Republic of the Philippines
HOUSE OF REPRESENTATIVES
CONGRESS OF THE PHILIPPINES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

943

Introduced by Honorable REYNALDO V. UMALI

EXPLANATORY NOTE

The 1987 Constitution expressly states that:

“The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social
services, promote full employment, a rising standard of living, and an
improved quality of life for all.” (Article 11, Sec. 9)

And

“The State shall promote social justice in all phases of national
development.”(Article 11, Sec. 10);

And further:

“The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.” (Article 11,
Sec. 18)

And finally:

“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 return on
investments, and to its expansion of its qrowth”. (Par. 4, Section 3, Article
xi)

Pursuant to the above-quoted provisions of the 1987 Constitution, it is the
apparent duty of the State to provide proper mechanisms that will put into practice
these constitutional mandates.

Presently, labor and management relations are characterized as
confrontational when discussing and settling basic and significant issues affecting
wages, benefits, as well as conditions of work. As a result, the productivity expected
both from labor and management suffers, thereby lessening their ability to compete
and survive as one entity.


It is ideal, as it is realistic, that the success of any business enterprise largely

depends on the atmosphere of cooperation and support of labor with management
and vice versa,

This bill, granting “Productivity Incentive Bonuses’ to laborers in the private
sector, is a recognition for their indispensable contribution to the success of the
business enterprise. It likewise seeks to promote and provide measures for the
mutual benefit and industrial harmony between labor and management.

Through this legislative initiative, the worker's rights to uplift and improve their
lives as well as the management's rights to a reasonable retum on their investments
are satisfied through their cooperative endeavors.

The granting of the Productivity Incentive Bonus for labor will not only serve as
an additional income but will work as an incentive for greater productivity. This
increased productivity will definitely benefit the business enterprise.

For In view thereof, early consideration and approval of this bill is earnestly
sought y

Representative
Second District, Province of Oriental Mindoro


Republic of the Philippines.
HOUSE OF REPRESENTATIVES.
CONGRESS OF THE PHILIPPINES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

$43

House Bill No.

Introduced by Honorable REYNALDO V. UMALI

AN ACT
GRANTING AN ANNUAL PRODUCTIVITY INCENTIVE TO ALL WORKERS IN
THE PRIVATE SECTOR, ESTABLISHING MECHANISMS FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:
SECTION 1. Title. - This Act shall be known as the “Workers Productivity Incentives

Act of 2010.”

SEC. 2. Statement of Policy. - It is hereby declared the policy of the State to
continuously empower the Filipino workers in their continuing struggle to uplift and
improve their lives through policies that effectively contribute to greater economic
gains, protection of their rights and advancement of their welfare. The State shall,
therefore, promote the rights of workers in their just and fair share in the profits from
the production of goods and services in all endeavors where their labors and
expertise are employed by virtue of a management-labor/employer-employee

relation.

SEC. 3. Extent of Grant. — All workers in the private sector regardless of their
employment status and not excluded by this Act shall be granted an annual
productivity incentive bonus which shall be equivalent to not less than ten percent

(10%) of net profits before taxes gained by any company or business establishment


for every fiscal year that engages their labor, skills and expertise for any period or
duration, Provided, that they have worked for at least one (1) month during the
calendar year. If the employee worked for only a portion of the year, the productivity

incentive bonus shall be computed pro rata.

SEC. 4, Rule Making Power. - The Department of Labor and Employment (DOLE),
in consultation with the National Wages and Productivity Commission (NWPC),
Bureau of Internal Revenue (BIR), and representatives from the labor and employer
sectors, shall promulgate and issue within six (6) months from the effectivity of this

Act such rules and regulations as are necessary to implement the provisions hereof.

SEC.5. Non-Diminution of Benefits. - Nothing in this Act shall be construed to
diminish or reduce any benefits and other privileges enjoyed by the workers under
existing laws, decrees, executive orders, company policy or practice, or any

agreement or contract between the employer and employees.

SEC. 6, Unlawful Interference or Restraint. - It shall be unlawful for an employer or
labor union or for any government official or employee and any other business
enterprise or entity to interfere with, restrain or coerce employees in the right to
receive this grant and to require as a condition of employment that the employee

shall, not collect this grant in his favor.

SEC. 7. Exemptions. - The provisions of this Act shall not apply to government-
owned and controlled corporations (OGCCs) with original charters; managerial
employees; house helpers; non-resident aliens; workers who are paid by results as
determined by the Secretary of Labor in appropriate regulations; workers employed
by retail service establishments employing not more than five (5) workers; employees.
or workers in companies or enterprises undergoing receivership/liquidation; and

those employed in new business enterprises. Applications for exemption strictly in


accordance with those exempted employers, enterprises or establishments herein
stated shall be duly filed with the Office of the Regional Director of the Department of
Labor and Employment (DOLE) whose decision can be appealed to the DOLE

Secretary within ten (10) days from its promulgation.

SEC. 8. Compliance Order. - All Regional Directors of the DOLE shall issue an
annual compliance order for the payment of the grant as provided for in this Act. The
order shall, among other things, direct the employer or manager to pay the amount
due each worker or employee, thirty (30) days after the end of every fiscal year and

shall also include the computation on which the order was based:

SEC. 9. Penalties. - Any person, corporation, trust, firm, partnership, association or
entity which refuses or fails to pay the herein prescribed grant in accordance with this
Act shall be directly liable to the affected worker for thrice (3x) the accrued grant plus
moral damages not exceeding thirty thousand pesos (P30,000.00) for each affected
worker and imprisonment of not less than one (1) year nor more than two (2) years

and including the costs of litigation and attorney's fees.

If the violation is committed by a corporation, trust or firm, partnership,
association or entity the penalty of imprisonment shall be imposed on the entity's
responsible officers. If the violation is committed by a foreign individual, he/she shall
be summarily deported under applicable laws after complete satisfaction of his

adjudged liabilities.

SEC. 10. Separability Clause. - If any provision of this Act shall be declared
unconstitutional, any other provision not affected thereby shall remain in full force and

effect.


SEC. 11. Repealing Clause. - All laws, decrees, orders, rules and regulations, or

parts thereof inconsistent with this Act are hereby repealed or amended accordingly.

SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its publication

in at least two (2) newspapers of general circulation

Approved,