Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

House Bist No. 5110

INTRODUCED BY REPRESENTATIVES
RAFAEL V. MARIANO, TEDDY CASINO,
NERI JAVIER COLMENARES, LUZVIMINDA C. ILAGAN,
EMERENCIANA A. DE JESUS AND ANTONIO L. TINIO

EXPLANATORY NOTE

Aside from being a Constitutional right, security of tenure is one of the very few
legal protections for Filipino workers inscribed in our laws. Despite this, local and
foreign-owned companies continue to violate these laws by enforcing various forms
of labor flexibilization and labor contractualization schemes.

Contractual employment schemes can be viewed as the micro-economic firm-level
aspect of the continuing and worsening economic restructuring of the world
economy that is part of the macro-level liberalization, deregulation and
privatization policies of neoliberal globalization. Labor flexibilization pertains to
innovations in work organization and employment schemes associated with the
adoption of new production technologies and/or human resource management
designed to extract greater profits prompted by increasing global competition and
crisis.

These schemes to maximize profit include labor-only-contracting, subcontracting,
hiring of casuals and contractuals, hiring of apprentices so that in the Philippines
labor flexibilization is used synonymously with “contractualization” or
“casualization” of labor. While labor flexibilization may garner superprofits for the
big capitalists, it increases the exploitation of workers, poses obstacles to their
genuine unionization, and raises the rate of unemployment and underemployment,

According to the International Labor Forum, “the use of contract labor and
“precarious work” is part of the a global business strategy to undermine decent
work and cut labor costs through labor market “flexibilization” or ‘casualization'.”

In the past decade, contractual employment proliferated due to the neoliberal
Policies of globalization. In fact, a big chunk of locally-generated employment is
attributed to contractual or temporary jobs across industries particularly in special
economic zones, the service sector and industries concentrated on export-oriented
production mainly of semi-manufactures with little value-added.

Contractual employment is an employment strategy that aggravates domestic
unemployment by destroying regular and permanent jobs while exposing
contractual or temporary workers to substandard and inhumane working
conditions.


In general, contractualization is aimed at pressing down workers’ wages and
increasing capitalists’ profits.

In particular, it is aimed at the the following: 1) weakening trade unionism through
the reduction of the traditional base of trade unions which are permanent workers;
2) systematic and efficient co-opting of workers into subscribing to an ideology that
attacks workers’ organization and unionism (employment vs. union mentality); 3)
depriving workers of benefits and wages that are due to regular workers and the
possibility of improving their working conditions through unionism and collective
bargaining and; 4) allowing capitalists to earn maximum profits and lessen the
impact of economic crisis by constant adjustments in current and long-term
production costs through wage reduction and elimination of workers’ benefits from
long-term employment.

To understand what the core of contractualization as an employer strategy, it is
important to understand that the entire framework of labor law, including
international labor law, is based on the permanent employer/employee
relationship.

Contractualization is not a mere short-term tactic to reduce costs or to defeat a
union organizing drive, but a long-term strategy for shedding all obligations to
workers and eliminating all employee rights based on the existence of an
employment relationship. It thereby removes various obstacles to the extreme
exploitation of workers which they have won through decades of struggles.

Based on recent studies, contractualization is extensive in the Philippines, with 7
out of 10 firms implementing combinations of flexible work arrangements and with
estimates showing that contractuals now outnumber regulars among Filipino
workers. As labor groups and advocates have described, contractualization is a
dagger in the hearts of Filipino workers.

With this reality, the State must determinedly protect and uphold workers’ rights to
decent and long-term employment by protecting their security of tenure, declaring
illegal all forms of contractual employment and penalizing those who will continue
to carry out this anti-worker scheme.

In view of the foregoing, the passage of this proposal is earnestly sought.
“AEL V. MARIANO
ANAKPAWIS Partylist

oe on } \
TEDDY A. CASINO J

BAYAN MUNA Partylist Bay:

wand & bya PCS ail
wu IINDA C. ILAG: EMERENCIANA A. DE JESUS
Gabriela Women's Party Gabriela Women's Party

ACT Teacher's Partylist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

House Bmx no, 0119

INTRODUCED BY REPRESENTATIVES
RAFAEL V. MARIANO, TEDDY CASINO,
NERI JAVIER COLMENARES, LUZVIMINDA C. ILAGAN,
EMERENCIANA A. DE JESUS AND ANTONIO L. TINIO

AN ACT
STRENGTHENING THE WORKERS’ RIGHT TO
SECURITY OF TENURE, AMENDING FOR THE PURPOSE ART. 106 OF PD
442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES

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

SECTION 1. Article 106 of Presidential Decree 442, as amended is hereby
amended to read as follows:

“article 106. 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 latter’s
subcontractor, if any, shall be paid in accordance with the provisions of

this Code

pth that-the : peontractor fails to-payth

£ his cenplevess. oer with thie-Codeh 2 all

i d-sevorally list & is a

Cmpleyec-to the extent of sheer promt under ie sont she
-and-extent that he is liable to employees ph

by-hims}

Phe Secretary —of —-Labor—and—mployment—may;—_by_appropriate
F prohibit th of labor-te-prot

£-workers—established_under_this-Code—_l prohibiti

tee hem. ake—appropriate—disti: 13 debor-eely:
acting-and_jeb acting aswell_as_differentiati ithinth



[Bheredoticher only: gontrecting wire tie parti
substantial eapital-or-inve
or caulequipmentmashinenes wor promacsamongother ad the

ulled and placed Sy ing_activiti

igh ae: directly teleted-t-the principal business of auch-employer-in
shall-be
sxe athe smplyer sh habe scopnsile tothe -orkere
Jatter-were directly employed by him]

FOR ALL INTENTS AND PURPOSES, THE CONTRACTOR, SUB-
CONTRACTOR, AGENCY, PERSON OR INTERMEDIARY SHALL BE
CONSIDERED MERELY AS AGENT OF THE EMPLOYER OR THE
PRINCIPAL WHO SHALL BE RESPONSIBLE FOR THE WORKERS IN THE
SAME MANNER AND EXTENT AS IF THE LATTER WERE DIRECTLY
EMPLOYED BY THE SAID EMPLOYER OR PRINCIPAL.”

SECTION 2. Separability Clause. If any portion or provision of this Act

is declared void or unconstitutional, the remaining portions or provisions hereof
shall not be affected by such declaration

SECTION 3. Repealing Clause. All laws, ordinances, rules, regulations,

issuances, or parts thereof inconsistent with this Act are hereby repealed or
modified accordingly;

SECTION 4. Effectivity Clause. This Act shall take effect fifteen (15)

days after its publication in the Official Gazette or in at least two (2) newspapers
of general circulation.

Approved.