FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
'10 
DEC -6 P 4 :32 
SENATE 
ithCE;!VED BY:-@:--
S. No. 2622 
Introduced by Senator JUAN MIGUEL F. ZUBIRI 
EXPLANATORY NOTE 
Even as the Constitution provides in no uncertain terms the right of workers to 
security of tenure, employment practices that abrogate this right still persist. Preventing 
workers from becoming regular employees and the denial by employers of the 
existence of employee-employer relationship are but two of the grave employment 
practices inconsistent with the workers' right to security of tenure. Such practices are 
usually effected through the classification of regular employees as "casual", "renewal" of 
employment contract every six months; firing of employees and hiring of new ones 
every five or six months; labor-only contracting; and hiring of "agency workers". 
In general, these unfair practices violate the right of workers to just and humane 
employment terms and conditions, to self-organization and collective bargaining. The 
. non-recognition of workers as regular employees, for instance, is tantamount to 
withholding from them benefits accorded to regular employees, including the right to 
join unions and engage in collective bargaining. Similarly, these labor practices violate 
the right of regular members in the sense that they weaken the latter's bargaining unit 
because they cannot recruit workers who should have been regular employees. 
Unfortunately, the legal prcivisions at present do not deter unscrupulous 
employers from 
committing 
anti~labor practices. 
Furthermore, the 
law on 
subcontracting is even vague and admits interpretation inconsistent with the provision 
of the law on regular employment. 
This legislation therefore intends to correct the significant omissions and 
loopholes in our laws by amending relevant sections in our Labor Code. Specifically, it 
seeks to: 
(1) render the misclassification of regular employees into other kinds of 
employees as an unfair labor practice and provide penalties thereof; and (2) harmonize 
. the laws on subcontracting and regular employment. 
Through these, we hope to 
secure and strengthen the constitutionally guaranteed right of our workers to security of 
tenure. 
Hence, support of this bill is earnestly sought. 
/-


;%rtlnb 
FIFTEENTH CONGRESS OF THE 
) 
(~fI.,. of I~"~r,..(nrv 
REPUBLIC OF THE PHILIPPINES ) 
.First Regular Session 
) 
'10 
DEC -6 P 4 :32 
SENATE 
S, No. 2622 
Introduced by Senator JUAN MIGUEL F. ZUBIRI 
AN ACT 
STRENGTHENING THE CONSTITUTIONAL RIGHT TO SECURITY OF TENURE, 
AMENDING FOR THE PURPOSE THE LABOR CODE OF THE PHILIPPINES, AND 
FOR OTHER PURPOSES 
. Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Short Title. This Act shall be known as the "Security of Tenure Act 
2 
of 2010." 
3 
SECTION 2. 
Labor-only contracting. 
Art 106 of the Labor Code shall be 
4 
amended to read as follows: 
5 
"Art. 106. Contractor or sub-contractor. - Whenever an employer enters 
6 
into a contract with another person for the performance of the former's work, the 
7 
employees of the contractor and of the latter's subcontractor, if any, shall be paid 
8 
in accordance with the proVisions of this Code. 
9 
In the event that the contractor or sub-contractor fails to pay the wages of 
10 
his employees in accordance with this Code, the employer shall be jointly and 
II 
severally liable with his contractor or sub-contractor to such employees to the 
12 
extent of the work performed under the contract, in the same manner and extent 
13 
that he is liable to employees directly employed by him. 
14 
The Secretary of Labor and Employment may, by appropriate regulations, 
15 
restrict or prohibit the contracting out of labor to protect the rights of workers 
16 
established under this Code. 
In so prohibiting or restricting, he may make 
17 
appropriate distinctions between labor-only contracting as well as differentiation 
18 
within these types of contracting, and determine who among the parties involved 
19 
shall be considered the employer for purposes of this Code, to prevent any 
20 
violation or circumvention cif any provision of this Code. 


