EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s. No. 908
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1 13 P?:Q6
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
AGAINST THE PRACTICE OF "ENDO" AND CONTRACTING, AMENDING FOR 
THIS PURPOSE ARTICLES 106 TO 109, 294 TO 296 OF AND ADDING A NEW 
PROVISION TO PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS 
THE LABOR CODE OF THE PHILIPPINES, AS AMENDED
EXPLANATORY NOTE
The right of workers' to security of tenure has long been bannered as a social 
justice measure. Asymmetric power relations between capital and labor have resulted in 
workers being compelled to accept intermittent and short-term employment, and 
employers maximizing profit by denying regularization to their benefits. Practices such 
as endo, temporary employment contracts, unscrupulous sub-contracting and the like, 
violate the right of workers to a just livelihood.
However, more current evidence shows that not only are "endo" arrangements 
violative of the rights of workers, they are also bad for the economy. In a recent study, 
it was found that "'temporary employment contracts' as employment modality creates 
and sustains market inefficiencies and locks the entire market in a suboptimal 
equilibrium. It retards our transition to a high value-added, high employment economy. 
In the end, it is not just the worker but also the consumer that suffers.1"
In the 17th Congress, a legislative measure prohibiting endo and other forms of 
contractualization was passed in both Houses of Congress. Unfortunately, despite 
several commitments by the President to workers' groups and despite certifying the bill 
as urgent, the measure was vetoed by the Executive. This veto, however, only 
underscores the precariousness of the rights of workers, and the urgent need to correct 
the asymmetries that inform relations between employers and employees.
This bill has the following features:
•  
Establishes a prohibition against contracting or subcontracting, except 
where a determination has been made by the National Tripartite Industrial 
Peace Council (NTIPC) that a specific activity may be legitimately 
contracted or subcontracted out;
•  
Imposes solidary liability on the employer for violations committed by the 
contractor or sub-contractor;
1 https://medium.eom/@futilitvflinc/endo-is-bad-for-the-economv-e23eff40blbb


Requires that all employees, except those under valid written probationary 
contracts, are deemed regular, including project and seasonal employees; 
Imposes penalties in the form of fine and imprisonment for violations
The passage of this bill is earnestly sought.
RISA HONTIVEROS 
V
Senator


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
SENATE
o:.
s. No. 903
■9 
P2-C6
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
AGAINST THE PRACTICE OF "ENDO" AND CONTRACTING, AMENDING FOR 
THIS PURPOSE ARTICLES 106 TO 109, 294 TO 296 OF AND ADDING A NEW 
PROVISION TO PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS 
THE LABOR CODE OF THE PHILIPPINES, AS AMENDED
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
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SECTION 1. Short Title. -  This Act shall be known as the "Anti-ENDO and
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Contracting Law".
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SEC. 2. Article 106 is hereby deleted and replaced as follows:
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"ART. 106. Prohibition Against Contracting or Subcontracting - CONTRACTING, 
WHERE A PERSON OR ENTITY FARMS OUT THE PERFORMANCE OF ITS BUSINESS OR 
ANY PART THEREOF TO ANOTHER, IS HEREBY STRICTLY PROHIBITED EXCEPT AS 
PROVIDED IN THE FOLLOWING PARAGRAPH.
THE SECRETARY OF LABOR AND EMPLOYMENT MAY, BASED ON THE UNANIMOUS 
RECOMMENDATION OF THE NATIONAL TRIPARTITE INDUSTRIAL PEACE COUNCIL 
(NTIPC) UNDER ART. 290 (C) OF THE LABOR CODE, AS AMENDED, SHALL DETERMINE 
BY APPROPRIATE REGULATIONS SPECIFIC ACTIVITIES WHICH MAY BE CONTRACTED 
OUT.
