BPO Workers Welfare and Protection Act Also Known as the Magna Carta for BPO Workers

Sentate Offite of the Secretarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 NOV 11 P2:53 DENAT RECEIVED BY: S. No._ Introduced by Senator Raffy T. Tulfo AN ACT ENSURING THE WELFARE AND PROTECTION OF BUSINESS PROCESS OUTSOURCING (BPO) WORKERS AND THE RECOGNITION OF THEIR RIGHTS AS PROVIDED FOR IN THE LABOR CODE OF THE PHILIPPINES EXPLANATORY NOTE The Philippines ranks as the second-largest business process outsourcing (BPO) sector globally, as reported by the International Labor Organization (ILO). In 2024, it generated $38 billion in revenue, amounting to 8.2% of the country's GDP, while employing approximately 1.82 million individuals across the nation. BPO services represent 73% of total services exports, matching the remittances sent home by Overseas Filipino Workers (OFWs). Given the lack of robust national industries, this sector is commendably acknowledged for providing immediate job opportunities to many Filipinos. Therefore, it is imperative to safeguard the rights and welfare of those who depend on this thriving industry. Since the 14th Congress, various consultations have been held with stakeholders, including BPO managers, call center agents, and the families of BPO employees, addressing multiple concerns about working conditions in several companies within this sector. Issues raised include insufficient regular breaks and inadequate restroom access, alongside health and psychological risks related to the nature of the jobs. A 2010 ILO study highlighted that although the BPO industry offers relatively "good quality jobs," significant changes in industry policies and practices are essential to enhance working conditions. The study indicated that 48% of BPO employees experience insomnia and 54% suffer from fatigue. Among those affected, 45.6% reported that client-related harassment is a major contributor to work-related stress,

while 41% cited excessive workloads, 37.4% noted performance pressures, 33.7% attributed issues to monotony, and 33.4% struggled with the demands of regular night shifts. The ILO report also pointed out the pressing issue of high staff turnover rates that requires attention. This bill aims to uphold and safeguard the rights of many Filipinos, particularly those from the youth demographic, who seek immediate employment in BPO firms. It reiterates the labor standards defined in the Labor Code and introduces additional benefits intended to tackle specific challenges and issues linked to the nature of BPO work. Key proposals of the bill include: 1. Enhanced job security for BPO employees, prohibiting temporary hiring practices and ensuring the regularization of all BPO workers after a maximum six-month probationary training period; 2. Establishment of a national entry-level wage aligned with the family living wage for all BPO employees; 3. Access to medical benefits upon joining a BPO company, rather than only after regularization; and 4. The right to self-organize for collective bargaining and engagement in democratic processes regarding workplace policies that affect employee rights. In light of these considerations, the immediate approval of this measure is respectfully sought. RAFFY T. TULFO

Senate Offier of the secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session NOV 11 P2:53 5. No. - SEN 493 RECEIVED BY: Introduced by Senator Raffy T. Tulfo AN ACT ENSURING THE WELFARE AND PROTECTION OF BUSINESS PROCESS OUTSOURCING (BPO) WORKERS AND THE RECOGNITION OF THEIR RIGHTS AS PROVIDED FOR IN THE LABOR CODE OF THE PHILIPPINES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. — This Act shall be known as the "BPO Workers' Welfare

2 and Protection Act" also known as "The Magna Carta for BPO Workers."

Sec. 2. Declaration of Policy. - Pursuant to Article II, Section 18 and Article

4 XIII, Sections 3 and 14 of the 1987 Constitution, the State shall protect the rights and 5 overall welfare of workers in the Business Process Outsourcing (BPO) industry, 6 promote their full employment and security of tenure, and ensure equal opportunities 7 consistent with domestic and international labor standards, particularly ILO 8 Conventions No. 87, 98, 155, and 190. The State shall secure decent working and 9 living conditions; standardize terms and conditions of employment nationwide; 10 guarantee entry-level remuneration no lower than the family living wage with progressive increases; regulate recruitment agencies and third-party contractors; establish administrative, adjudicative, and social welfare mechanisms; and safeguard worker safety, health, and security at the workplace and during transit. The State shall uphold the constitutional right of BPO workers to self- 15 organization, collective bargaining, and peaceful concerted activities, including the 16 right to strike, and shall promote union-building, independent labor associations, and 17 genuine worker representation while prohibiting and penalizing interference by management, recruitment agencies, and state forces in union affairs.

