SSS; GSIS and ECC BASICS

ATTY. J. OSWALD B. LORENZO

Former Labor Arbiter, NCR-REG. 4 --NLRC; Professor of Law

and Pre-Bar Reviewer; President, The Center for Law Advocacy and
Specialized Studies (CLASS); former Assistant Secretary/oic,
Undersecretary , DENR and POEA Director for Licensing and Past
President, National Association of Labor Arbiters (NALA), Inc.

SOCIAL LEGISLATION

Social Legislation comprises the general laws that are supposed

to protect the welfare of the public in general. Part of this would be
the Social Security Law, the Employees Compensation Commission
and the revised GSIS Act. The Agrarian Reforms Law is also included.
The basis of all these .enactments and legislations is SOCIAL
JUSTICE.

SOCIAL SECURITY SYSTEM

RA1161 as amended by RA 8282

 COVERAGE:

Compulsory:

1. Compulsory upon all employees not over 60 years of age and

their employers
2. In case of domestic helpers, their monthly income should not be
less than one thousand pesos
Limitation: Sec. 9 (a)
a. Any benefit already earned by the employees under private
benefit plans existing at the time of the approval of the Act
shall not be discontinued, reduced or otherwise impaired
b. Private plans which are existing and in force at the time of
compulsory coverage shall be integrated with the plan of the
SSS in such a way where the employer’s contribution to his
private plan is more than that required of him in this Act, he
shall pay to the SSS only the contribution required of him and
he shall continue his contribution to such private plan less his
contribution to the SSS so that the employer’s total
contribution to his benefit plan and to the SSS shall be the
 same as his contribution to his private benefit plan before
any compulsory coverage.
c. Any changes, adjustments, modifications, eliminations or
improvements in the benefits to be available under the
remaining private plan, which may be necessary to adopt by
reason of the reduced contribution thereto as a result of the
integration shall be subject to agreements between the
employers and the employees concerned
d. The private benefit plan which the employer shall continue
for his employees shall remain under the employer’s
management and control unless there is an existing agreement
to the contrary.
e. Nothing in this Act shall be construed as a limitation on the
right of employers and employees to agree on and adopt
benefits which are over and above those provided under this
act

3. Compulsory upon such self- employed persons as may be determined

by the Commission including but not limited to the following (Sec 9-A):
All self employed professionals

1. Partners and single proprietors

2. Actors and actresses directors, scriptwriters and news
correspondents who do not fall within the definition of the
term employee in Section 8 (d) of this Act
3. Professional athletes, coaches, trainers, and jockeys
4. Individual farmers and fishermen
Voluntary:
1. Spouses who devote full time to managing the household and
family affairs, unless they are also engaged in other vocation or
employment which is subject to mandatory coverage, may be
covered by the SSS on a voluntary basis.
2. Filipinos recruited by foreign based employers for employment
abroad may be covered by the SSS on a voluntary basis
3. Employees separated from employment may continue to pay
contributions to maintain his right to full benefits (Sec. 11)
4. Self-employed with no income (11-A)

BY AGREEMENT

Any foreign government, international organization, or their

wholly-owned instrumentality employing workers in 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 (Sec.8 (j (4)).

EXCLUDED EMPLOYMENT (SEC. 8 (J)):

1. Employment purely casual and not for the purpose of occupation or

business of the employer
2. Service performed on or in connection with an alien vessel by an
employee if he is employed when such vessel is outside the
Philippines.
3. Service performed in the employ of the Philippine government or
instrumentality or agency thereof.
4. Service performed in the employ of a foreign government,
international organization, or their wholly owned instrumentality;
5. Services performed by temporary employees, which may be
excluded by regulation of the commission.

 EFFECTIVE DATE OF COVERAGE:

1. Employer: It shall take effect on the first day of his operation

2. Employee: On the day of his employment
3. Self-employed: It shall take effect upon his registration with SSS

Definition of Terms
 EMPLOYER
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 orders as
regards the employment except the Government and any of its political
subdivisions, branches or instrumentalities, including corporations owned or
controlled by the Government
Self- employed person shall be both the employer and employee
at the same time

 EMPLOYEE

Any person who performs services for an employer in which either or

both mental and physical efforts are used and who receives compensation for
such services, where there is an employer- employee relationship.
Self- employed person shall be both the employer and employee at the
same time.
 DEPENDENTS:

1. The legal spouse entitled by law to receive support from the

member
2. the legitimate, legitimated or legally adopted and illegitimate
child who is unmarried, not gainfully employed and has not
reached 21 years of age or if 21 years of age, he is congenitally
incapacitated or while still a minor has been permanently
incapacitated and incapable of self- support, physically and
mentally and
3. the parent who is receiving regular support from the member

 BENEFICIARIES

a. The dependent spouse until he or she remarries, the

dependent legitimate, legitimated or legally adopted and
illegitimate children who shall be the primary beneficiaries of
the member
b. PROVIDED that the dependent illegitimate children shall be
entitled to 50% of the share of the legitimate, legitimated or
legally adopted children.
c. PROVIDED FURTHER in the absence of the legitimated, legally
adopted or legitimate children, illegitimate children shall be
entitled to 100% of the benefits.
d. IN THEIR ABSENCE, the dependent parents who shall be the
secondary beneficiaries.
e. IN THE ABSENCE OF ALL of the foregoing, any person
designated by the covered employee as secondary beneficiary.
Basic Benefits

1. Monthly pension
2. Dependents pension
It shall be paid for each dependent child conceived on or before the
date of the contingency but not exceeding five, beginning with the
youngest without substitution PROVIDED that where there are
legitimate and illegitimate children, the former shall be preferred.

3. Retirement benefits
A member who has paid at least 120 monthly contributions prior to
the semester of retirement and who:

a. has reached the age of 60 years and is already separated

from employment or has ceased to be self-employed
b. has reached the age of 65 years, shall be entitled for as
A covered member who is 60 years old not qualified under No. 1
shall still be entitled to retirement benefits PROVIDED, he is
separated from employment and is not continuing payment of
contributions to the SSS on his own.

SUSPENSION OF MONTHLY PENSION: Upon the re-employment or

resumption of self-employment of a retired employee who is less
than 65 years old.

1. Death Benefits
2Permanent disability benefits
3. Funeral Benefit
A funeral grant equivalent to Twelve thousand pesos (P12, 000.00)
shall be paid, in cash or in kind, to help defray the cost of funeral
expenses upon the death of a member, including permanently
totally disabled member or retiree.

4. Sickness benefit
Requirements:

a. A member must have paid at least 3 monthly contributions in

the twelve month period immediately preceding the semester
of sickness or injury
b. and is confined therefor for more than three days in a hospital
or elsewhere with the approval of the SSS
5. Maternity Leave Benefit
It shall be paid to a female employee who has paid at least 3
monthly contributions in the twelve month period immediately
preceding the semester of her childbirth or miscarriage PROVIDED:

a. That the employee shall have notified her employer of her

pregnancy and the probable date of her childbirth which notice
shall be transmitted to the SSS.
b. The full payment shall be advanced by the employer within 30
days from the filing of the maternity leave application
c. Payment of daily maternity benefits shall be a bar to the
recovery of sickness benefits
d. The maternity benefits provided under this section shall be
paid only for the first 4 deliveries or miscarriages
e. The SSS shall immediately reimburse the employer 100% of the
benefits advanced by the latter
f. If no contributions were remitted by the employer or no notice
was given to SS, the employer shall be liable for damages
 equivalent to the benefits which said employee member would
otherwise have been entitled to.
g.
 Non-transferability of benefits (Sec. 15)
Such benefits are not transferable and no power of attorney or
other document executed by those entitled thereto, in favor of any
agent, attorney or any other person for the collection thereof on
their behalf shall be recognized, except when they are physically
unable to collect personally such benefits.

Sources of Fund
1. Collection:
Beginning on the last day of the month when an employee’s
compulsory coverage takes effect and every month thereafter
during his employment, his employer shall pay the employer’s
contribution and shall deduct and withhold from such employee’s
monthly salary the employees contribution.

The same time of collection for self-employed

2. Remittance:
It shall be remitted within the first 10 days of each calendar month
following the month for which they are applicable or within such
time as the Commission may prescribe.

For self-employed they shall remit their contributions quarterly

on such dates and schedules as the Commission may require.

