Notes On Critical Areas in Labor Law II by Prof. Voltaire T. Duano

CRITICAL AREAS IN LABOR LAW
(SOCIAL LEGISLATION)
By: VOLTAIRE T. DUANO, LL.M.1
Employees’ Compensation Program
This is a comprehensive program designed to provide compensation benefit package to public

and private employees or their dependents in the event of work-related sickness, injury or death. In
San Miguel Corporation v. National Labor Relations Commission, G.R. No. L-57473, August
15, 1988, the features of Employees’ Compensation Program were noted by the Supreme Court as
follows:
On May 1, 1974, the Labor Code (P.D. No. 442) brought into being a new employees’ compensation
program. (To be enforced and implemented by the Employees’ Compensation Commission in conjunction with
the Government Service Insurance System and the Social Security System)
1) that is tax-exempt; (Id., Art. 166)
2) designed to ensure promptitude, in cases of work-connected disability or death, in the award to
employees and their dependents of adequate income benefit and medical or related benefits; (Id.)
3) funded by monthly contributions of all covered employers; (Id., Art. 183. The contributions are
pooled Into the State Insurance Fund)
4) compulsory on all employers and their employees not over 60 years of age; (Id., Arts. 168, 170)
5) the benefits of which are exclusive and in place of all other liabilities of the employer to the employee,
his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents;
(Id., Art. 173. The benefits are obviously exclusive of those under the old Workmen’s Compensation Act
(Act No. 3428, as amended) and the Employers’ Liability Act. Art. 173 further provides that payment of
compensation under the program shall bar the recovery of benefits under Sec. 699 of the Revised
Administrative Code; R.A. No. 1161 (the Social Security, Act), as amended; C.A. No. 186 (the GSIS Law),
as amended; R.A. No. 610 (the AFP Pension Act), as amended; and R.A. No. 4864 (re the Police
Commission), as amended) and
6) having its own adjudicative machinery with original and exclusive jurisdiction to settle any dispute
with respect to coverage, entitlement to benefits, collection and payment of contributions and penalties thereon,
or any other matter related thereto, independent of other tribunals except the Supreme Court. (Id., Arts. 180,
217. N.B. Art. 217 explicitly excepts from the jurisdiction of Labor Arbiters and the National Labor
Relations Commission “claims for employees’ compensation, social security, medicare and maternity
benefits.”)
Implementing agencies of the Employee Compensation Program
The agencies concerned in the implementation of the Employee Compensation Program:

1. Social Security System (SSS) - administering agency for the private sector;
2. Government Service Insurance System (GSIS) - administering agency for the public sector;
3. Employees’ Compensation Commission (ECC) - policy-making and the appellate bodyof
the ECP;
1LL.M. (Bene Meritus), San Sebastian College-Recoletos, Graduate School of Law (2014)
LL.B. (Valedictorian), San Sebastian College-Recoletos, College of Law (1993); A.B. Political Science
(Dean’s Lister), Lyceum of the Philippines (1989);
Bar Review Lecturer: Jurists Review Center; PUP Review Center; University of Cebu Law Center;
Academicus Review Center; Lyceum of the Philippines University; New Era University-COL; UP Law Center
(2019) and Villasis Review Center
Professorial Lecturer: College of Law, Polytechnic University of the Philippines, Lyceum of the
Philippines University, San Sebastian College-Recoletos, New Era University, Manila Adventist College,
University of Sto. Tomas, Graduate School of Law
Lecturer: Mandatory Continuing Legal Education (MCLE)
Authored the following books:

Labor Law Reviewer, First Edition 2022
Principles and Cases, Labor and Social Legislation, 2015, 2018, and 2022 Editions
Principles and Cases, Labor Relations, 2015, 2018, and 2022 Editions
Provisional Remedies and Special Civil Actions, Principles and Cases, 2015 and 2020 Editions; Rules on
Modes of Discovery, Principles and Cases, 2014 and 2021 Editions;
Tell Me About Labor Law Casebook Edition: A Ponencia of J. Leonen, 2020 Edition;
2016 POEA Rules and Regulations, 2019 Edition;
Special Issuances of the Supreme Court 2019 Edition
Notes on Critical Areas in Labor Law II by Prof. Voltaire T. Duano. Unauthorized copying, dissemination,
sharing, uploading, downloading, and storage strictly prohibited and will be prosecuted to the full extent of
the law, including the filing of administrative complaints with the Office of the Bar Confidant, IBP, and SC
as well as the filing of criminal charges. Page 1 of 24
Types of benefits under Employees Compensation
The benefits under Employees Compensation are in the form of income or services, and
consist of the following:
(1) Medical services, appliances and supplies;
(2) Rehabilitation services;
(3) Temporary total disability benefit;
(4) Permanent total disability benefit;
(5) Permanent partial disability benefit;
(6) Death benefit; and
(7) Funeral benefit. (Section 1, Rule VI, Amended Rules on Employees’ Compensation, which took
effect on June 1, 1987)
Definitions of terms under Article 173 (167)
2005 Bar Examination
(g) “Employee” means any person compulsorily covered by the GSIS under Commonwealth Act Numbered
One hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person
employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the
SSS under Republic Act Numbered Eleven hundred sixty-one, as amended.
(h) “Person” means any individual, partnership, firm, association, trust, corporation or legal representative
thereof.
(i) “Dependent” means the legitimate, legitimated or legally adopted or acknowledged natural child who is
unmarried, not gainfully employed, and not over twenty-one (21) years of age or over twenty-one (21) years of age
provided he 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 employee and the parents of said employee wholly
dependent upon him for regular support.
(j) “Beneficiaries” means the dependent spouse until he/she remarries and dependent children, who are the
primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent
children, the illegitimate children and legitimate descendants, who are the secondary beneficiaries: Provided, That the
dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other
dependent children who are qualified and eligible for monthly income benefit.
(k) “Injury” means any harmful change in the human organism from any accident arising out of and in the
course of the employment.
(l) “Sickness” means any illness definitely accepted as an occupational disease listed by the Commission, or
any illness caused by employment subject to proof that the risk of contracting the same is increased by working
conditions. For this purpose, the Commission is empowered to determine and approve occupational diseases and
work-related illnesses that may be considered compensable based on peculiar hazards of employment.
Nature of coverage
Coverage shall be compulsory. (Section 1, Rule I, Amended Rules on Employees’

Compensation, which took effect on June 1, 1987)
Scope of coverage
(a) Every employer shall be covered.

