Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bit no. 3715

Introduced by HON. JOY MYRA S. TAMBUNTING

EXPLANATORY NOTE

This bill seeks to protect workers in cases of company closure or cessation of operations of
establishments. Workers as partners in the production of wealth and income have to be
protected and afforded with their basic workers’ rights.

While poverty increases in the country, so does inequality thus, workers in times of economic
depression should be protected. Company closures and cessation of business activities are
inevitable. Various factors affect the business cycle and business productivity hence, workers
in most inopportune times of economic recessions are caught in the web of unemployment.
The loss of business is tantamount to loss of employment.

The Department of Labor and Employment (DOLE) - Bureau of Labor and Employment
Statistics reported that in year 2012, the total number of establishments resorted to
permanent closures or retrenchment due to economic reasons totaled 1,925 enlisted in 2013
displacing a total of 36,639 workers nationwide. Suffice to say that, a vast number of minimum
wage earners and their families has been economically displaced.

The figure was significantly higher than the 35,526 workers who lost their jobs in 2011 when
some 2,211 companies shutdown and 31,778 in 2012.

Metro Manila recorded the highest number of displaced workers. A total of 1,925 commercial
establishments field Notice of Closures affecting 17,144 workers in 2013.

Employers cited downsizing as @ main reason for the retrenchment and closures, financial
losses and lack of market as factors that caused establishments to lay off or close shop which
led to underemployment of nearly 13,000 workers. 5

The creation of a Workers’ Protection Board shall ensure that the workers’ rights are protected
and rightful benefits are afforded to them.

This humble piece of legislation aims to protect the workers and their families, and promote

their welfare.
t Aula Pilly

S. TAMBUNTING

Hence immediate passage of this legislation is eamestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. a715

Introduced by HON. JOY MYRA S. TAMBUNTING

AN ACT
TO PROTECT WORKERS IN THE EVENT OF COMPANY CLOSURES OR CESSATION OF
OPERATIONS BY ESTABLISHING THE MECHANISM AND PROPER STANDARDS
THEREFOR AND FOR OTHER PURPOSES

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

CHAPTER 1 - PRELIMINARY PROVISIONS
SECTION 1. Short Title. - This Act may be cited as the "Workers’ Protection Act of 2019."

SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State to protect
workers from economic insecurity due to involuntary unemployment and promote their rights
in the event such. For this purpose, the State herby recognizes the rights of all workers:

1) Toa reasonable period of notice for termination of employment;

2) To seek alternative employment during the period of notice;

3) To guarantee payments of wage claims; and

4) To petition the proper government agency to review any act of an employer to close
shop, cease operations, and/or order a mass layoff of employees.

SECTION 3. Definition of Terms. ~ As used in this Act, the following terms:

a. Bankruptcy shall mean a condition whereby an employer, who after a petition to the
court by himself or his creditors, is judged legally insolvent.

b. Glsure shall mean the permanent cessation of operations due to insolvency,
bankruptcy, foreclosure, and/or dissolution resulting in an employment loss.

¢. Cessation of operations shall mean the permanent or temporary shutdown of a single
site of employment or one or more facilities or operating units within a single site of
an employment, if the shutdown resulted in an employment loss at the single site of
employment. For purposes of this Act, it shall include but not exclusive of, cessation
of operations due to bankruptcy, closure, foreclosure, insolvency, dissolution and other
similar acts.

d. Insolvency shall mean the condition whereby an employer is unable to meet his
obligations as they accrue in the course of his trade or busiriess.


. Employer shall mean any person acting directly or indirectly in the interest of an
employer in relation to an employee and shall include, all government-owned or
Controlled corporations and institutions, as well Non-profit private institutions, or
organizations.

f. Employee shall mean any individual employed an employer.

9. Mass lay-off shall mean a reduction in force which (i) is not a result of a closure and
(ii) results in an employment loss at the single site of employment during any 30-day
Period for (1) at least thirty three percent (33%) of employees, and/or (2) at least fifty
(0) employees, excluding part-time employees,

h. Affected employees shall mean employees who may reasonably be expected to
experience an employment loss as a consequence of a proposed cessation of
operations or mass layoff by their employer.

|. Involuntary unemployment shall mean the termination of employment by an employer
as a result of cessation of operations.

3. Employment loss shall mean (i) a termination of employment, other than a discharge
for cause, voluntary departure or retirement, (ii) a layoff exceeding six (6) months, or
(iil) @ reduction in hours of work of more than fifty percent (50%) during each month
of any six-month period. a

k. Foreclosure shall mean the process by which a mortgagee acquires an absolute title
to the property of which he had previously been only the conditional owner, or upon
which he had previously a mere lien or encumbrance.

CHAPTER 2 - NOTIFICATION REQUIREMENT

SECTION 4. Notification Requirement. ~ An employer shall not order a plant closure,
mass layoff, shutdown or any form of cessation of operations until the end of a 90-day period
after the employer serves written notice of such an order:

a) To each affected employee;

b) To each collective bargaining representative;

¢) To the chief elected official of the local government unit within such closing or lay-off
to occur; and

) To the Labor Protection Board as herein created.