There is "labor-only'" contracting where the person supplying workers to an 
2 
employer does not have substantial capital [or] AND investment in the form of 
I 
3 
tools, equipment, machinery, work premises, among others, and the workers 
4 
recruited and placed by such person are performing activities which are directly 
s 
related to the principal business of such employer or WHERE THE PRINCIPAL 
6 
EMPLOYER HAS THE RIGHT OF CONTROL OVER MEANS BY WHICH THE 
7 
PURPORTED AGENCY OR CONTRACTUAL EMPLOYEE PERFORMS THE 
8 
ACTIVITIES, NOTWITHSTANDING THE FACT THAT THE AGENCY OR 
9 
CONTRACTOR HAS SUBSTANTIAL CAPITAL AND/OR INVESTMENT IN THE 
10 
FORM OF TOOLS, EQUIPMENT, MACHINERIES, WORK PREMISES, AMONG 
11 
OTHERS. In such cases,the person or intermediary shall be considered merely 
12 
as an agent of the employer who shall be responsible to the workers in the same 
13 
manner and extent as if the latter were directly employed by SUCH PRINCIPAL 
14 
EMPLOYER. 
15 
IN 
THE 
PERFORMANCE 
OF 
ITS 
16 
SUBCONTRACTOR 
MUST 
USE 
ITS 
OWN 
JOB, 
THE 
EQUIPMENT, 
LEGITIMATE 
FACILITIES, 
17 
MACHINERIES AND TOOLS AND CANNOT RELY ON THE PRINCIPAL 
18 
CONTRACTOR. THE USE OF THE SUBCONTRACTOR OF THE EQUIPMENT, 
19 
FACILITIES, MACHINERIES AND TOOLS OF THE PRINCIPAL IS AN 
20 
INDICATION THAT THE SUBCONTRACTOR HAS NO SUBSTANTIAL CAPITAL 
21 
AND INVESTMENT. 
22 
THE 
EMPLOYER AND 
THE 
LABOR-ONLY 
CONTRACTOR 
OR 
23 
SUBCONTRACTOR WHO VIOLATE THE FOREGOING PROVISION SHALL BE 
24 
SOLIDARY LIABLE TO PAY INDEMNITY OF NO LESS THAN P50,000.00 TO 
25 
EACH 
EMPLOYEE 
UNDER 
THE 
LABOR-ONLY 
CONTRACTOR 
OR 
26 
SUBCONTRACTOR, WITHOUT PREJUDICE TO THE OTHER MONETARY 
27 
AWARDS 
SUCH 
AS 
BACKWAGES, 
MONETARY CLAIMS, 
AND 
CBA 
28 
BENEFITS. 
29 
SECTION 3. 
Lawful classification of regular employment. .Art. 280 of the 
30 
Labor Code shall be amended as follows: 
31 
"ART. 280. Regular and Casual Employment; Penalty in Case of Violation 
32 
- The provisions of written contract to the contrary notwithstanding and regardless 
33 
of the oral agreement of the parties, an employee shall be deemed to be regular 
34 
where the employee has been engaged to perform activities which are usually 
35 
necessary and desirable in the usual trade or business of the employer, except 
36 
where the employment has been fixed for a specific project or undertaking the 
37 
completion or termination of which has been determined at the time of 


engagement of the employee, or where the work or services to be performed is 
2 
seasonal in nature and the employment is for the duration of the season. 
3 
SEASONAL AND PROJECT EMPLOYEES SHALL HAVE THE RIGHT TO 
4 
SECURITY 
OF 
TENURE, 
SUBJECT 
TO 
THE 
PROVISIONS 
ON 
5 
PROBATIONARY EMPLOYMENT, AND ARE ENTITLED TO RESUME THEIR 
6 
EMPLOYMENT IN THE SAME OR SIMILAR POSITION UPON THE START OF 
7 
THE NEXT SEASON OR PROJECT, AS THE CASE MAY BE; PROVIDED THAT, 
13 
DURING THE TIME THAT THEIR SERVICES ARE NOT ACTUALLY AVAILED 
9 
OF BY THE ESTABLISHMENT, THEY SHALL BE CONSIDERED TO BE ON 
10 
AUTHORIZED LEAVE WITHOUT PAY. 
