FURTHER AMENDING CERTAIN ARTICLES OF PRESIDENTIAL DECREE No. 442 ENTITLED "LABOR CODE OF THE PHILIPPINES".

• Number: Presidential Decree No. 626
• Sections: 41

Preamble

WHEREAS, Presidential Decree No. 570-A amends certain

provisions of Presidential Decree No. 442, otherwise known as the Labor

Code of the Philippines, and Presidential Decree No. 608 extends the

effectivity of Title II of Book IV on Employees' Compensation and State

Insurance Fund and Title III of Book IV on Medicare of the same Code to

January 1, 1975;

WHEREAS, pending the effectivity of said Titles, the Social

Security System, Government Service Insurance System, Philippine

Medical Care Commission, and the Department of Labor have utilized the

transition period for intensive study and consultations with labor

organizations, employers' organizations, and civic, professional, and

technical associations, representing the various sectors of the economy;

WHEREAS, as a result of such discussions and consultations,

it has been found necessary to make adjustments in the text of the Labor

Code to initiate, rationalize and coordinate the grant of benefits with

the broad objectives of the Code consistent with the overriding

priority of development;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution as

Commander-in-Chief of all the Armed Forces of the Philippines, and

pursuant to Proclamation No. 1081 dated September 22, 1972, as amended,

do hereby order and decree:

SECTION 1. Title II of Book IV on Employees' Compensation

and State Insurance Fund of the Labor Code of the Philippines is hereby

amended to read as follows:

"TITLE II

EMPLOYEES'

COMPENSATION AND STATE INSURANCE FUND

POLICY AND DEFINITIONS

COVERAGE AND

LIABILITY

ADMINISTRATION

CONTRIBUTIONS

MEDICAL BENEFITS

DISABILITY BENEFITS

DEATH BENEFITS

PROVISIONS COMMON

TO INCOME BENEFITS

RECORDS, REPORTS AND PENAL PROVISIONS

Article 164 Policy.

ART. 164. Policy. — The State shall promote and

develop a tax-exempt employees' compensation program whereby employees

and their dependents, in the event of work-connected disability or

death, may promptly secure adequate income benefit, and medical or

related benefits.

Article 165 Definition of terms.

ART. 165. Definition of terms. — As used in this

Title, unless the context indicates otherwise:

"Code" means the Labor Code of the Philippines instituted under

Presidential Decree numbered four hundred forty-two, as amended.

"Commission" means the Employees' Compensation Commission created

under this Title.

"SSS" means the Social Security System created under Republic Act

numbered eleven hundred sixty-one, as amended.

"GSIS" means the Government Service Insurance System created under

Commonwealth Act numbered one hundred eighty-six, as amended.

"System" means the SSS or GSIS, as the case may be.

"Employer" means any person, natural or juridical, employing the

services of the employee.

"Employee" means any person compulsorily covered by the GSIS under

Commonwealth Act numbered one hundred eighty-six, as amended, including

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.

"Persons" means any individual, partnership, firm, association,

trust, corporation or legal representative thereof.

"Dependents" means the legitimate, legitimated or legally adopted

child who is unmarried, not gainfully employed, and not over eighteen

years of age, or over eighteen but not over twenty-one years of age

provided that he is enrolled in school, or over twenty-one years of age

provided that he is congenitally incapacitated and incapable of

self-support physically or mentally; the legitimate spouse living with

the employee; and the legitimate parents of said employee wholly

dependent upon him for regular support.

"Beneficiaries" means the dependent spouse until he 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.

"Injury" means any harmful change in the human organism sustained

at work carried out during working hours at the workplace or elsewhere

while executing an order for the employer.

"Sickness' means any illness definitely accepted as an

occupational disease listed by the Commission, or any illness caused by

employment subject to proof by the employee that the risk of contracting

the same is increased by working conditions.

"Death" means loss of life resulting from injury or sickness.

"Disability" means all payments made under this Title for income

benefit, and medical or related benefits.

"Compensation" means all payments made under this Title for income

benefit, and medical or related benefits.

"Income benefit" means all payments made under this Title to the

employee or his dependents.

