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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. __ 2983

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

Arguably, the gravest threat to our workers* right to security of
tenure comes from the current trend towards contractualization and
de-regularization. Workers settle for intermittent and short term
employment affecting not only their ability to earn livelihood but also
their productivity and quality of work.

The present proposal recognizes subcontracting as a valid
business practice but also protects workers from unscrupulous and
unnecessary subcontracting. Hence, it balances legitimate business
interest with the need to protect workers from insecure employment
conditions.

In particular, the present proposal is characterized by the
following:

1. Many of the concepts and processes contained in the proposal
reflect current practice as provided by Department Order No. 18 series
of 2002 (DO 18). While some refinements have been made to DO 18
provisions, core concepts have been retained such as:

* Definition of subcontracted work and labor only contracting
¢ Recognition of rights of subcontracted workers
* Maintenance of registration system for legitimate subcontractors

2. The salient innovations introduced by this proposal include the
following:

¢ Principals can engage a maximum of 10% subcontracted
employees.

¢ Violation of contracting rules is made an unfair labor practice.

¢ Violation of contracting rules is penalized by a fine.

Hence, the support of this bill is earnestly sought.

JOSEPH VICTOR G. EJERCITO


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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2983

Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT
TO STRENGTHEN SECURITY OF TENURE AND FOR THAT
PURPOSE, AMENDING CERTAIN PROVISIONS OF PRESIDENTIAL
DECREE NO. 442

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

SECTION 1. Subcontracting. Article 106 of the Presidential
Decree No. 442 is hereby amended to read as follows:

ARTICLE 106. CONCEPT AND NATURE OF
SUBCONTRACTING ARRANGEMENT. IN LEGITIMATE
SUBCONTRACTING, THERE EXISTS A TRILATERAL RELATIONSHIP
UNDER WHICH THERE IS A CONTRACT FOR A SPECIFIC JOB, WORK
OR SERVICE BETWEEN THE PRINCIPAL AND THE
SUBCONTRACTOR, AND A CONTRACT OF EMPLOYMENT BETWEEN THE
SUBCONTRACTOR AND ITS WORKERS. HENCE, THERE ARE THREE
PARTIES INVOLVED IN THESE ARRANGEMENTS, THE PRINCIPAL
WHICH DECIDES TO FARM OUT A JOB OR SERVICE TO A
SUBCONTRACTOR, THE SUBCONTRACTOR WHICH HAS THE CAPACITY
TO INDEPENDENTLY UNDERTAKE AND ACTUALLY UNDERTAKES THE
PERFORMANCE OF THE JOB, WORK OR SERVICE, AND THE
CONTRACTUAL WORKERS ENGAGED BY THE SUBCONTRACTOR TO
ACCOMPLISH THE JOB WORK OR SERVICE. FOR PURPOSES OF THIS
CODE, "SUBCONTRACTING" REFERS TO AN ARRANGEMENT WHEREBY

(a) A PRINCIPAL AGREES TO PUT OUT OR FARM OUT WITH A
SUBCONTRACTOR THE PERFORMANCE OR COMPLETION OF A
SPECIFIC JOB, WORK OR SERVICE WITHIN A DEFINJTE OR
PREDETERMINED PERIOD, REGARDLESS OF WHETHER SUCH JOB,
WORK OR SERVICE IS TO BE PERFORMED OR COMPLETED WITHIN OR
OUTSIDE THE PREMISES OF THE PRINCIPAL OR

(b) A PERSON, PARTNERSHIP, ASSOCIATION OR CORPORATION
WHICH, NOT BEING A_ PRINCIPAL, CONTRACTS WITH A
SUBCONTRACTOR
FOR THE PERFORMANCE OF ANY WORK, TASK, JOB OR PROJECT.


SEC. 2. Parties. Article 106-A is hereby inserted in Presidential
Decree No. 442 as follows:

ARTICLE 106 - A. RIGHTS AND LIABILITIES OF PARTIES.

