f Social Legislation

ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

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LAST-MINUTE NOTES ON THE 2012 BAR EXAMINATION IN LABOR LAW BASED ON THE SUPREME COURT-PRESCRIBED SYLLABUS

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Prof. Joselito Guianan Chan F. SOCIAL LEGISLATION

[These 8-part Notes discuss all topics/sub-topics in the Supreme Court-prescribed Syllabus for Labor Law]

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F. SOCIAL LEGISLATION

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2. GSIS (RA 8291) a. Coverage b. Exclusions from coverage c. Benefits d. Beneficiaries

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1. SSS Law (RA 8282) a. Coverage b. Exclusions from coverage c. Benefits d. Beneficiaries

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3. Limited Portability Law (RA 7699) 4. Employee’s Compensation – Coverage and when compensable

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1. COVERAGE.

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=========================== TOPIC UNDER THE SYLLABUS: F. SOCIAL LEGISLATION 1. SSS Law (RA 8282) a. Coverage b. Exclusions from coverage c. Benefits d. Beneficiaries ===========================

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b. Compulsory coverage of self‐employed. Coverage in the SSS shall also be compulsory upon such self‐employed persons as may be determined by the SS Commission under such rules and regulations as it may prescribe, including but not limited to the following: 1. All self‐employed professionals; 2. Partners and single proprietors of businesses; 3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term "employee" in Section 8 (d) of this Act; 4. Professional athletes, coaches, trainers and jockeys; and 5. Individual farmers and fishermen. Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self‐employed persons.

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d. Effective date of coverage. 1. EMPLOYEES: Compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment 2. SELF‐EMPLOYED: The compulsory coverage of the self‐employed person shall take effect upon his registration with the SSS.

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c. Voluntary coverage. 1. Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a voluntary basis. 2. Filipinos recruited by foreign‐based employers for employment abroad may be covered by the SSS on a voluntary basis.

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a. Compulsory coverage. 1. All employees ‐ not over sixty (60) years of age and their employers. 2. Domestic helpers ‐ monthly income shall not be less than P1,000.00 per month

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TOPICS UNDER THE SYLLABUS

LABOR LAW: F. SOCIAL LEGISLATION Prof. Joselito Guianan Chan

www.chanroblesbar.com : www.chanroblesbar.com.ph



e. Effect of separation from employment. When an employee under compulsory coverage is separated from employment, his employer’s contribution on his account and his obligation to pay contributions arising from that employment shall cease at the end of the month of separation, but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to pay the total contributions to maintain his right to full benefit.

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A. Monthly Pension. The monthly pension shall be the highest of the following amounts: (1) The sum of the following: (i) P300.00; plus (ii) 20% of the average monthly salary credit; plus (iii) 2% of the average monthly salary credit for each credited year of service in excess of 10 years; or (2) 40% of the average monthly salary credit; or (3) P1,000.00: Provided, That the monthly pension shall in no case be paid for an aggregate amount of less than 60 months.

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2.1. MONTHLY PENSION.

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2.2. DEPENDENTS’ PENSION.

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B. Minimum Pension. The minimum pension shall be: (1) P1,200.00 for members with at least 10 credited years of service; and (2) P2,400.00 for those with 20 credited years of service.

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The following are the benefits provided under the SSS Law: a. Monthly pension b. Dependents’ pension c. Retirement benefits d. Death benefits e. Permanent disability benefits f. Funeral benefit g. Sickness benefit h. Maternity leave benefit

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2. BENEFITS.

2.3. RETIREMENT BENEFITS.

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Where monthly pension is payable on account of death, permanent total disability or retirement, dependents’ pension equivalent to 10% of the monthly pension or P250.00, whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding 5, beginning with the youngest and without substitution: Provided, That where there are legitimate or illegitimate children, the former shall be preferred.

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A. MONTHLY PENSION. A member who has paid at least 120 monthly contributions prior to the semester of retirement and who: (1) has reached the age of 60 years and is already separated from employment or has ceased to be self‐ employed; or (2) has reached the age of 65 years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first 18 monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS. The monthly pension of a member who retires after reaching age 60 shall be the higher of either: (1) the monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be self‐employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires.

B. LUMP SUM BENEFIT. A covered member who is sixty 60 years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own.

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f. Effect of interruption of business or professional income. If the self‐employed realizes NO income in any given month, he shall not be required to pay contributions for that month. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member.

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C. SUSPENSION OF MONTHLY PENSION. The monthly pension shall be suspended upon the reemployment or resumption of self‐employment of a retired member who is less than 65 years old. He shall again be subject to deduction for SSS contributions and his employer shall pay its corresponding SSS contribution.

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D. DEATH OF RETIRED MEMBER. Under Section 12‐B [d] of R.A. No. 8282, it is provided that upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within 60 months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the 5‐year guaranteed period, excluding the dependents’ pension.

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2.4. DEATH BENEFITS.

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(NOTE: The Supreme Court, in its en banc decision in Dycaico v. SSS, [G.R. No. 161357, Nov. 30, 2005], declared the proviso “as of the date of his retirement” in Section 12‐B [d] of R.A. No. 8282, (See above) which qualifies the term “primary beneficiaries,” as unconstitutional for it violates the due process and equal protection clauses of the Constitution.)

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2.5. PERMANENT DISABILITY BENEFITS.

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Upon the death of a member who has paid at least 36 monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to 36 times the monthly pension. If he has not paid the required 36 monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher.

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C. SUSPENSION OF MONTHLY PENSION. The monthly pension and dependents’ pension shall be suspended upon the: 1. reemployment; or 2. resumption of self‐employment; or 3. recovery of the disabled member from his permanent total disability; or 4. failure to present himself for examination at least once a year upon notice by the SSS.

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B. WHEN TREATED AS NEW MEMBER. A member who: (1) has received a lump sum benefit; and (2) is reemployed or has resumed self‐employment not earlier than 1 year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member.

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F. PERMANENT PARTIAL DISABILITY. If the disability is permanent partial, and such disability occurs before 36 monthly contributions have been paid prior to the semester of disability, the benefit shall be such percentage of the lump sum benefit described in the preceding paragraph with due regard to the degree of disability as the SS Commission may determine.

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E. DISABILITIES CONSIDERED PERMANENT TOTAL. The following disabilities shall be deemed permanent total: 1. Complete loss of sight of both eyes; 2. Loss of two limbs at or above the ankle or wrists; 3. Permanent complete paralysis of two limbs; 4. Brain injury resulting to incurable imbecility or insanity; and 5. Such cases as determined and approved by the SSS.

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D. DEATH OF PENSIONER. Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within 60 months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five‐year guaranteed period excluding the dependents’ pension.



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A. MONTHLY PENSION. Upon the permanent total disability of a member who has paid at least 36 monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required 36 monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher.

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G. PERMANENT TOTAL DISABILITY. (f) If the disability is permanent total and such disability occurs after 36 monthly contributions have been paid prior to the semester of disability, the benefit shall be the monthly pension for permanent total disability payable not longer than the period designated in accordance with the schedule provided under the SSS Law.

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H. ADDITIVES. The percentage degree of disability which is equivalent to the ratio that the designated number of months of compensability bears to 75, rounded to the next higher integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but shall be additive for deteriorating and related permanent partial disabilities to a maximum of 100%, in which case, the member shall be deemed as permanently totally disabled. I. WHEN LUMP SUM PAYMENT PROPER. In case of permanent partial disability, the monthly pension benefit shall be given in lump sum if it is payable for less than 12 months.

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2.6. FUNERAL BENEFIT.

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J. WHEN PENSIONER RETIRES OR DIES. Should a member who is on partial disability pension retire or die, his disability pension shall cease upon his retirement or death.

2.7. SICKNESS BENEFIT.

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(1) In no case shall the daily sickness benefit be paid longer than 120 days in one (1) calendar year, nor shall any unused portion of the 120 days of sickness benefit be carried forward and added to the total number of compensable days allowable in the subsequent year; (2) The daily sickness benefit shall not be paid for more than 240 days on account of the same confinement; and

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(3) The employee‐member shall notify his employer of the fact of his sickness or injury within 5 calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is not necessary: Provided, That if the member is unemployed or self‐ employed, he shall directly notify the SSS of his confinement within 5 calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the 5th day immediately preceding the date of notification.

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C. PAYMENT OF SICK BENEFIT BY SSS. 100% of the daily benefits shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof: Provided, That the employer has notified the SSS of the confinement within 5 calendar days after receipt of the notification from the employee member: Provided, further, That if the notification to the SSS is made by the employer beyond 5 calendar days after receipt of the notification from the employee‐member, said employer shall be reimbursed only for each day of confinement starting from the tenth calendar day immediately preceding the date of notification to the SSS: Provided, finally, That the SSS shall reimburse the employer or pay the unemployed member only for confinement within the one‐year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one (1) year from the last day of confinement.

2.8. MATERNITY LEAVE BENEFIT.

A. FEMALE MEMBER ENTITLED.

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B. COMPENSABLE CONFINEMENT. The compensable confinement shall begin on the first day of sickness, and the payment of such allowances shall be promptly made by the employer every regular payday or on the 15th and last day of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full pay to the credit of the employee member shall have been exhausted.

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A. ENTITLEMENT. A member who has paid at least 3 monthly contributions in the 12‐month period immediately preceding the semester of sickness or injury and is confined therefor for more than 3 days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self‐employed, a daily sickness benefit equivalent to 90% of his average daily salary credit, subject to the following conditions:

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A funeral grant of P12,000.00 shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree.





3. BENEFICIARIES.

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a. Dependency rule under the SSS Law. Under the SSS Law, the dependent shall refer to: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated, or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached 21 of age, or if over 21 years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self‐support, physically or mentally; and (3) The parent who is receiving regular support from the member. b. Beneficiaries under the SSS Law. I. PRIMARY BENEFICIARIES. The following are primary beneficiaries: 1. The dependent spouse until he or she remarries; 2. The dependent legitimate, legitimated or legally adopted, and illegitimate children

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II. SECONDARY BENEFICIARIES. The following are secondary beneficiaries: 1. The dependent parents, in the absence of the primary beneficiaries. 2. Any other person designated by the member as his/her secondary beneficiary, in the absence of all the foregoing (primary beneficiaries and dependent parents),

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[Note: The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated children of the member, his/her dependent illegitimate children shall be entitled to 100% of the benefits.]

