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Presidential Decree No. 1368

May 1, 1978

PRESIDENTIAL DECREE NO. 1368

AMENDING FURTHER CERTAIN PROVISIONS OF TITLE II, BOOK FOUR OF THE LABOR CODE OF THE PHILIPPINES (PD 442, AS AMENDED)

WHEREAS, The prudent administration of the Employees’ Compensation Program and the judicious management of the State Insurance Fund have resulted in the accumulation of surplus that is sufficient to enable the Employees’ Compensation Commission to enlarge the benefit structure for covered employees without necessarily requiring additional premium contributions from employers; cd

WHEREAS, The Employees’ Compensation Commission, in pursuance of its desire to achieve labor justice for victims of work-connected contingencies, must ensure and maintain adequate and prompt delivery of social security services in terms of continually upgraded benefits to keep pace with changing social-economic development; and

WHEREAS, The Government Service Insurance System and the Social Security System which are the major administering agencies of the Employees’ Compensation Program and the State Insurance Fund under the umbrella of the Employees’ Compensation Commission have instituted already the upgrading of benefits for non-work-related claims for their respective members; casia

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree that:

SECTION 1. Paragraphs (k), (l) and (y) of Article 167 of the Labor Code, as amended, are hereby amended further, and Paragraphs (cc), (dd) and (ee) are added thereto to read as follows:

“Art. 167. Definition of terms. — As used under this Title, unless the context indicates otherwise:

“(k) ‘Injury’ means any harmful change in the human organism from any accident sustained at work while at the workplace, or elsewhere while executing an order for the employer.”

“(l) ‘Sickness’ means any illness definitely accepted as an occupational disease listed by the Commission, or any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions. For this purpose, the Commission is empowered to determine and approve occupational diseases and work-related illnesses that may be considered compensable based on peculiar hazards of employment.” aisa dc

“(y) ‘Average monthly salary credit’ in the case of the 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 by sixty, except where the month 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 months of coverage in the same period.” aisa dc

“(cc) ‘Basic Benefit’ means the amount equivalent to one hundred fifteen percent of the benefit herein computed as follows:

“Forty-five percent of the first three hundred pesos of average monthly salary credit, or fraction thereof;

“Twenty-five percent of the next three hundred pesos of average monthly salary credit, or fraction thereof; plus

“Nine percent of each succeeding one hundred pesos of average monthly salary credit, or fraction thereof; plus cd i

“One-tenth of one percent 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 prior to the semester of contingency.

“(dd) ‘Graduated increment’ means the amount equivalent to seven and seven-tenths percent of the result obtained by subtracting the basic benefit from three hundred forty pesos; Provided, That the graduated increment shall not be less than ten pesos.

“(ee) ‘Monthly income benefit’ means the amount equivalent to one hundred fifteen percent of the result obtained by adding the basic benefit and the graduated increment: Provided, That the monthly income benefit shall in no case be less than the minimum of the SSS, nor more than the monthly salary credit, whichever is higher.” cd

SECTION 2. Paragraph (b) of Art. 176 of the Labor Code, as amended, is hereby amended further and a new paragraph is added thereto to read as follows:

“(b) 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. Each Member shall receive a per diem of two hundred pesos for every meeting that is 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 in his behalf.”

“(d) The Commission shall have the status and category of a government corporation, and it is hereby deemed attached to the Department of Labor for policy coordination and guidance.”

SECTION 3. Paragraph (d) of Art. 177 of the Labor Code, as amended is hereby amended further to read as follows:

“Art. 177. Powers and duties. — . . . .

“(d) To initiate policies and programs toward adequate occupational health and safety and accident prevention in the working environment, rehabilitation other than those provided for under Art. 190 hereof, and other related programs and activities, and to appropriate funds therefor.”

