Republic of the Philippines
House of Representatives

Quezon City

SIXTEENTH CONGRESS

First Regular Session

221

HOUSE BILL NO.

Introduced by HON. CINCHONA CRUZ-GONZALES

EXPANATORY NOTE

Article XII Section 1, paragraph of the 1987 Philippine Constitution states that, “The goals
of the national economy are a more equitable distribution of opportunities, income and wealth; a
sustained increase in the amount of goods and services produced by the nation for the benefit of
the people; and an expanding productivity as the key to raising the quality of life for all,
especially the under-privileged”

Also in Article 43, Chapter 1, Title 1, Book II of the Labor Code in implementing the said
constitutional provision states that it is the objective of the state “to develop human resources,
establish training institutions and formulate such plans and programs as will ensure efficient
allocation, development and utilization of the nation’s manpower and thereby promote
employment and accelerate economic and social growth”.

In pursuance of said legal provisions, the bill is introduced to reinforce the adoption of an
industry led manpower development strategy. This “Enterprise-Based Education and Training
‘Act of 2011” covers on-the-job trainings in enterprises or places of work. It aims to improve
skills, productivity and enhance trainees; employability. The bill recognizes two paths of
education and training first, by developing and upgrading the skills of a trainee in a
technologically changing world and second, by considering the on-the-job training (OJT) as part
of the trainees ‘experience which shall serve as added credential/leverage in the hiring of the
trainees.



This arrangement enables the local industries, middle-level manpower, products and services
attain greater competitiveness in the global market which in the long run bring about better
demand supply matching and will ease burden cost on the part of the government

To achieve the goal set by our Constitution it is necessary that a policy must be made and a
mechanism put in place to accelerate the development of a training scheme that will enhance the
Filipino workforce towards meeting global standards

Hence, the approval of this bill is earnestly and urgently sought

HON. CINCHONA CRUZ-GONZALES

Representative, CIBAC Party List


Republic of the Philippines
House of Representatives

Quezon City

SIXTEENTH CONGRESS

First Regular Session

HOUSE BILL NO.

Introduced by Hon. Cinchona Cruz-Gonzales

AN ACT INSTITUTING THE CODE FOR ENTERPRISE-BASED EDUCATION AND
TRAINING CODE IN THE PHILIPPINES OTHERWISE KNOWN AS EBT CODE
THEREBY AMENDING THE LABOR CODE, R.A. 7686 DUAL TRAINING ACT,
EXECUTIVE ORDER 111 AND CONSOLIDATING ALL POLICIES AND PROGRAMS
TO AFFORD AND TO PROMOTE EMPLOYMENT, PROTECTION OF
TRAINEES/STUDENTS AND TO IMPROVE THE QUALITY AND RELEVANCE OF
EDUCATION

ARTICLE. 1. Short Title — This Act shall be known as the “Enterprise-Based Education
and Training Act of 2011

ART. 2. Declaration of Policy. ~ It is hereby declared the policy of the State to enhance
the skills of middle-level workforce of the entire nation. The State seeks to strengthen middle-
level manpower education and training in the country and to promote employment so that it can
be assured an ever-growing supply of an educated and skilled globally competitive manpower
equipped with appropriate skills and desirable work habits and attitudes in accordance with the
requirements that meet the demands and standards of the workplace in the market. The policy
recognizes two paths of education and training, namely; for developing and upgrading the skills
of student/ trainee in a technologically changing world and for providing relevance in the
training of student/trainee by encouraging work experiences as valid part and means of education
and training. The recognition of two paths of education and training will greatly contribute to the
creation of a dependable pool of well-trained middle-level workforce in the country and to
promote employment.

ART. 3. Statement of Objectives. - This Act shall have the following objectives,

(1) To help meet the demand of the economy for well-trained manpower through
Technical Vocational Education and Training;


(2) To establish a national enterprise-based education and training system and
standards that is competency-based, including an on- and off-the job education
and training program through the participation of employers, workers, and
government;

(3) To established enterprise-based education and training standards to ensure that the
trainees will acquire the right competencies and for the protection of the rights
and safety of the trainees;

(4) To broaden the opportunities, venues of education and training towards greater
access

ART. 4, Definition of Terms — As used in this Act:

a. “Enterprise-Based Education and Training Program” means practical education
and training with compulsory related theoretical instructions conducted on-and-
off the job involving an agreement between a trainee and an enterprise on an
approved enterprise-based education and training qualification. The duration of
the program shall be based on the complexity of the competencies to be learned in
the specific qualification

b. An “Enterprise-Based Trainee/Student” is a person undergoing training for an
approved enterprise-based education and training qualification in an established
period assured by an enterprise-based education and training agreement.

