPLOYMENT IN ENGAGING WORKERS.

IN ANY OF THE FOREGOING CASES IN PARAGRAPH (B), THE PENALTY OF
LIFE IMPRISONMENT SHALL BE IMPOSED IF THE ACT COMMITTED
PERTAINS TO AT LEAST THREE (3) WORKERS.

SEC. 9. Separability Clause. - If any section or provision of this Act is held
unconstitutional or invalid, the remaining sections or provisions with the provisions
not affected thereby shall continue to be in full force and effect.

SEC. 10. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations, issuance or parts thereof inconsistent with this Act are hereby repealed
or modified accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days after publication in
the Official Gazette or two (2) newspapers of general circulation.

Approved,