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Signey v. SSS, [G.R. No. 173582, January 28, 2008] This case involves the issue of dependency involving conflicting claims over death benefits provided under R.A. No. 8282. The petitioner’s husband, Rodolfo Signey, Sr., was a member of the SSS. He died on 21 May 2001. In his member’s records, he had designated Yolanda Signey (petitioner) as primary beneficiary and his four children with her as secondary beneficiaries. On 6 July 2001, petitioner filed a claim for death benefits with the public respondent SSS. She revealed in her SSS claim that the deceased had a common‐law wife, Gina Servano (Gina), with whom he had two minor children, namely: Ginalyn Servano (Ginalyn), born on 13 April 1996, and Rodelyn Signey (Rodelyn), born on 20 April 2000. Petitioner’s declaration was confirmed when Gina herself filed a claim for the same death benefits on 13 July 2001 in which she also declared that both she and petitioner were common‐law wives of the deceased and that Editha Espinosa (Editha) was the legal wife. In addition, in October 2001, Editha also filed an application for death benefits with the SSS stating that she was the legal wife of the deceased. In resolving the issue of which of the parties have a right over the death benefits, the Supreme Court affirmed the factual findings of the SSC and the Court of Appeals. In the case at bar, the existence of a prior subsisting marriage between the deceased and Editha is supported by substantial evidence. Petitioner, who has fully availed of her right to be heard, only relied on the waiver of Editha and failed to present any evidence to invalidate or otherwise controvert the

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(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; (b) The full payment shall be advanced by the employer within 30 days from the filing of the maternity leave application; (c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided under the SSS Law for the same period for which daily maternity benefits have been received; (d) That the maternity benefits shall be paid only for the first 4 deliveries or miscarriages; (e) That the SSS shall immediately reimburse the employer of 100% of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and (f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

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A female member who has paid at least 3 monthly contributions in the 12‐month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary credit for 60 days or 78 days in case of caesarian delivery, subject to the following conditions:





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“SEC. 12‐B. Retirement Benefits. – “(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. …”

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The Supreme Court declared the above proviso “as of the date of his retirement” which qualifies the term “primary beneficiaries,” as unconstitutional for it violates the due process and equal protection clauses of the Constitution. As illustrated by the petitioner’s case, the said proviso “as of the date of his retirement” which qualifies the term “primary beneficiaries” results in the classification of dependent spouses as primary beneficiaries into two (2) groups: (1) Those dependent spouses whose respective marriages to SSS members were contracted prior to the latter’s retirement; and (2) Those dependent spouses whose respective marriages to SSS members were contracted after the latter’s retirement. Underlying these two (2) classifications of dependent spouses is that their respective marriages are valid. In other words, both groups are legitimate or legal spouses. The distinction between them lies solely on the date the marriage was contracted. The petitioner belongs to the second group of dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement. As such, she and those similarly situated do not qualify as “primary beneficiaries” under Section 12‐B [d] of R.A. No. 8282 and, therefore, are not entitled to survivor’s pension under the same provision by reason of the subject proviso. It is noted that the eligibility of “dependent children” who are biological offsprings of a retired SSS member to be considered as his primary beneficiaries under Section 12‐B [d] of R.A. No. 8282 is not substantially affected by the proviso “as of the date of his retirement.” A biological child, whether legitimate, legitimated or illegitimate, is entitled to survivor’s pension upon the death of a retired SSS member so long as the said child is unmarried, not gainfully employed and has not reached twenty‐one (21) years of age, or if over twenty‐one (21) years of age, he or she is congenitally or while still a minor has been permanently incapacitated and incapable of self‐support, physically or mentally. On the other hand, the eligibility of legally adopted children to be considered “primary beneficiaries” under Section 12‐B [d] of R.A. No. 8282 is affected by the proviso “as of the date of his retirement” in the same manner as the dependent spouses. A legally adopted child who satisfies the requirements in Section 8 [e] (2) thereof is considered a primary beneficiary of a retired SSS member upon the latter’s death only if the said child had been legally adopted prior to the member’s retirement. One who was legally adopted by the SSS member after his or her retirement does not qualify as a primary beneficiary for the purpose of entitlement to survivor’s pension under Section 12‐B [d] of R.A. No. 8282. The Supreme Court further declared that classifying dependent spouses and determining their entitlement to survivor’s pension based on whether the marriage was contracted before or after the retirement of the other spouse,

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Dycaico v. SSS, [G.R. No. 161357, Nov. 30, 2005] (Proviso in Section 12‐B of R.A. No. 8282 declared unconstitutional). In this case, Bonifacio S. Dycaico, the deceased husband of petitioner, became a member of the SSS on January 24, 1980. In his self‐employed data record (SSS Form RS‐1), he named the petitioner, Elena P. Dycaico, and their eight children as his beneficiaries. At that time, Bonifacio and Elena lived together as husband and wife without the benefit of marriage. In June 1989, Bonifacio was considered retired and began receiving his monthly pension from the SSS. He continued to receive the monthly pension until he passed away on June 19, 1997. A few months prior to his death, however, Bonifacio married the petitioner on January 6, 1997. Shortly after Bonifacio’s death, the petitioner filed with the SSS an application for survivor’s pension. Her application, however, was denied on the ground that under Section 12‐B [d] of R.A. No. 8282 or the Social Security Law, she could not be considered a primary beneficiary of Bonifacio as of the date of his retirement. The said proviso reads:

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confirmed marriage certificate registered under LCR Registry No. 2083 on 21 November 1967. She did not even try to allege and prove any infirmity in the marriage between the deceased and Editha. The Supreme Court further ruled: “As to the issue of who has the better right over the SSS death benefits, Section 8 [e] and [k] of R.A. No. 8282 is very clear. Hence, we need only apply the law. “Whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence. Since petitioner is disqualified to be a beneficiary and because the deceased has no legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a ‘dependent,’ the only requirements are that he/she must be below 21 years of age, not married nor gainfully employed. “In this case, the minor illegitimate children Ginalyn and Rodelyn were born on 13 April 1996 and 20 April 2000, respectively. Had the legitimate child of the deceased and Editha survived and qualified as a dependent under the SSS Law, Ginalyn and Rodelyn would have been entitled to a share equivalent to only 50% of the share of the said legitimate child. Since the legitimate child of the deceased predeceased him, Ginalyn and Rodelyn, as the only qualified primary beneficiaries of the deceased, are entitled to 100% of the benefits.”





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=========================== TOPIC UNDER THE SYLLABUS: F. SOCIAL LEGISLATION 2. GSIS (RA 8291) a. Coverage b. Exclusions from coverage c. Benefits d. Beneficiaries ===========================

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1. COVERAGE.

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a. Compulsory coverage. Membership in the GSIS shall be compulsory for all employees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status.

2. EXCLUSIONS FROM COVERAGE.

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b. Members of the judiciary and constitutional commissions. Members of the judiciary and constitutional commissions shall have life insurance only.

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3. BENEFITS.

a. Benefits under the GSIS Law. All members of the GSIS shall have the following benefits: 1. Monthly pension 2. Separation benefits 3. Unemployment or involuntary separation benefits 4. Retirement benefits 5. Permanent disability benefits a. Total and permanent disability benefits b. Permanent and partial disability benefits 6. Temporary disability benefits 7. Non‐scheduled disability 8. Survivorship benefits 9. Funeral benefits 10. Life insurance benefits a. Compulsory life insurance b. Optional insurance

3.1. MONTHLY PENSION.

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c. Effect of separation from the service. A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under the GSIS Law.

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B. COMPUTATION OF SERVICE.

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A. BASIC MONTHLY PENSION. The basic monthly pension is equal to: (1) 37.5% of the revalued average monthly compensation; plus (2) 2.5% of said revalued average monthly compensation for each year of service in excess of 15 years: Provided, That the basic monthly pension shall not exceed 90% of the average monthly compensation. The basic monthly pension shall not be less than P1,300.00: Provided, further, That the basic monthly pension for those who have rendered at least 20 years of service shall not be less than P2,400.00 a month.

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a. Excluded employees under the GSIS Law. Excepted from its coverage are: 1. Members of the Armed Forces of the Philippines (AFP) 2. Members of the Philippine National Police (PNP) 3. Contractuals who have no employer and employee relationship with the agencies they serve.

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regardless of the duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e., ‘provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden.’ The nexus of the classification to the policy objective is vague and flimsy. Put differently, such classification of dependent spouses is not germane to the aforesaid policy objective.





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The computation of service for the purpose of determining the amount of benefits shall be from the date of original appointment/election, including periods of service at different times under one or more employers, those performed overseas under the authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination with the Civil Service Commission. The term “service” shall include full time service with compensation: Provided, That part‐time and other services with compensation may be included under such rules and regulations as may be prescribed by the GSIS.

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C. EXCLUDED SERVICE. All service credited for retirement, resignation or separation for which corresponding benefits have been awarded under the GSIS Law or other laws shall be excluded in the computation of service in case of reinstatement in the service of an employer and subsequent retirement or separation which is compensable under this Act.

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3.2. SEPARATION BENEFITS.

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The separation benefits shall consist of: (a) a cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000 payable upon reaching 60 years of age or upon separation, whichever comes later: Provided, That the member resigns or separates from the service after he has rendered at least 3 years of service but less than 15 years; or (b) a cash payment equivalent to 18 times his basic monthly pension payable at the time of resignation or separation, plus an old‐age pension benefit equal to the basic monthly pension payable monthly for life upon reaching the age of 60: Provided, That the member resigns or separates from the service after he has rendered at least 15 years of service and is below 60 years of age at the time of resignation or separation.

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3.4. RETIREMENT BENEFITS.

C. CONDITIONS FOR ENTITLEMENT. A member who retires from the service shall be entitled to the retirement benefits provided that: (1) he has rendered at least 15 years of service; (2) he is at least 60 years of age at the time of retirement; and (3) he is not receiving a monthly pension benefit from permanent total disability.

B. GENERAL CONDITIONS FOR ENTITLEMENT.

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A. WHEN DISABILITY CONSIDERED TOTAL AND PERMANENT. The following disabilities shall be deemed total and permanent: (1) complete loss of sight of both eyes; (2) loss of two (2) limbs at or above the ankle or wrist; (3) permanent complete paralysis of two(2) limbs; (4) brain injury resulting in incurable imbecility or insanity; and (5) such other cases as may be determined by the GSIS.

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3.6. TOTAL AND PERMANENT DISABILITY BENEFITS.

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There are 2 kinds of permanent disability benefits under the GSIS Law: (1) Total and permanent disability (2) Permanent and partial disability

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3.5. PERMANENT DISABILITY BENEFITS.

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B. COMPULSORY RETIREMENT AGE. Unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee at 65 years of age with at least 15 years of service: Provided, That if he has less than 15 years of service, he may be allowed to continue in the service in accordance with existing civil service rules and regulations.

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A. AMOUNT OF RETIREMENT BENEFITS. Retirement benefit shall be: (1) the lump sum payment payable at the time of retirement plus an old‐age pension benefit equal to the basic monthly pension payable monthly for life, starting upon expiration of the five‐year (5) guaranteed period covered by the lump sum; or (2) cash payment equivalent to 18 months of his basic monthly pension plus monthly pension for life payable immediately with no five‐year (5) guarantee.

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Unemployment benefits in the form of monthly cash payments equivalent to 50% of the average monthly compensation shall be paid to a permanent employee who is involuntarily separated from the service due to the abolition of his office or position usually resulting from reorganization: Provided, That he has been paying integrated contributions for at least 1 year prior to separation.

