Employees’ Compensation and State Insurance Fund

Employees’ Compensation and State Insurance Fund Report By: Magi Bautista

Objectives: • Identify the membership coverage under the Employees’ Compensation Program • Explain the contingencies that are compensable/ non compensable under the program • Determine the employer’s obligations under the EC Program

Employees’ Compensation Program • Created to provide occupationally disabled workers and their dependents, with benefits and services by way of compensation for employment related contingencies. • Administered under the Employees’ Compensation Commission(ECC) by the SSS for employees in the private sector and GSIS for employees in the public sector

SSS vs ECC benefits **Philippine Labor Standards Guidebook by Atty. Sally Protacio

Checkpoint: Both the EC and SSS provide compensation to the worker for illness, death, disability, maternity, and old age regardless of whether the contingency arose from a work related activity or not. TRUE or FALSE FALSE

EC benefits are granted only to members with employers other than themselves. TRUE or FALSE TRUE

Coverage: • Membership under the EC Program is compulsory upon all employers and their employees not over 60 years of age. (Article 168, Labor Code) • Applies to all employees and employers both in the private and public sectors including casual, emergency, temporary or substitute employees. • Also covers Filipino employees working abroad for employers doing business in the Phil. (Article 169,Labor Code)

State Insurance Fund: • All revenues (not needed for operational expenses) shall be accumulated as the State Insurance Fund (SIF) which will be used exclusively for payment of benefits under the EC program. (Article 179, Labor Code) • Tax exempt employees’ compensation fund • Provides income, medical and other related benefits to employees and their dependents in the event of work connected injury or sickness, resulting in death or disability

Definitions: a. Injury or Accident • “Any harmful change in human organism from any accident arising out of and in the course of the employment” (Article 167,LC) b. Sickness • “Illness caused by employment subject to proof that risk of contracting the same is increased by working conditions.” (Article 167-1, LC) c. Death • “Loss of life resulting from injury or sickness.” (Article 167-m,LC) d. Disability • “Loss or impairment of a physical or mental function resulting from injury or sickness.” (Article 167-n,LC)

Checkpoint: Membership under the EC Program is compulsory upon all employers and their employees over 60 years of age. TRUE or FALSE FALSE Membership under the EC Program is compulsory upon all employers and their employees not over 60 years of age.

This is an accumulated tax exempt employees’ compensation fund used exclusively for payment of benefits under the EC program. Answer? State Insurance Fund

Compensable claims Injury or Accident a. The injury must be the result of accident arising out of and in the course of employment • Employee is injured at the workplace. • Employee is injured while performing his/her official function. • If the accident occurred while the employee is ministering to his/her personal comfort while at work. • If the accident happened while on board a company vehicle. • If the accident occurred during a company-sponsored activity. • If the accident occurred outside the company premises, the employee must have been executing an order of his/her employer.

b. “Going To and Coming From the Place of Work” Rule • The act of the employee of going to, or coming from the workplace must have been a continuing act, that is, he/she had not been diverted from it by any other activity, and he/she had not departed from his/her usual route to or from his/her workplace. • If on special errand, the special errand must have been official and in connection with his/her work. c. Progression (Deterioration) of Injury • In case an injury is shown to have arisen in the course of employment, every natural consequence that flows from the injury is deemed employment related.

Checkpoint: Juan dela Cruz is a messenger for ABC Company. He goes to and from work everyday using the same route. As a messenger, he is always mobile doing company errands. On the afternoon of August 25, 2013, Juan dropped by his girlfriend’s residence which is far off from his last delivery before going back to the company. Juan met an accident on his way back and broke his ankle. Can Juan claim from the EC Program? Why or Why not?

Answer NO, He cannot file for claims. “Going To and Coming From the Place of Work” Rule • The act of the employee of going to, or coming from the workplace must have been a continuing act, that is, he/she had not been diverted from it by any other activity, and he/she had not departed from his/her usual route to or from his/her workplace. • If on special errand, the special errand must have been official and in connection with his/her work.

Sickness a. The sickness must be the result of an occupational disease listed by the Commission. (ANNEX "A" AMENDED RULES ON EMPLOYEES' COMPENSATION ) b. The sickness is caused by one’s employment subject to proof by the employee that the risk of contracting the same is increased by working conditions. Increased risk theory: if the illness is caused or precipitated by factors inherent in the employees’ nature of work and working conditions. It does not include aggravation of a pre existing illness. 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. c. Progression (Deterioration) of Illness • In case a primary illness is shown to have arisen in the course of employment, every natural consequence that flows from the illness or injury is deemed employment related.

Checkpoint EMPLOYEES’ COMPENSATION COMMISSION (ECC) and GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioners, vs. COURT OF APPEALS and LILIA S. ARREOLA, respondents.

Checkpoint Death • Compensable when it resulted from a work connected injury or sickness Surviving spouse of a missing security guard assigned at Bubunawan Hydropower Plant in Bukidnon filed a claim for death benefits. The hydropower plant was one of the establishments hit by Typhoon Sendong wherein 10 workers died. Only one body was found and the other nine are still missing. Will the spouse be granted the death benefit claims?

Answer: • Spouse was given P10,000 as funeral benefits under ECP. • Aside from the amount, the deceased’s family received a monthly death benefit pension for the security guard’s work-connected death • Under ECC Board Resolution 93-08-0068 on August 5, 1993, the provision on presumptive death provides that: “If one is declared presumptively dead after he had been reported missing for some time, payment of death benefits shall be reckoned from the date he was declared presumably dead by proper authority, in accordance with law; except when the declaration of death specified another date, in such a case, with law; except when the declaration of death specified another date, in such a case, payment of death benefits shall start from the latter date; and in spite of the fact that the body of a missing person had not been recovered, and that no burial activities had been undertaken, the beneficiaries shall still be entitled to funeral benefits, as provided for under the law.” Source: http://www.ecc.gov.ph/SecondPage.aspx?content=87 Date Posted: Thursday, June 21, 2012

Policies on Disability benefits • Temporary Total Disability (TTD) – benefit is granted to claimant who has sickness or injury requiring prolonged treatment for a period of not more than 120 days. • Permanent Partial Disability (PPD) – benefit is granted up to a maximum of 240 days if the claimant’s disability persists, exceeding the 120 day limit • Permanent Total Disability (PTD) – benefit is granted if the claimant is still sick and unable to report for work as established by proper medical examination. • An employee/claimant who retires, or is otherwise separated from employment after the 120 days of TTD, but before 240 days may present himself/herself to the System for another physical and medical exam to determine if he/she is entitled to additional benefits,

Checkpoint Fernando V. del Castillo, suffered a stroke while employed as a lubeman at Central Azucarera de Tarlac. He filed an EC claim for permanent total disability (PTD) benefit with SSS. The SSS denied his claim on the ground that the duties he performed as a lubeman had no causal connection with his illness. Moreover, he has a history of smoking cigarettes which increased his risk of developing the illness. It was found out that SSS had previously granted him EC permanent partial disability (PPD) benefit for his hypertension. Is his claim for PTD valid?

Answer: After evaluating appellant case, the ECC-Secretariat reversed the decision of the SSS. In its decision, the ECC-Secretariat invoked that all consequences of hypertension, including stroke, which was previously considered as work-connected shall be deemed employment related. This is based on the Progression (Deterioration) of Illness or Injury found under Paragraph 4 of the Employees’ Compensation Board Resolution No. 93-08-0068 dated August 5, 1993. It provides in substance the following: “Where the primary illness or injury is shown to have arisen in the course of employment, every natural consequences that flows from the illness or injury shall be deemed employment related; x x x.” The ECC ordered the SSS to pay the claimant EC disability benefits plus reimbursement of medical expenses for his illness. Source: http://www.ecc.gov.ph/SecondPage.aspx?content=152 Date Posted: Monday, January 21, 2013

Limitations of liability • Employee’s Intoxication • Willful intention to injure or kill himself • Notorious Negligence

Definition: Intoxication – refers to a person’s condition of being under the influence of liquor or prohibited drugs to the extent that /her acts, words, or conduct are impaired visibly as to prevent him/her from physically and mentally engaging in the duties of his/her employment Notorious Negligence – is something more than mere or simple negligence. It signifies, a deliberate act of the employee to disregard his/her own safety, or ignorance an established warning or precaution. Willful Intent to Injure or Kill Oneself or Another – This contemplates a deliberate intent on the part of the employee to inflict injuries on himself/herself or another.

Employer’s obligation • Register all employees not over 60 years of age. Registration should be accomplished with SSS and GSIS • Beginning as of the last day of the month when an employee’s compulsory coverage takes effect and every month thereafter during his/her employment, his/her employer shall prepare to remit to the System a contribution equivalent to 1% of his/her monthly salary credit • Private employers remit a monthly contribution not exceeding Php10.00 • Government agencies remit a monthly contribution of Php100.00 beginning 2002 with a yearly increment of Php10.00 until contribution reaches Php170.00 by year 2010.

**Employers failure to remit contributions to the SIF shall make him/her liable to the SSS/GSIS for the benefits that may be due and payable to his/her employees during the calendar year of contingency. *Penalty varying from Php1000 to Php 10000 and or imprisonment for the duration of the violation on non compliance. *Late/non- payment of contribution is also subject to a 3% penalty monthly from date the remittance falls due.

Employers’ Contribution

Benefits • Medical Services, appliances, and supplies – for sickness or injury • Cash income benefit for permanent total disability on a lifetime basis • Daily cash income benefit for TTD • Monthly cash income benefit for PTD on a lifetime basis • Monthly cash income benefit for 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) • Rehabilitation Services – for permanent disability • Carer’s allowance – for permanent disability • Funeral benefit – for death

Prescriptive period • A claim for employee’s compensation must be filed with the System (SSS/GSIS) within 3 years from the time the cause of action accrued, provided however, that any claim filed within the system for any contingency that may be held compensable under the EC Program shall be considered as the EC claim itself.

The 3 year prescriptive period shall be reckoned from the onset of disability or date of death. In case of presumptive death, the 3 year limitation shall be counted from the date the missing person was officially declared to be presumptively dead.

summary • The EC Program is a social welfare insurance which compensates work-connected injury, sickness, disability and death with cash income benefit, medical, rehabilitation and related services. • It is administered by SSS for the private sector employees and by GSIS for the public sector. • Membership under the EC Program is compulsory upon all employers and their employees not over 60 years of age. • Applies to all employees and employers both in the private and public sectors including casual, emergency, temporary or substitute employees. • Also covers Filipino employees working abroad for employers doing business in the Phil.

References: • Protacio, Sally.2010 Philippine Labor Standards Guidebook.Quezon City: C&E Publishing Co. • http://www.ecc.gov.ph/Default.aspx • Labor Code of the Philippines

Employees’ Compensation and State Insurance Fund