SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
SENATE 
Senate Bill No. 2 '7 '7 0 
'15 
MAY 18 P 1 :51\ 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
FOSTERING A CULTURE OF VOLUNTARY COMPLIANCE WITH LABOR 
LAWS, AMENDING FOR THE PURPOSE ARTICLE 128 OF PRESIDENTIAL 
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE "LABOR 
CODE OF THE PHILIPPINES" 
EXPLANATORY NOTE 
The Constitution mandates that the State shall afford full protection to labor and 
ensure that workers shall be entitled to security of tenure, humane conditions and 
living wage. To pursue this, the Secretary of Labor and Employment under Article 
128 of the Labor Code of the Philippines, as amended, exercises visitorial and 
enforcement power over workplaces and worksites to monitor compliance of 
establishments with labor standards that are intended to protect workers from 
hazards in the workplace and promote their welfare by ensuring safe and healthy 
work environments. 
Using the 2010 NSO data, a total of 769,698 establishments should be 
inspected annually as to compliance with the General Labor Standards. 
However, data from 2007 to 2011 shows that designated labor inspectors have 
been unable to inspect a SUbstantial number given their limited number vis-a-vis 
the number of establishments to be inspected. Limitations are also seen in terms 
of the capacity of labor inspectors to check compliance with technical safety and 
occupational safety and health standards. 
President Benigno S. Aquino III, in his 2012 Labor Day speech, directed 
the full implementation of the country's labor laws, the non-tolerance of violations 
and circumvention, and giving workers what are due them under the laws. To 
implement this Presidential directive, the DOLE shifts from a regulatory 
framework to a compliance system with a strong pro-active and developmental 
dimension in enforcing and disposing labor standards cases. Crucial to the 
change in approach is the creation of a culture of voluntary compliance among 
companies so that they effect immediate restitution and correction. This system 
will also result in fast and fair settlement of benefits due to workers and in 
minimizing the issuance of compliance orders that opens the door to long, 
tedious, and costly litigations. To reinforce this system, personnel from the DOLE 
handling labor law compliance will likewise have to shift from merely regulatory 
approach in inspection to perform developmental tasks such as educating both 
employers and workers on labor laws including those on anti-child labor; 


conducting conciliation-mediation proceedings at the plant-level to encourage 
compliance; and promoting DOLE programs and services that are aimed to 
improving working conditions as well as productivity of enterprises. 
In view of the foregoing, it is imperative to institutionalize this major policy 
shift by amending Article 128 of the Labor Code of the Philippine, from a purely 
regulatory framework to the promotion of voluntary compliance through the use 
of developmental approach, as a supplement, in order to: (a) inculcate a culture 
of compliance with labor laws; (b) ensure fair, expeditious, and non-litigious 
settlement of dispute; (c) encourage the use of settlement in all labor cases; and 
(d) strengthen tripartism among the employees, employers and the government. 
Hence, passage of this significant measure is earnestly sought. 
Senator 


, , 
SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
"15 
t1AY 18 Pl :58 
SENATE 
Senate Bill No. 
2 'I 'I 0 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
FOSTERING A CULTURE OF VOLUNTARY COMPLIANCE WITH LABOR 
LAWS, AMENDING FOR THE PURPOSE ARTICLE 128 OF PRESIDENTIAL 
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE "LABOR 
CODE OF THE PHILIPPINES" 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
1 
SECTION 1. Article 128 of the Labor Code is hereby amended as follows: 
2 
3 
"ART. 128. Visitorial and enforcement power. -
(a) The 
4 
Secretary of Labor and Employment or his I HER duly authorized 
5 
representatives [,including labor regulation officers,] shall have 
6 
access to employer's EMPLOYMENT records and premises at any 
7 
time of the day or night whenever work is being undertaken therein, 
8 
and the right to copy therefrom, to question any employee and 
9 
investigate any fact, condition or matter which may be necessary 
10 
[to determine violations] IN THE DETERMINATION OF VIOLATION 
11 
OF LABOR STANDARDS AND OTHER LABOR LAWS AND 
12 
SOCIAL LEGISLATION or which may aid in the enforcement of this 
13 
Code and of any labor law, wage order or rules and regulations 
14 
issued pursuant thereto. 
15 
16 
"(b) Notwithstanding the provisions of Articles 129 and 217 
17 
of this Code to the contrary, [and in cases where the relationship of 
18 
employer-employee still exists,] the Secretary of Labor and 
19 
Employment or his I HER duly authorized representatives shall 
20 
have the power to issue compliance orders, to give effect to the 
21 
labor standards provision of this Code INCLUDING THE 
22 
EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP 
23 
and other labor legislation based ot'l the findings of [labor 
24 
employment and 
enforcement officers 
or industrial 
safety 
25 
engineers] THE LABOR LAWS COMPLIANCE OFFICERS made in 
26 
the course of inspection. 
The Secretary or his I HER duly 
27 
authorized representatives shall issue writs of execution to the 
28 
appropriate authority for the enforcement of their orders, except in 
29 
cases where the employer contests the findings of the [labor 
30 
employment 
and 
enforcement 
officer] 
LABOR 
LAWS 
31 
COMPLIANCE 
OFFICER 
and 
raises 
issues supported 
by 