The State shall advance security of tenure by abolishing prolonged floating without pay, prohibiting termination based solely on performance metrics, ending contractualization and precarious employment schemes, promoting non-discrimination and gender sensitivity, and imposing appropriate sanctions for labor and human rights violations. Recognizing that the BPO industry must contribute to national industrialization, 7 technology transfer, and quality job creation, the State shall regulate the industry in accordance with pro-labor, pro-rights, and pro-national development principles, holding all industry stakeholders accountable as partners in protecting and empowering Filipino BPO workers.

Sec. 3. Coverage. - This Act shall cover all employees and workers engaged

in the BPO industry. These include but are not limited to: (a) Call Centers and Contact Centers (Voice and Non-voice); (b) Data Processing and Management; (c) Software Development and Programming; (d) Online Gaming, Animation, and RPG Management; (e) Online Tutorial and Educational Resource; (f) Publishing, Content Writing, Medical Transcriptionists and SEO writing; (g) Social media and Al-related services such as content moderation and data labelling; and (h) Other occupations that may arise related to the BPO industry.

Sec. 4. Definition of Terms. — For purposes of this Act, the following terms are

defined as follows: (a) Business Process Outsourcing (BPO) refers to the contracting of specific business tasks, processes, or services - including but not limited to customer service, technical support, data processing, content moderation, software development, accounting, human resources, and other back-office or front- office operations - by a client company, whether domestic or foreign, to a third-party service provider operating in the Philippines; (b) BPO company refers to any juridical entity, whether registered as a corporation, partnership, cooperative, or sole proprietorship, engaged in the provision of outsourced business processes or services to client companies, including but

not limited to call centers, contact centers, shared services centers, knowledge process outsourcing (KPO) firms, information technology outsourcing (ITO) firms, and similar establishments, as well as recruitment agencies, manpower service providers, and third-party contractors that supply workers to such entities; (c) BPO worker refers to any person employed by a BPO company, whether under regular, probationary, project-based, fixed-term, seasonal, casual, or any other employment arrangement, who performs work directly related to the provision of outsourced business processes or services, including but not limited to the employees and workers covered by this Act as stipulated in Section 3; (d) Bereavement Leave refers to leaves allowed to BPO workers following a death of a member of their immediate family up to the 2nd degree of affinity or consanguinity; (e) Dislocation Allowance refers to an allowance provided once the company physically transfers the operational work place from its original location on a temporary basis; (f) Emergency Leave refers to leaves reserved for unforeseen, urgent, and unexpected matters that require the employee's immediate attention; (g) Menstrual Leave refers to leaves provided for women experiencing menstrual cycles, outside of the allotted sick leave and emergency leave; (h) Relocation Allowance refers to an allowance to be provided once the company physically transfers the operational workplace from its original location on a permanent or long term basis, exceeding 1 month; and (i) Work from Home Allowance refers to an allowance to cover expenses for equipment, gadgets, utilities, and Wi-Fi connection for a BPO worker's work- from-home arrangement.

Sec. 5. Construction in Favor of Labor. - All doubts in the implementation and

interpretation of the provisions of this law, including its implementing rules and regulations, shall be resolved in favor of labor.

Sec. 6. Standard of Treatment. — The employer and supervisors must, at all

times, treat its BPO workers in a just and humane manner, and ensure and provide that the rights and benefits of BPO workers be accorded them as mandated by

1 Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines. 2 Abusive language, physical violence, or any act which debases the dignity of a person 3 shall not be used against the employee.

