Security of Tenure Act

Senate Office of the Bertelary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) P4:14 First Regular Session ) APR 30 SENATE 2073 RECEIVED BY: S.B. No. - INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT STRENGTHENING THE WORKERS' RIGHT TO SECURITY OF TENURE, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES EXPLANATORY NOTE Article XIII, Section 3 of the Constitution grants to all workers the cardinal right to security of tenure. This is consistent with the principle under International Labour Organization Convention No. 158 or the Termination of Employment Convention, 19821 that the employment of a worker should not be terminated unless there is a valid reason for such termination connected with the worker's capacity or conduct, or based on the operational requirements of the enterprise, establishment or service. Security of tenure allows workers to enjoy job security in the face of the inherent inequality between labor and capital. Job security comes with stability of income for workers and their families, instead of having to worry about their income daily (or hand-to-mouth existence). The Labor Code defines security of tenure as follows: A regular employee cannot be terminated except for just or authorized cause. However, the practice of contracting/ subcontracting/ outsourcing/ contractualization has made this right insecure. A principal who has a contractor can terminate the workers simply by terminating or not renewing the contract with the contractor.3 A principal can claim that there is no employer-employee relationship in order to deny regular status to said workers. 1 https://normlex.ilo.org/dyn/nrmlx_en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENTID:3 2 Cf. Ariel Espina vs. Highlands Camp/Rawlings Foundation, Inc., G.R. No. 220935, 28 July 2020, Supreme Court First Division 3 E. (Leo) D. Battad, Precarious Employment in a Globalized World: Case of Non-Regular Employees in the Philippines, 5 Journal of Human Rights and Peace Studies 229-261, 252

According to the latest figures from the Philippine Statistics Authority (PSA) from 2022, contracting, subcontracting, or outsourcing is prevalent. According to the latest figures from the Philippine Statistics Authority (PSA) from 2022, contracting, subcontracting, or outsourcing is prevalent. Almost half or 46.7 percent of the total establishments nationwide relied on agency-hired or contracted workers. The Electricity, Gas, Steam and Air Conditioning Supply industry had the most establishments (78.2%) who engaged agency-hired workers. The Real Estate Activities (62.8%) and Human Health and Social Work Activities except Public Work Activities (60.3%) followed. Janitorial and security services were performed by 33.7 percent of all agency- hired workers. Meanwhile, 29.5 percent of them were working on production/ assembly and 6.0 percent on repair/ maintenance/ construction. Contracting also affects the right of workers to self-organization, collective bargaining, and peaceful concerted activities, including the right to strike in accordance with law. Because the principal can deny the existence of an employer- employee relationship with the workers, they cannot join the union of the principal's regular employees. If the workers form a union with the contractor, the principal can simply terminate its contract with the contractor. To prevent the contract from being terminated, the contractor will dismiss the workers who agree to form a unions. The PSA's latest figures show that only 6.5 percent of establishments are unionized, and only 8.4 percent of establishments are covered by collective bargaining agreements.6 The Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE) reported that as of the end of the second quarter of 2025, there were 18,635 enterprise-based unions in the private sector, covering 1,701,994 According to the June 2025 Labor Force Survey (LFS) of the PSA, 50.47 million private were ismened, wie mining of le and 25.50 oi employed in 4 Philippine Statistics Authority, Highlights of the 2021/2022 Integrated Survey on Labor and Employment: Module on Employment: August 2022, 26 Jan. 2024. 5 Comments of workers who were participants in the Bigkis WEP 2025 Training on Labor Relations, July 2025. See also Mely Ann Emerie Cristobal & Efren II Resurreccion, Note, De-confusing Contractualization: Defining Employees Engaged in Contractual Work in the Philippines, 88 PHIL. L.J. 342, 346-353 (2014) 6 Philippine Statistics Authority, Highlights of the 2021/2022 Integrated Survey on Labor and Employment (ISLE) - Module on Unionism and Collective Bargaining: August 2022, 3 May 2024. 7 Bureau of Labor Relations, Registered Labor Organizations, Workers' Associations and Existing Collective Bargaining Agreements as of 2nd Quarter 2025. 8 Philippine Statistics Authority, Participation in the Labor Force in June 2025 increased to 52.42 million Filipinos aged 15 years and over, 6 Aug. 2025.

