Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

4306

AKouse Bill No,”

Introduced by DIWA Party-list Representative Emmeline Y. Aglipay

EXPLANATORY NOTE

‘The importance of the contribution of the informal sector workers to our economy cannot
be overstated. In the Phitippines, figures based on the 2005 labor force survey show that the
informal sector now comprise 76.34 percent or 24.6 million of the country’s total employed, an
increase of several percentage points from previous estimates.(National Labor Force Survey,
2005) Numerous as they may be, the goverment lacks in providing for programs and
institutions that would not onty address the needs of these workers, but also protect their rights
and promote their welfare. The plight of these workers for the provision of basic services and
programs to uplift their livelihood can no longer be ignored.

Several provisions of this Act were lifted from House Bill No. 768, filed by
Representatives Juan Edgardo M. Angara, Danilo Ramon §, Femandez, and Lorenzo R. Tanada
I This Act, however, provides for a much different framework, by maximizing the
insolvement of the Local Government Units in the provision of services and benefits for the
informal sector workers. Also, this Act provides for a framework that utilizes existing structures
and mechanisms through the Deparment of Labor and Employment thereby simplifying the
implementation of its provisions and lessening the burden on the national budget.

Approval of this Act is earnestly sought.

Zo

Representative, DIWA Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
FIRST REGULAR SESSION

Rowse Bilt No, 4306

Introduced by Emmeline Y. Agi

AN ACT
PROVIDING FOR A MAGNA CARTA FOR INFORMAL SECTOR WORKERS,
INSTITUTIONALIZING MECHANISMS FOR IMPLEMENTATION THEREOF
AND FOR OTHER PURPOSES

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

TITLE 1
GENERAL PROVISIONS

Chapter !
Framework and Princiy

Section 1. Short Title. - This Act shall be known as the “Magna Carta for Informal Sector
Workers”

Section 2, Declaration of Policy. - Wt is hereby declared the policy of the State:

{a) To afford full protection to labor and to protect the rights of every worker, whether

working in the private or public sector or the formal or informal sector, to health, human

dignity, humane conditions of work, a decent and fair living wage, equal opportunities

for economic advancement and growth, access 10 justice, and social security and
protection,

(b) To recognize the contribution of informal sector workers to the national economy and
national product by ensuring that they are provided with an adequate share in the services
and benefits that are given to workers of the formal economy, including, but not limited
10 social services, economic benefits, and speedy and untrammeled legal recourse,

{c) To promote the holistic and total well-being, as well as the growth and development of all
informal sector workers;

(d) To ensure the protection and provision of the civic and constitutional rights of informal
sector workers including the rights to just and humane working conditions, self
organization, peaceful concerted activities, and to participate in policy and decision-
making processes affecting their rights and benefits;


{e) To provide venues for dialogue and consultation with informal sector workers in order
that their concems and needs are effectively addressed by lasting and workable reforms
in the system of enforcement of labor standards and advancement of labor relations;

() To develop and enhance the technical, special, entrepreneurial, and other skifls and
capabilities of informal sector workers towards their empowerment and eventual
integration and association into the formal sector of the economy;

(g) To advance the autonomy and empowerment of local government units and their ability
to be more responsive to the needs of the informal sector workers in their respective local
government units;

(h) To enhance and complement the system of decentralization and proper and effective
devolution of national powers, responsibitities, and resources to local government units
and at the same time respecting their power to create their own sources of revenues and
to levy taxes, fees, and charges

(i) To promote gender equity and equality and protect women workers in informal
employment against gender-based discrimination, exploitation and abuse; and improve
their access to social protection and participation in decision-making bodies and
processes,

G) To give proper attention and protect the vulnerable groups in the informal sector such as
children, differently-abled persons, indigenous peoples, and people living with HTV from
discrimination, exploitation, abuse and harassment, as welt as from performing work
hazardous to their occupational, physical, mental, emotional, reproductive and spiritual
health;

(k) To progressively eliminate child labor through the creation of more quality jobs for
adults effective enforcement of taws against child Jabor, elimination of gender-based
discrimination against gil child workers, improved access to universal education and
social protection, and elimination of cultural factors that tolerate, even accept child labor

Section 3. Framework In order to maximize available resources and existing government
mechanisms, Local Government Units (LGUs) in consultation with the national government
shall spearhead the implementation of the above-mentioned state policies

This shall make the provision of benefits and services more accessible to informal sector
workers. These benefits and services include, but are not limited to basic healthcare, social
insurance coverage, social welfare programs, economic and financial aid, and training and
livelihood programs. The LGUs are better equipped to determine the members of the informal
sector within their jurisdiction and therefore in a better position to develop and implement
programs for them

Section 4. Informal Sector Workers Local Development Office SWLDO)~ To ieplement the
framework of cootdination between the LGUs and the national government, there shalt be
created an Informal Sector Workers Local Development Office (ISWLDO) in every city. The
mandate and function of the ISWLDO are provided in Chapter II of this Act.

Section 5. Informal Sector Development Office (ISDO)--There shall also be created an
Informa! Sector Development Office under the Department of Labor and Employment (DOLE).
The mandate, functions and composition of the ISDO are provided in Chapter II of this Act
Section'6. Definition of Terms. — As used in this Act, the following terms shail mean

{a} Daily Basis - refers to the per day mode of paying a worker as bilaterally agrced upon by
the employer and worker,


(b) Employer — refers to a natural person or group or partnership of people or a corporation
for whom a paid worker renders productive employment or service.