c. “Enterprise” is a group or association, industry organization, (sole proprietorship),
government instrumentalities or civic group or any entity organized whether or
not for profit regardless of the product or services it could used.

d. “Enterprise-Based Education and Training Agreement between Enterprise and
Trainee” is a contract wherein an enterprise binds itself to train the trainee who in
turn accepts the terms of education and training for an enterprise-based training
qualification emphasizing the rights, duties and responsibilities of each party.

e. “Enterprise-Based Education and Training Qualification” is a qualification
approved for enterprise-based education training by the TESDA Board.
Qualification refers to the whole range of competencies a person possesses

£ Enterprise-Based Education and Training Fund” is a fund to be used to defray
expenses of the trainees and other expenses related to the implementation of
Enterprise-Based Training program.

g. “Competency Standards” are written specifications of the knowledge, skills,
attitudes and values required for the performance required for these in the
workplace,

h. “Competency Assessment” is the process of gathering and judging evidence in
order to decide whether a person has achieved a standard of competency or
competence objective.

i “Dual Education and Training” refers to the combination of on- and off-the-job
training involving an enterprise and a training institution.


j. “Nominal Duration of Education and Training” is the estimated number of
training hours

ART. 5. Trainee Entry Requirements for Qualifications of an Enterprise Based
Education and Training — To qualify as an enterprise-based student/trainee, a person
shall:

(a) Be at least high school graduate or its equivalent;

(b) Possess vocational aptitude and capacity for enterprise-based training
as established through appropriate testing; and

(c) Possess the ability to comprehend and follow oral and written
instructions. Industry associations and labour groups may recommend
to the TESDA appropriate educational requirements for different
occupations

ART. 6. Participating Enterprises. - As referred to DTS Law “Section 6.
Coverage”. This Act shall apply to all public and private educational institutions/training
center and agricultural, industrial and business establishments duly accredited to
participate in the dual training system.”

ART. 7. Scope of Training and Coverage of Venues — An enterprise, group or
association, industry organization, government or civic group wishing to organize an
enterprise-based education and training program shall have its program registered with
TESDA before it enters into an agreement with the student/trainees.

This code shall apply to all work-related or workplace related regardless of the
following seven (7) modalities: (1) Apprenticeship; () Learner ship; (3) On the Job
Training (OJT); (4) Practicum; (5) Work Appreciation Program; (6) Dual Training
System; (7) Internship

ART. 8. Contents of Enterprise-Based Training Agreement. ~ Enterprise-Based
Education and Training Agreements shall conform to the rules issued by the TESDA and
shall include the following

a. Nature and purpose of training;
b. Curriculum;
c. Period of training;

4. Training allowance equivalent to seventy-five percent (75%) of the existing
minimum wage which can be paid in cash or kind or in both;

e. Schedule of training allowance payments;

f Process of termination of enterprise-based training;

& Certification as proof of training to be issued by the employer or training
company, tech-voc institution or training center after completion of training

agreement; and

h. General rights and obligations of both parties


ART. 9. Signing of Enterprise-based Education and Training Arrangements ~
Every enterprise-based education and training agreement shall be signed by the employer
or his agent, or by an authorized representative of any of the recognized organizations,
associations, government institutions or civic groups and by the student/trainee. An
enterprise-based education and training agreement with a minor shall be signed in his
behalf by his parent or guardian or, if the latter is not available, by an authorized
representative of TESDA, and the same shall be binding during its lifetime

ART. 10. Enterprise-based Education and Training Arrangements -

Registered enterprise, group or association, industry organization, government institution
or civic group wishing to organize the enterprise-based education and training program
shall choose from any of the following enterprise-based education and training schemes,
which shall use the dual education and training approach;

(a) Enterprise-based education and training involving a company and an
identified technical vocational institution;

(b) Enterprise-based education and training involving a group of companies and a
technical vocational institution;

(c) Enterprise-based education and training involving an industry training center
and a company or a group of companies.

ART. LL. Responsibility for Theoretical Instruction — Compulsory theoretical
instructions shall be part of enterprise-based education and training program. In cases
where the program is undertaken in the plant, theoretical instructions may be given by the
enterprise. If the latter is not prepared to assume the responsibility, the same may be
delegated to an appropriate government agency

ART. 12. Enterprise-Based Education and Training Administration — The
overall policy for enterprise-based education and training shall be the function of the
TESDA Board. The responsibility for enterprise-based education and training
administration, monitoring and evaluation of on- and off-the-job training shall be the
concem of the TESDA Secretariat. The identification and prioritization of enterprise-
based education and training qualifications and the development of competency standards
and curricula shall be in consultation with industry associations, labor groups, and
TESDA. The Plant Enterprise-Based Education and Training Committee shall be
established in every participating enterprise to ensure that program implementation is in
accordance with approved policies

ART. 13. Investigation of Violation of Enterprise-Based Education and
Training Agreement — The Industry Coordinator, upon complaints of any interested party
or motupropio, shall have the initial responsibility for settling differences arising from
enterprise-based training agreements. In case it is not able to settle such differences, the
TESDA Secretariat or its authorized representative shall investigate and render a decision
pursuant to pertinent rules and regulations.