employees were unionized and 1.25 percent covered by CBAs in June 2025. Another challenge to the rights of workers is the practice of Endo or end-of- contract. Instead of hiring as regular employees, workers are engaged as fixed-term employees for periods not exceeding six months, but would be renewed repeatedly.9 Workers under Endo arrangements do not enjoy security of tenure. Under Endo, an employer evades the substantive and procedural due process requirements for termination by simply invoking end of contract.10 For this reason, fixed-term employment and Endo should be declared contrary to public policy. In PSA data, fixed-term is included in non-regular status, which also includes probationary, project, seasonal, and casual. 11 Again, according to the latest PSA data from 2022, 21.2 percent or 990,443 of the total 4,664,646 rank and file workers are non-regular. 12 The political will of the entire government will be required to give life to the right of all workers to security of tenure. Hence, this bill aims to: 1. prohibit contractualization and fixed-term employment for being contrary to public policy; 2. disallow the use of Articles 1193 and 1306 of the Civil Code in labor employment contracts13; 3. require employees, with some exceptions, be granted the rights of regular employees; and 4. require that project and seasonal employees be granted the rights of regular employees during the project or season, respectively. The WEP-proposed amendments are the product of round-table discussions and fora conducted by the University of the Philippines Law Center Workers and Employees Program with workers, unions, federations, workers' organizations, and similar non-government organizations. 14 ° Leilani S. Junio, Philippine News Agency, Bello: DOLE eyes 'win-win' option to end 'endo, 555', Business Mirror, 26 Oct. 2016, available at https://businessmirror.com.ph/2016/10/26/bello-dole- eyes-win-win-option-to-end-endo-555/ (last accessed 8 June 2025); Earl O. Condeza, Labor group hits DOLE's 'win-win solution' to end contractualization, Davao Today, 8 Dec. 2016, available at https://davaotoday.com/economy/labor-group-hits-doles-win-win-solution-to-end-contractualization/ Mely Ann Emerie Cristobal & Efren II Resurreccion, Note, De-confusing Contractualization: Defining Employees Engaged in Contractual Work in the Philippines, 88 PHIL. L.J. 342, 344 (2014), 10 Ramon O. Sampana vs. The Maritime Training Center Of The Philippines, G.R. No. 264439, 26 Feb. 2024, Supreme Court Second Division. See also Arlene T. Samonte vs. La Salle Greenhills, Inc., G.R. No. 199683, 10 Feb. 2016, Supreme 11 Philippine Statistics Authority, Technical Notes 2021/2022 Integrated Survey on Labor and Employment. 12 Philippine Statistics Authority, Highlights of the 2021/2022 Integrated Survey on Labor and Employment: Module on Employment: August 2022, 26 Jan. 2024. 13 Brent School, Inc. vs. Ronaldo Zamora, G.R. No. L-48494, 5 Feb. 1990 14 Workers and Employees Program (WEP) Holds First Roundtable Discussion with Various Labor Groups, 9 Nov. 2021, available at https://law.upd.edu.ph/wep-holds-first-roundtable-discussion-with- various-labor-groups/ (last accessed 14 Jan. 2026). (b) University of the Philippines College of Law, UP Law Center Workers And Employees Program

Hence, the passage of this bill is earnestly sought. toleras Faraper RISA HONTIVEROS Senator (WEP) Holds 2nd Online Roundtable Discussion With Various Labor Groups, 2 Dec. 2021, available at https://law.upd.edu.ph/wep-holds-2nd-online-roundtable-discussion-with-various-labor-groups/ (last accessed 14 Jan 2026). (c) University of the Philippines College of Law, Contractualization and ENDO still an urgent concern; the focus of WEP's first 2025 RTD on the Security of Tenure Bill, available at https://law.upd.edu.ph/contractualization-and-endo-still-an-urgent-concern/ (last accessed 14 Jan. 2026). (d) University of the Philippines College of Law, Workers' Forum on Key Labor Bills Filed in the 20th Congress, 3 Sept. 2025, available at https://law.upd.edu.ph/workers-forum-on-key-labor-bills-filed-in- the-20th-congress/ (last accessed 14 Jan. 2026).

