Bill seeks to amend Labor Code on employment of foreign nationals

By on May 17, 2015


MANILA — The House Committee on Labor and Employment has recently approved a proposal to amend the Labor Code to enhance the regulation of employment of foreign nationals by requiring them to secure a working permit from the labor department and raising penalties for law breakers, among others.

The committee chaired by Rep. Karlo Alexei B. Nograles (1st District, Davao City) approved House Bill 5470 seeking to amend Articles 40, 41 and 42 of Title II, Book 1 of Presidential Decree 442, as amended, otherwise known as the Labor Code of the Philippines, to enhance the regulation of employment of foreign nationals and transfer of technology to the country.

The amendment to Article 40 of PD 442, which pertains to employment permit of non-resident foreign nationals, provides that all non-resident foreign nationals seeking employment in the country shall obtain an employment permit from the Department of Labor and Employment (DOLE).

An employment permit may be issued to a non-resident foreign national subject to the Labor Market Test (LMT) on the non-availability of qualified and willing Filipino national, the bill provides.

Furthermore, the DOLE Secretary shall be authorized to grant exemptions from the LMT to foreign nationals as provided for under existing laws and agreements, as well as in industries or occupations or practice of professions where there is short supply, after tripartite consultation.

Foreign nationals issued employment permits shall transfer technology to Filipino understudies within a prescribed period, the bill provides.

For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise.

Meanwhile, the proposed amendment to Article 41 of PD 442, which pertains to prohibition against transfer of employment, provides that after the issuance of an employment permit, the foreign national shall not transfer to another job or change his employer without prior approval of the DOLE Secretary.

Furthermore, any non-resident foreign national who shall take up employment in violation of the provision of this Title and its implementing rules and regulations, as well as the employer or the responsible person representing the employer, shall be punished with a fine of PHP50,000 to PHP100,000, or imprisonment of six months to six years, or both such fine and imprisonment at the discretion of the court.

In addition, the foreign national shall be subject to deportation after service of his or her sentence, the bill provides.

The DOLE Secretary is authorized to impose a fine of PHP50,000 for every year or fraction thereof to both the foreign national found working without valid employment permit and to the employer.

As to the amendment of Article 42 of PD 442, which pertains to submission of list, the bill provides that any employer employing non-resident foreign nationals shall submit a list of such nationals to the Regional Director of the DOLE which has jurisdiction on the employer, within 30 days after hiring, indicating their names, citizenship, foreign and local addresses, nature of employment and status of stay in the country.

Nograles, principal author of HB 5470, said the bill is in line with the country’s commitment to the World Trade Organization- General Agreement on Trade in Services (WTO-GATS) to review the restrictions in Title ll, Book l of PD 442, as amended.

“The main restriction in the hiring of a foreign national is the Labor Market Test (LMT) which is used to determine the non-availability of a qualified, able and willing person in the Philippines to do the services for which the foreign national is being hired. It is comparable to an Economics Needs Test implemented by other countries,” said Nograles.

In addition to the WTO-GATS, Nograles said the country is also a member-state of the Association of Southeast Asian Nations (ASEAN), and is likewise obliged to review the said provision in preparation for the envisioned regional integration in 2015 as foreseen in the ASEAN Economic Community (AEC) Blueprint, which ASEAN member countries committed to the AEC in 2007.

“In conclusion, as the country strives to meet its commitments in the WTO-GATS, AEC and other bilateral, regional and multilateral agreements, it is expected to at least review the affected national laws and policies. It is a timely initiative to update the Labor Code of the Philippines as the country modernizes as part of a global community. It is also a show of good faith to countries, regions, and international bodies the country has agreements with, that our nation is willing to accommodate changes in order to meet its commitments. The proposed amendments are beneficial to the country as it paves the way to an improved but still protective policy on employment of foreign nationals,” said Nograles.

House Bill 5470 is co-authored by Reps. Emmeline Y. Aglipay-Villar (Party-list, Diwa), Florencio T. Flores, Jr. (2nd District, Bukidnon) and Deogracias B. Ramos, Jr. (2nd District, Sorsogon).