(c) Hazardous Establishment - is one in which the employee is exposed to potential risks
of disabling injury, illness or death, either because of the presence of biologic agents,
radiation, chemicals, substances, hazardous materials or physical hazards in the work
environment, or because of the nature of the work processes performed or equipment
used therein,

(d) Informal Economy — based on the Intemational Labor Conference (ILC) 2002a, this
refers to “all economic activities by workers and economic units that are — in law or in
practice —not covered or insufficiently covered by formal arrangements.”

(e) Informal Sector — as defined by NSCB Resolution No. 15, series of 2002, refers to ur
engaged in the production of goods and services with the primary objective of generating
employment and incomes to the persons concemed. It consists of household
unincorporated enterprises that are market and non-market producers of goods as well as
market producers of services

‘These enterprises may be operated by own-account workers, which may employ unpaid
family workers as well as occasional, seasonally hired workers, These enterprises may
also be owned and operated by employers which may employ less than ten (10)
employees on a continuous basis.

Tn addition, the informal sector shail also be composed of unpaid family workers and
all other individuals whose incames are not captured by the Bureau of Internal
Revenue, and as defined herein

() Informal Sector Workers — refer to individuals that include but are not fimited to the
following.

£1. small farmers owning small tracts of land; rural and agricultural workers who are
tenants or sharecroppers, laborers,

£2. small fisherfolk/operators owning smail boats and other fishing equipment,
fisherfolk who are without fishing equipment and market their catch directly;

£3. home-based workers who are independent producers of goods or services;

£4. industrial homeworkers who are workers involved in a system of production under
which work for an employer or contractor is carried out by a homeworker at his/her home
and where materials may or may not be furnished by the employer o contractor,

£5. selfemployed who are engaged by other enterprises through subcontracting
arrangements,

£6. vendors, whether with stalls or without permanent workplaces including street
hawkers or these plying their goods and trades in the streets and those engaged in sari-
sari stores:

£7. drivers of modes of transportation on land, whether motorized or not, and “barkers’,
fare collectors, dispatchers and other workers who share income with self-employed or
unincorporated operators of modes of transportation on land;

£8 drivers of modes of transportation on sea whether motorized or not,


£9. household helpers who are persons who render domestic or household services. for
compensation, exclusively to an employer as a family driver, babysitter, gardener, cook,
nursemaid or yaya, or laundry woman,

£10. non-corporate construction workers who are not part of any particular work pool or
engaged or hired by any construction company or agency,

£11. small scale miners doing their own product processing, including those invalved in
small scale mining and quarrying;

£12. non-corporate cargo handlers and allied workers;
£13. waste pickers and recyclers,

£14. own account workers including but not limited to those engaged in the
maintenance and repair of equipment and appliances, ctothing and footwear, as well as
those providing services such as beauticians, barbers, masseuses,

£15. “on-call” workers in the entertainment, movie, and media industry such as but not
limited to bit players, stuntmen and women, crew, make-up artists, etc.;

£16, volunteer workers in government and non-government entities who only receive
allowances or honoraria, including but not limited to: barangay health workers (BHW),
barangay tanod, barangay nutrition scholars (BNS), barangay daycare workers, and
volunteers in non-government or peopie’s organizations;

£17 workers involved in unincorporated household or family enterprises, whether unpaid
or receiving compensation or allowances, and

£18. other similar economic activities that are not illegal, criminal of life threatening in
nature. .

(g) Informal Sector Workers' Organization — refers to a group or groups of informal sector
workers, whether formally constituted or otherwise, that are organized with the primary objective
of promoting the welfare of informal sector workers

(h) “Pakyaw” Basis — refers to the pre-contracted wholesale mode of paying a worker as
bilaterally agreed upon by the employer and worker.

@) Worker — is a gencral term referring to either or both the self-employed or paid employee
covered under the provisions of this Act.

{j) Self-employed Worker — refers to any person who has no employer and who works for
himself/herself by producing goods or performing services for the market,

(k) Social Protection — refers to policies, programs and mechanisms that aim to provide
adequate social security and health insurance to informal sector workers,

(1) Worker of Minor Age — refers to children fifteen (15) to seventeen (17) years of age who are
engaged in productive employment under a valid contract of employment

{m) Working Hours - refers to the period of time within which a worker is required to be on
call to perform any and all tasks that may be designated, regardless of whether there are actual
tasks being undertaken


Chapter II
Coverage, Qualifications and Accreditation

Section 7. Coverage. - This Act shall include informal sector workers as defined in Section 4 of
this Act and informal sector workers’ organizations.

Section 8. Accreditation, — There shall be a simple and standard system of accreditation and
identification of informal sector workers and informal sector workers’ organizations in
accordance with the framework and principles of this Act. This system of accreditation shail be
determined by the ISDO under the Department of Labor and Employment. The concemed LGU
through the ISWLDO shail prescribe and determine the amount of the accreditation fee of
individual informal sector workers and informal sector workers” organizations.

All informa sector workers who meet the necessary accreditation requirements provided for in
this Act shall be listed in a database system of the concemed LGU, and shall be issued an
identification card signifying eligibility to avail of development programs, benefits and services
as mentioned in this Act for informal sector workers

The concerned LGU through the 1SWLDO shall review, revalidate and reassess such
accreditation every two (2) years from the date of tast accreditation. Renewal of eligibility shall
bein accordance with the merit and fitness principle

Section 9, Anmuta! Dues. - Informal sector workers and their organizations shall pay annual dues
to be determined by the province or city concemed, in consultation with their respective
ISWLDO referred to in Title If], Chapter ITT of this Act. In oo case shall the annual dues to be
paid by informal sector workers be mare than two hundred percent (200%) of the prescribed
minimum wage as determined by the Regional Tripartite Wages and Productivity Board
(RTWP8) in their respective regions or provinces.