"Medical benefit" means all payments made under this Title to the

providers of medical care, rehabilitation services and hospital care.

"Related benefit" means all payments made under this Title for

appliance and supplies.

"Appliances" means crutches, artificial aids and other similar

devices.

"Supplies" means medicine and other medical, dental or surgical

items.

"Hospital" means any medical facility, government or private,

authorized by law, an active member of good standing of the Philippine

Hospital Association and accredited by the Commission.

"Physician" means any doctor of medicine duly licensed to practice

in the Philippines, an active member of good standing of the Philippine

Medical Association and accredited by the Commission.

"Wages" or "salary" means all actual remuneration for employment

received during the month, except that part in excess of one thousand

pesos.

"Monthly salary credit" means the wage or salary base for

contributions as provided in Republic Act numbered eleven hundred

sixty-one, as amended, or the wages or salary.

"Average monthly salary credit" means the result obtained by

dividing the sum of the monthly salary credits in the sixty-month period

ending on the last day of the second quarter preceding the quarter of

death or permanent disability by sixty, except where the month of death

or permanent disability falls within eighteen calendar months from the

month of coverage, in which case, the average monthly salary credit is

the result obtained by dividing the sum of all monthly salary credits by

the number of calendar months of coverage.

"Average daily salary credit" means the result obtained by

dividing the sum of the monthly salary credits in the twelve-month

period ending on the last day of the second quarter preceding the

quarter of sickness or injury by thirty times the number of calendar

months of coverage, except where the month of sickness or injury falls

within nine calendar months from the month of coverage, in which case,

the average daily salary credit is the result obtained by dividing the

sum of all monthly salary credits by thirty times the number of calendar

months of coverage.

"Quarter" means a period of three consecutive months ending on the

last day of March, June, September and December.

Article 166 Compulsory coverage.

ART. 166. Compulsory coverage. — Coverage in the

State Insurance Fund shall be compulsory upon all employers and their

employees not over sixty years of age: Provided, That an employee

who is over sixty years of age and paying contributions to qualify for

the retirement or life insurance benefit administered by the System

shall be subject to compulsory coverage: Provided, further, That

in case of an employee who is both covered by the SSS and GSIS, only his

employment with the latter shall be considered for purposes of his

coverage.

Article 167 Foreign employment.

ART. 167. Foreign employment. — The Commission

shall ensure adequate coverage of Filipino employees employed abroad,

subject to regulations as it may prescribe.

Article 168 Effective date of coverage.

ART. 168. Effective date of coverage. — Compulsory

coverage of the employer during the effectivity of this Title shall

take effect on the first day of his operation, and that of the employee

on the date of his employment.

Article 169 Registration.

ART. 169. Registration. — Each employer and his

employees shall register with the System in accordance with its

regulations.

Article 170 Limitation of liability.

ART. 170. Limitation of liability. — The State

Insurance Fund shall be liable for compensation to the employee or his

dependents, except when the disability or death was occasioned by the

employee's intoxication, willful intention to injure or kill himself or

another, notorious negligence, or otherwise provided under this Title.

Article 171 Exclusiveness of liability.

ART. 171. Exclusiveness of liability. — Unless

otherwise provided, the liability of the State Insurance Fund under this

Title shall be 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. The

payment of compensation under this Title shall bar the recovery of

benefits as provided for in Section 699 of the Revised Administrative

Code, Republic Act numbered eleven hundred sixty-one, as amended,

Commonwealth Act numbered one hundred eighty-six, as amended, Republic

Act numbered sixty-one hundred eleven, as amended, Republic Act numbered

six hundred ten, as amended, Republic Act numbered forty-eight hundred

sixty-four, as amended and other laws whose benefits are administered by

the System, during the period of such payment for the same disability

or death.

Article 174 Employees' Compensation Commission.

ART. 174. Employees' Compensation Commission. —

(a) To initiate, rationalize and coordinate the policies of the

employees' compensation program, the Employees' Compensation Commission

is hereby created to be composed of four ex-officio members: the

Secretary of Labor as Chairman, the GSIS Manager, the SSS Administrator,

the Chairman of the Philippine Medical Care Commission; and two

appointive members, one of whom shall represent the employees and the

other, the employers, to be appointed by the President of the

Philippines for a term of six years. The appointive member shall have at

least five years experience in workmen's compensation or social

security programs. All vacancies shall be filled for the unexpired term

only.

