FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
S.B. No. 2562 
IntroJli~ed by SEN. MANNY VILLAR 
EXPLANATORY NOTE 
lil 
OCT 12 P2:13 
The State is duty-bound to maintain and strengthen the mantle of ample support and full 
protection it accords to workers for the upliftment and advancement of their welfare, both from the 
public and private sectors. Such duty is reflected in the installation of social institutions such as the 
Employees' Compensation Commission (ECC), Social Security System (SSS) and the Government 
Service Insurance System (GSIS). These institutions carry out (he policy of the State affirming labor 
as a primary social economic force. 
However, the fragmentation of these agencies and their respective services more often than 
not cause more problems and inconvenience to the workers which result from conflicting policies 
with respect to workers ITom the public sector vis-a-vis the ones from the private sector. 
This bill seeks to establish a Workers' Compensation Program which shall build and sustain 
among workers and employers a culture of safe and healthy work environment in order to minimize 
the incidence of work contingencies; ensure prompt and adequate compensation for workers and their 
dependents in the event of work contingencies; and provide occupationally-disabled workers with 
rehabilitation services to enable them to become productive members of society. 
In view of the foregoing, the approval of this initiative is earnestly sought. 
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"8 
'.f~ l[ 
FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
S.B. No. 2562 
I 
""," 
Introduced by SEN. MANNY VILLAR 
AN ACT 
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ESTABLISHING THE WORKERS COMPENSATION PROGRAM, THE WORK 
CONTINGENCY INSURANCE FUND, THE PHILIPPINE WORKERS COMPENSATION 
AUTHORITY AND DEFINING THEIR POWERS AND FUNCTIONS, AMENDING FOR 
THIS PURPOSE ARTICLES 166 TO 288-A OF TITLE 2 BOOK IV OF PRESIDENTIAL 
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE "LABOR CODE OF 
THE PHILIPPINES," AND APPROPRIATING FUNDS THEREFORE 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
ART, 1. Short Title. - This Act shall be known as the "Workers Compensation Act of201 0." 
CHAPTER I 
DECLARATION OF PRINCIPLES 
ART. 2. Basic Principles. - The State affirms labor as a primary social economic force. It 
shall protect the rights of the workers and promote their welfare. Toward this end, the State shall 
establish a tax-exempt Workers' Compensation Program which shall: 
1. 
Build and sustain among workers and employers a culture of safe and healthy work 
environment in order to minimize the incidence of work contingencies; 
2. Ensure prompt and adequate compensation for workers and their dependents in the event 
of work contingencies; and 
3. Provide occupationally-disabled workers with rehabilitation services to enable them to 
become productive members of society. 
For this purpose, the Workers' Compensation Program is hereby established. 
CHAPTER II 
DEFINITIONS 
ART. 3. Definition of Terms. - As used in this Act unless the context indicates otherwise: 
(a) "Authority" means the Philippine Workers' Compensation Authority. 
(b) "Beneficiary" means the legitimate spouse, the legitimate, legitimated, legally adopted 
children and illegitimate children, who shall be the primary beneficiaries; in their 
absence, the dependent parents or, subject to the restrictions imposed on dependent 
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children, the legitimate or the illegitimate descendants who are the secondary 
beneficiaries. 
(c) "Board" means the Board of Trustees of the Philippine Worker's Compensation 
Authority. 
(d) "Compensation" means all benefit payments made under this Act. 
(e) "Contribution" means the amount remitted or to be remitted by an employer to the Work 
Contingency Insurance Fund for each employee under hislher employ. 
(f) "Dependent" means the legitimate, legitimated, legally adopted or illegitimate child who 
is unmarried, not gainfully employed, and not over twentyone years (2!) of age or over 
twenty-one years (2!) of age provided he/she is incapacitated and incapable of self-
support due to a physical or mental defect which is congenital or acquired during 
minority; the legitimate spouse living with the worker; and the parents of said worker 
wholly dependent upon him/her for regular support. 