These annual dues shall accrue to the respective LGU where they are accredited and shall in no
case be unconscionable, prohibitive or unreasonable. Funds taken from these dues shall be used
for programs to benefit informal sector workers and their organizations, as recommended by the
ISWLDO. Such programs and the disbursement of funds therefor shall be approved by the
concerned provincial of city council. In addition, the annual dues will cover the cost of the
issuance of licenses to operate and shal! be paid to the provincial or city treasurer in the area
where they are accredited.

TITLED
RIGHTS AND BENEFITS OF INFORMAL SECTOR WORKERS

Chapter I
Basic Rights

Section 10. Basic Rights. - The State shall ensure that informal sector workers enjoy the same
basic rights accorded te all workers as enshrined in the Philippine Constitution, the Labor Code
as amended, and in international instruments. These include, but are not limited to.the rights to

(a) work, which includes the right to make a living by work freely chosen or accepted, and
the right to avail of technical and vocational guidance and training programs,

(b) the enjoyment of just and favorable conditions of work,

(©) aliving wage and equal remuneration for work of equal value without discrimination of
any kind;

(4) equal opportunity for promotion to an appropriate higher level, subject to no
considerations other than those of seniority and competence,


(e)

(g)
{h)

@
(k)

a)

{m)

(n}
(0)

Sect

safe and healthful working conditions which safeguard general, occupational and
reproductive health;

rest, leisure and reasonable limitation of working hours, and periodic holidays with pay,
as well as remuneration for public holidays whenever applicable;

matemity and patemity benefits, as provided for by law,

an adequate standard of living for workers and their families, adequate food, clothing,
and shelter, and the continuous improvement of such standard;

education, especially of children and young persons, without any discrimination;
social protection, comprising mainly of, bul not limited to social security and health care;

selforganization which includes among others, collective negotiations with other parties
for the promotion of their welfare and advancement of their interests,

substantially participate in policy and decision-making processes, including access to
information and other necessary resources relevant to the promotion and protection of
their sights and welfare;

be free from any form of discrimination, violence, sexual exploitation, harassment and
abuse;

equal treatment before the law; and

equal access to justice though appropriate mechanisms, including, but not limited to,
altemative dispute resolution mechanisms and processes.

‘tion 9. Additional Rights. — In addition, the State shall endeavor to provide informal sector

workers the following:

See

(a) infrastructure support such as farm to market roads, common, affordable and secure
workplaces and facilities, merchandising centers, farmers’ markets of a Bagsakan with
proper storage facilities, and inventory bulk-buying centers,

(b) policy support to promote and protect locally/domestically-produced products:

(©) access to markets, including capacity building to access E-marketing facilities,

(@) access to affordable, appropriate and adequate financial services, including, among
others, collateral-free and gender-balanced credit at low interest,

(e) access to appropriate and adequate machinery, equipment, and other technologies, with
the end in view of increasing productivity and growth;

(f) protection from unjust dislocation from places where economic activities are conducted;

(2) special measures against racketeering, extortion, and harassment, by both State and noa-
State elements; and

Chapter 1
Rights of Informal Sector Workers

tion 11. The Right fo Privacy and Confidentiality. - The emptoyer shall respect the privacy

of workers during the latter’s rest periods. This right 10 privacy shall extend to any and all forms
of personal communication, including letters, correspondence, telephone calls and text
messaging sent or received. The worker shall be allowed communications coursed through the
private telephone of the employer; provided that any additional expense incurred due to such
‘communication shail be bome by the worker and shall be deducted after the employer's due
notice to the worker of the amount incurred


The State, further guarantees the protection of the right of workers to communicate with relatives
and other persons and to receive visitors subject to reasonable limits prescribed in the
employment contract agreed and entered into by both the employer and the worker.

Section 12. Access fo Education and Training. — An informal sector worker shall not be
deprived of formal or non-formal education. In cases where he/she is productively emptoyed,
he/she shall be allowed to attend or pursue any kind of educational program during his/her free
time or any other time as agreed upon by the employer and the worker.

The Department of Education (DepEd), Commission on Higher Education (CHEd) and other
appropriate agencies, shall extend services such as the Study Now, Pay Later Program to
qualified informa! sector workers and their dependents.

Section 13. Access to Lawful Third Party Mediation. - The LGUs shall provide informal sector
workers and their employers the names, addresses and telephone numbers of the designated
liaison officers of the following,

(a) Department of Trade and Industry;

(>) Department of Labor and Employment,

(c) The Barangay office with jurisdiction over the area where he/she is productively
working:

{d) Duly registered NGOs accredited ta mediate the disputes involving informal sector

workers; and

{e) ISDO.

The employer guarantees the worker the access to ail available means of communication for the
purpose of contacting any of the above-enumerated institutions.

Section 14. Normal Hours of Work. - The normat hours of work is eight (8) hours per day,
exclusive of one (1) hour breaks each for breakfast, lunch and dinner. The worker shall be
allowed at least eight (8) hours of continuous rest per day. Otherwise, any work done by him/her
beyond the normal hours of work per day shall be duly compensated.

Section 15. Regular Working Days. — No worker shall render work for more than six (6) days
per week.