11 
An employment shall be deemed to be casual if it is not covered by the 
12 
preceding paragraph. [Provided, That any employee who has rendered at least 
13 
one year of service, whether such service is continuous or broken, shall be 
14 
considered a regular employee with respect to the activity in which he is employed 
15 
and his employment shall continue while such activity exists.] 
CASUAL 
16 
EMPLOYMENT SHALL HAVE THE RIGHT TO SECURITY OF TENURE AND 
17 
MAY BE TERMINATED ONLY FOR JUST OR. AUTHORIZED CAUSES. 
18 
HOWEVER, THEIR POSITION, NOT BEING NECESSARY OR DESIRABLE TO 
19 
THE USUAL TRADE OR BUSINESS OF THE EMPLOYER, MAY BE 
20 
ELIMINATED IF THE SERVICES ATTACHED THERETO ARE NO LONGER 
21 
AVAILED OF BY THE EMPLOYER. PROVIDED THAT IF THE POSITION HAS 
22 
BEEN IN EXISTENCE FOR MORE THAN ONE YEAR, IT SHALL BE 
23 
CONSIDERED AS REGULAR IN NATURE, SUBJECT TO THE PROVISIONS ON 
24 
PROBATIONARY EMPLOYMENT. TERMINATION WILL THEN BE ALLOWED 
25 
ONLY IF THERE IS JUST OR AUTHORIZED CAUSE. 
26 
THE PRINCIPAL EMPLOYER MUST DIRECTLY HIRE WORKERS WHO 
27 
ARE PERFORMING ACTIVITIES WHICH ARE USUALLY NECESSARY OR 
28 
DESIRABLE TO THE USUAL TRADE OR BUSINESS OF THE EMPLOYER, 
29 
WITHOUT PREJUDICE TO THEIR PROPER CLASSIFICATION AS REGULAR, 
30 
SEASONAL, 
PROJECT,· OR 
EMPLOYEES 
HIRED 
FOR 
A 
SPECIFIC 
31 
UNDERTAKING, AS PROVIDED FOR IN THE FIRST PARAGRAPH. 
THE 
32 
PRINCIPAL EMPLOYER' CANNOT HIRE THROUGH SUBCONTRACTORS, 
33 
LABOR CONTRACTORS,OR OTHER SIMILAR AGENCIES AND "MANPOWER" 
34 
SERVICE PROVIDERS, WORKERS PERFORMING ACTIVITIES WHICH ARE 
35 
USUALLY NECESSARY' OR DESIRABLE TO THE USUAL TRADE OR 
36 
BUSINESS OF THE EMPLOYER, REGARDLESS OF THE AMOUNT OF 
37 
INVESTMENT AND CAPITAL OF THE SUBCONTRACTOR OR LABOR 
38 
CONTRACTOR. 


LIKEWISE, IN NO CASE SHALL REGULAR EMPLOYMENT BE SUBJECT 
2 
TO A TERM, EXCEPT WHERE THE EMPLOYMENT HAS BEEN FIXED FOR A 
3 
SPECIFIC 
PROJECT 
.OR 
UNDERTAKING 
THE 
COMPLETION 
OR 
4 
TERMINATION OF WHICH HAS BEEN DETERMINED AT THE TIME OF 
5 
ENGAGEMENT OF THE EMPLOYEE, OR WHERE THE WORK OR SERVICE 
6 
TO BE PERFORMED IS SEASONAL IN NATURE AND THE EMPLOYMENT IS 
7 
FOR THE DURATION OF THE SEASON SUBJECT TO PARAGRAPH 2 
8 
HEREOF. 
9 
HOWEVER, 
TERM 
EMPLOYMENT 
SHALL 
BE 
ALLOWED 
FOR 
10 
OVERSEAS FILIPINO WORKERS, SHOULD THE VALID CONTRACT OF 
11 
EMPLOYMENT SO PROVIDED FOR A TERM. 
