Tulfo bill would set higher severance for AI-related layoffs

Tulfo’s bill would add provisions to the Labor Code after Article 298, which covers layoffs for business reasons such as redundancy.[1] It defines AI as technologies or systems that enable computers and machines to emulate human intelligence and problem-solving capabilities.[1] The proposal would require that the technology be genuinely introduced and adopted in good faith, for a valid purpose such as cutting costs or improving efficiency.[1] Those conditions are part of a bill that remains pending in the Senate, rather than current law.[1]

The bill would permit an AI-related dismissal only if the employer has no other option.[1] It would also require employers to use fair and reasonable criteria when choosing which employees to dismiss.[1] Alongside those limits, employers would have to consult workers about ways to avoid or reduce job cuts.[1] The proposal thus addresses both the justification for adopting AI and the process for selecting employees if the adoption leads to layoffs.[1]

The proposed separation pay would be no less than two months’ pay, or two months’ pay for every year of service, whichever amount is higher.[1] A fraction of at least six months would count as a full year of service.[1] The bill gives the example of a worker with 10 years of service receiving at least 20 months’ pay.[1] It would not reduce higher benefits available under existing laws, company policies or collective bargaining agreements.[1] Employers would also need to notify DOLE and employee representatives at least six months before a planned AI-related layoff.[1]

The proposal would require employers to provide or facilitate reskilling for new roles in the same field and offer other jobs within the company where possible.[1] It would also require a transition program to be developed with DOLE.[1] If enacted, the bill would give DOLE 30 days from the law’s effectivity to issue implementing rules.[1] For now, these measures are proposed requirements: the bill has not completed the Senate process and is not yet law.[1]