Section 16. Longevity Benefits. — Informal sector workers shall be entitled to benefits such as
longevity pay, service incentive leave, matemity and paternity benefits, 13" month pay, etc. as
may be applicable according to law.

Seetion 17, Clothing and Personal or Protection Equipment Alowance. - When the nature of
the work to be performed by the informal sector worker requires a particular type of clothing
and/or personal or protection equipment, such worker shall be entitled to.a minimum of one
thousand pesos (Php 1,000.00) clothing and personal or protection equipment allowance
annually. The worker must have rendered at feast one (1) year of contimous service such
employment in order to avail of this allowance.

Section 18, Pre-Termination of Contract. — The employer may, at his/her own discretion,
terminate the services of the worker, provided however, that the said employer provides the
worker with at least a fifteen (15)-day notice of termination, and termination pay equivalent to at
least one half (14) moath’s salary. In lieu of the fifteen (15)-day notice of termination, the
emptoyer may immediately terminate the services of the worker, provided that said employer
provides the worker termination pay equivalent to one (1) month’s salary.

Should the worker decide, on his/her own volition, to unilaterally leave the workplace prior to
the expiration of the term of employment provided for in his/her employment contract, said


worker shall forfeit any separation pay that may be due hirn/ber.

Section 19. Extent of Duty. — The employer shall not require a worker to perform any task of
work outside what is stipulated in the employment contract

Chapter TH
SOCIAL PROFECTION

Section 20. Social Security. — The State shall endeavor to extend social security protection to
all informal sector workers and their beneficiaries. They shall be entitled to all the benefits
provided by the Social Security Act of 1997, provided that they are members in yood standing

(a) The Social Security System (SSS) shal! cover all informal sector workers, who shall be
classified as eligible to register as self-employed persons as per Section 9-A of Republic
Act 8282, also known as the Social Security Act of 1997. The SSS, in consultation with
the ISDO, shall develop a separate schedule of contributions for informal sector workers,
in order to make contributions to the SSS possible taking into account their means,
income levels, occupations, and other related variables,

(b) In the interest of equity, the State shall cover what should have been the employers” share
for contributions of informal sector workers for the first two (2) years from the date of
their accreditation, had they been formally employed. In accordance with Section 22-A of
RA 8282, informal sector workers shall remit their contributions on a quarterty basis on
such dates and schedules as the SSS, in consultation with the ISDO may provide. in the
event that the selfemployed person does not realize profits in a given month, payment of
‘SSS contributions for that month wilt not be required.

(©) The SSS shall ensure that informal sector workers duly registered, in good standing and
afier compliance with all the prescribed requirements, will receive the benefits provided
for by the SSS. In addition, informal sector workers shall be entitled to avail of loans
provided by the SSS, after the member satisfies all the requirements for the same.

(@) For informal sector workers already registered with the SSS, they shall be subject to the
schedule of cantritutions that will be provided by the SSS for informal sector workers.
The SSS shall provide the required forms for membership for first time applicants in all
ities and provinces. The concerned LGU, through the Informal Sector Workers Local
Development Office, shall ensure thai informal secior workers accredited within their
jurisdiction are given an adequate understanding of the SSS, the procedures iavolved and
the benefits that they will be entitled to under the Social Security Act.

Section 21. Social Security for Volunteers of Government Instrumentalities. — Volunteer
workers of government instrumentalities as defined in Sec. 4(f.16) of this Act, shall be covered
by the Government Service Insurance System (GSTS). As far as practicable, the GSIS shall

pattem their system after that of the SSS for informal sector workers. All provisions in Section

19 of this Act shall be applicable to volunteer workers of government instrumentalities as may be

appropriate

Section 22, Health Insurance. — The State shall ensure the provision of a minimum benefit
package which shall be periodically upgraded to meet the goal of universal coverage which is
affordable, accessible and appropriate to the needs of all

(a) Government subsidies for PhilHealth sponsorship programs shall be expanded to cover
all informal sector workers, In the interest of equity, the State shall cover what should
have been the employers’ share for contributions of informal sector workers for the first
two (2) years from the date of their accreditation, had they been formally employed.


ib) In accordance with Section 28 of Republic Act 7875 or the National Health Insurance Act
of 1995, informal sector workers shall also contribute to the Fund, based on a reasonable,
equitable and progressive contribution schedule to be determined by the ISDO; provided,
that contributions from informal sector workers shall be collected every three (3) months;
and provided finally, that total contributions for one (1) year shall not exceed three
percent (3%) of their estimated actual net income for the preceding year.

Chapter TV
Requisites for Employment

Section 23. Minimum Standards. — All working arrangements entered into by informal sector
workers shall be in accordance with the minimum applicable labor and social standards as
contained in the Labor Code of the Philippines, as amended and in Tille Il of this Act.

In general, the standards set forth in Sec. 23 of this Act shall be applicable to the following,
situations, where the informal sector worker.
(1) has an employer, or
(2) is receiving his/her salary or other form of compensation from such employer, of
(3) must report to work at certain periods of time to render services for such employer, such
as but not limited to:
(a) informal economic enterprises supplying or doing outsourcing work for exporters;
(b) investors-locators in export processing zones or industrial parks ticensed by the
Export Processing Zone Authority; and
(c) domestic formal sector manufacturers and retailers-distributors

Particularly, these standards shall apply to:

(1) moral and agricultural workers who are tenants or sharecroppers, laborers,

() industrial homeworkers;

(3) household helpers;

(4) non-corporate construction workers;

(5) non-corporate cargo handlers and allied workers,

(6) waste pickers and recyclers;

(7) own account workers including but not limited to those engaged in the maintenance and
repair of equipment and appliances, clothing and footwear, as well as_ those praviding
services such as beauticians, barbers, masseuses,

(8) “on-call” workers in the entertainment, movie, and media industry such as but not limited
to bit players, stuntmen and women, crew, make-up artists, etc.

