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Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. _7590

Introduced by
BAYAN MUNA Representatives FERDINAND R. GAITE,
CARLOS ISAGANI T. ZARATE, and EUFEMIA C. CULLAMAT,
ACT TEACHERS Party-List Representative FRANCE L. CASTRO,
GABRIELA Women’s Party Representative ARLENE D. BROSAS
and KABATAAN Party-List Representative SARAH JANE I. ELAGO.

AN ACT
EXPANDING UNEMPLOYMENT BENEFITS FOR INVOLUNTARILY
UNEMPLOYED WORKERS, AND PROVIDING FUNDS THEREFOR

EXPLANATORY NOTE

A substantial and alarming number of workers have lost their jobs due to the economic restrictions
brought about by the COVID-19 pandemic. According to the latest labor force survey from the
Philippine Statistics Authority, the country’s unemployment rate has reached 17.7% or 7.3 million
‘unemployed Filipinos last April which is the highest in six decades. This is close to 20% of the
total labor force and translates to around 1 in every 5 Filipino worker without access to gainful
income. This figure rose from 5.3 percent in January and 5.1 percent a year ago to its current all-
time high!

In addition, PSA data also showed that two-thirds of laborers in the country depend on salaries
and wages, while 28.7 percent are considered self-employed, rendering professional services or
operating their own business. Further, 13 million Filipinos or 38.4 percent of the labor force
reported that they still had jobs but were unable to report to work because of the pandemic-
induced lockdowns which has resulted in various infractions to labor rights including the
diminution or non-payment of wages, and reduced workhours among others. This figure has been
further exacerbated by the influx of approximately one million displaced overseas Filipino workers
(OFWs) who have been retrenched or fired from their employment abroad due to the pandemic’,

Independent think tank IBON Foundation estimates that the unemployment crisis may even be
worse than what these offficial figures show. IBON estimates that the real unemployment rate is
likely around 22% and the real number of unemployed Filipinos is around 14 million.

These conditions underscore the urgency and importance of expanding existing modes of
‘unemployment benefits provided by the State by dispensing additional cash assistance to displaced
workers to prevent substantial reductions in consumption levels caused by job loss in
consideration of the current state of the economy with a GDP growth contraction of a record

-lose-jobs-due-to-covid-19-pandemic-dole



ween auaen

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16.5% during the second quarter based on PSA reports’

Notably, the Social Security System (SSS) and the Government Service Insurance System (GSIS),
the two major public institutions administering insurance-based and contributory social security
programs in the coutnry, provide workers with some form of social safety net against
‘unemployment or involuntary separation. But these benefits are simply not enough especially in
the context of the COVID-19 pandemic and the disposition it has left Filipino workers with.

‘This bill sccks to expand existing modes of unemployment or involuntary separation benefits
provided for by SSS in the case of private sector workers, and GSIS, in the case of government
‘employees. In addition, this bill secks to provide unemployment benefits for informal sector
workers who account for more than a third of the coutnry’s total GDP*.

In view of the foregoing, approval of this bill is earnestly sought.

Approved,

REP.4ERDINAND R. GAITE
Bayan Muna Partylist

REP. Sad Boris anare REP. wiht C. CULLAMAT

Bayan Muna Partylist Bayan Muna Partylict
At D. BROSAS
ACT Teachers Partylict GABRIELA Women's Party
REP. JANE I. ELAGO

Kabataan Partylist

3 hitps://business. inquirer.ne/304543/officially-a-recession-ph-edp-shrank-16-5-in-
“htips:/Mbusinessmirror.com.pl/2017/1/08/informal-sector-contribution-to-gdp-al-pS-tillion



Semi sHawne

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. _7590

Introduced by
BAYAN MUNA Representatives FERDINAND R. GAITE,
CARLOS ISAGANI T. ZARATE, and EUFEMIA C. CULLAMAT,
ACT TEACHERS Party-List Representative FRANCE L. CASTRO,
GABRIELA Women’s Party Representative ARLENE D. BROSAS
and KABATAAN Party-List Representative SARAH JANE I. ELAGO

AN ACT
EXPANDING UNEMPLOYMENT BENEFITS FOR INVOLUNTARILY
UNEMPLOYED WORKERS, AND PROVIDING FUNDS THEREFOR

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

SECTION 1. Short Title. — This Act shall be known and cited as the “Unemployment Benefits
Act of 2020.”

SECTION 2. Declaration of Policy. —It shall be the policy of the State to afford full protection
to its labor force and promote full employment and equality of employment opportunities for al
Pursuant thereto, the country’s social security systems are hereby mandated to provide all workers
unemployment benefits for their protection against involuntary unemployment.

SECTION 3. Coverage. — Any worker, employed in the public or private sector, whether in the
formal or informal economy, who is involuntarily separated from employment, shall be covered
by this Act. Provided, That the employee was willing and able to work at the time of separation from
employment.