SECTION 4. Article 179 of the Labor Code, as amended, is hereby amended further to read as follows: casia

“Art. 179. Investment of funds. — Provisions of existing laws to the contrary notwithstanding, 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 payment of the benefits under this Title, and no amount thereof shall be used for any other purpose. All amounts accruing to the State Insurance Fund, which is hereby established in the SSS and the GSIS, respectively, shall be deposited with any authorized depository bank approved by the Commission, or invested with due and prudent regard for the liquidity needs of the System.” casia

SECTION 5. Paragraph (a) of Art. 191 of the Labor Code, as amended, is hereby amended further to read as follows:

“Art. 191. 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 such disability or fraction thereof be paid by the System an income benefit equivalent to ninety percent of his average daily salary credit, subject to the following conditions: the daily income benefit shall not be less than two pesos and fifty centavos, nor more than twenty pesos, nor paid for a continuous period longer than one hundred twenty days, except as otherwise provided in the Rules, and the System shall be notified of the injury or sickness.”

SECTION 6. Paragraphs (a) and (b) of Art. 192 of the Labor Code, as amended, are hereby amended further to read as follows:

“Art. 192. 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 his permanent total disability shall, for each month until his death, be paid by the System during such a disability, an amount equivalent to the monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution: Provided, That the monthly income benefit shall be the new amount of the monthly benefit for all covered pensioners, effective upon approval of this Decree. cdasia

“(b) The monthly income benefit shall be guaranteed for five years, and 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.”

SECTION 7. Paragraphs (b) and (c) of Art. 193 of the Labor Code, as amended, are hereby amended further, and Paragraphs (f) and (g) are added thereto, to read as follows: cd i

“Art. 193. Permanent partial disability. — . . . .

“(b) The benefit shall be paid for not more than the period designated in the following schedule: cdtai

Complete and permanent Number of Months:

loss of use of:

One thumb 10

One index finger 8

one middle finger 6

one ring finger 5

one little finger 3

one big toe 6

Any toe 3

One arm 50

One hand 39

One foot 31

One leg 46

One ear 10

Both ears 20

Hearing of one ear 10

Hearing of both ears 50

Sight of one eye 25

“(c) A loss of a wrist shall be considered as a loss of the hand, and a loss of an elbow shall be considered as a loss of the arm. A loss of an ankle shall be considered as a loss of the foot, and a loss of a knee shall be 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 shall be considered as a loss of one-half of the whole finger or toe: Provided, That such a loss shall be either the functional loss of the use or physical loss of the member.

“(f) In cases of injuries or illnesses resulting in a permanent partial disability not listed in the preceding schedule, the benefit shall be an income benefit equivalent to the percentage of the permanent loss of the capacity for work.

“(g) Under such regulations as the Commission may approve, the income benefit payable in case of permanent partial disability may be paid in monthly pension or in lump sum if the period covered does not exceed one year.” cdt

SECTION 8. Art. 194 of the Labor Code, as amended, is hereby amended further, and another paragraph is added thereto, to read as follows:

“Art. 194. Death. — 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 an amount equivalent to his monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution: Provided, However, That the monthly income benefit shall be guaranteed for five years: Provided, Further, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries a lump sum benefit equivalent to thirty-five times the monthly income benefit.

“(b) 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 actuarial balance of his monthly income benefit under permanent total disability to be given out in the form of a monthly pension: Provided, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries a lump sum benefit equivalent to the same actuarial balance of his pension under permanent total disability.

“(c) The monthly income benefit provided herein shall be the new amount of the monthly income benefit for the surviving beneficiaries upon the approval of this Decree.”

SECTION 9. A new article is hereby added after Art. 208 of the Labor Code, as amended, to read as follows: cda

“Art. 208-A. Repeal of laws. — All existing laws, Presidential Decrees and Letters of Instructions which are inconsistent with or contrary to this Decree, are hereby repealed: Provided, That in the case of GSIS, conditions for entitlement to benefits shall be governed by the Labor Code, as amended: Provided, However, That the formulas for computation of benefits shall be those provided for under Commonwealth Act numbered one hundred eighty-six, as amended by Presidential Decree No. 1146, plus fifteen percent thereof.”

SECTION 10. Effectivity. — This Decree shall take effect on May 1st, 1978.

DONE in the City of Manila, Republic of the Philippines, this 1st day of May, in the year of Our Lord, Nineteen Hundred and Seventy-Eight.

Published in the Official Gazette, Vol. 74 No. 37 Page 7200 on September 11, 1978.