The ISWLDO shall ensure that the provision of benefits and services, including but not limited
to: basi¢ healthcare, social security, heatth services, economic and financial aid, and taining and
livelihood programs, shal! remain accessible to all informal sector workers

Section 24. Provisions of Employment Contract. - This provision shall apply specifically 10
cases and situations where the existence of an employment contract is applicable, The
employment contract shall be in written form. However, the absence of a written agreement
does not mean the absence of an employment relationship. As a matter of right, informal sector
workers can insist on a written agrcement based on minimum standards.

In cases wherein minors are contracted with, the said employment contract shall be signed on
his/her behalf by either parent or legal guardian, with the expressed written consent of the said
minor

In cases wherein illiterate workers are contracted with, the said contract shalt be explained to the
worker concemted and attested to by a representative from the LGU or an elected Barangay
official in the city or municipality where the worker is designated to work.

Each of the contracting parties shal! be provided with a full set of the duly signed employmet


contract which shall include the following basic provisions:

(a) working arrangements;
(b) period/duration of employment,

{c) compensation, which shall not be below the minimum set by the Regional Tripartite Wages
and Productivity Board, and made of payment,

{d) duties and responsibilities;

{e) working hours and day-off schedules,

(f) living quarters or sleeping arrangements (for live-in workers),

{g) causes for termination of employment, and

{b) minimum of twenty percent (20%) down payment for labor cost and services and minimum.
of 50% for inventory of raw materials used in the production for homeworkers.

Section 25. Amount of Wages. The Regional Tripartite Wages and Productivity Board
(RTWPB) may determine and fix minimum wage cates applicable in their regions or provinces
for informal sector workers therein, subject to guidelines issued by the National Wages and
Productivity Commission

Fer this purpose, each RTWPB shall include as an additional member, a Regional Agent of the
Informal Sector Development Office, as created by this Act.

In case of piece-rate workers, their wages shall be determined by the conduct of time and motion
studies facilitated by the Bureau of Working Conditions of the DOLE, and reflected in
corresponding Piece Orders issued by the DOLE.

Section 26. Payment of Wages. - The amount of compensation and the mode of payment shal!
be made in accordance with the provisions in the employment contract and shall be made
directly to the workers. No deductions from such payments shall be made by the employer
except those provided by law. The expressed written consent of the worker shall first be secured
before deductions apart from those provided by Saw are made.

No parent, guardian, relative or any other person shall be allowed to take a loan against the
compensation of his/her relative-worker without the express written consent of the concemed
worker. Neither shall a worker of minor age be mandated to work in payment of loan or liability
by a parent, guardian, relative, or any other person.

Chapter V
Informal Sector Workers of Minor Age

Section 27. Allowable Employment of Workers of Minor Age. — Children fifteen (15) years up
ta seventeen (17) years of age may be employed; provided, that consent by either parent of the
minor or his/her legal guardian be presented and attested by any representative of the LGU or
duly elected Barangay official where the work is to he done. In no instance shall children below
fifteen (15) years old be engaged in any form of productive services.

Workers of minor age shall not be allowed to render work for more than four (4) hours a day,
five (5) days a week, exclusive of one (1) hour break for breakfast or lunch whichever is
applicable.

Chapter VI
Prohibited Acts

Section 28. Prohibition Against Forced Night Work. — It is unlawful to force, threaten,
intimidate or otherwise harass informal sector workers lo engage in night work. Moreover,
workers of minor age shall not be allowed to render work between eight 0’ clock in the evening
until six o’clock in the morning of the following day.

10


Section 29. Prohibition Against Work to be Undertaken. - Informal sector workers shall not be
allowed to render work beyond their physical and mental capabitities

Section 30. Prohibition Against Bonded Labor. - An informal sector worker shall not be
allowed to use hissher future services as collateral for any loan ot advances made to or 10 be
made by said worker with the employer. Likewise, no employer shall be allowed to involuntary
bind the worker to his/her continued employ as @ form of payment for any loan or advances
which he/she may have made with the employer. Should there be an outstanding loan incurred
and he/she decides to unilaterally terminate the contract of employment, said loan or advance
shall be paid by him/her to the employer under terms and conditions specified in a duly executed
promissory note between the parties

Section 31. Prohibition Against Labor-Only Contracting. — \n no case shall the employer sub-
contract the services of an informal sector worker to any third party, unless such activity fails
within the purview of allowable sub-contracting for which the necessary permits and licenses
have been secured

Section 32. Prohibition Against Recruitment and Finders Fees, — Regardless of whether the
worker was sourced either through an employment agency or a third party, said worker shall
neither be charged nor levied a share in the recruitment fees or finder’s fees by the said
employment agency or third party.