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3.3. UNEMPLOYMENT OR INVOLUNTARY SEPARATION BENEFITS.





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A member who suffers permanent disability for reasons not due to his grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another, shall be entitled to the retirement benefits.

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C. PERMANENT TOTAL DISABILITY BENEFITS. If the permanent disability is total, he shall receive a monthly income benefit for life equal to the basic monthly pension effective from the date of disability provided that: (1) he is in the service at the time of disability; or (2) if separated from the service, he has paid at least 36 monthly contributions within the 5‐year period immediately preceding his disability, or has paid a total of at least 180 monthly contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the service and has paid a total of at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to 18 times his basic monthly pension: Provided, finally, That a member cannot enjoy the monthly income benefit for permanent disability and the old‐age retirement simultaneously.

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Unless the member has reached the minimum retirement age, disability benefit shall be suspended when: (1) he is reemployed or (2) he recovers from disability as determined by the GSIS, whose decision shall be final and binding; or (3) he fails to present himself for medical examination when required by the GSIS.

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A. WHEN DISABILITY CONSIDERED PERMANENT AND PARTIAL. The following disabilities shall be deemed permanent and partial: (1) complete and permanent loss of the use of: (i) any finger (ii) any toe (iii) one arm (iv) one hand (v) one foot (vi) one leg (vii) one or both ears (viii) hearing of one or both ears (ix) sight of one eye (2) such other cases as may be determined by the GSIS.

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3.7. PERMANENT AND PARTIAL DISABILITY BENEFITS.

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If a member who suffers permanent total disability does not satisfy conditions (1) and (2) above, but has rendered at least 3 years service at the time of his disability, he shall be advanced the cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000 which should have been his separation benefit.

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B. PERMANENT AND PARTIAL DISABILITY BENEFITS. If the disability is partial, he shall receive a cash payment in accordance with a schedule of disabilities to be prescribed by the GSIS: Provided, That he satisfies either conditions (1) or (2) as follows: (1) he is in the service at the time of disability; or (2) if separated from the service, he has paid at least 36 monthly contributions within the 5‐year period immediately preceding his disability, or has paid a total of at least 180 monthly contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the service and has paid a total of at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to 18 times his basic monthly pension: Provided, finally, That a member cannot enjoy the monthly income benefit for permanent disability and the old‐age retirement simultaneously. 3.8. TEMPORARY DISABILITY BENEFITS.

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A. AMOUNT OF BENEFIT. A member who suffers temporary total disability for reasons not due to any of the conditions enumerated in Section 15 of the GSIS Law1 shall be entitled to 75% of his current daily compensation for each day or fraction thereof of temporary disability benefit not exceeding 120 days in one calendar year after exhausting all his sick leave credits and collective bargaining agreement sick leave benefits, if any, but not earlier than the 4th day of his temporary total disability provided that any of the following conditions is not attendant: (1) he is in the service at the time of his disability; or (2) if separated, he has rendered at least three (3) years of service and has paid at least six (6) monthly contributions in the twelve‐month period immediately preceding his disability. The temporary total disability benefit shall in no case be less than P70.00 a day.

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Grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another.

9 LABOR LAW: F. SOCIAL LEGISLATION Prof. Joselito Guianan Chan




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C. EXTENSION OF PAYMENT OF BENEFIT. If the disability requires more extensive treatment that lasts beyond 120 days, the payment of the temporary total disability benefit may be extended by the GSIS but not to exceed a total of 240 days.

3.9. NON‐SCHEDULED DISABILITY.

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For injuries or illnesses resulting in a disability not listed in the schedule of partial/total disability, as provided in the GSIS Law, the GSIS shall determine the nature of the disability and the corresponding benefits therefor.

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3.10. SURVIVORSHIP BENEFITS.

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B. DEATH OF A MEMBER. Under Section 21 of the GSIS Law, upon the death of a member, the primary beneficiaries shall be entitled to: (1) survivorship pension: Provided, That the deceased: (i) was in the service at the time of his death; or (ii) if separated from the service, has at least 3 years of service at the time of his death and has paid 36 monthly contributions within the 5‐year period immediately preceding his death; or has paid a total of at least 180 monthly contributions prior to his death; or (2) the survivorship pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service: Provided, That the deceased was in the service at the time of his death with at least 3 years of service; or (3) a cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000.00: Provided, That the deceased has rendered at least 3 years of service prior to his death but does not qualify for the benefits under the item (1) or (2) above of this paragraph.

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Under Paragraph (b) of Section 21, the survivorship pension shall be paid as follows: (1) when the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension for life or until he/she remarries; (2) when only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent children's pension equivalent to 10% of the basic monthly pension for every dependent child not exceeding five (5), counted from the youngest and without substitution; (3) when the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall receive the dependent children's pension mentioned in the immediately preceding paragraph (2) hereof.

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In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: (1) the cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000: Provided, That the member is in the service at the time of his death and has at least 3 years of service; or (2) in the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his legal heirs.

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B. DEATH OF A PENSIONER. Under Section 22 of the GSIS Law, upon the death of an old‐age pensioner or a member receiving the monthly income benefit for permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension defined in Section 20 of the GSIS Law (See above), subject to the provisions of paragraph (b) of Section 21 hereof (See above). When the pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid only after the expiration of the said period.

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For purposes of the survivorship benefits, legitimate children shall include legally adopted and legitimate children.

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A. COMPONENTS OF THE SURVIVORSHIP BENEFITS. Under Section 20 of the GSIS Law, when a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits provided in Sections 21 (Death of a Member) and 22 (Death of a Pensioner) hereunder subject to the conditions therein provided for. The survivorship pension shall consist of: (1) the basic survivorship pension which is 50% of the basic monthly pension; and (2) the dependent children's pension not exceeding 50% of the basic monthly pension.

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B. PROHIBITION. A member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously.

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3.11. FUNERAL BENEFITS.

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A. COMPULSORY LIFE INSURANCE. All employees except for Members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as follows: (1) for those employed after the effectivity of the GSIS Law, their insurance shall take effect on the date of their employment; (2) for those whose insurance will mature after the effectivity of the GSIS Law, their insurance shall be deemed renewed on the day following the maturity or expiry date of their insurance; (3) for those without any life insurance as of the effectivity of the GSIS Law, their insurance shall take effect following said effectivity.

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3.12. LIFE INSURANCE BENEFITS.

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Dividends. ‐ An annual dividend may be granted to all members of the GSIS whose life insurance is in force for at least 1 year in accordance with a dividend allocation formula to be determined by the GSIS.

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a. Dependents. Dependents shall be the following: (a) the legitimate spouse dependent for support upon the member or pensioner; (b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is unmarried, not gainfully employed, not over the age of majority, or is over the age of majority but incapacitated and incapable of self‐support due to a mental or physical defect acquired prior to age of majority; and (c) the parents dependent upon the member for support.

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b. Beneficiaries. There are 2 kinds of beneficiaries under the GSIS Law as follows: 1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children. 2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent children, the legitimate descendants.

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Gainful Occupation — Any productive activity that provided the member with income at least equal to the minimum compensation of government employees.

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================================ TOPIC UNDER THE SYLLABUS: F. SOCIAL LEGISLATION 3. Limited Portability Law (RA 7699) ================================

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[R.A. No. 7699 [An Act Instituting Limited Portability Scheme in the Social Security Insurance System by Totalizing the Workers’ Creditable Services or Contributions in Each of the Systems] approved on May 1, 1994.]

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1. LIMITED PORTABILITY SCHEME ‐ TOTALIZING THE WORKERS’ CREDITABLE SERVICES OR CONTRIBUTIONS TO BOTH SSS AND GSIS.

a. Declared policy is to establish a unitary social security system.

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4. BENEFICIARIES.

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B. OPTIONAL INSURANCE. Subject to the rules and regulations prescribed by the GSIS, a member may apply for insurance and/or pre‐need coverage embracing life, health, hospitalization, education, memorial plans, and such other plans as may be designed by the GSIS, for himself and/or his dependents. Any employer may likewise apply for group insurance coverage for its employees. The payment of the premiums/installments for optional insurance and pre‐need products may be made by the insured or his employer and/or any person acceptable to the GSIS.

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The amount of funeral benefit shall be determined and specified by the GSIS in the rules and regulations but shall not be less than P12,000.00: Provided, That it shall be increased to at least P18,000.00 after five (5) years and shall be paid upon the death of: (a) an active member as defined under Section 2(e) of this Act; or (b) a member who has been separated from the service, but who may be entitled to future benefit pursuant to Section 4 of this Act; or (c) a pensioner, as defined in Section 2(o) of this Act; or (d) a retiree who at the time of his retirement was of pensionable age under this Act but who opted to retire under Republic Act No. 1616.





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b. Totalization, defined. The term “totalization” refers to the process of adding up the periods of creditable services or contributions under each of the Systems, for the purpose of eligibility and computation of benefits.3

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c. Portability, defined. On the other hand, the term “portability” refers to the transfer of funds for the account and benefit of a worker who transfers from one system to the other.4

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d. Applicability of limited portability scheme. The benefits provided under R.A. No. 7699 apply to active or inactive members of either System (GSIS/SSS) as of the date of its effectivity on May 20, 1994.5

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e. Coverage. R.A. No. 7699 and its implementing rules apply to all worker‐members of the GSIS and/or SSS who transfer from the public sector to the private sector or vice‐versa, or who wish to retain their membership in both Systems.6

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f. Creditability and totalization of contributions and benefits in SSS and GSIS. Under Section 3 of R.A. No. 7699, it is enunciated that provisions of any general or special law or rules and regulations to the contrary notwithstanding, a covered worker who transfers employment from one sector to another (i. e., from private sector to public sector, or vice versa), or is employed in both sectors, shall have his creditable services or contributions in both Systems (GSIS and SSS) credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old‐age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization provided, however, that overlapping periods of membership shall be credited only once for purposes of totalization.

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h. Totalization of contributions and benefits; how processed.

