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PRESIDENTIAL DECREE Number 626

 
 
FURTHER AMENDING CERTAIN ARTICLES OF PRESIDENTIAL DECREE No. 442 ENTITLED "LABOR CODE OF THE PHILIPPINES."
 
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 of Book IV of 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, employer's organizations, and civic, professional and technical associations, representing the various sectors of the economy;
 
WHEREAS, as a result of such discussion and consultations, it has been found necessary to make adjustments in the text of Labor Code to initiate, rationalize and coordinate the grant of benefits with broad objectives of the Code consistent with overriding priority of development;
 
NOW, THEREFORE, I FERDINAND E. MARCOS, President of the Philippines, by virtue of 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 21, 1972, as amended, do hereby order and decree:
 
SECTION 1. Title II of Book IV on Employee's 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

CHAPTER I

POLICY AND DEFINITIONS
 
ARTICLE 166. Definition of terms. - As used in this Title unless the context indicates indicates otherwise:
 
a. "Code" means the Labor Code of the Philippines instituted under Presidential Decree numbered four hundred forty-two, as amended.
b. "Commission" means the "Employees' Compensation Commission created under this Title.
c. "SSS" means the Social Security System created under Republic Act numbered eleven hundred sixty-one, as amended.
d. "GSIS" means the Social Security System created under Republic Act numbered eleven hundred sixty-one, as amended.
e. "System" means the SSS or GSIS, as the case may be.
f. "Employer" means any person, natural or judicial, employing the services of the employee.
g. "Employee" means any persons compulsory 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 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. "Dependents" means the legitimate, legitimated, legally adopted or acknowledge natural child who is unmarried, not gainfully employed, and not over twenty-one years of age or over twenty-one years of age provided he is incapacitated and incapable of self-support due to physical or mental defects which is congenital or acquired during minority; the legitimate spouse living with the employee; and parents of said employee wholly dependent upon him for regular support." (As amended by Sec. I, P.D. 1921).
j. "Beneficiaries" means the dependent spouse until he remarries and dependent children, who are 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." (As amended by Sec. I, P.D. 1921).
k. "Injury" means by harmful change in the human organism from any accident arising out of and in the course of employment." (As amended by Sec. I, P.D. 1921).
l. "Sickness" means any illness definitely accepted as an occupational disease listed by the Commission, or nay illness caused by the 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 illness that may be considered compensable based on peculiar hazards of employment. (As amended by Sec. I, P.D. 1368).
m. "Death" means loss of life resulting from injury or sickness.
n. "Disability" means loss or impairment of physical or mental function resulting from injury or sickness.
o. "Compensation" means all payments made under this Title for income benefits and medical or related benefits.
p. "Income Benefit" means all payments made under this Title to the employee or his dependents.
q. "Medical Benefit" means all payments made under this Title to the providers of medical care, rehabilitation services and hospital care.
r. "Related benefits" means all payments made under this Title for appliances and supplies.
s. "Appliances" means crutches, artificial aids and other similar devices.
t. "Supplies" means medicines and other medical, dental or surgical items.
u. "Hospital" means any medical facility, government or private, authorized by law an active member in good standing of the Philippine Hospital Association and accredited by the Commission.
v. "Physician" means any doctor of medicine duly licensed to practice in the Philippines, an active member in good standing of the Philippine Medical Association and accredited by the Commission.
w. "Wage" or "Salary", insofar as they refer to the computation of benefits, means the monthly remuneration as defined in Republic Act No. 161, as amended, for SSS and Presidential Decree No. 1146, as amended for GSIS, respectively, except that part in excess of Three Thousand Pesos." (As amended by Se. I, E.O. 179).
x. "Monthly salary credit" means the wage or the salary base for contributions as provided in Republic Act numbered eleven hundred sixty-one, as amended, or the wages or salary.
y. "Average monthly salary credit" in the case of SSS means the result obtained by dividing the sum of the monthly salary credits in the sixty month period immediately preceding the semester of death or permanent disability, falls within eighteen calendar months from the month of coverage, in which case it is the result obtained by dividing the sum of all monthly salary credits paid prior to the month of the contingency by the total number of calendar month of coverage in the same period. (As amended by Sec. I, P.D. 1368).
z. "Average daily salary credit" in the case of the SSS means the result obtained by dividing the sum of the six highest monthly salary credits in the twelve month period immediately preceding the semester of sickness or injury by one hundred eighty, except where the month of injury falls within the twelve calendar months from the first month of coverage, in which case it is the result obtained by dividing the sum of all monthly salary credits by thirty times the number of calendar months of coverage in the same period.
 
  In the case of the GSIS, the average daily salary credit shall be the actual daily salary or wage or the monthly salary or wage divided by the actual number of working days of the month of             contingency. (As amended by Sec. 1, P.D. 981)
 
     aa.  "Quarter" means as a period of three consecutive months ending on the last day of March, June, September, and December.      
     bb.  "Semester" means a period of two consecutive quarters ending in the quarter of death permanent disability, injury or sickness. 
             (As amended by Sec. 1, P.D. 981). 
     cc.  "Replacement ratio" - The sum of twenty percent and the quotient obtained by dividing three hundred by the sum of three hundred forty and the average 
             monthly salary credit. (As amended by Se. 1, P.D. 1641). 
     dd. "Credit years of service" - For a member covered prior to January 1975, nineteen hundred seventy five minus the calendar years of coverage, plus the number of 
            calendar years in which six or more contributions have been paid from January 1975 up to the calendar year containing the semester prior to the contingency. 
            (As amended by Sec. 1, P.D. 1641). 
     ee. "Monthly income benefit" means the amount equivalent to one hundred fifteen percent of the sum of:
 
               The average monthly salary credit multiplied by the replacement ratio; and
 
               One and a half percent of the average monthly salary credit for each credited year of service in excess of ten years;
 
               Provided, That the monthly income benefit shall in no case be less than two hundred fifty pesos. (As amended by Sec. 1, P.D. 1921). 
  
 
 
CHAPTER II
COVERAGE AND LIABILITY
 
Article 168. 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 of life insurance benefit administered by the System shall be subject to compulsory coverage. (As amended by Sec. 16, P.D. 850).
 
Article 169. Foreign employment. - The Commission shall ensure adequate coverage of Filipino employees employed abroad, subject to regulations as it may prescribe.
 
Article 170. 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 171. Registration. - Each employer and his employees shall register with the System in accordance with its regulations.
 
Article 172. Limitation of liability. - The State Insurance Fund shall be liable for compensation to the employee of his dependents, except when the disability or death was occasioned by the employee's intoxication, negligence, or otherwise provided under this Title.
 
Article 173. Extent of Library. - 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 not 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, or by other agencies of the government. (As amended by Sec. 2, P.D. 1921).
 
Article 174. Liability of third parties. - (a) When the disability or death is caused by circumstances creating legal liability against a third party, the disabled employee or the dependents in case of his death shall be paid by the System under this Title. In case benefit is paid under this Title, the System shall be subrogated to the rights of the disabled employee or the dependents in case of his death, in accordance with the general law.
 
(b) Where the System recovers from such third party damages in excess of those paid or allowed under this Title, such excess shall be delivered to the disabled employee or other persons entitled hereto, after deducting the cost of proceedings and expenses of the System. (As amended by Se. 17, P.D. 850).
 
Article 175. Deprivation of benefits. - Except as otherwise provided under this Title, no contact, regulation or device whatsoever shall operate to deprive the employee or his dependents of any part of the income benefits, and medical or related services granted under this Title. Existing medical services being provided by the employer shall be maintained and continued to be enjoyed by their employees.
 

 


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