Section 33. Prohibition Against Hazardous Work and Conditions, — No informal sector worker
shall be employed in a hazardous establishment or in any hazardous work, activity or
undertaking, and neither shall he/she be exposed to hazardous working conditions

For purposes of this Section, hazardous work or conditions shail include, but not be limited to the
foltowing:

(2) Any work which requires workers to cender services beyond ten (10) hours;

(b) Any work, employment or activity which exposes the worker to physical, emotional or sexual
abuse;

(¢} Any work which involves manual handling or transport of heavy loads without proper
assistance which, given the age and physical condition of the informal sector worker, are likely
ta jeopardize the health or safety of the informal sector worker,

(4) Any work in an unheatthy environment which exposes workers to hazardous substances,
agents or processes, or to temperature, noise levels, or vibrations damaging to their health;

{e) Any and all forms of slavery or practices similar to slavery, such as the sale and trafficking of
persons, forced or compulsory labor, debt bondage and serfdom,

(f) Any use, procuring or offering of the worker for prostitution or pomography;

(g) Any use, procuring or offering of the worker for the commission of any offense or crime,
particularly for the production and trafficking of narcotic drugs and substances as defined in the
Dangerous Drugs Act of 2002 and other related laws;

(h) Any other type of work, activity, condition or undertaking that may be hereinafter be defined
as hazardous by the DOLE.

Section 34. Prohibition Against Interference and Coercion. - No person shall commit any of
the following acts of interference and coercion

rt


(a) Preventing a worker from upholding or exercising his/her rights;

(b) Preventing workers from joining or assisting organizations or unions for purposes not
comtrary to law, in order to protect and defend their mutual interests and to obtain redress of
Brievances through peaceful concerted efforts;

(c) Preventing a worker from carrying out his/her duties or functions in an organization or union,
or to penalize the same for any lawful action performed in that capacity:

(d) Harassing, interfering, intimidating ot preventing the worker from performing his/her duties
and functions;

(e) Harassing, transferring, penalizing or terminating the services of 2 worker who is carrying out
his/her functions or role for and in behaif of his/her employer; and

(Performing acts 10 diminish the independence and freedom of any workers’ union or
organization to direct its own affairs.

TITLE
INSTITUTIONAL MECHANISMS,

Chapter I
Special Allocations for Development Initiatives

Section 35. Special Allocations for Development Initiatives. - The development initiatives for
informal sector workers shall form part of an integrated and convergent plan to address poverty
and vulnerability. The national and tocal government units shall work together in support of such
plan ta maximize impact of meager resources.

(a) The creation of the Informal Sector Development Office (ISDO) under the DOLE shalll be
taken into consideration in determining the budget allocated for the DOLE in the General
Appropriations Act. This budget shall be appropriated for the programs and services for informal
sector workers to be implemented by the ISDO and ISWLDO as created by Title IIL, Chapters VI
and VI of this Act, and by the respective LGUs.

{b) The kmplementing Rules and Regulations (IRR) of this Act shall determine additional
guidelines on, among others, the use of such finances to ensure that programs and services truly
benefit informal sector workers.

(©) ISDO may seek other sources of funding such as grants and/or donations from individuals
and/or organizations that are committed to assisting the efforts of the national and local
government to support informal sector workers.

Section 36, Exclusivity of Government Programs. — The government shall ensure that programs
of financing, grants and other similar incentives shall be exclusively extended 10 accredited
informal sector workers and informal sector workers’ organizations

Section 37. Tax Exemption. A duly accredited informal sector worker or organization shall be
exempted from all taxes, national or local, license and building permit fees and other business
taxes except real property and capital gains taxes, import duties and other taxes on imported
articles

32


Chapter 1
Informal Sector Development Office (ISDO)

Section 38. Creation of the Informal Sector Development Office (ISD). — There is hereby
created an Informal Sector Development Office, herein otherwise referred to as the ISDO, which
shall be attached to the Department of Labor and Employment, The ISDO shall be constituted
within thirty (30) days after the drafting and approval of the IRR of this Act

The ISDO shall be the primary office responsible for the promotion, growth, development and
empowerment of informal sector workers and informal sector workers’ organizations in the
country. It shall facilitate and closely coordinate national efforts to promote the informal
sector's viability and growth. Towards this end, the ISDO and the respective local government
units shall coordinate and closety work together ta provide an integrated program for skills
enhancement, literacy and education, health services, social welfare services and assistance in
tapping of local as well as foreign funds. It shall also perform other functions relative to the
attainment of the objectives of this Act.

Section 39, Mandate and Functions of ISDO. The ISDO shall

(a) Develop programs and projects that will specifically address the varying concems of
informal sector workers and would assure their receipt of real and tangible benefits, and ensure
their implementation,

(b) Coordinate with the LGUs concemed in order to develop and ensure implementation of a
simple system of accreditation and identification of informal sector workers and informal sector
workers’ organizations in accordance with the standards and provisions of this Act,

(c) After consultations with informal sector workers’ organizations and the LGUs concemed,
develop and ensure implementation of policies and programs that will address specific needs and
protect rights of informal sector workers as enumerated by Section 4{f) of this Act;

{d) Provide guidelines for the implememation by LGUs of a fair and credible system of
evaluation, review and assessment relative to the renewal of accrediation of informal sector
workers and informal sector workers’ organizations for entitlement to the rights and benefits
provided by this Act

(e) Develop and ensure implementation of labor standards;
(8) Coordinate with 1.GUs in order to develop and ensure implementation of a communication
plan including massive information dissemination activities targeting informal sector workers
and informal sector workers’ organizations, in the various regions towards a better understanding

and appreciation of the benefits this Act may bring them;

(g) Monitor and coordinate implementation of policies and programs through its Regional
Agents;

(h) Coordinate and harmonize all informal sector-related policies, programs, projects and
activities of various government agencies towards greater efficiency and effectiveness;

() Monitor the LGU-generated incomes from informal employment through the LGUs’ periadic
report submitted to the ISDO; and

) Develop and ensure implementation of accessible and just conflict resolution and
adjudication systems and mechanisms to promote dialogue, conciliation, mediation and redress
of grievances to protect the rights of informal sector workers.