SECTION 5. Right to Alternative Employment. ~ During the 90-day notice period which
shall commence upon the receipt of the said notice by the affected employee, an employer
shall allow the affected employee to use a specific amount of paid work time to seek
alternative employment.

SECTION 6. Right to Petition the Act of the Employer. — During the 90-day notice
period, the affected employees or their collective bargaining representative may petition the
Labor Protection Board as herein created to investigate possible anomalies arising from the
intended closure or cessation of operations by an employer.


SECTION 7. Civil Actions Against Employers. - Any employer who orders a closure or
mass layoff or shutdown or any form of cessation of Operations or mass layoff in violation of
Sec. 4 of this Act shall be liable to each aggrieved employee who suffers an employment loss
aS a result of such closure or mass layoff or any form of cessation Of operations for the
following:

a) Back pay for each day of violation at a rate of Compensation not less than the final
regular rate received by such employee, including benefits and conditions; and

b) Mandatory severance pay.

Any employer who violates Sections 4 and 5 of this Act shall be subject to a civil penalty of
ten thousand pesos (P10,000.00) for each day of violation, provided however that such
penalty shall not apply if the employer pays to each aggrieved employee the amount for which
the employer is liable to that employee within three (3) weeks from the date the employer
orders the closure or mass layoff or shutdown or cessation of operations.

CHAPTER 3 - THE WORKERS PROTECTION BOARD

SECTION 8. The Workers Protection Board. - For purposes of this Act, there shall be
created an independent agency to be known as the Workers Protection Board (WPB).

SECTION 9. Composition. - The Board shall composed of a Chairman and two (2) Members
who shall be nominated and elected in @ Labor Conference called for this purpose except for
the Chairman who shall be appointed by the President from a selection of three nominees
submitted by the Labor Conference which shall be held within thirty (30) days following the
effectivity of this Act and shall be attended by delegates presenting major labor federations.

SECTION 10. Qualification of Nominees. — The nominees for both the Chairman and
Members must have the following qualification:

Satisfactory background on labor and commerce Particularly on corporation rules and

laws.

b) Must not have worked or performed functions in any management of a company or
establishment in the past.

©) Must not have business interest in any corporation or establishment.

4) Must not be related to any corporate official within the fourth degree of consanguinity.

SECTION 11. Power and Functions. - The Board shall, in coordination with the
Department of Labor and Employment (DOLE), Securities and Exchange Commission (SEC),
and the Department of Justice (DOJ), perform the following functions:

a) Undertake the investigations, shutdown, rotation or retrenchment of
workers/employees due to labor saving devices to prevent losses, dissolution,
insolvency or bankruptcy;

b) Compel the disclosure and submission of its book of accounts and other financial
records following an information to the Board that the company or establishment will
lead to closure or cessation of operation, shutdown, rotation or retrenchment of
employees/workers;


) Issue subpoenas to any official of a company or establishment and other parties
concerned to require attendance in the investigation;

¢)

Hold custody of the company's machinery and other production equipment from the
commencement of the investigation, or to require the posting of bond or both to secure
the interests of the affected workers/employees;

Ensure that payment of wages/salaries and other benefits were being made
Continuously while the company is undergoing an investigation;

e

f) Ensure issuance of notices to workers/employees as required in this Act and the
enforcement of the period to seek alternative employment;

) facilitate the immediate release of monetary claims of workers/employees which may
be made through banks or which be deemed sufficient by the Board;

hy

Conduct quarterly inspection on the book of accounts and financial records of the
companies and establishments registered with the Securities and Exchange
Commission to monitor its operations; and

') Initiate legal action against any company or establishment found to violate any of the
Provision of this Act.

SECTION 12. Funding, - The funding requirements necessary to carry out the provisions of
this Act shall be charged to the current fiscal year appropriations of the Department of Labor
and Employment. Thereafter, such sum as may be necessary is hereby authorized to be
appropriated in the General Appropriations Act on the succeeding year its enactment into law.

CHAPTER 4 - FINAL PROVISIONS

SECTION 13. Implementing Rules and Regulations, - The implementing rules and
regulations necessary to carry out the provisions of this Act shall be adopted and promulgated
by the Department of Labor and Employment.

SECTION 14. Repealing Clause. ~ All laws, executive orders and provisions thereof
inconsistent with this Act hereby repealed or modified accordingly.

SECTION 15. Separability Clause. — If any provision or part of this Act, or the application
thereof to any person or circumstance, is held invalid or unconstitutional, the remainder of
this Act or the application of such Provision or part thereof to other persons or circumstances
shall not be affected thereby,

SECTION 16. Effectivity Clause. — This Act shall take effect fifteen days after its publication
in at least two (2) national newspapers of general circulation.

Approved,