Philippine Sen. Erwin Tulfo has introduced legislation that would require employers to provide six months’ advance notice, mandatory reskilling opportunities and doubled separation pay before dismissing employees due to artificial intelligence automation.
Senate Bill No. 2563 seeks to amend Article 298 of Presidential Decree No. 442, known as the Labor Code of the Philippines, by establishing statutory hurdles companies must clear before declaring positions redundant due to technological adoption.
Under the proposed measure, displaced personnel would receive separation pay equivalent to at least two months’ salary or two months’ salary for every year of service, whichever is higher. Current Philippine labor regulations mandate a minimum of one month of pay or one month of pay per year of service for terminations resulting from redundancy or labor-saving automation.
To execute layoffs tied to automated software or AI systems, employers would have to satisfy five legal conditions:
- Prove a bona fide installation or deployment of the technology
- Demonstrate good-faith adoption
- Establish a valid economic justification, such as cost reduction or operational efficiency
- Show that no reasonable alternative exists other than workforce reduction
- Apply fair and reasonable criteria when selecting personnel for termination
The measure also directs employers to conduct advance consultations with staff and formally notify the Department of Labor and Employment at least six months prior to scheduled dismissals.
“As companies adopt AI, employees whose jobs become redundant risk losing not only their employment but also their means of supporting their families,” Tulfo said in the bill’s explanatory note. “Technological progress is inevitable, but Filipino workers should not be left behind or made to bear its costs alone.”
Under Article 298 of the existing Labor Code, companies dismissing staff due to redundancy or labor-saving devices must serve written notice to both the worker and DOLE at least one month before the effective date. Tulfo’s bill singles out AI integration for stricter compliance standards.
Senate Bill No. 2563 remains pending at the committee level in the Senate. The proposal must clear committee scrutiny, three chamber readings, passage of a counterpart bill in the House of Representatives and presidential approval before it can become law.
This article is published on BitPinas: AI Layoff Bill: Erwin Tulfo Files Senate Measure to Shield Philippine Workers from Automation
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