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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
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72 JUL 12 All 74
SENATE
S. B. NO. 362
RECEIVED BY;
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
ENHANCING THE REGULATION ON EMPLOYMENT OF 
FOREIGN NATIONALS AND TRANSFER OF TECHNOLOGY, 
AMENDING FOR THE PURPOSE ARTICLES 40, 41, AND 42 OF 
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE 
KNOWN AS THE LABOR CODE OF THE PHILIPPINES AND FOR 
OTHER PURPOSES
EXPLANATORY NOTE
The proposed amendments to Articles 40, 41, and 42 of the Philippine 
Labor Code is triggered by the lingering problem of coordination and 
accountability among government agencies for the increasing number of 
foreign nationals working illegally in the country. Additionally, it is a show of 
good faith to other countries, regions, and international bodies that the country 
honors its commitments in the WTO-GATS, ASEAN Economic Community 
(AEC), and other bilateral, regional and multilateral agreements, to at least 
review the restriction in the hiring of foreign nationals, or the Labor Market Test 
(LMT), which is used to determine the non-availability of a qualified, able and 
willing person in the Philippines to do the services for which the foreign national 
is being hired.
The amendments aim to: (1) update the provisions and reflect the terms 
used by the country in trade negotiations and in its bilateral, regional and 
multilateral agreements’ commitments; (2) provide flexibility in the Labor 
Market Test in cases where there is a short supply of skilled workers in specific 
industries, occupations and professions; (3) provide for training of Filipino 
understudies to transfer skills and technology from the foreign national through 
an understudy program; (4) emphasize that the Department of Labor and 
Employment is the sole issuing authority of employment permits all over the


country including those working or employed in enterprises in preferred areas 
of investments or in economic zones; and (5) update the fines and penalties for 
violations which was set several decades ago.
In conclusion, as the Philippines strives to meet its commitments in the 
WTO-GATS, AEG, and other bilateral, regional and multilateral agreements, 
the proposed amendments will improve but reiterate the restrictive policy on 
employment of foreign nationals.
The immediate passage of this bill Is earnestly sought.
SENATOR JOEL VILLANUEVA^


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE 
S. B. NO.362
Senate
of ill-.' i£r ‘ rrri.n^
*22 JUL 12 A11 -24
RECEIVED BY:
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
ENHANCING THE REGULATION ON EMPLOYMENT OF FOREIGN 
NATIONALS AND TRANSFER OF TECHNOLOGY, AMENDING FOR 
THE PURPOSE ARTICLES 40, 41, AND 42 OF PRESIDENTIAL 
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION. 1. Title 
follows:
I, Book I of the Labor Code is hereby amended to read as
Title II - Employment of Non-Resident [Aliens] FOREIGN NATIONALS
SEC. 2. Article 40 of the Labor Code is hereby amended to read as follows:
ARTICLE 40. Employment permit of non-resident [aliens] FOREIGN 
NATIONALS - [Any alien] ALL NON-RESIDENT FOREIGN 
NATIONALS seeking [admission to the Philippines for employment 
purposes and any domestic or foreign employer who desires to 
engage an alien for] employment in the Philippines shall obtain an 
employment permit from the Department of Labor AND 
EMPLOYMENT.
[The] AN employment permit may be issued to a non-resident [alien] 
FOREIGN NATIONAL [or to—the- applicant employer after a 
determination of the] SUBJECT TO THE LABOR MARKET TEST 
BASED ON THE non- availability of a [person in the Philippines 
who-is competent, able and] QUALIFIED AND willing [at the time 
ef-application to-perform the services-for which the alien is desired]
FILIPINO NATIONAL