Section 40, Composition. The Chairperson of the ISDO shall be appointed by the Secretary of

13


the Department of Labor and Employment (DOLE) and shall have the rank equivalent to the
Undersecretary of the DOLE. The ISDO shall also have not more than two (2) Vice-
Chaimersons, to assist the Chairperson in whatever capacity the latter may see fit, The ISDO
shail be composed of the following members

{a) A representative from the Department of Labor and Employment (DOLE):

(b) A representative from the National Economic and Development Authority (NEDA):

(c) A representative from the Department of Agriculture (DA);

(d) A representative from the Department of Social Welfare and Development (DSWD),

(e) A representative from the Department of Interior and Local Goverament (DIG),

(f) A representative from the Commission on Human Rights (CHR);

(g) A representative from the National Anti-Poverty Commission (NAPC),

(h) A representative from the Technical Education and Skills Development Authority (TESDA),

() Three (3) representatives from the private sector at large, who must be Filipino citizens,
proven 1o have been active in assisting informal sector workers, 1o represent Luzon, Visayas and
Mindanao;

{@ One (1) representative each from the League of Cities, League of Municipalities, League of
Provinces and League of Councilors,

(k) Six (6) representatives from People’s Organizations (POs) of informal sector workers, two
(2) each from Luzon, Visayas and Mindanao to be elected in a National Assembly of these
organizations duly called for that purpose, provided that these representatives truly reflect
genuine representation of the concems of informal sector workers. The guidelines for the
nomination and clection, including processes and mechanics shall be determined by the IRR of
this Act.

Representatives from the private sector and from the POs of informal sector workers shall serve
as ISDO members for a term of three (3) years without re-election and shall be subject 1o terms
and conditions provided for by the IRR.

The ISDO members shall meet for an initial period of consultation once every two (2) months for
year from the date of effectivity of this Act. Thereafter, periodic consultations shall be
conducted twice a year.

Five million pesos (Php 5,000,000.00} shal! be allocated from the Presidential discretionary fund
for the initial operating expenses of the ISDO-

Section 41. Executive Committee of the ISDO. — Seven (7) members shalt be constituted as the
Executive Committee of the ISDO, Besides the Chair and Vice-Chair, the following shall also be
elected by the ISDO members from among themselves: two (2) representatives of organizations
of informal sector workers, one (1) from the different leagues of local officials, one (1) from the
private sector, and one (1) from a national goverament agency

The Executive Committee shall ensure the attainment of the objectives of this Act through active
monitoring and coordination with the LGUs, its Regional Agents, and the SWLDO. The
Executive Committee shall discharge the functions of the ISDO in any and all matters relative to
the advancement of the welfare and the protection of the rights of informal sector workers.


The Executive Committee shall have the authority to act for and in bebalf of ISDO during
intervals of meetings, and within the specific authority granted by the ISDO.

Section 42, Authority of the ISDO to Solicit Assistance from Various Agencies. - The ISDO
may, from time to time, call for the participation of any government agency in its deliberations
especially when such agency is directly or indirectly concemed with and/or affecting the growth
and development of informal sector workers in any pacticular area or manner.

Section 43. Regional ISDO Agents. — There shall be one (1) Regional ISDO Agent per region
that shall be appointed by the ISDO and shall have the rank of a DOLE Regional Director. Their
qualifications shall be provided for by the IRR of this Act. The Regional Agents shall have
functions that include but are not limited to. monitoring the LGUs within their respective
regional designations and coordinating with the ISDO; evaluation of policies programs for
informal sector workers; providing technical assistance in the development of local plans and
programs, as well as other administrative fimctions necessary for the success of initiatives for the
benefit of informal sector workers in their jurisdiction. The Regional Agents shall also work
closely with the Informal Sector Workers Local Development Office (ISWI.DO) in order to
ensure the attainment of the objectives of this Act

The assignment of one (1) Regional Agent per region of the Philippines, shall be similar to that
of the division of regions provided for in the DOLE with respect to its Regional Offices. Except
for the National Capital Region (NCR), there shall be one (1) Regional Agent each for the
following regions, who shall supervise over the respective cities and/or provinces in their
respective regional designations:

Region T- La Union, Mocos Sur, Hocos Norte, Dagupan;

Region II Cagayan, Isabela, Nueva Vizcaya, Quirino,

Region IJ - Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales,

Region I'V-A — Cavite, Laguna, Batangas, Rizal, Quezon;

Region 1V-B - Mindoro, Marinduque, Romblon, Palawan,

Region V — Albay, Camarines Sur, Camarines Norte, Catanduanes, Sorsogon, Masbate,

Region VE. Guimaras, Aklan, Antique, Capiz, Negros Occidental

Region VII - Cebu, Bohol, Negros Oriental, Siguijor,

Region VIII - Northern Leyte, Southem Leyte, Western Leyte, Biliran, Westen Samar,

‘Northern Samar, Eastern Samar,

Region IX — Zamboanga City, Isabela, Zamboanga de! Norte, Zamboanga det Sur,

Zamboanga Sibugay,

Region X — Camiguin, Misamis Occidental, Ozamiz City, Bukidnon, Lanao del Norte,

Region XI — Davao City, Davao det Sur, Davao del Norte, Davao Oriental, Compostela

Valley;

Region XII - SARGEN, Southem Cotabato, Sultan Kudarat, North Cotabato, Cotabato

City,

Cordillera Administrative Region (CAR}-— Abra, Benguet, Ifugao, Kalinga, Mountain

Province, Apayao, Baguio;

CARAGA — Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur.