(g) "Disability" means loss or substantial reduction of eaming power due to an injury or a 
disease arising out of and in the course of employment. 
(h) "Employer" means any person, natural or juridical, domestic or foreign, who carries on in 
the Philippines any trade, business, industry, undertaking or activity of any kind and uses 
the services of another person who is under his/her orders as regards the employment, 
including the national government, its political subdivisions, agencies or instrumentalities 
and govemment-owned or controlled corporations. 
(i) "Fund" means the Work Contingency Insurance Fund. 
G) "GSIS" means the Government Service Insurance System 
(k) "Occupationally Disabled Worker" or ODW refers to a worker whose usual work 
capability! and earning capacity has been affected by his/her work-connected disease or 
injury. 
(I) "SSS" means the Social Security System. 
(m) "System" means the SSS or GSIS, as the case may be. 
(n) "Work Contingency" refers to any disease, injury or death arising out of employment. 
(0) "Worker" means any person employed in a private or government entity and is a member 
of the System. 
(p) "Working Life" means the normal productive life of a worker until the compulsory age of 
retirement. 
CHAPTER III 
THE WORKERS COMPENSATION PROGRAM 
A.COVERAGE 
ART. 4. Coverage 
(a) Coverage in the Program shall be compulsory upon all employees and their workers. 
(b) Compulsory coverage of employer shall take effect on the first day of its business 
operation, and that of the worker, on the first day of employment. 
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(c) The Authority may consider coverage of overseas Filipino workers and workers in the 
informal sector subject to regulations as it may prescribe. 
ART. 5. Registration. The registration of an employer and his/her workers with the SSS 
or GSIS shall be automatic registration in the Program. Their respective membership 
numbers provided by the Systems shall be the same numbers that wiIl be used under this Act. 
B. BENEFITS 
B.lo LOSS-OF-INCOME BENEFIT 
ART. 6. Loss-Of-Income Benefit. Under such regulations as the Authority may 
approve, any worker who sustains a work-connected injury or contracts a work-connected 
disease resulting into loss of income due to his/her inability to work shall, for each day of 
such inability to work, be paid a loss-of income benefit. The amount for the loss-of-income 
benefit shall be fixed by the Authority. 
The payment of the loss-of-income benefit shall be for the duration of the inability of 
the worker to work but shall not extend beyond the working life of the worker. It shall be 
suspended or terminated if he/she: 
, 
1. Fails to present himself/herself for periodic medical and physical examination as may 
be required by the Authority; 
2. Recovers from his/her disease or injury; or 
3. Gets gainfully employed. 
B.2. BENEFIT FOR LOSS OR LOSS OF USE OF BODY PART 
ART. 7. Lump Sum Benefit. Under such regulations as the Authority may approve, 
any worker who contracts a work-connected disease or sustains a work-connected injury 
resulting in permanent loss or loss of use of body part shall be paid a lump sum' benefit in an 
amount fixed by the Authority in accordance with the prevailing intemational standards as 
defined by the International Labor Organization (ILO) or similar bodies; Provided, that the 
following loss or loss of use of body parts shall not entitle the worker to a lump sum benefit 
but only to a loss-of-income benefit for the duration of his/her 
working life: 
I. Complete loss of sight of both eyes; 
2. Loss of two I imbs at or above the ankle or wrist; 
3. Permanent complete paralysis of two limbs; 
4. Brain injury resulting in incurable imbecility or insanity; and 
5. Such other cases as may be determined by the Authority. 
B.3. MEDICAL AND ALLIED BENEFITS 
ART. 8. Medical and Allied Benefits. Upon due notice to the Authority, a worker who 
suffers from a work-connected disease or injury shall be provided with medical benefits and 
prosthetic devices as the nature of his/her disease or injury may require subject to the expense 
limitation as may be prescribed by the Authority; Provided, that the worker submits 
himself/herself to a medical examination as may be required by the Authority; and Provided, 
further, that payment of benefits shall be suspended if the worker unreasonably refuses to submit 
himself/herselfto the medical examination. 