Senate Office of the fortreiarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES P4:14 First Regular Session APR 30 SENATE RECEIVED BY: S.B. No. 2073 INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT STRENGTHENING THE WORKERS' RIGHT TO SECURITY OF TENURE, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO 442, AS THE AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF PHILIPPINES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Security of Tenure

2 Act."

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State

4 to: 5 a) Afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all; b) Promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all. 12 It is also declared the policy of the State, in accordance with the United Nations 13 Guiding Principles on Business and Human Rights, to: a) protect workers' rights against abuse under the principle that workers' rights are human rights;

b) enforce laws that are aimed at, or have the effect of, requiring business enterprises to respect human rights; 3 C) require businesses to respect human rights, including workers' rights. 4 Further, Article XIII, Section 3 of the Constitution grants to all workers the cardinal 5 right to security of tenure. This is consistent with the principle under International 6 Labour Organization Convention No. 158 that the employment of a worker should 7 not be terminated unless there is a valid reason for such termination connected with 8 the worker's capacity or conduct, or based on the operational requirements of the 9 enterprise, establishment or service. 10 To this end, the State shall prohibit contractualization and fixed-term employment 11 for being contrary to law and public policy and regulate employment status to ensure compliance with the right to security of tenure.

SEC. 3. Article 106 of Presidential Decree No. 442, as amended, otherwise

known as the Labor Code of the Philippines, is repealed and substituted as follows: "Article 106. Prohibition of Contractualization. - All forms of contractualization are hereby prohibited. Job contracting, or the contracting out of a work by the principal employer to a contractor, personnel agency (formerly termed "manpower agency"), cooperative, in-house agency or a similar analogous entity or arrangement is hereby prohibited. Violations shall constitute unfair labor practice and shall be deemed unlawful and penal in nature and will be subject to criminal prosecution: Provided, that any law to the contrary notwithstanding, the criminal case for any violation of this Article may be filed independently of any complaint before the labor tribunals. When the employer contracts or subcontracts the performance of a work that is necessary or desirable to its business or operations, the worker or workers supplied by a third person or party under this paragraph shall be considered regular employees or employees of the principal employer, as provided for in Article 295 (280) and Article 296 (281), as amended of the Labor Code. There is contractualization whenever an employer enters into a contract with another person for the performance of the former's work. This includes

working arrangements whereby: (a) A principal agrees to contract out or farm out with a contractor, subcontractor, personnel agency (formerly termed "manpower agency"), workers cooperative, or a similar or analogous entity, the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal; or (b) A person, partnership, association or corporation,or cooperative which, not being a principal, contracts with a contractor, subcontractor, personnel agency (formerly termed "manpower agency")/cooperative, workers' cooperative or any other similar or analogous entity for the performance of any work, task, job or project."

SEC. 4. Article 107 of the Labor Code of the Philippines is repealed and

substituted to read, as follows: "Article 107. Prohibition of Fixed Term Employment. - All forms of fixed term employment are prohibited for being contrary to public policy. For this purpose, the use of Articles 1193 and 1306 of the Civil Code of the Philippines is deemed inapplicable for employment contracts. The employee so engaged shall automatically be deemed a regular employee of the employer. Any stipulation in any written or oral contract of employment for a definite or fixed period shall be null and void ab initio, and the person or persons responsible for such acts shall be penalized in accordance with Sections 13 to 16 of this Act. The above prohibition shall not apply to Overseas Filipino Workers (OFWS), project and seasonal employees, and relievers who are temporary replacements of absent regular employees whose engagements shall not exceed one (1) week."

SEC. 5. Article 294 [279] of the Labor Code of the Philippines is repealed and

29 substituted to read, as follows: "Article 294 [279]. Security of Tenure. - All employees irrespective of employment status or position shall not be dismissed without just or authorized cause and without complying with procedural due process.

A dismissal without just or authorized cause and without complying with procedural due process is illegal and the employee shall be entitled to immediate reinstatement even pending appeal without loss of seniority rights and other privileges and benefits. Additionally, the illegally dismissed employee shall be entitled to full backwages and accrued benefits and remunerations provided by law, company policy and collective bargaining agreement, computed from the time compensation was withheld up to the time of actual reinstatement. Unremitted SSS, PhilHealth, and PAG-IBIG contributions shall likewise be paid. Actual, moral, exemplary, nominal and other forms of damages, attorney's fees, and costs of suit shall also be awarded, in accordance with existing laws. If reinstatement is no longer feasible due to strained relations between the parties, or, when prayed for by the employee, the employer, other than the payment of back wages, is also liable to pay the dismissed employee or employees separation pay equivalent to at least two (2) months or to at least two (2) months pay for every year of service, whichever is higher. Furthermore, without prejudice to the other penalties that may be imposed under this Code, any employer who illegally dismissed an employee shall be liable to pay a fine of double the amount of the employee's full backwages, inclusive of allowances, that the dismissed employee is adjudged to receive. The employer shall have the burden of proving that the termination is with just or authorized cause and complies with procedural due process."

SEC. 6. A new article, Article 294-A, is inserted to the Labor Code of the

Philippines to read, as follows: "Article 294-A. Employer-Employee Relationship. - There exists an employer- employee relationship when the worker is engaged to render work or service under the control or supervision of the employer, not only as to the end to be achieved, but also as to the manner, means, and method in reaching the end. Payment of remuneration, however denominated, to the worker also indicates the existence of employer-employee relationship."

SEC. 7. Article 295 [280] of the Labor Code of the Philippines is amended to

1 read as follows: "ARTICLE 295 [280]. Regular [and casual] employment. - The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee OR WORKER has been engaged to perform activities which are [usually] necessary or desirable in the usual business or trade of the employer. [except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.} [An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at teast one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he/she is employed and his/her employment shall continue while such activity exists.]"

SEC. 8. A new article, Article 295-A, is inserted in the Labor Code of the

19 Philippines to read, as follows: "Article 295-B. Burden of Proof. - The burden of proof in showing that the work performed is not necessary or desirable to the employer's business or operations lies on the employer."

SEC. 9. Article 296 [281] of the Labor Code of the Philippines is amended to

read, as follows: "Article 296 [281]. Probationary employment. - Probationary employment shall not exceed six (6) months from the FIRST DAY OF SERVICE OF AN EMPLOYEE [date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period]. THIS PROVISION APPLIES TO ALL WORKERS OR EMPLOYEES, REGARDLESS OF THE NATURE OF EMPLOYMENT, CONTINUOUS OR BROKEN. THE RIGHTS, TERMS AND CONDITIONS OF EMPLOYMENT OF PROBATIONARY EMPLOYEE SHALL NOT BE LOWER THAN THE MINIMUM

STANDARDS SET BY LAWS OR REGULATIONS. THE JOB DESCRIPTION AND QUALIFICATION STANDARDS TO QUALIFY FOR REGULAR EMPLOYMENT SHALL BE IN A WRITTEN CONTRACT AND MADE KNOWN BY THE EMPLOYER TO THE EMPLOYEE AT THE TIME OF THE [HIS/HER] ENGAGEMENT. The services of an employee who has been engaged on a probationary basis may be terminated for a just OR AUTHORIZED cause, UNDER ARTICLES 297 [282] AND 298 [283] OF THE LABOR CODE, AS AMENDED, or when he/she fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of THE [his] engagement. THE PROBATIONARY EMPLOYEE SHALL AUTOMATICALLY BECOME A REGULAR EMPLOYEE AFTER MEETING THE STANDARDS STIPULATED IN THE WRITTEN CONTRACT OF PROBATIONARY EMPLOYMENT OR THROUGH REPEATED ENGAGEMENT OF THE SAME EMPLOYEE AFTER THE EXPIRATION OF THE PROBATIONARY EMPLOYMENT. AN EMPLOYMENT WITHOUT A WRITTEN PROBATIONARY CONTRACT SHALL BE IPSO FACTO DEEMED REGULAR EMPLOYMENT, RECKONED FROM THE FIRST DAY OF EMPLOYMENT."

