SEN*fE 
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QFEICE OF THE SECRETARY 
THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
Senate Bill No. 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
Employees both from the government and private sector are being given special 
benefits under the Employee's Compensation Program (ECP). For the twenty five (25) 
years of implementation of this program, millions of workers and their dependents have 
been compensated for work-related injury or sickness. However, there is a need to 
further enhance the effectiveness and efficiency of the implementation of the said 
program which can be addressed by undertaking a serious review and analysis of the 
actual structure and system beihg followed by the Employees Compensation Program. 
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 Government Service Insurance 
System (GSIS) for service delivery, and State Insurance Fund (SIF) for administration. 
The fragmentation of services as provided by different agencies resulted to the following 
problems: 
1. Inequity which arises from the different individual, and most of the times 
inconsistent policies of SSS and GSIS which supplements the 
implementation of the ECP policy, resulting to disparity both in the 
contribution and benefits of public and private sector employees. The 
government employees' contribution to the said program is P30.00 per 
employee, while the private employees contribute a meager P10.00 each. 
However, in terms of benefits, the private sector employees enjoy higher 
compensation. Fort instance, private sector employees enjoy P200.00 daily 
income benefits for temporary total disability and PI 0,000.00 funeral 
benefits while government employees only receive P90.00 and P10,000.00, 
respectively. 
2. The performance of the public sector State Insurance Fund (SIF) managed 
by the GSlS contrasts with that of SIF managed by the SSS. It should be 
noted that SIF managed by the SSS is growing at a higher rate than the SIF 
under the GSIS. 
3. The bureaucratic problems, specifically on decision-making, results to a 
sluggish and complex system. Immediate response should be accorded to 
employees or their dependents who acquired sickness or injury, and whose 
health and welfare are at stake. 
4. The government is incurring high administrative costs from the maintenance 
of the three (3) agencies mandated to implement the same program. Given 
the present economic difficulties of the country, the government cannot 
afford to spend the much-needed resources to redundant bureaucratic 
structures. There is an overwhelming need for the enhancement of basic 
social services and infrastructure, among others. 


5. The implementation of the program is weak and ineffective because the two 
Systems have their primary mandates to pursue under their respective 
charters resulting into a lesser priority given to the ECP implementation at 
the field level. 
Further, the present ECP as defined by PD 626 is merely focused on benefits 
payment and has neglected work contingency prevention and the rehabilitation of 
occupationally disabled workers. There is a need to incorporate pro-active, preventive 
and rehabilitative measures in the program to address the problem of increasing 
discrepancy between the claims filed and the contributions collected annually. 
A comprehensive and integrated implementation of the ECP is needed that will 
promote the welfare of the workers. The ECP cannot continue under an unbalanced and 
unstable system for its benefits and services are essential to the daily living of the 
working Filipino. 
For these reasons, the immediate passage of this measure is earnestly sought. 
e 
JI 
GOY EJERCITO ESTRADA 
Senator 
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THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
5 4PR 18 P I  35 ’ 
1 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
Senate Bill No. 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
ESTABLISHING THE WORKERS’ GOMPENSATION PROGRAM, THE WORK 
CONTINGENCY 
INSURANCE 
FUND, 
THE 
PHILIPPINE WORKERS’ 
COMPENSATION AUTHORITY AND DEFINING THEIR POWERS AND 
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: 
FUNCTIONS, AMENDING FOR THIS PURPOSE ARTICLES 166 TO 288-A OF 
ART. 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 andl adequate compensation for workers and their 
dependents in the event of work contingencies; and 
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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 
DEFINITION§ 
ART. 3. 
indicates otherwise: 
1. 
2. 
DEFINITION OF TERMS. As used in this Act unless the context 
“Authority” means the Philippine Workers’ Compensation Authority. 
“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. 
3. 
“Board” means the’ Board of Trustees of the Philippine Workers’ 
Compensation Authority. 
“Compensation” means all benefit payments made under this Act. 
“Contribution” means the amount remitted or to be remitted by an 
employer to the Work Contingency Insurance Fund for each employee 
under hidher employ. 
4. 
5. 
6. “Dependent” means the legitimate, legitimated, legally adopted or 
illegitimate child who lis 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 himlher for regular support. 


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7. 
8. 
9. 
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. 
“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 government, its political subdivisions, agencies or 
instrumentalities and government-owned or controlled corporations. 
“Fund” means the Work Contingency Insurance Fund. 
10. “GSIS” means the Government Service Insurance System. 
11: 
“Occupationally Disabled Worker” or ODW refers to a worker whose 
usual work capability1 and earning capacity has been affected by hislher 
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’kefers 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. 
16. “Working Life” means the normal productive life of a worker until the 
compulsory age of retirement. 
CHAPTER 111 
THE WORKERS’ COMPENSATION PROGRAM 
A. COVERAGE 
ART. 4. 
COVERAGE (a) Coverage in the Program shall be compulsory 
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upon all employers and their workers. 


