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OF THE PHILIPPINES 
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THIRTEENTH CONGRESS OF THE REPUBLIC 
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7 
Introduced by Senator LUISA “LOI” P. EJERCIT 
EXPLANATORY NOTE 
This proposed law seeks to grant workers and employees the right 
to own initially, free of charge and subsequently, buy certain percentage 
of the shares of stocks in business enterprises and other institutions and 
to enable them to participate in the Board of Directors or any other 
equivalent corporate or policy-making body in the establishment they 
work for. 
This proposed legislation therefore, will make workers part or co- 
owners of the corporations or institutions they have worked with through 
the years. 
The passage of this bill into law will bring about the following 
benefits, among others: 
Workers’ co-ownership will induce or spur domestic 
trade or activity. The increase in disposable income 
will translate into consumption or increases in savings 
which in turn would find their ways into the financial 
market to fund expansion or investment in new plants 
and factories. This in turn implies greater income, 
employment and marketable products or merchandise. 
(1) 
(3) 
(4) 
With inspired workers, the quality of goods produced 
will 
also 
improve, 
Quality produce 
enhances 
competitiveness in both domestic and foreign markets. 
The desire for increased earnings will motivate the 
worker-owner produce quality goods. 
Plans for low-cost housing can easily be implemented 
at the corporate level with workers able to address 
both the problems of financing and affordability. 
Unnecessary strikes and work stoppages will soon 
become a thing of the past. Wasteful production can 
be avoided and efficient and effective use of corporate 
resources ensured. 
Fraudulent and deceptive transfer of corporate profits 
and resources will be discouraged. 


, 
Increased incomes for millions of workers will broaden 
the tax base for government revenue generation. 
(6) 
The newly acquired status of being “co-owners” will 
encourage workers to study further to cope with 
changing knowledge and technology. This in turn will 
make for an enlightened citizenry. 
(7) 
The right of 
workers to “co-determination” as 
envisioned 
in 
the 
Constitution 
will 
now 
be 
operationalized. 
(8) 
The basis for proposed workers co-ownership are amply provided 
for in the various sections of the Philippine Constitution specifically in 
Article XI1 on the National Economy and Patrimony, Article XI11 on Social 
Justice and Human Rights, and finally in Article I1 on the Declaration of 
Principles and State Policies. 
This proposed bill therefore seeks to provide an “enabling law“ and 
transform into concrete policy and program the afore-quoted provisions 
on “workers co-ownership” in the Philippine Constitution. 
Worker’s’ experience under an unbridled capitalism is most 
agonizing. 
It consigns the workers to live forever in the depths of 
poverty. Workers under this system work like slaves to their employers. 
“Collective Bargaining” may have alleviated their suffering but the clamor 
for better treatment remains forceful but unsolved. 
The State therefore, must intervene in order to promote distributive 
justice. The enactment of this proposed bill on workers’ co-ownership is 
one such intervention to “humanize” work and the production process. 
Thus, the immediate passage of this bill is most earnestly sought. 
LUISA “LOI” 
EJERCITB ESTRADA 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
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) 
cllJ,i ?‘.I ?1’ :kl i 
First Regular Session 
1 
S E N A T E  
S. B. No. 
Introduced by Senator LUISA HLOI” P. EJERCITO E$TRADA 
AN ACT 
GRANTING WORKERS THE RIGHT TO OWN AND SUBSEQUENTLY TO 
BUY A CERTAIN PERCENTAGE OF AUTHORIZED SHARES OF 
STOCKS OF ANY COMMERCIAL, INDUSTRIAL, AGRICULTURAL 
ED CORPORATIONS AS WELL AS RELIGIOUS, MEDICAL 
OR EDUCATIONAL INSTITUTIONS OPERATED FOR PROFIT AND TO 
CORPORATIONS AND 
ENTERPRISES, 
AND 
TO 
ENCOURAGE 
PRODUCTIVITY, PROMOTE AND MAINTAIN INDUSTRIAL PEACE 
ENTERPRISES, 
INCLUDING 
GOVERNMENT-OWNED 
OR 
ENSURE 
WORKERS’ 
REPRESENTATION 
IN 
MON-PROFIT 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
SECTION 1. Short Title. - 
This Act shall be known as the 
“Workers Co-ownership Act”. 
SEC. 2. Declaration of Pottey. - It is the policy of the State to 
regulate the acquisition, ownership, use and disposition of property and 
its increments for the common good, promote the principle of shared 
responsibilities between workers and employers to foster industrial 
peace, recognizing the rights of labor to its just share in the fruits of 
production and the right of enterprises to reasonable returns of 
investments, expansion and growth, affording the rights of the workers to 
participate in policy and decision-making processes affecting their rights, 
benefits and general welfare in line with the duty of the State to promote 
distributive and social justice in all phases of national development. 