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1. Contributions. All contributions paid by such member personally and those that were paid by his employers to both Systems (GSIS and SSS) shall be considered in the processing of benefits which he can claim from either or both Systems, provided, however, that the amount of benefits to be paid by one System shall be in proportion to the number of contributions actually remitted to that System.8 The term “contributions” refers to the contributions paid by the employee or worker to either the GSIS or the SSS on account of the worker’s membership.9

Section 1, R.A. No. 7699. Section 2, R.A. No. 7699; Section 1 [e], Rule III, Rules and Regulations Implementing R.A. No. 7699. Section 2, Ibid.; Section 1 [b], Rule III, Ibid.. 5 Section 1, Rule VII, Rules and Regulations Implementing Republic Act No. 7699. 6 Section 1, Rule I, Ibid.. 7 Section 2, Rule IV, Ibid.. 8 Section 4, R.A. No. 7699. 9 Section 2, Republic Act No. 7699; Section 1 [a], Rule III, Rules and Regulations Implementing R.A. No. 7699. 10 Section 1 [f], Rule III, Ibid.. 11 Section 1 [g], Rule III, Ibid.. 2 3 4

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2. Creditable services or periods of contributions. All creditable services or periods of contributions made continuously or in the aggregate of a worker under either of the sectors shall be added up and considered for purposes of eligibility and computation of benefits. (Section 1, Rule V, Rules and Regulations Implementing Republic Act No. 7699). The term “creditable services” insofar as the public sector is concerned, refers to the following: 1. All previous services rendered by an official/employee pursuant to an appointment, whether permanent, provisional or temporary; 2. All previous services rendered by an official/employee pursuant to a duly‐approved appointment to a position in the Civil Service with compensation or salary; 3. The period during which an official or employee was on authorized sick leave of absence without pay not exceeding one (1) year; 4. The period during which an official or employee was out of the service as a result of illegal termination of his services as finally decided by the proper authorities; and 5. All previous services with compensation or salary rendered by elective officials.10 The term “periods of contributions” for the private sector refers to the periods during which a person renders services for an employer with compensation or salary, and during which contributions were paid to the SSS. A “self‐ employed person” is considered an employee and employer at the same time.11

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g. Limited portability of funds. The processes involved in the prompt payment of money benefits to eligible members is the joint responsibility of the GSIS and SSS. (Section 1, Rule IV, Rules and Regulations Implementing R.A. No. 7699). The System or Systems responsible for the payment of money benefits due a covered worker shall release the same within fifteen (15) working days from receipt of the claim, subject to the submission of the required documents and availability of complete employee/employer records in the System or Systems.7

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It is the declared policy of the State to institute a scheme for totalization and portability of social security benefits with the view of establishing within a reasonable period, a unitary social security system.2





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3. Benefits. All services rendered or contributions paid by a member personally and those that were paid by the employers to either System shall be considered in the computation of benefits which may be claimed from either or both Systems. However, the amount of benefits to be paid by one System shall be in proportion to the services rendered or periods of contributions made to that System.13 Under Section 1 [j], Rule III of the Rules and Regulations Implementing R.A. No. 7699, “benefits” refer to the following: 1. Old‐age benefit; 2. Disability benefit; 3. Survivorship benefit; 4. Sickness benefit; 5. Medicare benefit, provided that the member shall claim said benefit from the System where he was last a member; and 6. Such other benefits common to both Systems that may be availed of through totalization.

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i. Totalization; when applicable. Totalization applies in the following instances: a. if a worker is not qualified for any benefits from both Systems; or b. if a worker in the public sector is not qualified for any benefits from the GSIS; or c. if a worker in the private sector is not qualified for any benefits from the SSS. For purposes of computation of benefits, totalization applies in all cases so that the contributions made by the worker‐member in both Systems shall provide maximum benefits which otherwise will not be available. In no case shall the contribution be lost or forfeited.14

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j. Effect if worker is not qualified after totalization. If after totalization, the worker‐member still does not qualify for any benefit listed in Rule III, Section 1 [j] [supra] of the Rules and Regulations Implementing R.A. No. 7699, the member will then get whatever benefits correspond to his/her contributions in either or both Systems.15

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k. Effect if worker qualifies for benefits in both Systems. If a worker qualifies for benefits in both Systems, totalization shall not apply.16

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l. Processes of totalization; joint responsibility of GSIS and SSS. The processes of totalization of creditable services or periods of contributions and computation of benefits provided under R.A. No. 7699 are the joint responsibility of the GSIS and the SSS.17

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m. Effect of overlapping periods of creditable services. Overlapping periods of creditable services or contributions in both Systems shall be credited only once for purposes of totalization.18 “Overlapping of periods” refers to the periods during which a worker simultaneously contributes to both 19 Systems. ================================ TOPIC UNDER THE SYLLABUS: F. SOCIAL LEGISLATION 4. Employee’s Compensation – Coverage and when compensable ================================

Relevant legal provisions : Articles 166 to 208-A, Title II, Book IV of the Labor Code. 1. BACKGROUND ON THE STATE INSURANCE FUND [SIF].

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a. SIF created from contributions of employers.

Section 1 [h], Rule III, Ibid.. Section 2, Rule V, Ibid.. Section 3, Rule V, Rules and Regulations Implementing R.A. No. 7699 Section 4, Rule V, Rules and Regulations Implementing R.A. No. 7699. 16 Section 5, Rule V, Ibid.. 17 Section 6, Rule V, Ibid.. 18 Section 7, Rule V, Ibid.. 19 Section 1 [i], Rule III, Ibid.. 12 13 14 15

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Gamogamo v. PNOC Shipping and Transport Corp., [G.R. No. 141707, May 7, 2002] Following the concept of totalization, the High Court in this case pronounced that obviously, totalization of service credits is only resorted to when the retiree does not qualify for benefits in either or both of the Systems. In case the employee is qualified to receive benefits granted by the GSIS or the SSS, as the case may be, he cannot avail of the benefits under R.A. No. 7699.

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The term “eligibility” means that the worker has satisfied the requirements for entitlement to the benefits provided for under R.A. No. 7699.12





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b. Two (2) separate SIFs. There are two (2) separate and distinct State Insurance Funds: one established under the SSS for private sector employees; and the other, under the GSIS for public sector employees. The management and investment of the Funds are done separately and distinctly by the SSS and the GSIS. It is used exclusively for payment of the employees’ compensation benefits and no amount thereof is authorized to be used for any other purpose.20

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c. Three (3) agencies involved in the implementation of the ECP. There are three (3) agencies involved in the implementation of the Employees’ Compensation Program (ECP). These are: The Employees’ Compensation Commission (ECC) which is mandated to initiate, rationalize and coordinate policies of the ECP and to review appealed cases from the Government Service Insurance System (GSIS) and the Social Security System (SSS), the administering agencies of the ECP.

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d. Role of the GSIS and SSS. As administering agencies of the ECP, both GSIS and SSS are tasked to: 1. Evaluate all employees compensation (EC) claims filed within a given period and pay the corresponding EC benefits; 2. Collect EC premiums remitted by employers; and 3. Manage the State Insurance Fund. Both the GSIS and the SSS invest the funds in profitable ventures to generate earnings which will form part of the State Insurance Fund (SIF) from which payments for employees’ compensation claims are sourced.

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f. Role of the employer. On the part of the employer, its duty is only to pay the regular monthly premiums to the System (GSIS/SSS). It does not look for insurance companies to meet sudden demands for compensation payments or set up its own funds to meet those contingencies. It does not have to defend itself from spuriously documented or long past claims.

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2. SCOPE OF COVERAGE OF THE ECP.

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g. Role of the employee. The injured worker does not have to litigate his right to compensation. There is no notice of injury nor requirement of controversion. The sick worker is simply required to file a claim with the ECC which determines, on the basis of the employee’s supporting papers and medical evidence, whether or not compensation should be paid. The payment of benefits is more prompt ad the cost of administration is low. The employer no longer opposes or fights a claim for compensation by the employee. Resultantly, the lop‐sided situation of an employer against one employee is absent.21

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a. General coverage. The following shall be covered by the Employees’ Compensation Program (ECP): 1. All employers; 2. Every employee not over sixty (60) years of age; 3. An employee over 60 years of age who had been paying contributions to the System (GSIS/SSS) prior to age sixty (60) and has not been compulsorily retired; and 4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily covered by both Systems.22

20 21 22

Article 179, as amended by Section 4, P.D. No. 1368. Sarmiento v. ECC, G.R. No. L-65680, May 11, 1988, 161 SCRA 312. Article 168, Ibid.; Section 2, Rule I, Ibid..

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b. Sectors of employees covered by the ECP. The following sectors are covered under the ECP: 1. All public sector employees including those of government‐owned and/or controlled corporations and local government units covered by the GSIS; 2. All employees in the private sector covered by the SSS; and 3. Overseas Filipino workers (OFWs), namely: a. Filipino seafarers compulsorily covered under the SSS. b. Land‐based contract workers provided that their employer, natural or juridical, is engaged in any trade, industry or business undertaking in the Philippines; otherwise, they shall not be covered by the ECP.

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e. Role of the ECC. The law applies the social security principle in the handling of workmen’s compensation. Towards this end, the Employees’ Compensation Commission (ECC) administers and settles claims from a fund under its exclusive control. The employer does not intervene in the compensation process and it has no control, as in the past, over payment of benefits. The open‐ended Table of Occupational Diseases requires no proof of causation. A covered claimant suffering from an occupational disease is automatically paid benefits.

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The State Insurance Fund (SIF) is built up by the contributions of employers based on the salaries of their employees as provided under the Labor Code.





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c. Nature of coverage. The coverage is compulsory in nature. 23

3.1. MEDICAL BENEFITS.

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3. EMPLOYEES’ COMPENSATION BENEFITS. The following are the benefits provided under the Labor Code: a. Medical Benefits24 b. Disability Benefits25 1. Temporary total disability26 2. Permanent total disability27 3. Permanent partial disability28 c. Death Benefit29 d. Funeral Benefit30

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a. Conditions for entitlement to medical services, appliances and supplies. Any employee is entitled to such medical services, appliances and supplies as the nature of his disability and the progress of his recovery may require, subject to the expense limitation as contained in Annex “C” of the Amended Rules on Employees’ Compensation, if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains an injury or contracts sickness; and 3. The System has been duly notified of the injury or sickness.31

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c. Extent of services. The employee is entitled to the benefits only for the ward services of an accredited hospital and accredited physician. However, if the employee chooses accommodations better than ward services, the excess of the total amount of expenses incurred over the benefits provided under Annex “C” of the Amended Rules on Employees’ Compensation (infra), shall be borne by the employee. 34 The hospital shall provide all the medicines, drugs or supplies necessary for the treatment of the employee at a cost not exceeding the retail prices prevailing in local drug stores.35 Payments shall be made directly to the providers of such services in such amount as are prevailing in the community for similar services or provided under the schedule set forth in said Annex “C,” whichever is less.36 The right of the employee to seek reimbursement for medical expenses does not only pertain to those incurred for the principal or primary ailment but extends to those incurred for complications arising therefrom even if the same occurred after the employee had already retired.

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3.2. TEMPORARY TOTAL DISABILITY.

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d. Loss of wages or earning capacity not required. It is worthy to note that Article 185 does not impose as a pre‐requisite for the grant of medical benefits, that the injured or sick employee should show proof that he suffered loss of wages or earning capacity as a result of such injury or sickness. The law is clear that the injured or sick employee is “immediately” entitled to be provided during the subsequent period of his disability, with such medical services and appliances as the nature of his sickness or injury and progress of his recovery may require.37

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a. Total disability, when temporary.