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(b) Compulsory coverage of the 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 hidher 
workers with the SSS or GSlS 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.l 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: 
1, Fails to present himself/herself for periodic medical and physical 
examination as may be required by the Authority; 
2. Recovers from hidher 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 


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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 hislher 
working life: 
I. 
Complete loss of sight of both eyes; 
2. Loss of two limbs 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 hidher 
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 imay 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 
hidher working life, be entitled to a Carer's allowance. 


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B.5 DEATH BENEFITS 
ART. I O .  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 hislher loss-of-income benefit for the remainder of hislher 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 
helshe has no primary beneficiary, the Authority shall pay to hislher 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 ldetermined 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 hislher 
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 INJURIESIDISEASE. If a worker receiving a loss-of- 
income benefit suffers another work-connected disease, the worker shall be 


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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 hislher 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. 
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(b) Except as otherwise provided, no contract, regulation or device 
whatsoever shall operate to deprive the worker or hislher 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. 
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 orlfiling of any claim for benefit shall demand or charge 
for hislher 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 nor more than Five 


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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 of1 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 fori 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 limportance 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. 


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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 
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 GSlS under P.D. 626, as amended, 
including arrearages of the government with the GSlS 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. 


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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 I prevention programs and rehabilitation services 
programs for occupationallyidisabled 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,l grant or donation received for Program operations 
shall be governed by resolution of the Board provided that: 
1. All funds under the 1 management and control of the Authority shall be 
subjected to all rulesland 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. 
2. 
(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 hislher dependents, except when the disability or death is 
nccnsinned bv the worker's intoxication. willful intent to injure or kill 
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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 hislher 
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 hislher 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 hidher dependents, after deducting the cost of proceedings and 
expenses of the Authority. 
6. 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 
hislher 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 expddient and advisable by the Authority, the collection 
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and remittance of contribution may be made quarterly or semi-annually in 


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made collectible under the National Internal Revenue Code, a 
The remittance by the employer of the contributions to 
take priority over and above the payment of any and all 
salaries and wages of its employees. 
advance; Provided that, upon separation of a worker, any contribution paid in 
advance but not due shall be credited or refunded to hidher 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, hislher 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, hislher employer's obligation to pay the monthly contribution 
arising from that employment shall be suspended during uch. months that 
helshe is not receiving salary or wages. 
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amended. 
ihe Authority shall 
obligations, except 


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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 
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 Bllowable 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: 
I. 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 erhployers whose records show a high frequency of 
work accidents or occupational diseases; 


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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 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 (1 2%) 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; 
I O .  To submit annuallyla 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 


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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. 
ART. 27. THE BOARD C)F 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 lof 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 hislher predecessord 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 bp them but not to exceed Ten Thousand Pesos (Php 
I O ,  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: 


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1. 
2. 
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a, 
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 maylimpose for the best interest of the Authority; 
To review on appeal any dispute arising under this Act with respect to 
coverage, benefits, 1 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. 
ART. 29. THE PRESlDENT 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: 


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a) 
b) 
c) 
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 himlher by the Board. 
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. 
d) 
2. 
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 lcontributions 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. 


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In case of payment of benefits for any claim which is later determined to be 
fraudulent and the employer1 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 (PhP500.00) but not more than One Thousand 
(PhP1,OOO.OO) Pesos multiplied by the total number of employees employed by 
the firm and imprisonment od 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 himlher or for some other persons, 
shall suffer the penalties provided for in the Revised Penal Code or in other 
special penal laws. 
CHAPTER VI1 
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 forlin 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 


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accordance with laws, rulesiand 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 as 
respondent thereof until its final resolution. 
All cases pending beforel 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 OR THE STATE INSURANCE FUND ADMINISTERED 
BY THE SSS AND THE GSIS. The State Insurance Fund being administered by 
the SSS and the GSlS shall be transferred to the Authority within three (3) years 
from the effectivity of this Act. The SSS and the GSlS 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 GSlS 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 srrangement with the SSS and the GSlS for the 
collection and recording of its contributions, provided such collections and 
accruals thereto are deposited in the name and account of the Authority. 
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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 GSlS AND THE SSS TO THE AUTHORITY. The 
functions, assets, equipment, records, and operating procedures of the 
Employees' Compensation 'operations of the GSlS and the SSS shall be 
transferred to the Authority within one (1) year from the effectivity of this Act. The 
personnel of the Systems I 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 GSlS 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 GSlS for the calendar year 
would not be sufficient to1 finance the operations of the Authority for the 
remaining months of the fiscal year, the Authority may appropriate such amount 


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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 least1 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, i 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,