Regulatory Framework & Legal Issues in Business (LAW-20033) PDF

INSTRUCTIONAL MATERIALS FOR Law-20033 Regulatory Framework & Legal Issues In Business Compiled by: ATTY. RITCHE I. ESPONILLA Faculty College of Accountancy and Finance Page !1 of 40 ! ...

INSTRUCTIONAL MATERIALS FOR Law-20033 Regulatory Framework & Legal Issues In Business Compiled by: ATTY. RITCHE I. ESPONILLA Faculty College of Accountancy and Finance Page !1 of 40 !  INTRODUCTION / OVERVIEW This Instructional Material (IM) presents the laws on Labor; the SSS Law; Ease of Doing Business in the Philippines; Secrecy of Bank of Deposits; Anti-Money Laundering Act; PDIC Law; Truth In Lending Act; Intellectual Property Code of the Philippines; E-Commerce Act; and the Data Privacy Act. Foremost is the labor laws that safeguards the welfare of the workingmen. At the same time, it gives the structure of the workplace and defines the responsibilities of every employee to better serve, on the other hand, the capital. The accompanying discussion on the SSS law gives insight as to the compulsory coverage of all employers which, at the end of the day, gives ample benefit to the employees when a time comes that they could not work either by reason of disability, sickness, separation and/or retirement from work. The Ease of doing Business in the Philippines gives insight as to the reforms undertaken to expedite business transactions with the government. The ultimate end of which is to obviate corruption. The discussions on the Secrecy of Bank Deposits, Anti-Money Laundering Act, PDIC law and the Truth in Lending Act provides the students the basic understanding the legal intricacies of banking system. They will know that while bank deposits cannot at anytime just be inquired into, at the same time, bank transactions cannot also be used to launder money. Likewise, stu- dents will further know that somehow, to the extent covered by the law, bank deposits are se- cured and are insured. The Intellectual Property Code of the Philippines will instruct the students that intellectual property refers to anything created by someone, including but not limited to inventions, literary works, items created by artists (e.g. artwork and musical pieces), symbols, designs, images, pictures, and even names that are used for commercial purposes. All these creations are pro- tected by the law, ensuring that the people behind it are given due recognition or remuneration for their effort (https://www.full-suite.com/blog/beginners-guide-to-intellectual-property-laws- philippines/). Intellectual property protection is critical to fostering innovation. Without protection of ideas, businesses and individuals would not reap the full benefits of their inventions and would focus less on research and development. Similarly, artists would not be fully compensat- ed for their creations and cultural vitality would suffer as a result (https://www.stopfakes.gov/arti- cle?id=Why-is-Intellectual-Property-Important). While the E-Commerce Act provides recognition of the electronic transactions which importance is more highlighted today because of the advent of online activities and business transactions. Lastly, knowledge on the Data Privacy Act ensures ample protection for every informa- tion being gathered from individual. On the other hand, it outlines the responsibilities in the use, collection, sharing, and storage of data. The law imposes civil and criminal sanctions for unau- thorised and improper collection and/or use of data including illegal access to it. At the end of this course, students will not only understand the basic concepts of the laws as herein discussed but will also be able to exercise critical thinking in ensuring that the laws serve the purpose they were enacted and are abreast with the demands of the changing times. Page !2 of 40 !  TABLE OF CONTENTS Page Lesson 1. — Labor Code of the Philippines and other Social Legislation. 7 Employer-Employee Relationship. 7 Illustrative cases: i. DEALCO Farms vs. NLRC, GR No. 153192, Jan. 30, 2009 (“comboys”) ii. Jose Sonza vs. ABS-CBN, GR No. 138051, June 10, 2004 (talent) Working Conditions and Rest Periods. 8 Hours of Work Illustrative cases: i. Seaman. — National Shipyard & Steel Corp vs. CIR and Malondras, G.R. No. L-17068, December 30, 1961. ii. Faculty. — University of Pangasinan Faculty Union vs. University of Pangasinan, G.R. No. L-63122, February 20, 1984. Meal periods. Night shift differential. Overtime work Undertime not offset by overtime. Emergency overtime work. Computation of additional compensation. Weekly rest periods. Right to weekly rest day. When employer may require work on a rest day. Compensation for rest day, Sunday or holiday work. Holidays, SIL and Service Charges. Right to holiday pay. Service Incentive Leave. Service charges. Wages. 