House approves security of tenure bill on 3rd reading

Bea Cupin
House approves security of tenure bill on 3rd reading
Should it be passed into law, the measure would ban hiring workers for limited periods of time, or what is known as 'fixed-term' labor contracts

MANILA, Philippines – The House of Representatives on Monday, January 29, approved on 3rd reading a measure that amends the existing Labor Code and seeks to stop abusive forms of contractualization.

House Bill 6908, or “An Act Strengthening the Security of Tenure of Workers, Amending for the Purpose Presidential Decree No. 442, as amended, otherwise known as the ‘Labor Code of the Philippines,'” was approved by 199 legislators and rejected by 7.  

None of those present abstained during the plenary session Monday afternoon. 

The measure is sponsored by legislators from different political parties. 

Its primary sponsors are opposition member Akbayan Representative Tom Villarin and supermajority member Leyte 3rd District Representative Vicente Veloso. Those who opposed the proposal were members of the progressive Makabayan bloc. 

Should it be passed into law, the measure would ban hiring workers for limited periods of time, or what is known as “fixed-term” labor contracts. In practice, this means hiring a person for the same job several times, but only offering a 5-month contract each time. The practice is known as the “5-5-5” scheme. 

In his sponsorship speech, Villarin noted that the measure would change the definition of “prohibited” arrangements or “labor only” contracting. A contractor is considered “labor only” or illegal if an employer has not enough capital or equipment, has no control over his or her worker’s duties, or if the contractor’s nature is directly linked to that of the principal business. 

“By providing that any one of these acts constitute prohibited ‘labor only’ contracting, our workers are finally protected against this malevolent but unfortunately widespread practice,” said Villarin. 

The measure would also deem illegal dismissal “without just or authorized cause or without observance of procedural due process.” A worker is entitled to reinstatement pending appeal and should not lose existing seniority rights and privileges, benefits, back wages, and the like. 

Employment with fixed-term contracts is also only allowed in the case of Overseas Filipino Workers, workers on probation, relievers who are temporary replacements of permanent employees who are absent, project employees, and seasonal workers. 

The amendments would also impose heavier penalties on employers who do violate their workers’ right to security of tenure. The fines are as follows: 

  • P30,000 for a person or entity operating as a job contractor without a license, as long as the person or entity does not commit other violations in the code; 
  • A fine of P30,000 for those unlicensed contractors who practice labor-only contracting per employee, with the fine not exceeding P5 million. The person or entity shall also be barred from applying for future licenses; 
  • A P30,000 fine per employee for licensed contractors practicing labor-only contracting. Their license will also be revoked; 
  • A P30,000 fine per employee for persons or entities that engages fixed-term employees, with the fine not exceeding P5 million

President Rodrigo Duterte had promised to abolish contractualization in the country when he was running for president in 2016. (READ: Duterte to sign executive order vs endo ‘any time soon’ – Bello)

Progressive groups against measure 

Not everyone, however, was pleased with the measure. 

Bayan Muna Representative Carlos Zarate said he opposed certain provisions in the proposed law. 

Isang usapin rito ang pagtanggal ng terminong ‘necessary and desirable’ sa Section 295 ng panukalang batas. Ang pagtanggal ng katagang ito ay bumabakbak sa pag-asang regularisasyon ng mga manggagawa,” he said. 

(One of the issues here is the removal of the term “necessary and desirable” in Section 295 of the law. Its removal removes the hope of regularization of our workers.) 

Delikado po ito, sapagkat karanasan na ng mga maggagawa, lalo sa malalaking kumpanya, na ang kanilang trabaho, kahit ito ay part and parcel ng pagtakbo ng negosyo o opisina, ay ginagawang contractual. Nagbubukas ang pagtanggal ng terminong ‘necessary and desirable’ sa lalong paglaganap ng kontraktwal na trabaho sa lahat ng bahagi ng operasyon ng mga negosyo,” he added. 

(This is dangerous because in the experience of our workers, particularly in bigger companies, that in their work, even if it’s part and parcel of the way the business or office is run, they are still contractual. By removing the term “necessary and desirable,” you run the risk of making contractualization even worse in all parts of a business’ operations.) 

“Regular employees,” according to Presidential Decree 442, are those whose activities are “usually necessary or desirable in the usual business or trade of the employer.”

An exemption is when a specific project is set to be determined at a time specified by the employer upon hiring. Under the proposed amendment to the decree, fixed-term contracts are allowed in the case of overseas Filipino workers (OFWs), probationary workers, relievers for permanent employees who are absent, project hires, and seasonal workers.

Meanwhile, Gabriela Representative Arlene Brosas said the proposed measure actually doesn’t offer any solutions to the problem of contractualization. Brosas hit Article 106-A of the proposed measure, saying it explicitly allows the principal-contractor-employee relationships. “Contractualization is still legal under the proposed measure because it recognizes the job contractor or the middle man,” she said. 

Brosas also opposed the removal of the term “necessary and desirable” in particular articles of the proposed measure.  

Its counterpart measure is still pending at the committee level in the Senate. –

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Bea Cupin

Bea is a senior multimedia reporter who covers national politics. She's been a journalist since 2011 and has written about Congress, the national police, and the Liberal Party for Rappler.