(b) Every employee not over 60 years of age shall be covered.
(c) An employee over 60 years of age shall be covered if he had been paying contributions to
the System prior to age 60 and has not been compulsorily retired.
(d) An employee who is coverable by both the GSIS and SSS shall be compulsorily covered
by both Systems. (Section 2, Rule I, Amended Rules on Employees’ Compensation, which took
effect on June 1, 1987)
Grounds for compensability
2012 and 1994 Bar Examinations
(a) For the injury and the resulting disability or death to be compensable, the injury must be
the result of accident arising out of and in the course of the employment. (ECC Resolution No. 2799,
July 25, 1984).
(b) For the sickness and the resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under Annex “A” of these Rules with the
conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the
disease is increased by the working conditions.
(c) Only injury or sickness that occurred on or after January 1, 1975 and the resulting
disability or death shall be compensable under these Rules. (Section 1, Rule III, Amended Rules
on Employees’ Compensation, which took effect on June 1, 1987)
Compensable sickness and the resulting disability or death
In Lorenzo v. Government Service Insurance System, G.R. No. 188385, October 2, 2013
the Supreme Court explained the rule for the sickness and the resulting disability or death to be
compensable as follows:
Sickness, as defined under Article 167 (The Article embodies the amendment of Title II, Book IV on
Employees’ Compensation and State Insurance Fund of the Labor Code by P.D No. 626) (1) Chapter I, Title II,
Book IV of the Labor Code of the Philippines refers to “any illness definitely accepted as an occupational
disease listed by the Employees’ Compensation Commission, or any illness caused by employment, subject to
proof that the risk of contracting the same is increased by working conditions.
In cases of death, such as in this case, Section 1(b), Rule III of the Rules Implementing P.D. No. 626, as
amended, requires that for the sickness and the resulting disability or death to be compensable, the claimant
must show: (1) that it is the result of an occupational disease listed under Annex “A” of the Amended Rules on
Employees’ Compensation with the conditions set therein satisfied; or (2) that the risk of contracting the
disease is increased by the working conditions.
Section 2(a), Rule III of the said Implementing Rules, on the other hand, defines occupational diseases
as those listed in Annex “A” when the nature of employment is as described therein. The listed diseases are
therefore qualified by the conditions as set forth in the said Annex “A,” hereto quoted:
OCCUPATIONAL DISEASES
For an occupational disease and the resulting disability or death to be compensable, all of the following
conditions must be satisfied:
(1) The employee’s work must involve the risks described herein;
(2) The disease was contracted as a result of the employee’s exposure to the described risks;
(3) The disease was contracted within a period of exposure and under such other factors necessary to
contract it;
(4) There was no notorious negligence on the part of the employee.
xxxx
Occupational Disease Nature of Employment
xxx
15. Leukemia and Lymphoma Among operating room personnel due to anesthetics
xxx
As correctly pointed out by the ECC, the coverage of leukemia as an occupational disease relates to
one’s employment as an operating room personnel ordinarily exposed to anesthetics. In the case of petitioner’s
wife, the nature of her occupation does not indicate exposure to anesthetics nor does it increase the risk of
developing Chronic Myelogenous Leukemia. There was no showing that her work involved frequent and
sufficient exposure to substances established as occupational risk factors of the disease. Thus, the need for the
petitioner to sufficiently establish that his wife’s job as a teacher exposed her to substances similar to
anesthetics in an environment similar to an “operating room.” (The ECC denied compensability based on
non-compliance with the conditions that: 1) Rosario’s work must involve the risks described; 2) The
disease was contracted as a result of the employee’s exposure to the described risks; 3) The disease
was contracted within a period of exposure and under such other factors necessary to contract it; and
4) There was no notorious negligence on the part of the employee.) This leans on the precept that the
awards for compensation cannot rest on speculations and presumptions. (Jimenez v. Court of Appeals, 520
Phil. 20, 36-37 [2006])
Indeed, following the specific mandate of P.D. No. 626, as amended, and its Implementing Rules, the
petitioner must have at least provided sufficient basis, if not medical information which could help determine the
causal connection between Rosario’s ailment and her exposure to muriatic acid, floor wax and paint as well as
the rigors of her work. Instead, petitioner merely insists on the supposition that the disease might have been
brought about by the harmful chemicals of floor wax and paint aggravated by the fact that the Manggahan
Elementary School is just along the highway which exposed Rosario to smoke belched by vehicles, all
contributing to her acquisition of the disease.
We find such factors insufficient to demonstrate the probability that the risk of contracting the disease is
increased by the working conditions of Rosario as a public school teacher; enough to support the claim of
petitioner that his wife is entitled to employees compensation. Petitioner failed to show that the progression of
the disease was brought about largely by the conditions in Rosario’s work. Not even a medical history or
records was presented to support petitioner’s claim.
Occupational Diseases (as Annex “A” Amended Rules on Employees’ Compensation)
For an occupational disease and the resulting disability or death to be compensable, all of the
following conditions must be satisfied:
(1) The employee’s work must involve the risks described herein;
(2) The disease was contracted as a result of the employee’s exposure to the described risks;
(3) The disease was contracted within a period of exposure and under such other factors necessary to
contract it;
(4) There was no notorious negligence on the part of the employee.
The employer who has failed to provide adequate protection and safety devices shall be
subject to the penalty imposed by Article 200 of the Code. Where he has provided adequate
protective and safety devices, there shall be a determination as to whether or not the employee has
been notoriously negligent.
The test of proof in compensation proceedings
In Leonis Navigation Co., Inc. vs. Villamater, G.R. No. 179169, March 3, 2010, the test of
proof in compensation proceedings was discussed as follows:
Jurisprudence provides that to establish compensability of a non-occupational disease,
reasonable proof of work-connection and not direct causal relation is required. Probability, not the
ultimate degree of certainty, is the test of proof in compensation proceedings. (Debaudin v. Social
Security System, G.R. No. 148308, September 21, 2007, 533 SCRA 601)
The increased risk theory
In Government Service Insurance System vs. Besitan, G.R. No. 178901, November 23,
2011, explained the concept of increased theory as follows:
Corollarily, for the sickness or resulting disability or death to be compensable, the claimant must prove
either (1) that the employee’s sickness was the result of an occupational disease listed under Annex “A” of the
Amended Rules on Employees’ Compensation, or (2) that the risk of contracting the disease was increased by
his working conditions.
Certainty is not required only probability
Under the increased risk theory, there must be a reasonable proof that the employee’s working condition
increased his risk of contracting the disease, or that there is a connection between his work and the cause of
the disease. (Castor-Garupa v. Employees’ Compensation Commission, G.R. No. 158268, April 12, 2006,
487 SCRA 171, 180) Only a reasonable proof of work-connection, not direct causal relation, however, is
required to establish compensability of a non-occupational disease. (Government Service Insurance System
v. Cordero, G.R. Nos. 171378 & 171388, March 17, 2009, 581 SCRA 633, 640) Probability, and not certainty,
is the yardstick in compensation proceedings; thus, any doubt should be interpreted in favor of the employees
for whom social legislations, like PD No. 626, were enacted. (Government Service Insurance System v.
Corrales, G.R. No. 166261, June 27, 2008, 556 SCRA 230, 243-244)
Interpretation of the phrase “arising out of and in the course of employment”
In Valeriano v. Employees Compensation Commission, G.R. No. 136200, June 8, 2000 the
Supreme Court explained the phrase “arising out of and in the course of employment” in determining
the issue of whether petitioners injuries were work-connected:
Citing Iloilo Dock & Engineering Co. v. Workmens Compensation Commission, 26 SCRA
102, November 27, 1968 the Court of Appeals dismissed petitioners claim on the ground that he
had not been injured at his work place, executing an order of his superior, or performing official
functions when he met the accident.
We agree. In Iloilo, the Court explained the phrase “arising out of and in the course of
employment” in this wise:
“The two components of the coverage formula — “arising out of” and “in the course of employment” —
are said to be separate tests which must be independently satisfied; however, it should not be forgotten that the
basic concept of compensation coverage is unitary, not dual, and is best expressed in the word, “work-
connection,” because an uncompromising insistence on an independent application of each of the two portions
of the test can, in certain cases, exclude clearly work-connected injuries. The words “arising out of” refer to the
origin or cause of the accident, and are descriptive of its character, while the words “in the course of” refer to
the time, place and circumstances under which the accident takes place.
“As a matter of general proposition, an injury or accident is said to arise “in the course of employment”
when it takes place within the period of the employment, at a place where the employee may reasonably x x x
be, and while he is fulfilling his duties or is engaged in doing something incidental thereto.” (Ibid., pp. 105-106,
per Castro, J.)
Thus, for injury to be compensable, the standard of “work connection” must be substantially satisfied. The
injury and the resulting disability sustained by reason of employment are compensable regardless of the place
where the injured occurred, if it can be proven that at the time of the injury, the employee was acting within the
purview of his or her employment and performing an act reasonably necessary or incidental thereto. (Lopez v.
Employees Compensation Commission, 228 SCRA 657, December 21, 1993)
Petitioner Valeriano was not able to demonstrate solidly how his job as a firetruck driver was related to
the injuries he had suffered. That he sustained the injuries after pursuing a purely personal and social function -
- having dinner with some friends -- is clear from the records of the case. His injuries were not acquired at his
work place; nor were they sustained while he was performing an act within the scope of his employment or in
pursuit of an order of his superior. Thus, we agree with the conclusion reached by the appellate court that his
injuries and consequent disability were not work-connected and thus not compensable.
The 24-hour-duty doctrine
In explaining the 24-hour doctrine, the Supreme Court explained the applicability of Hinoguin
and Nitura in Valeriano v. Employees Compensation Commission, G.R. No. 136200, June 8,
2000 where petitioner debunks the importance given by the appellate court to the fact that he was
not at his work place and had in fact been dismissed for the day when he met the accident. He
argues that his claim for disability benefits is anchored on the proposition that the exigency of his job
as a fireman requires a constant observance of his duties as such; thus, he should be considered to
have been “on call” when he met the accident. He underscores the applicability of Hinoguin v. ECC,
172 SCRA 350, April 17, 1989 and Nitura v. ECC, 201 SCRA 278, September 4, 1991 to his case.
Thus, ruled:
In Hinoguin and Nitura, the Court granted death compensation benefits to the heirs of Sgt. Limec
Hinoguin and Pfc. Regino Nitura, both members of the Philippine Army. After having gone elsewhere on an
overnight pass, Sgt. Hinoguin was accidentally shot by a fellow soldier during the former’s return trip to their
headquarters. Pfc. Nitura, on the other hand, died after falling from a bridge during his trip back to his camp. At
the time of his death, he had just accomplished his commander’s instruction to check on several personnel of
his command post who were then at a dance party.
Both cases espoused the position that the concept of “work place” cannot always be literally applied to a
soldier on active duty status who, to all intents and purposes, is on a 24-hour official duty status, subject to
military discipline and law and at the beck and call of his superior officers at all times, except when he is on
vacation leave status. (See Hinoguin, pp. 356- 357; and Nitura, pp. 283-284)
This ratiocination, later applied to police officers in Employees Compensation Commission v. Court of
Appeals, 257 SCRA 717, June 28, 1996 was dissected in the more recent GSIS v. Court of Appeals, 306
SCRA 41, April 20, 1999. In the latter case, the deceased police officer, SPO2 Florencio Alegre, was
moonlighting as a tricycle driver at the time of his death. The Court reviewed Hinoguin, Nitura and ECC and
noted that in each case death benefits were granted, not just because of the principle that soldiers or policemen
were virtually working round the clock. More important, there was a finding of a reasonable nexus between the
absence of the deceased from his assigned place of work and the incident causing his death. The Court
explained:
“In Hinoguin, the connection between his absence from the camp where he was assigned and the place
where he was accidentally shot was the permission duly given to him and his companions by the camp
commander to go on overnight pass. According to the Court, “a place [where] soldiers have secured lawful
permission cannot be very different, legally speaking, from a place where they are required to go by their
commanding officer” and hence, the deceased is to be considered as still in the performance of his official
functions.
“The same thing can be said of Nitura where the deceased had to go outside of his station on permission
and directive by his superior officer to check on several personnel of his command who were then attending a
dance party.
“As for P/Sgt. Alvaran in the Employees Compensation Commission case, although he was not given any
directive or permission by a superior officer to be at the Mandaluyong Police Station, his presence there was
nonetheless justified by the peacekeeping nature of the matter he was attending to at the time x x x he was
attacked and shot to death, that is, [while] bringing his son to the police station to answer for a crime [--] a basic
duty which any policeman is expected and ought to perform.” (Ibid., p. 48, per Romero, J)
Ruling that the death of SPO2 Alegre was not compensable, the Court pointed out that the 24-hour-duty
doctrine should not embrace all acts and circumstances causing the death of a police officer, but only those
that can be categorized as police service in character. It further held:
“Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for death
benefits, namely: (a) that the employee must be at the place where his work requires him to be; (b) that the
employee must have been performing his official functions; and (c) that if the injury is sustained elsewhere, the
employee must have been executing an order for the employer, it is not difficult to understand then why SPO2
Alegres widow should be denied the claims otherwise due her. Obviously, the matter SPO2 Alegre was
attending to at the time he met his death, that of ferrying passengers for a fee, was intrinsically private and
unofficial in nature proceeding as it did from no particular directive or permission of his superior officer. In the
absence of such prior authority as in the cases of Hinoguin and Nitura, or peace-keeping nature of the act
attended to by the policeman at the time he died even without the explicit permission or directive of a superior
officer, as in the case of P/Sgt. Alvaran, there is no justification for holding that SPO2 Alegre met the requisites
set forth in the ECC guidelines. That he may be called upon at anytime to render police work as he is
considered to be on a round-the-clock duty and was not on an approved vacation leave will not change the
conclusion arrived at[,] considering that he was not placed in a situation where he was required to exercise his
authority and duty as policeman. In fact, he was refusing to render one[,] pointing out that he already complied
with the duty detail. At any rate, the 24-hour duty doctrine, as applied to policemen and soldiers, serves more
as an after-the-fact validation of their acts to place them within the scope of the guidelines rather than [as] a
blanket license to benefit them in all situations that may give rise to their deaths. In other words, the 24-hour
duty doctrine should not be sweepingly applied to all acts and circumstances causing the death of a police
officer but only to those which, although not on official line of duty, are nonetheless basically police service in
character.” (Ibid., p. 49)
Going to and from work rule
When an employee is accidentally injured at a point reasonably proximate to the place of work,
while he is going to and from his work, such injury is deemed to have arisen out of and in the course
of his employment. (Vda. de Torbela v. Employees’ Compensation Commission, G.R. No. L-
42627 February 21, 1980citing Philippine Fiber Processing Co., Inc. vs. Fermina Ampil, 99
Phil. 1050; Talisay-Silay Milling Co., Inc, vs. Workmen’s Compensation Commission, 21 SCRA
366)
ACCIDENT ON WAY HOME FROM WORK AS “ARISING OUT OF/IN THE COURSE OF EMPLOYMENT”
In Lazo v. Employees’ Compensation Commission, G.R. No. 78617 June 18, 1990, the
petitioner contends that the injuries he sustained due to the vehicular accident on his way home from
work should be construed as “arising out of or in the course of employment” and thus, compensable.
In deciding in favor of petitioner, the High Court said:
The Court has carefully considered the petition and the arguments of the parties and finds that the
petitioner’s submission is meritorious. Liberally interpreting the employees compensation law to give effect to its
compassionate spirit as a social legislation CIemente v. WCC, G.R. No. L-42087, 8 April 1988, 159 SCRA
492. in Vda. de Torbela u. ECC, G.R. No. 142627, February 21, 1980, 96 SCRA 260 the Court held:
It is a fact that Jose P. Torbela, Sr. died on March 3, 1975 at about 5:45 o’clock in the morning due to
injuries sustained by him in a vehicular accident while he was on his way to school from Bacolod City, where he
lived, to Hinigaran, Negros Occidental where the school of which he was the principal was located and that at
the time of the accident he had in his possession official papers he allegedly worked on in his residence on the
eve of his death. The claim is compensable. When an employee is accidentally injured at a point reasonably
proximate to the place at work, while he is going to and from his work, such injury is deemed to have arisen out
of and in the course of his employment.
Again in Alano v. ECC, G.R. No. L-48594, March 16, 1988, 158 SCRA 670 it was reiterated:
Dedicacion de Vera, a government employee during her lifetime, worked as principal of Salinap
Community School in San Carlos City, Pangasinan. Her tour of duty was from 7:30 a.m. to 5:30 p.m. On
November 29, 1976, at 7:00 A-M., while she was waiting for a ride at Plaza Jaycee in San Carlos City on her
way to the school, she was bumped and run over by a speeding Toyota mini-bus which resulted in her
instantaneous death. ...
In this case, it is not disputed that the deceased died while going to her place of work. She was at the
place where, as the petitioner puts it, her job necessarily required her to be if she was to reach her place of
work on time. There was nothing private or personal about the school principal’s being at the place of the
accident. She was there because her employment required her to be there.
More recently, in Vano vs. GSIS & ECC, G.R. No. 81327, December 4, 1989 this Court, applying the
above quoted decisions, enunciated:
Filomeno Vano was a letter carrier of the Bureau of Posts in Tagbilaran City. On July 31, 1983, a Sunday,
at around 3:30 p.m. Vano was driving his motorcycle with his son as backrider allegedly on his way to his
station in Tagbilaran for his work the following day, Monday. As they were approaching Hinawanan Bridge in
Loay, Bohol, the motorcycle skidded, causing its passengers to be thrown overboard. Vano’s head hit the
bridge’s railing which rendered him unconscious. He was taken to the Engelwood Hospital where he was
declared dead on arrival due to severe hemorrhage.
We see no reason to deviate from the foregoing rulings. Like the deceased in these two (2)
aforementioned cases, it was established that petitioner’s husband in the case at bar was on his way to his
place of work when he met the accident. His death, therefore, is compensable under the law as an employment
accident.
In the above cases, the employees were on their way to work. In the case at bar, petitioner had come
from work and was on his way home, just like in the Baldebrin case, where the employee “... figured in an
accident when he was going home from his official station at Pagadian City to his place of residence at Aurora,
Zamboanga del Sur ....” (See Baldebrin supra.)
xxx
In the case at bar, it can be seen that petitioner left his station at the Central Bank several hours after his
regular time off, because the reliever did not arrive, and so petitioner was asked to go on overtime. After
permission to leave was given, he went home. There is no evidence on record that petitioner deviated from his
usual, regular homeward route or that interruptions occurred in the journey.
xxx
There is no reason, in principle, why employees should not be protected for a reasonable period of time
prior to or after working hours and for a reasonable distance before reaching or after leaving the employer’s
premises. (Cudahy Packing Co. v. Parramore, 263 U.S. 418 [1923] and Papineau v. Industrial Accident
Commission, 187 Pac. 108.)
If the Vano ruling awarded compensation to an employee who was on his way from home to his work
station one day before an official working day, there is no reason to deny compensation for accidental injury
occurring while he is on his way home one hour after he had left his work station.
The “proximity” or the “off-premises” rule
In Ollero v. Workmen’s Compensation Commission, No. L-41742, August 23, 1978, the
issue posed in this petition for review is not new; it concerns what has been termed as the
“proximity”, the “going to and coming from”, or the “off-premises” rule. In other words, is the place of
occurrence of an injury suffered by an employee an essential factor in determining its compensability
that is whether or not the injury occurred in the course and by reason of the employment?
It is now the settled principle in this jurisdiction that for an injury to be compensable it is not
necessary that the cause therefor shall have taken place within the place of employment, for so long
as the worker acted within the scope of his employment, performing an act reasonably necessary or
incidental thereto, the injury sustained by reason thereof falls within the protection of the law
regardless of the place of injury. (Chua Yeng vs. Roma, et al., 1960, 109 Phil. 1022, citing
Vergoza vs. Arnaz Vda. de Cruz, L-7305, December 15, 1953; Ramos vs. Poblete, 40 Off. Gaz.
3474; and Estandarte vs. Phil. Motor Alcohol Corp., G.R. No. 39733, November 1, 1933. Iloilo
Dock & Engineering Co. vs. WCC, et al., 1968, 26 SCRA 102. Luzon Stevedoring Corp. vs.
WCC. et al., 1969, 27 SCRA 1132. Belarmino, et al. vs. WCC, Pacific Metals Corp., et al., L-
41747, March 31, 1978)
The situation of the petitioner herein, Mercedes Ollero, involves more particularly the “going to
and coming from work” or what has been referred to also as the “street-peril” principle. Under
American Jurisprudence, the general rule is that the hazards encountered by employees while going
to or returning from their regular place of work, before reaching or after leaving the employer’s
premises, are not ordinarily incident to the employment, and for this reason injuries resulting from
such hazards are in most instances held not to be compensable as arising out of and in the course
of the employment. (82 Am Jur 2d, Sec. 255, p. 43, citing: Voehl v. Indemnity Ins. Co., 288 US
162, 77 L Ed 676, 53 S Ct 380, 87 ALR 245, and a host of cases)
The aforementioned general rule however admits various exceptions in most of the States of
the Union, and among these are: where the employer provides transportation or remunerates the
employee for the time or expense involved, where the employee performs same task in connection
with his employment at home or en route, or is on a special mission at his employer’s behest, and so
on. (p. 44, ibid)
Following American Jurisprudence, in the early case of Afable, et at vs. Singer Sewing
Machine Co., 1933, this Court in a decision penned by Justice James C. Vickers, denied
compensation to the heirs of Leopoldo Madlangbayan, a collector of defendant company who was
run over and fatally injured in one of the streets in the city of Manila while returning home alter
making his collections in San Francisco del Monte.
The Court inter alia held:
“The accident which caused the death of the employee was not due to and in pursuance of his
employment. At the time that he was run over by the truck, Leopoldo Madlangbayan was not in the pursuance
of his employment with the defendant corporation, but was on his way home alter he had finished his work for
the day and had left the territory where he was authorized to make collections for the defendant. The employer
is not an insurer “against all accidental injuries which might happen to an employee while in the course of the
employment”, and as a general rule, an employee is not entitled to recover from personal injuries resulting from
an accident that befalls him while going to or returning from his place of employment, because such an
accident does not arise out of and in the course of his employment.” (58 Phil. 39, 41, citing Mueller
Construction Co. vs. Industrial board, 283, III., 148; N.E., 1028; Indemnity Co. vs. Dinkins, 211 S.W., 949,
In Re Peter S. Winchester, 2nd A.R. U.S.C.C., 262; In re Julius Rosenberg, 2nd A.R.U.S. C.C., 263; Kirby
Lumber Co. vs. Scurlock, 229 S.W., 975, among others)
In the later case of Philippine Engineer’s Syndicate, Inc. vs. Flora S. Martin & WCC, 1962, per then
Justice later Chief Justice Roberto Concepcion, this Court applied one of the exceptions above enumerated. In
the Martin case, Aurelio Martin was employed by the Philippine Engineer’s Syndicate as a plant operator in its
project in Benguet, Mountain Province. Late in the afternoon of December 2, 1957, after coming from work
Aurelio Martin was standing together with other coworkers by the roadside near his place of work waiting for the
truck of the company that would convey them home. When the service truck arrived Martin clung to the truck
and in doing so he slipped and fell and a result he sustained fatal injuries. The Court affirmed the award of
compensation to the heirs of the deceased worker, ruling that the accident arose out of or in the course of
employment because the truck involved in the accident was the service truck of the employer furnished by the
latter to convey its workers home from work, citing the following:
“. . . Off-Premise injuries to or from work, in both liberal and narrow states, are compensable (1) if
the employee is on the way to or from work in a vehicle owned or supplied by the employer, whether in a
public (e.g., the employer’s street car) or private conveyance. . . . .” (Workmen’s Compensation Laws by
Hororitz, p. 162)8 [Ollero vs. Workmen’s Compensation Commission, 84 SCRA 695(1978)]
Limitation
No compensation shall be allowed to the employee or his dependents when the injury,
sickness, disability or death was occasioned by any of the following:
(1) his intoxication;
(2) his willful intention to injure or kill himself or another; or
(3) his notorious negligence. (Section 1, Rule IV, Amended Rules on Employees’
Disability benefits
Definition of disability
Disability means loss or impairment of a physical or mental function resulting from injury or
sickness. (Article 173 [m]) “Disability” is generally defined as “loss or impairment of a physical or
mental function resulting from injury or sickness.” (Labor Code, Art. 167 [n]) Clearly, “disability” is
not synonymous with “sickness” or “illness,” the former being a potential effect of the latter.
(Remigio v. NLRC, C.F. Sharp Crew Management, Inc. & New Commodore Cruise Line, Inc.,
G.R. No. 159887, April 12, 2006)
Three kinds of disability benefits under the Labor Code
In Bernardo Remigio v. NLRC, C.F. Sharp Crew Management, Inc. & New Commodore
Cruise Line, Inc., G.R. No. 159887, April 12, 2006 it was held: There are three kinds of disability
benefits under the Labor Code, as amended by P.D. No. 626: (1) temporary total disability, (2)
permanent total disability, and (3) permanent partial disability. Section 2, Rule VII of the
Implementing Rules of Book V of the Labor Code differentiates the disabilities as follows:
Sec. 2. Disability.—(a) A total disability is temporary if as a result of the injury or sickness the employee
is unable to perform any gainful occupation for a continuous period not exceeding 120 days, except as
otherwise provided for in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in
Rule X (Rule X. Temporary Total Disability, SECTION 2. Period of entitlement [to Temporary Total
Disability Benefit]) of these Rules.
(c) A disability is partial and permanent if as a result of the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his body. (emphasis supplied)
Temporary Total Disability
A total disability is temporary if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period not exceeding 120 days, except as otherwise
provided for in Rule X of these Rules. (Section 2 [a], Rule VII, Amended Rules on Employees’
Condition to entitlement of temporary total disability
An employee shall be entitled to an income benefit for temporary total disability if all of the
following conditions are satisfied:
(1) He has been duly reported to the System;
(2) He sustains the temporary total disability as a result of the injury or sickness, and
(3) The System has been duly notified of the injury or sickness which caused his disability.
His employer shall be liable for the benefit if such illness or injury occurred before the employee
is duly reported for coverage to the System. (Section 1, Rule X, Amended Rules on Employees’
Period of entitlement
Period to pay
The income benefit shall be paid beginning on the first day of such disability. If caused by an
injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or
sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset
of disability in which case benefit for temporary total disability shall be paid. However, the System
may declare the total and permanent status at any time after 120 days of continuous temporary total
disability as may be warranted by the degree of actual loss or impairment of physical or mental
functions as determined by the System. (Section 2 [a], Rule X, Amended Rules on Employees’
Permanent Total Disability
A disability is total and permanent if as a result of the injury or sickness the employee is unable
to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise
provided for in Rule X of these Rules. (Section 2 [b], Rule VII, Amended Rules on Employees’
Permanent disability
Permanent disability is the inability of a worker to perform his job for more than 120 days,
regardless of whether or not he loses the use of any part of his body. (Government Service
Insurance System v. Cadiz, G.R. No. 154093, 8 July 2003, 405 SCRA 450, 454; Ijares v. Court
of Appeals, G.R. No. 105854, 26 August 1999, 313 SCRA 141, 149-150)
Total disability
Total disability, on the other hand, means the disablement of an employee to earn wages in the
same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of
work which a person of his mentality and attainments could do. (Philippine Transmarine Carriers,
Inc. v. NLRC, G.R. No. 123891, 28 February 2001, 353 SCRA 47, 53) It does not mean absolute
helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the
incapacity to work resulting in the impairment of ones earning capacity. (Ibid., citing Bejerano v.
Employees Compensation Commission, G.R. No. 84777, 30 January 1992, 205 SCRA 598, 602)
Absolutely disabled or totally paralyzed not required in total disability
A total disability does not require that the employee be absolutely disabled, or totally paralyzed.
What is necessary is that the injury must be such that the employee cannot pursue her usual work
and earn therefrom. (Remigio v. NLRC, C.F. Sharp Crew Management, Inc. & New Commodore
Cruise Line, Inc., G.R. No. 159887, April 12, 2006 citing Austria v. CA, G.R. No. 146636, August
12, 2002, 387 SCRA 216, 221, citing Gonzaga v. ECC, No. L-62287, January 31, 1984, 127
SCRA 443)
Test of permanent total disability
In Remigio v. NLRC, C.F. Sharp Crew Management, Inc. & New Commodore Cruise Line,
Inc., G.R. No. 159887, April 12, 2006 the Supreme Court laid down the test of permanent total
disability as follows:
In Vicente v. ECC:
x x x the test of whether or not an employee suffers from ‘permanent total disability’ is a showing of the
capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by
reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more
than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees
Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the
said employee undoubtedly suffers from ‘permanent total disability’ regardless of whether or not he loses the
use of any part of his body. (emphases supplied)
Liability of employer to permanent total disability
His employer shall be liable for the benefit if such injury or sickness occurred before the
employee is duly reported for coverage to the System. (Rule XI, Amended Rules on Employees’
Condition to entitlement of permanent total disability
An employee shall be entitled to an income benefit for permanent total disability if all of the
following conditions are satisfied:
(1) He has been duly reported to the System;
(2) He sustains the permanent total disability as a result of injury or sickness; and
(3) The System has been duly notified of the injury or sickness which caused his disability.
(Section 1 [a], Rule XI, Amended Rules on Employees’ Compensation, which took effect on
June 1, 1987)
Basis to pursue an action for total and permanent disability benefits
In Torillos v. Eastgate Maritime Corp., G. R. No. 215904, January 10, 2019, citing C.F Sharp
Crew Management, Inc. v. Taok, G.R. No. 193679, July 18, 2012, 691 Phil. 521 (2012) that a
seafarer may have basis to pursue an action for total and permanent disability benefits in any of the
following conditions:
(a) The company-designated physician failed to issue a declaration as to his fitness to
engage in sea duty or disability even after the lapse of the 120-day period and there is no
indication that further medical treatment would address his temporary total disability, hence,
justify an extension of the period to 240 days;
(b) 240 days had lapsed without any certification issued by the company designated
physician;
(c) The company-designated physician declared that he is fit for sea duty within the 120-day
or 240-day period, as the case may be, but his physician of choice and the doctor chosen under
Section 20-B(3) of the POEA-SEC are of a contrary opinion;
(d) The company-designated physician acknowledged that he is partially permanently
disabled but other doctors who he consulted, on his own and jointly with his employer, believed
that his disability is not only permanent but total as well;
(e) The company-designated physician recognized that he is totally and permanently
disabled but there is a dispute on the disability grading;
(f) The company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the third doctor
selected under Section 20-B(3) of the POEA-SEC found otherwise and declared him unfit to
work;
(g) The company-designated physician declared him totally and permanently disabled but
the employer refuses to pay him the corresponding benefits; and
(h) The company-designated physician declared him partially and permanently disabled
within the 120-day or 240-day period but he remains incapacitated to perform his usual sea
duties after the lapse of said periods.
The compensation and benefits of seafarers for injuries or illness under the POEA-
Standard Employment Contract
The liabilities of the employer when the seafarer suffers work-related injury or illness during the
term of his contract are as follows:
1. The employer shall continue to pay the seafarer his wages during the time he is on board the
ship;
2. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer
shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment as
well as board and lodging until the seafarer is declared fit to work or to be repatriated. However,
if after repatriation, the seafarer still requires medical attention arising from said injury or illness,
he shall be so provided at cost to the employer until such time he is declared fit or the degree of
his disability has been established by the company-designated physician.
3. In addition to the above obligation of the employer to provide medical attention, the seafarer
shall also receive sickness allowance from his employer in an amount equivalent to his basic
wage computed from the time he signed off until he is declared fit to work or the degree of
disability has been assessed by the company-designated physician. The period within which the
seafarer shall be entitled to his sickness allowance shall not exceed 120 days. Payment of the
sickness allowance shall be made on a regular basis, but not less than once a month.
The seafarer shall be entitled to reimbursement of the cost of medicines prescribed by the
company-designated physician. In case treatment of the seafarer is on an out-patient basis as
determined by the company-designated physician, the company shall approve the appropriate
mode of transportation and accommodation. The reasonable cost of actual traveling expenses
and/or accommodation shall be paid subject to liquidation and submission of official receipts
and/or proof of expenses.
For this purpose, the seafarer shall submit himself to a post-employment medical examination
by a company-designated physician within three working days upon his return except when he
is physically incapacitated to do so, in which case, a written notice to the agency within the
same period is deemed as compliance. In the course of the treatment, the seafarer shall also
report regularly to the company-designated physician specifically on the dates as prescribed by
the company-designated physician and agreed to by the seafarer. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim
the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be
agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final
and binding on both parties.
4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work-
related.
5. In case a seafarer is disembarked from the ship for medical reasons, the employer shall bear
the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation; or (2) fit to
work but the employer is unable to find employment for the seafarer on board his former ship or
another ship of the employer.
6. In case of permanent total or partial disability of the seafarer caused by either injury or illness
the seafarer shall be compensated in accordance with the schedule of benefits enumerated in
Section 32 of his Contract. Computation of his benefits arising from an illness or disease shall
be governed by the rates and the rules of compensation applicable at the time the illness or
disease was contracted.
The disability shall be based solely on the disability gradings provided under Section 32 of this
Contract, and shall not be measured or determined by the number of days a seafarer is under
treatment or the number of days in which sickness allowance is paid.
7. It is understood and agreed that the benefits mentioned above shall be separate and distinct
from, and will be in addition to whatever benefits which the seafarer is entitled to under
Philippine laws such as from the Social Security System, Overseas Workers Welfare
Administration, Employees’ Compensation Commission, Philippine Health Insurance
Corporation and Home Development Mutual Fund (Pag-IBIG Fund). (Section 20 [A], Amended
Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-
Board Ocean-Going Ships, Memorandum Circular No. 10 Series of 2010)
The post-employment medical examination requirement under the POEA-Standard

Employment Contract
The procedure for post-employment medical examination is provided in Section 20 [A][3] of

the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino
Seafarers On-Board Ocean-Going Ships, Memorandum Circular No. 10 Series of 2010, as follows:
3. In addition to the above obligation of the employer to provide medical attention, the seafarer
shall also receive sickness allowance from his employer in an amount equivalent to his basic
wage computed from the time he signed off until he is declared fit to work or the degree of
disability has been assessed by the company-designated physician. The period within which the
seafarer shall be entitled to his sickness allowance shall not exceed 120 days. Payment of the
sickness allowance shall be made on a regular basis, but not less than once a month.
The seafarer shall be entitled to reimbursement of the cost of medicines prescribed by the
company-designated physician. In case treatment of the seafarer is on an out-patient basis as
determined by the company-designated physician, the company shall approve the appropriate
mode of transportation and accommodation. The reasonable cost of actual traveling expenses
and/or accommodation shall be paid subject to liquidation and submission of official receipts
and/or proof of expenses.
For this purpose, the seafarer shall submit himself to a post-employment medical examination
by a company-designated physician within three working days upon his return except when he
is physically incapacitated to do so, in which case, a written notice to the agency within the
same period is deemed as compliance. In the course of the treatment, the seafarer shall also
report regularly to the company-designated physician specifically on the dates as prescribed by
the company-designated physician and agreed to by the seafarer. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim
the above benefits. [Underscore ours supplied]
Reason for the strict compliance with the three (3)-day period for the post-employment
examination by the company-designated physician?
Ebuega v. Southfield Agencies, Inc. v. Wilhemsen Ship Management Holding Ltd., G.R. No.
208396, March 14, 2018 ruled:
Manota v. Avantgarde Shipping Corporation, 715 Phil. 54 (2013) [Per J. Peralta, Third
Division], explained why the requisite three (3)-day period for examination by the
company-designated physician "must be strictly observed":
The 3-day mandatory reporting requirement must be strictly observed since

within 3 days from repatriation, it would be fairly manageable for the physician to
identify whether the disease . . . was contracted during the term of his employment
or that his working conditions increased the risk of contracting the ailment.
....
Moreover, the post-employment medical examination within 3 days from . . .

arrival is required in order to ascertain [the seafarer's] physical condition, since to
ignore the rule would set a precedent with negative repercussions because it would
open the floodgates to a limitless number of seafarers claiming disability benefits. It
would certainly be unfair to the employer who would have difficulty determining the
cause of a claimant's illness considering the passage of time. In such a case, the
employers would have no protection against unrelated disability claims. (Id. at 64-
65 citing Crew and Ship Management International, Inc. and Salena, Inc. v. Jina T.
Soria, G.R. No. 175491, December 10, 2012; Jebsens Maritime, Inc. v. Undag,
G.R. No. 191491, December 14, 2011, 662 SCRA 670, 681)
The third-doctor conflict resolution procedure under the 2010 POEA-SEC
The POEA Standard Employment Contract clearly provide that when a seafarer sustains a
work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be
determined by the company-designated physician. If the physician appointed by the seafarer
disagrees with the company-designated physician's assessment, the opinion of a third doctor may
be agreed jointly between the employer and the seafarer to be the decision final and binding on
them. (Hernandez v. Magsaysay Maritime Corporation, G.R. No. 226103, January 24, 2018)
The procedure for third-doctor conflict resolution is specifically provided in Section 20 [A][3] of
the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino
Seafarers On-Board Ocean-Going Ships, Memorandum Circular No. 10 Series of 2010, as follows:
3. xxx
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case, a written
notice to the agency within the same period is deemed as compliance. In the course of
the treatment, the seafarer shall also report regularly to the company-designated
physician specifically on the dates as prescribed by the company-designated physician
and agreed to by the seafarer. Failure of the seafarer to comply with the mandatory
reporting requirement shall result in his forfeiture of the right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may
be agreed jointly between the employer and the seafarer. The third doctor’s decision
shall be final and binding on both parties. (Underscore ours supplied)
The guidelines on company-designated physician to assess the seafarer
In Cutanda v. Marlow NavigationPhils., Inc. G. R. No. 219123, September 11, 2017, the High Court
explained that the seafarer's disability should not be simply determined by the number of days that he
could not work and the determination of the fitness of a seafarer by the company-designated physician
should be subject to the periods prescribed by law. Thus, the Court said:
Finally, in Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr, (Elburg), it was affirmed
that the Crystal Shipping doctrine was not binding because a seafarer's disability should
not be simply determined by the number of days that he could not work. Nevertheless, the
pronouncement in Carcedo was reiterated - that the determination of the fitness of a
seafarer by the company-designated physician should be subject to the periods prescribed
by law. Elburg provided a summation of periods when the company-designated physician
must assess the seafarer, to wit:
1. The company-designated physician must issue a final medical assessment on

the seafarer's disability grading within a period of 120 days from the time the
seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the
period of 120 days, without any justifiable reason, then the seafarer's disability
becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the
period of 120 days with a sufficient justification (e.g., seafarer required further
medical treatment or seafarer was uncooperative), then the period of
diagnosis and treatment shall be extended to 240 days. The employer has the
burden to prove that the company-designated physician has sufficient
justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within
the extended period of 240 days, then the seafarer's disability becomes
permanent and total, regardless of any justification.
Work-related illness under the Amended Standards Terms and Conditions

Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going
Ships (MC No. 10-2010)
Work-related illness means any sickness as a result of an occupational disease listed under
Section 32-A of this Contract with the conditions set therein satisfied. (No. 16, Definitions of Term, MC-10-
2010)
Conditions for an occupational disease and the resulting disability or death to be

compensable under Section 32-Aof the Amended Standards Terms and Conditions
Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships
(MC No. 10-2010)
For an occupational disease and the resulting disability or death to be compensable, all of the
following conditions must be satisfied:
1. The seafarer’s work must involve the risks describe herein;

2. The disease was contracted as a result of the seafarer’s exposure to the describe[d] risks;
3. The disease was contracted within a period of exposure and under such other factors
necessary to contract it;
4. There was no notorious negligence on the part of the seafarer. (Section 32-A POEA-SEC)
Work-related injury under the Amended Standards Terms and Conditions

Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going
Ships (MC No. 10-2010)
Work-related injury means injury arising out of and in the course of employment. (No. 17,
Definitions of Term, MC-10-2010)
Republic Act No. 7699, Limited Portability Law
2014, 2011 and 2005 Bar Examinations
On May 1, 1994, Republic Act No. 7699 AN ACT INSTITUTING LIMITED PORTABILITY
SCHEME IN THE SOCIAL SECURITY INSURANCE SYSTEMS BY TOTALIZING THE WORKERS’
CREDITABLE SERVICES OR CONTRIBUTIONS IN EACH OF THE SYSTEMS was approved.
The salient provisions are as follows:
1. Declaration of Policy
It is hereby declared the policy of the State to promote the welfare of our workers by recognizing their
efforts in productive endeavors and to further improve their conditions by providing benefits for their long years
of contribution to the national economy. Towards this end, the State shall institute a scheme for totalization and
portability of social security benefits with the view of establishing within a reasonable period a unitary social
security system. (Section 1, Republic Act No. 7699)
2. Definition of Terms
As used in this Act, unless the context indicates otherwise, the following terms shall mean:
(a) “Contributions” shall refer to the contributions paid by the employee or worker to either the
Government Service Insurance System (GSIS) or the Social Security System (SSS) on account of the worker’s
membership;
(b) “Portability” shall refer to the transfer of funds for the account and benefit of a worker who transfers
from one system to the other;
(c) “Sector” shall refer to employment either in the public or private sector;
(d) “System” shall refer to either the SSS as created under Republic Act No. 1161, as amended or the
GSIS as created under Presidential Decree No. 1146, as amended; and
(e) “Totalization” shall refer to the process of adding up the periods of creditable services or contributions
under each of the Systems, for purposes of eligibility and computation of benefits. (Section 2, Republic Act
No. 7699)
3. Creditable services or contributions
Provisions of any general or special law or rules and regulations to the contrary notwithstanding, a
covered worker who transfers employment from one sector to another or is employed in both sectors shall have
his creditable services or contributions in both Systems credited to his service or contribution record in each of
the Systems and shall be totalized for purposes of old-age, disability, survivorship and other benefits in case
the covered member does not qualify for such benefits in either or both Systems without totalization: Provided,
however, That overlapping periods of membership shall be credited only once for purposes of totalization.
(Section 3, Republic Act No. 7699)
4. Contributions to be considered in the processing of benefits
All contributions paid by such member personally, and those that were paid by his employers to
both Systems shall be considered in the processing of benefits which he can claim from either or both
Systems: Provided, however, That the amount of benefits to be paid by one System shall be in proportion
to the number of contributions actually remitted to that System. (Section 4, Republic Act No. 7699)
5. Rule against diminution or reduction of benefits
Nothing in this Act shall be construed to diminish or reduce the benefits being enjoyed by a
covered worker arising from existing laws, issuances, and company policies or practices or agreements
between the employer and the employees. (Section 5, Republic Act No. 7699)
6. Rule making power
The Department of Labor and Employment for the private sector and the Civil Service
Commission for the government sector, together with the SSS and the GSIS shall, within ninety (90) days
from the effectivity of this Act, promulgate the rules and regulations necessary to implement the
provisions hereof: Provided, That any conflict in the interpretation of the law and the implementing rules
and regulations shall be resolved in favor of the workers. (Section 6, Republic Act No. 7699)
Rules and Regulations Implementing Republic Act No. 7699
Pursuant to Section 6 of Republic Act No. 7699 entitled “An Act Instituting Limited Portability
Scheme in the Social Security Insurance Systems by Totalizing the Workers' Creditable Services or
Contributions in each of the Systems” the following Rules and Regulations are hereby promulgated to
effectively implement the provisions of the Act.
RULE I : COVERAGE
Section 1. These rules and regulations shall apply to all worker-members of the Government Service
Insurance System (GSIS) and/or Social Security System (SSS) who transfer from one sector to another,
and who wish to retain their membership in both Systems.
RULE II : INTERPRETATION
Section 1. These rules shall be interpreted in the light of the Declaration of Policy found in
Section 1 of the Act:
It is hereby declared the policy of the State to promote the welfare of our workers by recognizing
their efforts in productive endeavors and to further improve their conditions by providing benefits for their
long years of contribution to the national economy.”
Toward this end, nothing in the Act shall be construed to diminish or reduce the benefits being
enjoyed by a cover worker arising from existing laws, issuances and company policies or practices or
agreements between the employer and the employees and any conflicting interpretation of the law and
the implementing rules and regulations shall be resolved in favor of the workers.
RULE III. DEFINITION OF TERMS
Section 1. As used in these rules, the following terms shall mean:
a) Contributions – shall refer to the contributions paid by the employer or worker to either the
Government Service Insurance System (GSIS) or the Social Security System (SSS) on account of the
worker's membership.
b) Portability – shall refer to the transfer of funds for the account and benefit of a worker who transfers
from one system to the other.
c) Sector – shall refer to employment either in the public or private sector.
d) System – shall refer to either the GSIS as created under Commonwealth Act No. 186 as amended by
Presidential Decree No. 1146 or the SSS as created under Republic Act No. 1161, as amended.
e) Totalization – shall refer to the process of adding up the period of creditable services or contributions
under each of the Systems, for purposes of eligibility and computation of benefits.
f) Creditable services – for the public sector, the following shall be considered creditable services:
1.1 All previous services rendered by an official/employee pursuant to an appointment whether

permanent, provisional or temporary.
1.2 All previous services rendered by an official/employee pursuant to a duly approved

appointment to a position in the Civil Service with compensation or salary;
1.3 The period during which an official/employee was on authorized sick leave of absence
without pay not exceeding one year;
1.4 The period during which an official or employee was out of the service as a result of illegal
termination of his service as finally decided by the proper authorities; and
1.5 All previous services with compensation or salary rendered by elective officials.
g) Period of contribution – for the private sector, the periods of contribution shall refer to the periods
during which a person renders services for an employer with compensation or salary and during which
contributions were paid to SSS. For the purpose of this Section, a self-employed person shall be
considered an employee and employer at the same time.
h) Eligibility – means the workers has satisfied the requirements for entitlement to the benefits provided
for under the Act.
i) Overlapping of periods – shall refer to the periods during which a worker simultaneously contributes to
both Systems.
j) Benefits – shall refer tot he following:

1. Old-age benefit
2. Disability benefit
3. Survivorship benefit
4. Sickness benefit
5. Medicare benefit, provided that the member shall claim said benefit from the
System where he was last a member, and
6. Such other benefits common to both System that may be availed of through totalization.
RULE IV : LIMITED PORTABILITY OF FUNDS
Section 1. The process involved in the prompt payment of money benefits to eligible members shall be
the joint responsibility of the GSIS and SSS.
Section 2. The System or Systems responsible for the payment of money benefits due a covered worker
shall release the same within fifteen (15) working days from receipt of the claim, subject to the submission
of the required documents and availability of the complete employee/employer records in the System.
RULE V : TOTALIZATION
Section 1. All creditable services or periods of contributions made continuously or in the aggregate of a
worker under either of the Sectors shall be added up and considered for purposes of eligibility and
computation of benefits.
Section 2. All services rendered or contributions paid by a member personally and those that were paid
by the employers to either System shall be considered in the computation of benefits, which may be
claimed from either or both Systems. However, the amount of benefits to be paid by one System shall be
in proportion to the services rendered/periods of contributions made to that System.
Section 3. Totalization shall apply in the following instances:
a) If a worker is not qualified for any benefits from both Systems;