NATURAL OR JURIDICAL PERSONS ENGAGED IN ANY ARRANGEMENT ACTING AS 
PRINCIPALS IN VIOLATION OF THE PROHIBITION AGAINST CONTRACTING OR 
SUBCONTRACTING SHALL AUTOMATICALLY BE CONSIDERED THE WORKER'S DIRECT 
EMPLOYER AND THE LATTER SHALL BE DEEMED AS DIRECT EMPLOYEES FOR ALL 
PURPOSES. 
NATURAL OR JURIDICAL PERSONS ACTING AS CONTRACTORS IN 
VIOLATION OF THE PROHIBITION AGAINST CONTRACTING OR SUBCONTRACTING 
SHALL BE CONSIDERED MERELY AS AN AGENT OF THE EMPLOYER."
SEC. 3. Articles 107 is hereby deleted and replaced to read as follows:
ART. 107. CONDITIONS ON CONTRACTING. -  CONTRACTING ALLOWED UNDER 
THE PRECEDING ARTICLE SHALL BE DONE ONLY IF THE NATURAL OR JURIDICAL 
PERSON ACTING AS CONTRACTOR OBTAINS A LICENSE FROM THE DEPARTMENT OF 
LABOR AND EMPLOYMENT AND ONLY IF IT PERFORMS A JOB, WORK OR SERVICE 
IDENTIFIED BY THE SECRETARY OF LABOR AND EMPLOYMENT, BASED ON THE


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UNANIMOUS RECOMMENDATION OF THE NATIONAL TRIPARTITE INDUSTRIAL PEACE 
COUNCIL (NTIPC) UNDER ART. 290 (C) OF THE LABOR CODE.
SUCH LICENSE SHALL BE ISSUED AND MAINTAINED ONLY IF THE APPLICANT:
(A) HAS A PAID-UP CAPITAL OR NET WORTH OF AT LEAST FIFTY MILLION 
PESOS (P50,000,000.00), WHICH MAY BE INCREASED BY THE SECRETARY OF LABOR 
AND 
EMPLOYMENT 
AS 
DEEMED 
APPROPRIATE 
THROUGH 
TRIPARTITE 
CONSULTATION;
(B) HAS A CORE OF REGULAR EMPLOYEES CONSISTING OF COMPETENT 
PROFESSIONALS OR SKILLED WORKERS ESPECIALLY TRAINED TO PERFORM THE JOB, 
WORK OR SERVICE TO BE CONTRACTED OUT;
(C) HAS INVESTMENT IN THE FORM OF EQUIPMENT, MACHINERIES OR TOOLS 
WHICH ARE REASONABLY NECESSARY TO PERFORM OR COMPLETE THE JOB, WORK, 
OR SERVICE TO BE CONTRACTED OUT;
(D) 
EXERCISES 
EXCLUSIVE 
CONTROL 
OVER 
THE 
PERFORMANCE 
AND 
COMPLETION OF THE JOB, WORK, OR SERVICE CONTRACTED OUT;
(E) OBTAINS CERTIFICATION OF COMPLIANCE WITH LABOR AND SOCIAL 
WELFARE LAWS INCLUDING PROOF OF PAYMENT OF SOCIAL SECURITY, PHILIPPINE 
HEALTH INSURANCE CORPORATION, AND HOME DEVELOPMENT MUTUAL FUND (PAG- 
IBIG) CONTRIBUTIONS; AND
(F) PAYS A LICENSE FEE, WHICH SHALL NOT BE LOWER THAN FIVE HUNDRED 
THOUSAND PESOS (P500,000.00).
THE LICENSE SHALL BE VALID FOR A PERIOD OF TWO (2) YEARS AND MAY BE 
RENEWED UPON COMPLIANCE WITH THE REQUIREMENTS PRESCRIBED ABOVE AND 
OTHER REQUIREMENTS AS MAY BE DETERMINED BY THE DEPARTMENT OF LABOR 
AND 
EMPLOYMENT PROVIDED THAT THE JOB, 
WORK, 
OR SERVICE TO 
BE 
PERFORMED CONTINUES TO BE DETERMINED BY THE SECRETARY OF LABOR AND 
EMPLOYMENT 
AS 
VALID 
FOR 
CONTRACTING 
BASED 
ON 
THE 
UNANIMOUS 
RECOMMENDATION OF THE NATIONAL TRIPARTITE INDUSTRIAL PEACE COUNCIL 
(NTIPC).
