Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

iG 1218

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
GRANTING AN ANNUAL PRODUCTIVITY INCENTIVE TO ALL WORKERS IN
THE PRIVATE SECTOR, ESTABLISHING MECHANISMS FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

The 1987 Constitution expressly states that:

“The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation and free the people from poverty
through policies that provide adequate social services, promote full employment,
a rising standard of living, and an improved quality of life for all.” (Article \l, Sec.
9)

And:

“The State shall promote social justice in all phases of national
development.” (Article II, Sec. 10);

And further:

“The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.” (Article |, Sec. 18)

And finally:


“The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable return on investments, and to its expansion of
its qrowth.” (Par. 4, Section 3, Article XIII)

Pursuant to the above-quoted provisions of the 1987 Constitution, it is the
apparent duty of the State to provide proper mechanisms that will put into
practice these constitutional mandates.

Presently, labor and management relations are characterized as
confrontational when discussing and settling basic and significant issues
affecting wages, benefits as well as conditions of work. As a result, the
productivity expected both from labor and management suffers thereby lessening
their ability to compete and survive as one entity.

It is ideal as it is realistic that the success of any business enterprise
largely depends on the atmosphere of cooperation and support of labor with
management and vice versa.

This bill, granting “Productivity Incentive Bonuses” to laborers in the
private sector, is a recognition of their indispensable contribution to the success
of the business enterprise. It likewise seeks to promote and provide measures
for the mutual benefit and industrial harmony between labor and management.

Through this legislative initiative, the worker's rights to uplift and improve
their lives as well as the management's rights to a reasonable return on their
investments are satisfied through their cooperative endeavors.

The granting of the Productivity Incentive Bonus for labor will not only
serve as additional income but will work as an incentive for greater productivity
This increased productivity will definitely benefit the business enterprise.

Itis in this light that the approval of this measure is earnestly requested

DIOSDADO (GAL ARROYO GLORIA MACAPAGAL ARROYO
Second District, Camarines Sur cond District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

FIFTEENTH CONGRESS.
First Regular Session

1218

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
GRANTING AN ANNUAL PRODUCTIVITY INCENTIVE TO ALL WORKERS IN
THE PRIVATE SECTOR, ESTABLISHING MECHANISMS FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES

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

SECTION 1. Title. — This Act shall be known as the “Workers Productivity
Incentives Act of 2010."

SECTION 2. Statement of Policy. - It is hereby declared the policy of the
State to continuously empower the Filipino workers in their continuing struggle to
uplift and improve their lives through policies that effectively contribute to greater
economic gains, protection of their rights and advancement of their welfare. The
State shall, therefore, promote the rights of workers in their just and fair share in
the profits from the production of goods and services in all endeavors where their
labors and expertise are employed by virtue of a management-labor/employer-
employee relation.

SECTION 3. Extent of Grant. — All workers in the private sector regardless
of their employment status and not excluded by this Act shall be granted an
annual productivity incentive bonus which shall be equivalent to not less than ten
percent (10%) of net profits before taxes gained by any company or business
establishment for every fiscal year that engages their labor, skills and expertise
for any period or duration, provided that they have worked for at least one month


during the calendar year. If the employee worked for only a portion of the year,
the productivity incentive bonus shall be computed pro rata.

SECTION 4. Rule Making Power. — The Department of Labor and
Employment, in consultation with the National Wages and Productivity
Commission, Bureau of internal Revenue, and representatives from the labor and
employer sectors shall promulgate and issue within six (6) months from the
effectivity of this Act such rules and regulations as are necessary to implement
the provisions hereof.

SECTION 5. Non-diminution of Benefits. — Nothing in this Act shall be
construed to diminish or reduce any benefits and other privileges enjoyed by the
workers under existing laws, decrees, executive orders, company policy or
practice, or any agreement or contract between the employer and employees.

SECTION 6. Unlawful interference or restraint. — It shall be unlawful for an
employer or labor union or for any government official or employee and any other
business enterprise or entity to interfere with, restrain or coerce employees in the
right to receive this grant and to require as a condition of employment that the
employee shall, not collect this grant in his favor.

SECTION 7. Exemptions. - The provisions of this Act shall not apply to
government-owned and controlled corporations with original charters; managerial
employees; house helpers; non-resident aliens; workers who are paid by results
as determined by the Secretary of Labor in appropriate regulations; workers
employed by retail service establishments employing not more than five (5)
workers; employees or workers in companies or enterprises undergoing
receivership/liquidation; and those employed in new business enterprises.
Applications for exemption strictly in accordance with those exempted employers,
enterprises or establishments herein stated shall be duly filed with the Office of
the Regional Director of the Department of Labor and Employment (DOLE)
whose decision can be appealed to the DOLE Secretary within ten (10) days
from its promulgation.

SECTION 8. Compliance Order. — All Regional Directors of the DOLE
shall issue an annual compliance order for the payment of the grant as provided
for in this Act. The order shall, among other things, direct the employer or
manager to pay the amount due each worker or employee, thirty (30) days after
the end of every fiscal year and shall also include the computation on which the
order was based.

SECTION 9. Penalties. — Any person, corporation, trust, firm, partnership,
association or entity which refuses or fails to pay the herein prescribed grant in
accordance with this Act shalll be directly liable to the affected worker for thrice
(3x) the accrued grant plus moral damages not exceeding thirty thousand pesos
(P30,000.00) for each affected worker and imprisonment of not less than one (1)


year nor more than two (2) years and including the costs of litigation and
attorney's fees.

If the violation is committed by a corporation, trust or firm, partnership,
association or entity the penalty of imprisonment shall be imposed on the entity's
responsible officers. If the violation is committed by a foreign individual, he/she

shall be summarily deported under applicable laws after complete satisfaction of
his adjudged liabilities.

SECTION 10. Separability Clause. — If any provision of this Act shall be

declared unconstitutional, any other provision not affected thereby shall remain in
full force and effect.

SECTION 11. Repealing Clause. - All laws, decrees, orders, rules and

regulations, or parts thereof inconsistent with this Act are hereby repealed or
amended accordingly.

SECTION 12. Effectivity. — This Act shall take effect fifteen (15) days after
its publication in at least two [2) newspapers of general circulation.

Approved,