House Bill 3556 – regulating outsourcing – to become part of labour code

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House Bill 3556 – Regulating Outsourcing of Work to Become Part of Labor Code –

A new bill was introduced in the house this week – House Bill 3556, also known as An Act Regulating Outsourcing of Work, will amend Article 106 of the Philippine Labor Code.

The amendment will redefine job contracting and labour-only contracting and to regulate outsourcing of work – possibly creating a major issue for BPO companies throughout the Philippines.


The new bill was introduced by Baguio Representative Mark Go. He said” “It is the intent of my bill to redefine and simplify job contracting and labour-only contracting under the term outsourcing of work.

“Under this bill, outsourcing of work will refer to the contracting out of work or service by an employer to a contractor or sub-contractor whose employees perform functions and activities which are directly or indirectly related to the principal business of the employer.”

Go also said there was a need to resolve recurring problems in the practice of contractualisation, adding that his bill would be a “win-win” for both employees and employers.


The bill was introduced after Go gave a privilege speech, saying: “I am hoping that through this bill, both workers’ and employers’ rights will be protected. The bill seeks to regulate outsourcing of work by providing conditions for its practice and penalties for any violation.

“These include no termination without due process; outsourced employees must not exceed 20 per cent of the total workforce of any company; and payment of separation pay for outsourced employees equal to one month salary at the end of the contract period.”

“Service contracting is the current trend and we must be able to compete with neighbouring countries. We must make changes in the light of current domestic situation and global order that will be beneficial for our employees, employers and the economy.’”