ART. 14. Appeal to the TESDA Secretariat ~ The decision of the TESDA
Secretariat may be appealed by any aggrieved person to the TEDA Board within five (5)
days from receipt of the decision. The decision of the TESDA Board shall be final and
executor.


ART. 15, Exhaustion of Administrative Remedies — No person shall institute any
action for the enforcement of any enterprise-based training agreement or damages for
breach of any such agreement, unless he has exhausted all available administrative
remedies

ART. 16. Conditions as Exemptions for Voluntary Participating Organization
of Enterprise-Based Education and Training Program:

(a) When national security or particular requirements of economic development
so demand, the President of the Philippines may require compulsory
enterprise-based education and training in certain trades, occupations, jobs or
employment levels where shortage of trained manpower is deemed critical as
determined by the TESDA Board upon the recommendation of its Secretariat

(b) Where services of foreign technicians are utilized by private companies in
enterprise-based education and training occupations, such companies are
required to set-up appropriate enterprise-based education and training
programs.

ART. 17. Enterprise-based Education and Training Fund. — An Enterprise-
Based Education and Training Program Fund shall be established to defray the expenses
of the trainees and other expenses related to the implementation of the enterprise-based
training program. The fund shall be derived from the following

(a) One percent (1%) of passport fees collected from departing Overseas Fillipino
Workers (OFWs);

(b) Training levy; and

(c) Donations, grants and endowments specifically for the enterprise-based education
and training programs,

ART. 18. Enterprise-based Education and Training Incentives ~ Participating
Enterprises, Groups or Associations, Industry Organizations or Civic Groups participating in
the enterprise-based education and training program shall be granted the following
incentives:

a.) An additional deductions from taxable income equivalent to fifty percent (50%) of the
training expenses incurred provided that such expenses shall not exceed five percent
(5%) of their total direct labor expenses but in no case exceed twenty-five million
pesos (P25,000,000) a year;

b.) Donations, contributions, bequest, subsidy or financial aid actually paid or maid to a
participating training institution within the taxable year shall also be deductible for
income tax purposes in an amount not to exceed five percent (5%) of the taxable
business income of the participating enterprise, group or association, industry
organization or civic group computed without the benefit of deduction; and

©.) Exemption from donor's tax, provided, however that not more than thirty percent
(30%) of said donations shall be used by the training institution for administration
purposes

ART. 19. Exemption from Probationary Employment System of Equivalency. ~
Certified enterprise-based training graduates shall be exempted from probationary


employment. They shall be employed as regular workers if chosen to be retained by the
participating enterprise, group or association, industry organization, government
institution or civic group. The trainees’ on-the-job training (OJT) shall be considered part
of the trainee’s work experience. After graduation, a certification shall be issued by the
employer to serve as added credential/leverage in the hiring of the graduates. Enterprise-
Based Training graduates shall likewise be awarded equivalent unit credits in the formal
system of education and that can be used in pursuing tertiary degree courses, subject to
the integrated policies and guidelines on equivalency and adult education acceleration
program of TESDA, Commission on Higher Education (CHED) and Department of
Education (DepEd),

ART. 20. Insurance Coverage and Protection of Trainees ~ Every participating
enterprise, group or association, industry organization, government institution or civic
group undertaking training in accordance with the provisions of this Act shall sign a life
and/or accident insurance policy.

ART. 21. Responsibility for Work Site Safety — Every agricultural, industrial,
medical and business establishment undertaking training in accordance with the
provisions of this Act, shall sign a life and/or accident insurance policy on the life of the
trainee with the insured and the spouse, children or parents of the trainee as the
beneficiaries thereof Provided, that the agricultural, industrial and business
establishments shall pay for the premium of said insurance policy.

ART. 22. Repealing Clause. — All laws, decrees, orders, rules and regulations or
parts thereof inconsistent with this Act are herby repealed or modified accordingly.

ART, 23. Effectivity — This Act shall take effect after completion of its
publication in the Official Gazette or in two (2) newspapers of general circulation

Approved,