The Vice-Chairman of the Commission shall be alternated each year

between the GSIS General Manager and the SSS Administrator. The

presence of four members shall constitute a quorum. Meetings shall be

held as often as necessary. Each member shall receive a per diem of one

hundred pesos for every meeting actually attended by him exclusive of

actual, ordinary and necessary travel and representation expenses. In

his absence, any member may designate an official of the institution he

serves on full-time basis as his representative to act on his behalf.

The general conduct of the operations and management functions of

the GSIS or SSS under this Title shall be vested in its respective

chief executive officer, who shall be immediately responsible for

carrying out the policies of the Commission.

Article 175 Powers and duties.

ART. 175. Powers and duties. — The Commission shall

have the following powers and duties:

To assess and fix a rate of contribution from all employers.

To determine the rate of contribution payable by an employer

whose records show a high frequency of work accidents or occupational

diseases due to failure by the said employer to observe adequate safety

measures.

To approve rules and regulations governing the processing of

claims and the settlement of disputes arising therefrom as prescribed by

the System.

To initiate policies and programs towards adequate occupational

health and safety and accident prevention in the working environment.

To make the necessary actuarial studies and calculations

concerning the grant of constant help and income benefits for permanent

disability or death, and the rationalization of the benefits for

permanent disability and death under this Title with benefits payable by

the System for similar contingencies.

To appoint the personnel of its staff, subject to civil service

law and rules.

To adopt annually a budget of expenditures of the Commission and

its staff chargeable against the State Insurance Fund.

To have the power to administer oath and affirmation, and to

issue subpoena and subpoena duces tecum in connection with any question

or issue arising from appealed cases under this Title.

To sue and be sued in court.

To perform such other acts as it may deem appropriate for the

attainment of the purposes of the Commission and proper enforcement of

the provisions of this Title.

Article 176 Management of funds.

ART. 176. Management of funds. — All revenues

collected by the System under this Title shall be deposited, invested,

administered and disburse in the same manner and under the same

conditions, requirements and safeguards as provided by Republic Act

numbered one hundred sixty-one, as amended, and Commonwealth Act

numbered one hundred eighty-six, as amended, with regard to such other

funds as are thereunder being paid to or collected by the SSS and GSIS,

respectively: Provided, That the Commission, SSS and GSIS may

disburse each year not more than twelve per cent of the contributions

and investment earnings collected for operational expenses, including

occupational health and safety programs, incidental to the carry out of

this Title.

Article 177 Investment of funds.

ART. 177. Investment of funds. — All revenues as

are not needed to meet current operational expenses under this Title

shall be accumulated in a fund to be known as the State Insurance Fund,

which shall be used exclusively for the payment of the benefits under

this Title, and no amount thereof shall be used for any other purpose.

AK amounts accruing to the State Insurance Fund, which is hereby

established in the SSS and GSIS, respectively, shall be deposited with

any authorized depository banks approved by the Commission, or invested

with due and prudent regard for the liquidity needs of the System.

Article 178 Settlement of claims.

ART. 178. Settlement of claims. — The System shall

have original and exclusive jurisdiction to settle any dispute arising

from this Title with respect to coverage, entitlement to benefits,

collection and payment of contributions and penalties thereon, or any

other matter related thereto, subject to appeal to the Commission, which

shall decide appealed cases within twenty working days from the

submission of the evidence.

Article 179 Review.

ART. 179. Review. — Decisions, orders or

resolutions of the Commission may be reviewed on certiorari by the

Supreme Court only on questions of law upon petition of an aggrieved

party within ten days from notice thereof.

Article 180 Enforcement of decisions.

ART 180. Enforcement of decisions. — (a) Any

decision, order or resolution of the Commission shall become final and

executory if no appeal is taken therefrom within ten days from notice

thereof. All awards granted by the Commission in cases appealed from

decisions of the System shall be effected within fifteen days from

receipt of notice.