, 
SEC. 3. . 
Coverage. 
- This Act shall apply to all business 
enterprises, corporations and cooperatives, includin government-owned 
or controlled corporations performing proprietary functions or purely 
governmental or quasi-proprietary function as well as religious, medical 
or educational institutions operated for profit or not. It shall cover all 
employees and workers including casual, regular, supervisor and non- 
managerial employees who have rendered at least one (1) year of 
continuous service and who 
are members of labor unions or 
cooperatives existing in their establishments or agencies. 
SEC. 4. 
Definition of Terms. - For the purposes of this Act, the 
following definitions shall apply: 
( 1) 
“Business Enterprises” refer to commercial, industrial, 
agricultural or agro-industrial establishments engaged in the 
production, 
manufacturing, 
processing, 
repacking 
or 
assembly and distribution of goods, including service- 
oriented enterprises duly registered as such by appropriate 
government agencies. 
“Government-owned and controlled corporations performing 
(2) 
proprietary functions” refer to corporations registered under 
the Corporation Code whose charters 
invest them with 
proprietary or pecuniary interest and those which actually 
operate for profit. 
(3) 
“Medical Institutions” refer to hospitals, clinics or any 
medical facility that dispense health care services as 
contemplated in the Magna Carta of Health Workers. 


(4) 
“Educational Institutions” refer to privately owned technical, 
vocational ‘or special schools, colleges and universities, 
including state colleges and universities but excluding the 
primary and secondary public school system and pre-need 
educational 
institutions or corporations that provide 
education related services. 
“Workers co-ownership” refer to a system whereby workers 
are made part or joint owners of the means of production in 
a given business enterprise, establishment, including non- 
stock corporations. Ownership shall be in the form of shares 
of stocks entitlements or any form of conveyance as to confer 
title of a thing or object. 
“Workers Cooperatives” refer to certified labor organizations 
whether in the private or public sector, organized for the 
purpose of representing their members in collective 
bargaining or negotiations and duly registered with the 
Department of Labor and Employment or the Civil Service 
Commission. 
(5) 
(6) 
SEC. 5. Automatic Transfer Of Sha 
to Cdrporate Munugement Board. - Any commercial, industrial, 
agricultural, or agro-industrial enterprises or cooperatives, including any 
government owned or controlled corporations as well as any religious, 
medical or educational institution operated for profit with at least ten 
(10) years of corporate existence is hereby required to allocate, pant or 
cede free of monetary consideration, ten percent (10%) or such other 
percentage not less than ten percent (10%) of its authorized stock to its 
workers’ cooperatives or labor union. 
Provided, That such workers 


cooperatives or labor unions shall be duly registered with the Cooperative 
Development Authority or the Securities and Exchange Commissian, as 
the case may be. 
SEC. 6. 
Optrion to 
Another Thi 
Percent (30%) of 
Authorized Shares of Stocks.. - The workers’ cooperative or labor 
unions mentioned in the preceding section shall have the further right 
and option to buy another thirty percent (30%) of the authorized capital 
stock of the said business enterprises or establishment. 
Consideration for the issuance of the shares of stock to the 
workers’ cooperatives or labor unions pursuant to this section shall be 
paid for by the Philippine government through any of its government 
financial institutions by means of loan granted by the latter to the former 
through financial intermediation negotiated for the purpose, which the 
former will pay at subsidized lending rate of not more than five percent 
(5%) per annum. 
SEC 7. 
Stock Purchase Beyond FQ 
percent (40%) of the 
Authorized Capital Stock. - Purchase by the workers cooperatives or 
labor unions beyond forty percent (40%) of the authorized capital stock 
of business enterprises and institutions shall be made through voluntary 
negotiations between the existing owners of the shares of stocks and the 
workers cooperatives or labor unions. 
SEC. 8. 
of Neurlg Qrganized Business 
EntetprBSe or 
- Any newly-organized commercial, 
industrial, agricultural or agro-industrial enterprise or cooperative, 
including any government-owned or controlled corporations as well as 