IN ALL CASES, THE JOB CONTRACTOR SHALL DEMONSTRATE THAT IT HAS FINANCIAL 
CAPACITY TO CARRY ON ITS BUSINESS BASED ON FACTORS SUCH AS, BUT NOT 
LIMITED, TO THE NUMBER OF ITS EMPLOYEES AND THE NATURE OF ITS BUSINESS.
ANY LEGITIMATE LABOR ORGANIZATION SHALL HAVE ACCESS TO COPIES OF 
LICENSES ISSUED TO JOB CONTRACTORS AND ANY AND ALL SUBMISSIONS MADE IN 
CONNECTION WITH SUCH LICENSE.
FOR 
THIS 
PURPOSE, 
THE 
SECRETARY 
OF 
LABOR 
AND 
EMPLOYMENT, 
IN 
CONSULTATION WITH THE NATIONAL TRIPARTITE INDUSTRIAL PEACE COUNCIL 
(NTIPC), SHALL ISSUE THE APPROPRIATE REGULATIONS FOR THE LICENSING, 
RENEWAL, SUSPENSION, AND REVOCATION OF LICENSES OF CONTRACTORS.
IN NO CASE SHALL PRIVATE RECRUITMENT AND PLACEMENT AGENCIES (PRPA) OR 
PRIVATE EMPLOYMENT AGENCIES (PEA) UNDER ARTICLE 25 OF THE LABOR CODE, AS 
AMENDED, BE ALLOWED TO ENGAGE IN CONTRACTING."


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SEC. 4. Articles 108 of the Labor Code is hereby deleted.
SEC 5. Article 109 of the Labor Code is hereby amended to read as follows:
ART. 109. Solidary liability. The provisions of existing laws to the contrary 
notwithstanding, every employer [or indirect employer] shall be held solidarily 
responsible with its contractor or subcontractor for any violation of any provision of this 
Code. For purposes of determining the extent of their civil liability under this Chapter, 
they shall be considered as direct employers.
SEC. 6. Article 294 of the Labor Code is hereby amended as follows:
"ART. 294. Security o f Tenure. -  [In  case or regular employment, the employer 
shall not term inate] [t]T he services of an employee, IRRESPECTIVE OF EMPLOYMENT 
STATUS OR POSITION, SHALL NOT BE TERMINATED except for a just cause or when 
authorized by this Title. An employee who is unjustly dismissed from work shall be 
entitled to reinstatement without loss of seniority rights and other privileges and to 
his/HER full backwages, inclusive of allowances, and to his/HER other benefits or their 
monetary equivalent computed from the time his/HER compensation was withheld from 
him/HER up to the time of his/HER actual reinstatement.
THE EMPLOYER SHALL HAVE THE BURDEN OF PROVING THAT THE TERMINATION IS 
WITH CAUSE AND DUE PROCESS."
SEC. 7. Article 295 is hereby deleted and replaced to read as follows:
"ARTICLE 295. STATUS OF EMPLOYMENT. -  EXCEPT THOSE UNDER VALID 
WRITTEN PROBATIONARY CONTRACTS, ALL EMPLOYEES ARE DEEMED REGULAR, 
INCLUDING PROJECT AND SEASONAL EMPLOYEES, AND SHALL, IN CASE OF RANK- 
AND-FILE 
OR 
SUPERVISORS, 
BE TREATED 
AS 
PART OF THE 
APPROPRIATE 
BARGAINING UNIT FOR PURPOSES OF THE EXERCISE OF THE CONSTITUnONAL 
RIGHT TO SELF-ORGANISATION AND COLLECTIVE BARGAINING, AND SHALL BE 
ENTITLED TO ALL THE BENEFITS UNDER THE EXISTING CBA, IF ANY.
