The House of Representatives, voting 199-7 with no abstention, overwhelmingly approved on third and final reading on Monday House Bill 6908 seeking to strengthen the security of tenure of employees in the private sector by prohibiting labor-only contracting and "endo" (end of contract).
The bill seeks to amend several provisions of President Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, to fulfill its objectives.
It seeks to amend Article 106 of PD 44 titled "Contractor" so that whenever an employer enters into a contract with a person for the performance of the former's work, the employees of the contractor shall be paid in accordance with the Labor Code and other laws.
The contracting out of the same work contracted out by the employer is prohibited.
In the event the contractor fails to pay the wages, allowances and benefits of his employees based on the Labor Code and other laws, the employer shall be jointly and severally liable with the contractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed under him.
The Secretary of Labor and Employment, upon consultation with the National Tripartite Industrial Peace Council, shall, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers established under the Labor Code. He may make appropriate distinctions between labor-only contracting which is hereby prohibited, and legitimate job contracting, which is permitted in accordance with the Labor Code.
There is 'labor-only' contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, or has no control over the workers' methods and means of accomplishing their work or the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
A new Article 106-A is inserted in the Labor Code, requiring all persons or entities doing business as job contractors to obtain a license from the DOLE through its regional offices. The term job contractor shall refer to a sole proprietorship, corporation, partnership, association, cooperative or any other organization that performs a specific work, job or service for a specific employer.
Article 294 of the Labor Code titled "Security of Tenure" is also amended so that in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized. An illegally dismissed employee is entitled to immediate reinstatement even pending appeal and without loss of seniority rights and benefits, full back wages and accrued benefits provided by law, company policy of collective bargaining agreement.
Likewise, Article 295 titled "Regular Employment" is amended so that a regular employee is one who has been hired for an indefinite period. No employment with a fixed term or definite period shall be allowed except in cases of overseas Filipinos workers (OFWs), workers on probation, relievers who are temporary replacements or absent regular employees whose engagements shall not exceed six months, project employees, and seasonal workers.
Relievers, project and seasonal employees shall enjoy the rights of regular employees for the duration of the engagement, project or season, respectively.
All other forms of discontinuous employment are prohibited. Clauses in employment contracts providing for a fixed term or definite period of employment are void. Workers under such arrangements are deemed regular employees reckoned from the first day of employment.
Moreover, Article 296 titled "Probationary Employment" is amended so that probationary employment shall not exceed six months from the date the employee started working. It may be terminated for a just cause when he fails to qualify as a regular employee.
The bill inserted a new 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.
Authors of the bill include committee on labor and employment chairman Rep. Randolph Ting, Reps. Vicente S. E. 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, Aniceto Bertiz III, Bernadette Herrera-Dy, Sol Aragones, Deputy Speaker Linabelle Ruth Villarica, Reps. Joseph Stephen Paduano, Arthur Yap, Manuel Zubiri, John Marvin Nieto, Edward Vera Perez Maceda, Vilma Santos-Recto, Edcel Lagman, Jose Atienza, Jr., Dennis Laogan, Sherwin Tugna, Anthony Bravo and Wes Gatchalian, among others.
Source: House of Representatives