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B.4 CARER'S ALLOWANCE 
ART. 9. Carer's Allowance. In cases where the workers' incapacity resulting from a 
work-connected injury or disease is of such magnitude as determined by the Authority that 
he/she must have the constant help of another person, the worker shall for 'the duration of 
his/her disability but not to exceed his/her working life, be entitled to a Carer's allowance. 
B.5 DEATH BENEFITS 
ART. 10. Death. Under such regulations as it may approve, the Authority shall pay to 
the primary beneficiaries upon the death of the covered worker the underlying cause of which 
is a work-connected disease or injury an amount equivalent to his/her loss-of-income benefit 
for the remainder of his/her working life, plus ten percent (10%) thereof for each dependent 
child, but not exceeding five, beginning with the youngest and without substitution; 
Provided, that if he/she has no primary beneficiary, the Authority shall pay to his/her 
secondary beneficiaries the loss-of-income benefit. 
A funeral benefit in an amount as may be determined by the Authority shall also be 
paid upon the death of a covered worker due to a work- connected disease or injury. 
B.6 PROVISIONS COMMON TO ALL BENEFITS 
ART. 11. Relationship and Dependency. All questions of relationship and 
dependency shall be determined at the time of the covered worker's contingency. If the 
Authority in good faith pays loss-of-income benefit to a dependent who is inferior in right to 
another dependent or with whom another dependent is entitled to share, such payment shall 
discharge the Authority from liability, unless and until such other dependent notifies the 
Authority of his/her claim prior to the payments. 
In case of doubt as to the respective rights of rival claimants, the Authority is hereby 
empowered to determine as to whom payments should be made in accordance with such 
regulations as the Authority may approve. If the money is payable to a minor or incompetent, 
payment shall be made by the Authority to the surviving parent or legal guardian. 
ART. 12. Second Injuries/Disease. If a worker receiving a loss- of income benefit 
suffers another work-connected disease, the worker shall be entitled to an additional medical 
and (jther allied benefits necessary for the treatment of the second work-connected disease 
subject to the cost limitation as may be prescribed by the Authority. 
ART. 13. Earned Benefits. (a) A worker who is receiving loss-ofincome benefits 
shall not be deprived of his/her right to receive earned benefits such as allowances for 
holidays, vacation leaves and any benefit granted under the collective bargaining or other 
agreements with the employer during the period that he/she is enjoying loss-of-income 
benefit. 
(b) Except as otherwise provided, no contract, regulation or device whatsoever shall 
operate to deprive the worker or his/her dependents of any part of the income benefits and 
medical or related services granted. Existing medical services being provided by the 
employer shall be maintained and continued to be enjoyed by their workers. 
(c) Benefits shall not I be transferable nor liable to tax, attachment, garnishment, levy 
or seizure by or under any legal process Whatsoever, either before or after receipt by the 
person or persons entitled thereto, except to pay any debt of the worker to the Fund. 
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ART. 14. Prescriptive Period. No claim for compensation shall be given due course 
unless said claim is filed with the Authority within three (3) years from the time the work-
connected disease or injury happened. 
ART. 15. Prohibition. No agent, attorney; or other person pursuing or in-charge of 
the preparation or filing of any claim for benefit shall demand or charge for his/her services 
any fee land any stipulation to the contrary shall be null and void. The retention or deduction 
of any amount from any benefit granted for the payment of fees of such services is 
prohibited. Violation of this Article shall be punished by a fine of not less than Five Hundred 
Pesos (P500.00) nor more than Five Thousand Pesos (P5,000.00), or imprisonment for not 
less than six (6) months but not more than one (I) year, or both, at the discretion of the court. 
C. REHABILITATION OF OCCUPATIONALLY-DISABLED WORKERS 
, ART. 16. Rehabilitation Services. (a) The Authority shall establish a continuing 
program designed to meet the individual needs of an occupationally disabled worker to 
re~tore his/her earning capability. In this regard, the Authority may maintain or avail of! the 
services of specialized private and public rehabilitation facilities or centers that can provide 
the necessary assistance that respond to the needs of occupationally-disabled workers. 