‘A. THE SUBCONTRACTED EMPLOYEE IN ALL CASES,
SUBCONTRACTED EMPLOYEE SHALL BE ENTJTLED TO ALL THE RIGHTS
AND PRIVILEGES DUE REGULAR EMPLOYEES INCLUDING THE
FOLLOWING:

(a) SAFE AND HEALTHFUL WORKING CONDITIONS;

(b) LABOR STANDARDS SUCH AS SERVICE INCENTIVE LEAVE,

REST DAYS, OVERTIME PAY, HOLIDAY PAY, 13™ MONTH PAY

AND SEPARATION PAY;

(c) SOCIAL SECURITY AND WELFARE BENEFITS;

(e) SECURITY OF TENURE;

(d) SELF-ORGANIZATION, COLLECTIVE BARGAINING AND

PEACEFUL CONCERTED ACTION; AND

IN ADDITION, SUBCONTRACTED EMPLOYEES SHALL HAVE A
RIGHT TO A WRITTEN CONTRACT WHICH SHALL INCLUDE THE
FOLLOWING TERMS AND CONDITIONS:

(i) THE SPECIFIC DESCRIPXON OF THE JOB, WORK OR SERVICE
TO BE PERFORMED BY THE CONTRACTUAL EMPLOYEE;

(ii) THE PLACE OF WORK AND TERMS AND CONDITIONS OF
EMPLOYMENT, INCLUDING A STATEMENT OF THE WAGE RATE
APPLICABLE TO THE INDIVIDUAL CONTRACTUAL EMPLOYEE; AND

(iii). THE TERM OR DURATION OF EMPLOYMENT, WHICH SHALL
BE COEXTENSIVE WITH THE CONTRACT OF THE PRINCIPAL AND
SUBCONTRACTOR, OR WITH THE SPECIFIC PHASE FOR WHICH THE
CONTRACTUAL EMPLOYEE IS ENGAGED, AS THE CASE MAY BE.

THE SUBCONTRACTED EMPLOYEE SHALL BE INFORMED BY THE
SUBCONTRACTOR OF THE FOREGOING TERMS AND CONDITIONS ON
OR
BEFORE THE FIRST DAY OF HIS EMPLOYMENT.

B, THE PRINCIPAL AND THE SUBCONTRACTOR. THE LEGITIMATE
SUBCONTRACTOR SHALL BE CONSIDERED THE EMPLOYER OF THE
CONTRACTUAL EMPLOYEE FOR PURPOSES OF ENFORCING THE
PROVISIONS OF THE LABOR CODE AND OTHER SOCIAL LEGISLATION.
IN ALL CASES OF SUBCONTRACTING, HOWEVER, THE PRINCIPAL
SHALL BE SOLIDARILY LIABLE WITH THE CONTRACTOR IN THE EVENT
OF ANY VIOLATION OF ANY PROVISION OF THE LABOR CODE,
INCLUDING THE FAILURE TO PAY WAGES.

THE PRINCIPAL SHALL BE DEEMED THE EMPLOYER OF THE
CONTRACTUAL EMPLOYEE IN ANY OF THE FOLLOWING CASES:


(a) WHERE THERE IS LABOR-ONLY CONTRACITNG; OR

(b) IN THE ABSENCE OF THE WRITTEN CONTRACT REQUIRED BY
ARTICLE 106-A; OR
(c) IN CASES OF VIOLATION OF ARTICLE 106 - B.

IN ADDITION, THE PRINCIPAL SHALL BE SOLIDARILY LIABLE
WITH THE SUBCONTRACTOR IN CASE THE CONTRACT BETWEEN THE
PRINCIPAL AND SUBCONTRACTOR IS PRETERMINATED FOR REASONS
NOT ATTRIBUTABLE TO THE FAULT OF THE SUBCONTRACTOR.

SEC. 3. Prohibition against labor only contracting. Article
106-B is hereby inserted in Presidential Decree No. 442 as follows:

ARTICLE 106-B. PROHIBITION AGAINST LABOR-ONLY
SUBCONTRACTING. ENGAGING IN LABOR-ONLY CONTRACTING OR
CONTRACTING WITH A LABOR-ONLY CONTRACTOR IS STRICTLY
PROHIBITED.

