Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

1512

House Bill No.

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

EXPLANATORY NOTE

Since the passage of the Labor Code in 1974 which allowed contracting and
subcontracting, regulation has failed to protect the workers from abuse and
exploitation. Contractualization has become a widespread practice covering
millions of workers. It has led to violations of workers’ rights to organize, to
bargain collectively and to strike. Contractualization has created a pool of
workers who have no social security, no healthcare, no access to Pag-IBIG
and no Security of Tenure. This is work offering the laborer no hope and no
future. This is precarious work and has no place in a decent society.
Contractualization is inherently exploitative, it dilutes the core labor standards
and undermines the workers’ right to a decent life. It limits the choices of
workers to freely shape their own future.

This Bill aims to totally prohibit contractualization and all its forms including all
fixed-term employment. There is a need to pass a law to strengthen security
of tenure and to end abusive practices of contractualization. This bill intends
to totally prohibit contracting, subcontracting, manpower agency hiring,
outsourcing, including those undertaken by so-called service cooperatives
engaged in manpower supply. All workers must be treated as regular
employees doing away with other types or definitions of employment.

Further, this Bill seeks to criminalize Labor-Only Contracting which is already
prohibited under our existing laws but is perpetually being circumvented to
deprive workers of their Constitutionally-guaranteed rights to Security of
Tenure, their right to self-organization, their right to collectively bargain, and
their right to s living wage. Thus, this legislative proposal provides penal
provisions against violators. It is the deepest hope of Filipino workers that this
bill will be immediately enacted.


The practice of contractualization must be stopped and employees must be
regularized. Only then can they have security of tenure and exercise their
right to self-organization and to bargain collectively. Without regularization,
trade union organizing will almost become impossible to undertake. This Bill
will strengthen the security of tenure of workers who will be directly hired and
be working with a company or the principal. By ending contractualization,
regularizing workers and strengthening their security of tenure, they can better
exercise their right to organize and collectively bargain with their employers
which can provide them with their fair share of the wealth that they have
helped to create.

YMOND DEMOCRITO C. MENDOZA
Representative, TUCP Party-List


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS,
First Regular Session

1512

House Bill No.

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

AN ACT
STRENGTHENING WORKERS RIGHT TO SECURITY OF TENURE AND
CRIMINALIZING LABOR-ONLY CONTRACTING,
AMENDING FOR THE PURPOSE ARTICLES 106 TO 109 OF BOOK III,
ARTICLES 294 [279] TO 296 [281] OF BOOK VI, AND ARTICLE 303 [288]
OF BOOK VII OF PRESIDENTIAL DECREE NO. 442, OTHERWISE
KNOWN AS VTHE LABOR CODE OF THE PHILIPPINES, AS AMENDED.

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

SECTION 1. Title. This Act shall be known as the "Security of Tenure Act.”

SECTION 2. Article 106 of Presidential Decree 442, as amended, otherwise
known as the Labor Code of the Philippines is hereby repealed and
‘substituted as follows:

“ARTICLE 106. PROHIBITION OF CONTRACTUALIZATION AND
FIXED TERM EMPLOYMENT. - ALL FORMS OF
CONTRACTUALIZATION AND FIXED TERM EMPLOYMENT ARE
HEREBY PROHIBITED. VIOLATIONS SHALL CONSTITUTE
UNFAIR LABOR PRACTICE AND SHALL BE DEEMED UNLAWFUL
AND PENAL IN NATURE AND WILL BE SUBJECT TO CRIMINAL
PROSECUTION.

THERE IS CONTRACTUALIZATION WHENEVER AN EMPLOYER
ENTERS INTO A CONTRACT WITH ANOTHER PERSON FOR THE
PERFORMANCE OF THE FORMER’S WORK. THIS INCLUDES
WORKING ARRANGEMENTS WHEREBY:

a. A PRINCIPAL AGREES TO CONTRACT OUT OR FARM OUT
WITH A CONTRACTOR, SUBCONTRACTOR, MANPOWER
AGENCY, WORKERS’ COOPERATIVE, OR A SIMILAR OR

1


ANALOGOUS ENTITY, THE PERFORMANCE OR COMPLETION
OF A SPECIFIC JOB, WORK OR SERVICE WITHIN A DEFINITE
OR PREDETERMINED PERIOD; REGARDLESS OF WHETHER
SUCH JOB, WORK OR SERVICE IS TO BE PERFORMED OR
COMPLETED WITHIN OR OUTSIDE THE PREMISES OF THE
PRINCIPAL; OR

bo A PERSON, PARTNERSHIP, ASSOCIATION, OR
CORPORATION WHICH NOT BEING A_ PRINCIPAL,
CONTRACTS WITH A CONTRACTOR, SUBCONTRACTOR,
MANPOWER AGENCY, WORKERS’ COOPERATIVE OR ANY
OTHER SIMILAR OR ANALOGOUS ENTITY FOR THE
PERFORMANCE OF ANY WORK, TASK, JOB OR PROJECT.”

