House OKs security of tenure bill on 3rd reading

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Metro Manila (CNN Philippines, December 2) – In a 204-7 vote with three abstentions, the House of Representatives approved on third and final reading a bill which aims to further protect workers’ rights by prohibiting labor-only contracting in the private sector. 

House Bill No. 7036, or the Security of Tenure Act, seeks to amend Presidential Decree No. 442, or the Labor Code of the Philippines.

The proposed measure defines labor-only contracting as existing in the following circumstances: when the contractor does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; when the contractor has no control over the workers’ methods and means of accomplishing their work; and when the contractor’s workers are performing activities which are directly related to the principal business of the employer.

The bill prohibits fixed-term employment except in cases of overseas Filipino workers, workers on probation, relievers who are temporary replacements of absent regular employees with engagements not exceeding six months, project employees, and seasonal employees.

Under the bill, the rights and benefits of relievers, and project and seasonal employees shall be at par with those of regular employees.

The bill also requires persons and entities doing business as job contractors to obtain a license from the Department of Labor and Employment. The license is valid for three years and cannot be renewed unless the contractor shows that it has the "net financial contracting capacity to carry on its business.”

In July 2019, President Rodrigo Duterte rejected a version of the bill which he said “unduly broadens” the scope of labor-only contracting, effectively banning other forms "that are not particularly unfavorable to employees."