The House of Representatives has approved on third and final reading a bill that provides protection and relief to over 1.5 million Filipino freelance workers who may fall prey to abusive employers due to a lack of a grievance system in the digital economy.
With an overwhelming 250 votes, the chamber passed House Bill (HB) 6718 or the “Freelance Workers Protection Act,” which also mandates the institutionalization of benefits such as night differential and hazard pay for freelance workers whenever they are applicable.
“As the digital economy expands, the number of Filipino freelance workers also increases. And if no laws are in place to protect our gig economy freelancers or to establish a formal grievance system to enforce their rights, they will be susceptible to all kinds of abuse,” Speaker Martin G. Romualdez said.
“This is the reason a majority of lawmakers in the House threw their support behind this measure. As a sector with an exploding growth spurt in the coming years, they need protective cover under our laws to ensure their transition as a significant driver of our economy,” Romualdez added.
Freelance workers in the Philippines account for over 1.5 million people working in the gig economy.
HB 6718 defines a freelance worker as any natural person or entity composed of no more than one natural person, whether incorporated under the Securities and Exchange Commission, registered as a sole proprietorship under the Department of Trade and Industry (DTI) or registered as self-employed with the Bureau of Internal Revenue (BIR).
This person must be “hired or retained to provide services, in exchange for compensation, as an independent contractor to do work according to one’s own methods and without being subjected to the control of the hiring party, except only as to the results of the work.”
The measure mandates that a written contract be executed by any hiring party with the freelance worker that contains the extent of the services retained or obtained and important details such as the amount of compensation and the schedule of payment.
“No modification of the terms of the contract shall be enforceable unless signed by both the hiring party and the freelance worker,” the bill read.
Also, the measure listed down unlawful practices such as engaging a freelance worker without a contract or payment of compensation later than 15 days after the date stipulated by both parties.
These unlawful practices carry a fine of not less than P50,000 but not more than P500,000.
“Any person or such person’s authorized representative aggrieved by a violation of this Act may file a complaint with the DoLE, through the Undersecretary for Workers with Special Concerns, without prejudice to the filing of civil action in appropriate cases,” HB 6718 read.
“The DoLE may, at any time after the filing of a complaint, attempt to resolve the complaint by any method of dispute resolution, including mediation and conciliation. If a conciliation agreement is entered into, the DoLE shall embody such agreement in an order and serve a copy thereof upon all parties to the conciliation agreement,” it added.
Also, Sec. 19 of the bill mandates that freelancers shall be entitled to tax relief “within the threshold provided under the National Internal Revenue Code of 1997, as amended, and Republic Act No. 9178, otherwise known as the “Barangay Micro Business Enterprises (BMBEs) Act of 2002.”
The BIR is also mandated to designate a special lane or assistance desk to assist freelancers on their inquiries and in complying with the processing of documents, including the registration requirement under the bill.
An education and information campaign is also decreed under HB 6718 to be spearheaded by DoLE in coordination with DTI, BIR and LGUs to educate freelancers about their rights and obligations under the measure, the proper procedure for registration as a taxpayer, and the modes of legal redress afforded to them.
Reps. Luis Raymund Villafuerte, Miguel Luis Villafuerte, Tsuyoshi Anthony Horibata, Nicolas C. Enciso VIII, Joey Sarte Salceda were among the principal authors of the measure.