In all other cases, decisions, orders and resolutions of the

Commission which have become final and executory shall be enforced and

executed in the same manner as decisions of the Court of First Instance,

and the Commission shall have the power to issue to the city or

provincial sheriff or to the sheriff whom it may appoint such writs of

execution as may be necessary for the enforcement of such decisions,

orders or resolutions, and any person who shall fail or refuse to comply

therewith shall, upon application by the Commission, be punished by the

proper court for contempt.

Article 181 Employer's contributions.

ART. 181. Employer's contributions. — (a) Under

such regulations as the System may prescribe, beginning as of the last

day of the month when an employee's compulsory coverage takes effect and

every month thereafter during his employment, his employer shall

prepare to remit to the System a contribution equivalent to one percent

of his monthly salary credit.

The rate of contribution shall be reviewed periodically and,

subject to the limitations herein provided, may be revised as the

experience in risk, cost of administration, and actual or anticipated as

well as unexpected losses, may require

Contributions under this Title shall be paid in their entirety by

the employer and any contract or device for the deduction of any

portion thereof from the wages or salaries of the employees shall be

null and void.

When a covered employee dies, becomes disabled or is separated

from employment, his obligation to pay the monthly contribution arising

from that employment shall cease at the end of the month of contingency

and during such months that he is not receiving wages or salary.

Article 182 Government guarantee.

ART. 182. Government guarantee. — The Republic of the

Philippines guarantees the benefits prescribed under this Title, and

accepts general responsibility for the solvency of the State Insurance

Fund. In case of any deficiency, the same shall be covered by

supplemental appropriations from the national government.

Article 183 Medical services.

ART. 183. Medical services. — Immediately after an

employee contracts sickness or sustains an injury, he shall be provided

by the System during the subsequent period of his disability with such

medical services and appliances as the nature of his sickness or injury

and progress of his recovery may require, subject to the expense

limitation prescribed by the Commission.

Article 184 Liability.

ART. 184. Liability. — The System shall have the

authority to choose or order a change of physician, hospital or

rehabilitation facility for the employee, and shall not be liable for

compensation for any aggravation of the employee's injury or sickness

resulting from unauthorized changes by the employee of medical services,

appliances, supplies, hospitals, rehabilitation facilities or

physician.

Article 185 Attending physician.

ART. 185. Attending physician. — Any physician

attending an injured or sick employee shall comply with all the

regulations of the System and submit reports in prescribed forms at such

time as may be required concerning his condition or treatment. All

medical information relevant to the particular injury or sickness shall

on demand be made available to the employee or the System. No

information developed in connection with treatment or examination for

which compensation is sought shall be considered as privileged

communication.

Article 186 Refusal of examination or treatment.

ART. 186. Refusal of examination or treatment. —

If the employee unreasonably refuses to submit to medical examination or

treatment the System shall stop the payment of further compensation

during such time as such refusal continues. What constitutes an

unreasonable refusal shall be determined by the System, which may on its

own initiative determine the necessity character, and sufficiency of

any medical services furnished or to be furnished.

Article 187 Fees and other charges.

ART. 187. Fees and other charges. — All fees and

other charges for hospital services, medical care and appliances,

excluding professional fees, shall not be higher than those prevailing

in wards of hospitals for similar services to injured or sick persons in

general and shall be subject to the regulations of the Commission.

Professional fees shall only be appreciably higher than those prescribed

under Republic Act numbered sixty-one hundred eleven, as amended,

otherwise known as the Philippines Medical Care Act of 1969.

Article 188 Rehabilitation services.

ART. 188. Rehabilitation services. — (a) The System

shall, as soon as practicable, establish a continuing program for the

rehabilitation of injured and handicapped employees, who shall be

entitled to rehabilitation services, which shall consist of medical,

surgical or hospital treatment, including appliances if he has been

handicapped by the injury, to help him become physically independent.

As soon as practicable, the System shall establish centers

equipped and staffed to provide a balanced program remedial treatment,

vocational assessment and preparation designed to meet the individual

needs of each handicapped employee to restore him to suitable

employment, including assistance as may be within its resources to help

each rehabilitee to develop his mental, vocational or social potential.

Article 189 Temporary total disability.

ART. 189. Temporary total disability. — (a) Under

such regulations as the Commission may approve, any employee under this

Title who sustains an injury or contracts sickness resulting in

temporary total disability shall for each day of injury or fraction

thereof, or for each day or fraction thereof after the third day of

sickness, be paid by the System an income benefit equivalent to ninety

per cent of his average daily salary credit, subject to the following

conditions: (1) The daily income benefit shall not be less than two

pesos and fifty centavos nor more than sixteen pesos nor paid for a

continuous period longer than one hundred twenty days and (2) The System

shall be notified of the injury or sickness.

The payment of such income benefit shall be in accordance with

the regulations of the Commission: Provided, That the employee

shall not be entitled to avail himself of the income benefit under this

Title and his sick leave credits at the same time: Provided, further,

That all sick leaves earned by him shall be preserved to his credit if

he has not been paid his salary during such leave or absence.

Article 190 Permanent Total disability.

ART. 190. Permanent Total disability. — (a) Under such

regulations as the Commission may approve, any employee under this

Title who contracts sickness or sustains an injury resulting in

permanent total disability shall for each month until his death but not

exceeding five years be paid by the System during such disability an

income benefit to be computed as follows:

Forty-five per cent of the first three hundred pesos of average

monthly salary credit or fraction thereof; plus Twenty-five per cent of

the next three hundred pesos of average monthly salary credit or

fraction thereof; plus One tenth of one per cent of the average monthly

salary credit for each month of paid coverage in the System in excess of

one hundred twenty months of paid coverage as of the last day of the

second quarter preceding the quarter of disability: Provided,

That the monthly income benefit shall not be less than forty-five pesos:

Provided, further, That in no case shall the total income

benefit exceed twelve thousand pesos.

The monthly income benefit shall be suspended if the employee is

gainfully employed or recovers from his permanent total disability or

fails to present himself for examination at least once a year upon

notice by the System

The following disabilities shall be deemed total and permanent:

Temporary total disability lasting continuously for more than

one hundred twenty days

Complete loss of sight of both eyes;

Loss of two limbs at or above the ankle or wrist;

Permanent complete paralysis of two limbs;

Brain injury resulting in an incurable imbecility or insanity;

and (6) Such cases as determined by the Medical Director of the System

and approved by the Commission.

The number of months of paid coverage shall be denned and

approximated by a formula to be approved by the Commission.

Article 191 Permanent partial disability.

ART. 191. Permanent partial disability. — (a) Under

such regulations as the Commission may approve, any employee under this

Title who contracts sickness or sustains an injury resulting in

permanent partial disability shall for each month not exceeding the

period designated herein be paid by the System during such disability an

income benefit equivalent to the income benefit for permanent total

disability.

The benefit shall be paid for not more than the period designated

in the following schedule:

Complete and permanent

loss

of the use of

Number of

months

One thumb

8

One index finger

6

One middle finger

5

One ring finger

4

One little finger

2

One big toe

5

Any toe

2

One hand

31

One arm

40

One foot

25

One leg

37

One ear

8

Both ears

16

Hearing of one ear

8

Hearing of both ears

40

Sight of one eye

20

A loss of a wrist shall be considered as a loss of the hand, and a

loss of an elbow considered as a loss of the arm. A loss of an ankle

shall be considered as loss of the foot, and a loss of a knee considered

as a loss of the leg. A loss of more than one joint shall be considered

as a loss of the whole finger or toe, and a loss of only the first

joint considered as a loss of one-half the whole finger or toe: Provided,

That such loss shall be either the functional loss of the use or

physical loss of the member.

In cases of permanent partial disability less than the total loss

of the member specified in the preceding paragraph, the same monthly

income benefit shall be paid for a portion of the period established for

the total loss of the member in accordance with the proportion that the

partial loss bears to the total loss. If the result is a decimal

fraction, the same shall be rounded off to the next higher integer.

In cases of simultaneous loss of more than one member or a part

thereof as specified in this Article, the same monthly income benefit

shall be paid for a period equivalent to the sum of the periods

established for the loss of the member or a part thereof. If the result

is a decimal fraction, the same shall be rounded off to the next higher

integer.

Article 192 Death.

ART. 192. Death. — (a) Under such regulations as

the Commission may approve, the System shall pay to the primary

beneficiaries upon the death of the covered employee under this Title a

monthly income benefit equivalent to the monthly income benefit for

permanent total disability increased by ten percent for each dependent

child not exceeding five, beginning with the youngest and without

substitution: Provided, That the portion equivalent to the

monthly income benefit for permanent total disability shall be

guaranteed for five years; Provided, further, That if he has no

primary beneficiary the System shall pay to his beneficiaries or legal

heirs a lump sum benefit equivalent to the lesser of thirty times the

monthly income benefit for permanent total disability and six thousand

pesos.

Under such regulations as the Commission may approve, the System

shall pay to the primary beneficiaries upon the death of a covered

employee who is under permanent total disability under this Title the

balance of his income benefit plus ten percent of the monthly income

benefit for each dependent child but not exceeding five, beginning with

the youngest and without substitution: Provided, That if he has

no primary beneficiary the System shall pay to his beneficiaries or

legal heirs a lump sum benefit equivalent to the lesser of the balance

of his income benefit or thirty times his monthly income benefit and six

thousand pesos.

Article 193 Relationship and dependency.

ART. 193. Relationship and dependency. — All

questions of relationship and dependency shall be determined as of the

time of death.

Article 194 Delinquent contributions.

ART. 194. Delinquent contributions. — (a) An

employer who is delinquent in his contributions shall be liable to the

System for the benefits which may have been paid by the System to his

employees or their dependents, and any benefit and expenses to which

such employer is liable shall constitute a lien on all his property,

real or personal, which is hereby declared to be preferred to any credit

except taxes. The payment of the employer of the lump sum equivalent of

such liability shall absolve him from the payment of the delinquent

contributions and penalty thereon with respect to the employee

concerned.

Failure or refusal of the employer to pay or remit the

contributions herein prescribed shall not prejudice the right of the

employee or his dependents to the benefits under this Title. If the

sickness, injury, disability or death occurs before the System receives

any report of the name of his employee, the employer shall be liable to

the System for the lump sum equivalent of the benefits to which such

employee or his dependents may be entitled.

Article 195 Second injuries.

ART. 195. Second injuries. — If any employee under

permanent partial disability suffers another injury which results in a

compensable disability greater than the previous injury, the State

Insurance Fund shall be liable for the income benefit of the new

disability Provided, That if the new disability is related to the

previous disability, the System shall be liable only for the difference

in income benefits.

Article 196 Assignment of benefits.

ART. 196. Assignment of benefits. — No claim for

compensation under this Title is transferable, or liable to tax,

attachment, garnishment, levy or seizure by or under any legal process

whatsoever, either before or after receipt by the person or persons

entitled thereto, except to pay any debt of the employee to the System.

Article 197 Earned benefits.

ART. 197. Earned benefits. — Income benefits

shall, with respect to any period of disability, be payable in

accordance with this Title to an employee who is entitled to receive

wages, salaries or allowance for holidays, vacation or sick leaves, and

any award or benefit under a collective bargaining or other agreement.

Article 198 Safety devices.

ART. 198. Safety devices. — In case the employee's

injury or death was due to the failure of the employer to comply with

any law, or to install and maintain safety devices, or take other

precautions for the prevention of injury, said employer shall pay to the

State Insurance Fund a penalty of twenty five percent of the lump sum

equivalent of the income benefit payable by the System to the employee.

All employees, especially those who should have been paying a rate of

contribution higher than that required of them under this Title, are

enjoined to undertake and strengthen measures for the occupational

health and safety of their employees.

Article 199 Prescriptive period.

ART. 199. Prescriptive period. — No claim for

compensation shall be given due course unless notice thereof has been

given to the employer in accordance with the provisions herein, except

when said notice is not required. The right to compensation shall be

barred unless said claim is filed with the System within one year from

notice to the employer.

Article 200 Erroneous payment.

ART. 200. Erroneous payment. — (a) If the System in good

faith pay income benefit to a dependent who is inferior in right to

another dependent or with whom another dependent is entitled to share,

such payments shall discharge the System from liability, unless and

until such other dependent notifies the System of his claim prior to the

payments.

In case of doubts as to the respective rights of rival claimants,

the System is hereby empowered to determine as to whom payment should

be made in accordance with such regulations as the Commission may

approve. If the money is payable to a minor or incompetent, payment

shall be made by the System to such person or persons as it may consider

to be best qualified to take care and dispose of the minor's or

incompetent's property for his benefit.

Article 201 Prohibition.

ART. 201. Prohibition. — No agent, attorney or other

person pursuing or in charge of the preparation or filing of any claim

for benefit under this Title shall demand or charge for his services any

fee, and any stipulation to the contrary shall be null and void. The

retention or deduction of any amount from any benefit granted under this

Title for the payment of fees such services is prohibited. Violation of

any provision of this Article shall be punished by a fine of not less

than five hundred pesos nor more than five thousand pesos, or

imprisonment for not less than sixty months nor more than one year, or

both, at the discretion of the court.

Article 202 Exemption from levy, tax, etc.

ART. 202. Exemption from levy, tax, etc. — All laws

to the contrary notwithstanding, the State Insurance Fund and all its

assets shall be exempt from any tax, fee, charge, levy, or customs, or

import duty, and no law hereafter enacted shall apply to the State

Insurance Fund unless it is provided therein that the same is applicable

by expressly stating its name.

Article 203 Record of death or disability.

ART. 203. Record of death or disability. — (a) All

employers shall keep a logbook to record chronologically the sickness,

injury or death of their employees, setting forth therein his name, date

and place of the contingency, nature of the contingency and absences.

Entries in the logbook shall be made within five days from notice or

knowledge of the occurrence of the contingency. Within five days after

entry in the logbook, the employer shall report to the System only those

contingencies it deems to be work-connected.

All entries in the employer's logbook shall be made by the

employer or any of his authorized official after verification of the

contingencies or the employee's absences for a period of a day or more.

Upon request by the System, the employer shall furnish the necessary

certificate regarding information about any contingency appearing in the

logbook, citing the entry number, page number and date. Such logbook

shall be made available for inspection to the duly authorized

representative of the System.

Should any employer fail to record in the logbook an actual

sickness, injury or death of any of his employees within the period

prescribed herein, give false information or withhold material

information already in his possession, he shall be held liable for fifty

percent of the lump sum equivalent of the income benefit to which the

employee may be found to be entitled, the payment of which shall accrue

to the State Insurance Fund.

In case of payment of benefits for any claim which is later

determined to be fraudulent and the employer is found to be a party to

the fraud, such employer shall reimburse the System the full amount of

the compensation paid.

ART. 204, Notice of sickness, injury or death. —

Notice of sickness, injury or death shall be given to the employer by

the employee or by his dependents or anybody on Ms behalf within five

days from the occurence of the contingency. So notice to the employer

stall be required if the contingency is known to the employer or his

agents or representatives.

Article 205 Penal Provisions.

ART. 205. Penal Provisions. — (a) The penal

provisions of Republic Act numbered eleven hundred sixty-one, as

amended, and Commonwealth Act numbered one hundred eighty-six, as

amended, with regard to the funds as are thereunder being paid to,

collected or disbursed by the System, shall be applicable to the

collection, administration and disbursement of the funds under this

Title.

Any person, who for the purpose of securing entitlement to any

benefit or payment under this Title or the issuance of any certificate

or document for any purpose connected with this Title, whether for him

or for some other person, commits fraud, collision, falsification,

misrepresentation of facts or any other kind of anomally shall be

punished with a fine of not less than five hundred pesos nor more than

five thousand pesos and an imprisonment for not less, than six months

nor more than one year, at the discretion of the court.