GOVERNMENT SERVICE INSURANCE SYSTEM---RA 8291

COMPULSORY MEMBERSHIP (Sec. 3)

Compulsory for all employees (as defined in Section 2 (d) of GSIS

Law) receiving compensation who have not reached the compulsory
retirement age, irrespective of employment status, EXCEPT MEMBERS
OF THE ARMED FORCES AND THE PNP, subject to the condition that they
must settle first their financial obligations with the GSIS and
contractuals who have no employer and employee relationship with the
agencies they serve.
EXCEPT FOR THE MEMBERS OF THE JUDICIARY AND
CONSTITUTIONAL COMMISSIONS WHO SHALL HAVE LIFE INSURANCE
ONLY, all members of the GSIS shall have life insurance, retirement and
all other social security protection such as disability, survivorship,
separation and unemployment benefits.
 COMPUTATION OF SERVICE
The computation of service for the purpose of determining the amount
of benefits payable shall be FROM THE DATE OF THE ORIGINAL APPOINTMENT/ ELECTION
INCLUDING PERIODS OF SERVICE AT DIFFERENT TIMES UNDER THE AUTHORITY OF THE REPUBLIC
OF THE PHILIPPINES AND THOSE THAT MAY BE PRESCRIBED BY THE GSIS IN COORDINATION
WITH THE CIVIL SERVICE COMMISSION.
All service credited for retirement, resignation or separation for
which corresponding benefits have been awarded shall be EXCLUDED in
the computation of service in case of reinstatement in the service of an
employer and subsequent retirement or separation which is
compensable.

Definition of Terms

 Employer:
The national government, its political subdivisions, branches,
agencies or instrumentalities including GOCC’s and financial
institutions with original charters, the constitutional commissions
and the judiciary

 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 appointment,

 Dependents:
1. The legitimate spouse dependent for support upon the member
or pensioner
2. The legitimate, legitimated legally adopted child, including the
illegitimate child who is:
a. unmarried,
b. not gainfully employed,
c. not over the age of majority,
d. 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

3. Parents dependent upon the member for support

 Primary Beneficiary
The legal dependent spouse until he/she remarries
 Secondary Beneficiary
The dependent parents and subject to the restrictions on dependent
children, the legitimate descendants

 Disability
Any loss or impairment of the normal functions of the physical
and/or mental faculty of a member which reduces or eliminates
his/her capacity to continue with his/her current gainful occupation
or engage in any other gainful occupation.

 Total Disability
Complete incapacity to continue with his present employment or
engage in any gainful occupation due to the loss or impairment of
the normal functions of the physical and/or mental faculties of the
member

 Permanent Total Disability

Accrues or arises when recovery from impairment mentioned in
Section 2 (Q) (defining disability) is medically remote

 Temporary Total Disability

Accrues or arises when impaired physical and/or mental faculties
can be rehabilitated and/or restored to their normal functions

 Permanent Partial Disability

Accrues or arises upon the irrevocable loss or impairment of certain
portion/s of the physical faculties, despite which the member is able
to pursue a gainful occupation.

Sources of Fund

 Contributions
1. It shall be mandatory for the member and the employer to pay
the monthly contributions.
2. The employer shall include in its annual appropriation the
necessary amounts for its share of the contributions indicated
above PLUS any additional premiums that may be required on
account of the hazards or risks of its employees occupation.
3. Failure to do so shall subject the employers to penal or
administrative sanctions.

 Collection and Remittance

 1. Collection: The employer shall report to the GSIS all pertinent
information regarding the employee and shall deduct each month
from the salary or compensation of each employee the
contribution payable by him.
2. Remittance: The employer shall remit directly to the GSIS the
employees and employers contributions within the first ten (10)
days of the calendar month following the month to which the
contributions apply.
 Benefits

1. SEPARATION BENEFITS (SEC. 11):

Separation benefits are given to the:

a. 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 or
b. The member resigns or separates from office 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.

Separation benefits likewise include:

UNEMPLOYMENT OR INVOLUNTARY SEPARATION BENEFITS (Sec.

12): 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 contributions.

2. RETIREMENT BENEFITS:
Conditions for entitlement (Sec. 13-A):

Member has rendered at least 15 years of service

He is at least 60 years of age at the time of retirement

He is not receiving a monthly pension benefit from permanent

total disability

3. PERMANENT DISABILITY BENEFITS

General Conditions for Entitlement (Sec. 15):
 The member must have suffered permanent disability for reasons
NOT DUE to:

1. Grave misconduct
2. Notorious negligence
3. Habitual intoxication, or willful intention to kill himself or
another.

Specific conditions for entitlement (Sec. 16):

He shall receive monthly income benefit for life equal to the

basic monthly pension effective from the date of the disability.
PROVIDED:

1. He is in the service at the time of the disability

2. IF SEPARATED FROM SERVICE, he has paid at least 36 monthly
contributions within the 5 year period immediately preceding
the disability or has paid a total of at least 180 monthly
contributions prior to the disability
3. IF HE WAS IN SERVICE AND HAS PAID A TOTAL OF AT LEAST
180 MONTHLY CONTRIBUTIONS, in addition to the monthly
income benefit, he shall receive a cash payment equivalent to
18 times his basic monthly pension
4. However, a member cannot enjoy the monthly income
benefit for permanent disability and the old age retirement
simultaneously.

