Sen. Erwin Tulfo has filed a bill seeking to require employers to reskill workers before resorting to AI-related layoffs and provide higher separation pay for employees whose termination is justified.
Senate Bill No. 2563 proposes adding a new article to the Labor Code setting conditions for terminating employees because of the installation or implementation of artificial intelligence (AI) technologies.
“As companies adopt AI, employees whose jobs become redundant risk losing not only their employment but also their means of supporting their families,” Tulfo wrote.
Under the proposed measure, employers must establish that the introduction or implementation of AI is genuine, undertaken in good faith, and justified by cost savings, efficiency improvements, or other valid economic reasons.
Employers must also show that no other option is available apart from adopting AI and terminating affected employees. The selection of workers to be laid off must follow fair and reasonable criteria.
Employees whose termination meets these conditions would receive separation pay equivalent to at least two months’ pay or two months’ pay for every year of service, whichever is higher.
The bill would also require employers to notify the Department of Labor and Employment (DOLE) at least six months before the intended termination.
Employers introducing AI systems that could lead to job losses would be required to reskill their existing employees before resorting to layoffs.
“There must be a proactive effort to keep workers away from termination just because AI comes in. We are not only talking about careers here, we are concerned with livelihood and lives of the employees’ families,” Tulfo stated.