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THE SECRETARY OF LABOR AND EMPLOYMENT IS 
AUTHORIZED TO GRANT EXEMPTIONS FROM THE LABOR 
MARKET TEST TO FOREIGN NATIONALS AS PROVIDED FOR 
UNDER EXISTING LAWS AND REGULATIONS, AS WELL AS IN 
INDUSTRIES OR OCCUPATIONS OR PRACTICE OF 
PROFESSIONS WHERE THERE IS SHORT SUPPLY, AS 
DETERMINED THROUGH TRIPARTITE CONSULTATION.
For an enterprise registered in preferred areas of investments OR 
IN DESIGNATED ECONOMIC ZONES, THE employment permit 
SHALL ONLY BE ISSUED BY THE DEPARTMENT OF LABOR 
AND EMPLOYMENT, [may be issued] upon recommendation [of]
BY the government agency charged with the supervision of said 
registered enterprise OR LOCATOR.
SEC. 3. A new Article 40-A of the Labor Code is hereby provided to read as 
follows;
ARTICLE 40-A. UNDERSTUDY PROGRAM - FOREIGN 
NATIONALS ISSUED EMPLOYMENT PERMITS SHALL 
TRANSFER TECHNOLOGY TO AT LEAST TWO (2) FILIPINO 
UNDERSTUDIES WITHIN THE PRESCRIBED PERIOD AS 
INDICATED IN THE DEPARTMENT OF LABOR AND 
EMPLOYMENT-APPROVED UNDERSTUDY PROGRAM OF THE 
ENTERPRISE.
SEC. 4. Article 41 of the Labor Code is hereby amended to read as follows: 
ARTICLE 41. Prohibition against transfer of employment.
(a) After the issuance of an employment permit, the [alien] 
FOREIGN NATIONAL shall not transfer to another job or change 
his/HER employer without prior approval of the Secretary of Labor 
AND EMPLOYMENT.
(b) Any non-resident [alien] FOREIGN NATIONAL who shall take 
up employment in violation of the provision of this Title and its 
implementing rules and regulations, AS WELL AS THE 
EMPLOYER OR THE RESPONSIBLE PERSON REPRESENTING 
THE EMPLOYER, shall be punished [in accordance with the 
provisions of Articles 289 and 290] WITH A FINE of [the Labor 
Code.] NOT LESS THAN FIFTY THOUSAND PESOS 
(P50,000.00) NOR MORE THAN ONE HUNDRED THOUSAND 
PESOS (P100,000.00), OR IMPRISONMENT OF NOT LESS 
THAN SIX MONTHS NOR MORE THAN SIX YEARS OR BOTH 
SUCH FINEAND IMPRISONMENT ATTHE DISCRETION OF THE 
COURT.


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In addition, the [alien worker] FOREIGN NATIONAL shall be subject 
to deportation after service of his/HER sentence.
THE SECRETARY OF LABOR AND EMPLOYMENT SHALL ALSO 
IMPOSE A FINE OF FIFTY THOUSAND PESOS (P50,000.00) OR 
A FRACTION THEREOF FOR EVERY YEAR OF CONTINUING 
VIOLATION TO BOTH THE FOREIGN NATIONAL FOUND 
WORKING WITHOUT VALID EMPLOYMENT PERMIT AND TO 
THE EMPLOYER.
SEC. 5 Article 42 of the Labor Code is hereby amended to read as follows:
ARTICLE 42. Submission of List. - Any employer employing non­
resident foreign nationals [on the effective date of this Code] shall 
submit a list of such nationals to the REGIONAL DIRECTOR OF 
THE DEPARTMENT OF LABOR AND EMPLOYMENT WHICH 
HAS JURISDICTION ON THE EMPLOYER [Secretary of Labor and 
Employment] within 30 days after HIRING, [such date] indicating 
their names, citizenship, foreign and local addresses, nature of 
employment and status of stay in the country. [The Secretary of 
Labor and Employment shall then determine if they are entitled to 
an employment permit.]
SEC. 6. Implementing Rules and Regulations. - Within ninety (90) days from 
the effectivity of this Act, the Secretary of Labor and Employment, in 
coordination with concerned agencies and in consultation with the relevant 
stakeholders, shall formulate the necessary rules and regulations to implement 
the provisions of this Act.
SEC. 7. Repealing Clause. - All statutory laws, orders and issuances, rules 
and regulations and/or parts thereof inconsistent with the provisions of this Act 
are hereby repealed or modified accordingly.
SEC. 8. Effectivity. - This Act shall take effect after fifteen (15) days from the 
date of its publication in Official Gazette or in a newspaper of general 
circulation.
Approved,