(b) Arrangements for placement of vocationally/technically trained occupationally-
disabled workers shall be an integral part of the rehabilitation program: As an incentive to 
employers, the Authority may enter into agreements to share in the payment of wages of re-
employed occupationally-disabled workers subject to the conditions it may provide. 
D. WORK CONTINGENCY PREVENTION 
ART. 17. Work Contingency Prevention. The Authority shall establish a continuing 
program that will increase awareness among employers and their employees on the 
importance of work contingency prevention. It shall ensure that an appropriate culture of 
occupational health and safety is developed among them and the general public as well in 
order that the occurrence of occupational diseases or injuries is minimized, if not completely 
prevented. It shall undertake continuing studies and researches and develop and implement 
an information, education, communication, and training programs in the field of work 
contingency prevention. 
ART. 18. Employer's Responsibility on Work Contingency Prevention. All 
employers shall install and maintain safety devices and shall put in place all necessary' 
precautionary measures and safeguards for the prevention of work accidents and occupational 
diseases. Any employer who fails to comply with these requirements upon determination by 
an appropriate authority shall pay to the Authority a penalty equivalent to fifty (50%) percent 
of the benefits payable to the worker who suffers from an accident or contracts an 
occupational disease at the workplace. In the case of employers who were previously 
assessed by the Authority a higher rate of contribution because of the high frequency of work 
accidents or occupational diseases, the penalty shall be one hundred percent (100%) of the 
benefits payable to the worker who suffers from an accident or occupational disease at the 
workplace. 
CHAPTER IV 
THE WORK CONTINGENCY INSURANCE FUND 
A. THE FUND 
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ART. 19. Work Contingency Insurance Fund. There is hereby created a Work 
Contingency Insurance Fund hereinafter referred to as the Fund which shall be under the 1 
direct administration of the Philippine Workers' Compensation Authority. The Fund shall 
consist of: 
1. Contributions remitted by employers at rates prescribed by the Authority pursuant to 
Chapter V of this Act; 
2. The current balances of the State Insurance Fund collected and administered by the 
SSS and the GSIS under P.O. 626. as amended, including arrearages of the government 
with the GSIS and of private employers with the SSS for the said Fund; 
3. Subsequent appropriations pursuant to Articles 20 (b) and 34 of this Act; 
4. Donations and grants-in-aids; and 
5. All accruals thereof including investment earnings. 
The Fund shall be used for the payment of the compensation and other benefits to all 
qualified beneficiaries for work-connected disease, injury or death and for work-contingency 
prevention programs and rehabilitation services programs for occupationally-disabled 
workers and for other purposes necessary and authorized under this Act. 
ART. 20. Management and Investment of Fund. (a) The use, disposition, 
investments, disbursements, administration and management of the Fund including any 
subsidy, grant or donation received for Program operations shall be governed by resolution of 
the Board provided that: 
1. All funds under the management and control of the Authority shall be subjected to all 
rules and regulations applicable to all public funds; and 
2. The Authority may disburse each year not more than twelve percent (12%) of the 
c0ntributions and investment earnings collected for its operational expenses. 
(b) A p0l1ion of the Fund that is not needed to meet the current obligations may be 
invested under such terms and conditions and rules and regulations as may be prescribed 
by the Authority; Provided, that investments shall satisfy the requirements of liquidity, 
safety, security and yield in order to ensure the actuarial solvency of the Fund. 
ART. 21. Government Guarantee. The Republic of the Philippines guarantees the 
benefits under this Act and accepts general responsibility for the solvency of the Fund. In 
case of any deficiency, the same shall be covered by supplemental appropriations from the 
national government. 
. 
ART. 22. Liabilities. (a) The Fund shall be liable for the compensation due to the 
worker or his/her dependents, except when the disability or death is occasioned by the 
worker's intoxication, willful intent to injure or kill himself/herself or another, notorious 
negligence, or otherwise provided under this Act. 