Sec. 7. Protection from Understaffing or Overloading. - There shall be no

understaffing or overloading of BPO workers. The ratio of BPO worker to client quota or quantitative targets shall be such as to reasonably effect a sustained quality of 7 service at all times without overworking the worker and over-extending their services beyond what is stipulated in the employment contract, or what is allowed as the worker's regular hours of work. The employer may request the employee to perform tasks beyond the duties stipulated in the employment contract: Provided, that the employee consents: Provided, further, that such tasks are duly compensated by the employer with an additional pay of not less than thirty percent (30%) of the regular rate per hour.

Sec. 8. Regularization of All BPO Workers. - BPO workers shall be considered

regular employees when the BPO worker is allowed to work after the maximum probationary period of six (6) months. If the training period is less than six (6) months, the BPO worker shall be considered a regular employee after they finish the training / trainee period. The services of a BPO worker engaged on a probationary basis or under a training period will only be terminated for a just cause or when they fail to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of their engagement.

Sec. 9. Explicit Ban on Training Bonds. - It shall be unlawful for any person or

company to compel a BPO worker to commit to a company bond, imposing an exorbitant fee to be paid by the employee upon leaving the company before a specified length of time with justified reason.

Sec. 10. Regular Hours of Work. - Normal hours of work for BPO workers shall

not exceed eight (8) hours a day. Any work done by BPO employees beyond the regular hours of work shall be duly compensated by the employer, regardless if the worker is working on site or from home.

Sec. 11. Rest and Meal Periods. - BPO workers shall be entitled to

2 compensable rest periods and meal periods not less than what is provided for in the 3 Labor Code and other existing laws. Employees shall have the right to brief restroom breaks, which shall not be shorter than five minutes for each two hour interval or a total of at least fifteen (15) minutes for restroom breaks throughout the work shift. These restroom breaks shall 7 be added on top of the two fifteen (15)-minute breaks and lunch breaks. To comply with such, the BPO company shall devise a mechanism in order to ensure the implementation of regular restroom breaks among its workers without sacrificing the continuous flow of work among its employees.

Sec. 12. Wages. - BPO workers shall receive an entry-level wage of not less

than Thirty Six Thousand Pesos (PHP 36,000.00). BPO workers shall be entitled to an Automatic Wage Increase with (1) upskilling or cross-skilling, and (2) promotions. Any wage order shall apply to all BPO employees, including those receiving above minimum wage levels, by automatically applying the wage distortion principle using the Pineda formula. BPO workers whose status have been tagged as "floating" will continue to receive their full wages and benefits for up to twelve (12) months.

Sec. 13. Overtime Work. — Work may be performed beyond eight (8) hours a

day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

Sec. 14. Night Shift Differential. - BPO workers shall be paid a night shift

differential of not less than twenty-five percent (25%) of the regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning.

Sec. 15. Regular Working Days. — All BPO workers shall render work for not

more than five (5) consecutive days per week. Interval between shifts should not be less than twelve (12) hours regardless of overtime work.

While the specific day of the week set aside as rest day may be stipulated in the employment contract, the same may be changed for another day of the week 3 upon the mutual agreement of the employer and the employee: Provided, that the employer shall respect the preference of the employee for their weekly rest day when 5 said preference is based on religious grounds.

Sec. 16. Work on Holidays. — BPO workers have the right to refuse to work on

7 days designated as non-working holidays. The employer shall duly compensate the 8 employee's work on such days in accordance with existing laws with regard to holiday pay. Given the nature of the industry, the company shall devise a mechanism in order to ensure that workers are able to exercise this right without prejudice to workers' performance assessment and evaluation.

Sec. 17. Hazard Pay. - During times of inclement weather and other such

hazardous conditions, BPO workers shall be subject to hazard pay monthly that is equivalent to thirty percent (30%) of the basic pay and shall not be subjected to tax deductions. BPO workers shall also receive a wage subsidy of One Hundred Pesos (PHP 100.00) per day for working during national emergencies.

Sec. 18. Work During Calamities. - Work shall be voluntary on days of heavy

rain and other instances of inclement weather conditions, with workers receiving the necessary Hazard Pay as provided in Section 17 of this Act. Otherwise, work shall be automatically suspended in cases of typhoons, earthquakes, volcanic eruption, fire, and other such states of calamity.

