THIRTEENTH CONGRESS OF THE 
) 
First Regular Session 
) 
REPUBLIC OF THE PHILIPPINES ) 
S E N A T E  
Introduced by Senator Juan M. Flavier 
EXPLANATORY NOTE 
The Eniployees' Compensation Law, which gives life and spirit to the 
Employees' Compensation Program for almost twenty eight (28) years now, had been 
amended by eight (8) Presidential Decrees and Executive Orders. Despite these 
amendments, the public and private sector employees and their beneficiaries still clamor 
for the revamp of the program. 
Aware of the overriding need to improve the present law, the Employees' 
compensation Commission (ECC) conducted a series of consultations and discussions 
with some multi-sectoral groups such as labor organizations, employers, concerned 
government agencies, non-government organizations and the general public. It has been 
established that the fragmented implementation of the Employees' Compensation 
Program (ECP) by four (4) independent agencies (ECC, GSIS, SSS and the OSHC) has 
resulted in, among others: 
(1) the contrasting performance and status of the two State Insurance Funds 
(SIFs); 
(2) the disparity and inequity in the benefits enjoyed by the public vis-a-vis 
private sector workers who are both beneficiaries of the same program; 
(3) the delay in the processing of EC claims due to the involvement of three 
agencies separately operating under their respective systems, procedures and 
policies; 
(4) the high administrative cost; and 
( 5 )  the over-emphasis on the compensatoiy aspect of the program to the 
detriment of the equally important work contingency prevention program and 
the rehabilitation of occupationally-disabled workers (ODWs). 
Considering that it has become necessary to introduce a new law to make it more 
responsive to the urgent demands of the Filipino workforce and the dynamic changes in 
social economic development, the bill as drafted provides: 
1 .  A clear declaration of state policy which serves as basis for the establishment of 
the Workers Compensation Program; 
2. A clear description of the Program and its component namely: coverage, benefits, 
rehabilitation of occupationally disabled workers and the work contingency 
prevention; 


3. The setting up of a single hnd from which payment of benefits shall be sourced 
which is now aptly and more accurately/descriptively called the work 
Contingency Insurance Fund (WCIF). Provisions for a more systematic collection 
of contributions have been included to minimize defaults in payment which partly 
was the reason for the present state of the public sector SIF; 
4. The simplication of the benefits system to avoid confusion particularly in the 
grant of the primary and basic benefits under the Workers Compensation Program 
which is the loss-of-income benefits. More important, the concept of working lfe 
was introduced to define the extent in time to which a worker or his beneficiaries 
may be entitled to enjoy the loss-of-income benefits; 
5. The importance now given to the corollary hut equally important concerns of the 
Workers Compensation Program which are: (1) the rehabilitation of disabled 
victims of occupational diseases or work accidents; and (2) the work-contingency 
prevention or the minimization, if not the complete prevention of the occurrence 
of work accidents and occupational diseases; 
The provision for the possible coverage of informal sector workers and the 
overseas Filipino workers under the program; and 
The unified administration of the program through the proposed Philippine 
Workers Compensation Authority. 
6 .  
7. 
This bill, therefore, will put into action President Gloria Macapagal-Arroyo’s and this 
Congress’s overwhelming concern on the welfare of the working men and women of our 
country, recognizing that a healthy workforce will surely result in a healthy economy. 
Early passage of this bill is strongly recommended. 
2 


, RkCLIVED BY : 
I 
THIRTEENTH CONGRESS OF THE 
1 
First Regular Session 
) 
REPUBLIC OF THE PHILIPPINES ) 
S E N A T E  
Introduced by Senator Juan M. Flavier 
AN ACT ESTABLISHING THE 
WORKERS’ COMPENSATION PROGRAM, 
THE WORK CONTINGENCY INSURANCE FUND, 
THE PHILIPPINE WORKERS’ COMPENSATION AUTHORITY 
AND DEFINING ITS POWERS AND FUNCTIONS AND 
OF PRESIDENTIAL DECREE FOUR HUNDRED FORTY TWO (PD 442)’ AS 
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE 
PHILIPPINES AND APPROPRIATING FUNDS THEREFOR 
AMENDING FOR THIS PURPOSE ARTICLES 166 TO 208-A OF 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
ARTICLE. 1. Short Title - This Act shall be known as the “Workers’ Compensation 
Act of 2005”. 
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. 
3 


For this purpose, the Workers’ Compensation Program is hereby established. 
*
.
 