(b) Unless otherwise provided, the liability of the Fund under this Act shall be 
exclusive and in place of the liabilities of the employer to the worker or his/her dependents 
with respect to work-connected disease, injury or death. The payment of compensation under 
this Act shall not bar the recovery of benefits which the worker may be entitled to under 
other laws. 
(c) When the disability or death is caused by circumstances creating a legal liability 
against a Third Party, the worker or the dependents in case of his/her death shall be paid by 
the Authority under this Act. In case benefit is paid under this Act, the Authority shall be 
7 


subrogated to the rights of the worker or the dependents in case of his/her death in 
accordance with the law. 
Where the Authority recovers from such Third Party damages in excess of those paid 
or allowed under this Act, such excess shall be delivered to the worker or his/her dependents, 
after deducting the cost of proceedings and expenses of the Authority. 
A. CONTRIBUTION 
ART. 23. Employer's Contribution. Under such regulations as the Authority'may 
prescribe, beginning as of the last day of the month when a Worker's' compulsory coverage 
takes effect and every month thereafter during his/her employment, the employer shall remit 
to the Authority a contribution equivalent to one percent (1 %) of the worker's monthly 
salaries or wages, or such amount as may be fixed by the Authority after due consideration of 
the liquidity of the Fund. 
Remittance of employers' contributions to the Authority shall be made within the first 
five (5) days of each month following the month for which they are applicable. If deemed 
expedient and advisable by the Authority, the collection and remittance of contribution may 
be made quarterly or semi-annually in advance; Provided that, upon separation of a worker, 
any contribution paid in advance but not due shall be credited or refunded to his/her 
employer. 
The rate of contribution shall be reviewed periodically subject to the limitations 
herein provided and may be revised based on actuarial studies. Contributions under this Act 
shall be paid in their entirety by the employer and any contract or device for the deduction of 
any portion thereof from the wages or salaries of the workers shall be null and void. 
When a covered worker dies during employment, or is separated from employment, 
his/her employer's obligation to pay the monthly contribution arising from that employment 
shall cease on the last day of the month of contingency. 
When a covered employee becomes disabled during employment and is unable to 
work, his/her employer's obligation to pay the monthly contribution arising from that 
employment shall be suspended during such months that he/she is not receiving salary or 
wages. 
ART. 24. Default. (a) Any employer who defaults in the payment of such 
contributions or refuses or neglects to pay the same after they become due and payable shall 
be liable to a surcharge of three percent (3%) for every month of default in addition to the 
contributions, both of which shall be collected by the Authority or its duly organized 
representatives in the same manner as taxes are made collectible under the National Internal 
Revenue Code. as amended. The remittance by the employer of the contributions to the 
Authority shall take priority over and above the payment of any and all obligations, except 
salaries and wages of its employees. 
(b) Failure or refusal of the employer to payor remit the contributions herein 
prescribed shall not prejudice the right of the employee or his dependents to the benefits of 
this 1\.ct. If the sickness, injury, disability, or death occurs before the Authority receives any 
report of the name of his employee, the employer shall be liable to the Authority for the lump 
sum 'equivalent to the benefits to which such employee or his dependents may be entitled. 
CHAPTER V 
THE PHILIPPINE WORKERS' COMPENSATION AUTHORITY 
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ART. 25. The Philippine Workers' Compensation Authority. The Philippine Workers' 
Compensation Authority (PWCA) is hereby established to implement the Workers' 
Compensation Program. The Authority shall have the status and category of a government 
financial institution. 
The Authority shall be exempted from the payment of taxes, fees, charges, levy, 
customs or import duty, and no taw hereafter enacted shall apply to the Authority unless it is 
provided therein that the same is applicable by expressly stating its name. 
Any donation, bequest, subsidy or financial aid which may be made to the Authority 
shall constitute as allowable deduction from the income of the donor for income tax purposes 
and shall be exempted from donor's tax, subject to such conditions as provided in the 
National Internal Revenue Code, as amended. 