Sec. 19. Social Welfare Benefits. - Without prejudice to the Securities and

23 Exchange Commission (SEC), Collective Bargaining Agreement (CBA), or company practice or policy, all BPO workers shall be members of and entitled to receive the benefits conferred by the Social Security System (SSS), Employees' Compensation and State Insurance Fund (ECSIF), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (HDMF) or the Pag-IBIG Fund, and other applicable social protection laws, rules, and regulations, as may now or hereafter be created in favor of labor.

Sec. 20. Allowances and Other Benefits. - All allowances, benefits, and

bonuses shall be exempted from tax for a limit of One Hundred and Twenty Thousand Pesos (PHP 120,000.00). BPO workers are also entitled to the following allowances:

(a) Work from Home Allowance; (b) Relocation Allowance, the computation for which should be progressive on the basic daily pay and distance from the original location plus twenty percent (20%) of the original basic pay; and (c) Dislocation Allowance, computation for which should be progressive on the basic daily pay and distance from the original location. BPO workers are also guaranteed an annual appraisal of ten percent (10%) of their basic monthly wage, in addition to any salary increase due to upskilling or promotions.

Sec. 21. Leave Benefits. - BPO workers shall be entitled to all leave benefits

and privileges as provided by law, such as but not limited to Service Incentive Leave, Maternity Leave, Paternity Leave, Solo Parent Leave, leaves for employees under the Republic Act No. 9710 (Magna Carta of Women for those undergoing gynecological surgeries) and Republic Act No. 9262 (Violence against Women and Children Act for those dealing with legal or medical matters related to abuse), and other leaves that may be provided by law. BPO workers are also entitled to the following leave benefits: (1) Paid Leaves, in which all workers shall be entitled to paid sick leaves of fifteen (15) working days and paid vacation leaves of fifteen (15) working days, for a total of thirty (30) working days, effective upon regularization and shall replenish on the 1st of January of each year, and shall not be forfeited by any circumstances: Provided, that documentation shall not be a requirement for a BPO worker to avail of a sick leave: Provided, that sick leaves shall be convertible to cash on a monthly basis: Provided, further, that vacation leaves shall not be deleted by any circumstances once plotted and shall be guaranteed without prejudice to the employee; (2) Emergency Leaves, which shall be determined as necessary by the employee, and not to be withheld for any reason and circumstance (including but not limited to, calamity, accidents, and personal emergency leaves). (3) Bereavement Leaves, which shall also be allowed for fourteen (14) working days in cases of death within the workers' immediate family up to the 2rd degree of affinity or consanguinity; and

(4) Menstrual Leaves, which shall be equivalent, but not limited, to two (2) working days every month, in which the employee must still be provided with the regular basic pay with allowances for the entire duration of the leave. 4 Upon separation of the employee from service, they shall be entitled to all applicable 5 accumulated leave credits with pay. No employee shall be terminated based solely on 6 unapproved leaves without affording the employee due process in an administrative proceeding.

Sec. 22. Transportation Benefits. - In the absence of or given the lack of safe

9 and adequate public transportation services in BPO workers' places of work, they shall be entitled to safe transportation service, which may include, but are not limited to (a) shuttle services, or (b) travel allowance not subject to tax deductions for Transport Network Vehicle Service (TNVS) or commute to and from the place of work to designated drop-off points to be provided by the company in order to facilitate the safe commute of employees at vulnerable times at night or early in the morning.

Sec. 23. Better Working Conditions. To improve the working conditions of the

BPO Workers, the company should: (a) Provide adequate sleeping quarters, affordable canteens with sanitary standards, potable drinking water, lounge or rest areas, and stations for breastfeeding and childcare; (b) Ascertain a specific area for smoking outside of the workplace building, while also initiating a smoking cessation program; (c) Ensure an expanded and standardized unemployment insurance plan and benefits, including floating employees and employees with active cases in NLRC for illegal and constructive dismissal; (d) Prohibit any practice of mandatory overtime, delayed breaks, shortened workweek, multiple job assignments without additional compensation, and other forms of unregulated adjustments on working conditions; (e) Allow employee representation in the OSH committee through election as stipulated by the Department of Labor and Employment; (f) Be accountable for meeting the logistical and operational needs of work-from- home employees, including but not limited to the internet, basic utilities, tools and equipment, with employees not being penalized for failing to comply; and

(g) Maintain the employees' job security in the threat of employment loss due to digitization and automation, and ensure continuous personnel training and upskilling.

