HR's legal guide: Classification of COVID-19 as an occupational and work-related disease in the Philippines

With COVID-19 now considered as an occupational and work-related disease in the Philippines, infected workers may receive appropriate compensation. Here's what employers need to know, in this piece by Patrick Henry Salazar, a senior associate with the Employment Practice of Quisumbing Torres, the Philippine member firm of Baker McKenzie International.

Philippine employment law requires private sector employers to provide workers compensation benefits to their employees through the Employees' Compensation ("EC") programme. In particular, employers have to contribute a certain amount for each employee (which is dependent on the monthly compensation of the said employee) to the programme through the Philippine Social Security System ("SSS").

In return, employees who suffer work-related contingencies may receive workers compensation benefits under the EC Programme.

In this regard, the Philippine Employment Compensation Commission ("ECC") recently issued Board Resolution No 21-04-14, Series of 2021, entitled the "Conditions for the Compensability of COVID-19 under the ECC List of Occupational and Work-Related Disease or Annex A of the Amended Rules on Employees' Compensation (EC)" ("ECC Board Resolution No. 21-04-14").

Salient portions of ECC Board Resolution No. 21-04-14

Under ECC Board Resolution No. 21-04-14, COVID-19 is now considered as an occupational and work-related disease. As a result, workers who have been infected with COVID-19 may receive appropriate compensation under the EC Programme.

COVID-19 is compensable in any of the following conditions:

1. There must be a direct connection between the offending agent or event and the worker based on epidemiologic criteria and occupational risk (i.e., healthcare workers, screening and contact tracing teams, etc.).
2. The tasks assigned to the worker would require frequent face-to-face and close proximity interactions with the public or with confirmed cases for healthcare workers.
3. Transmission occurred in the workplace.
4. Transmission occurred while commuting to and from work.
5. For purposes of filing compensation claims resulting from COVID-19, the government requires, among others, that COVID-19 must be clinically diagnosed and supported by diagnostic proof, including a reverse transcriptase polymerase chain reaction ("RT-PCR") test.

Impact to companies operating in the Philippines

Compliance with employer obligations

Employers should always comply with their obligation to contribute a certain amount for each employee to EC Programme through the SSS to avoid complications in claiming workers compensation under the EC Programme.

Further, employers should remain attentive on their obligation to record chronologically the sickness, injury or death of their employees setting forth therein their names, dates and places of contingency and absences, and report to the SSS those contingencies it deems to be work-connected (which now includes COVID-19 as an occupational and work-related disease).

Failure of an employer to keep a record or to give false information or withhold material information already in possession would make the employer liable for 50% of the lump sum equivalent of the benefit to which the employee may be found to be entitled, the payment of which shall accrue to the government.

Employers should also ensure that compensation claims resulting from COVID-19 are accurate, made in good faith, and aligned with ECC Board Resolution No. 21-04-14. In case of payment of benefit 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 SSS the full amount of the compensation paid.

ECC Board Resolution No. 21-04-14 may minimise direct claims against employers

An employee who contracts a work-related illness or disease during his or her employment may be entitled to benefits under the EC Programme. However, the employee has the option of claiming damages from his or her employer under the Civil Code of the Philippines (“Civil Code”) instead of availing the benefits of the EC Programme. Normally, the claim of the employee or his heirs for damages will be based on the alleged negligence of the employee’s employer.

Under the EC Programme, an employee who suffers work-connected sickness or injury resulting in disability or death is entitled to benefits under the EC Programme.

For the sickness or injury or the resulting disability or death to be compensable, it must be the result of an occupational disease listed in the EC rules, or there is proof that the risk of contracting the sickness or injury is increased by the working conditions or that the said sickness or injury is a result of an accident arising out of and in the course of the employment. If the sickness or injury is determined to be compensable, the EC Programme will pay the benefits.

On the other hand, if the sickness or injury was occasioned by the employee’s willful intention to injure or kill himself, among others, the employee will not be entitled to benefits under the EC Programme.

Since COVID-19 is now considered as an occupational and work-related disease compensable under the EC Programme, it is possible that employees would not be inclined to file direct claims for damages against their employers even if the employees believe that they contracted COVID-19 because of the employer's negligence or risk of contracting COVID-19was increased by the working conditions.

Thus, it is recommended that employers comply with their obligations under the EC Programme and lend assistance to their employees claiming compensation under the EC Programme to minimise the risk of employees going after their employers for damages.

Photo / The author, Patrick Henry Salazar