FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
. -', 
First Regular Session 
) 
I ;) 
JilL - i 1''' :'\4 
SENATE 
Senate Bill No. 80 
.. ~ 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
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, g 
rising standard of living, and an improved guality 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 primarv 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 emplovers. 
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 
growth". (Par. 4, Section 3, Article XIII) 
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 return 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. 
It is in this light that the approval of this measure is earnestly requested. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
E:f :--~,~. 'fE 
OFFICE 01: i'HE SF~rARV 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 80 
..' 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
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-Iabor/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 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, in 
consultation with the National Wages and Productivity Commission, Bureau of 
Internal Revenue, 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 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 
receivershiplliquidation; 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,