CHAPTER I1 
DEFINITIONS 
ART. 3. Definition of Terms - As used in this Act unless the context indicates 
otherwise, the following definition of terms shall be adopted: 
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 children, the legitimate or the illegitimate 
descendants who are the secondary beneficiaries. 
c) “Board” means the Board of Trustees of the Philippine Workers’ 
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 hisher 
employ. 
f )  “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 hekhe 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 
h i d e r  for regular support. 
g) “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. 
hj “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 
hidher orders as regards the employment, including the national govemment, 
its political subdivisions, agencies or instrumentalities and government-owned 
or controlled corporations. 
i) “Fund” means the Work Contingency Insurance Fund. 
j) “GSIS” means the Government Service Insurance System. 
kj “Occupationally Disabled Worker” or ODW refers to a worker whose usual 
work capability and earning capacity has been affected by hisher work- 
connected disease or injury. 
1) “SSS” means the Social Security System. 
m) “System” means the SSS or GSIS, as the case may be. 
4 


n) “Work Contingency” refers to any disease, injury or death arising out of 
0) “Worker” means any person employed in a private or government entity and 
p) “Working Life” means the normal productive life of a worker until the 
employment. 
who is a member of the System. 
compulsory age of retirement. 
CHAPTER I11 
THE WORKERS’ COMPENSATION PROGRAM 
A. COVERAGE 
ART. 4. 
Coverage - (a) Coverage in the Program shall be compulsory upon all 
(b) Compulsory coverage of the employer shall take effect on the first day of its 
(c) The Authority may consider coverage of overseas Filipino workers and workers in 
employers and their workers. 
business operation, and that of the worker, on the first day of employment. 
the informal sector subject to regulations as it may prescribe. 
ART. 5. Registration - The registration of an employer and hisher 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 hisher 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: 
8 
f
.
 
1. Fails to present himselfherself for periodic medical and physical 
2. Recovers from hisher disease or injury; or 
3. Gets gainfully employed. 
examination as may be required by the Authority; 
5 


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 hisher 
working life: 
a) Complete loss of sight of both eyes; 
b) Loss of two limbs at or above the ankle or wrist; 
c) Permanent complete paralysis of two limbs; 
d) Brain injury resulting in incurable imbecility or insanity; and 
e) 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 hisher 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 himselfkerself to the medical examination. 
B. 4 CAREER’S ALLOWANCE 
ART. 9. Career’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 hisker disability but not to exceed his/her working life, be entitled to a 
Career’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 hisher loss-of- 
income benefit for the remainder of hidher working life, plus ten percent (10%) thereof 
for each dependent child, but not exceeding five, beginning with the youngest and 
6 


without substitution; Provided, that if he/she has no primary beneficiary, the Authority 
shall pay to hisher 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 hisher 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 
shall not be deprived of hisher 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 hehhe is enjoying loss-of-income 
benefit. 
(b) Except as otherwise provided, no contract, regulation or device whatsoever shall 
operate to deprive the worker or hisher 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, 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. 
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. 
7 


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 hisher 
services any fee and 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 nor more than Five Thousand Pesos, 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 hisher 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 
8 


percent (100%) of the benefits payable to the worker who suffers fiom 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 the 
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 @) 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. 
2. 
All funds under the management and control of the Authority shall be subjected 
to all rules and regulations applicable to all public funds; and 
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. 
9 


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 hisher dependents, except when the disability or death is occasioned by the 
worker’s intoxication, willful intent to injure or kill himselfherself 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 hisker 
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 hisher death shall 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 hisker 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 hisker 
dependents, after deducting the cost of proceedings and expenses of the Authority. 
B. 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 hisker employment, the 
employer shall remit to the Authority a contribution equivalent to one percent (19’0) 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 
hisker employer. 
The rate of contribution shall be reviewed periodically subject to the limitations 
herein provided and may be revised based on actuarial studies. 
10 


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, 
hisher 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, hisher employer’s obligation to pay the monthly contribution arising from that 
employment shall be suspended during such months that hekhe 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 
authorized representative 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 
under 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 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 AUTHOFUTY 
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 law 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 whicth may be made to the Authority 
11 


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 and 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, 
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 benkfits for occupational diseases, injury 
or deatb 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; 
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. 
12 


. 
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 hisher predecessor. The 
members of the Board shall receive a per diem of at least Two Thousand five hundred 
pesos (Php 2, 500.00) for each board meeting actually attended by them but not to 
exceed Ten thousand pesos (Php 10, 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. 
2. 
3. 
4. 
5. 
6. 
7. 
8. 
To formulate the policies and guidelines and develop programs to effectively 
carry out the purposes of this Act; 
To adopt, amend and rescind such rules and regulations as may be necessary to 
carry out the provisions and purposes of this Act; 
To approve the annual operating budget of the Authority as recommended by its 
President; 
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 workers; 
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; 
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 
To do and perform any and all acts necessary, proper and incidental to the 
attainment of the purposes and objectives of this Act. 
13 