FOR THIS PURPOSE, LABOR-ONLY CONTRACTING REFERS TO AN
ARRANGEMENT WHERE THE SUBCONTRACTOR MERELY RECRUITS,
SUPPLIES OR PLACES WORKERS TO PERFORM A JOB, WORK OR
SERVICE FOR A PRINCIPAL, INCLUDING INSTANCES WHERE ANY OF
THE FOLLOWING ARE PRESENT:

(i) THE SUBCONTRACTOR DOES NOT HAVE SUBSTANTIAL
CAPITAL AND INVESTMENT WHICH RELATES TO THE JOB, WORK OR
SERVICE TO BE PERFORMED;

(ii) THE EMPLOYEES RECRUITED, SUPPLIED, OR PLACED BY
SUCH SUBCONTRACTOR ARE PERFORMING ACTIVITIES WHICH ARE
DIRECTLY RELATED TO THE MAIN BUSINESS OF THE PRINCIPAL; OR

(iii) THE SUBCONTRACTOR DOES NOT EXERCISE THE RIGHT TO
CONTROL OVER THE PERFORMANCE OF THE WORK OF THE
CONTRACTUAL EMPLOYEE.

AS USED IN THIS CODE, SUBSTANTIAL CAPITAL AND
INVESTMENT” IN SUBCONTRACTING ARRANGEMENTS REFERS TO
TOOLS, EQUIPMENT, IMPLEMENTS, MACHINERIES AND WORK
PREMISES, ACTUALLY AND _ DIRECTLY USED BY THE
SUBCONTRACTOR IN THE PERFORMANCE OR COMPLETION OF THE
JOB, WORK OR SERVICE CONTRACTED OUT. THE USE OF THE
SUBCONTRACTOR OF THE EQUIPMENT, FACILITIES, MACHINERIES,
AND TOOLS OF THE PRINCIPAL IS AN INDICATION THAT THE
SUBCONTRACTOR HAS NO SUBSTANTIAL CAPITAL AND
INVESTMENT. THE EXISTENCE OF CAPITAL STOCKS AND
SUBSCRIBED CAPITALIZATION IN RELATION TO CORPORATIONS
ENGAGED IN SUBCONTRACTING DOES NOT BY ITSELF CONSTITUTE
SUBSTANTIAL CAPITAL AND INVESTMENT.

AS USED IN THIS CODE, THE "RIGHT TO CONTROL" IN
SUBCONTRACTING ARRANGEMENTS SHALL REFER TO THE RIGHT


RESERVED TO THE PERSON FOR WHOM THE SERVICES OF THE
CONTRACTUAL WORKERS ARE PERFORMED, TO DETERMINE NOT
ONLY THE END TO BE ACHIEVED, BUT ALSO THE MANNER AND MEANS.
TO BE USED IN REACHING THAT END.

SEC. 4. Prohibitions. Article 106-C is hereby inserted in
Presidential Decree No. 442 as follows:

ARTICLE 106-C. PROHIBITIONS I N SUBCONTRACTING
ARRANGEMENTS. REGARDLESS OF COMPLIANCE WITH THE
IMMEDIATELY PRECEDING ARTICLE, THE FOLLOWING ARE HEREBY
DECLARED PROHIBITED FOR BEING CONTRARY TO LAW OR PUBLIC
POLICY:

(a) ENGAGING OR MAINTAINING BY THE PRINCIPAL OF
SUBCONTRACTED EMPLOYEES IN EXCESS OF 10% OF THE
PRINCIPAL'S TOTAL WORKFORCE INCLUDING, BUT NOT LIMITED TO.

(b) CONTRACTING OUT OF A JOB, WORK OR SERVICE WHEN
THE SAME RESULTS IN THE TERMINATION OF REGULAR EMPLOYEES
AND REDUCTION OF WORK HOURS OR REDUCTION OR SPLITTING OF
THE BARGAINING UNIT;

(c) CONTRACTNG OUT OF WORK WITH A “CABO”. FOR THIS
PURPOSE, “CABO” REFERS TO A PERSON OR GROUP OF PERSONS OR
TO A LABOR GROUP WHICH, IN THE GUISE OF A LABOR
ORGANIZATION, OR COOPERATIVE, SUPPLIES WORKERS TO AN
EMPLOYER, WITH OR WITHOUT ANY MONETARY OR OTHER
CONSIDERATION WHETHER IN THE CAPACITY OF AN AGENT OF THE
EMPLOYER OR AS AN OSTENSIBLE
INDEPENDENT CONTRACTOR;