Sec. 24. Protection from Discrimination, Harassment, and Violence. - BPO

workers shall be protected from discrimination by reason of sex, sexual orientation, 6 gender, age, political or religious beliefs, civil status, physical characteristics, disability, 7 medical conditions, race, or ethnicity. BPO workers shall be protected from harassment and violence, according to the principles of the International Labour Organization 9 Convention No. 190. BPO companies must also ensure their compliance and adherence to the provisions and principles of Republic Act No. 11313 or the Safe Spaces Act. The company should form an obligatory safe space employees committee to ensure the company's compliance and to enhance its lawful implementation in the BPO industry. Similarly, BPO companies must respect the workers' freedom of speech, self- expression, artistic expression and preferences for clothing.

Sec. 25. Medical Examination and Medical and Health Benefits. — Apart from

17 PhilHealth insurance, BPO workers shall be entitled other medical and health benefits which include the following: (a) A medical examination free of charge upon entry in the BPO company and not merely upon regularization, and every year thereafter during their tenure of employment. (b) An HMO or Medical and Health insurance benefits upon employment with minimum coverage of Four Hundred Thousand Pesos (PHP 400,000.00) that can be extended to up to two dependents to be determined by the employee. The HMO shall cover pre-existing conditions, annual physical examination, Ears, Nose, and Throat (ENT) conditions, dental services, neuro-psychological services, and the treatment of communicable diseases. They shall also be compensated for injuries and medical complications arising from and related to their work in accordance with existing laws, labor policies, guidelines or circulars as the case may be. (c) Over-the-counter medicines and basic health supplements or vitamins shall be made available, for free, all throughout operational hours.

(d) The company shall also have a resident psychologist available 24/7 as the nature of the BPO employees' work are constantly exposed to a highly stressful environment (e.g. demeaning treatment of customers, high pressure to meet performance targets, exposure to obscene and violent content, especially for content moderators. (e) Annual psychiatric and psychological evaluation which may be included in the annual physical examination as stipulated in Section 22 (a) of this Act. When needed, professional psychological or psychiatric intervention should also be provided for free that may be covered by HMO or Medical and Health insurance as stipulated in Section 27(b) of this Act. (f) Annual medical, dental, and optical reimbursement of One Hundred and Fifty Thousand Pesos (PHP 150,000.00) shall also be awarded to BPO industry workers. (g) Mandatory Standardized Death and Accident Benefits amounting to Two Million Pesos (PHP 2,000,000.00) must be provided. (h) Medical kits for both On-Site and Work-from-Home employees shall be provided at times of national emergency, which consist of the following: (1) Company-provided Personnel Protective Equipment (PPE) and hygiene kits for on-site employees; (2) Healthcare kits and medicine for work-from-home employees; and (3) Additional health and medical packages to employees, in accordance with the prevailing public health conditions.

Sec. 26. Workplace Policy on Occupational Safety and Health. - An

occupational safety and health policy shall be formulated by each BPO establishment addressing the safety and health concerns in BPO workplaces and worksites, promoting progressive health conditions, mitigating and pre-emptive processes for the benefit of workers, in accordance with the Occupational Safety and Health Standards (OSHS) and other related OSH issuances. Each BPO company shall enforce a proper business continuity plan that prioritizes the safety, security, and well-being of 30 employees, especially in times of disasters and calamities.

(a) OSH Standards must be enforced and inspected by the concerned and authorized bodies of the government and prohibit any acts of self-regulated OSH Standards inspection. (b) The company shall institutionalize OSH committees with genuine and sufficient representation from the employee sector. It shall include a professional medical personnel and workers' representative. The company shall ensure that a medical personnel is on duty for all working hours.

