You are on page 1of 9



By: Prof. Joselito Guianan Chan
(These Notes, consisting of 8 parts, are supplementary to the authors book entitled 2012 Bar Reviewer on Labor Law)

A. SSS LAW (R.A. No. 8282).
1. Compulsory coverage.
a. All employees - not over sixty (60) years of age and their employers.
b.Domestic workers/kasambahay Under the Kasambahay Law [R.A. No. 10361],[1]it is
required that the domestic worker or kasambahay must have rendered at least one (1) month
of service. Premium payments or contributions shall be shouldered by the employer.
However, if the domestic worker is receiving a wage of Five thousand pesos (P5 ,000.00)
and above per month, the domestic worker shall pay the proportionate share in the
premium payments or contributions, as provided by law.
2. Compulsory coverage of self-employed.
Coverage in the SSS shall also be compulsory upon such self-employed persons as may be
determined by the SS Commission under such rules and regulations as it may prescribe, including
but not limited to the following:
a. All self-employed professionals;
b. Partners and single proprietors of businesses;
c. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within
the definition of the term employee;
d. Professional athletes, coaches, trainers and jockeys; and
e. Individual farmers and fishermen.
Unless otherwise specified herein, all provisions of this Act applicable to covered employees
shall also be applicable to the covered self-employed persons.
3. Voluntary coverage.

a. 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.
b. Filipinos recruited by foreign-based employers for employment abroad may be covered by the
SSS on a voluntary basis.
4. Effective date of coverage.
1. Employees: Compulsory coverage of the employer shall take effect on the first day of his
operation and that of the employee on the day of his employment
2. Self-Employed: The compulsory coverage of the self-employed person shall take effect upon
his registration with the SSS.
5. Benefits.
The following are the benefits provided under the SSS Law:
a. Monthly pension
b. Dependents pension
c. Retirement benefits
d. Death benefits
e. Permanent disability benefits
f. Funeral benefit
g. Sickness benefit
h. Maternity leave benefit
6. Beneficiaries.
a. Dependency rule under the SSS Law.
Under the SSS Law, dependent shall refer to:
(1) The legal spouse entitled by law to receive support from the member;

The legitimate,

legitimated, or legally

adopted, and illegitimate

child who

is unmarried, not gainfully employed and has not reached 21 of age, or if over 21


age, he

iscongenitally or



a minor has

been permanently

incapacitated and incapable of self-support, physically or mentally; and

(3) The parent who is receiving regular support from the member.
b. Beneficiaries under the SSS Law.

The following are primary beneficiaries:
1.The dependent spouse until he or she remarries;
2.The dependent legitimate, legitimated or legally adopted, and illegitimate children
[Note: The dependent illegitimate children shall be entitled to 50% of the share of
the legitimate,
absence of

legitimated or legally

the dependent



children: Provided,


further, That in

children of




his/her dependent illegitimate children shall be entitled to 100% of the benefits.]

The following are secondary beneficiaries:
1.The dependent parents, in the absence of the primary beneficiaries.
2.Any other person designated by the member as his/her secondary beneficiary, in the
absence of allthe foregoing (primary beneficiaries and dependent parents),

B. GSIS LAW (R.A. No. 8291).

1. Compulsory coverage.
Membership in the GSIS shall be compulsory for all employees receiving compensation who have
not reached the compulsory retirement age, irrespective of employment status.
2. Exclusions from coverage.
Excepted from GSIS coverage are:
1. Members of the Armed Forces of the Philippines (AFP);
2. Members of the Philippine National Police (PNP);
3. Contractuals who have no employer and employee relationship with the agencies they serve;
4. Members of the judiciary and constitutional commissions. - Members of the judiciary and
constitutional commissions shall have life insurance only.
3. Benefits.
All members of the GSIS shall have the following benefits:
1. Monthly pension
2. Separation benefits
3. Unemployment or involuntary separation benefits

