Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

6190
HOUSE BILL NO.

Introduced by the Honorable Precious Hipolito Castelo

EXPLANATORY NOTE
Section 3 of Article XIII of the Constitution provides:

SECTION 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including
the right to strike in accordance with law. They shall be entitled to security
of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.

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 retumns on investments, and to
expansion and growth.

Dubbed as the “sunshine industry of the Philippines’, the Business Process Outsourcing (BPO)
sector is undeniably one of the most robust industries in the country. It has also proven to be the
largest and fastest growing industry in the Philippines’. Majority of intemational research and
data companies have placed the Philippines as the number 1 country on the list of top outsourcing
destinations in the world. in 2015, the Philippines replaced Mumbai as the 2nd ranking BPO
destination

The BPO industry in the country owes much of its success to the relatively low labor costs here
and the fluency of majority of Filipinos in the English language. Further, Republic Act No. 7916 or
the Special Economic Zone Act of 1995, paved the way for the entry of more and more BPO



players in the country, given the fact that said law provided for special tax accommodations to
those BPO companies which register as ecozone enterprises.

Nevertheless, as enshrined and mandated in the Constitution, it is also important to maintain a
balance between the interests of the workers and employees. In a study made by the Asian
Development Bank (ADB), it was found that while BPOs have fueled economic growth in the past
years, the impact of this growth has barely trickled down to most of the population®. As such, it
may be inferred from this study that the employer's side benefits more from the existing laws and
regulations relevant to the BPO industry.

It is thus apt to enact a regulation that will ensure the protection of the interests and welfare of
BPO employees, This measure intends to guarantee safe and humane working conditions for
them.

As such, the immediate passage of this bill is most eamestly 6



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

First Regular Session
EIGHTEENTH CONGRESS

6190
House Bill No.

Introduced by the Honorable Precious Hipolito Castelo

AN ACT
PROVIDING FOR THE PROTECTION OF EMPLOYEES IN THE BUSINESS PROCESS
OUTSOURCING (BPO) INDUSTRY

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

SECTION 1. Short Title. - This Act shall be known as the “Magna Carta for Business
Process Outsourcing (BPO) Employees Act”

SEC. 2. Declaration of Policy. — (a) It is the policy of the State to afford full protection to
labor, local and overseas, organized and unorganized, and promote full employment and equal
employment opportunities for all.

(b) The State shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of work, and
a living wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law.

SEC. 3. Definitions of Terms. - As used in this Act, the term:

a) “Business Process Outsourcing’ or “BPO” refers to the delegation of service-type
business processed to a third-party service provider;

b) “Call center’ is a type of BPO and refers to a centralized office for receiving and

transmitting requests by telephone or internet. Call center operations include, but

are not limited to, the granting of incoming product support, information inquiries

from consumers, and outgoing calls for telemarketing, clientele, product services,

and debt collection;

“BPO employee” shall refer to any person employed by a BPO either in a

temporary/probationary or permanent capacity;

d) “Department” shall refer to the Department of Labor and Employment;

e) “Secretary” shall refer to the Secretary of Labor and Employment;

ic}

SEC. 4. Rights of BPO Employees. — BPO employees shalll enjoy the following rights:

a) The right to organize and join labor organizations;


b) The right to a safe and healthy working environment which will facilitate optimal
physical and mental health in relation to their work;

c) BPO employees shall have at least a one (1) hour continuous meal break in the
middle of every (8) hour shift;

d) The right to privacy of BPO employees shall be respected. The monitoring of
personal phone calls shall not be allowed. In the event that their official phone
conversations are monitored, they must be informed of this and there must be
consent in their part at all times prior to the start of the monitoring process, in
compliance with the Data Privacy Act;

e) For employees working in the night shift, they shall have the right to stay in a
comfortable resting area within the employer's premises until daybreak to ensure
their safety;

f) The right to be informed of the terms and conditions of their contract.

SEC. 5. Duties of Employers in the Industry. -Itis the duty of all BPO companies engaged
in business in the Philippines to observe the following:

a) Establish and maintain a safe and healthy working environment which will facilitate
optimal physical and mental health in relation to the work of BPO employees;

b) Monitoring software should not be used to unduly pressure employees and should
not impose an oppressive working environment;

c) Employers should incorporate regular rest breaks and changes in activity for all
display screen equipment users;

4) Cany out risk assessments and remove monotonous work and work at a pre-
determined rate when designing task whenever possible; and

€) Inform their prospective recruits that they can have their contract explained to them
free of charge at the BPO Help Desk of the Department of Labor and Employment.

SEC. 6. BPO Help Desk. - There shall be a BPO Help Desk at the national and regional
offices of the Department of Labor and Employment. It shall be equipped to advise employees or
prospective employees of BPO companies of the terms and conditions of their employment when
presented with a copy of the contract. It shalll also inform employees of the proper procedure in
filing complaints for violations of this Act.

SEC. 7. Grievance Mechanism. - There shall be a mechanism in every company for the
adjustment and resolution of grievances arising from the interpretation and enforcement of
‘employment contracts and company personnel policies. This shall not require the prior existence
of a collective bargaining agreement for the mechanism to be put in place.

SEC. 8. Jurisdiction. — The Labor Arbiter shall have a primary and exclusive jurisdiction
to hear and decide within thirty (30) calendar days after the submission of the case by the parties
for decision without extensions, even in the absence of stenographic notes, cases involving all
workers in the BPO industry as provided for under Article 217 of the Labor Code.

‘SEC. 9. Annual Report to Congress. - The Secretary shall submit a report within one year
from the implementation of this Act, and every year thereafter, on the improvement in the working
conditions and attrition rate in the call center industry.

SEC. 10. Implementing Rules and Regulations. - The Secretary shall formulate and
disseminate the Implementing Rules and Regulations of this Act.


SEC. 11
unconstitutional,

Separability Clause. - If any provision or part hereof is held invalid or
the remainder of the law or the provision not otherwise affected shall remain

valid and subsisting.

SEC. 12.
letter of instructic
provisions of this

SEC. 13.

Repealing Clause. — Any law, presidential decree or issuance, executive order,
n, administrative order, rule or regulation contrary to or inconsistent with, the
Act is hereby repealed, modified, or amended accordingly.

Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication

in at least two (2) newspapers of general circulation.

Approved,