Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

‘ DAS

- H. B. No.

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA.

EXPLANATORY NOTE

Employees both from the government and private sector are being given special benefits
under the Employee's Compensation Program (ECP). In the twenty five (25) years of
implementation of this program, millions of workers and their dependents have ben compensated
for work-related injury or sickness. However, there is a need to further enhance the effectiveness
and efficiency of the implementaiion of the said program which can be addressed by undertaking
a serious review and analysis of the actual structure and system being followed,

The primary predicament of the present system is the fragmented process of
implementation under three (3) government agencies, namely: the Employees’ Compensation
Commission (ECC) for policy formulation and appealed cases disposition, the Social Security
System (SSS) and the Government Service insurance System (GStS) for service delivery, and the
State Insurance Fund (SIF) for administration.

The fragmentation of services as provided by different agencies resulted to the following
problems: (1) Inequity to beneficiaries resulting from the inconsistent policies ofthe SSS and the
GSIS; (2) Disparity in the performance of the public sector State Insurance Fund (SIF) managed
by the GSIS and the private sector SIF managed by the SSS; (3) Bureaucratic problems; (4) High
administrative costs in the maintenance of the three (3) agencies mandated to implement the same
program; and (5) Low priority being given by the SSS and the GSIS to the ECP because of their
respective primary mandates.

Further, the present ECP as defined by PD 626 is merely focused on benefits payment,
and has neglected work contingency prevention, as well as the rehabilitation of occupationally
disabled workers.

‘A comprehensive and integrated implementation of the ECP is needed in order to
promote the welfare of the workers. The ECP cannot confinue under an unbalanced and unstable
system for its benefits and services are essentiat to the daily living of the working Filipino.

For these reasons, the immediate passage of this measure is carnestly sought.

JUAN EDGARDO “S@NNY” M. ANGARA
Representative
Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

OO B.No. <2

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA.

AN ACT
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 of 2010.”

CHAPTER L

DECLARATION OF PRINCIPL)

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 occupationaily-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:


. *Authority” means the Philippine Workers’ Compensation Authority.

2. “Beneficiary” means the legitimate spouse, the {egitimate,
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
children, the legitimate or the illegitimate descendants who are the
secondary beneficiaries,

3. “Board” means the’ Board of Trustees of the Philippine Workers’
Compensation Authority.

4. “Compensation” means all benefit payments made under this Act.

5, “Contribution” means the amount remitted or to be remitted by an
employer to the Work Contingency Insurance Fund for each
employee under his/her employ.

8. “Dependent’ means the legitimate, legitimated, legally adopted or
illegitimate child who is unmarried, not gainfully employed, and not
over twenty-one years (21) of age or over twenty-one years (21) 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.

7. “Disability’ means loss or substantial reduction of earning power
due to an injury or a disease arising out of and in the course of
employment.

8. “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 government-owned
oF controlled corporations.

9. “Fund" means the Work Contingency Insurance Fund.

10."GSIS* means the Govemment Service Insurance System.

11.“Occupationally Disabled Worker" or ODW refers to a worker
whose usual work capability and earming capacity has been
affected by his/her work-connected disease or injury.

12."SSS" means the Social Security System.

13. “System” means the SSS or GSIS, as the case may be.

14."Work Contingency” refers to any disease, injury or death arising
‘out of employment.

15."Worker’ means any person employed in a private or government
entity and who is a member of the System. ;

416.“Working Life” means the normal productive life of a worker until the

compulsory age of retirement.

CHAPTER Ill
THE WORKERS’ COMPANSATION 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.
(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 will be used under this Act.

B. BENEFITS
B.1. 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 foss-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 shail 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 international 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:

. Complete loss of sight of both eyes;

. Loss of two limbs at or above the ankle or wrist;

}. Permanent complete paralysis of two limbs;

. Brain injury resulting in incurable imbecility or insanity; and
Such other cases as may be determined by the Authority.

ORONS

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/herself to the medical examination.

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, tho 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 foss-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 Geath 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
felationship 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 other 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-of-
income benefits shail not bo 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 | be transferable nor liable to tax, attachment,
gamishment, levy or seizure by or under any legal process whatsoever, sither

before or after receipt by the person or persons entitled thereto, except to pay
any debt of the worker to the Fund.

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 fo the contrary shall be
null and void. The retention o* 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 (1) 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 restore his/her earning capability. In this regard, the Authority
may maintain or avail off 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 shail pay to the Authority a penalty equivalent to fifty (60%) 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 penaity 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

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 the1 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.D. 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:

4. 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 contributions and investment earnings collected for its
operational expenses.

(b) A portion 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 fo 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 shail be paid by the Authority under this Act. In case benefit is paid
under this Act, the Authority shall be 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. EMPLOYERS 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 saleries 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, hisiner 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 shalll 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 pay or remit the contributions
herein prescribed shall not prejudice the right of the employee or his dependents
to the benefits of this Act. If the sickness, injury, disability, or death occurs before
the Authority receives any report of the name of his employee, the employer shall
bbe 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

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 régulations 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, entitlement 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 diseasés, 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 (1 2%) operational expenses
provided for in Article 20 (a) (2) hereof;

To sue and be sued in Court;

- 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;

8. 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;

11.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.

NO

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 shall be filled 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
(P10,000.00) 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:

1. 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;

To approve and adopt guidelines affecting investments, settlement

of claims, disposition of acquired assets and increased benefits to

a

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 of the 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,

1. 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.

‘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;

. To appoint the lower level personnel of the Authority;

¢. 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 him/her 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 (4) 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 payment 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
the 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 (P1,000.00)
Pesos multiplied by the total number of employees employed by the firm and
imprisonment of not less than one (1) year. If the 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 the 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.

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.D. 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.D. 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 es 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 cf 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

on functions are assumed by the Authority in accordance with Article 51 of this
ct.

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 name and account of the Authority.

ART. 36, 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 shail be under the administration of the Authority upon the effectivity of
this 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 fo 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 calendar year, as tly
approved by the Department of Budget and one (08H; ed i *

remaining entirety by the SSS and the GSIS; j
Snare the is tinexpended appropriations of the EC, the OSHC rere
7 i ions of the SSS an ye
employees’ compensation opera operations ofthe Authority for the remaining
be sufficient to finance the operations o|
Tere ac ne cea ish ar
ure:
necessary to meet expected expendil

loading fund of the State Insurance Fund.

ART. 38. IMPLEMENTING RULES AND REGULATIONS vont of ts

’ from the comple! of i

una and tatoos shall formulate, approve and publish in the
members,


official gazette or in at least1 two (2) national newspapers of general circulation
the implementing rules and regulations of this Act.

ART. 39, AMENDATORY CLAUSE. Title Il, 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,