For the NCR, there shall be two (2) Regional Agents, to supervise and monitor the following,
cities - Caloocan Malabon, Navotas, Valenzueta, Makati, Pasay, Manila, Muntinlupa, Taguig,
Paranaque, Las Pinas, Pasig, Pateros, Mandaluyong, Marikina, San Juan, Quezon City,

‘Chapter IL
Informal Sector Workers Local Development Office (ISW1.DO)

Section 44, Informal Sector Workers Local Development Office (ISWLDO). — An Informal
Sector Workers Local Development Office (ISWLDO) shall be established in every province and
city, according to the enumeration of cities and provinces found in Section 42 hereof, to perform
functions that aid in the attainment of the purposes of this Act. Such functions shal! include but

1s


shall not be limited to the following:

{a) Preparing an overall development plan and work program that will address the needs of the
informal sector workers and incorporate them in their respective provincial and city development
plans;

(b) Consulting informal sector workers’ organizations in the area, identifying specific needs of
various subsectors of the informal sector and take appropriate measures in order to address such
concems,

(c} Ensuring accreditation and identification of informal sector workers within their respective
jurisdictions, and to facilitate their immediate access 10 benefits and services provided for by this
Act,

{d) Monitoring, assessing and evaluating implementation of the plans and programs as welt as
the performance of informal sector workers, their economic activities and their organizations in
the areas;

{e) Coordinating with other local offices, private sector and other organizations with existing,
programs for the informal sector workers towards integration and convergence;

(f) Conducting training programs especially those that focus on education, technical skills,
livelihood and healthcare for the informal sector workers.

(g) Implementing consciousness-raising and capability building activities which include
information on workers’, women’s and children’s rights and leadership training,

(h) Providing technical support and access to credit, market, technology, social protection
schentes, and training for micro-entrepreneurs and those in service industry, smal! transport, non-
corporate construction workers, etc.;

(@ Training pools of community trainers in business counseling and awareness-raising on
occupational safety and health hazards, risks and social protection;

j) Supporting activities that encourage the organization of informal sector workers,

(k) Establishing a database on human resources and skills registry to be used as tools for LGU
planning and budgeting;

(1) Training informal sector workers on negotiation skills and on the conduct of time and motion
studies to determine proper wages; and

(m) Providing services, which shall include but oot be limited to counseling. conciliation,
mediation, and tegal assistance for the furtherance of the objectives of this Act.

(n) Ensuring effective participation of informal sector workers and informal sector workers’
organizations through the establishment of regutar consultative mechanisms and processes within
the respective LGUs. Consultations among the organizations of informal sector workers shall be
conducted within the LGUs to determine specific issues and problems affecting their sector, and
monitor and evaluate implementation of prourams and policies that address such issues and
problems.

Following the principle of merit and equity, LGUs that fulfill such allocations may receive
additional assistance from the national govemment as recommended by the {SDO: provided, that
they have formulated their local development plan for informal sector workers.

Section 45. Composition. - The ISWLDO shall be under the sole supervision of the Local Chief

16


Executives, For this purpose, the powers inherent in an employer shall be exercised by the Local
Chief Executives over members of the ISWLDO, The IRR of this Act shall provide for
ISWLDO’s composition and other relevant guidelines regarding its’ operations.

Section 46. Budget — The respective LGUs shall either set aside at least three percent (3%) of
their annual budget or shall find other sources of funding for the creation and initial operations of
ISWLDO.

TITLE TV
FINAL PROVISIONS

Section 47. Penal Provisions, —

(a) Any person who shall willfully interfere with, restrain or coerce a worker in the exercise of

his/her rights as provided for by law, or shall in any manner commit any act in violation of Title
Ty Cogtinme 8,10 and 27.23 AF ahi
than’ Twenty Thousand Pesos (P21

both fine and imprisonment at the discretion of the Court, without prejudice to any penal of civil
liability under the Revised Penal Code or other taws. In cases where there exists an employment
contract between the informal sector worker and the employer, such contract may provide for
higher civil liabilities.

Aw

(b) If the offender is a public official, the Coun, in addition to the penalties provided in the
preceding paragraph, may impose the additional penalty of disqualification from public office.

(c)_ In the case of a private institution/company found to be violating any provision of this Act,
it shalt be subject to a penalty ranging from suspension of license or revocation of such at the
discretion of the Court

Section 48, Implementing Rules and Regulations (IRR). — ‘The Implementing Rules and
Regulations of this Act shall be formulated by the DOLE, in consultation and coordination with
various informal sector workers’ organizations The ISDO shall, within three (3) months from
the effectivity of this Act, promulgate the necessary rules and regulations to effectively
implement the same.

Section 49, Separabitity Clause. - If any provision of this Act is declared unconstitutional or
invalid, the provisions not affected shall continue to be in full force and effect

Section 50, Repealing Clause. - All laws, decrees, orders, rules and regulations or other
issuances inconsistent with the provisions of this Act are hereby repealed, amended or modified
accordingly

Section 51. Effectivity. — This Act shall take effect fifteen (115) days after its publication in at
least two (2) newspapers of general circulation or the Official Gazette, whichever comes first