If the act penalized by this Article is committed by any person

who has been or is employed by the Commission or System, or a

recidivist, the imprisonment shall not be less than one year: if

committed by a lawyer, physician or other professional he shall in

addition to the penalty prescribed herein be disqualified from the

practice of his profession; and if committed by an official, employee or

personnel of the Commission, System or any government agency, he shall

In addition to the penalty prescribed herein The dismissed with

prejudice to reemployment in the government service.

Article 206 Applicability.

ART. 206. Applicability. — This Title shall apply only

to injury, sickness, disability or death occuring on or after January

1, 1975.

SEC. 2. Title III of Book IV on Medicare of the same Code is

hereby amended to read as follows:

"ART. 207. Medical care. — The Philippine Medical

Care Plan shall be implemented as provided under Republic Act Numbered

sixty-one hundred eleven, as amended".

SEC. 3. Article 331 of Chapter II of Book VII on Prescription

of Offense and Claims of the same Code is hereby amended to read as

follows:

"ART. 331. Money claims. — All money claims arising

from employer-employee relations accruing during the effectivity of this

Code shall be filed within three (3) years from the time the cause of

action accrued; otherwise they shall be forever barred.

"All money claims accruing prior to the effectivity of this Code

shall be filed with the appropriate entities established under this Code

within one year from the date of such effectivity, and shall be

processed or determined in accordance with the implementing rules and

regulations of the Code; otherwise they shall be forever barred.

"Workmen's compensation claims accruing prior to the effectivity

of this Code and during the period from November 1, 1974 up to December

31, 1974, shall be filed with the appropriate regional offices of the

Department of Labor not later than March 31, 1975; otherwise they shall

be forever barred. These claims shall be processed and adjudicated in

accordance with the law and rules at the time their causes of action

accrued.

SEC. 4. Article 335 of Chapter III of Book VII on Transitory

and Final Provisions of the same Code is hereby amended to read as

follows:

"ART. 336. Bureau of Workmen's Compensation and

Workmen's Compensation Commission. — The present Bureau of Workmen's

Compensation, Workmen's Compensation Commission, and Workmen's

Compensation Units in the Department of Labor shall continue to exist up

to December 31 1975. Thereafter, said Offices shall be considered

abolished and all officials and personnel thereof shall be transferred

to and mandatorily absorbed by the Department of Labor, subject to

Presidential Decree No. 6, Letters of Instructions No. 14 and 14-A and

the Civil Service law and rules.

"The salaries of the present officials and personnel of the Bureau

of Workmen's Compensation, Workmen's Compensation Commission, and

Workmen's Compensation Units in the regional offices of the Department

of Labor shall be paid for the appropriations under Presidential Decree

No 503 for the fiscal year ending June 30, 1975. Beginning- July 1,

1975, their salaries shall be paid from general appropriations."

SEC. 5. Article 339 of Chapter III of Book VII on Transitory

and Final Provisions of the same Code is hereby amended to read as

follows:

"ART. 339. Disposition of pending cases. — All cases

pending before the Court of Industrial Relations and the National Labor

Relations Commission established under Presidential Decree No. 21 on

the date of effectivity of this Code shall be transferred to and

processed by the corresponding labor relations division or the National

Labor Commission created under this Code having cognizance of the same

in accordance with the procedure laid down herein and its implementing

rules and regulations. Cases on labor relations on appeal with the

Secretary of Labor or the Office of the President of the Philippines as

of the date of effectivity of this Code shall remain under their

respective jurisdiction and shall be decided in accordance with the law,

rules and regulation i n force at the time of appeal.

"All workmen's compensation cases pending before the Workmen's

Compensation Units in the regional offices of the Department of Labor

and those pending before the Workmen's Compensation Commission as of

March 31, 1975, shall be processed and adjudicated in accordance with

the law, rules and procedure existing prior to the effectivity of the

Employees' Compensation and State Insurance Fund."

SEC. 6. The numbers of the Articles of the same Code shall be

amended by renumbering them consecutively beginning with Art. 1.

SEC. 7. This Decree shall take effect on January 1, 1975.

Done in the City of Manila, this 27th day of December, in the

year of Our Lord, nineteen hundred and seventy-four.

(Sgd.)

FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary