NINETEENTH CONGRESS OF THE
)
REPUBLIC OF THE PHILIPPINES
)
First Regular Session
HOUSE OF REPRESENTATIVES
HOUSE BILL NO. ____
Introduced by REPRESENTATIVE VIRGILIO S. LACSON
EXPLANATORY NOTE
Article II, Section 18 of the 1987 Constitution provides that “the State affirms labor as a
primary social economic force. It shall protect the rights of workers and promote their welfare". 
Likewise, Article XIII, Section 3 of the 1987 Constitution further provides that: "The
State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable returns to
investments, and to expansion and growth." 
To strike a balance between labor and capital has been the aim of the government in
enacting its laws. It is the duty of the State to help its citizens seek employment, as well as to
help them seek re-employment in case of their separation. 
This measure seeks to mandate employers to provide an unemployment assurance benefit
fund for employees, which would help balance the interest of both labor and capital by
discouraging contractualization, and also promoting regularization. 
In view of the foregoing, immediate passage of the bill is earnestly sought. 
VIRGILIO S. LACSON
Manila Teachers Party-list
July 27, 2022
12:46 pm
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NINETEENTH CONGRESS OF THE
)
REPUBLIC OF THE PHILIPPINES
)
First Regular Session
HOUSE OF REPRESENTATIVES
HOUSE BILL NO. ____
Introduced by REPRESENTATIVE VIRGILIO S. LACSON
AN ACT
MANDATING PRIVATE BUSINESS ENTERPRISES TO CONTRIBUTE AND SET ASIDE
AN
AMOUNT
FOR
THE
BENEFIT
OF
ITS EMPLOYEES AND CONTRACTEE'S
EMPLOYEES OR THE UNEMPLOYMENT LABOR ASSURANCE MUTUAL FUND ACT
Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled; 
Sec 1. Short Title, – This Act shall be known as “Unemployment Labor Assurance
Mutual Fund Act or ULAM FUND ACT“. 
Sec. 2. Declaration of Policy. – The State shall ensure to balance the interests of both
labor and capital in order to have a harmonious and sound working environment. It shall
also provide means in helping its citizens to obtain re-employment in case of separation. 
Sec. 3. Definition of Terms - 
a. Employee - the term includes persons employed on a non-regular basis or those who
are contracted by an employer to provide labor services.
b. Employer - a private business enterprise employing and/or contracting the services of at
least five hundred (500) persons. For purposes of this Act, it shall include principals of
agencies in a legitimate-job contracting agreement, supplying labor personnel to said
principals.
c. Employment Service Provider – an accredited entity engaged in the business of seeking
employment.
d. Involuntary Separation - the term includes separation of an employee from
employment without the consent and without cause by the employee, on grounds
including but not limited to those provided for by articles 282, 283, and 284 of the Labor
Code, and the end of period or contract of the employee.
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Sec. 4. Employment Service Provider. - For purposes of this Act, the DOLE Secretary
shall accredit employment service providers whose business and purpose is for
local deployment of workers. The accreditation of the employment service provider shall
be
for
primarily
seeking
jobs
for
the separated employee. The Mutual Fund
Manager/Administrator shall only deal with DOLE accredited employment service
providers whose purpose is to seek employment for the separated employee. 
Sec. 5. Covered Employers. - For purposes of being covered by this Act, private business
enterprises employing and/or contracting the services of at least five hundred (500)
employees, whether regular or non-regular, including anyone employed or contracted for
less than six (6) months, except those employed for a specific result which may be
achieved within less than six (6) months, regardless of the area of designation or location
of the said employees. 
This Act shall cover business enterprises or groups of employers with similar franchises,
holding companies, subsidiaries, affiliates, or conglomerates. 
Sec. 6. Duty to Contribute and Remit to the Unemployment Mutual Fund. – Within
fifteen (15) days from the end of each month of employment, the employer shall, at no
cost to the employee, remit to the unemployment mutual fund an amount equivalent to
Twenty percent (20%) of the employee's monthly salary. 
The employer shall withhold from the monthly salary of the employee as the
employee's contribution to the mutual fund an amount equivalent to five percent (5%),
to be remitted to the unemployment mutual fund within the same period. 
The
obligation
to
withhold
the
amount
stated
above
to
the
mutual
fund
manager/administrator shall begin on the first month of employment or at the start of
the contract of the employee. 