10 Definitions. Regional minimum wages. Prohibition against elimination or diminution of benefits. Payment by results. Payment of wages. — HOW? WHEN? WHERE? TO WHOM PAID? Solidary liability of employer with contractor or subcontractor. “labor-only” contracting? “Outsourcing”? Indirect employer. Posting of bond. Solidary liability. Prohibition regarding wages. Non-interference in disposal of wages. Wage deduction. Deposits for loss or damage. - Not allowed with exceptions. Page !3 of 40 !  Limitations. Withholding of wages and kickbacks prohibited. Deduction to ensure employment. Retaliatory measures. False reporting. Leaves. 11 Leaves Under Law: Service Incentive Leave (SIL) Solo Parents' Leave Maternity Leave Paternity Leave (R. A. 8187) Leaves under RA 9262 Leaves under RA 9710 Post employment / Termination of employment. 12 Security of tenure. Regular and casual employment. Probationary employment. Termination by employer. Just causes. Authorized causes. Termination by employee. References. 13 Lesson 2. — The Social Security System (SSS) Act. 14 Coverage. 14 Effective Date of Coverage. Benefits available. 15 Monthly Pension. Dependents’ Pension. Retirement Benefits. Death Benefits. Permanent Disability Benefits. Funeral Benefit. Sickness Benefit. Unemployment. Insurance or Involuntary Separation Benefits. Non-Transferability of Benefits. References. 19 Exercises. 19 Lesson 3. — The Ease of Doing Business and Efficient Government Service Delivery Act in the Philippines. 19 Essential features of the law. 19 Coverage. Zero-Contact Policy. Bigger accountability for receiving officers. Shorter processing times. Limiting the number of signatories to (at most) three people. Single unified business application form. Page !4 of 40 !  Environmental and agricultural clearances, sanitary permits, and other local permits will be issued along with the business permit which shall be valid for one year. Business one-stop shop. Automatic Approval or Automatic Extension of License, Clearance, Permit, Certification or Authorization. References. 21 Lesson 4. — Electronic and E-Commerce Act. 21 Scope of the application of the law. 21 Definition of terms. 21 "Electronic Data Message”. ”Electronic Document”. "Electronic Signature”. Legal recognition and communication of electronic messages and documents. 22 Legal Recognition of Electronic Data Messages. Legal Recognition of Electronic Documents. Legal Recognition of Electronic Signatures. Attribution of Electronic Data Message. Time of Dispatch of Electronic Data Messages or Electronic Documents. 23 Time of Receipt of Electronic Data Messages or Electronic Documents. 23 Electronic commerce in carriage of goods. 24 Electronic transactions in government. 24 References. 24 Lesson 5. — Philippine Deposit Insurance Corporation (PDIC) Law. 25 What is the Philippine Deposit Insurance Corporation (PDIC)? What does the PDIC do? What is maximum deposit insurance coverage of PDIC? What are covered by the PDIC Deposit Insurance? Which banks are members of the PDIC? What specific risks to a bank does PDIC cover? Do you need to pay any insurance premium to the PDIC to be covered? What is NOT covered by the PDIC Deposit Insurance? What is my PDIC deposit insurance coverage if I have several types of accounts in a bank? If I have deposits in different banks, what is my PDIC deposit insurance coverage? How can I claim PDIC deposit insurance if my bank closes? References. 27 Exercises. 27 Lesson 6. — Truth in Lending Act. 27 What is the policy behind the Truth in Lending Act? Who are covered under the Truth in Lending Act? In that definition, what is meant by “credit”? In the same definition, what is meant by a “finance charge”? What are the information required to be furnished to the debtor or borrower? When and how should these information be furnished to the debtor or borrower? What is the effect on the obligation in case of violations to the Truth in Lending Act? What are the penalties in case of violation? References. 28 Page !5 of 40 ! Lesson 7. — An Act Prohibiting Disclosure of or Inquiry into Deposits with any Banking Institution (“Bank Secrecy Law”). 29 What are the covered deposits? What are the exceptions? What are the penal provisions for violating the bank secrecy law. References. 30 Exercises. 30 Lesson 8. — The Anti-Money Laundering Act of 2001, as amended by R. A. 10365. 30 Rationale for Enacting the Law. History of the Act. Salient Features. What are the covered institutions? What is the Covered Transaction? What is the Suspicious Transaction? Freezing of Monetary Instrument or Property. Authority to Inquire into Bank Deposits. References. 32 Exercises. 32 Lesson 9. — Intellectual Property Code of the Philippines. 32 State policy declaration: Effect on international conventions and on principle of reciprocity. Laws repealed. What are the intellectual property rights under the Intellectual Property Code? Copyright and related rights. Trademarks and service marks. Industrial designs and Layout Designs (Topographies) of Integrated Circuits. Patents. Government Agencies. The scheme of penalties for infringement has also been changed. References. 