Article 168, Labor Code; See also Section 1, Rule I, Amended Rules on Employees’ Compensation. Articles 185 to 190, Chapter V, Title II, Book IV, Labor Code Articles 191 to 193, Chapter VI, Title II, Book IV, Labor Code 26 Article 191, Labor Code. 27 Article 192, Labor Code. 28 Article 193, Labor Code. 29 Article 194, Chapter VII, Title II, Book IV, Labor Code. 30 Section 1, Rule XIV, Amended Rules on Employees’ Compensation. 31 Section 1, Rule VIII, Amended Rules on Employees’ Compensation. 32 Section 2, Rule VIII, Amended Rules on Employees’ Compensation. 33 Itogon-Suyoc Mines, Inc. v. Dulay, G.R. No. L-18974, Sept. 30, 1963. 34 Section 3 [a], Rule VIII, Amended Rules on Employees’ Compensation. 35 Section 3 [b], Rule VIII, Ibid.. 36 Section 3 [c], Rule VIII, Ibid.. 37 Article 185, Labor Code; Corales v. ECC, G.R. No. L-44063, Feb. 27, 1979, 88 SCRA 547. 23 24 25

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b. Period of entitlement. The medical services, appliances and supplies are required to be provided to the afflicted employee beginning on the first day of injury or sickness, during the subsequent period of his disability, and as the progress of his recovery may require.32 The obligation of the SIF to provide medical services shall continue for as long as the employee is sick. This duty is not ended even if employment was terminated.33

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c. Start of coverage of employees under the ECP. The coverage under the ECP of employees in the private and public sectors starts on the first day of their employment.





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b. Conditions to entitlement in case of temporary total disability. An employee shall be entitled to an income benefit for temporary total disability if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains the temporary total disability as a result of the injury or sickness; and 3. The System has been duly notified of the injury or sickness which caused his disability. His employer shall be liable for the benefit if such illness or injury occurred before the employee is duly reported for coverage to the System (GSIS/SSS).40

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c. When to commence payment of benefits. The income benefit in the case of temporary total disability should be paid beginning on the first day of such disability. If caused by an injury or sickness, it should not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attention beyond 120 days but not to exceed 240 days from the onset of the disability, in which case, benefit for temporary total disability shall be paid. However, the System (GSIS/SSS) may declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System (GSIS/SSS).41

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e. Income benefit for temporary total disability. Any employee entitled to the benefit for temporary total disability shall be paid an income benefit equivalent to ninety percent (90%) of his average daily salary credit as determined by the System (GSIS/SSS), subject to the following conditions: 1. The income benefit shall not be more than P200.00 per day for private sector workers and P90.00 per day for public sector employees and shall not be paid longer than 120 days for the same disability unless the injury or sickness requires more extensive treatment that lasts beyond 120 days but not to exceed 240 days from the onset of the disability, in which case, he shall be paid benefit for temporary total disability during the extended period. 2. The monthly income benefit shall be suspended if the employee fails to submit a monthly medical report certified by his attending physician as required under Section 5 of Rule IV of the Amended Rules on Employees’ Compensation. [See ECC Resolution No. 3682 dated July 21, 1987].43 Said Section 5 of Rule IV of the Amended Rules on Employees’ Compensation requires that an employee enjoying temporary total disability benefits shall submit to the System (GSIS/SSS) a monthly medical report on his disability certified by his attending physician; otherwise, his benefit shall be suspended until such time that he complies with this requirement. Further, he must also submit himself for examination upon being notified by the System (GSIS/SSS), at least once a year.

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3.3. PERMANENT TOTAL DISABILITY. a. Permanent disability, defined. “Permanent disability” is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body.44

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b. Total disability, defined. “Total disability,” on the other hand, means disablement of an employee to earn wages in the same kind of work, or work of a similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainment could do.45 Total disability is lack of ability to follow continuously some substantial gainful occupation without serious discomfort or pain and without material injury to health and danger to life.46

Article 191, Labor Code; Section 2 [a], Rule VII, Amended Rules on Employees’ Compensation. Fedillo v. WCC, G.R. No. L-43642, Jan. 17, 1985, 134 SCRA 56. Section 1, Rule X, Amended Rules on Employees’ Compensation. 41 Section 2 [a], Rule X, Ibid.. 42 Section 3, Rule VII, Amended Rules on Employees’ Compensation. 43 Section 3, Rule X, Ibid.. 44 Crystal Shipping, Inc. v. Natividad, G.R. No. 154798, October 20, 2005; GSIS v. Cadiz, G.R. No. 154093, July 8, 2003, 405 SCRA 450, 454; Ijares v. CA, G.R. No. 105854, Aug. 26, 1999, 313 SCRA 141, 149-150. 45 GSIS v. Cadiz, G.R. No. 154093, July 8, 2003; Transmarine Carriers, Inc. v. NLRC, G.R. No. 123891, February 28, 2001, 353 SCRA 47; GSIS v. CA, G.R. No. 132648, March 4, 1999, 363 Phil. 585, 592. 46 Malimata v. ECC, G.R. No. 91777, Feb. 19, 1991, 194 SCRA 264; Medina v. ECC, G.R. No. L-62406, March 22, 1986. 38 39 40

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d. Cash payment of temporary total disability benefit. Temporary total disability resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself.42

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A total disability is temporary if, as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period of not exceeding 120 days, except when such disability still requires medical attendance beyond 120 days, but not to exceed 240 days.38 If the disability is the result of an injury or sickness, the period of compensability shall be counted from the first day of such injury or sickness. An employee who later had to stop working due to a compensable illness is also entitled to temporary total disability benefits.39





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Total disability does not mean a state of absolute helplessness. A total disability does not require that the employee be absolutely disabled or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual work and earn therefrom.47

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Seagull Maritime Corp. v. Dee, [G.R. No. 165156, April 2, 2007] It was held in this case that although private respondent’s injury was undeniably confined to his left foot only, however, the inescapable impact of private respondent’s injury on his capacity to work as a seaman cannot be disregarded. In their desire to escape liability from private respondent’s rightful claim, petitioners denigrated the fact that even if private respondent insists on continuing to work as a seaman, no profit‐minded employer will hire him. His injury erased all these possibilities.

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GSIS v. CA, [G.R. No. 132648, March 4, 1999, 363 Phil. 585, 592] The High Court held here that while permanent total disability invariably results in an employee’s loss of work or inability to perform his usual work, permanent partial disability occurs when an employee loses the use of any particular anatomical part of his body which disables him to continue with his former work. Stated otherwise, the test of whether or not an employee suffers from permanent total disability is the capacity of the employee to continue performing his work notwithstanding the disability he incurred. If by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensation (which, in a more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from a permanent total disability regardless of whether or not he loses the use of any part of his body. Permanent total disability does not mean a state of absolute helplessness, but means disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for, or any work which a person of similar mentality and attainment could do.

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d. Total disabilities considered permanent. The following total disabilities are considered permanent: 1. Temporary total disability lasting continuously for more than 120 days and prevents an employee from pursuing his usual work and earning therefrom.50 2. Complete loss of sight of both eyes; 3. Loss of two limbs at or above the ankles or wrists; 4. Permanent and complete paralysis of two limbs; 5. Brain injury resulting in incurable imbecility or insanity; and 6. Such cases as determined by the System (GSIS/SSS) and approved by the ECC.51

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Palisoc v. Easways Marine, Inc., [G.R. No. 152273, September 11, 2007] The petitioner here was unable to perform his job for more than 120 days from the time of his repatriation which entitles him to permanent disability benefits. Thus, even in the absence of an official finding by a company‐ designated physician that petitioner is unfit for sea duty, he is deemed to have suffered permanent disability because of his inability to work for more than 120 days. The Court of Appeals erred in ruling that petitioner’s operation involving the removal of his gallbladder is not a compensable injury, disease, or illness under Appendix 1 of the POEA‐SEC. Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines petitioner’s entitlement to permanent disability benefits is his inability to work for more than 120 days.

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e. Litmus test and distinction between permanent total disability and permanent partial disability. In Vicente v. ECC, [G.R. No. 85024, January 23, 1991, 193 SCRA 190], the Supreme Court laid down the litmus test and distinction between Permanent Total Disability and Permanent Partial Disability, to wit: “[W]hile ‘permanent total disability’ invariably results in an employee’s loss of work or inability to perform his usual work, ‘permanent partial disability,’ on the other hand, occurs when an

Austria v. CA, G.R. No. 146636, Aug. 12, 2002, 387 SCRA 216, 221, citing Gonzaga v. ECC, No. L-62287, Jan. 31, 1984, 127 SCRA 443. Section 2 [b], Rule VII, Amended Rules on Employees’ Compensation; Diopenes v. GSIS, G.R. No. 96844, Jan. 23, 1992, 205 SCRA 331; Aquino v. ECC, G.R. No. 89558, Aug. 22, 1991, 201 SCRA 84; Vicente v. ECC, G.R. No. 85024, Jan. 23, 1991. Bejerano v. ECC, G.R. No. 84777, Jan. 30, 1992, 205 SCRA 598; Crystal Shipping, Inc. v. Natividad, G.R. No. 154798, October 20, 2005. 50 Section 1 [b], Rule XI, Amended Rules on Employees’ Compensation; Diopenes v. GSIS, G.R. No. 96844, Jan. 23, 1992, 205 SCRA 331;; Palisoc v. Easways Marine, Inc., infra. 51 Section 1 [b], Rule XI, Amended Rules on Employees’ Compensation. 47 48 49

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GSIS v. Cadiz, [G.R. No. 154093, July 8, 2003] It was declared in this case that the fact that the employee did not lose the use of any part of his body does not justify the denial of his claim for permanent total disability.

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c. Disability, when total and permanent. A disability is total and permanent if, as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days.48 Moreover, the fact that the permanently and totally disabled employee continues to work after such disability does not deprive him of the benefits provided under the law. (Makabali v. ECC, G.R. No. L‐51533, Nov. 29, 1983). For what is important consideration is the inability to do substantially all material acts necessary for the prosecution of a gainful occupation without serious discomfort or pain and without material injury or danger to life. In disability compensation, it is not the injury per se which is compensated but the incapacity to work.49 Disability is intimately related to one’s earning capacity. The test to determine its gravity is the impairment or loss of one’s capacity to earn and not its mere medical significance.





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f. Requisites for entitlement to income benefit for permanent total disability. An employee is entitled to an income benefit for permanent total disability if all of the following conditions are

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g. ECC Board Resolution No. 98‐09‐0563 [September 25, 1998]. ECC Board Resolution No. 98‐09‐0563 issued on September 25, 1998, enunciated the following conditions that should be taken into account in considering disability as permanent, in addition to the existing rules and regulations relative to permanent total disability, and in consonance with the Supreme Court’s pronouncement on liberal construction in disability claims cases: 1. If the disability results to disablement of an employee or worker to earn wages in the same kind of work, or work of similar nature that he/he was trained for; 2. If the disability results to disablement of an employee or worker to earn wages in any kind of work which a person of his mentality and attainment could do; 3. If the disability results to the inability of an employee or worker to do substantially all material acts necessary to the prosecution of an occupation for remuneration or profit in substantially customary and usual manner; 4. If the disability results to the lack of ability of an employee or worker to follow continuously the same substantial gainful occupation without serious discomfort or pain and without injury or danger to life; 5. If an employee or worker is compelled to retire or cease from employment before reaching the age of compulsory retirement by reason of work‐related contingency; 6. If, after retirement, an employee or worker dies within a reasonable period of time, and the cause of his death is the disability ailment or injury, in which event, his disability shall be considered permanent and total; 7. If the temporary and total disability shall last continuously for more than 120 days, except as otherwise provided in Rule X of the existing implementing rules and regulations of P.D. No. 626, as amended.