Sec. 7. Additional contributions in case of indirect hiring. - In case the employee was
hired or contracted through a manpower agency, an additional Five percent (5%) of the
salary of each employee, to be contributed by the manpower agency, at no additional
cost to the employee, shall be advanced by the employer, to be deducted from the
amount to be paid to the manpower agency, and such is remitted to the mutual fund.
The additional contribution shall be used for activities for employment, training,
education and/or research. 
Sec. 8. Unemployment Assurance Mutual Benefit Fund. - Unless the accredited
employment service provider had placed the separated employee under a new
employment, the separated employee shall be entitled to receive One-Third (1/3) of the
total amount contributed by his or her employer on the Thirtieth (30th) day of his
unemployment; he shall then be entitled to receive the second, then the third and last on
the sixtieth (60th) and ninetieth (90th) day of his continued unemployment,
respectively. 


The Five Percent (5%) employee's contribution shall be managed by a non-profit entity
as the mutual fund manager/administrator primarily for the fund's administration,
employment activities, research, training, and insurance benefits for its contributor and
its beneficiaries that will be under the approval and supervision of the Insurance
Commission.
The mutual fund manager/administrator with the assistance of the Department of Labor
and Employment (DOLE) shall be provided with the necessary information and data to
ensure viability, efficient management and operation of the mutual fund. Employers,
employees, manpower agencies, employment service providers and other entities could
be sanctioned by DOLE and/or Insurance Commission for withholding or refusing to
provide necessary information and reports for the effective implementation of this Act. 
Sec. 9. Three Strike Rule. -The accredited employment service provider shall seek
employment for the separated employee for a period of Ninety (90) days from the date of
the involuntary separation. The separated employee, within the said period, shall have
Three (3) offers to accept the employment offered by the employment service provider.
Within the same period, the employment service provider can make three (3) attempts or
job offers to place the separated employee for a new employment. The job offered must
be or reasonably equivalent to employee's previous employment including job location. 
In case the separated employee refuses to accept the third (3rd) job offer before the lapse
of the Ninety (90) day period, the accredited employment service provider shall be
relieved of its duty of seeking employment for the said employee, and the remaining
funds shall be automatically forfeited. 
The compensation of the accredited employment service provider shall be the months
contributed by the employer for the benefit of its non-regular employees that have not
been allocated to the employee. 
Sec. 10. Determination of involuntary separation. - In case of involuntary separation, the
employee shall receive the unemployment assurance benefit, despite the pendency of the
determination by any tribunal or court of the legality of termination, without prejudice to
the outcome of the case. 
Sec. 11. Regularization of an Employee. - In case an employee is regularized by the
employer as provided for under the Labor Code, the employer shall be entitled for the
refund of the total amount of its contributions to the unemployment assurance benefit
fund. 
Sec. 12. Exempted Employers. - Employers whose rate of regularization rate is
eighty percent (80%) per annum shall be exempted from the coverage of this Act. 


Sec. 13. Punishable Acts. - Officers or agents of the employer who fail to make the
monthly remittance to the unemployment mutual fund shall be criminally liable and
shall be punished by a fine of not less than Five thousand pesos (P5,000.00) but not
more than Twenty thousand pesos (P20,000.00), or imprisonment of not less than six (6)
months and one (1) day but not more than six (6) years, or both, at the discretion of the
Court. 
Notwithstanding, the employer, whether a natural or juridical person, shall be charged
with twelve percent (12%) interest per annum plus twenty percent (20%) penalty of the
remittable amount upon the due date. 
Sec. 14. Separability Clause. – If any provision or portion of this Act is declared
unconstitutional, the remainder of this Act or any provision not thereby affected shall
remain in full force and effect. 
Sec. 15. Repealing Clause. - All laws, decrees, executive orders, ordinances, rules,
regulations, and other issuances, or parts thereof, which are inconsistent with any
provision of this Act, are hereby repealed, amended, and/or modified accordingly. 
Sec. 16. Implementing Rules and Regulations. - The Department of Labor and
Employment and Insurance Commission shall issue the implementing rules and
regulations to implement the provisions of this Act within ninety (90) days from the
effectivity of this Act. 
Sec. 17. Effectivity. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation. 
Approved,