i. 
FOURTEENTH CONGRESS OF THE REPUBLIC} 
OF THE PHILIPPINES 
} 
7 &H 30 i‘3 :A(; 
* ”  8 
c 
First Regular Session 
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S. B. sENA!iEo 
No. 
Introduced by Senator Lacson 
EXPLANATORY NOTE 
The 1987 Constitution provides in Article I1 Section 18 that: 
“Sec. 18. The State affirms labor as a primary social 
economic force. It shall protect the rights of workers and 
promote their welfare.” 
It likewise provides in Article XI11 Section 3 that: 
“Sec. 3. The State shall afford full protection to labor, 
local and overseas, organized and unorganized, and promote 
full employment and equality of employment opportunities for 
all. 
It shall guarantee the rights of workers to self- 
organization, collective bargaining and negotiations, and 
peaceful concerted activities, including the right to strike in 
accordance with law. They shall be entitled to security of 
tenure, humane conditions of work and a living wage. They 
shall participate in policy and decision-making processes 
affecting their rights and benefits as may be provided by law.” 
For a number of years, the Philippine labor force is made to suffer the 
cost of underdevelopment and backwardness. Existing economic policies, 
the lack of genuine agrarian reform and nationalist industrialization 
programs and the onslaught of globalization has given rise to high rates of 
unemployment and underemployment. 
Underemployment, unemployment and substandard labor conditions 
have pushed many of our countrymen to leave our country and seek greener 
pastures abroad. Those who opted to remain are left with no choice but to 
work under employment conditions that do not provide them with the full 
rights to which they are entitled. 
Unscrupulous employers particularly in export-oriented industries and 
wholesale and retail businesses have resorted to devious schemes to subvert 
their employees’ right to security of tenure and other labor rights. The most 
prevalent of these practices is the contractualization of job opportunities and 


the creation of “workers’ cooperatives” to prevent the application of 
employer-employee relationship between the company and their workers 
thereby depriving the workers the protection to which they are entitled under 
the Labor Code. 
Some of the big department stores it is reported, almost ninety percent 
(90%) of its entire workforce, most of them salesladies and store personnel, 
are employed on a contractual basis for a period of five to six months after 
which, their services will be terminated and will be rehired for another five 
to six months contract a few days thereafter. This practice is being resorted 
to evade the intent and spirit of the provisions of our Labor Code thus 
preventing these employees from acquiring security of tenure and from 
enjoying the benefits appertaining to them. 
In view of this blatant disregard of our workers rights, it becomes a 
matter of utmost urgency and necessity for Congress to enact a law that will 
adequately and effectively put a stop to this pernicious practice lest we be 
accused of tolerating the exploitation of the working masses. 
The proposed measure seeks to discourage this practice by increasing 
the salary of contractual workers by fifty percent of their monthly andor 
daily compensation with a proviso that if they are rehired and allowed to 
work for a period of one year, they will be considered as regular employees 
of the company where they are working. 
It is for this reason that the early approval of this bill is earnestly 
sought. 
qenator 


? JUN M P3:ili, 
FOURTEENTH CONGRESS OF THE REPUBLIC} 
OF THE PHILIPPINES 
1 
First Regular Session 
1 ' ,. 
S E N A T E  
S.B.No. 200 
Introduced by Senator Lacson 
AN ACT 
INCREASING THE MONTHLY SALARY OF CONTRACTUAL 
WORKERS BY FIFTY PERCENT (50%) OF THEIR MONTHLY 
AND/OR DAILY COMPENSATION AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress Assembled: 
SEC. 1. The Constitutional mandate that the State affirms labor as a 
primary social economic force and that it shall protect their rights and 
promote their welfare, is hereby affirmed and recognized. 
The State shall endeavor every means possible to protect all workers, 
whether regular, contractual, casual, seasonal, project employees and fixed 
term employees, from the exercise of their rights under existing law 
including but not limited to the right to self-organization, collective 
bargaining and negotiation, to engage in peacefid and concerted activities 
including the right to strike within the bounds recognized by law, to security 
of tenure and a just, reasonable and humane wages. 
Toward this end, the State expresses its antipathy to the pernicious 
practice of employers of hiring contractual employees working for a fixed 
period of time and rehiring them afterwards to prevent them from acquiring 
the status of regular employees and from enjoying the benefits accruing to 
the same. Said practice prevents these employees not only from acquiring 


security of tenure but also the enjoyment of other rights appertaining'to 
regular employees. 
SEC. 2. 
The provision of existing laws to the contrary 
notwithstanding, upon the effectivity of this Act, all employers shall be 
required to pay all their contractual employees a monthly compensation 
equivalent to the total amount of their monthly andlor daily compensation 
plus fifty percent (50%) thereof for the duration of their contractual 
undertaking; Provided, That, contractual employees who have been rehired 
and who have served for a cumulative period of at least one (1) year, 
whether the said period be continuous or broken shall be considered regular 
employees; Provided further, That, the status of regular employee shall 
immediately be conferred to the said contractual employee on the day 
corresponding to the last day of the one year period that helshe is supposed 
to render. 
SEC. 3. All laws, executive orders, decrees, rules and regulations, or 
any part thereof inconsistent with the provisions of this Act are deemed 
repealed or modified accordingly. 
SEC. 4. This Act shall take effect fifteen (15) days after the 
completion of its publication in the Official Gazette or in a newspaper of 
general circulation. 
Approved,