1 
documentary proofs which were not considered in the course of 
2 
inspection. 
3 
4 
"A[n] COMPLIANCE order issued by the duly authorized 
5 
representative of the Secretary of Labor and Employment under 
6 
this Article may be appealed to the [latter] OFFICE OF THE 
7 
SECRETARY. In case said order involves a monetary award, an 
8 
appeal by the employer may be perfected only upon the posting of 
9 
a cash or surety bond issued by a reputable bonding company duly 
10 
accredited by the [Secretary of Labor and Employment] SUPREME 
11 
COURT OF THE PHILIPPINES in the amount equivalent to the 
12 
monetary award in the COMPLIANCE order appealed from. 
13 
14 
"(c) The Secretary of Labor and Employment OR HIS/HER 
15 
DULY AUTHORIZED REPRESENTATIVE may [likewise] order 
16 
THE stoppage of work [or suspension of operations] of any unit or 
17 
department of an establishment when non-compliance with the law 
18 
or implementing rules and regulations [poses] MAY CAUSE OR 
19 
CAUSED grave and imminent danger to the health and safety of 
20 
workers in the workplace. Within twenty-four hours, a hearing shall 
21 
be conducted to determine whether an order for the stoppage of 
22 
work [or suspension of operations] shall be lifted or not. In case the 
23 
violation is attributable to the fault of the employer, he shall pay the 
24 
employees concerned their [salaries or] wages AND OTHER 
25 
LABOR STANDARDS BENEFITS during the period of such 
26 
stoppage of work [or suspension of operation]. 
27 
28 
"(d) It shall be unlawful for any person or entity, INCLUDING 
29 
GOVERNMENT AGENCIES AND 
INSTRUMENTALITIES, 
to 
30 
obstruct, impede, delay or otherwise render ineffective the orders of 
31 
the Secretary of Labor and Employment or his / HER duly 
32 
authorized representatives issued pursuant to the authority granted 
33 
under this Article, and· no inferior court or entity shall issue 
34 
temporary or permanent injunction or restraining order or otherwise 
35 
assume jurisdiction over any case involving the enforcement orders 
36 
issued in accordance with this Article. 
37 
38 
"THE SECRETARY OF LABOR AND EMPLOYMENT OR 
39 
HIS/HER 
DULY 
AUTHORIZED 
REPRESENTATIVES 
MAY, 
40 
AFTER SUMMARY PROCEEDINGS, IMPOSE A FINE OF NOT 
41 
LESS THAN ONE HUNDRED THOUSAND PESOS (~100,OOO.OO) 
42 
BUT NOT MORE THAN FIVE HUNDRED THOUSAND PESOS 
43 
(~OO,OOO.OO) FOR ANY VIOLATION OF THIS PROVISION, 
44 
WITHOUT PREJUDICE TO THE FILING OF APPROPRIATE 
45 
CRIMINAL ACTION. 
46 
47 
"(e) The Secretary of Labor and Employment may, by 
48 
appropriate regulations, require employers to keep and maintain 
49 
such employment records as may be necessary in aid of his 
50 
visitorial and enforcement power under this Code. 
51 
52 
"[Any government employee found guilty of violation of, or 
53 
abuse of authority, under this Article shall, after appropriate 
54 
administrative investigation, be subject to summary dismissal from 
55 
the service.] 
56 
2 


1 
"[The Secretary of Labor and Employment may, by 
2 
appropriate regulations, require employers to keep and maintain 
3 
such employment records as may be necessary in aid of his 
4 
visitorial and enforcement powers under this Code.] 
5 
6 
"(F) THE SECRETARY OF LABOR AND EMPLOYMENT IN 
7 
THE EXERCISE OF HIS/HER VISITORIAL AND ENFORCEMENT 
8 
POWER MAY, BY APPROPRIATE REGULATIONS, ESTABLISH A 
9 
COMPLIANCE SYSTEM TO INCULCATE A CULTURE OF 
10 
VOLUNTARY COMPLIANCE WITH LABOR LAWS, AND ENSURE 
11 
FAIR, EXPEDITIOUS, AND NON-LITIGIOUS SETTLEMENT OF 
12 
DISPUTES. 
13 
14 
"(G) ANY MONETARY AWARD GRANTED TO THE 
15 
EMPLOYEES UNDER THIS ARTICLE WHICH ARE NOT PAID TO 
16 
THE 
SAID 
EMPLOYEES 
BECAUSE 
THEY CANNOT BE 
17 
LOCATED AFTER DILIGENT AND REASONABLE EFFORT 
18 
WITHIN A PERIOD OF THREE (3) YEARS FROM THE DATE OF 
19 
NOTICE THEREOF SHALL BE HELD AS A SPECIAL FUND OF 
20 
THE DEPARTMENT OF LABOR AND EMPLOYMENT TO BE 
21 
USED FORTHE PROMOTION OF COMPLIANCE WITH LABOR 
22 
STANDARDS." 
23 
24 
25 
SEC 2. Implementing Rules and Regulations. - The Department of Labor and 
26 
Employment shall issue the necessary rules and regulations for the effective 
27 
implementation of this Act. 
28 
29 
30 
SEC 3. 
Separability Clause. -
If any provIsion of this Act is declared 
31 
unconstitutional, the same shall not affect the validity and effectivity of the other 
32 
provisions thereof. 
33 
34 
35 
SEC 4. 
Repealing Clause. -
Presidential Decree No. 442, as amended, 
36 
otherwise known as the "Labor Code of the Philippines", and all other acts, laws, 
37 
decrees, executive orders, proclamations, rules and regulations or any part 
38 
thereof, which are inconsistent with the provisions of this Act, are hereby 
39 
repealed or modified accordingly. 
40 
41 
42 
SEC. 5. Effectivity. - This Act shall take effect after fifteen (15) days from the 
43 
date of its publication in the Official Gazette or in at least two (2) newspapers of 
44 
general circulation. 
45 
46 
47 
48 
49 
50 
Approved, 
3