(d) TAKING UNDUE ADVANTAGE OF THE ECONOMIC SITUATION
OR LACK OF BARGAINING STRENGTH OF THE CONTRACTUAL
EMPLOYEE, R UNDERMINING HIS SECURITY OF TENURE, OR BASIC
RIGHTS, OR CICUMVENTING THE PROVISIONS OF REGULAR
EMPLOYMENT, IN ANY OF THE FOLLOWING INSTANCES:

(i) IN ADDITION TO HIS ASSIGNED FUNCTIONS, REQUIRING
THE CONTRACTUAL EMPLOYEE TO PERFORM FUNCTIONS WHICH ARE
CURRENTLY BEING PERFORMED BY THE REGULAR EMPLOYEES OF THE
PRINCIPAL OR OF THE SUBCONTRACTOR;

(ii) REQUIRING HIM TO SIGN, AS A PRECONDITION TO
EMPLOYMENT OR CONTINUED EMPLOYMENT, AN ANTEDATED
RESIGNATION LETTER; A BLANK PAYROLL; A WAIVER OF LABOR
STANDARDS INCLUDING MINIMUM WAGES AND SOCIAL OR WELFARE
BENEFITS; OR A  QUITCLAIM RELEASING THE PRINCIPAL,
SUBCONTRACTOR FROM ANY LIABILITY AS TO PAYMENT OF FUTURE
CLAIMS; AND


(ii) REQUIRING HIM TO SIGN A CONTRACT FIXING THE PERIOD
OF EMPLOYMENT TO A TERM SHORTER THAN THE TERM OF THE
CONTRACT BETWEEN THE PRINCIPAL AND THE SUBCONTRACTOR,
UNLESS THE LATTER CONTRACT IS DIVISIBLE INTO PHASES FOR
WHICH SUBSTANTIALLY DIFFERENT SKILLS ARE REQUIRED AND THIS
IS MADE KNOWN TO THE EMPLOYEE ATTHE TIME OF ENGAGEMENT;

(e) CONTRACTING OUT OF A JOB, WORK OR SERVICE THROUGH
AN INHOUSE AGENCY WHICH REFERS TO A:

(i). SUBCONTRACTOR ENGAGED IN THE SUPPLY OF LABOR
WHICH IS OWNED, MANAGED OR CONTROLLED BY THE PRINCIPAL;
OR

(ii). SUBCONTRACTOR IN WHICH THE PRINCIPAL OWNS OR
OTHERWISE REPRESENTS ANY SHARE OF STOCK; OR

(iii), SUBCONTRACTOR WHICH OPERATES SOLELY FOR THE
PRINCIPAL.

(f) CONTRACTING OUT OF A JOB, WORK OR SERVICE DIRECTLY
RELATED TO THE BUSINESS OR OPERATION OF THE PRINCIPAL BY
REASON OF A STRIKE OR LOCKOUT WHETHER ACTUAL OR IMMINENT;

(g) CONTRACTING OUT OF A JOB, WORK OR SERVICE BEING
PERFORMED BY OR _ PREVIOUSLY PERFORMED BY REGULAR
EMPLOYEES AND/OR MEMBERS OF THE BARGAINING UNIT.

SEC. 5. Registration of Subcontractors. Article 106-D is
hereby inserted
in Presidential Decree No. 442 as follows:

ARTICLE 106 - D. REGISTRATION OF SUBCONTRACTORS.

1) MANDATORY REGISTRATION. IT SHALL BE MANDATORY FOR
ALL PERSONS OR ENTITIES ACTING AS SUBCONTRACTORS TO
REGISTER UNDER A REGISTRATION SYSTEM HEREBY ESTABLISHED
TO GOVERN CONTRACTING ARRANGEMENTS AND TO BE
IMPLEMENTED BY THE REGIONAL OFFICES OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT.

NON-REGISTERED PERSONS OR ENTITIES ACTING AS
SUBCONTRACTORS SHALL BE DEEMED AS LABOR-ONLY
CONTRACTORS. MERE REGISTRATION, WITHOUT A SHOWING OF
COMPLIANCE WITH ALL REQUIREMENTS FOR LEGITIMATE
SUBCONTRACTING AND AVOIDANCE OF ALL PROHIBITIONS OF
SUBCONTRACTING, SHALL NOT INDICATE LEGITIMATE
SUBCONTRACTING.