ART. 26. Powers and Functions. The Authority, as the implementing agency for the 
Workers Compensation Program, shall have the following powers and functions: 
1. To issue rules land regulations necessary for the effective implementation of the 
Program; 
2. To assess, review from time to time, fix and adjust the rate of contributions from all 
employers, collect the same and manage the Fund; Provided, that the Authority may 
assess higher rates of contributions for employers whose records show a high frequency 
of work accidents or occupational diseases; 
3. To settle any claim or dispute arising from this Act with respect to coverage, 
elltitlement to benefits, collection and payment of contributions and penalties thereon, or 
any other matter related thereto including the power to administer oath and affirmation 
and to issue subpoena; 
4. To undertake the necessary actuarial studies and calculations concerning increases in 
benefits and the financial stability of the Fund, the rationalization of the loss-of-income 
benefits and other benefits for occupational diseases, injury or death; Provided, that the 
Authority may upgrade the benefits and add new ones so long as the actuarial stability of 
the Fund shall at all times be ensured; 
5. To organize its office, fix the compensation of and appoint its personnel who shall be 
exempted from the provisions of R.A. 6758, develop and implement programs as may be 
necessary to promote the welfare and interest of its employees; and adopt its annual 
budget of expenditures chargeable against, the twelve percent (12%) operational 
expenses provided for in Article 20 (a) (2) hereof; 
6. To sue and be sued in court; 
7. To acquire, utilize, dispose of property which may be necessary or expedient for the 
attainment of the purposes of this Act; 
8. To enter into agreements or contracts for the proper, efficient and stable administration 
of the Program; 
9. To receive and accept grants, donations and other forms of financial assistance from 
any natural or juridical person, whether domestic or foreign, or from any international 
organization; 
10. To submit annually a report to the President of the Philippines covering its operations, 
particularly the status of the finances and other activities in the administration and 
enforcement of the Program during the preceding year, including information and 
recommendations on policies for the improvement of the Program; 
9 


II. To perform such other acts as it may deem appropriate for the attainment of the 
purposes and proper enforcement of the provisions of this Act. 
, ART, 27. The Board of Trustees. The corporate powers and functions of the 
Authority shall be vested in and exercised by the Board of Trustees composed of the 
Secretary of Labor and Employment as Ex-Officio Chairperson, the President of the 
Authority as Ex-Officio Vice-Chairperson and the Insurance Commissioner as ex-officio 
members and four (4) other members to be appointed by the President of the Philippines, two 
(2) of whom shall represent the labor sector, one (1) coming from the public sector and 
another one (1) from the private sector, and two (2) representing the employers' group. 
The four (4) appointive members shall be chosen from among the nominees of 
workers and employers organizations. 
The appointed members shall hold office for six (6) years, or until their successors 
are duly appointed and qualified. Any vacancy in the Board other than through the expiration 
of the term shaIl be fiIled in the manner in which the original appointment was made and the 
appointee shall serve only the unexpired term of his/her predecessor. The members of the 
Board shall receive a per diem of at least Two Thousand Five Hundred Pesos (P2,500.00) for 
each board meeting actually attended by them but not to exceed Ten Thousand Pesos 
(PIO,OOO.OO) a month and reasonable transportation and representation allowances as may be 
fixed by the Board. 
ART. 28. Powers and Functions of the Board of Trustees. The Board of Trustees 
shall have the following powers and functions: 
I. To formulate the policies and guidelines and develop programs to effectively carry out 
the purposes of this Act; 
2. To adopt, amend and rescind such rules and regulations as may be necessary to carry 
out the provisions and purposes of this Act; 
3. To approve the annual operating budget of the Authority as recommended by its 
President; 
4. To approve the organizational and administrative structures and the compensation 
schedule of the personnel of the Authority and to appoint its senior officials; 
5. To approve and adopt guidelines affecting investments, settlement of claims, 
disposition of acquired assets and increased benefits to workers; 
6. The provision of any law to the contrary notwithstanding, to compromise or release, in 
whole or in part, any claim or to settle any liability to the Authority, regardless of the 
amount involved, under such terms and conditions as it may impose for the best interest 
orthe Authority; 
. 7. To review on appeal any dispute arising under this Act with respect to coverage, 
benefits, contributions and penalties thereon or any matter related thereto; and 
8. To do and perform any and all acts necessary, proper and incidental to the attainment 
of the purposes and objectives of this Act. 
