Query as to Whether or not Rural Banks are Required to Secure Payment of Compensation and Other Benefits of Bank Officers and Employees Under Section 30 of the Workmen's Compensation Act (Republic Act No. 4119)

1966 CBP MEMORANDUM CIRCULAR TO ALL RURAL BANKS NO. 03 SUBJECT : Query as to Whether or not Rural Banks are Required to Secure Payment of Compensation and Other Benefits of Bank Officers and Employees Under Section 30 of the Workmen's Compensation Act (Republic Act No. 4119) For your information and guidance, we are quoting hereunder a letter of the Director, Bureau of Workmen's Compensation replying to our query as to whether or not Rural Banks are required to secure payment of compensation and other benefits of bank officers and employees under Section 30 of the Workmen's Compensation Act (Republic Act No. 4119): LLphil "Republic of the Philippines Department of Labor BUREAU OF WORKMEN'S COMPENSATION Manila November 17, 1964 Mr. Honesto O. Francisco Central Bank of the Philippines Manila S i r : This has reference to your letter dated November 6, 1964 on the workmen's compensation insurance coverage of all employees in rural banks under Section 30 of the Workmen's Compensation Act, as further amended by Republic Act No. 4119. In this connection, please be advised that, to quote Sec. 1 of our law, "This Act shall be applicable to all employees in industrial, commercial, agricultural establishments and in religious, charitable and educational institutions . . . . " Although Sec. 14 of Republic Act No. 720 exempts rural banks with net assets not exceeding P700,000.00 from the payment of all taxes, charges and fees of whatever nature and description, and therefore, of the registration fee and additional contribution provided for in Sections 56 and 54 of our Act, we believe such provision does not embrace securing payment for workmen's compensation and other benefits due them, inasmuch as no taxes, charges and fees accruing to this Office are involve therein. It will be appreciated if these banks, which are under the supervision of your Office could be advised accordingly. Thank you for your cooperation with this Office. Very truly yours, S/Nieves Baens del Rosario T/NIEVES BAENS DEL ROSARIO Director In this connection, we would invite attention to Section 30 of the Workmen's Compensation Act, as amended, which require employers to secure the payment of compensation and other benefits to their employees or laborers and their dependents either with an insurance company authorized to do business in the Philippines or as self-insurers. We believe that rural banks which are financially capable of shouldering liabilities that may be due to their employees should act as self-insurers, in view of the following. a) This will eliminate expenses in the form of regular premiums that have to be paid if private insurance companies would undertake the coverage; b) The bonds and securities required by law to be deposited by the rural banks as self-insurer, may be in the form of Central Bank supported PW & ED Bonds which are convertible to cash any time liability arises, aside from the fact that they are exempt from taxations, attachment, seizure and execution. Rural Banks under whose name said bonds are registered are entitled to the interest accruing therefrom. This arrangement, therefore, provides sufficient guarantee and definite security for the payment of compensation and other benefits that may be due to employees and their dependents. prLL In view of the fact that Republic Act No. 4119 (Workmen's Compensation Act) took effect on June 20, 1964, and said statute requires that employers covered within the Act should secure the payment of compensation and other benefits to their employees and that failure to do so is penalized under Sec. 30, subsection (k) thereof, we suggest immediate compliance to the pertinent provision of said Act. (SGD.) HONESTO O. FRANCISCO Director