* 
any religious, medical or educational institutions operated for profit is 
hereby required to allocate and offer to sell the same to the workers’ 
cooperative or labor union forty percent (40%) of its authorized capital 
stock. The union or cooperatives can avail of this option to purchase 
said shares of stock within a period of one (1) year from the corporation’s 
organization and registration. 
Consideration for the issuance of said shares of stocks to the 
workers cooperatives or labor unions shall be made in cash to be paid by 
the Philippine. Government thru a government financial institution by 
means of a loan granted by the latter to the former through financial 
intermediation negotiated for such purpose which the workers’ 
cooperative or labor union will repay at subsidized lending rates of not 
more than five percent (5%) per annum. 
SEC. 9. 
Osuemmnt-owned and Controlled C ~ t . p ~ r a t i ~ n ~ .  
- 
Employees of Government-owned and controlled corporations performing 
proprietary functions shall be entitled to at least ten percent (10%) profit 
sharing and a seat in the Board of Directors thru their duly elected union 
representative. 
SEC. 10. 
Non-stoc., Non Profit CQ 
and Cooperatbes . - In non-stock government-owned or controlled 
corporations, religious, medical educational institutions, including state 
colleges and universities and cooperatives not organized for profit, the 
duly recognized and certified labor organizations shall be entitled to at 
least one (1) seat in the Board of Directors or any other equivalent 
corporate or policy-making body with €ull voting rights. Provided, That in 


case there is no recognized or certified labor union or organization in the 
corporation or institution the workers’ representative shall be elected 
from among their ranks. Providedfirther, That in the case of non-stock 
government corporations, the workers’ representatives therein shall be 
appointed by the President of the Philippines. 
SEC. 11. 
Non-Diminution of Rights and Benefits. - Nothing 
in this Act shall be construed as a waiver of the workers’ right to self- 
organization, collective bargaining and negotiation and peaceful 
concerted activities, including the right to strike; nor to diminish or 
reduce any benefits and other privileges enjoyed by the workers under 
the existing laws, decrees, executive orders, company policy or practice 
or any other agreement or contract between the employer and employees. 
SEC. 12. 
Sanction. - 
Any violation or circumvention of this 
Act shall be considered an unfair labor practice and punishable in 
accordance with Title VI of P.D. 442, otherwise known as “The Labor 
Code of the Philippines”, as amended by B.P. Blg. 70 and B.P. Blg. 130. 
Foreign nationals found violating or circumventing the provisions 
of this Act shall be deported immediately from the country. 
SEC. 13. 
Implementing Rules and Regulations. - 
The 
Secretary of the Department of Labor shall, within thirty (30) days from 
effectivity of this Act, constitute and convene a tripartite body for the 
purpose of formulating the rules and regulations as are necessary to 
carry out the provisions hereof. 


SEC. 14. 
Clawe. - If any provision or part hereof 
is held invalid or unconstitutional, the remainder of the law or the 
provision not otherwise affected shall remain valid and subsisting. 
Separabili 
SEC. 15. RepeaZi 
Clause. - Any laws, decrees, executive 
orders, letter of instructions and rules and regulations or any part 
thereof which is inconsistent with any of the provisions of this Act is 
hereby repealed or modified accordingly. 
SEC. 16. E?$fe&zdtg CtcncSe. - This Act shall take effect fifteen 
(15) days following its complete publication in two newspapers of general 
circulation. 
Approved, 
GVL/tmd/gvlco-ownersfip act