Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

2552

HOUSE BILL NO.

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

This proposed law seeks to grant workers and employees the right to
own initially, free of charge and subsequently buy certain percentage of the
shares of stocks in business enterprises and other institutions and to enable
them to participate in the Board of Directors or any other equivalent
corporate or policy-making body in the establishment they work for.

This proposed legislation therefore, will make workers part of co-
owners of the corporations or institutions they have worked through the
years.

The passage of this bill into law will bring about the following benefits,
among others:

(1) Workers’ co ownership will induced or spur domestic trade or
activity. The increase in disposable income will translate into
consumption or increases in savings which in turn would find their
ways into the financial market to fund expansion or investment in
new plants and factories. This in turn implies greater income,
employment and marketable products or merchandise.

(2) With inspired workers, the quality of goods produced will
improve. Quality produce enhances competitiveness in both
domestic and foreign markets. The desire for increased earnings
will motivate the worker-owner produce quality goods.

(3) Plans for low-cost housing can easily be implemented at the
corporate level with workers able to address both the problems of
financing and affordability.

(4) Unnecessary strikes and work stoppages will soon become a
thing of the past. Wasteful production can be avoided and efficient
and effective use of corporate resources ensured.

(5) Fraudulent and deceptive transfer of corporate profits and
resources will be discouraged.


(6) Increased incomes for millions of workers will broaden the tax
base for government revenue generation.

(7) The newly acquired status of being “co-owners” will encourage
workers to study further to cope with changing knowledge and
technology. This in turn will make for an enlightened citizenry.

(8) The right of workers to “co-determination” as envisioned in the
Constitution will now be operationalized.

The Basis of proposed workers co-ownership are amply provided for
in the various sections of the Philippines Constitution specifically in
Article XII on the National Economy and Patrimony, Article XIII on
Social Justice and Human Rights, and Finally in Article II on the
declaration of Principles and State Policies.

This proposed bill therefore seeks to provide as “enabling law”
and transform into concrete policy and program the afore-quoted
provisions on “workers co-ownership” in the Philippine Constitution.

Workers’ Experience under an unbridled capitalism is most
agonizing. It consigns the workers to leave forever in the depths of
poverty. Workers under this system work like slaves for their
employers. “Collective Bargaining” may have alleviated their suffering
but the clamor for better treatment remains unsolved.

The State Therefore, must intervene in order to promote
distributive justice. The enactment of this proposed bill on workers’
co-ownership is one such intervention to “humanize” work and the
‘production process. Thus, the immediate passage of this bill is most
earnestly south. .

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

2552

HOUSE BILL NO.

Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT

GRANTING WORKERS THE RIGHT TO OWN AND SUBSEQUENTLY TO
BUY A CERTAIN PERCENTAGE OF AUTHORIZED SHARES OF STOCKS
OF ANY COMMERCIAL, INDUSTRIAL, AGRICULTURAL ENTERPRISES,
INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS
AS WELL AS RELIGIOUS, MEDICAL OR EDUCATIONAL INSTITUTIONS
OPERATED FOR PROFIT AND TO ENSURE WORKERS’
REPRESENTATIONIN NON-PROFIT CORPORATIONS AND
ENTERPRISES, AND TO ENCOURAGE PRODUCTIVITY. PROMOTE AND
MAINTAIN INDUSTRIAL PEACE

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

SECTION 1. Short Title - This Act shall be known as the “Workers
Co-ownership Act”.

SEC. 2. Declaration of Policy - It is the policy of the State to
regulate the acquisition, ownership, use and disposition of property and its
increments for the common good, promote the principle of shared
responsibilities between workers and employers to foster industrial peace,
recognizing the rights of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns of investments, expansion and
growth, affording the rights of the workers to participate in policy and
decision-making processes affecting their rights, benefits and general
welfare in line with the duty of the State to promote distributive and social
justice in all phases of national development.

SEC. 3. - Coverage - This Act shall apply to all business enterprises,
corporations and cooperatives, including government-owned or controlled
corporations performing proprietary functions or purely governmental or
quasi-proprietary function as well as religious, medical or educational
institutions operated for profit or not. It shall cover all employees and
workers including casual, regular, supervisor and non-managerial employees
who have rendered at least one (1) year of continuous service and who are
members of labor unions or cooperatives existing in their establishments or
agencies.


SEC. 4. - Definition of Terms - For the purpose of this Act, the
following definitions shall apply:

(1) “Business Enterprises” refers to commercial, industrial,
agricultural or agro-industrial establishments engaged in the
Production, manufacturing, processing, repacking or assembly and
distribution of goods, including service-oriented enterprises duly
registered as such by appropriate government agencies.

(2) “Government-owned and controlled corporations performing
Proprietary functions” refer to corporations registered under the
Corporation Code whose charters invest tem with Proprietary or
Pecuniary interest and those which actually operate for profit.

(3) “Medical Institutions” refer to hospitals, clinics or any medical
facilities that dispense health care services as contemplated in the
Magna Carta of Health Workers.

(4) “Educational Institutions” refer to privately owned technical,
vocational or special schools, colleges and universities, including
state colleges and universities but excluding the primary and
secondary public school system and pre-needs educational
institutions or corporations that provide educational related
services.