b) If a worker in the public sector is not qualified for any benefits in the GSIS; or
c) If a worker in the private sector is not qualified for any benefits from the SSS.
For the purpose of computation of benefits, totalization shall apply in all cases so that the
contributions made by the worker-member in both Systems shall provide maximum benefits which
otherwise will not be available. In no case shall the contribution be lost or forfeited.
Section 4. If after totalization the worker-member still does not qualify for any benefit listed in Rule III,
Section 1 (j), the member will then get whatever benefits correspond to his/her contributions in either or
both Systems.
Section 5. If a worker qualifies for benefits in both Systems, totalization shall not apply.
Section 6. The process of totalization of creditable services or periods of contributions and computation
of benefits provided for under the Act shall be the joint responsibility of the GSIS and the SSS.
Section 7. Overlapping periods of creditable services or contributions in both Systems shall be credited
only once for purposes of totalization.
RULE VI : RESPONSIBILITY
Section 1. The GSIS and the SSS shall be responsible for the recording and documentation of
the creditable services and/or periods of contributions of the members respectively.
Section 2. For purposes of the Act, accreditation of services or periods of contributions of the
members shall be undertaken by the GSIS for the public sector and by the SSS for the private
sector.
Section 3. Complaints and questions relative to the creditable services or periods of contributions as well
as computation of benefits shall be brought before the System concerned and shall be resolved in
accordance with the policies and procedures adopted by the said System.
RULE VII : APPLICABILITY
Section 1. The benefits herein provided shall apply to active or inactive members of either System as of
date of effectivity of the Act which is May 20, 1994.
SOCIAL SECURITY LAW
SOCIAL SECURITY SYSTEM (REPUBLIC ACT NO. 11199)
AND GOVERNMENT SERVICE INSURANCE SYSTEM
(REPUBLIC ACT NO. 8291)
Employer under the SSS Law (RA 11199)
Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade,
business, industry, undertaking, or activity of any kind and uses the services of another person who is
under his/her orders as regards the employment, except the Philippine Government and any of its political
subdivisions, branches or instrumentalities, including corporations owned or controlled by the Philippine
Government, provided that a self-employed person shall be both employee and employer at the same
time. (Sec. 8 (c), RA 11199, Rule 12, Sec. 3, IRR of RA 11199)
Employee under the SSS Law (RA 11199)
Any person who performs services for an employer in which either or both mental or physical
efforts are used and who receives compensation for such services, where there is an employer-employee
relationship, provided that a self-employed person shall be both employee and employer at the same
time. (Sec. 8 (d), RA 11199, Rule 12, Sec. 1, IRR of RA 11199)
As a general rule, the determination of the existence or non-existence of an employer employee

relationship for the purpose of determining the coverage in the SSS shall be within the sole
jurisdiction of the Commission. [SSS Office Order 2017-032 (29 May 2017)]
Dependents under the SSS Law (RA 11199)
The dependents shall refer to the following:
i. The legal spouse entitled by law to receive support from the member; (Sec. 8 (e) (1) , RA
11199, Rule 12, Sec. 5, IRR of RA 11199)
ii. The legitimate, legitimated or legally adopted and illegitimate child who is:
a) Unmarried,
b) Not gainfully employed, and
c) Has not reached twenty-one (21) years of age, or if over 21 years of age, he/she is
congenitally or while still a minor has been permanently incapacitated and incapable of self-
support, physically or mentally. (Sec. 8(e) (2), RA 11199, Rule 12, Sec. 1, IRR of RA 11199)
A child who has entered in a common-law relationship and has not reached the age of eighteen
(18) is still a dependent. However, upon reaching the age of 18, the child is no longer qualified as a
dependent.
iii. The parent who is receiving regular support from the member. (Sec. 8 (e) (3), RA 11199,
Rule 12, Sec. 1, IRR of RA 11199)
The employment or service covered under the SSS Law (RA 11199) and the
exceptions
Any service performed by an employee for his/her employer, except the following:
i. Services where there is no employer-employee relationship in accordance with existing labor

laws, rules, regulations and jurisprudence;(Sec. 8, (j), (1), RA 11199, Rule 12, Sec. 10, IRR of RA
11199)
ii. Service performed in the employ of the Philippine Government or instrumentality or agency
thereof; (Sec. 8, (j), (2) , RA 11199, Rule 12, Sec. 10, IRR of RA 11199)
iii. Service performed in the employ of a foreign government or international organization, or
their wholly-owned instrumentality. This exemption notwithstanding, any foreign government,
international organization or their wholly-owned instrumentality employing workers in the
Philippines or employing Filipinos outside of the Philippines, may enter into an agreement with the
Philippine Government for the inclusion of such employees in the SSS except those already
covered by their respective civil service retirement systems. The terms of such agreement shall
conform with the provisions of the Social Security Act of 2018 on coverage and amount of payment
of contributions and benefits and the provisions of the Social Security Act of 2018 Act shall be
supplementary to any such agreement; (Sec. 8, (j), (3), RA 11199, Rule 12, Sec. 10, IRR of RA
11199)
iv. Such other services performed by temporary and other employees which may be excluded
by regulation of the Commission; and (Sec. 8, (j), (4), RA 11199, Rule 12, Sec. 10, IRR of RA
11199)
v. Employees of bona fide independent contractors shall not be deemed employees of the
employer engaging the service of said contractors. (Sec. 8, (j), (4), RA 11199, Rule 12, Sec. 10,
IRR of RA 11199)
The primary and secondary beneficiaries under the SSS Law (RA 11199)
The following are considered as primary beneficiaries:
i. The dependent spouse who has not re-married ([Sec. 8, (k), RA 11199, Rule 12, Sec. 12, IRR
of RA 11199), cohabited or entered in a “live-in” relationship before or after the death of the
member, and
ii. The dependent legitimate, legitimated or legally adopted and illegitimate children.
Where there are legitimate or illegitimate children, the former shall be preferred. The dependent
illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated
or legally adopted children. In the absence of the dependent legitimate, legitimated or legally
adopted children of the member, his/her dependent illegitimate children shall be entitled to one
hundred percent (100%) of the benefits. (Sec. 8, (k), RA 11199, Rule 12, Sec. 12, IRR of RA
11199)
In the absence of primary beneficiaries, the secondary beneficiaries are as follows:
i. The dependent parents of the deceased member; and

ii. In the absence of dependent parents, any other person/s designated and reported by the
member to the SSS (Sec. 8, (k), RA 11199, Rule 12, Sec. 13, IRR of RA 11199). The person
designated by the member shall be someone who has a right to claim for support from the
deceased member under the Family Code of the Philippines, including dependent children who
have reached the age of majority.
Coverages of the Social Security Law
The following are the coverages under SSS Law:
1. Compulsory coverage of employees and their employers
Coverage in the SSS shall be compulsory upon all employees including domestic workers or
“kasambahays” not over sixty (60) years of age (up to the day of his/her 60th birthday) and their
employers. (Sec. 9, (a), RA 11199, Rule 13, Sec. 1, IRR of RA 11199)
Covered employees with private benefit plans
The benefit already earned by the employees under private benefit plans existing at the time of
the approval of the Social Security Act of 2018 shall not be discontinued, reduced or otherwise
impaired. (Sec. 9, (a), RA 11199, Rule 13, Sec. 2, IRR of RA 11199)
Compulsory coverage of the self-employed
Coverage in the SSS shall be compulsory upon self-employed persons as may be determined
by the Commission under such rules and regulations it may prescribe. (Sec. 9-A, 1st par., RA
11199, Rule 13, Sec. 3, IRR of RA 11199)
Compulsory OFW coverage. - Coverage in the SSS shall be compulsory upon all sea-based
and land-based OFWs as defined under R.A. No. 8042 or the Migrant Workers and Overseas
Filipinos Act of 1995 as amended [by R.A. No. 10022], provided they are not over sixty (60) years
of age. (Sec. 9-B, (a), 1st par., RA 11199, Rule 14, Sec. 1, IRR of RA 11199)
The following may be covered by the SSS on a voluntary basis:
i. A spouse of a member who devotes full time to managing the household and family affairs,
but does not engage in other vocation or employment which is subject to compulsory or mandatory
coverage; (Sec. 9(b), RA 11199, Rule 13, Sec. 4, IRR of RA 11199)
ii. An OFW upon the termination of his/her employment overseas;(Sec. 9-B, (f), RA 11199, Rule
13, Sec. 4, IRR of RA 11199)
iii. A covered employee who was separated from employment who continues to pay his/her
contributions; and (Sec. 11, RA 11199, Rule 13, Sec. 4, IRR of RA 11199)
iv. A self-employed member who realizes no income in any given month who continues to pay
his/her contributions. (Sec. 11-A, RA 11199, Rule 13, Sec. 4, IRR of RA 11199)
Effective date of coverage of the employer, employee, self-employed and OFW
1. Compulsory coverage of the employer shall take effect on the first day of his/her operation.
(Sec. 10, RA 11199, Rule 15, Sec. 1, IRR of RA 11199)
2. Compulsory coverage of the employee shall take effect on the first day of his/her
employment. (Sec. 10, RA 11199, Rule 15, Sec. 2, IRR of RA 11199)
3. Compulsory coverage of the self-employed person shall take effect upon his/her registration
with the SSS. Registration shall mean payment of first contribution. (Sec. 10, proviso, RA 11199,
Rule 15, Sec. 3, IRR of RA 11199)
4. The effective date of coverage of the OFW shall be as follows:
i. Compulsory coverage of a sea-based OFW shall take effect on the first day of his/her
employment;
ii. Compulsory coverage of a land-based OFW covered under BLAs shall take effect based on
the provisions of the Agreement and its implementing arrangement;
iii. Compulsory coverage of a land-based OFW not covered under BLAs shall take effect on the
applicable month and year of the first contribution payment; and
iv. Voluntary coverage of land-based overseas Filipinos shall take effect on the applicable
month and year of the first contribution payment. (RA 11199, Rule 15, Sec. 4, IRR of RA 11199)
Jurisdiction of the Social Security Commission
Any dispute arising under the Social Security Act of 2018 with respect to coverage, benefits,
contributions and penalties thereon or any other matter related thereto, shall be cognizable by the
Commission. (Sec. 5, (a), RA 11199, Rule 6, Sec. 1, IRR of RA 11199)
Appeal from the decision of the Social Security Commission and the mode of appeal
The decision of the Commission may be reviewed both upon the law and the facts by the Court of
Appeals except that in appeals involving purely questions of law, it shall be reviewed by the Supreme
Court, unless otherwise provided under the Rules of Court. (Sec. 5, (c), RA 11199, Rule 7, Sec. 3, IRR of
RA 11199)
The mode of appeal is by petition for review before the Court of Appeals under Rule 43 of the
Rules of Court.
The liabilities of the employer who fails to report his employee for social security
coverage
If the employee subject to compulsory coverage dies or becomes sick or disabled or reaches the
age of sixty (60) without the SSS having previously received any report or written communication about
him/her from his/her employer, the said employer shall pay to the SSS damages which is equivalent to
the benefits to which said employee member would have been entitled had his/her name been reported
on time by the employer to the SSS. (Sec. 24 (a), RA 11199, Rule 39, Sec. 1, IRR of RA 11199)
a. Employer’s liability to pay damages. - In case of pension benefits, the employer shall be liable
to pay the SSS damages equivalent to the accumulated pension due as of the date of settlement of
the claim or to the five (5) years' pension, whichever is higher, including dependents' pension. (Sec.
24 (a), RA 11199, Rule 39, Sec. 1, IRR of RA 11199)
b. Employer relieved from liability to pay damages. - If the contingency occurs within thirty (30)
days from the date of employment, the employer shall be relieved of his/her liability for damages.
(Sec. 24 (a), RA 11199, Rule 39, Sec. 1, IRR of RA 11199)
The guidelines on the obligation to report all employees for coverage (SSC Circular No. 60 [5
November 1965]) and on the liability of employee’s initial and subsequent employers (SSC Circular
No. 62 [26 May 1966]) shall continue to apply, subject to Section 33 of the Social Security Act of
2018. (Rule 39, Sec. 1, IRR of RA11199)
Republic Act No. 8291 amending Presidential Decree No. 1146
On May 30, 1997 Republic Act No. 8291 was approved. It is AN ACT AMENDING
PRESIDENTIAL DECREE NO. 1146, AS AMENDED, EXPANDING AND INCREASING THE
COVERAGE AND BENEFITS OF THE GOVERNMENT SERVICE INSURANCE SYSTEM, INSTI-
TUTING REFORMS THEREIN AND FOR OTHER PURPOSES
Definition of terms under Section 2 of RA 8291
Unless the context otherwise indicates, the following terms shall mean:
(a) GSIS — The Government Service Insurance System created by Commonwealth Act No. 186;
(b) Board — The Board of Trustees of the Government Service Insurance System;
(c) Employer — The national government, its political subdivisions, branches, agencies or instrumentalities,
including government-owned or controlled corporations, and financial institutions with original charters, the
constitutional commissions and the judiciary;
(d) Employee or Member — Any person receiving compensation while in the service of an employer as
defined herein, whether by election or appointment, irrespective of status of appointment, including barangay and
Sanggunian officials;
(e) Active Member — A member who is not separated from the service;
(f) Dependents — Dependents shall be the following: (a) the legitimate spouse dependent for support upon
the member or pensioner; (b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is
unmarried, not gainfully employed, not over the age of majority, or is over the age of majority but incapacitated and
incapable of self-support due to a mental or physical defect acquired prior to age of majority; and (c) the parents
dependent upon the member for support;
(g) Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children;
(h) Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent children,
the legitimate descendants;
Compulsory Membership
Membership in the GSIS shall be compulsory for all employees receiving compensation who
have not reached the compulsory retirement age, irrespective of employment status. (Section 3,
Republic Act No. 8291)
Excluded from membership
Members of the Armed Forces of the Philippines and the Philippine National Police, subject to
the condition that they must settle first their financial obligation with the GSIS, and contractuals who
have no employer and employee relationship with the agencies they serve.
Members of the judiciary and constitutional commissions who shall have life insurance only
(Section 3, Republic Act No. 8291)
Benefits
Computation of the Basic Monthly Pension
The basic monthly pension is equal to:

1) thirty-seven and one-half percent (37.5%) of the revalued average monthly compensation; plus
2) two and one-half percent (2.5%) of said revalued average monthly compensation for each year of service
in excess of (15) years: Provided, That the basic monthly pension shall not exceed ninety percent (90%) of the
average monthly compensation. (Section 9 [A], Republic Act No. 8291)
Adjustment of basic monthly pension

The basic monthly pension may be adjusted upon the recommendation of the President and
General Manager of the GSIS and approved by the President of the Philippines in accordance with
the rules and regulations prescribed by the GSIS: Provided, however, that the basic monthly pension
shall not be less than One thousand and three hundred pesos (P1,300.00): Provided, further, that
the basic monthly pension for those who have rendered at least twenty (20) years of service after the
effectivity of this Act shall not be less than Two thousand four hundred pesos (P2,400.00) a month.
(Section 9 [B], Republic Act No. 8291)
Separation Benefits
The separation benefits shall consist of:

(a) a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each
year of service he paid contributions, but not less than Twelve thousand pesos (P12,000) payable upon reaching
sixty (60) years of age upon separation, whichever comes later: Provided, that the member resigns or separates from
the service after he has rendered at least three (3) years of service but less than fifteen (15) years; (Section 11 [a],
Republic Act No. 8291) or
(b) a cash payment equivalent to eighteen (18) times his basic monthly pension at the time of resignation or
separation, plus an old-age pension benefit equal to the basic monthly pension payable monthly for life upon reaching
the age of sixty (60): Provided, that the member resigns or separates from the service after he has rendered at least
fifteen (15) years of service and is below sixty (60) years of age at the time of resignation or separation. (Section 11
[b], Republic Act No. 8291)
Unemployment or Involuntary Separation Benefits
Unemployment benefits in the form of monthly cash payments equivalent to fifty percent (50%)
of the average monthly compensation shall be paid to a permanent employee who is involuntarily
separated from the service due to the abolition of his office or position usually resulting from
reorganization: Provided, That he has been paying integrated contributions for at least one (1) year
prior to separation. Unemployment benefits shall be paid in accordance with the following schedules:
“Contributions Made Benefit Duration
1 year but less than 3 years 2 months
3 or more years but less than 6 years 3 months
The first payment shall be equivalent to two (2) monthly benefits. A seven-day (7) waiting
period shall be imposed on succeeding monthly payments.
All accumulated unemployment benefits paid to the employee during his entire membership
with the GSIS shall be deducted from voluntary separation benefits.
The GSIS shall prescribe the detailed guidelines in the operationalization of this section in the
rules and regulations implementing this Act. (Section 12, Republic Act No. 8291)
Retirement Benefits
Retirement benefits in the government service
The Government Service Insurance System (GSIS) offers four retirement benefits depending
on the qualifications of the member as provided by the following laws:
1. R.A. 8291 — at least 60 years old, have rendered a minimum of 15 years in government
service and not a permanent total disability pensioner.
(a) Retirement benefits shall be:
(1) the lump sum payment as defined in this Act payable at the time of retirement plus an old-age
pension benefit equal to the basic monthly pension payable monthly for life, starting upon expiration of
the five-year (5) guaranteed period covered by the lump sum; or
(2) cash payment equivalent to eighteen (18) months of his basic monthly pension plus monthly
pension for life payable immediately with no five-year (5) guarantee. (Section 13 [a], Republic Act No.
8291)
(b) Unless the service is extended by appropriate authorities, retirement shall be compulsory for an
employee of sixty-five (65) years of age with at least fifteen (15) years of service: Provided, That if he has less
than fifteen (15) years of service, he may be allowed to continue in the service in accordance with existing civil
service rules and regulations. (Section 13 [a], Republic Act No. 8291)
Conditions for Entitlement

A member who retires from the service shall be entitled to the retirement benefits enumerated in
paragraph (a) of Section 13 hereof: Provided, That:
(1) he has rendered at least fifteen years of service;
(2) he is at least sixty (60) years of age at the time of retirement; and
(3) he is not receiving a monthly pension benefit from permanent total disability. (Section 13-A,
Periodic Pension Adjustment

The monthly pension of all pensioners including all those receiving survivorship pension benefits shall be
periodically adjusted as may be recommended by the GSIS actuary and approved by the Board in accordance
with the rules and regulations prescribed by the GSIS. (Section 14, Republic Act No. 8291)
2. P.D. 1146 — if in service after May 31, 1977 but before June 24, 1997.
This retirement scheme will apply if an employee entered government service after May 31, 1977 but before
June 24, 1977. The retiree would be entitled to receive the following benefits below depending on the years of
service:
1. Basic monthly pension, if an employees are at least 60 years old and had rendered 15 years of
service. The basic monthly pension is guaranteed for five 17 years. After the five-year guarantee period, you
would receive a basic monthly pension for life. You may request for the payment in lump-sum of the basic
monthly pension for the guaranteed period of five years at a discounted rate of not less than 6%.
2. If an employee are at least 60 years old and have rendered at least 3 years but less than 15 years of
service, would be entitled to a cash payment equivalent to 100% of the average monthly compensation for
every year of service.
3. R.A. 660 — if in service on or before May 31, 1977.

This kind of retirement scheme is given to an employee whose sum of age and years of service is 87 and at
least 52 years old, have been in service on or before May 31, 1977 with the last three years of continuous service. On
this scheme the employee is entitled to receive the following benefits:
1. Monthly Annuity Guaranteed for Five Years and Lifetime Pension. If an employee would retire at the
age of 52 to 59, he/she would receive automatic pension from the date of retirement with the option to request
for a one-year lump sum at a discounted rate and every six months thereafter. If an employee would retire at
the age of 60 to 62, he/she is automatically entitled to receive a three-year lump-sum with the remaining two-
year balance payable at 63.
2. If an employee would retire at the age of 63 and over he/she have two options:
a) Lump-sum guaranteed for five years and pension will resume at the end of guaranteed period;
or
b) Automatic pension – to start from date of retirement. This option would entitle the employee to
a mandatory annual increase in pension and Christmas bonus.
4. R.A. 1616 — if in the service on or before May 31, 1977.

This will apply if an employees have been in government service on or before May 31, 1977 with at least 20
years of service, the last three years of which had been continuous except in case of death, disability, abolition of
position, reorganization or phase-out position. Under this law the employee would receive the following benefits:
1. Gratuity — an employees’ last employer would pay for the gratuity benefit, the computation of which
would be based on total creditable service converted into gratuity months multiplied by the highest salary that
you have received.
2. Refund of retirement premiums — an employee is entitled to receive a refund from the Government
Service Insurance System (GSIS) consisting of an employees’ personal contributions throughout the years of
government service plus interest and government share without interest.
Permanent Disability Benefits

General Conditions for Entitlement
A member who suffers permanent disability for reasons not due to his grave misconduct,
notorious negligence, habitual intoxication, or willful intention to kill himself or another, shall be
entitled to the benefits provided, subject to the corresponding conditions thereof. (Section 15,
Permanent Total Disability Benefits
(a) If the permanent disability is total, he shall receive a monthly income benefit for life equal to the basic
monthly pension effective from the date of disability: Provided, That:
(1) he is in the service at the time of disability; or
(2) if separated from the service, he has paid at least thirty-six (36) monthly contributions within the five
(5) year period immediately preceding disability, or has paid a total of at least one hundred eighty (180) monthly
contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the service and
has paid a total of at least one hundred eighty (180) monthly contributions, in addition to the monthly income
benefit, he shall receive a cash payment equivalent to eighteen (18) times his basic monthly pension: Provided,
finally, That a member cannot enjoy the monthly income benefit for permanent disability and the old-age
retirement simultaneously. (Section 16[a], Republic Act No. 8291)
(b) If a member who suffers permanent total disability does not satisfy conditions (1) and (2) in paragraph (a)
of this section but has rendered at least three (3) years of service at the time of his disability, he shall be advanced
the cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of
service he paid contributions, but not less than Twelve thousand pesos (P12,000.00) which should have been his
separation benefit. (Section 16[b], Republic Act No. 8291)
(c) Unless the member has reached the minimum retirement age, disability benefit shall be suspended when:
(1) he is reemployed; or
(2) he recovers from his disability as determined by the GSIS, whose decision shall be final and binding;
or
(3) he fails to present himself for medical examination when required by the GSIS. (Section 16[c],
(d) The following disabilities shall be deemed total and permanent:
(1) complete loss of sight of both eyes;
(2) loss of two (2) limbs at or above the ankle or wrist;
(3) permanent complete paralysis of two (2) limbs;
(4) brain injury resulting in incurable imbecility or insanity; and
(5) such other cases as may be determined by the GSIS. (Section 16[d], Republic Act No. 8291)
Permanent Partial Disability Benefits

