Senate Bill 2563: Protection Against AI Layoffs
7 min read
This is for Filipino employees, virtual assistants, employers and HR teams wondering what happens to people when AI takes over tasks. It explains Senate Bill No. 2563, a proposal filed in the Senate, what it would require if enacted, and what to watch. It also opens a new series that follows the bill.
Key Takeaways
- SB 2563 proposes safeguards for employees displaced by AI, including good faith, a valid economic reason and fair selection.
- The proposal emphasizes alternatives to termination, including reskilling, and calls for six months' notice to DOLE.
- The bill is not yet a substitute for existing labor law. Readers should follow its legislative status.
The short answer
Senate Bill No. 2563 is a proposed amendment to the Philippine Labor Code, filed by Sen. Erwin Tulfo. It would set conditions employers must meet before ending jobs because of AI, such as good faith, a valid economic reason, no reasonable alternative, fair selection, reskilling efforts, six months' notice to DOLE and higher separation pay.[1][2] As of November 10, 2026, it has been filed and is reported to be pending in committee. It is not law.[3]
Picture a Cebu company that adds an AI tool to draft customer replies and sort invoices. Part of what three people used to do is now automated. The question is not only whether the tool works. It is what happens to those three people.
That question is behind the bill. Tulfo, who chairs the Senate Committee on Social Justice, Welfare and Rural Development, said workers should not bear the costs of technological progress alone.[1] Introducing AI does not by itself settle whether a dismissal is lawful. The proposal is about the process an employer would have to follow.
About this series: SB 2563 Watch
This is Episode 1 of SB 2563 Watch, a short series inside Zero-Ten Park's VA Guide Series. It follows one bill from filing onward, in plain language, and keeps what is proposed separate from what is law today. It is written for employees and VAs, employers, HR teams and business owners.
Episode 1: the basics You are here
What SB 2563 proposes, what it could mean for each type of reader, and what has not changed.
Later episodes
Updates when the bill moves, such as committee action or amendments, and how its proposals compare with existing redundancy rules. Topics will follow what happens to the bill. We will not predict whether it passes.
How each episode works
Proposals are labeled as proposals, claims are linked to sources, and every article says when it was last checked.
New to the employment basics? Our earlier VA guides on contractor vs employee and on SSS, PhilHealth and Pag-IBIG cover the ground this series builds on.
Find your path: how could SB 2563 affect your situation?
What is Senate Bill No. 2563?
SB 2563 is a measure filed by Sen. Erwin Tulfo to amend the Labor Code with rules on termination caused by installing or implementing AI technologies.[1][2] Reports describe it as amending Article 298, the provision on closure of establishments and reduction of personnel. That article covers labor-saving devices, redundancy (a job that is more than the business reasonably needs) and retrenchment.[3]
Today, an employer ending jobs for redundancy or labor-saving devices must give written notice to the worker and DOLE at least one month ahead, and pay at least one month's pay or one month's pay per year of service, whichever is higher.[4] The bill would add stricter, AI-specific steps. News summaries differ in detail, so check the official text.
What does the bill propose?
These are proposed provisions as reported, not existing obligations. SB 2563 is not law.
| Proposed safeguard | What it could mean in practice |
|---|---|
| Genuine AI implementation | AI adoption would have to be bona fide, not a pretext for dismissing employees.[1] |
| Good faith | Employers would need to implement AI in good faith.[1] |
| Valid economic purpose | Reported reasons include cost reduction, improved efficiency or other justifiable economic reasons.[2] |
| No reasonable alternative | Termination would be framed as a last resort, with the employer showing no reasonable alternative exists.[2] |
| Fair and reasonable selection criteria | Employers would need a fair basis for deciding which employees are affected.[1] |
| Reskilling before layoffs | Employers would be expected to prioritize reskilling existing employees before resorting to termination.[2] |
| Advance notice | At least six months' notice to DOLE before intended AI-related termination. Reports also mention consultation with affected workers.[3] |
| Separation pay | At least two months' pay, or two months' pay for every year of service, whichever is higher.[2] |
Swipe sideways on small screens.
What could employers and HR teams miss?
If the bill were enacted, planning would matter as much as the technology. These are points to think about now, not confirmed legal requirements.
- AI implementation does not necessarily mean every affected role is eliminated. Many roles change rather than disappear.
- The proposal emphasizes exploring alternatives before termination.
- Reskilling and redeployment are workforce-planning questions, not just training programs.
- Fair selection criteria could become an important area of documentation.
- A six-month notice period, if enacted, could significantly affect project and workforce timelines.
- Existing obligations, including one-month notice and separation pay for authorized causes, remain relevant while the bill is pending.[4]
Planning workforce or hiring changes in the Philippines? We are happy to talk through your employment setup and HR processes.
Book a consultationWhat should employees know?
The proposal is meant to address AI-related job displacement. Employees should not assume it already gives new enforceable protections. Until it becomes law, your contract and existing Labor Code rules apply.
- Understand your current employment status and contract.
- Keep records of formal communication about role changes.
- Ask whether reskilling or redeployment options are being considered.
- Follow official updates on the bill.
- Seek qualified advice for a specific employment dispute.
VAs and freelancers: termination rules apply to employment relationships, and the real working arrangement can matter more than the label. See our guide to contractor vs employee.
What has not changed yet, and what remains uncertain
SB 2563 is a proposal. Its provisions are not current law unless and until the legislative process is completed and the measure takes effect.
- Existing rules still apply. Article 298 still sets one month's written notice to workers and DOLE, and separation pay of at least one month's pay or one month's pay per year of service, for redundancy or labor-saving devices.[3][4]
- The bill has not replaced the redundancy, labor-saving device, notice or separation-pay rules.
- Neither employers nor employees can treat the proposed steps, such as six months' notice, as enforceable today.
- Whether and how existing rules apply to a particular AI rollout depends on the facts of the case.
What happens next?
Reports say the bill must clear committee consideration and three Senate readings, win approval of a counterpart measure in the House of Representatives, and receive presidential approval before becoming law.[3] Amendments are possible along the way. We are not predicting whether or when it will pass.
Related proposals have also been filed in the House, such as House Bill No. 1899.[5] Watch for committee action, changes to the text, and the Senate's official record of the bill's status.[6]
FAQ
Has Senate Bill No. 2563 become law?
No. Senate Bill No. 2563 has been filed as a proposed measure and is reported to be pending in committee. It would need to pass the Senate and House of Representatives and receive presidential approval before becoming law. Until then, it should not be treated as enacted law, and its proposed requirements are not enforceable.
Can employers already dismiss employees because of AI?
Only within existing law, and it depends on the facts. SB 2563 is not law. Article 298 of the Labor Code recognizes labor-saving devices and redundancy as authorized causes, with written notice to the worker and DOLE and separation pay. For a specific case, ask DOLE or a labor lawyer.
Does SB 2563 require employers to reskill employees before AI-related layoffs?
Not yet, because the bill is not law. Reskilling is a key proposed safeguard: reports say employers would have to prioritize reskilling existing employees before resorting to termination. Any current duty comes from existing labor law and employment agreements, not this bill. If it is enacted, the final text would set the actual requirement.
Questions about employing people in the Philippines?
Zero-Ten Park is a Cebu-based co-working space and Employer of Record (EOR) provider. Our EOR service supports businesses employing people in the Philippines through local employment administration and HR support, within the agreed scope.
An EOR does not by itself resolve AI-related termination questions or guarantee compliance. For a specific legal question, speak with a qualified labor lawyer or DOLE. To talk through your own setup, book a consultation.
Sources
Reviewed November 10, 2026. SB 2563 was filed days before this review, so details may change. We could not retrieve the official Senate page for the bill, so its provisions here rely on news reports. Confirm against the official text.
- Neil Jayson Servallos, The Philippine Star, Bill vs AI job displacement filed (November 9, 2026): filing, sponsor, proposed conditions, notice and reskilling. Checked November 10, 2026.
- Katlene O. Cacho-Laurejas, SunStar Cebu, Bill seeks safeguards for workers displaced by AI (November 9, 2026): economic reasons, alternatives, selection, separation pay. Checked November 10, 2026.
- Riza Dagoc, TokenPost, Philippine Bill Would Require Six-Month Notice to DOLE for AI Layoffs (November 9, 2026): Article 298, committee status, steps to enactment, comparison with current rules. Checked November 10, 2026.
- Supreme Court of the Philippines, Navotas Shipyard Corp. v. Montallana, G.R. No. 190053 (March 24, 2014): quotes the notice and separation-pay text of Article 283, now numbered Article 298. Checked November 10, 2026. Confirm the current text with DOLE.
- House of Representatives, House Bill No. 1899, Twentieth Congress: a House proposal on termination due to AI automation. Checked November 10, 2026.
- Senate of the Philippines, official website: bill text and legislative status. Check directly for updates.
- DOLE, official website: guidance on authorized causes, notice and separation pay under the Labor Code. Confirm current rules.
- Zero-Ten Park, Employer of Record service page (last modified September 2, 2026; checked November 10, 2026): EOR scope.
General educational information only. Not legal advice. This article describes a proposed bill, not current law.