(5) “Workers co-ownership” refer to a system whereby workers are
made part or joint owners of the means of production in a given
business enterprises, establishment, including —_non-stock
corporations. Ownership shall be in the form of shares of stocks
entitlements or any form of conveyance as to confer title of a thing
or object.

(6) “Workers Cooperatives” refer to certified labor organizational
whether in the private or public sector, organized for the purpose of
representing their members in collective bargaining or negotiations
and duly registered with the Department of Labor and Employment
or the Civil Service Commission.

SEC. 5. - Automatic Transfer of Shares of Stocks and Rights to
Corporate Management Board - Any commercial, industrial, agricultural
or agro-industrial enterprises or cooperatives, including any government
owned or controlled corporations as well as any religious, medical or
educational institution operated for profit with at least ten (10) years of
corporate existence is hereby required to allocate or cede free of monetary
consideration, ten percent (10%) or such other percentage not less than ten
Percent (10%) of its authorized stock to its workers' cooperatives or labor
union. Provided, that such workers cooperatives or labor unions shall be duly
registered with the Cooperative Development Authority or the Securities and
Exchange Commission, as the case may be.


SEC. 6. - Option to Buy another Thirty Percent (30%) of
Authorized Shares of Stocks - The workers’ cooperative or labor unions
mentioned in the preceding section shall have the further right and option to
buy another thirty percent (30%) of the authorized capital stock of the said
business enterprises or establishment.

Consideration for the issuance of the shares of stock to the workers’
cooperatives or labor unions pursuant to this section shall be paid for by the
Philippine government through any of its government financial institutions by
means of loan granted by the latter to the former through financial
intermediation negotiated for the purpose, which the former will pay at
subsidized lending rate of not more than five (5%) per annum.

SEC. 7. - Stock Purchase beyond Forty Percent (40%) of the
Authorized Capital Stock - Purchase by the workers cooperatives or labor
unions beyond forty percent (40%) of the authorized capital stock of
businéss enterprises and institutions hall be made through voluntary
negotiations between the existing owners of the shares-of stocks and the
workers cooperatives or labor unions.

SEC. 8. - Purchase of Stocks of Newly-Organized Business
Enterprises or Institutions - Any newly-organized commercial, industrial,
agricultural or agro-industrial enterprise or cooperative, including any
government-owned or controlled corporations as well as any religious,
medical or educational institutions operated for profit is hereby required to
allocate and offer to sell the same to the workers’ cooperative or labor union
forty percent (40%) of its authorized capital stock. The union or
cooperatives can avail of this option to purchase said shares of stock within
a period of one (1) year from the corporation’s organization and registration.

Consideration for the issuance of said shares of stocks to the workers
cooperatives or labor unions shall be made in cash to be paid by the
Philippine Government thru a government financial institution by means of a
loan granted by the latter to the former through financial intermediation
negotiated for such purpose which the workers’ cooperative or labor union
will repay at subsidized lending rates of not more than five percent (5%) per
annum.

SEC. 9. - Government-Owned and Controlled Corporations -
Employees of Government-Owned and controlled corporations performing
proprietary functions shall be entitled to at least ten percent (10%) profit
sharing and a seat in the Board of Directors thru their duly union
representative.

SEC. 10. - Non-Stock, Non Profit Corporations, Institutions and
Cooperatives — In non-stock government-owned or controlled corporations,
religious, medical educational institutions, including state colleges and
certified labor organizations shall be entitled to at least one (1) seat in the
Board of Directors or any other equivalent corporate or policy-making body
with full voting rights. Provided, That in case there is no recognized or
certified labor voting or organization in the corporation or institution, the
workers’ representative shall be elected from among their ranks. Provided
further, That in the case of non-stock government corporations, the workers


representatives therein shall be appointed by the President of the
Philippines.

SEC. 11. —- Non-Diminution of Rights and Benefits - Nothing in
this Act shall be construed as a waiver of the workers’ right to self-
organization, collective bargaining and negotiation and peaceful concerted
activities, including the right to strike, nor to diminish or reduce any benefits
and other privileges enjoyed by the workers under the existing laws,
decrees, executive orders, company policy or practice or any other
agreement or contract between the employer and employees.

SEC. 12. - Sanction — Any violation or circumvention of this Act shall
be considered an unfair labor practice and punishable in accordance with the
Title VI of P.D. 442, otherwise known as “The Labor Code of the Philippines”
as amended by B.P. Blg. 70 and B.P. 130.

Foreign national found violating or Circumventing the provisions of this
Act shall be deported immediately from the country.

SEC. 13. - Implementing Rules and Regulations - The Secretary
of the Department of Labor shall, within (30) days from effectivity of this
Act, constitute and convene a tripartite body for the purpose of formulating
the rules and regulations as are necessary to carry out the provisions hereof.

SEC. 14. - Separability Clause - If any provision or part hereof is
held invalid or unconstitutional, the remainder of the law or the provision not
otherwise affected shall remain valid and subsisting.

SEC. 15. - Repealing Clause — Any laws, decrees, executive orders,
letter of instructions and rules and regulations or any part thereof which is
inconsistent with any of the provisions of this Act is hereby repealed or
modified accordingly.

SEC. 16. - Effectivity Clause - This Act shall take effect fifteen (15)

days following its complete publication in at least two (2) newspapers of
general circulation.

Approved,