2) REQUIREMENTS FOR REGISRAUON. A SUBCONTRACTOR MAY
BE LISTED IN THE REGISTRY OF SUBCONTRACTORS UPON


COMPLETION AND SUBMISSION OF AN APPLICATION FORM PROVIDED
BY THE DEPARTMENT. IN THE APPLICATION FORM, THE APPLICANT
SUBCONTRACTOR SHALL PROVIDE THE FOLLOWING INFORMATION:

(a)THE NAME AND BUSINESS ADDRESS OF THE APPLICANT AND
THE AREA OR AREAS WHERE IT SEEKS TO OPERATE;

(b)THE NAMES AND ADDRESSES OF OFFICERS, IF THE
APPLICANT IS A CORPORATION, PARTNERSHIP, COOPERATIVE OR
UNION;

(c) THE NATURE OF THE APPLICANT'S BUSINESS AND THE
INDUSTRY OR INDUSTRIES WHERE THE APPLICANT SEEKS TO
OPERATE;

(d)THE NUMBER OF REGULAR WORKERS; THE LIST OF CLIENTS,
IF ANY; THE NUMBER OF PERSONNEL ASSIGNED TO EACH CLIENT, IF
ANY AND THE SERVICES PROVIDED TO THE CLIENT;

(e)THE DESCRIPTION OF THE PHASES OF THE CONTRACT AND
THE NUMBER OF EMPLOYEES COVERED IN EACH PHASE, WHERE
APPROPRIATE; AND.

(f) A COPY OF AUDITED FINANCIAL STATEMENTS IF THE
APPLICANT IS A CORPORATION, PARTNESHIP, COOPERATIVE OR A
UNION, OR COPY OF THE LATEST INCOME TAX RETURN (ITR) IF THE
APPLICANT IS A SOLE PROPIETORSHIP.

THE APPLICATION SHALL BE SUPPORTED BY:

(a) A CERTIFIED COPY OF A CERTIFICATE OF REGISTRATION OF
FIRM OR BUSINESS NAME FROM THE SECURITIES AND EXCHANGE
COMMISSION (SEC), DEPARTMENT OF TRADE AND INDUSTRY (DTI),
COOPERATIVE DEVELOPMENT AUTHORITY (CDA), OR FROM THE DOLE
IF THE APPUCANT IS A UNION; AND

(b) A CERTIFIED COPY OF THE LICENSE OR BUSINESS PERMIT
ISSUED BY THE LOCAL GOVERNMENT UNIT OR UNITS WHERE THE
SUBCONTRACTOR OPERATES. THE APPLICATION SHALL BE VERIFIED
AND SHALL INCLUDE AN UNDERTAKING THAT THE SUBCONTRACTOR
SHALL ABIDE BY ALL APPLICABLE LABOR LAWS AND REGULATIONS.

3) FILING AND PROCESSING OF APPLICA DONS THE
APPLICATION AND ITS SUPPORTING DOCUMENTS SHALL BE FILED IN
TRIPLICATE IN THE REGIONAL OFFICES WHERE THE APPLICANT
PRINCIPALLY OPERATES. NO APPLICATION FOR REGISTRATION SHALL
BE ACCEPTED UNLESS ALL THE FOREGOING REQUIREMENTS ARE
COMPLIED WITH. THE SUBCONTRACTOR SHALL BE DEEMED
REGISTERED UPON PAYMENT OF A REGISTRATION FEE TO BE
DETERMINED BY THE REGIONAL OFFICE.


WHERE ALL THE SUPPORTING DOCUMENTS HAVE BEEN
SUBMITTED, THE REGIONAL OFFICE MAY DENY OR APPROVE THE
APPLICATION WITHIN SEVEN (7) WORKING DAYS AFTER ITS FILING.