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Garcia v. Compensation Appeals and Review Staff, [G.R. No. L‐59651, December 6, 1985, 140 SCRA 376] The denial of permanent total disability benefits to the claimant in this case, who was a school teacher with thirty‐eight (38) years of dedicated service, would render inutile and meaningless, the social justice precept guaranteed by the Constitution. The claimant is entitled not only to partial disability but to full compensation because her illness rendered her incapable of teaching. That claimant’s employment had contributed even in a small degree to the development of the disease is enough for compensability of claim.53

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h. Payment for all compensable months of disability. In case of permanent total disability, the full monthly income benefits should be paid for all compensable months of disability.54

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i. Effect of cessation of grant of employees’ compensation benefits to entitlement to benefits for the same disability in another law being administered by the System. After the benefit under the Employees’ Compensation Program (ECP) has ceased, and if the employee is otherwise qualified for benefit for the same disability under another law administered by the System (GSIS/SSS), he should be paid such benefit in accordance with the provisions of that law. This rule applies to contingencies which occurred prior to May 1, 1978.55

Section 1 [a], Rule XI, Amended Rules on Employees’ Compensation. See also Tolosa v. ECC, G.R. No. 60509, May 8, 1985, 136 SCRA 335 involving same principle. Section 2 [a], Rule XI, Amended Rules on Employees’ Compensation. 55 Section 2 [b], Rule XI, Ibid.. 52 53 54

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j. 5‐year guaranteed monthly income benefits; grounds for suspension of grant of benefits. Except as otherwise provided in other laws, decrees, orders or letters of instructions, the monthly income benefit is guaranteed for five (5) years and shall be suspended under any of the following conditions: 1. Failure to present himself for examination at least once a year upon notice by the System;

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1. He has been duly reported to the System (GSIS/SSS); 2. He sustains the permanent total disability as a result of the injury or sickness; and 3. The System has been duly notified of the injury or sickness which caused his disability. His employer shall be liable for the benefit if such injury or sickness occurred before the employee is duly reported for coverage to the System (GSIS/SSS).52

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employee loses the use of any particular anatomical part of his body which disables him to continue with his former work. Stated otherwise, the test of whether or not an employee suffers from ‘permanent total disability’ is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in a more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from ‘permanent total disability’ regardless of whether or not he loses the use of any part of his body.” (See also Social Security Commission, v. CA, G.R. No. 152058, Sept. 27, 2004; Ijares v. Court of Appeals, G.R. No. 105854, Aug. 26, 1999, 313 SCRA 141).





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k. Cash payment of permanent total disability benefit. Permanent total disability resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself.57

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l. Monthly income benefit. Any employee entitled to permanent total disability benefits shall be paid by the System (GSIS/SSS) a monthly income as defined in Section 9, Rule VI of the Amended Rules on Employees’ Compensation.58

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1. In the case of the SSS. In the case of the SSS, the monthly income benefit is the amount equivalent to one hundred fifteen percent (115%) of the sum of the average monthly salary credit multiplied by the replacement ratio and one and a half percent (1‐1/2%) of the average monthly salary credit for each credited year of service in excess of ten (10) years; provided, that the monthly income benefit shall in no case be less than P250.00; provided, however, that the monthly pension of surviving pensioners shall be increased automatically and simultaneously to the extent that the fifteen percent (15%) difference in monthly income benefit between EC and SS and the twenty percent (20%) difference in monthly income benefit between EC and GSIS, should be maintained.59

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3.4. PERMANENT PARTIAL DISABILITY.

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m. Amount of benefit for dependent children. Under Section 4, Rule XI of the Amended Rules on Employees’ Compensation, it is provided that each dependent child, but not exceeding five (5), counted from the youngest and without substitution, shall be entitled to ten percent (10%) of the monthly income benefit of the employee. The Amended Rules on Employees Compensation, however, shall not apply to causes of action which accrued before May 1, 1978. Except the benefit to dependent children under said Section 4 of Rule XI of the Amended Rules on Employees’ Compensation, the aggregate monthly benefit payable, in the case of the GSIS, shall in no case exceed the monthly wage or salary actually received by the employee as of the date of his permanent total disability per ECC Resolution No. 2819 dated August 9, 1984.61

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a. Disability, when partial and permanent. A disability is partial and permanent if, as a result of the injury or sickness, the employee suffers a permanent partial loss of the use of any part of his body.62

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b. Requisites for entitlement. An employee shall be entitled to an income benefit for permanent partial disability (PPD) if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains the permanent partial disability as a result of the injury or sickness; and 3. The System has been duly notified of the injury or sickness which caused his disability. His employer shall be liable for the benefit if such injury or sickness occurred before the employee is duly reported for coverage to the System (GSIS/SSS).63

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c. Effect of gainful employment. For purposes of entitlement to income benefits for permanent partial disability, a covered employee shall continue to receive the benefits provided thereunder even if he is gainfully employed and receiving his wage or salary.64

Section 2 [c], Rule XI, Ibid.. Section 3, Rule VII, Amended Rules on Employees’ Compensation. Section 3 [a] [1], Rule XI, Amended Rules on Employees’ Compensation. 59 L.O.I. 1286; ECC Resolution No. 2799, July 25, 1984; Section 9 [a], Rule VI, Amended Rules on Employees’ Compensation. 60 ECC Resolution No. 2799, July 25, 1984; Section 9 [a], Rule VI, Amended Rules on Employees’ Compensation. 61 Section 6, Rule XI, Amended Rules on Employees’ Compensation. 62 Section 2 [c], Rule VII, Amended Rules on Employees’ Compensation; (Tria v. ECC, G.R. No. 96787, May 8, 1992, 208 SCRA 834; Abaya, Jr. v. ECC, G.R. No. 64255, Aug. 16, 1989, 176 SCRA 507. 63 Section 1 [a], Rule XII, Amended Rules on Employees’ Compensation. 64 Section 1 [b], Rule XII, Ibid.. 56 57 58

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2. In the case of the GSIS. In the case of the GSIS, the monthly income benefit shall be the basic monthly pension as defined in P, D. No. 1146 [May 31, 1977] plus twenty percent (20%) thereof, but shall not be less than P250.00 nor more than the actual salary at the time of contingency.60

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2. Failure to submit a quarterly medical report certified by his attending physician as required under Section 5, Rule IV of the Amended Rules on Employees’ Compensation; 3. Complete or full recovery from his permanent disability; or 4. Upon being gainfully employed.56 Said Section 5 of Rule IV of the Amended Rules provides that an employee enjoying permanent disability benefit where the disability resulted from a disease should submit to the System (GSIS/SSS) a quarterly medical report on his disability certified by his physician; otherwise his benefit shall be suspended until such time that he complies with this requirement.





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Complete and Permanent Loss of the use of No. of Months one thumb ‐ 10 one index finger ‐ 8 one middle finger ‐ 6 one ring finger ‐ 5 one little finger ‐ 3 one big toe ‐ 6 any toe ‐ 3 one hand ‐ 39 one arm ‐ 50 one foot ‐ 31 one leg ‐ 46 one ear ‐ 10 both ears ‐ 20 ‐ 10 hearing of one ear hearing of both ears ‐ 50 sight of one eye ‐ 2569

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e. Schedule of income benefit payment. Under said Section 2, Rule XII of the Amended Rules on Employees’ Compensation, the income benefit shall be paid beginning with the first month of such disability, but no longer than the designated number of months in the following schedule:

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In case of permanent partial disability less than the total loss of the member, the same monthly income shall be paid for a portion of the period established for the total loss of the member in accordance with the proportion that the partial loss bears to the total loss. If the result is a decimal fraction, the same shall be rounded off to the next higher integer.70 In case of simultaneous loss of more than one member or a part thereof, the same monthly income shall be paid for a period equivalent to the sum of the periods established for the loss of the member or part thereof but not exceeding seventy‐five (75). If the result is a decimal fraction, the same shall be rounded off to the higher integer.71 The degree of permanent disability shall be equivalent to the ratio that the designated number of months of compensability bears to seventy‐five (75).72 f. Consequence of loss of a part of body. The following rules shall apply in case of loss of a part of the employee’s body: 1. A loss of a wrist is considered a loss of the hand; 2. A loss of an elbow is considered a loss of the arm; 3. A loss of an ankle is considered a loss of the leg; 4. A loss of more than one joint is considered a loss of the whole finger or toe; and 5. A loss of only the first joint shall be considered a loss of one‐half of the whole finger or toe. Other permanent partial disabilities shall be determined by the Medical Officer of the System (GSIS/SSS).73

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g. Unlisted injuries and illnesses (non‐scheduled disabilities). In cases of injuries or illnesses not listed in the schedule under Section 2, Rule XII of the Amended Rules on Employees’ Compensation [supra], the benefit shall be an income benefit equivalent to the percentage of the permanent loss of the capacity for work.74

Section 3, Rule VII, Amended Rules on Employees’ Compensation. Section 3-A, Rule VII, Ibid.. Section 3 [a], Rule XII, Amended Rules on Employees’ Compensation. 68 Section 3 [a], Rule XII, Amended Rules on Employees’ Compensation. 69 Section 2 [a], Rule XII, Amended Rules on Employees’ Compensation. 70 Section 3 [b], Rule XII, Ibid.. 71 Section 3 [c], Rule XII, Amended Rules on Employees’ Compensation. 72 Section 2 [c], Rule XII, Ibid.. 73 Section 2 [b], Rule XII, Ibid.. 74 Section 4 [a], Rule XII, Ibid.. 65 66 67

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d. Income benefit in case of permanent partial disability (PPD). Permanent partial disability is the exception to the rule that disability resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself.65 Consequently, in the case where the period covered for payment of income benefit for PPD does not exceed twelve (12) months, the System (GSIS/SSS) may pay in lump sum; otherwise the income benefit shall be paid in monthly pension.66 In other words, if the indicated number of months exceeds twelve (12), the income benefit should be paid in monthly pension; otherwise, the System may pay the income benefit in lump sum or in monthly pension.67 Under ECC Board Resolution 93‐08‐0068 issued on August 5, 1993, permanent partial disability benefit is granted up to a maximum of two hundred forty (240) days if the claimant's disability persist exceeding the 120‐day limit. Any employee entitled to PPD benefit shall be paid by the System (GSIS/SSS) a monthly income benefit for the number of months indicated in Section 2, Rule XII of the Amended Rules on Employees’ Compensation [See Schedule below].68





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a. Death, meaning. Within the context of the employees’ compensation program, the term “death” means loss of life resulting from an injury or sickness.75 b. Compensable death. “Compensable death” refers to death which is the result of a work-related injury or sickness.