SECTION 4. Definition of Terms. For purposes of this Act, these terms are defined as follows:

a) Average Monthly Compensation — the amount arrived at after dividing the aggregate
amount of compensation the employees received during the last 36 months preceding their
unemployment by 36, or if the employees had less than 36 months of employment, the
amount arrived at after dividing the aggregate amount of compensation received during
their employment by the number of months they were employed; Provided, that the amount
arrived at shall not be lower than ten thousand pesos (Php10,000.00) in accordance to
Section 5 of this Act;

b) Private Sector Employee — includes any person who performs services for an employer in
the private sector which either both mental or physical efforts are used and who receives
compensation for such services; Provided, That a self-employed worker shall be both the


employce and employer at the same time;

©) Government Employee — Any person, receiving compensation while in the service of the
national government, its political subdivisions, branches, agencies or instrumentalities,
including government-owned or controlled corporations, and financial institutions with
original charters, the constitutional commissions and the judiciary, whether by election or
appointment, irrespective of status of appointment, including barangay and sanggunian
officials;

4) Employer — any person, natural or juridical, domestic or foreign, who carries on in the
Philippines any trade, business, industry, undertaking, or activity of any kind and engages
and controls the services of another person. For purposes of this Act, employer includes
national government agencies, and government-owned and controlled corporations;

©) Informal sector workers — those whose employment is not subject to standard labor
legislation, taxation, social protection or entitlement to certain employment benefits
including, but not limited to independent contractors, street vendors, public utility vehicle
drivers, operators, freelancers, agricultural and fisheries workers, and self-employed
workers in the gig economy; the job is casual or of a limited short duration; the hours of
work or wage are below a certain threshold; the worker is not covered either by SSS or
GSIS; or the employer is an unregistered enterprise;

9) Involuntary unemployment — separation of a worker from employment or pre-termination
of a contract of employment without his or her consent and without cause by the worker,
based on authorized causes as provided for by Articles 283 and 284 of the Labor Code of
the Philippines; or abolition of office or position or other similar cases for government
employees, respectively, or separation due to business closures and significant economic
downturn or natural or human-induced calamities /disasters resulting in the loss of income;

) Unemployment Benefits ~ benefits in the form of monthly cash payments guaranteed by
the state to workers involuntarily separated from employment as provided for in Sections
6 and 7 of this Act.

SECTION 5. Minimum Compensation. — In no case shall the disbursement of unemployment
benefits be lower than ten thousand pesos (Php10,000.00). In cases wherein the amount arrived at
in computing for average monthly compensation falls below this threshold, the Department of
Labor and Employment (DOLE) is hereby authorized to augment the said amount to comply with
the minimum compensation as provided in this section.

SECTION 6. Unemployment Benefits in the Formal Economic Sector. — Unemployment
benefits in the form of monthly cash payments provided by the Social Security System (SSS) in the
case of private sector employees and by the Government Service Insurance System (GSIS) in the
case of government workers involuntarily unemployed in accordance to Sec. 14-B of Republic Act
11199 otherwise known as the “Social Security Act of 2018” and to Sec. 12 of Republic Act 8291
or the “Revised Government Service Insurance System Act of 1977” respectively, subject to the
rules and regulations thereof. Provided, That in case the average monthly compensation is below ten
thousand pesos (Php10,000.00), the DOLE shall provide to the beneficiary additional cash needed
on top of the benefits already guaranteed by either the SSS or GSIS in compliance with Section 5
of this Act. Provided, further that the unemployment benefits shall be paid directly to qualified


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unemployed workers for a minimum of two months and a maximum duration subject to the rules
and regulations of Republic Act 11199 otherwise known as the “Social Security Act of 2018” for
private sector employees, and Republic Act 8291 or the “Revised Government Insurance Service
Tnsurance Act of 1977” for government employees, respectively.

SECTION 7. Unemployment Benefits in the Informal Economic Sector. — Unemployment
benefits in the form of monthly cash payments equivalent to ten thousand pesos (Php10,000.00)
shall be paid to all informal sector workers who are not covered by either the SSS or the GSIS,
and who are involuntarily separated from employment. Provided, that the total amount shall be paid
for by the State through the DOLE for a maximum of two (2) consecutive months or until such
time that the worker has found gainful employment whichever comes first.

SECTION 8. Appropriations. — The sum of two hundred billion pesos
(Php200,000,000,000.00) is hereby appropriated as initial operating fund to effectively carry out
the provisions of this Act. Thereafter, such sums as may be necessary for the continued
implementation of this Act shall be included in the annual General Appropriations Act.

SECTION 9. Implementing Rules and Regulations. ~The DOLE, GSIS and the SSS shall
promulgate the rules and regulations for the effective implementation of this Act within thirty (30)
days from approval hercof.

SECTION 10. Separability Clause. - If any part or provision of this Act is subsequently
declared unconstitutional or invalid, other parts or provisions hereof which are not affected
thereby shall continue to be in full force and effect.

SECTION 11. Repealing Clause. — All laws, executive orders, presidential decrees, rules and
regulations or parts thereof which are in conflict or inconsistent with the provisions of this Act
are hereby repealed.

SECTION 12. Effectivity Clause. — This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved