Labor in the Philippines

The Employee's Compensation Program is designed to provide public and private sector employees and their dependents with income and other benefits in the event of a work-connected injury, sickness, disability or death. It was created under P.D. 626 and became effective on January 1975.  It assures workers of total protection through the provision of a comprehensive benefit package encompassing preventive occupational safety and health aspects, curative or medical and compensatory grant, and rehabilitation of occupational disabled workers. Program Administration There are three agencies involved in the implementation of the Employees Compensation Program.  These are: The Employees’ Compensation Commission (ECC) which is  mandated to initiate, rationalize and coordinate policies of the ECP and to review appealed cases from the Government Service Insurance System (GSIS) and the Social Security System(SSS). the administering agencies of the ECP.  As administering agencies of the ECP, both GSIS and SSS are tasked to: Evaluate all employees compensation (EC) claims filed within a given period and pay the corresponding EC benefits; Collect EC premiums remitted by employers; and  Manage the State Insurance Fund.  Both Systems invest the funds in profitable ventures to generate earnings which will form part of the State Insurance Fund from where payments for employees compensation claims are sourced.

Who are covered under the ECP?

The following are covered under the Employees' Compensation Program:

a.       All public sector employees including those of government-owned or corporations and local government units ;

b.       All employees in the private sector covered by the SSS; and

c.       Filipino Seamen compulsorily covered under the SSS. Landbased contract workers are only subject to coverage under the ECP if their employer, natural or juridical, is engaged in any trade, industry or business undertakings in the Philippines.

When shall coverage of employees under the ECP start?

Employees in the private sector and public sector are covered starting on the first day of their employment.

 

What work contingencies are compensable under the ECP?

The following are compensated under the new ECP.

• Work-connected injury or accident;
• Work-connected sickness; and
• Any disability or death resulting from any work-connected accident or work-connected sickness.

What are the forms of compensation a claimant may received for work-related injury, sickness, disability or death?

The compensation which a claimant may received for a work-connected injury, sickness, disability or death are in the following forms:

·         Cash Income Benefit - for disability or death;

·         Medical and related services - for injury or sickness; and

·         Rehabilitation services (in addition to monthly cash income benefit) for permanent disability.

To be more specific, the benefits given to the employee or his dependents are in the form of:

·         Daily cash income benefit for temporary total disability (TTD);

·         Monthly cash income benefit for permanent total disability (PTD) on a lifetime basis;

·         Monthly cash income benefit for permanent partial disability (PPD);

·         Monthly cash income benefit for death, also on lifetime basis, except for benefit paid to secondary beneficiaries, which is a monthly pension not to exceed 60 months but not less than fifteen thousand pesos (P15,000.00);

·         Medical services, appliances and supplies for injury or sickness;

·         Rehabilitation services for permanent disability; and

·         Carer's allowance for permanent disability. 

When is an accident/injury compensable?

   An injury is compensable if it was sustained due to an accident arising out of and in the course of employment.

When is an accident considered to have resulted out of and in the course of employment?

An accident is considered to have resulted out of and in the course of employment if:

·         it occurred while the employee was performing his official function, at the place where his work requires him to be, and, if elsewhere, the employee must have been executing an order for the employer;

·         it occurred while the employee was performing an act within the time and space limits of his employment to minister to personal comfort, such as satisfaction  of his thirst, hunger or other physical demands, or protect himself from excessive cold;

·         it occurred while the employee was going to or coming from the place of work; provided however, that there was no diversion from his usual route;

·         it occurred while the employee was engaged in company sponsored activities, such as field trips, picnics, intramurals, etc.; and 

·         it occurred while the employee was onboard a shuttle bus or any vehicle provided by the company.

When is sickness compensable?

Any sickness that is listed by the ECC as an "occupational disease" (View List) is compensable

An illness not listed as "occupational disease", may be compensable if an employee can show an evidence/proof that the risk of contracting such sickness was increased by the working conditions (increased risk theory), e.i. if the illness is caused by or precipitated by factors inherent in the employee's nature of work and working conditions.  However, this does not include aggravation of pre-existing illness.

How can a claimant establish compensability of a sickness under the increased risk theory?

There is an increase risk if the illness is caused or precipitated by factors inherent in the employees' nature of work and working conditions. To establish compensability of a claim under the increased risk theory, the claimant must show proof of work-connection.  The degree of proof required is merely substantial evidence as a reasonable mind may accept as adequate to support a conclusion.

When is a disability compensable and how much income benefits may an employee received?

A disability is compensable if it  is caused by a work-connected injury or sickness.

INCOME BENEFIT FOR TEMPORARY TOTAL DISABILITY (TTD):

Income benefit is 90% of the employee's average daily salary credit as determined by the System.  This income benefits shall not be more than P200 per day for private workers and P90 per day for government employees, and shall not be paid longer than 120 days, unless the injury or sickness requires more extensive treatment that lasts beyond 120 days. During this extended period, the worker shall continue to be paid the TTD benefit but not to exceed 240 days.

The employee has no obligation to the System while he is receiving TTD income benefit. However, the employee should submit to the System a monthly medical report on his disability certified by his attending physician.  Failure to do so shall cause the suspension of his income benefit until such a time when he complies with his obligation. He must also submit himself for examination, upon being notified by the System, at least once a year.

 A worker does not have to exhaust his leave credits before he may be entitled to employees compensation benefits.

Should the employee who suffered any work-connected sickness or injury still has available leave credits, he shall, starting on the very first day of the contingency, enjoy both his leave with pay and employees' compensation benefits at the same time.