Sec. 27. Security of Tenure. - No employee can be terminated based on

habitual absences and performance, to protect them from being abused by legal provisions that allow floating status of employees for not more than six (6) months, and other existing laws, and after due process in an administrative proceeding as provided for in this Act. When putting workers in floating status, the company must not hire new employees until all employees who shall be subject or are currently in floating status have been absorbed in vacancies in other or new accounts, provided that the workers are willing to be absorbed in other or new accounts available.

Sec. 28. Prohibition Against Elimination or Diminution of Benefits. - Nothing in

this Act shall be construed to eliminate or diminish in any way existing benefits being enjoyed by BPO employees at the time of effectivity of this Act, or benefits beyond the minimum standards set forth by this Act.

Sec. 29. Right to Money Claims. - The company may not, in any case, prevent

a BPO worker from receiving their rightful money claims arising from labor disputes.

Sec. 30. Safeguards in Administrative Proceedings. - In any administrative

proceeding, a BPO worker shall have: (a) the right to be informed of the charges; (b) the right to full access on evidence against them; (c) the right to defend themselves or by a counsel of their choice; (d) the right to be given adequate time to prepare their case, which shall in no case be less than one week; (e) the right to appeal to designated authorities; and (f) such other rights that will ensure fairness and impartiality during proceedings.

Sec. 31. Access to Relevant Information. - The State shall ensure that BPO

companies allow their workers and employees access to:

(a) relevant information to make them understand their rights, benefits, obligations, conditions and realities attending to the profession: Provided, that BPO companies shall not restrain their employees from organizing or attending activities, such as, but are not limited to, workshops and symposia, that seek to equip BPO workers with relevant information with regard to their rights, welfare and conditions; and (b) information on service level agreement between client and vendor, especially when it affects working conditions and worker compensation and benefits, as consistent with Article 13 Section 3 of the 1987 Philippine Constitution which states that "[t]hey shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law."

Sec. 32. Freedom from Interference or Coercion. — It shall be unlawful for any

person or company to commit any of the following acts of interference or coercion: (a) to require as a condition of employment that BPO employees shall not join, form, or assist in the formation of an organization or union; (b) to discriminate in order to encourage or discourage membership in an organization or union; (c) to prevent a BPO employee from carrying out their duties and functions in their organization or union to penalize the employee for any lawful action performed in that capacity; (d) to perform acts calculated to diminish the independence and freedom of the union or organization to direct its own affairs; (e) to perform acts of company retaliation, be it directly or indirectly, against employees raising grievances; and (f) to tag any employee as a "communist", ", "terrorist", "subversive", or any similar label that can constitute as red-tagging which is a threat to the employee's right to life, liberty, and security.

Sec. 33. Right to Self-organization to Engage in Collective Bargaining and to

Participate in Democratic Exercises. — It shall be unlawful for any person or company to restrict the right of BPO workers to join, organize, or assist organizations and to collective bargaining. In addition, BPO companies should exercise due diligence and actively provide venues for workers to participate in the deliberation of issues and in

1 the formulation of policies that affect them. BPO employees should be represented in 2 industry tripartite bodies and mechanisms, and other related mechanisms as facilitated 3 by the Department of Labor and Employment and other relevant agencies.

Sec. 34. Penal Provision. - Any person or company who violates the provisions

5 of this Act shall be punished with a fine of not less than Five Hundred Thousand Pesos 6 (P500,000) and/or imprisonment of not less than six (6) months but not more than 7 one (1) year or both at the discretion of the Court.

Sec. 35. Separability Clause. - If any provision of this Act is declared

9 unconstitutional or invalid, the remainder thereof not affected thereby shall continue 10 to be in full force and effect.

Sec. 36. Repealing Clause. - All laws, ordinances, rules and regulations, other

issuances or parts thereof which are inconsistent with this law are hereby repealed or modified accordingly.

Sec. 37. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in at least two newspapers of general circulation. Approved,