SEC. 10. A new article, Article 296-A, is inserted to the Labor Code of the

Philippines to read, as follows: "Article 296-A. Employment Status of Project and Seasonal Employees. - [Any provision and employment contracts fixing the period of employment shall be void; and the employee so engaged shall automatically be deemed a regular employee of the employer. No employment with a fixed term or definite period shall be allowed except in cases of Overseas Filipino Workers, relievers who are temporary replacements of absent regular employees whose engagements shall not exceed one (1) week, project and seasonal employees.] Project and seasonal employees shall have the same rights and benefits as regular employees for the duration of the project or season, as the case may be.

For this purpose, project employment refers to an existing project or undertaking the nature of which is temporary and the completion or termination has been determined and made known to the employee at the time of the engagement. Seasonal employment refers to employment based on the existence of a season and shall only be applicable in agricultural work. In project and seasonal employment, workers who are rehired shall be considered regular employees. Seasonal workers shall have the right of first refusal as to the employment for subsequent seasons. Project employees shall also have the right of first refusal as to employment for subsequent projects."

SEC. 11. A new article, Article 295-B, is inserted to the Labor Code of the

Philippines to read, as follows: "Article 295-B. Prohibition on all other forms of employment. - All other forms of employment other than those under Articles 107, 295, 295-A, and 296 are prohibited. Workers under such prohibited arrangements are deemed regular employees, reckoned from the first day of employment."

SEC. 12. Investigation and Enforcement. - The Department of Labor and

20 Employment (DOLE) shall have the authority to investigate and require the keeping 21 of records necessary for the administration of this Act. It shall issue such rules, regulations, orders and instructions as it deems necessary and appropriate to carry 23 out its responsibilities under this Act.

SEC. 13. Criminal Penalty. - Any violation of this Act shall be punished with a

fine of not less than one million pesos (P1,000,000.00) but not more than ten million 26 pesos (P10,000,000.00), or imprisonment of not less than six (6) years and one (1) 27 day but not more than twelve (12) years, or both, at the discretion of the court. If the offense is committed by a corporation, trust, firm, partnership or association or other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership or association or entity.

SEC. 14. Settlement Not a Bar. - Any waiver, compromise, quitclaim, or

1 affidavit of desistance shall be inadmissible in evidence in any criminal, civil, or administrative proceeding for violation of this Act.

SEC. 15. Administrative Penalty. - Any person, partnership, corporation, or

4 other business entity which violates this Act shall have its business permit suspended 5 by the Office of the Mayor of the city or municipality having jurisdiction over the 6 business operations. Within twenty-four hours, the Office of the Mayor shall determine whether the suspension of operations shall be lifted or not. The person, partnership, corporation, or other business entity liable shall pay the employees concerned their salaries or wages during the period of such suspension. Any person, partnership, corporation, or other business entity which violates this Act for a second time shall have its business permit cancelled. The affected workers shall be given separation pay of one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

SEC. 16. Solidary Liability. The employer and the contractor or subcontractor

shall be solidarily liable to indemnify each contractual employee with no less than 18 One Hundred Thousand Pesos (P100,000.00), without prejudice to other monetary 19 awards to which such employee may be entitled such as backwages, monetary 20 claims and other benefits under an applicable collective bargaining agreement or company policy, whether written or otherwise.

SEC. 17. Implementing Rules and Regulations. - The Secretary of Labor and

23 Employment and the National Tripartite Industrial Peace Council (NTIPC) shall 24 promulgate the necessary implementing rules and regulations within one hundred 25 and twenty (120) days from the effectivity of this Act.

SEC. 18. Separability Clause. - Should any provision herein be subsequently

27 declared invalid or unconstitutional, the same shall not affect the validity or the 28 legality of the other provisions not so declared.

SEC. 19. Repealing Clause. - Articles 108 and 109 of the Labor Code of the

30 Philippines are repealed. All other laws, decrees, rules, and regulations or parts thereof, which are contrary to or inconsistent with this Act are hereby repealed or 32 modified accordingly.

SEC. 20. Effectivity Clause. - This Act shall take effect fifteen (15) days after

2 publication in the Official Gazette or in any newspaper of general circulation. Approved,