THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
S E N A T E  
Senate Bill No. = 
8 
INTRODUCED BY SEN. MANNY VILLAR 
EXPLANATORY NOTE 
Presidential Decree No. 442, as amended, otherwise known as the “Labor 
Code of the Philippines”, contains various provisions on compromise 
agreements/voluntary settlements, to writ: 
“ART. 227. Compromise Agreements. - Any compromise 
settlement, including those involving labor standard laws, 
voluntarily agreed upon by the parties with the assistance of the 
Bureau or the regional office of the Department of Labor, shall be 
final and binding upon the parties. The National Labor Relations 
Commission or any court, shall not assume jurisdiction over issues 
involved therein except in case of non-compliance thereof or if 
there is prima facie evidence that the settlement was obtained 
through fraud, misrepresentation, or coercion”. 
“ART. 221. Technical rules not binding and prior resort to 
amicable settlement. - In any proceeding before the Commission or 
any of the Labor Arbiters, the rules of evidence prevailing in courts 
of law or equity shall not be controlling and it is the spirit and 
intention of this Code that the Commission and its members and 
the Labor Arbiters shall use every and all reasonable means to 
ascertain the facts in each case speedily and objectively and 
without regard to technicalities of law or procedure, all in the 
interest of due process. In any proceeding before the Commission 
or any Labor Arbiter, the parties may be represented by legal 
counsel but it shall be the duty of the Chairman, any Presiding 
Commissioner or Commissioner or any Labor Arbiter to exercise 
complete control of the proceedings at all stages. 
Any provision of law to the contrary notwithstanding, 
the Labor Arbiter shall exert all efforts towards the amicable 
settlement of a labor dispute within his jurisdiction on or 
before the first hearing. The same rule shall apply to the 
Commission in the exercise of its original jurisdiction”. 
(Emphasis supplied) 


"ART. 262-A. Procedures. - The Voluntary Arbitrator or 
panel of Voluntary Arbitrators shall have the power to hold 
hearings, receive evidences and take whatever action is necessary 
to resolve the issue or issues subject of the dispute, including 
efforts to effect a voluntary settlement between parties". 
(Emphasis supplied) 
"ART. 263. Strikes, Picketing and Lockouts. -- 
xxx 
xxx 
xxx 
(e) During the cooling-off period, it shall be the duty of the 
Ministry to exert all efforts at mediation and conciliation to 
effect a voluntary settlement. Should the dispute remain 
unsettled until the lapse of the requisite number of days from the 
mandatory filing of the notice, the labor union may strike or the 
employer may declare a lockout." (Emphasis supplied) 
(See, Article 265 of the Labor Code) 
Experience in labor dispute settlements preponderantly indicates that 
amicable/compromise/voluntary settlements between the workers and their 
employers do not generally constitute a respectable portion of the workers' 
original money claims. The hand of the law must be invoked to balance this 
lopsided situation and thereby approximate the true wishes of the parties to any 
amicablelcompromise agreement. 
Cursory perusal of the above quoted provisions of the Labor Code readily 
shows that said provisions do not pretend to regulate the terms and conditions of 
any amicable/compromise agreement between the employer and his workers. 
This Bill seeks to provide the bare minimum conditions under which a 
reasonable compromise agreement may be entered into between the company 
and the workers by mandating that the amount of the compromise settlement 
should not be less than fifty percent (50%) of the worker's original money claims 
and that installment payments thereof if'any, should not be longer than two (2) 
months. 
Premises considered, the approval of this Bill is urgently requested. 
MANNYVILL R 4 


THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
“ P  
S E N A T E  
Senate Bill No. 
8 
INTRODUCED BY SEN. MANNY VILLAR 
AN ACT 
PROVIDING THAT ANY COMPROMISE AGREEMENT ON MONEY CLAIMS 
THAN FIFTY PERCENT (50%) OF SUCH MONEY CLAIMS, AMENDING FOR 
THIS PURPOSE ARTICLE 277 OF THE “LABOR CODE OFTHE 
PHILIPPINES” AND FOR OTHER PURPOSES 
ARISING FROM EMPLOYER-EMPLOYEE RELATIONS MUST NOT BE LESS 
> 
Be, enacted by the Senate and the House of Represenfafives of the 
Philippines in Congress assembled: 
SECTION 1. Article 277 of Presidential Decree No. 442, as amended, 
othetwise known as the “Labor Code of the Philippines” is hereby further 
amended by adding a new paragraph 0) to read as follows: 
“ARTICLE 277. Miscellaneous Provisions.- 
(a) xxx 
(b) xxx 
(c) xxx 
(d) xxx 
(e) xxx 
(f) xxx 
(9) xxx 
(h) xxx 
(i) xxx 


(j) NOTWITHSTANDING ANY PROVISION OF LAW TO 
THE CONTRARY, ANY COMPROMISE/AMICABLE 
SETTLEMENT OR VOLUNTARY AGREEMENT ON 
ANY MONEY CLAIMS EXCLUSIVE OF DAMAGES 
ARISING FROM EMPLOYER-EMPLOYEE RELATIONS 
MUST NOT BE LESS THAN FIFTY PERCENT (50%) OF 
SUCH MONEY CLAIMS. PROVIDED, THAT ANY 
INSTALLMENT PAYMENTS, IF ANY, TO SATISFY ANY 
SUCH COMPROMISE OR VOLUNTARY SETTLEMENT 
SHALL NOT BE LONGER THAN TWO (2) MONTHS. 
ANY COMPROMISENOLUNTARY AGREEMENT IN 
VIOLATION OF THIS PARAGRAPH SHALL BE NULL 
AND VOID. 
SECTION 2. Repealing Clause. - All laws, orders, issuance, rules and 
regulations or parts thereof inconsistent with the provisions of this Act are hereby 
repealed, amended or modified accordingly. 
SECTION 3. Effectivity Clause. - This Act shall take effect fEfteen (15) days 
after its complete publication in the Official Gazette or in at least two (2) national 
newspapers of general circulation, whichever comes earlier. 
Approved,