Unless the member has reached the minimum retirement age,

disability benefits shall be SUSPENDED when:

1. He is reemployed
2. He recovers from his disability as determined by the GSIS,
whose decision shall be final and binding
3. He fails to present himself for medical examination when
required by the GSIS
 PERMANENT PARTIAL DISABILITY (Sec. 17):
He must satisfy specific conditions 1-3.

4. TEMPORARY DISABILITY BENEFITS (Sec. 18)

 The member shall be entitled to 75% of the current daily
compensation for each day or fraction thereof of temporary
disability benefit not exceeding 120 days in one calendar year
after exhausting all sick leave credits and collective bargaining
agreement sick leave benefits. PROVIDED:

1. He is in service at the time of his disability

2. If separated, he has rendered at least 3 years of service and
has paid at least 6 monthly contributions in the 12- month
period immediately preceding the disability
HOWEVER, a member cannot enjoy temporary total disability
benefit and sick leave pay simultaneously

IN ADDITION, If the disability requires more extensive treatment

that lasts beyond 120 days, the payment of the temporary total
disability benefit may be extended by the GSIS but not to exceed a total
of 240 days

LASTLY, and in no case shall the benefit be less than 70 pesos a

day.

5. SURVIVORSHIP BENEFITS:
 For purposes of survivorship benefits, legitimate children shall
include legally adopted and legitimated children.

 Death of a Member
Upon the death of a member, the primary beneficiaries shall be entitled
to:

1. SURVIVORSHIP PENSION, PROVIDED:

a. Member was in service at the time of his death

b. If separated from service, has rendered at least 3 years of
service and paid 36 monthly contributions with the 5- year
period immediately preceding his death or has paid a total of
at least 180 monthly contributions.

2. SURVIVORSHIP PENSION PLUS A CASH PAYMENT EQUIVALENT TO

100% OF HIS AVERAG`E MONTHLY COMPENSATION FOR EVRY YEAR
OF SERVICE
 PROVIDED: The deceased was in the service at the time of his
death with at least three years of service

3. SURVIVORSHIP PENSION PLUS A CASH PAYMENT EQUIVALENT TO

100% OF HIS AVERAGE MONTHLY COMPENSATION FOR EVERY YEAR
OF SERVICE HE PAID CONTRIBUTIONS BUT NOT LESS THAN P12,
000
PROVIDED That the deceased has rendered at least 3 years of
service prior to his death but does not qualify under 1 and 2.

 ORDER OF PAYMENT OF THE SURVIVORSHIP PENSION


1. When the dependent spouse is the only survivor, he/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.

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 dependents pension.

 IN THE ABSENCE OF PRIMARY member is in service at

BENEFICIARIES, THE the time of his death and
SECONDARY BENEFICIARIES has at least 3 years of
SHALL BE ENTITLED TO: service.
1. Cash payment equivalent 2. In the absence of
to 100% of his average secondary beneficiaries ,
monthly compensation the benefits under this
for each year of service paragraph shall be paid to
he paid contributions, the legal heirs
but not less than P12,000
PROVIDED that the
that it shall be increased
to at least eighteen
6. FUNERAL BENEFITS:
thousand pesos
(P18,000.00) after five
It shall not be less than years and shall be paid
twelve thousand pesos upon death.
(P12,000.00) PROVIDED
 7. LIFE INSURANCE
BENEFITS

All employees except

members of the AFP and the
PNP shall be compulsorily
covered with life insurance.

Adjudication of Claims and Disputes

 PRESCRIPTION OF CLAIMS
Claims for benefits under the
Act except for life and
retirement shall prescribe
AFTER 4 YEARS FROM THE DATE
OF THE CONTINGENCY.

 JURISDICTION

GSIS shall have the

exclusive and original
jurisdiction to settle any dispute
arising under the Act and any
other laws administered by the
GSIS.

Appealable under Rule 43

and 45 Of the 1997 Rules of Civil
Procedure. The appeal shall not
stay the execution of the order
or award unless ordered by the
Boards, CA, or SC and the appeal
shall be without prejudice to the
special civil action of certiorari
when pro
ECC

I N J U R Y

Q. What an injury?

Answer. Injury is defined as any harmful changes in human organism from

any accident sustained at work while executing an order for the employer.