PROJECT AND SEASONAL EMPLOYEES ARE REGULAR FOR THE DURATION OF THE 
PROJECT OR SEASON, AS THE CASE MAY BE. FOR THIS PURPOSE, PROJECT 
EMPLOYMENT IS EMPLOYMENT IN AN EXISTING PROJECT OR UNDERTAKING THE 
COMPLETION OR TERMINATION OF WHICH HAS BEEN DETERMINED AND MADE 
KNOWN TO THE EMPLOYEE AT THE TIME OF THE ENGAGEMENT. SEASONAL 
EMPLOYMENT IS BASED ON THE EXISTENCE OF A SEASON IN AGRICULTURAL WORK 
AS 
DETERMINED 
BY THE 
DEPARTMENT 
OF 
LABOR 
AND 
EMPLOYMENT, 
IN 
CONSULTATION WITH THE NATIONAL TRIPARTITE INDUSTRIAL PEACE COUNCIL 
(NTIPC). WORKERS UNDER PROJECT AND SEASONAL EMPLOYMENT ARE ENTITLED TO 
THE RIGHT OF FIRST REFUSAL TO THE TASK, WORK, OR PROJECT WHICH IS THE 
SUBJECT MATTER OF THEIR EMPLOYMENT.
ALL OTHER FORMS OF DISCONTINUOUS EMPLOYMENT ARE PROHIBITED. CLAUSES IN 
EMPLOYMENT CONTRACTS PROVIDING FOR A FIXED TERM OR DEFINITE PERIOD OF 
EMPLOYMENT ARE VOID. WORKERS UNDER SUCH ARRANGEMENTS ARE DEEMED 
REGULAR EMPLOYEES RECKONED FROM THE FIRST DAY OF EMPLOYMENT AND 
SHALL, IN CASE OF RANK-AND-FILE OR SUPERVISORS, BE TREATED AS PART OF THE 
APPROPRIATE BARGAINING UNIT FOR PURPOSES OF THE EXERCISE OF THE 
CONSnTUnONAL RIGHT TO SELF-ORGANISATION AND COLLECTIVE BARGAINING,


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AND SHALL BE ENTITLED TO ALL THE BENEFITS UNDER THE EXISTING CBA; IF ANY.
FOR THE AVOIDANCE OF DOUBT, AN EMPLOYER-EMPLOYEE RELATIONSHIP EXISTS 
WHEN THE WORKER IS ENGAGED TO RENDER WORK OR SERVICE UNDER THE 
CONTROL OR SUPERVISION OF THE EMPLOYER, NOT ONLY AS TO THE END TO BE 
ACHIEVED, BUT ALSO THE MANNER, MEANS AND METHOD IN REACHING THE END."
SEC. 8. Article 296 is hereby amended to read as follows:
"A rt. 296. P rob ation ary em p lo ym e n t -  Probationary employment shall not exceed 
six (6) months from the [date the employee started working, unless it is covered by an 
apprenticeship agreement stipulating a longer period. The services of an employee 
who has been engaged on a probationary basis may be terminated for a just cause or 
when he fails to qualify as a regular employee in accordance with reasonable 
standards made known by the employer to the employee at the time of his 
engagement. An employee who is allowed to work after a probationary period shall be 
considered a regular employee.] FIRST DAY OF SERVICE REGARDLESS OF THE 
NATURE OF WORK TO BE PERFORMED.
The services of an employee who has been engaged on a probationary basis may be 
terminated for a just cause or when he fails to qualify as a regular employee in 
accordance with reasonable standards WHICH SHALL BE made known by the employer 
to the employee IN WRITING at the time of his engagement. An employee who is 
allowed to work after a probationary period shall be considered a regular employee.
EXCEPT WHEN THE TERMINATION IS FOR JUST CAUSE, A PROBATIONARY EMPLOYEE 
WHO HAS RENDERED AT LEAST ONE (1) MONTH OF SERVICE IS ENTITLED TO A 
TERMINATION PAY OF ONE-HALF (1/2) MONTH SALARY."
SEC. 9. Insert a new Article 303-A to read as follows:
"ARTICLE 303-A. PENALTIES. 
-  (A) THE 
DEPARTMENT OF 
LABOR AND 
EMPLOYMENT SHALL IMPOSE THE FOLLOWING PENALTIES:
1. FOR EVERY PERSON OR ENTITY ENGAGED IN ANY ACTIVITY IN VIOLATION OF 
THE PROHIBITION AGAINST CONTRACTING OR SUBCONTRACTING, A FINE OF 
AT LEAST FIFTY THOUSAND PESOS (PHP 50,000.00) ASSESSED PER EMPLOYEE 
ENGAGED UNDER A PROHIBITED CONTRACTING ARRANGEMENT.
2. FOR EVERY PERSON WHO OR ENTITY WHICH MISCLASSIFIES AN EMPLOYEE'S 
STATUS OF EMPLOYMENT IN DEROGATION OF THE EMPLOYEE'S SECURITY OF 
TENURE, A FINE OF AT LEAST FIFTY THOUSAND PESOS (PHP 50,000.00) 
ASSESSED PER MISCLASSIFIED EMPLOYEE.
3. FOR EVERY PERSON OR ENTITY ENGAGED IN ANY ACTIVITY IN VIOLATION OF 
THE PROHIBITION AGAINST FIXED TERM EMPLOYMENT, A FINE OF AT LEAST 
ONE HUNDRED THOUSAND PESOS (PHP 100,000.00) ASSESSED PER EMPLOYEE 
ENGAGED UNDER SUCH PROHIBITED ARRANGEMENTS.
4. FOR EVERY PERSON OR ENTITY ENGAGED IN ANY ACTIVITY IN VIOLATION OF 
THE PROVISION ON PROBATIONARY EMPLOYMENT, A FINE OF AT LEAST ONE 
HUNDRED THOUSAND PESOS (PHP 100,000.00) ASSESSED PER EMPLOYEE 
ENGAGED UNDER SUCH PROHIBITED ARRANGEMENTS.


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THESE PENALTIES SHALL BE IMPOSED WITHOUT PREJUDICE TO OTHER DAMAGES 
AND PENALTIES THAT MAY BE IMPOSED UNDER THIS CODE AND OTHER LAWS AND 
REGULATIONS.
(B) IMPRISONMENT OF NOT LESS THAN TWELVE (12) YEARS AND ONE (1) DAY BUT 
NOT MORE THAN TWENTY (20) YEARS SHALL BE IMPOSED UPON ANY PERSON 
FOUND GUILTY OF COMMITTING ANY OF THE FOLLOWING:
1. ENGAGING IN ANY ACTIVITY IN VIOLATION OF THE PROHIBITION 
AGAINST CONTRACTING OR SUBCONTRACTING;
2. MISCLASSIFYING AN EMPLOYEE'S STATUS OF EMPLOYMENT IN 
DEROGATION OF THE EMPLOYEE'S SECURITY OF TENURE;
3. VIOLATING THE PROVISION ON PROBATIONARY EMPLOYMENT;
OR
4. OTHER THAN THOSE ALLOWED IN ARTICLE 295 OF THIS CODE, 
USING FIXED TERM EMPLOYMENT IN ENGAGING WORKERS.
IN ANY OF THE FOREGOING CASES IN PARAGRAPH (B), THE PENALTY OF LIFE 
IMPRISONMENT SHALL BE IMPOSED IF THE ACT COMMITTED PERTAINS TO AT LEAST 
THREE (3) WORKERS.
SEC. 10. Separability Clause. - If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall 
remain valid.
SEC. 11. Repealing Clause. - All acts, executive orders, administrative orders, 
proclamations, rules and regulations or parts thereof inconsistent with any of the 
provisions of this Act are hereby repealed or modified accordingly.
SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after 
publication in the Official Gazette or two (2) newspapers of general circulation.
Approved,