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 cany out its policies and decisions. In 
addition, he/she shall have the following duties and functions: 
a) 
b) 
c) 
d) 
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. 
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 
To perform other duties as may be assigned to himher by the Board. 
- . 
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 
14 
. 


fmvdvlapt iuld *e qp?p\u~er is bind to be a party fa @ Qqpd, such qmpfpyer q p l  
rcjqpwse to the A~#!5riIy #be full mpwt 
I
.
 of the compi?n;spoq paid. 
consjst of failure or refusql to 
, 
, .  
. .  
,
I
 
, 
8 *  
,., 
: :  
/ .  
' 
,
,
 
, , ! !  . 
CHAPTER VI1 
T V S I T O R Y  PROVISIONS 
s i  
I i 
ART. 33. Settlement of'EC Claims - All employees' compensatipn c\f#ps wbicp 
accmed prior to the effeytivity of this Act, shall be filed with the Social SecMty Sy$e$ 
(Spff)! and the G o v q p q I  SprVipe Insurance System (GSIS) for claims in theprivate'tylil 
SqYPV ent sectors,, peqpotbely, and shall be processed, determined an4 settleq, in 
accordance with the 1mplement.ing rules and regulatioils  provided fqr in F. 
- 
- 
amended, and such laws, rules and regulations existing a$ 
as of the effectivity 
laws, rules and re@ations 
contingencies'that pccrued upon thp effectivity 
./ 
, , \ . , I  
, 
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. .  
ofthis Act shall be 
with this Act8'.* ( 3  
, . I  
, ,  
cases pending &fprq \be Employees' Cornpensfitiqn Commissipq established 
.D. 626, as ameqfl&on the date of effectivity of this Act shall be transferred to 
by the AuthofiQy Qn employees' compensation cases on appeal with Nf 
of Appeals and tQp$ljpreme Court as of the date of effectivity of this Act, the 
rity shall continue q p$ ondent thereof until its final resplution. 
I 
3 
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. 
. , /  
' All cases pending befor4 'the ~Employees' Compensation' Qxmnission, ,wMch 
be@?? the effectivity of +in .ACt;shall be processed and adjidicated by the 
acQ@dance with the law, tules and procedure existing prior ta .the effectivity of this A,c\t;i 
ART. 34. Transfer of the State Insurance Fund Admiqi3Iered by the SSS' 
GSIS - The State Insurance Fyxrd being administered by the SSS and the GSIS 
transfpped to the Authority within three (3) years from the effectivity of this Act. 


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 name 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 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 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. Termination of the Employees’ Compensation Commission and State 
Insurance Fund under P.D. 626 - The Employees’ Compensation Commission (ECC) 
shall be, as is hereby, abolished and all officials and personnel thereof shall be transferred 
to and mandatorily absorbed by the Authority without demotion in rank, and/or 
diminution of salaries and fringe benefits; Provided that the Authority may develop an 
attractive retirement package for ECC employees who may wish to avail of early 
retirement with benefits comparable or similar to those granted to employees of other 
government financial institutions which undertook similar reorganization. 
. 
The functions, assets, equipment, records, and operating procedures of the ECC are 
likewise transferred to the Authority. 
However, the term of office of incumbent members of the Board of Commissioners of 
the ECC shall be deemed expired upon effectivity of this Act. 
16 


ART. 38. The Occupational Safety and Health Center - 
The Occupational 
Safety and Health Center (OSHC) created under Executive Order No. 307, dated 
November 4, 1987, as the research arm of the ECC on occupational safety and health 
shall be, as is hereby, abolished and its officials and personnel transferred to and 
absorbed by the Authority without demotion in rank, and/or diminution of salaries and 
fringe benefits; Provided, that the Authority may develop an attractive retirement package 
for OSHC employees who may wish to avail of early retirement with benefits comparable 
or similar to those granted to employees of other government financial institutions which 
undertook similar reorganization. 
The functions, assets, equipment, records, and operating procedures of the OSHC are 
likewise transferred to the Authority. 
ART. 39. 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 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 ECC, the 
OSHC 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. 40. 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 pubIish in the official gazette or in at least two (2) 
national newspapers of general circulation the implementing rules and regulations of this 
Act. 
ART. 41. Amendatory Clause - Title 11, 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. 42. Separability Clause - If any provision of this Act is declared invalid, the 
other provisions not affected thereby shall remain valid. 
ART. 43. Effectivity - This Act shall take effect fifteen (15) days after its publication 
in the offcial gazette or in at least two (2) national newspapers of general circulation 
whichever comes earlier. 
Approved, 
17