Republic of the Phi
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

No, 4930

House

Introduced by TUCP Party-List Representative
RAYMOND DEMOCRITO C. MENDOZA

EXPLANATORY NOTE

‘The Trade Union Congress of the Philippines, as the largest aggrupation of labor
federations and labor unions in the country, has consistently espoused and struggled
for the realization of the Constitutional mandate of full protection to labor by the
State,

It is an established fact that labor, although often referred to as the partner of capital
in creating wealth, has perpetually been in the much lesser side of the equation. This
is especially in our country whose businesses and industries have never seemed to
leapfrog out of economic and financial struggle and distress.

These fiscal troubles, whether imagined or otherwise, have always been the
justifications used by employers in objecting to measures that seek to provide more
protection and benefits to the labor sector. This is even though other countries,
including those even poorer than us, have already afforded a greater level of security
and benefit to their labor sector.

In terms of protecting employees’ right to security of tenure, the Labor Code of the
Philippines, or Presidential Decree No. 442, as amended, lists and limits the
authorized causes for employment termination

Under Article 283, the employer may terminate employment or reduce the total
number of personnel due to installation of labor saving devices, redundancy,
retrenchment to prevent losses, cessation of operations or closure of the
establishment. On the other hand, Article 284 allows termination on the ground of
disease.

In all the said instances of authorized causes of termination, the separation pay ranges
from payment of half (1/2) month to one (1) month salary for every year of service.

‘The TUCP believes that last authorized cause of termination, which is disease under
Article 284, should be treated differently from the other causes. The worker, who is
terminated from employment because he or she suffers from disease of such nature


that his continued employment would be prejudicial to his health or his co-workers,
should be treated with more compassion.

The reason is quite obvious. An employee terminated due to such a disease will no
longer be able to find gainful employment. This is as compared to those who were
terminated due to redundancy and related causes.

This bill seeks the increase of separation pay of employees terminated due to disease,
from one month salary or one-half month salary for every year of service, to the
equivalent of at least to SIX (6) months salary or TWO months salary for every year
of service, whichever is greater.

Moreover, it institutionalizes the issuance of a certification by a competent public
health authority that the disease is of such nature or at such stage that it cannot be
cured within a period of six (6) months even with proper medical treatment before an
employee can be terminated for this cause. Also it mandates that should the employee
terminated on such ground regain his health, he shall be entitled to reinstatement to
his former position without loss of seniority,

In view of the foregoing, the immediate passage of the bill is earnestly sought.

FTO C. MENDOZA
TUCP Party-List Representative


Republic of the Phi
HOUSE OF REPRES!
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 4930

Introduced by TUCP Party-List Representative
HON. RAYMOND DEMOCRITO C. MENDOZA

AN ACT
INCREASING THE SEPARATION PAY OF EMPLOYEES
TERMINATED DUE TO DISEASE, PROVIDING CONDITIONS
FOR SUCH TERMINATION, AMENDING FOR THE PURPOSE
ARTICLE 284 OF PRESIDENTIAL DECREE NO. 442,
OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES, AS AMENDED, AND FOR OTHER PURPOSES.

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

SECTION 1. Declaration of Policy. — The State, in accordance with the
Constitutional mandate, shall afford full protection to labor. It shall continuously
endeavor to provide for security of tenure to workers and ameliorate the welfare of

those who have been removed from employment for causes other than their own fault

\CTION 2. Amendment of Article 284 of the Labor Code. Article 284 of
Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines,

as amended, is hereby further amended, to read as follows:

"ARTICLE 284. Disease as ground for termination. — An
employer may terminate the services of an employee who has been

found to be suffering from any disease and whose continued


employment is prohibited by law or is prejudicial to his health as well
as the health of his co-employees; Provided that A CERTIFICATION
IS ISSUED BY A COMPETENT PUBLIC HEALTH AUTHORITY
THAT THE DISEASE IS OF SUCH NATURE OR AT SUCH
STAGE THAT IT CANNOT BE RESTORED TO HEALTH WITHIN

A PERIOD OF SIX (6) MONT!

S EVEN WITH PROPER MEDICAL
TREATMENT; PROVIDED FURTHER, THAT he is paid separation
pay equivalent at least to [one] SIX months salary or TWO [to one-
half] months salary for every year of service, whichever is greater, a
fraction of at least six months being considered as one whole year;
PROVIDED FINALLY, THAT SHOULD THE EMPLOYEE
TERMINATED ON SUCH GROUND REGAIN HIS HEALTH, HE
SHALL BE ENTITLED TO REINSTATEMENT TO HIS FORMER

POSITION WITHOUT LOSS OF SENIORITY."

SECTION 3. Implementing Rules. — Within sixty (60) days after the effectivity of
this Act, the Secretary of Labor and Employment is hereby mandated to issue its

Implementing Rules.

SECTION 4. Separability Clause. - If any provision of this Act, or any parts thereof,
is declared unconstitutional, the same shall not affect the validity and effectivity of the

other portions.


SECTION 5. Repealing Clause. - All laws, executive orders, presidential decrees,
proclamations, rules, regulations, issuances and enactments of parts thereof

inconsistent with this Act are hereby repealed or modified accordingly.

SECTION 6. Effectivity. - This Act shall take effect fifteen (15) days from its
complete publication in the Official Gazette or in a newspaper of general

circulation in the Philippines, whichever comes earlier.

APPROVED.