38 Exercises. 38 Lesson 10. — Data Privacy Act of 2012. 38 Types of Information: Personal information. Sensitive Personal Information. Privileged information. Three (3) principles to be adhered to in the processing of data. Transparency. Legitimate Purpose. Proportionality. Rights of the Data Subjects. Penalty provisions. References. 40 Exercises. 40 Page !6 of 40 !  Lesson 1. Presidential Decree No. 442 otherwise known as the “Labor Code of the Philippines” and other Social Legislations. Week: 1st Week to 4th week. Learning Objectives: 1. To understand the basic concepts of the law. 2. To know and understand the terminologies and definitions used in the law. 3. To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will know the concept of employer-employee relationship. 2. Students will know the minimum labor standards. 3. Students will understand the causes and the legal process of terminating employment. Methodology: On-Line Discussions: 1. Employer-Employee Relationship. — Foremost, in the discussion of the Labor Code is the determination of the existence of the employee-employer relationship. This is very important since if there is no employer-em- ployee relation that exists between the parties the Labor Code finds no application. In determining whether employer-employee relationship exists, the four-fold test is fol- lowed, to wit: (1) the power to hire; (2) the payment of wages; (3) the power to dismiss: and (4) the power to control the employees’ conduct, or the so-called "control test.” Of the four, the power of control is the most important element. Illustrative cases: 1. DEALCO Farms vs. NLRC, GR No. 153192, Jan. 30, 2009 (“comboys”) Facts: Respondents Albert Caban (Caban) and Chiquito Bastida (Bastida) were hired by petitioner Dealco Farms as escorts or "comboys" for the transit of live cattle from General San- tos City to Manila. Respondents’ work entailed tending to the cattle during transportation. It in- cluded feeding and frequently showering the cattle to prevent dehydration and to develop heat resistance. On the whole, respondents ensured that the cattle would be safe from harm or death caused by a cattle fight or any such similar incident. Upon arrival in Manila, the cattle are turned over to and received by the duly acknowledged buyers or customers of petitioner, at which point, respondents’ work ceases. Thereafter, respondents Caban and Bastida were replaced for no reason at all. Thus, they filed an illegal dismissal case against petitioner Delaco Farms. Issue: Were respondents employees of the petitioner? Decision: In resolving the issue, the four-fold test as to whether employer-employee rela- tionship exists was applied: (1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control the employees’ conduct, or the so-called "control test”. Of the four, the power of control is the most important element. [Petitioner] admits having engaged the services of [respondents] as caretakers or "comboys" (convoys) though it qualifies that it was on a "per trip" or "per contract" basis. It also admits paying their remuneration of ₱1,500.00 per trip. It tacitly admits having terminated [respondents’] services when it said that [respon- dents] were among the group of escorts who were no longer accommodated due to the de- Page !7 of 40 ! crease in volume of imports and shipments. [Petitioner] also undoubtedly exercised control and supervision over [respondents’] work as caretakers considering that the value of the cattle shipped runs into hundreds of thousands of pesos. The preparation of the cattle for shipment, manning and feeding them prior to and during transit, and making a report upon return to Gen- eral Santos City to tally the records of the cattle shipped out versus cattle that actually reached Manila are certainly all in accordance with [petitioner’s] instructions. Thus, all the four elements in the determination of an employer-employee relationship being present, [x x x] [respondents] were, therefore, employees of [petitioner]. 