Q. What are the conditions for compensability of injuries?

A. For injury and the resulting disability or death to be compensable, the injury must
be the result of an accident that satisfies all of the following conditions:

a. The employee must have been injured at the place where his work
requires him to be;
b. The employee must have been performing his official functions;
c. If the injury was sustained elsewhere, the employee must have been
executing an order for the employer (Sec. 1(a), Rule III, Amended Rules
on Employees Compensation).

Thus an injury or accident is said to arise “in the course of

employment” when it takes place within the period of employment, at a
place where the employee may be, and while he is fulfilling his duties or is
engaged in doing something incidental thereto. Note that “in the course”
factor applies to time, place and circumstances (PHHC vs. WCC, L – 18246,
30 October 1964).

Q AND A

1. Distinguish “arising out of” and “in the course of” factors?

An injury or illness “arise out of” when it results from a risk or hazard
which is necessarily or ordinarily or reasonably inherent in or incident to the
conduct of such work or business. It refers to the origin or cause of the accident
and are descriptive of its character (PASUDECO; 16 SCRA 784).
 “In the course of” takes place when an employee is doing the duty which
he is required to perform. It refers to time, place, and circumstances under which
accident takes place (Afable vs. Singer Machine Co.,58 Phil. 42).

2. What are the instances of compensable injuries?

The following are instances of compensable injuries:

a. Peculiar risks. A metro aide while at work on a public street was

crushed to death by an automobile. The injury caused by an accident
was in pursuance his employment, thus compensable.
b. Street perils. A caminero’s death or injury performing his work when hit
by a fast moving vehicle is held to be compensable (Balajadia vs.
Province Supra).
A street sweeper is exposed to the perils of the street thus any injury
arising there from is compensable (Balajadia vs. Province, G.R. No. L-
41979, 15 October 1934).

c. Acts of ministration. The injury of the employee who heeded the “call of
nature” and sustained injuries in the performance of such act, is
deemed compensable. Likewise, acts necessary to the health and
comfort of an employee while at work such as satisfaction of thirst,
hunger, etc. are incidental to employment and injuries sustained there
from are held to be compensable. (Chua vs. Roman, L-14827, 31 October
1960).
d. Acts of God. A ships captain’s death because his vessel sank in a
marine disaster arising out of employment is thus compensable (Murillo
vs. Mendoza, 66 Phil, 689).
A farm worker’s death while administering insecticides to
agricultural plants in the open field, and lightning struck him, was held to be
compensable.

e. Assaults. A heated argument ensued between two workers over a work

assignment resulting in an assault by one to the other; the injury or
 death arising there from has been held to be compensable (BLTC vs.
Mandaguit, 70 Phil. 685).
However, assault occasional not attributable to employment such as
when it sprang from jealousy over a beautiful girl, as the two workers as
rivals, was held to be not compensable.

f. Recreational activities. The injury of the employee who was injured

during a company-sponsored recreational activity is deemed
compensable. The test is whether such activity is for the benefit or
interest of the employer; otherwise it is not compensable. (99 C.J.S. 737;
RP vs. Amil, 10 SCRA 669).

An employee won a prize (around the world tour) for having been chosen
as the “most outstanding employee of the year.” In the course of such tour he
met an accident; the injury is deemed compensable.

g. Acts for the benefit of the employer. In an attempt to protect the

properties of the company, an employee was killed by the burglars. The
resulting death is compensable.
In his desire to retrieve the logs being carried away by strong
current, the employee, although a good swimmer, met his death by
drowning as a consequence. This is deemed compensable (Cuevo vs.
Barrredo, No. L-45699, 24 February 1938).