UPON REGISTRATION, THE REGIONAL OFFICE SHALL RETURN
ONE SET RETAIN ONE SET FOR ITS FILE, AND TRANSMIT THE
REMAINING SET TO THE BUREAU OF LOCAL EMPLOYMENT. THE
BUREAU SHALL DEVISE THE NECESSARY FORMS FOR THE
EXPEDITIOUS PROCESSING OF ALL APPLICATIONS FOR
REGISTRATION. OF THE DULY-STAMPED APPLICATION DOCUMENTS
TO THE APPLICANT,

4) ANNUAL REPORTING OF REGISTERED CONTRACTORS. THE
SUBCONTRACTOR SHALL SUBMIT IN TRIPLICATE THE FOLLOWING
DOCUMENTS:

(a) A LIST OF CONTRACTS ENTERED WITH THE PRINCIPAL
DURING THE SUBJECT REPORTING PERIOD;

(b)THE NUMBER OF WORKERS COVERED BY EACH CONTRACT
WITH THE PRINCIPAL;

(c) AN ANNUAL REPORT INCLUDING A SWORN UNDERTAKING
THAT THE BENEFITS FROM THE SOCIAL SECURJTY SYSTEM (SSS),
THE HOME DEVELOPMENT MUTUAL FUND (HDMF), PHILHEALTH,
EMPLOYEES COMPENSATION COMMISSION (ECC) AND REMIITANCES
TO THE BUREAU OF INTERNAL REVENUE (BIR) DUE ITS
CONTRACTUAL EMPLOYEES HAVE BEEN MADE DURING THE SUBECT
REPORTING PERIOD.

THE REGIONAL OFFICE SHALL RETURN ONE SET OF THE DULY-
STAMPED REPORT TO THE SUBCONTRACTOR, RETAIN ONE SET FOR
ITS FILE, AND TRANSMIT THE REMAINING SET TO THE BUREAU OF
LOCAL EMPLOYMENT WITHIN FIVE (5) DAYS FROM RECEIPT THEREOF.

5) DELISTTNG OF CONTRACTORS OR SUBCONTRACTORS. THE
REGIONAL DIRECTOR SHALL CANCEL THE REGISTRATION OF
SUBCONTRACTORS BASED ON ANY OF THE FOLLOWING GROUNDS:

(a) NON-SUBMISSION OF CONTRACTS BETWEEN THE PRINCIPAL
AND THE SUBCONTRACTOR WHEN REQUIRED TO DO SO;

(b) NON-SUBMISSION OF SWORN DOCUMENTS STATED IN
ARTICLE 106- D 4 (C);

(c) ENGAGEMENT IN LABOR-ONLY CONTRACTING;

(d)VIOLATION OF THE PROHIBITED ACTIVITIES PROVIDED BY
THIS CODE;

(e) NON-COMPLIANCE WITH LABOR STANDARDS AND WORKING
CONDITIONS.


6) RENEWAL OF REGISTRAT7ON OF SUBCONTMDORS. ALL
REGISTERED SUBCONTRACTORS MAY APPLY FOR RENEWAL OF
REGISTRATION EVERY TWO YEARS. FOR THIS PURPOSE, THE
TRIPARTITE INDUSTRIAL PEACE COUNCIL (TIPC) AS CREATED UNDER
EXECUTIVE ORDER NO. 49, SHALL SERVE AS THE OVERSIGHT
COMMITTEE TO VERIFY AND MONITOR THE FOLLOWING:

(a) ENGAGING IN ALLOWABLE CONTRACTING ACTIVITIES; AND

(b) COMPLIANCE WITH ADMINISTRATIVE REPORTING
REQUIREMENTS.

SEC. 6. Duty to Produce Contract. Article 106-E is hereby
inserted in Presidential Decree No. 442 as follows:

ARTICLE 106-E. DUTY TO PRODUCE COPY OF CONTRACT.
THE PRINCIPAL OR SUBCONTRACTOR SHALL PRODUCE A COPY OF
THE CONTRACT BETWEEN THE PRINCIPAL AND THE CONTRACTOR IN
THE COURSE OF INSPECTION. THE SUBCONTRACTOR SHALL ALSO
PRODUCE A COPY OF THE CONTRACT OF EMPLOYMENT OF
SUBCONTRACTED WORKERS WHEN DIRECTED TO DO SO BY THE
REGIONAL DIRECTOR OR HIS AUTHORIZED REPRESENTATIVE.

A COPY OF THE CONTRACT BETWEEN THE SUBCONTRACTED
EMPLOYEE AND THE SUBCONTRACTOR SHALL BE FURNISHED THE
CERTIFIED BARGAINING AGENT, IF THERE IS ANY.