4. Retirement benefits
5. Permanent disability benefits
(a) Total and permanent disability benefits
(b) Permanent and partial disability benefits
6. Temporary disability benefits
7. Non-scheduled disability
8. Survivorship benefits
9. Funeral benefits
10. Life insurance benefits
(a) Compulsory life insurance
(b) Optional insurance
4. Beneficiaries.
a. Dependents.
Dependents shall be the following:
(a) the legitimate spouse dependent for support upon the member or pensioner;
(b)the legitimate, legitimated, legally adopted child, including the illegitimate child, who is
unmarried, notgainfully employed, not over the age of majority, or is over the age of majority
but incapacitated and incapable of self-support due to a mental or physical defect acquired
prior to age of majority; and
(c) the parents dependent upon the member for support.
b. Beneficiaries.
There are 2 kinds of beneficiaries under the GSIS Law as follows:
1. Primary beneficiaries The legal dependent spouse until he/she remarries and the
dependent children.
2. Secondary beneficiaries The dependent parents and, subject to the restrictions on
dependent children, the legitimate descendants.

a. Purpose of the law is to establish a unitary social security system. - It is the declared policy
of the State to institute a scheme for totalization and portability of social security benefits with
the view of establishing within a reasonable period, a unitary social security system.
b. Totalization, defined. It refers to the process of adding up the periods of creditable services or
contributions under each of the Systems, for the purpose of eligibility and computation of
c. Portability, defined. It refers to the transfer of funds for the account and benefit of a worker
who transfers from one system to the other.
d. Applicability of limited portability scheme. - The benefits provided under R.A. No. 7699 apply
to activeor inactive members of either System (GSIS/SSS) as of the date of its effectivity on May
20, 1994.
e. Coverage. - The law applies to all worker-members of the GSIS and/or SSS who transfer from the
public sector to the private sector or vice-versa, or who wish to retain their membership in both
f. Creditability and totalization of contributions and benefits in SSS and GSIS. - A covered
worker who transfers employment from one sector to another (i. e., from private sector to public
sector, or vice versa), or is employed in both sectors, shall have his creditable services or
contributions in both Systems (GSIS and SSS) credited to his service or contribution record in
each of the Systems and shall be totalized for purposes of old-age, disability, survivorship and
other benefits in case the covered member does not qualify for such benefits in either or both
Systems without totalization provided, however, that overlapping periods of membership shall be
credited only once for purposes of totalization.
g. Limited portability of funds. - The processes involved in the prompt payment of money benefits
to eligible members are the joint responsibility of the GSIS and SSS. The System or Systems
responsible for the payment of money benefits due a covered worker shall release the same
within fifteen (15) working days from receipt of the claim, subject to the submission of the
required documents and availability of complete employee/employer records in the System or
h. Totalization of contributions and benefits; how processed.
1. Contributions .- All contributions paid by such member personally and those that were paid by
his employers to both Systems (GSIS and SSS) shall be considered in the processing of
benefits which he can claim from either or both Systems, provided, however, that the amount
of benefits to be paid by one System shall be in proportion to the number of contributions
actually remitted to that System. The termcontributions refers to the contributions paid by the
employee or worker to either the GSIS or the SSS on account of the workers membership.

2. Creditable services or periods of contributions. - All creditable services or periods of

contributions made continuously or in the aggregate of a worker under either of the sectors
shall be added up and considered for purposes of eligibility and computation of benefits. The
term creditable services insofar as the public sector is concerned, refers to the following:
1. All previous services rendered by an official/employee pursuant to an appointment, whether
permanent, provisional or temporary;
2. All previous services rendered by an official/employee pursuant to a duly-approved
appointment to a position in the Civil Service with compensation or salary;
3. The period during which an official or employee was on authorized sick leave of absence
without pay not exceeding one (1) year;
4.The period during which an official or employee was out of the service as a result of illegal
termination of his services as finally decided by the proper authorities; and
5.All previous services with compensation or salary rendered by elective officials.
The term periods of contributions for the private sector refers to the periods during which
a person renders services for an employer with compensation or salary, and during which
contributions were paid to the SSS. A self-employed person is considered an employee
and employer at the same time. The term eligibility means that the worker has satisfied the
requirements for entitlement to the benefits provided for under R.A. No. 7699.
3. Benefits. - All services rendered or contributions paid by a member personally and those that
were paid by the employers to either System shall be considered in the computation
of benefits which may be claimed from either or both Systems.However, the amount of
benefits to be paid by one System shall be in proportion to the services rendered or periods of
contributions made to that System. The benefits are:
a.Old-age benefit;
b.Disability benefit;
c.Survivorship benefit;
d.Sickness benefit;
e. Medicare benefit, provided that the member shall claim said benefit from the System where
he was last a member; and
f. Such other benefits common to both Systems that may be availed of through totalization.
i. Totalization; when applicable. - Totalization applies in the following instances:
a.if a worker is not qualified for any benefits from both Systems; or

b.if a worker in the public sector is not qualified for any benefits from the GSIS; or
c.if a worker in the private sector is not qualified for any benefits from the SSS.
For purposes of computation of benefits, totalization applies in all cases so that the contributions
made by the worker-member in both Systems shall provide maximum benefits which otherwise
will not be available. In no case shall the contribution be lost or forfeited.
j. Effect if worker is not qualified after totalization. - If after totalization, the worker-member still
does not qualify for any benefit, the member will then get whatever benefits correspond to
his/her contributions in either or both Systems.
k. Effect if worker qualifies for benefits in both Systems .- If a worker qualifies for benefits in both
Systems, totalization shall not apply.
l. Effect of overlapping periods of creditable services. - Overlapping periods of creditable
services or contributions in both Systems shall be credited only once for purposes of
totalization. Overlapping of periods refers to the periods during which a worker simultaneously
contributes to both Systems.
a. General coverage. - The following shall be covered by the Employees Compensation Program
1.All employers;
2.Every employee not over sixty (60) years of age;
3. An employee over 60 years of age who had been paying contributions to the System (GSIS/SSS)
prior to age sixty (60) and has not been compulsorily retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily covered
by both Systems.
b. Sectors of employees covered by the ECP. - The following sectors are covered under the ECP:
1. All public sector employees including those of government-owned and/or controlled
corporations and local government units covered by the GSIS;
2. All employees in the private sector covered by the SSS; and
3. Overseas Filipino workers (OFWs), namely:
a. Filipino seafarers compulsorily covered under the SSS.
b. Land-based contract workers provided that their employer, natural or juridical, is engaged in
any trade, industry or business undertaking in the Philippines; otherwise, they shall not be
covered by the ECP.

c. Start of coverage of employees under the ECP. - The coverage under the ECP of employees
in the private and public sectors starts on the first day of their employment. The coverage
is compulsory in nature.
d. Employees compensation benefits. - The following are the benefits provided under the Labor
a. Medical benefits
b.Disability benefits
1.Temporary total disability
2.Permanent total disability
3.Permanent partial disability
c.Death benefit
d.Funeral benefit
e.Temporary total disability. - A total disability is temporary if, as a result of the injury or sickness,
the employee is unable to perform any gainful occupation for a continuous period of not
exceeding 120 days,except when such disability still requires medical attendance beyond 120
days, but not to exceed 240 days. If the disability is the result of an injury or sickness, the period
of compensability shall be counted from the first day of such injury or sickness. An employee who
later had to stop working due to a compensable illness is also entitled to temporary total
disability benefits.
f.Permanent total disability. It is the inability of a worker to perform his job for more than 120
days, regardless of whether or not he loses the use of any part of his body.
Total disability, on the other hand, means disablement of an employee to earn wages in the
same kind of work, or work of a similar nature that he was trained for, or accustomed to perform,
or any kind of work which a person of his mentality and attainment could do. It is lack of ability to
follow continuously some substantial gainful occupation without serious discomfort or pain and
without material injury to health and danger to life.
Total disability does not mean a state of absolute helplessness. A total disability does not require
that the employee be absolutely disabled or totally paralyzed. What is necessary is that the injury
must be such thatthe employee cannot pursue his usual work and earn therefrom.
A disability is total and permanent if, as a result of the injury or sickness, the employee is unable
to perform any gainful occupation for a continuous period exceeding 120 days. Moreover, the
fact that the permanently and totally disabled employee continues to work after such disability
does not deprive him of the benefits provided under the law. For what is important consideration
is the inability to do substantially all material acts necessary for the prosecution of a gainful

occupation without serious discomfort or pain and without material injury or danger to life. In
disability compensation, it is not the injury per se which is compensated but the incapacity to work.
g.Death benefit. - Within the context of the employees compensation program, the
term death means loss of life resulting from an injury or sickness. Compensable death refers
to death which is the result of a work-related injury or sickness.


- The




be P10,000.00 for

and P3,000.00 for the public sector.