House Bill on Security of Tenure Seeks to Prohibit Labor – Only and End-of-Contract

Proposed Bill or Initiative

Author: Emerico O. de Guzman, Managing Partner – Angara Abello Concepcion Regala & Cruz

House Bill No. 6908 seeks to prohibit labor-only contracting, which exists when any of the following elements are present: lack of substantial capital or investment in the form of tools, equipment, machineries, and work premises, among others; contractor’s lack of control over the worker’s means and methods of performing the work, or performance of activities which are directly related to the principal business of the principal-client. The Bill has proposed administrative penalties, including closure, and fines for those engaged in such labor-only contracting and end-of-contract arrangements. It likewise proposes various measures for security of tenure. This Bill has been approved on its third and final reading by the Philippine House of Representatives.

Senate Bill on Security of Tenure Seeks to Establish Posting of Bond and Other Measures

Proposed Bill or Initiative

Author: Emerico O. de Guzman, Managing Partner – Angara Abello Concepcion Regala & Cruz

A Senate bill on contractualization and security of tenure proposes that if contracting-out work will be done by manufacturing or production firms, the service or component, phase, or product must be identifiable. In addition to defining the terms “legitimate contractor” versus “labor-only contracting,” the Bill seeks to establish the posting of a bond by the contractor to cover for any unpaid wages and other monetary benefits of the contractor’s employees. For security of tenure, the Bill proposes remittance of government-mandated contributions during reinstatement pending appeal, definition of the different types of employees in an employer-employee relationship within the context of regular, probationary, project-based, and seasonal employment.