ART. 29. The President and Other Senior Officials of the Authority. 
I. The President of the Authority. The President of the Philippines shall appoint the 
President of the Authority, hereinafter referred to as the President. The President shall be 
a career official and shall not be removed from office except for cause in accordance with 
existing laws. 
10 


The President shall advise the Board and shall carry out its policies and decisions. In 
addition, he/she shall have the following duties and functions: 
a.To act as the Chief Executive Officer of the Authority; 
b. To appoint the lower level personnel of the Authority; 
c. To remove, suspend or otherwise discipline the officials and employees of the 
Authority in accordance with existing Civil Service rules and regulations; and 
d. To perform other duties as may be assigned to himlher by the Board. 
2. Other Senior Officials of the Authority. The President shall be assisted by two (2) 
Senior Vice-presidents who shall be appOinted by the Board: one (1) for operations; and 
one (1) for fund management, The Senior Vice- President for fund management must 
have actuarial experience. 
ART. 30. Regional and Field Offices. The Authority shall establish regional and field 
offices in provinces or chartered cities, or wherever it is deemed necessary, to bring its 
services closer to the workers. 
The field offices shall have original and exclusive jurisdiction to settle any dispute 
arising from this Act with respect to coverage, entitlement to benefits, collection and 
paym~nt of contributions and penalties thereon, or any other matter related thereto, subject to 
appeal to the Board. 
CHAPTER VI 
RECORDS, REPORTS AND PENAL PROVISIONS 
ART. 31. Record of Disease, Injury or Death. All employers shall maintain a record 
of their employees' sickness, injuries or death and upon (he request of the Authority shall 
provide the same to support any or all claims for benefits under this Act which may be filed 
by the workers. 
Any employer who unreasonably withholds material information relative to sickness, 
injury or death of a worker shall be held liable for fifty percent (50%) of the benefits to which 
the worker may be found to be entitled, the payment of which shall accrue to the Fund. 
In case of payment of benefits for any claim which is later determined to be 
fraudulent and the employer is found to be a party to the fraud, such employer shall 
reimburse to the Authority the full amount of the compensation paid. 
ART. 32. Penal Provisions. (a) Where the violations consist of failure or refusal to 
remit contribution to the Authority, the penalty shall be a fine of not less than Five Hundred 
(P500.00) but not more than One Thousand (PI ,000.00) Pesos multiplied by the total number 
of employees employed by the firm and imprisonment of not less than one (1) year. Ifthe 
offender is a head of a government agency, political subdivision, government owned or 
controlled corporation, or state college or university, he/she shall suffer the additional penalty 
of absolute perpetual disqualification from holding public office and from holding any 
profession or calling licensed by the government. 
(b) Any person found to have participated directly or indirectly in the commission of 
fraud, collusion, falsification, or misrepresentation in any transaction with (he Authority 
whether for him/her or for some other persons, shall suffer the penalties provided for in the 
Revised Penal Code or in other special penal laws. 
11 


CHAPTER VII 
TRANSITORY PROVISIONS 
ART. 33. Settlement of EC Claims. All employees' compensation claims which 
accrued prior to the effectivity of this Act, shall be filed with the Social Security System 
(SSS) and the Government Service Insurance System (GSIS) for claims in the private and 
government sectors, respectively, and shall be processed, determined and settled in 
accordance with the implementing rules and regulations provided for in P.O. 626, as 
amended, and such laws, rules and regulations existing at the time of their accrual. Claims 
pending before the Systems as of the effectivity date of this Act shall be processed and settled 
in accordance with laws, rules and regulations existing at the time their cause of action 
accrued. Claims for contingencies that accrued upon the effectivity of this Act shall be 
processed in accordance with this Act. 
