Philippine senator files bill to protect workers from AI layoffs

A legislative response to automation

Philippine Senator Erwin Tulfo has introduced Senate Bill No. 2563 to amend the existing Labor Code. The primary goal of this legislation is to establish clear and fair conditions for Filipino workers who may be replaced by artificial intelligence (AI). Tulfo, who chairs the Senate Committee on Social Justice, Welfare, and Development, argues that technological progress should not leave workers behind.

The senator highlighted that as companies integrate AI, employees risk losing both their jobs and their ability to support their families. He stated that while technological progress is unavoidable, workers should not be left to struggle because they were removed from their roles without sufficient protection. The bill seeks to create a framework where automation serves as a tool for growth rather than a mechanism for sudden, unchecked job losses.

This legislative move comes as global tech firms increasingly cite AI as a reason for significant workforce reductions. By proposing these safeguards, the bill aims to balance the interests of corporate efficiency with the social necessity of maintaining livelihoods. It positions the government as a mediator in the growing tension between rapid technological adoption and labor rights.

Mandatory conditions for layoffs

Under the proposed bill, companies would not be allowed to lay off employees for AI automation without meeting specific criteria. Employers must first demonstrate that the introduction of AI technologies was done in good faith and can be proven to either reduce costs or improve operational efficiency. The bill insists that retrenchment must be treated as a last resort, meaning companies must explore all other viable solutions before cutting staff.

Furthermore, the selection process for which employees are let go must be fair and reasonable. The bill seeks to prevent arbitrary decisions and ensure that the most vulnerable workers are not disproportionately affected by the transition to AI-enhanced systems. This creates a high bar for corporations, requiring them to justify the necessity of human replacement with concrete data and transparent logic.

If a company determines that there is no other option but to replace workers with AI, they must provide a significant heads-up. The bill mandates that employers alert the Department of Labor and Employment at least half a year before any such terminations occur. This timeframe is intended to give both the government and the affected workers time to prepare for the transition.

Financial and career protections

The bill includes specific financial requirements for companies that do proceed with AI-related layoffs. Retrenched workers would be entitled to a payout equivalent to a minimum of two months' pay or two months' pay for every year of service, whichever amount is greater. This ensures that displaced workers have a financial cushion as they navigate the transition out of their current roles.

Beyond immediate payments, the legislation places a responsibility on employers to assist in the long-term career paths of their former staff. Companies would be required to provide opportunities for reskilling and redeployment to those whose jobs have been made redundant. This means the employer must help the worker learn new skills that are relevant to the modern, AI-integrated economy.

Senator Tulfo emphasized that the focus of the bill is not just on individual careers but on the lives of the employees' families. By requiring proactive efforts to keep workers employed, the bill seeks to prevent the sudden destruction of livelihoods. It shifts the burden of adjustment from the individual worker to the corporation that is profiting from the new technology.

The global context of AI cuts

The push for these protections is fueled by a wave of mass retrenchments across the global tech landscape. For instance, Meta reported in April that it was cutting roughly 10% of its staff, which was about 8,000 people, as it increased spending on AI technology. These large-scale cuts serve as a primary example of the trend the bill aims to regulate.

Other major firms have followed similar paths, with Oracle shedding nearly 13% of its workforce, or about 21,000 jobs, to enhance operations through AI. Reports from various news outlets have identified several other companies involved in AI-driven job cuts, including Pinterest, Dow, Amazon, PayPal, Coinbase, Indeed, Glassdoor, and HP. These examples illustrate the scale of the disruption occurring in the private sector.

While the Philippine government has not specified which local industries are most at risk, the trend is clearly visible in the international market. The bill serves as a preemptive measure to ensure that the Philippines does not mirror these global patterns without any legal safeguards. It seeks to create a structured environment where the benefits of AI are shared more equitably with the workforce.

National strategy and upskilling

In response to these changes, the Philippine government is also focusing on education and preparation. Palace Press Officer Claire Castro noted that while the specific industries at risk are not yet fully defined, the administration is aware of the shift. President Ferdinand Marcos Jr. has urged Filipino workers to actively upskill and reskill to remain competitive in what he calls the 'AI-era.'

The government's stance suggests a two-pronged approach: providing the legal framework for worker protection while simultaneously encouraging individual adaptation. While the bill provides a safety net for those who are displaced, the administration's call for upskilling suggests a need for workers to proactively seek new competencies. This creates a landscape where both policy and personal initiative are expected to play roles in navigating the transition.

Moving forward, the success of Senate Bill No. 2563 will depend on how it is balanced against the needs of businesses to remain competitive. If passed, it could set a precedent for how other nations handle the intersection of labor law and rapid technological advancement. The ultimate goal remains ensuring that the Filipino workforce can thrive alongside AI rather than being sidelined by it.