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c. Proof required in order for death to be compensable. Death compensation benefit cannot be awarded unless there is substantial evidence showing that: (a) The cause of the employee’s death was reasonably connected with his work; or (b) The sickness for which he died is an accepted occupational disease; or (c) His working conditions increased the risk of contracting the disease for which he died.76

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The monthly income benefit provided under Article 194 of the Labor Code is the new amount of the monthly income benefit for the surviving beneficiaries upon the approval of P.D. No. 1368 [May 1, 1978] which introduced amendments to Title II, Book IV of the Labor Code.78 e. Requisites for entitlement to death benefit. The beneficiaries of a deceased employee shall be entitled to an income benefit if all of the following conditions are satisfied: 1. The employee had been duly reported to the System (GSIS/SSS); 2. He died as a result of an injury or sickness; and 3. The System has been duly notified of his death, as well as the injury or sickness which caused his death. His employer shall be liable for the benefit if such death occurred before the employee is duly reported for coverage to the System (GSIS/SSS).79

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In Lu v. WCC, [G.R. No. L‐43181, October 27, 1986, 145 SCRA 170], it was ruled that the death of the employee, not having occurred while in the performance of his duties as a gasoline attendant, the claimant cannot be extended the benefits of the Workmen’s Compensation Act.

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In another case, Tolosa v. ECC, [G.R. No. 60509, May 8, 1985, 136 SCRA 335], it was pronounced that the employee’s widow is not entitled to death benefits because her husband had stopped working when he became physically disabled to do his work at the time of his retirement in 1975 and died on February 14, 1984, or almost nine (9) years after, which is clearly not within the two‐year period required by the old Workmen’s Compensation Act.

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But in Manuzon v. ECC, [G.R. No. 88573, June 25, 1990], where the employee died about 4 ½ years after retiring from the service due to a stroke, a cardiovascular accident caused by thrombosis, the Supreme Court, in reversing the denial of the claim by the ECC, ruled that the dependents are entitled to the benefits, although the death occurred after the retirement, because the cause of death, myocardial infarction, is closely related to the cause of his compulsory retirement.

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In the 2004 case of GSIS v. Cuanang, [G.R. No. 158846, June 3, 2004], where the employee died a year after retirement, the Supreme Court, following the ruling in Manuzon v. ECC, [supra] held that “(i)ndeed, if a death which occurred almost four and one half years after retirement was held to be within the coverage of the death benefits under P.D. 626, as in the Manuzon case, with more reason should a death which occurred within one year after retirement be considered as covered under the same law. A claim for benefit for such death cannot be defeated by the mere fact of separation from service. (Citing Ijares v. CA, G.R. No. 105854, Aug. 26, 1999, 313 SCRA 141).

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g. Death of a member while under permanent partial disability. Upon the death of a covered member during the period that he/she was receiving permanent partial disability (PPD) benefits, the remainder of his PPD benefits shall be paid to his primary beneficiaries. However, the beneficiaries shall be entitled to the same benefits enjoyed by the beneficiaries of a permanent total disability (PTD) pensioner upon his death, provided that the cause of death was the same illness or injury for which he/she was awarded PPD benefits.

Article 167 [m], Labor Code. Gau Sheng Phils., Inc. v. Joaquin, G.R. No. 144665, Sept. 8, 2004, citing Bonilla v. Court of Appeals, G.R. No. 136453, Sept. 21, 2000, 340 SCRA 760. Section 3, Rule VII, Amended Rules on Employees’ Compensation. 78 Article 194 [c], Labor Code. 79 Section 1 [a], Rule XIII, Ibid.. 80 Buena Obra v. SSS, G.R. No. 147745, April 9, 2003. 81 Section 1 [b], Rule XIII, Amended Rules on Employees’ Compensation. 75 76 77

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h. Additional requisites; proof of marriage. If the employee has been receiving monthly income benefit for permanent total disability at the time of his death, the surviving spouse must show that the marriage has been validly subsisting at the time of his disability.81

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f. Death to be compensable must occur while in the performance of job; exception. Under the law on employees’ compensation, death is compensable only when it results from a work‐connected injury or sickness.80

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3.5. DEATH BENEFIT.





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i. Material date to determine the amount of death compensation benefits. It is well‐settled that the material date to determine the amount of death compensation benefits is the date of the death of the employee and not the amount provided by law at the time of payment.82

j. Period of entitlement to death benefit.

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k. Presumptive death.

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2. For secondary beneficiaries. The income benefit for secondary beneficiaries shall be sixty (60) times the monthly income benefit of a primary beneficiary which in no case shall be less than P15,000.00 which shall likewise be paid as monthly pension per ECC Resolution No. 2799 dated July 25, 1984.84

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1. When death benefits should be paid. Under ECC Board Resolution 93‐08‐0068 issued on August 5, 1993, payment of death benefits shall be reckoned from the date a worker was declared presumptively dead after he/she had been reported missing for sometime, by proper authority, in accordance with law; except when the declaration of death specified another date, in such a case, payment of death benefits shall start from the latter date.

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l. Death benefit, not part of the estate of the deceased. The death benefits being paid under the law are not part of the deceased’s estate. They are not in the nature of inheritance. They are granted by operation of law as financial compensation and aid for the death of the employee. It must be noted that the dependents mentioned in the law are not referred to as the “heirs” but rather as “beneficiaries.” It may be further observed that the dependents are not necessarily the “heirs” of the deceased, as this term is understood in civil law. 3.6. FUNERAL BENEFIT UNDER THE LABOR CODE.

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a. Entitlement to funeral benefit. A funeral benefit of P3,000.00 shall be paid upon the death of a covered employee or a permanently totally disabled pensioner to one of the following: 1. The surviving spouse; or 2. The legitimate child who spent for the funeral services; or 3. Any other person who can show incontrovertible proof of his having borne the funeral expenses, in accordance with ECC Resolution No. 3682 dated July 21, 1987 and ECC Resolution No. 2799 dated July 25, 1984.85

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b. Increases in the amount of funeral benefit. 1. By virtue of ECC Resolution No. 3903 [May 1, 1988] passed by the Employees’ Compensation Commission (ECC), the amount of funeral benefit was increased from P3,000.00 as provided in the Labor Code and its implementing rules, to P6,000.00. 2. Subsequently, in 1992, the amount of funeral benefit to private sector employees was increased to P8,000.00 effective May 1, 1992 pursuant to ECC Resolution No. 92-07-0032 dated July 8, 1992. 3. Effective May 1, 1994, the funeral benefit was increased to P10,000.00 for the private sector and P3,000.00 for the public sector.

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a. Dependency, meaning.

Lucero v. NLRC, G.R. No. 74197, Oct. 28, 1991, 203 SCRA 218. Section 2 [A] [a] and [b], Rule XIII, Amended Rules on Employees’ Compensation. Section 2 [B] [a], Rule XIII, Ibid.. 85 Section 1, Rule XIV, Amended Rules on Employees’ Compensation. 82 83 84

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4. DEPENDENCY.

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c. Effect of denial of death benefit on entitlement to funeral benefit. The denial of the death benefit being claimed has an adverse effect on the claim for funeral benefit. The Supreme Court in the case of Tolosa v. ECC, [G.R. No. 60509, May 8, 1985, 136 SCRA 335], held that the widow is not entitled to funeral benefit in view of its ruling that she is not entitled to death benefit.

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2. Entitlement to funeral benefits. The beneficiaries shall be entitled to funeral benefits as provided for under the law, even though the body of a missing person had not been recovered and that no burial activities had been undertaken.

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1. For primary beneficiaries. The income benefit for primary beneficiaries shall be paid beginning at the month of death and shall continue to be paid for as long as the beneficiaries are entitled thereto. The monthly income benefit shall be guaranteed for 5 years which in no case shall be less than P15,000.00. Thereafter, the beneficiaries shall be paid the monthly income benefit for as long as they are entitled thereto. This is in accordance with ECC Resolution No. 2799 dated July 25, 1984.83





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c. Classification of dependency. Dependency may be classified as follows: 1. As to the amount ‐ partial or total; or 2. As to status ‐ legal or actual.

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b. Test of dependency. There is no uniform test to ascertain dependency. What the law imposes is that the dependency relationship should exist at the time of the occurrence of the injury. What would be ordinary necessity and comfort for one person may not necessarily apply to another. However, such factors as standards of living, station in life, the necessity and comfort required and the like, may prove helpful in determining dependency. Total or partial dependency is a question of fact which may be established by appropriate evidence. In Paragatos v. Barredo, [31 O. G. 97], the Supreme Court ruled that based on the evidence presented, the plaintiff‐parent was partially dependent upon his son for support, taking into account the circumstances and conditions prevailing in the country where any amount sent by a son to his father who lives in the rural area and who can hardly provide for the needs of his minor children is sufficient evidence of partial dependency.

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1. Partial dependency. A partial dependent is a person who has some means or income of his own and who receives less than all of his support from the employee. If the contributions from the employee enable him to live in accordance with his station in life, without which he could not live in accordance therewith, such person is a partial dependent.

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3. Legal dependency. Legal dependency proceeds from the mandate or operation of the law, irrespective of the ability of the dependent to support himself. This type of dependency, having been established by operation of law, is conclusive.

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d. Specific dependents under the Labor Code.

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4. Actual dependency. Under this type of dependency, the reasonable expectation of continuing support appears to be the general and important criterion to consider. An actual dependent, therefore, is one who looked to the employee for support, partially or wholly.

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1. Dependents provided under the Labor Code. Under the Labor Code, the term “dependent” refers to the following: a. The legitimate, legitimated or legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over twenty‐one (21) years of age or over twenty‐one (21) years of age provided he is incapacitated and incapable of self‐support due to a physical or mental defect which is congenital or acquired during minority; b. The legitimate spouse living with the employee; and c. The parents of said employee wholly dependent upon him for regular support. 86

86 87

Article 167 [i], Labor Code. Article 167 [i], Labor Code.

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2. Children as dependents. The children referred to as dependents under the law are: 1. Legitimate children; 2. Legitimated children; 3. Legally‐adopted children; and 4. Acknowledged natural children. As a general rule, minor children of the deceased employee are conclusively presumed to be dependents. As far as children of majority age are concerned, they should prove their dependency in accordance with the requirements of the law. Thus, a child who is over 21 years of age may still be considered dependent if he satisfies the two (2) requirements as follows: i. He is incapacitated; and ii. Incapable of self‐support due to a physical or mental defect which is congenital or acquired during 87 minority.

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2. Total dependency. A total dependent is one who has no means of support and entirely depends for support upon the contribution from the employee or one who may have an income from other sources but the amount of which is too small and insignificant as would enable him to support himself without the major support from the employee.