SECTION 3. Article 294[279] of the Labor Code, as amended, is hereby
repealed and substituted as follows:

“ARTICLE 294 [279]. SECURITY OF TENURE. - ALL EMPLOYEES
IRRESPECTIVE OF EMPLOYMENT STATUS OR POSITION SHALL
NOT BE DISMISSED WITHOUT CAUSE AND DUE PROCESS.

A DISMISSAL WITHOUT JUST OR AUTHORIZED CAUSE AND DUE
PROCESS IS ILLEGAL AND THE EMPLOYEE SHALL BE
ENTITLED TO REINSTATEMENT WITHOUT LOSS OF SENIORITY
RIGHTS AND BENEFITS. ADDITIONALLY, THE ILLEGALLY
DISMISSED EMPLOYEE SHALL BE ENTITLED TO FULL
BACKWAGES AND ACCRUED BENEFITS AND REMUNERATIONS
PROVIDED BY LAW, COMPANY POLICY AND COLLECTIVE
BARGAINING AGREEMENT, COMPUTED FROM THE TIME
COMPENSATION WAS WITHHELD UP TO THE TIME OF ACTUAL
REINSTATEMENT. UNREMITTED SSS, PHILHEALTH, AND PAG-
IBIG CONTRIBUTIONS SHALL LIKEWISE BE PAID. ACTUAL,
MORAL, EXEMPLARY AND OTHER FORMS OF DAMAGES MAY
ALSO BE AWARDED.

THE EMPLOYER SHALL HAVE THE BURDEN OF PROVING THAT
THE TERMINATION IS WITH CAUSE AND DUE PROCESS.”

SECTION 4. Article 295 [280] of the Labor Code, as amended, is hereby
repealed and substituted as follows:

“ARTICLE 295 [280]. EMPLOYER-EMPLOYEE RELATIONSHIP. -
THERE EXISTS AN EMPLOYER-EMPLOYEE RELATIONSHIP
WHEN THE WORKER IS ENGAGED TO RENDER WORK OR
SERVICE UNDER THE CONTROL OR SUPERVISION OF THE
EMPLOYER, NOT ONLY AS TO THE END TO BE ACHIEVED, BUT
ALSO AS TO THE MANNER, MEANS, AND METHOD IN REACHING
THE END.


PAYMENT OF REMUNERATION, HOWEVER DENOMINATED, TO
THE WORKER ALSO INDICATES THE EXISTENCE OF
EMPLOYER-EMPLOYEE RELATIONSHIP.”

SECTION 5. A new Article, Article 295-A is hereby inserted to the Labor Code
to read as follows:

“ARTICLE 295-A. STATUS OF EMPLOYMENT. - ALL EMPLOYEES,
EXCEPT THOSE UNDER PROBATIONARY EMPLOYMENT, ARE
DEEMED REGULAR, INCLUDING PROJECT AND SEASONAL
EMPLOYEES.

ANY PROVISION AND EMPLOYMENT CONTRACTS FIXING THE
PERIOD OF EMPLOYMENT SHALL BE VOID; AND THE
EMPLOYEE SO ENGAGED SHALL AUTOMATICALLY BE DEEMED
A REGULAR EMPLOYEE OF THE EMPLOYER.

PROJECT AND SEASONAL EMPLOYEES ARE REGULAR FOR
THE DURATION OF THE PROJECT OR SEASON, AS THE CASE
MAYBE. FOR THIS PURPOSE, PROJECT EMPLOYMENT IS
EMPLOYMENT IN AN EXISTING PROJECT OR UNDERTAKING
THE COMPLETION OR TERMINATION OF WHICH HAS BEEN
DETERMINED AND MADE KNOWN TO THE EMPLOYEE AT THE
TIME OF THE ENGAGEMENT, WHILE SEASONAL IS AN
EMPLOYMENT BASED ON THE EXISTENCE OF A SEASON IN
AGRICULTURAL WORK. IN PROJECT AND SEASONAL
EMPLOYMENT, WORKERS ARE CALLED TO WORK FROM TIME
TO TIME AND TEMPORARILY LAID-OFF DURING THE
COMPLETION OF THE PROJECT OR OFF-SEASON, BUT ARE IN
THE WORK POOL ON LEAVE WITH OR WITHOUT PAY STATUS IN
BETWEEN PROJECTS OR SEASONS. SEASONAL WORKERS
SHALL HAVE THE RIGHT OF FIRST REFUSAL TO THE TASK,
WORK, OR PROJECT, WHICH IS THE SUBJECT MATTER OF
HIS/HER EMPLOYEMENT.

