As AI Changes Workplaces, What Protections Exist for Filipino Workers?

What Filipino workers and employers should know — and what the law currently says.

Artificial intelligence is already changing how many workplaces operate, especially in business process outsourcing companies (BPOs) and other technology-driven industries. Naturally, many workers are asking difficult questions about job security, while employers are trying to understand how to adopt new tools responsibly and competitively.

What is important to know is that Philippine labor law already provides safeguards for both employers and employees during major workplace transitions — including automation and restructuring.

The CONCERN is real — but so is the law

A lot of people are quietly worried about this right now, especially those working in BPOs, call centers, and other desk-based industries. The question worth asking out loud: can your employer actually let you go just because a chatbot or an AI system can now do your job? And is that even legal?

The short answer is: not without following the rules. Even in 2026, with no dedicated AI law yet on the books, Philippine labor law already gives workers significant protection. Employers who skip the proper process — even with a legitimate business reason — are exposed to serious legal liability.

What employers must STILL COMPLY WITH under the Labor Code

When a company restructures operations and eliminate positions, this generally falls under redundancy — one of the authorized causes for termination under Article 298 of the Labor Code. Notably, though, the word “authorized” does not mean automatic. It comes with strict requirements that employers must follow.

Skipping this process — even if the redundancy itself is legitimate — can expose an employer to a finding of illegal dismissal. That entitles the worker to reinstatement and full back wages. The Supreme Court has consistently held that both the substantive ground and procedural due process must be satisfied. One without the other is not enough.

Where the government stands on AI

The Philippine government’s position is not anti-AI. In May 2025, President Marcos approved the National AI Strategy for the Philippines (NAIS-PH), a whole-of-government framework running through 2028.[1] Its philosophy is centered on what it calls “inclusive innovation” — AI as a tool for national development, not a mechanism for pushing workers out.

To back this up, the government launched Project UNLAD (Uplifting National Labor through Advanced Digital Upskilling), a ₱740-million program run jointly by IT & Business Process Association of the Philippines (IBPAP), the Department of Information and Communications Technology (DICT), and the Technical Education and Skills Development Authority (TESDA) to retrain workers for higher-value, AI-assisted roles.[2] Meanwhile, the Philippine Economic Zone Authority (PEZA) launched an AI academy inside its economic zones, rolled out initially in Cebu, where about 5,000 AI training certificates have already been issued to workers within export-oriented zones, in partnership with TESDA and private-sector collaborators.[3] The message from government, at least for now, is clear: the goal is to move Filipino workers up, not out.

Can AI Alone be Reason for Termination?

The Labor Code does not yet specifically regulate AI-driven decision-making in employment. There is, however, a pending bill in Congress directly addressing this gap. House Bill No. 9448, or the Protection of Labor Against Artificial Intelligence Automation Act, proposes to prohibit employers from using AI as the sole basis for hiring, evaluating, or terminating employees. It would also ban AI-driven displacement of workers unless the employer provides equivalent alternative employment.[4]

At present, these proposals remain under legislative consideration and do not change existing legal requirements. Employers adopting AI tools must still comply with established labor standards, while employees continue to enjoy protections under current law.

The bigger picture

Despite the understandable anxiety, the data is more nuanced than the headlines suggest. The Philippine BPO industry actually added over 80,000 jobs in 2025 even as AI adoption accelerated.[5]

Many experts expect the near-term impact of AI to involve task transformation rather than immediate wholesale job elimination. In many workplaces, automation is shifting demand toward more specialized and higher-value work instead of simply removing entire roles.

That said, the structural risk is real and should not be dismissed. The IMF has flagged that some sectors, including the BPO industry, may face greater exposure to automation-related disruption. With the sector accounting for around 8% of GDP, this is not just a personal concern for individual workers; the conversation also extends to broader national economic policy.

For employers, the legal and operational issues surrounding AI adoption are rarely solved through abrupt workforce reductions alone. Many companies globally are instead exploring hybrid approaches — using AI to augment existing teams, retrain employees, and improve productivity while preserving institutional knowledge and workforce stability.

For Workers

• Employees remain entitled to procedural due process and applicable separation benefits during legitimate redundancy exercises.
• Workers should keep records of employment contracts, performance reviews, and communications relating to restructuring or workplace changes.
• Employees who believe they were dismissed without proper legal basis or procedure may seek assistance from DOLE or the National Labor Relations Commission (NLRC).
• Upskilling and familiarity with AI-assisted tools may also help workers remain competitive as industries evolve.

For Employers

• Companies considering automation or restructuring should ensure compliance with redundancy and due process requirements under the Labor Code.
• Clear communication with employees during periods of transition can help reduce uncertainty and workplace disputes.
• Where feasible, retraining, redeployment, and AI-assisted upskilling initiatives may offer more sustainable long-term solutions than abrupt displacement.
• AI should be viewed not only as a cost-cutting tool, but also as a means of improving operations while supporting workforce development.

As AI continues to reshape industries, both employers and employees will need to adapt — but technological change does not suspend existing labor rights and responsibilities. Philippine law continues to require that workplace transitions be carried out fairly, lawfully, and with due regard for both business realities and worker protection.

At Peralta Jimenez Law Firm, we recognize that navigating the intersection of artificial intelligence and employment law is not only legally complex but also deeply personal. Whether you are an employer seeking to structure a lawful redundancy process or an employee dealing with issues that impact your livelihood, reputation, and professional standing, you do not have to figure it out alone.

Protect your business or your career. Call us today for a legal consultation.

[1] https://www.imf.org/-/media/files/publications/wp/2025/english/wpiea2025043-print-pdf.pdf
[2] https://www.oecd.org/en/publications/oecd-economic-surveys-philippines-2026_f0e0c581-en/full-report/sustaining-growth-and-stability-amid-headwinds_a8f57a2c.html
[3] https://admin.ibpap.org/storage/hub-resources/1fntWJGQKvZg4CfwP4yfXs0Jr1n85DVR1vYXJvSn.pdf
[4] https://pco.gov.ph/news_releases/pbbm-make-best-use-of-ai-for-national-devt/
[5] https://www.philstar.com/lifestyle/on-the-radar/2026/02/06/2505961/steven-bartlett-sparks-talks-ambition-wellbeing-filipinos
[6] https://www.philstar.com/the-freeman/cebu-business/2026/04/22/2522692/philippine-launches-ai-academy-ecozones
[7] https://issuances-library.senate.gov.ph/bills/house-bill-no-9448-19th-congress
[8] https://www.bworldonline.com/top-stories/2025/09/24/700403/it-bpm-industry-still-bullish-on-growth-2/

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