SEC. 7. Unfair Labor Practice. Article 248 of Presidential
Decree No. 442 is hereby amended to read as follows:

Article 248. Unfair labor practices of employers. - It shall
be

(a) To interfere with, restrain or coerce employees in the
exercise of their right to self-organization;

(b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall withdraw from one
to which he belongs;

(c) To contract out services or functions being performed by MEMBERS.
OF THE BARGAINING UNIT AND/OR REGULAR RANK-AND-FILE AND
SUPERVISORYEMPLOYEES [union members when such will interfere
with, restrain or coerce employees in the exercise of their rights to
self-organization];

(d) To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including the
giving of financial or other support to it or its organizers or supporters;


(e) To discriminate in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in this Code
or in any other law shall stop the parties from requiring membership in
a recognized collective bargaining agent as a condition for
employment, except those employees who are already members of
another union at the time of the signing of the collective bargaining
agreement. Employees of an appropriate bargaining unit who are not
members of the recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues and other fees paid
by members of the recognized collective bargaining agent, if such non-
union members accept the benefits under the collective bargaining
agreement: Provided, that the individual authorization required under
Article 242, paragraph (0) of this Code shall not apply to the non-
members of the recognized collective bargaining agent;

(f) To dismiss, discharge or otherwise prejudice or discriminate
against an employee for having given or being about to give testimony
under this Code;

(g) To violate the duty to bargain collectively as prescribed by
this Code;

(h) To pay negotiation or attorney's fees to the union or its
officers or agents as part of the settlement of any issue in collective
bargaining or any other dispute; or

(i) To violate a collective bargaining agreement.

(Gj) TO DENY THE EXISTENCE OF EMPLOYER-EMPLOYEE
RELATIONSHIP AND/OR TO CLASSIFY AS CASUAL, CONTRACTUAL,
SUBCONTRACTED EMPLOYEES, AGENCY EMPLOYEES, OR OTHER NON-
REGULAR CLASSIFICATION THOSE EMPLOYEES WHO ARE REGULAR
EMPLOYEES BY VIRTUE OF ARTICLE 280 OF THIS CODE.

The provisions of the preceding paragraph notwithstanding, only
the officers and agents of corporations, associations or partnerships
who have actually participated in, authorized or ratified unfair labor
practices shall be held criminally liable.

SEC. 8. Penalties. Article 288 of Presidential Decree No. 442 is
hereby amended to read as follows:

Article 288. Penalties. - Except as otherwise provided in this
Code, or unless the acts complained of hinge on a question of
interpretation or implementation of ambiguous provisions of an
existing collective bargaining agreement, any violation of the
provisions of this Code declared to be unlawful or penal in nature shall
be punished with a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Ten Thousand Pesos (P10,000.00) or


imprisonment of not less than three months nor more than three
years, or both such fine and imprisonment at the discretion of the
court.

ANY PRINCIPAL OR SUB-CONTRACTOR WHO  VIOLATES
ARTICLES 106, 106-A, 106-B, 106-C, 106-D AND 106-E SHALL BE
SOLIDARILY LIABLE TO INDEMNIFY EACH SUBCONTRACTED
EMPLOYEE NO LESS THAN P50,000.00 WITHOUT PRUUDICE TO OTHER
MONETARY AWARDS TO WHICH SUCH SUBCONTRACTED EMPLOYEE
MAY BE ENTITLED SUCH AS BACKWAGES, MONETARY CLAIMS AND
BENEFITS UNDER A COLLECTIVE BARGAINING AGREEMENT OR
COMPANY POLICY, WHETHER WRITTEN OR OTHERWISE.

In addition to such penalty, any alien found guilty shall be
summarily deported upon completion of service of sentence.

Any provision of law to the contrary notwithstanding, any
criminal offense
punished in this Code, shall be under the concurrent jurisdiction of the
Municipal
or City Courts and the Courts of First Instance.

SEC. 9. Separability Provisions. If any provision of this law or
the application thereof to any person or circumstance, is held invalid,
the remainder of this law, or the application of such provision or part
to other persons of circumstances, shall not be affected thereby.

SEC. 10. Repealing Clause. Article 107 of the Labor Code as
amended is hereby expressly repealed. All other provisions of existing
laws, orders, decrees, rules and regulations inconsistent herewith are
hereby repealed.

SEC. 11. Effectivity. This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in at feast two (2)
newspapers of general circulation.

Approved,