ALL OTHER FORMS OF EMPLOYMENT ARE PROHIBITED AND
WORKERS UNDER SUCH ARRANGEMENTS ARE DEEMED
REGULAR EMPLOYEES RECKONED FROM THE FIRST DAY OF
EMPLOYMENT.”

SECTION 6. Article 296[281] of the Labor Code, as amended, is hereby
repealed and substituted as follows:

“ARTICLE 296 [281]. PROBATIONARY EMPLOYMENT. -
PROBATIONARY EMPLOYMENT SHALL NOT EXCEED SIX (6)
MONTHS FROM THE FIRST DAY OF SERVICE REGARDLESS OF
THE NATURE OF WORK TO BE PERFORMED.


THE RIGHTS, TERMS AND CONDITIONS OF EMPLOYMENT OF
PROBATIONARY EMPLOYEE WHICH SHALL NOT BE LOWER
THAN THE MINIMUM STANDARDS SET BY LAWS OR
REGULATIONS. THE JOB DESCRIPTION AND QUALIFICATION
STANDARDS TO QUALIFY FOR REGULAR EMPLOYMENT SHALL
BE IN A WRITTEN CONTRACT AND MADE KNOWN BY THE
EMPLOYER TO THE EMPLOYEE AT THE TIME OF HIS/HER
ENGAGEMENT.

THE SERVICES OF A PROBATIONARY EMPLOYEE MAY BE
TERMINATED FOR JUST AND AUTHORIZED CAUSE UNDER
ARTICLES 282 AND 283 OF THE LABOR CODE, AS AMENDED,
OR WHEN HE/SHE FAILS TO QUALIFY AS A REGULAR
EMPLOYEE.

THE PROBATIONARY EMPLOYEE SHALL AUTOMATICALLY
BECOME A REGULAR EMPLOYEE AFTER MEETING THE
STANDARDS STIPULATED IN THE WRITTEN CONTRACT OF
PROBATIONARY EMPLOYMENT OR THROUGH REPEATED
ENGAGEMENT OF THE SAME EMPLOYEE AFTER THE
EXPIRATION OF THE PROBATIONARY EMPLOYMENT.”

SECTION 7. Article 303 [288] of the Labor Code, as amended, is hereby
amended to read as follows:

“Article 303 [288]. Penalties. Except as otherwise provided in this
Code, or unless the acts complained of hinge on a question of
interpretation or implementation of ambiguous provisions of an existing
collective bargaining agreement, any violation of the provisions of this
Code declared to be unlawful or penal in nature shall be punished with
a fine of FIFTY THOUSAND PESOS (PHP50,000.00) NOR MORE
THAN FIVE MILLION PESOS (PHP5,000,000.00), or imprisonment of
not less than SIX MONTHS AND ONE DAY NOR MORE THAN
TWELVE YEARS, or both such fine and imprisonment at the discretion
of the court.

MOREOVER, A _ CONTRACTING EMPLOYER AND THE
CONTRACTOR OR SUBCONTRACTOR SHALL BE SOLIDARILY
LIABLE TO INDEMNIFY EACH EMPLOYEE WITH NO LESS THAN
FIFTY THOUSAND PESOS (PHP50,000.00) WITHOUT PREJUDICE
TO OTHER MONETARY AWARDS TO WHICH SUCH EMPLOYEE
MAY BE ENTITLED SUCH AS BACKWAGES, MONETARY CLAIMS
AND BENEFITS UNDER AN APPLICABLE COLLECTIVE
BARGAINING AGREEMENT OR COMPANY POLICY, WHETHER
WRITTEN OR OTHERWISE.

In addition to such penalty, any [alien] FOREIGN NATIONAL found
guilty shall be summarily deported upon completion of service of
sentence.


Any provision of law to the contrary notwithstanding, any criminal
offense punishable in this Code, shall be under the concurrent
jurisdiction of the Municipal or City Courts and the [Courts of First
Instance] REGIONAL TRIAL COURT.”

SECTION 8. IMPLEMENTING RULES AND REGULATIONS. - The
Secretary of Labor and Employment shall promulgate the necessary
implementing rules and regulations within one hundred and twenty (120) days
from the effectivity of this Act.

SECTION 9. REPEALING CLAUSE. - Articles 107, 108, and 109 of the Labor
Code are hereby repealed. All other laws, decrees, rules, and regulations or
parts thereof, which are contrary to or inconsistent with this Act are hereby
repealed or modified accordingly.

SECTION 10. SEPARABILITY CLAUSE. - If any provision of this law or the
application thereof to any person or circumstance, is held invalid, the
remainder of this law, or the application of such provision or part to other
persons of circumstances, shall not be affected thereby.

SECTION 11. EFFECTIVITY CLAUSE. - This Act shall take effect fifteen (15)

days after its publication in the Official Gazette or in at least two (2)
newspapers of general circulation.

Approved,