12 
EMPLOYEES WHO ARE REGULAR, REGARDLESS OF THE ORAL OR 
13 
WRITTEN AGREEMENTS TO THE CONTRARY, SHALL BE CONSIDERED 
14 
PART OF THE APPROPRIATE COLLECTIVE BARGAINING UNIT AND MAY 
15 
EXERCISE 
THE 
RIGHT TO 
SELF-ORGANIZATION 
AND 
COLLECTIVE 
16 
BARGAINING. 
17 
AN EMPLOYER WHO VIOLATES THE FOREGOING SHALL BE LIABLE 
18 
TO PAY AN INDEMNITY OF P50,OOO.OO TO EACH EMPLOYEE, WITHOUT 
19 
PREJUDICE TO THE OTHER MONETARY AWARDS SUCH AS BACKWAGES, 
20 
MONETARY CLAIMS, AND CBA BENEFITS. 
21 
SECTION 4. Non-recognition of regular status as unfair labor practice. Art. 
22 
248 (Unfair labor practices of employers) shall be amended as follows: 
23 
"ART. 248. 
Unfair labor ·practices of employers. - It shall be unlawful for an 
24 
employer to commit any of the following unfair labor practices: 
25 
(a) To interfere with, restrain or coerce employees in the exercise of their right to 
26 
self-organization; 
27 
(b) To require as a condition for employment that a person or an employee shall 
28 
not join a labor organization or shall withdraw from one to which he belongs; 
29 
(c) To contract out services or functions being performed by union members 
30 
when such will interfere with, restrain or coerce employees in the exercise of their 
31 
right to self-organization; 
32 
(d) To initiate, dominate,· assist 
or otherwise interfere with the formation or 
33 
administration of any labor organization, including the giving of financial or other 
34 
support to it or its organizers or officers; 
35 
(e) To discriminate in reg'ard to hire or tenure of employment or any term or 
36 
condition of employment in order to encourage or discourage membership in any 
37 
labor organization. Nothing in this Code or in any other law shall prevent the 
38 
parties from requiring membership in a recognized collective bargaining agent as 


LIKEWISE, IN NO CASE SHALL REGULAR EMPLOYMENT BE SUBJECT 
2 
TO A TERM, EXCEPT WHERE THE EMPLOYMENT HAS BEEN FIXED FOR A 
3 
SPECIFIC 
PROJECT 
.OR 
UNDERTAKING 
THE 
COMPLETION 
OR 
4 
TERMINATION OF WHICH HAS BEEN DETERMINED AT THE TIME OF 
5 
ENGAGEMENT OF THE EMPLOYEE, OR WHERE THE WORK OR SERVICE 
6 
TO BE PERFORMED IS SEASONAL IN NATURE AND THE EMPLOYMENT IS 
7 
FOR THE DURATION OF THE SEASON SUBJECT TO PARAGRAPH 2 
8 
HEREOF. 
9 
HOWEVER, 
TERM 
EMPLOYMENT 
SHALL 
BE 
ALLOWED 
FOR 
10 
OVERSEAS FILIPINO WORKERS, SHOULD THE VALID CONTRACT OF 
11 
EMPLOYMENT SO PROVIDED FOR A TERM. 
12 
EMPLOYEES WHO ARE REGULAR, REGARDLESS OF THE ORAL OR 
13 
WRITTEN AGREEMENTS TO THE CONTRARY, SHALL BE CONSIDERED 
14 
PART OF THE APPROPRIATE COLLECTIVE BARGAINING UNIT AND MAY 
15 
EXERCISE THE 
RIGHT 
TO 
SELF-ORGANIZATION 
AND 
COLLECTIVE 
16 
BARGAINING. 