h. Acts during emergency. Whatever injuries are sustained in the course of

a rescue work during an emergency arising out of the employment are
compensable. Injury suffered by an employee in his attempt to rescue a
co-worker arising out of employment, is also a compensable
(Estandarte vs. Phil. Motor Alcohol Co., G.R. No. 39722, 1 November
1933).
3. Can injuries sustained off the premises be compensable?
 YES. An injury is compensable when it is sustained an employee anytime
and anywhere while executing an order for the employer. A well-known rule on
the matter is the “coming and going” rule. The following are compensable off-
premise injuries:

a. The employee is on the way to or from work in a vehicle owned or

supplied by the employer. Example is the employer’s supplied bus
(Talisay-silay Milling Co. vs. WCC, 21 SCRA 366).
b. The employee is subject to call at all hours or at the moment of the
injury. Example: The employer summoned him, while on his way he was
injured in an accident.
c. The employee is traveling for the employer. Example: Traveling
workers.
d. The employee is on his way to further work at time, even though on a
fixed salary. Example: The employer required employee to bring some
papers at home for overtime purposes; on his way he met an accident
(Torbela vs. ECC, G.R. No. L-42627, 21 February 1980).
e. The employee is required to bring the car to employer’s business place
for use therein (Iloilo Dock and engineering Co. vs. 26 SCRA 102, 105).
f. The employee is accidentally injured at a point reasonably proximate to
the place of work, such injury is deemed to have arisen out of and in the
course of his employment. Example: The school principal sustained an
injury in a vehicular accident while he was on his way to school and at
the time of the accident, he had in his possession official papers he
worked on his residence on the eve of his death (Vda. De Torbela vs.
ECC, 96 SCRA 260).

4. What is the going and coming rule? Give the exceptions to the rule.

The general rule in workmen’s compensation law known as the going and
coming rule, is that in the absence of special circumstances, an employee injured
while going to or coming from his place of work is excluded from the benefits of
the workmen’s compensation law. Thus, an injury or accident sustained by an
employee while using the public streets and highways in going to or returning
from the place of employment is not compensable. Such as injury is suffered as
a consequence of risk and hazard of employment. Furthermore, the employer is
not an insurer against all accidental injuries which might happen to an employee
while in the course of employment. (Iloilo Dock and Engineering Co. vs. WCC, 26
SCRA 102, 105)

This rule, however, admits of exceptions, to wit:

a. where the employee is proceeding to or from his work on the premises

of his employer;
b. where the employee is about to enter or about to leave the premises of
his employer by the way of the exclusive or customary means of ingress
and egress (proximity rule);
c. where the employee is charged, while on his way to of from his place of
employment or at his home, or during his employment with some duty
or special errand connected with his employment; and
d. where the employer as an incident of the employment provides the
means of transportation to and from the place of employment.
5. Explain and illustrate the proximity rule.

The proximity rule, an exception to the coming and going rule, provides
that an injury or accident sustained off the employer’s premise, but while in close
proximity thereto and while using a customary means of ingress and egress, is
deemed compensable.

Where the employee, while proceeding to work and running to avoid the
rain, slipped and fell into a ditch fronting the main gate of the employer's factory,
and as a result of which he died the next day, it was held that the accident
occurred within the zone of employment and therefore compensable.
6. What defenses may be interposed by the State Insurance Fund against a claim
for compensation made by a covered employee or his dependents?

The following defenses may be set up:

a. The injury is not work-connected or the sickness is not occupational.

b. The disability or death was occasioned by the employee’s intoxication,
willful intention to injure or kill himself or another, or his notorious
negligence.
c. No notice of sickness, injury or death was given to the employer.
d. The claim was filed beyond three (3) years from the time the cause of
action accrued.
7. Does intoxication bar compensation?

In order to prevent payment of compensation the following conditions must

concur:

a. there must be proof of actual intoxication;

b. the intoxication must be to such a degree that the employee is
incapacitated from substantially engaging in employment and
performing his task;
c. the intoxication must be the proximate cause of the injury;
d. the intoxication must not only be the proximate cause (Schneider,
Workmen’s Compensation Laws, Vol. VI, 493-4; Balbija vs. Time
Taxicab, 1219-R, 20 October 1955).
8. Does suicide bar compensation?

Since the employee committed the crime by himself, the resulting death is
not covered for compensation as in the following cases;

a. when It results from insanity resulting from compensable injury or

disease;
b. when it occurs during a delirium resulting from compensable injury or
disease; and
 c. when it flows from an uncontrollable impulse arising from compensable
injury or disease (Horovits, 41 Nebraska Law Journal, 36).
9. What is notorious negligence? Does it bar compensation?

Notorious negligence is equivalent to gross negligence; it is something

more than mere carelessness or lack of foresight; it falls under the designation of
evident and manifest negligence and signifies a deliberate act of the employee to
disregard his own personal safety. However, mere disobedience to the rules,
orders and/or prohibition does not in itself constitute notorious negligence, if no
intention can be attributed to the injured to end his life.

Notorious negligence resulting in serious injury or death of the employee is

not compensable. However, no man in his senses would deliberately cause death.
Thus, the presumption is that the laborer by his instinct of self-preservation takes
precaution to avoid such danger unless a willful intention is attributed to him to
end his life (Dela Cruz vs. Cia. Maritima, G.R. No. 38236, 21 August 1933).

10. What is the liability of the State Insurance Fund?

Whenever other laws provide similar benefits for the same contingency, the
employee who qualifies for the benefits shall have the option to choose the law
under which the benefit will be paid to him. If the law chosen provides for
benefits lesser than those provided by the Labor Code, he shall be entitled only
to the difference.

The employee cannot avail himself at the same time of similar benefits
provided by different laws, except the difference thereof. However, the employer
may continue to grant benefits already earned by the employees under any
collective bargaining agreement or any other arrangement (Sec. 2, Rule ІV,
Amended Rules on Employees Compensation).

11. What are the benefits excluded by the State Insurance Fund?

The following benefits are excluded by the State Insurance Fund:

 a. Gratuity benefits under Section 699 of the Revised Administrative Code,
as amended by R.A. No. 1232;
b. Retirement, disability, sickness, and death benefits under the SSS Law (
R.A. No. 1161, as amended);
c. Life insurance, disability and retirement benefits under the GSIS Law
(Com. Act. No. 186, as amended);
d. Gratuities and pensions of every personnel for deaths and disabilities
incurred in line of duty in accordance with R.A. No. 610, as amended;
e. Medical benefits administered by the Philippine Medical Care
Commission provided in R.A. No. 4864, as amended; and
f. Other benefits granted by other laws and administered either by the
GSIS or SSS.
12. Is Article 173, now Art. 179 of the Labor Code, as amended a bar to claim for
damages under the Civil Code?

NO. Article 179 of the Labor Code does not bar to claim for damages under
Civil Code arising from employer’s negligence, for liability under Article 17 is
confined only to illness or injury.

13. Is simultaneous recovery of benefits allowed?

YES. While it is true the SSS Law (R.A. No. 1161, as amended) is “distinct
and different” from the Labor Code, the provisions of Sections 15 of the SSS law
and Article 179 of the Labor Code are in pari materia insofar as they both relate to
payment of compensation to covered employees, and insofar also as both
provisions barred the simultaneous recovery of benefits under both the SSS Law
and the Labor Code, until Article 173, now Art. , was then amended by P.D No.
1921 in 1984. The amendment introduced by P.D No. 1921 to Article 179 lifted the
ban against the simultaneous recovery of benefits under the Labor Code and the
SSS law, and is deemed to have repealed by necessary implication the provision
of Section 15 of the SSS Law. Since P.D. No. 1921 is the latest expression of the
legislative will, it will prevail over Section 15 of the SSS Law. (Opinions of the
Secretary of justice dated May 23, 1989 and January 12, 1990 addressed to the
SSS).

Furthermore, benefits under the State Insurance Fund accrue due to the
employees concerned due to hazards involved and are made a burden on the
employment itself. On the other hand, social security benefits are paid to SSS
members by reason of their membership therein for which they contribute their
money to a general fund.

It must be noted that under the new Social Security Act (R.A. 8282), the
provision of Section 15 of the old SSS law which bars simultaneous recovery of
benefits, has already been deleted.

14. Can a claimant who has already recovered from the State Insurance Fund still
recover damages in a criminal or civil case in relation thereto?

NO. 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.

15. G., who worked in the weaving department of a textile firm, was stabbed to
death by L., his fellow employee. L. was convicted of homicide and sentenced to
pay indemnity to the heirs of G. If the heirs have already recovered from the State
Insurance Fund, can they still hold the employer subsidiarily liable for the
indemnity to be paid by L., in the event the latter is unable to pay the same?
Why?

NO, the heirs can no longer recover indemnity from the employer. The
liability of the State Insurance Fund is exclusive and in place of all other liabilities
of the employer to the employee and his dependents or beneficiaries. This
includes the subsidiary liability of the employer under the Revised Penal Code.
(Generoso vs. Universal Textile Mills, Inc. G.R. No. L-28586, January 22, 1980)

16. What are the liabilities of third parties?

 In case the injury or death is caused by circumstances creating a legal
liability against a third party other than the employer, the injured employee or his
dependents may either claim compensation from the System under the Labor
Code or sue for damages in accordance with law. In case the benefit is paid by
the system, the latter is subrogated to the rights of the injured employee or his
dependent in accordance with the general law. Where the System recovers from
such third party damages in excess of those paid or allowed under Title II, Book
IV, of the Labor Code, such excess shall be delivered to the injured employee or
another person entitled thereto, after deduction of the expenses of the System
and the cost of the proceedings.

It must be noted that injuries or death caused by a third person are

compensable provided the requisites of compensability are present. However,
the injured employee cannot claim payment twice for the same injuries, that is,
from the third party and from the SSS or GSIS (Alba vs. Bulaong, 101 Phil. 434).

17. S., a driver-mechanic, was killed when he tried to fight unidentified men who
carnapped the vehicle of his employers. As a consequence of his death, his heirs
filed an action for death compensation and damages before the RTC against his
employers. The latter, however, contended that the complaint should be
dismissed as the appropriate remedy is a claim under the Employees’
Compensation Program. Is the contention of the employers correct? Explain.

NO. The employee or his heirs have the choice of cause of action and the
corresponding relief, i.e. either an ordinary action for damages based on Article
1171 of the New Civil Code before the regular courts or a special claim for limited
compensation under the Employees’ Compensation Program. But the right of
choice is qualified in that the employee should be held to the particular remedy in
which he stakes his fortune. (Vda. de Severo vs. Go, G.R. No. L-44330, January
29, 1988)

18. Who are entitled to benefits under the employees’ compensation program?
 The covered employee, his dependents, and in case of his death, his
beneficiaries.

19. Who are the dependents of the employee?

Dependents include the following:

a. the legitimate, legitimated or legally adopted child who is:

(1) unmarried,
(2) not gainfully employed, and
(3) 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 due to physical or
mental defect which is congenital or acquired during minority;
b. the legitimate spouse living with the employee; and
c. the legitimate parents of said employee wholly dependent upon him for
regular support.
20. What is the meaning of dependency?

Dependency is a relationship between two persons where the claimant-

beneficiary looks up to or relies for support upon another for the purpose of
maintaining himself consistent with the dependent’s station in life. Thus, a lawful
dependent is one who relies upon the deceased for the support with reasonable
expectation that the same shall continue. The support may take the form of
sustenance, dwelling, clothing and medical attendance. (Art. 290, New Civil
Code)

21. Who are included under the term beneficiaries?

Beneficiaries mean the dependent spouse until he remarries and

dependent children who are the primary beneficiaries. In their absence, the
dependent parents subject to the restrictions imposed on dependent children, the
illegitimate children and legitimate descendants, who are the secondary
beneficiaries.

22. Who are the primary beneficiaries?

The following beneficiaries are considered primary:

a. The legitimate spouse living with the employee at the time of the
employee’s death until he remarries; and
b. Legitimate, legitimated or legally adopted or acknowledged natural
children who are unmarried, not gainfully employed, not over 21 years
of age, or over 21 years of age provided that he is incapacitated and
incapable of the self support, due to physical or mental defect which is
congenital or acquired during minority: Provided further that the
dependent acknowledged natural chill shall be considered a primary
beneficiary only when there are no other dependent children who are
qualified and eligible for monthly income benefit: Provided, Finally, that
if there are two or more acknowledged natural children, they shall be
counted from the youngest and without substitution, but not exceeding
five. (Sec. 1(b), Rule XV, Amended Rules on Employees Compensation)
23. Who are the secondary beneficiaries?

The following beneficiaries are considered secondary:

a. The legitimate beneficiaries parents wholly dependent upon the

employee for support.
b. The legitimate descendants and illegitimate children who are unmarried,
not gainfully employed and not over 21 years of age, or over 21years of
age provided that he is incapacitated and incapable of self-support due
to physical or mental defect which is congenital or acquired during
minority. (Sec.1(c), Rule XV, Amended Rules on Employees
Compensation)
24. Who shall have priority?
 Primary beneficiaries shall have priority claim to death benefit over
secondary beneficiaries. Whenever there are primary beneficiaries, no death
benefit shall be paid to secondary beneficiaries.

If the deceased employee has no primary beneficiaries at the time of his

death benefit shall be paid to his secondary beneficiaries.

If the deceased employee has no beneficiaries at the time of his death, the
death benefits shall accrue to the Employees Compensation Fund. (Sec.2, Rule
XV, Amended Rules on Employees Compensation)

25. Classify the benefits which may be enjoyed under the State Insurance Fund.

a. Medical Benefits
b. Disability Benefits
c. Death Benefits and
d. Funeral Benefits