Senator Erwin Tulfo has filed a bill that sets conditions for companies that lay off workers because of artificial intelligence (AI). It includes six months’ notice to the Department of Labor and Employment (DOLE) and a minimum amount of separation pay.
Tulfo, chairperson of the Senate Committee on Social Justice, Welfare, and Development, filed Senate Bill (SB) No. 2563. It amends Article 298 of the Labor Code of the Philippines to set conditions for when an employer may terminate employees because of AI and to guarantee compensation for those affected.
Under the bill, an employer may terminate workers because of AI only if all of the following conditions are met: AI technologies or systems are genuinely introduced or implemented; the implementation is done in good faith; the purpose is valid, such as cutting costs, improving efficiency, or another justifiable economic reason; the employer has no other option than to introduce AI and terminate the employee; and the criteria for choosing which employees to terminate are fair and reasonable. In practice, a company that replaces staff with an AI system would have to show it met each condition before laying anyone off.
Employers must notify DOLE at least six months before the terminations take effect. The bill also requires consultations with affected workers. Employers must also make every effort to reskill existing workers before resorting to layoffs, and must provide opportunities for redeployment.
Workers who are terminated would receive separation pay of at least two months’ pay, or two months’ pay for every year of service, whichever is higher.
In the bill’s explanatory note, Tulfo wrote: “Technological progress is inevitable, but Filipino workers should not be left behind or made it bear its costs alone.”
In a statement on Sunday, he said: “There must be a proactive effort to keep workers away from termination just because AI comes in.”
The explanatory note also states: “As companies adopt AI, employees whose jobs become redundant risk losing not only their employment.”
On Friday, Malacañang acknowledged that AI may displace workers but said the technology could also create new opportunities for Filipinos, according to GMA News.
The reports available at the time of writing did not state penalties for employers who violate the proposed rules, how the bill would be enforced, or how many Philippine workers have lost jobs to AI. They also did not say which industries the measure would cover.
The bill has been filed in the Senate. No schedule for committee hearings has been announced.