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The term “dependency” does not mean absolute dependency for the necessities of life but rather, that the dependent looked to and relied on the contribution of the claimant, in whole or in part, as a means of supporting and maintaining himself in accordance with his station in life. Under this concept, a person may be considered a dependent although he is able to maintain himself without any assistance from the decedent. (Castillo v. Cadwallader & Gibson Lumber Company, G.R. No. 41267, Sept. 26, 1934). For instance, the legitimate spouse may be gainfully employed himself or herself but he/she is considered a dependent for as long as he/she is living with the deceased employee at the time of the occurrence of death.





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88

Samar Mining Co., Inc. v. WCC, G.R. Nos. L-29938-39, March 31, 1971; Consuegra v. GSIS, G.R. No. L-28093, Jan. 30, 1971.

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4. Policy on surviving spouse. Under ECC Board Resolution No. 97‐09‐0500 issued on September 4, 1997, a policy has been enunciated as regards surviving spouse found not to be living with the covered employee at the time the employee died. Said surviving spouse is entitled to employees' compensation benefits provided that the separation occurred owing to any of the following circumstances: 1. Refusal of the covered employee to continue living with the surviving spouse; or the employee's abandonment of the said spouse, without justifiable or valid cause; 2. Attempt of the covered employee against the life of the surviving spouse, common child/children of the spouse; 3. Commission of an act of sexual abuse against the surviving spouse, common child/children of the spouse; 4. The covered employee's recurrent commission of physical violence, or grossly, abusive conduct, against the surviving spouse, common child/children of the spouse; 5. The covered employee's infliction of physical violence, or imposition of moral duress, to compel the surviving spouse, common child/children or child/children of the spouse to change their religious or political affiliation; 6. Attempt of the covered employee to corrupt or induce the surviving spouse, common child/children or child/children of the spouse to engage in prostitution, or to make them connive with the employee in such an act of corruption or inducement; 7. Drug addiction or habitual alcoholism of the covered employee; 8. Lesbianism or homosexuality of the covered employee; 9. Contraction of bigamous marriages by the covered employee, whether in the Philippines or abroad; 10. Sexual infidelity or perversion of the covered employee; 11. The covered employee's act of allowing the surviving spouse, common child/ children or child/children of the spouse to be subjected to acts of lasciviousness; and 12. The covered employee's contraction of serious sexually transmitted disease extra‐maritally.

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3. Legitimate spouse as dependent. At the outset, it bears stressing the fact that, unlike the old Workmen’s Compensation Act where Sections 9 and 10 thereof explicitly made a distinction between “widow” and “widower” in terms of entitlement to benefits, the Labor Code uses the generic term “spouse” which may refer either to a widow (wife) or a widower (husband). In order for the widowed spouse of the deceased employee to be entitled to compensation benefits, the law imposes the following requirements: 1. He/she is a legitimate spouse; and 2. He/she should be living with the deceased employee at the time of death. A widowed spouse is, as a general rule, conclusively presumed to be a dependent when living with the deceased at the time of the latter’s death, irrespective of whether he/she is gainfully employed. The only time when this conclusive presumption does not attach is when the surviving spouse is not the legitimate spouse or is voluntarily living apart from the deceased employee at the time of death. In case there are two (2) wives claiming the benefits under the law, the Workmen’s (now Employees’) Compensation Commission, according to the Supreme Court, is empowered to rule on the issue of who is the legitimate spouse who shall be awarded the benefits. The Commission may act as referee and arbitrator to help the two (2) claimants reach an amicable settlement.88 In case the legitimate surviving spouse was living separately from the deceased employee at the time of death, he/she may be treated as dependent if such separation was necessary and justified as when the same was caused by health or business reasons or because of the fault of the deceased spouse. Under these situations, it is believed that the conclusive presumption of dependency should still apply. In Vda. de Makabenta v. Davao Stevedore Terminal Company, [G.R. No. L‐27489, April 30, 1970], a marriage celebrated in a hospital where the deceased employee was confined after the fatal accident where he sustained the injury but before his death, was held sufficient for purposes of determining the dependency of the wife. For three (3) months prior to such marriage, they were already living together as common‐law husband and wife.

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Under the old Workmen’s Compensation Act, as amended, stepchildren as well as brothers and sisters of the deceased employee are considered dependents. However, under the Labor Code, reference to them is absent. Therefore, they should no longer be considered as dependents. As far as illegitimate children are concerned, paragraph [i] of Article 167 of the Labor Code defining the term “dependent” does not mention or make reference to them as dependents. However, paragraph [j] thereof and Section 1 [c], Rule XV of the Amended Rules on Employees’ Compensation treat illegitimate children as secondary beneficiaries. Legally-adopted children, to be considered dependents, must have been judicially-decreed as such prior to the occurrence of the injury and death of the deceased employee. Without judicial pronouncement on the adoption, as when the child was merely taken into the home and treated as a member of the family, would not be sufficient for purposes of entitlement to the benefits.





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5. BENEFICIARIES.

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c. Primary beneficiaries. The following beneficiaries shall be considered primary: 1. The legitimate spouse living with the employee at the time of the employee’s death until he/she remarries; and 2. The legitimate, legitimated or legally adopted or acknowledged natural children who are unmarried, not gainfully employed, not over 21 years of age, or over 21 years of age, provided that he is incapacitated and incapable of self‐support due to a physical or mental defect which is congenital or acquired during minority. A dependent acknowledged natural child shall be considered as a primary beneficiary only when there are no other dependent children who are qualified and eligible for monthly income benefit. If there are two or more acknowledged natural children, they shall be counted from the youngest and without substitution, but not exceeding five (5). This rule is in accordance with ECC Resolution No. 2799 dated July 25, 1984.91

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d. Secondary beneficiaries. The following beneficiaries shall be considered secondary: 1. The legitimate parents wholly dependent upon the employee for support; 2. The legitimate descendants and illegitimate children who are unmarried, not gainfully employed and over 21 years of age, or over 21 years of age provided that he is incapacitated and incapable of self‐support due to a physical or mental defect which is congenital or acquired during minority.92

89 90

91 92 93

Article 167 [j], Labor Code. Section 1 [a], Rule XV, Amended Rules on Employees’ Compensation. Section 1 [b], Rule XV, Amended Rules on Employees’ Compensation. Section 1 [c], Rule XV, Ibid.. Section 1 [a], Rule XV, Ibid..

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e. When to determine beneficiaries. Beneficiaries shall be determined at the time of the employee’s death.93 Consequently, although in other jurisdictions, posthumous children who died before the employee’s death are considered as dependents (King v. Peninsulas Portland Cement Co., 216 Mich. 335), however, under the laws of the Philippines, they cannot, as a general rule, be so considered since beneficiaries are determined at the time of the death of the employee. However, in Vda. de Makabenta v. Davao Stevedore Terminal Company, [G.R. No. L‐27489, April 30, 1970], the daughter born after the death of the employee and, therefore, a posthumous child, was considered a legal dependent of the deceased employee.

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b. General classification. Beneficiaries under the Labor Code may be classified as follows: 1. Primary; or 2. Secondary.90

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a. Beneficiaries, defined. The term “beneficiaries” means the dependent spouse until he/she remarries and dependent children who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants, who are the secondary beneficiaries, provided that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit.89

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5. Parents of deceased employee as dependents. In order for the parents of the deceased employee to qualify as dependents, the law simply imposes one (1) requirement, i.e., that they are wholly and not partially, dependent upon the latter for regular support. Living with the deceased employee is not a requirement. The conclusive presumption applicable to the other dependents is not followed in the case of parents. Consequently, the burden of proof is upon such parents to prove dependency. As to what is meant by “regular support,” the law and the implementing rules failed to define or describe it. However, such regularity of support which is certainly a question of fact may be inferred from the peculiar facts of a case. In Malate Taxicab v. Del Villar, [G.R. No. L‐7489, February 29, 1956], the parents were considered dependents despite the substantial income of the father who is an accountant earning P300.00 per month. The test of dependency, according to the High Court, is not merely whether the contributions were necessary to bare subsistence. Dependency may exist although the dependents could have subsisted without the assistance he received, if such contributions were relied on by the claimant for his means of living as determined by his position in life. So, it is immaterial that claimant could have so reduced his living expenses that he could have been supported independently from the earnings of the employee. One need not be actually a part of the deceased employee’s household in order to be a dependent. There may be dependency notwithstanding the fact that the employee did not work steadily or was absent from the home at the time of his accidental death, and notwithstanding the employee’s unlawful acts or his statement in his application for employment that he had no dependents.





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g. Benefits payable. Primary beneficiaries shall be entitled to a monthly income benefit. In their absence, the secondary beneficiaries shall be entitled to a monthly income benefit not to exceed sixty (60) months and the death benefit shall not be less than P15,000.00 per ECC Resolution No. 2799 dated July 25, 1984.97

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END OF DISCUSSION ON TOPIC F. SOCIAL LEGISLATION

Section 2 [a], Rule XV, Amended Rules on Employees’ Compensation. Section 2 [b], Rule XV, Ibid.. Section 2 [c], Rule XV, Ibid.. Section 3, Rule XV, Ibid.. 98 No. I [1] thereof. 99 No. I [2] thereof. 100 Tibulan v. Inciong, G.R. No. 48576, Aug. 11, 1989, 176 SCRA 316. 101 Id.. 94 95 96 97

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i. Evidence to prove relationship and dependency. A marriage certificate issued by the parish priest who solemnized the marriage between the surviving spouse and the deceased is sufficient to establish marriage relationship.100 The baptismal certificates and birth certificates of the children are also sufficient evidence to prove the relationship of the dependents with the deceased. Strict observance of the technical rules of evidence is not properly demanded in employees’ compensation cases.101

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h. Monthly income benefit, how distributed. The ECC passed Resolution No. 90‐03‐0022 [March 23, 1990] adopting and promulgating the Suppletory Rules to the Amended Rules on Employees’ Compensation. These Suppletory Rules provide for the distribution of monthly income benefits as follows: 1. Monthly income benefits shall be shared equally by all the primary beneficiaries including dependent children who were not considered in the determination of dependent pensions. Upon emancipation or otherwise disqualification to entitlement to the dependent pension of a dependent child, only ten percent (10%) shall be deducted from the benefits and the remaining income benefits shall, once again, be divided equally by the qualified primary beneficiaries.98 2. If there are no primary beneficiaries, the secondary beneficiaries shall also share equally in the monthly income benefits.99

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f. Rule on priority of beneficiaries. 1. Priority of primary beneficiaries; secondary beneficiaries excluded. Primary beneficiaries have priority claim to death benefits over secondary beneficiaries. Whenever there are primary beneficiaries, no death benefit should be paid to secondary beneficiaries.94 2. In the absence of primary beneficiaries, death benefits should be paid to secondary beneficiaries. If the deceased employee has no primary beneficiaries at the time of his death, the death benefits should be paid to his secondary beneficiaries.95 3. In the absence of both primary and secondary beneficiaries, death benefits shall accrue to the Employees’ Compensation Fund. If the deceased employee has no primary or secondary beneficiaries at the time of his death, the death benefit shall accrue to the Employees’ Compensation Fund.96



f Social Legislation

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