17 
AN EMPLOYER WHO VIOLATES THE FOREGOING SHALL BE LIABLE 
18 
TO PAY AN INDEMNITY OF P50,OOO.OO TO EACH EMPLOYEE, WITHOUT 
19 
PREJUDICE TO THE OTHER MONETARY AWARDS SUCH AS BACKWAGES, 
20 
MONETARY CLAIMS, AND CBA BENEFITS. 
21 
SECTION 4. Non-recognition of regular status as unfair labor practice. Art. 
22 
248 (Unfair labor practices of employers) shall be amended as follows: 
23 
"ART. 248. 
Unfair labor ·practices of employers. -
It shall be unlawful for an 
24 
employer to commit any of the following unfair labor practices: 
25 
(a) To interfere with, restrain or coerce employees in the exercise of their right to 
26 
self-organization; 
27 
(b) To require as a condition for employment that a person or an employee shall 
28 
not join a labor organization or shall withdraw from one to which he belongs; 
29 
(c) To contract out services or functions being performed by union members 
30 
when such will interfere with, restrain or coerce employees in the exercise of their 
31 
right to self-organization; 
32 
(d) To initiate, dominate,; assist 
or otherwise interfere with the formation or 
33 
administration of any labor organization, including the giving of financial or other 
34 
support to it or its organizers or officers; 
35 
(e) To discriminate in reg·ard to hire or tenure of employment or any term or 
36 
condition of employment in order to encourage or discourage membership in any 
37 
labor organization. Nothing in this Code or in any other law shall prevent the 
38 
parties from requiring membership in a recognized collective bargaining agent as 


a condition for employment~ except of those employees who are already members 
2 
of another union at the tirT]e of the signing of the collective bargaining agreement. 
3 
Employees belonging to a'n appropriate bargaining unit who are not members of 
4 
the recognized collective bargaining agent may be assessed a reasonable fee 
5 
equivalent to the dues qnd other fees paid by members of the recognized 
6 
collective bargaining agent, if such non-union members accept the benefits under 
7 
the collective bargaining agreement. Provided, That the individual authorization 
8 
required under Article 242, paragraph (0), of this Code shall not apply to non-
9 
members of the recognized collective bargaining agent; 
10 
(f) To dismiss, 
discharg~ or otherwise prejudice or discriminate against an 
11 
employee for having given or being about to give testimony under this Code; 
12 
(g) To violate the duty to bargain collectively as prescribed by this Code; 
13 
(h) To pay negotiation or attorney's fees to the union or its officers or agents as 
14 
part of the settlement of any issue in collective bargaining or any other dispute; or 
15 
(i) To violate a collective bargaining agreement. 
16 
The provisions of the preceding paragraph notwithstanding, only the officers and 
17 
agent of corporations, associations, or partnerships who have actually participated 
18 
in, authorized or ratified unfair labor practices shall be held criminally liable, 
19 
U) TO CLASSIFY AS CASUAL, CONTRACTUAL, SUBCONTRACTOR'S OR 
20 
LABOR-ONLY CONTRACTOR'S EMPLOYEES, AGENCY EMPLOYEES, AND 
21 
OTHER 
NON-REGULAR WORKERS 
THOSE 
EMPLOYEES WHO 
ARE 
22 
REGULAR EMPLOYEES BY VIRTUE OF THE ACTIVITIES THEY PERFORM 
23 
AND 
OTHER CIRCUMSTANCES WHICH 
MAKE THEIR EMPLOYMENT 
24 
REGULAR. 
25 
SECTION 5. Repealing Clause. - Art. PD 442, as amended, otherwise known as 
26 
the Labor Code of the Philippines, and all other acts, laws, rules and regulations are 
27 
hereby repealed, modified, or amended accordingly. 
28 
SECTION 6. Separability Clause. - If any part, section or provision of this Act 
29 
shall be held invalid or unconstitutional, the other provisions shall not be affected 
30 
thereby. 
31 
SECTION 7. Effectivity Clause. - This Act shall take effect fifteen (15) days 
32 
after its publication in the Official Gazette or in at least two (2) newspapers of general 
33 
circulation. 
34 
Approved,