Almost 2 million workers are expected to benefit from the enactment of a measure that will amend the country’s Labor Code.
With a vote of 119 in the affirmative, 7 in the negative, and no abstention, the House of Representatives approved on third and final reading House Bill 6908 or the proposed Security of Tenure Bill, which aims to address problems of labor-only contracting and end of contract. The bill seeks to amend Presidential Decree 442 (PD 442) or the Labor Code of the Philippines.
The bill introduces a new provision that requires all job contractors to obtain license from Department of Labor and Employment (DOLE), and provides rights and benefits of relievers, project, and seasonal employees at par with regular employees, which is consistent with the principle that all workers must be treated alike.
Among the salient points of the legislation is its prohibition of subcontracting of jobs already contracted out by principal employers and any form of fixed-term employment. It will impose a fine, ranging from P30,000 to P5 million, on labor contractors who will violate its provisions.
However, it is important to note that not all kinds of contracting are prohibited under HB 6908.
The measure merely prohibits labor-only contracting which is present when: 1) the contractor does not have substantial capital or investment in the form of tools, equipment, machineries and work premises, among others; 2) the contractor has no control over the workers’ methods and mean of accomplishing their work; 3) and the contractor’s workers are performing activities which are directly related to the principal business of the employer.
The term “job contractor” refers to a sole proprietorship, corporation, partnership, association, cooperative or any other organization that performs a specific work, job or service for a principal employer. The term “principal employer” refers to the person or entity, including the government, that contracts out a specific work, job or service.
The bill also seeks to amend Article 106 of PD 442, titled “Contractor,” so that whenever an employer enters into a contract with workers, the employees of the contractor shall be paid in accordance with the Labor Code and other laws. It simplifies and clarifies the classification of employees. Under the measure, fixed-term employment would be prohibited, except in cases of overseas workers, temporary relievers, seasonal workers and project employees. It said relievers, project employees and seasonal employees would be entitled to the rights of regular employees for the duration of their service.
A probationary employee, who has rendered at least one month of service, would be entitled to termination pay of a half-month’s salary. Likewise, all other forms of discontinuous employment are prohibited. Clauses in employment contracts providing for a fixed term or definite period of employment are cancelled. Workers under such arrangements are deemed regular employees reckoned from the first day of employment.
The bill inserted Article 303-A titled “Administrative Penalties,” which cites the penalties the DOLE shall impose on erring principal employers, job contractors, manpower agencies, workers’ cooperatives and any other similar entities.
Principal authors of the bill include committee on labor and employment chairman Rep. Randolph Ting, Reps. Vicente Veloso, Raymond Democrito Mendoza, Mark Go, Tomasito Villarin, Ariel Casilao, Kaka Bag-ao, Emmeline Aglipay-Villar, Karlo Alexei Nograles, Jericho Jonas Nograles, Carlos Isagani Zarate, Emmi de Jesus, Antonio Tinio, Arlene Brosas, France Castro, Sarah Elago, Winston Castelo, Bellaflor Angara-Castillo, Angelina Tan M.D., Harry Roque, and Aniceto Bertiz III.
Its counterpart measure, Senate Bill No. 1193 authored by Sen. JV Ejercito is still pending at the committee level in the Senate.
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