All cases pending before the Employees' Compensation Commission established 
under p.o. 626; as amended, on the date of effectivity of this Act shall be transferred to and 
processed by the Authority. On employees' compensation cases on appeal with the Court of 
Appeals and the Supreme Court as of the date of effectivity of this Act, the Authority shall 
continue as respondent thereof until its final resolution. 
All cases pending before the Employees' Compensation Commission, which accrued 
before the effectivity of this Act, shall be processed and adjudicated by the Authority in 
accordance with the law, rules and procedure existing prior to the effectivity of this Act. 
ART. 34. Transfer of the State Insurance Fund Administered by the SSS and the 
GSIS. The State Insurance Fund being administered by the SSS and the GSIS shall be 
transferred to the Authority within three (3) years from the effectivity of this Act. The SSS 
and the GSIS shall, however, continue to perform the processing of EC claims until such time 
that such functions are assumed by the Authority in accordance with Article 51 of this Act. 
The Authority shall, by appropriate Memorandum of Agreements, entrust to the GSIS 
and the SSS payment of benefits under this Act while the Authority is in the process of 
organizing and instituting its operations. 
During the same period and for such period of time it may fix, the Authority may 
likewise continue the arrangement with the SSS and the GSIS for the collection and 
recording of its contributions, provided such collections and accruals thereto are deposited in 
the mime and account of the Authority. 
ART. 35. Supplemental Appropriations for the State Insurance Fund. Considering 
the negative status of the present public sector State Insurance Fund and to achieve equity in 
the assignment of benefits payment, the amount of Three Billion Pesos (PhP3 Billion) is 
hereby appropriated from the funds not otherwise appropriated and added to the present 
private sector State Insurance Fund to constitute the single Work Contingency Insurance fund 
that,shall be under the administration of the Authority upon the effectivity ofthis Act. 
ART. 36. Transfer of the Employees' Compensation Functions of the GSIS and the 
SSS to the Authority. The functions, assets, equipment, records, and operating procedures of 
the Employees' Compensation operations of the GSIS and the SSS shall be transferred to the 
Authority within one (1) year from the effectivity of this Act. The personnel of the Systems 
who are performing Employees' Compensation functions shall be given preference in the 
hiring of the Authority'S personnel especially in the field offices. 
ART. 37. Funding Requirements. Such amount as may be necessary to cover the 
initial operational expenses of the Authority, including the salaries of incumbent personnel 
for the current budget year, shall be taken from the remaining unexpended appropriations of 
the ECC, OSHC and the employees' compensation operations of the SSS and GSIS for the 
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calendar year, as duly approved by the Department of Budget and Management (DBM), 
which shall be advanced in their remaining entirety by the SSS and the GSIS; provided, that 
where the remaining unexpended appropriations of the EGG, the OSHG and the employees' 
compensation operations of the SSS and GSIS for the calendar year would not be sufficient 
to finance the operations of the Authority for the remaining months of the fiscal year the 
Authority may appropriate such amount as may be necessary to meet expected expenditures 
out of the twelve percent (12%) annual loading fund of the State Insurance Fund. 
ART. 38. Implementing Rules and Regulations. Within one hundred and twenty 
(120) days from the completion of the appointments of its members, the Board of Trustees 
shall formulate, approve and publish in the official gazette or in at least two (2) national 
newspapers of general circulation the implementing rules and regulations of this Act. 
ART. 39. Amendatory Clause. Title II, Book IV of Presidential Decree No. 442, as 
amended by P. D. 626, as amended, is hereby amended. All other laws, executive orders, 
administrative rules and regulations or parts thereof which are inconsistent with the 
provisions of this Act are accordingly amended, modified or repealed. 
ART. 40. Separability Clause. If any provision of this Act is declared invalid, the 
other provisions not affected thereby shall remain valid. 
ART. 41. Effectivity. This Act shall fake effect fifteen (15) days after its publication 
in the official gazette or in at least two (2) national newspapers of general circulation 
whichever, comes earlier. 
Approved, 
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