INCOME BENEFIT FOR PERMANENT PARTIAL DISABILITY (PPD):

An employee under PPD shall be paid a monthly income benefit equal to the monthly income benefit paid for PTD according to the schedule of payments beginning with the first month of disability and shall continue for a period as follows:

Complete and Permanent Loss of the use of:	Number of Months
One thumb	10
One index finger	8
One middle finger	6
One ring finger	5
One little finger	3
One big toe	6
Any other toe	3
One hand	39
One arm	50
One foot	31
One leg	46
One ear	10
Both ears	20
Hearing of one ear	10
Hearing of both ears	50
Sight of one eye	25

For the complete and permanent loss of more than one member or part of his body at the same time, the employee shall be paid the same amount of monthly income benefit for a period equivalent to the SUM TOTAL of the periods established for the loss of the individual members.  

Thus, an employee who loses his thumb (10 months) and  his little finger (3 months) at the same time shall receive the monthly income benefit for a period of 13 months.

An employee under PPD may receive a lump sum benefit if the period  of his disability does not exceed 12 months.

An employee who is receiving PPD income benefit and becomes  or remains to be gainfully employed shall continue to receive his monthly income benefit for as long as he is entitled to it.

INCOME BENEFIT FOR  PERMANENT TOTAL DISABILITY (PTD):

An employee under PTD shall, until his death, be paid by the System a monthly income benefit, plus 10% thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution.

·         For the private sector employees, the monthly income benefit for PTD shall be 15% more than the SSS benefit; and

·         For government employees, the monthly income benefit is 20% more than the GSIS basic monthly pension (BMP).

Monthly Income Benefits (MIB)

For private sector, the monthly income benefit is equivalent to 115% of the sum of the monthly pension which shall be the highest of the following amounts:

      a. The sum of the following:

·         Three Hundred Pesos (Php300.00); plus

·         Twenty percent (20%) of the average monthly salary credit; plus

·         Two percent (2%) of the average monthly salary credit for each credited year of service in excess of ten (10) years; or 

      b. Forty percent (40%) of the average monthly salary credit; or

      c. Two thousand Pesos (Php 2,000.00).

For the government sector, the monthly income benefits is equivalent to 120% of Basic Monthly Pension (BMP) under P.D. 1146 (GSIS Law).

      The BMP is equivalent to 37.5% of the revalued average monthly compensation (RAMC), plus 2.5% thereof for every year of      service in excess of 15 years.

      RAMC is equivalent to the monthly compensation (AMC), plus Php 140.00.

      AMC is the quotient obtained by  dividing the total compensation received during the last three years by the number of months during which compensation was received but in no case shall the AMC exceed Php3,000.00.

      Based on the foregoing formula, a government employee who has been in the service for 10 years and receiving at least 3,000 a month for the last three years before permanent total disability, will receive a monthly income benefit of Php1,413.00 under the Employees' Compensation Law.

Payment of the Permanent Total Disability Monthly income benefit may be suspended if:

·         the employee fails to submit his quarterly medical report;

·         he fails to present himself for annual examination;

·         he has recovered from his PTD; or

·         he is gainfully employed, except or otherwise provided for in other laws or Executive Orders.

When is death compensable?

Death is compensable when it resulted from a work-connected injury or sickness.

In case an employee dies, his beneficiaries are entitled to receive the income benefit.  The status of the beneficiaries shall be determined at the time of employee's death. 

The employee's beneficiaries are classified into:

Primary beneficiaries	-          legitimate husband or wife who is living with the employee when the employee dies, until he or she remarries; and -         the legitimate, legitimated, legally adopted or acknowledged natural children who are unmarried, not gainfully employed and not over 21 years of age. To be considered as primary beneficiary: For a legitimate, legitimated, legally adopted or acknowledged natural child whose age is over 21, he must have been incapacitated and incapable of self-support due to physical or mental defect  that is congenital or acquired during minority.
Secondary beneficiaries	-          the legitimate parents wholly dependent upon the employee for support, and -         the legitimate descendants and illegitimate children who are unmarried, not gainfully employed and not over 21 years of age.  To be considered as secondary beneficiary: A legitimate descendant or an illegitimate child who is over 21 years of age must have been incapacitated and incapable of self-support due to a physical or mental defect that is congenital or acquired during minority.
If there are primary and secondary beneficiaries at the time of the employee's death, only the primary beneficiaries have priority claim to the death benefits. No death benefits shall be given to secondary beneficiaries whenever there are primary beneficiaries.

INCOME BENEFIT FOR DEATH

·         The monthly income benefit of primary beneficiaries shall be equal to the monthly income benefit paid for PTD.  This shall be paid to them for as long as they are entitled to it and guaranteed for five (5) years.

·         Primary beneficiaries (or whoever spent for burial services) will also receive funeral benefit.

·         If there are dependent children, the benefit shall be increased by 10% for every dependent child but not more than five (5) children counted from the youngest and without substitution.

·         The monthly income benefits shall be shared equally by all primary beneficiaries, including the dependent children not counted among the five designated ones.  Upon disqualification of a designated child, ten percent (10%) shall be deducted from the benefits, and the remaining amount shall once again be divided equally by the qualified primary beneficiaries.

·         The secondary beneficiaries may receive the death benefits only when the deceased employee has no primary beneficiaries at the time of his death. They shall receive a monthly pension equal to 60 times the employee's monthly income benefit, but in no case lower than Php15,000.00. If the deceased was a pensioner under PTD, and if he did not have primary beneficiaries at the time of his death, the secondary beneficiaries shall be entitled only to the balance of the five-year guaranteed period; but if the member under PTD dies after the five year guaranteed period, secondary beneficiaries are no longer entitled to any benefits. 

·         If there are no beneficiaries at the time of his death, the death benefits shall become part of the State Insurance Fund.

When is an  injury, sickness, disability or death not compensable?

• When these are due to the employee's intoxication, willful intention to injure or kill himself or another, or notorious negligence.
• When these are not work-related.