(a) If the disability is partial, he shall receive a cash payment in accordance with a schedule of disabilities to
be prescribed by the GSIS: Provided, That he satisfies either conditions (1) or (2) of Section 16 (a). (Section 17[a],
(b) The following disabilities shall be deemed permanent partial:
(1) complete and permanent loss of the use of:
(i) any finger
(ii) any toe
(iii) one arm
(iv) one hand
(v) one foot
(vi) one leg
(vii) one or both ears
(viii) hearing of one or both ears
(ix) sight of both eyes
(2) such other cases as my be determined by the GSIS. (Section 17[b], Republic Act
No. 8291)
Temporary Total Disability Benefits

(a) A member who suffers temporary total disability for reasons not due to any of the conditions enumerated
in Section 15 hereof shall be entitled to seventy-five percent (75%) of his current daily compensation for each day or
fraction thereof of temporary disability benefit not exceeding one hundred twenty (120) days in one calendar year
after exhausting all his sick leave credits and collective bargaining agreement sick leave benefits, if any, but not
earlier than the fourth day of his temporary total disability: Provided, That:
(1) he is in the service at the time of his disability; or
(2) if separated, he has rendered at least three (3) years of service and has paid at least six (6) monthly
contributions in the twelve-month period immediately preceding his disability.
Provided, however, That a member cannot enjoy the temporary total disability benefit and sick leave pay
simultaneously: Provided, further, That if the disability requires more extensive treatment that lasts beyond one
hundred twenty (120) days, the payment of the temporary total disability benefit may be extended by the GSIS but not
to exceed a total of two hundred forty (240) days. (Section 18 [a], Republic Act No. 8291)
(b) The temporary total disability benefit shall in no case be less than Seventy pesos (P70.00) a day. (Section
18 [b], Republic Act No. 8291)
(c) The notices required of the member and the employer, the mode of payment, and the other requirements
for entitlement to temporary total disability benefits shall be provided in the rules and regulations to be prescribed by
the GSIS. (Section 18 [c], Republic Act No. 8291)
Non-scheduled Disability
For injuries or illnesses resulting in a disability not listed in the schedule of partial/total disability
provided herein, the GSIS shall determined the nature of the disability and the corresponding
benefits therefor. (Section 19, Republic Act No. 8291)
Survivorship Benefits
When a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits
provided in Sections 21 and 22 hereunder subject to the conditions therein provided for. The
survivorship pension shall consist of:
(1) the basic survivorship pension which is fifty percent (50%) of the basic monthly pension; and
(2) the dependent children’s pension not exceeding fifty percent (50%) of the basic monthly pension. (Section
20, Republic Act No. 8291)
Death of a Member
(a) Upon the death of a member, the primary beneficiaries shall be entitled to:
(1) survivorship pension: Provided, That the deceased:
(i) was in the service at the time of his death; or
(ii) if separated from the service, has at least three (3) years of service at the time of his
death and has paid thirty-six (36) monthly contributions within the five-year period immediately
preceding his death; or has paid a total of at least one hundred eighty (180) monthly contributions
prior to his death; or
(2) the survivorship pension plus a cash payment equivalent to one hundred percent (100%) of his
average monthly compensation for every year of service: Provided, That the deceased was in the service at the
time of his death with at least three (3) years of service; or
(3) a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for
each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000.00): Provided,
That the deceased has rendered at least three (3) years of service prior to his death but does not qualify for the
benefits under item (1) or (2) of this paragraph. (Section 21 [a], Republic Act No. 8291)
(b) The survivorship pension shall be paid as follows:

(1) when the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension
for life or until he/she remarries;
(2) when only dependent children are the survivors, they shall be entitled to the basic survivorship
pension for as long as they are qualified, plus the dependent children’s pension equivalent to ten percent (10%)
of the basic monthly pension for every dependent child not exceeding five (5), counted from the youngest and
without substitution;
(3) when the survivors are the dependent spouse and the dependent children, the dependent spouse
shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall
receive the dependent children’s pension mentioned in the immediately preceding paragraph (2) hereof.
(Section 21 [b], Republic Act No. 8291)
(c) In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to:
(1) the cash payment equivalent to one hundred percent (100%) of his average monthly compensation
for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000.00):
Provided, That the member is in the service at the time of his death and has at least three (3) years of service;
or
(2) in the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his
legal heirs. (Section 21 [c], Republic Act No. 8291)
(d) For purposes of the survivorship benefits, legitimate children shall include legally adopted and legitimated
children. (Section 21 [d], Republic Act No. 8291)
Death of a Pensioner
Upon the death of an old-age pensioner or a member receiving the monthly income benefit for
permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension defined
in Section 20 of this Act, subject to the provisions of paragraph (b) of Section 21 hereof. When the
pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid
only after the expiration of the said period. (Section 22, Republic Act No. 8291)
Funeral Benefits
The amount of the funeral benefits shall be determined and specified by the GSIS in the rules
and regulations but shall not be less than Twelve thousand pesos (P12,000.00): Provided, That it
shall be increased to at least Eighteen thousand pesos (P18,000.00) after five (5) years and shall be
paid upon the death of:
(a) an active member as defined under Section 2 (e) of this Act; or
(b) a member who has been separated from the service, but who may be entitled to future benefit
pursuant to Section 4 of this Act; or
(c) a pensioner, as defined in Section 2 (o) of this Act; or
(d) a retiree who at the time of his retirement was of pensionable age under this Act but who opted to
retire under Republic Act No. 1616. (Section 23, Republic Act No. 8291)
Compulsory Life Insurance
All employees except for Members of the Armed Forces of the Philippines (AFP) and the
Philippine National Police (PNP) shall, under such terms and conditions as may be promulgated by
the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as
follows:
(1) for those employed after the effectivity of this Act, their insurance shall take effect on the date of
their employment;
(2) for those whose insurance will mature after the effectivity of this Act, their insurance shall be
deemed renewed on the day following the maturity or expiry date of their insurance;
(3) for those without any life insurance as of the effectivity of this Act, their insurance shall take effect
following said effectivity. (Section 24, Republic Act No. 8291)
Dividends
An annual dividend may be granted to all members of the GSIS whose life insurance is in force
for at least one (1) year in accordance with a dividends allocation formula to be determined by the
GSIS. (Section 25, Republic Act No. 8291)
Optional Insurance
Subject to the rules and regulations prescribed by the GSIS, a member may apply for insurance
and/or pre-need coverage embracing life, health, hospitalization, education, memorial plans, and
such other plans as may be designed by the GSIS, for himself and/or his dependents. Any employer
may likewise apply for group insurance coverage for its employees. The payment of the
premiums/installments for optional insurance and pre-need products may be made by the insured or
his employer and/or any person acceptable to the GSIS. (Section 26, Republic Act No. 8291)
Reinsurance
The GSIS may reinsure any of its interests or part thereof with any private company or
reinsurer whether domestic of foreign: Provided, That the GSIS shall submit an annual report on its
reinsurance operations to the Insurance Commission. (Section 27, Republic Act No. 8291)
Facility of Payment
The GSIS shall prescribe rules and regulations to facilitate payment of benefits, proceeds, and
claims under this Act and any other laws administered by the GSIS. Payments made by the GSIS
prior to its receipt of an adverse claim, to a beneficiary or claimant subsequently found not entitled
thereto, shall not bar the legal and eligible recipient to his right to demand the payment of benefits,
proceeds, and claims from the GSIS, who shall, however, have a right to institute the appropriate
action in a court of law against the ineligible recipient. (Section 29, Republic Act No. 8291)
Settlement of Disputes
The GSIS shall have original and exclusive jurisdiction to settle any disputes arising under this
Act and any other laws administered by the GSIS.
The Board may designate any member of the Board, or official of the GSIS who is a lawyer, to
act as hearing officer to receive evidence, make findings of fact and submit recommendations,
together with all documentary and testimonial evidence to the Board within thirty (30) working days
from the time the parties have closed their respective evidence and filed their last pleading. The
Board shall decide the case within thirty (30) days from the receipt of the hearing officer’s findings
and recommendations. The cases heard directly by the Board shall be decided within thirty (30)
working days from the time they are submitted by the parties for decision. (Section 30, Republic
Act No. 8291)

Notes On Critical Areas in Labor Law II by Prof. Voltaire T. Duano

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Notes On Critical Areas in Labor Law II by Prof. Voltaire T. Duano

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CRITICAL AREAS IN LABOR LAW

Employees’ Compensation Program

This is a comprehensive program designed to provide compensation benefit package to public

Implementing agencies of the Employee Compensation Program

The agencies concerned in the implementation of the Employee Compensation Program:

Lecturer: Mandatory Continuing Legal Education (MCLE)

Authored the following books:

Definitions of terms under Article 173 (167)

2005 Bar Examination

1997 Bar Examination

Coverage shall be compulsory. (Section 1, Rule I, Amended Rules on Employees’

(a) Every employer shall be covered.

Grounds for compensability

2012 and 1994 Bar Examinations

Compensable sickness and the resulting disability or death

Occupational Diseases (as Annex “A” Amended Rules on Employees’ Compensation)

The test of proof in compensation proceedings

The increased risk theory

2017 and 2012 Bar Examinations

Interpretation of the phrase “arising out of and in the course of employment”

1996 Bar Examination

The 24-hour-duty doctrine

2005 Bar Examination

2008 Bar Examination

The “proximity” or the “off-premises” rule

1993 Bar Examination

Three kinds of disability benefits under the Labor Code

Temporary Total Disability

Condition to entitlement of temporary total disability

Absolutely disabled or totally paralyzed not required in total disability

Test of permanent total disability

Liability of employer to permanent total disability

Condition to entitlement of permanent total disability

Basis to pursue an action for total and permanent disability benefits

2015 Bar Examination

The post-employment medical examination requirement under the POEA-Standard

The procedure for post-employment medical examination is provided in Section 20 [A][3] of

The 3-day mandatory reporting requirement must be strictly observed since

Moreover, the post-employment medical examination within 3 days from . . .

The third-doctor conflict resolution procedure under the 2010 POEA-SEC

The guidelines on company-designated physician to assess the seafarer

1. The company-designated physician must issue a final medical assessment on

Work-related illness under the Amended Standards Terms and Conditions

Conditions for an occupational disease and the resulting disability or death to be

1. The seafarer’s work must involve the risks describe herein;

Work-related injury under the Amended Standards Terms and Conditions

Republic Act No. 7699, Limited Portability Law

2014, 2011 and 2005 Bar Examinations

4. Contributions to be considered in the processing of benefits

5. Rule against diminution or reduction of benefits

6. Rule making power

Section 1 of the Act:

RULE III. DEFINITION OF TERMS

Section 1. As used in these rules, the following terms shall mean:

c) Sector – shall refer to employment either in the public or private sector.

1.1 All previous services rendered by an official/employee pursuant to an appointment whether

1.2 All previous services rendered by an official/employee pursuant to a duly approved

j) Benefits – shall refer tot he following:

RULE IV : LIMITED PORTABILITY OF FUNDS

Section 3. Totalization shall apply in the following instances:

a) If a worker is not qualified for any benefits from both Systems;

RULE VII : APPLICABILITY