2. Jose Sonza vs. ABS-CBN, GR No. 138051, June 10, 2004 (talent) Facts: Petitioner Jay Sonza signed an Agreement with respondent ABS-CBN with the Mel and Jay Management and Development Corporation (MJMDC) as talent for radio and tele- vision. Jay Sonza thereafter filed a complaint against ABS-CBN before the Department of Labor and Employment, National Capital Region in Quezon City complaining, among others, that ABS- CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, sign- ing bonus, travel allowance and amounts due under the Employees Stock Option Plan (“ESOP"). On the other hand, ABS-CBN contended that there is no employer-employee rela- tionship existed between the parties. Issue: Whether there exists employer-employee relationship between Jay Sonza and ABS-CBN? Decision: In applying the four-fold test the Supreme Court held that there is no employer- employee relationship between Jay Sonza and ABS-CBN: A. Selection and Engagement of Employee - ABS-CBN engaged Sonza’s services to co- host its television and radio programs. However, the specific selection and hiring of Sonza, be- cause of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If Sonza did not possess such unique skills, talent and celebrity status, ABS-CBN would not have en- tered into the Agreement with Sonza but would have hired him through its personnel department just like any other employee. In any event, the method of selecting and engaging Sonza does not conclusively determine his status. We must consider all the circumstances of the relation- ship, with the control test being the most important element. B. Payment of Wages - All the talent fees and benefits paid to Sonza were the result of negotiations that led to the Agreement. If Sonza were ABS-CBN's employee, there would be no need for the parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th month pay” which the law automatically incorporates into every employer-employee contract. Whatever benefits Sonza enjoyed arose from contract and not because of an employer-employee rela- tionship. C. Power of Dismissal - For violation of any provision of the Agreement, either party may terminate their relationship. Sonza failed to show that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided un- der labor laws. D. Power of Control - Sonza contends that ABS-CBN exercised control over the means and methods of his work. SONZA's argument is misplaced. ABS-CBN engaged Sonza’s ser- vices specifically to co-host the “Mel & Jay” programs. ABS-CBN did not assign any other work to Sonza. To perform his work, Sonza only needed his skills and talent. How Sonza delivered his lines, appeared on television, and sounded on radio were outside ABS-CBN’s control. Sonza did not have to render eight hours of work per day. The Agreement required Sonza to attend only rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of Sonza’s script. However, the Agreement prohibited Sonza from criticizing in his shows ABS-CBN or its interests. The clear implication is that Sonza had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. 2. Working Conditions and Rest Periods. Page !8 of 40 !  2.1. Hours of Work Art. 82 - Entities not applicable. — The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employ- ees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. Art. 83 - Normal hours of work 8 hrs/6 days or 48 hours work week. 40 hour work week for health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week. ARTICLE 84. Hours worked. GENERAL RULE: “NO WORK NO PAY”; “A FAIR DAYS WAGE FOR A FAIR DAYS WORK”. Hours worked. — The following shall be considered as compensable hours worked: (a) All time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed work place; and (b) All time during which an employee is suffered or permitted to work. Principles in determining hours worked. — The following general principles shall govern in determining whether the time spent by an employee is considered hours worked: (a) All hours are hours worked which the employee is required to give his employer, re- gardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. (b) An employee need not leave the premises of the work place in order that his rest pe- riod shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place. (c) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no re- placement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. (d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest. (Rule 1, Sec. 3 & 4, IRR). Illustrative cases: Seaman. — National Shipyard & Steel Corp vs. CIR and Malondras, G.R. No. L-17068, December 30, 1961. — We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very na- ture of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he had spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. Page !9 of 40 !  Faculty. — University of Pangasinan Faculty Union vs. University of Pangasinan, G.R. No. L-63122, February 20, 1984. — It is beyond dispute that the petitioner’s members are full- time employees receiving their monthly salaries irrespective of the number of working days or teaching hours in a month. However, they find themselves in a most peculiar situation whereby they are forced to go on leave during semestral breaks. These semestral breaks are in the na- ture of work interruptions beyond the employees’ control. The duration of the semestral break varies from year to year dependent on a variety of circumstances affecting at times only the pri- vate respondent but at other times all educational institutions in the country. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from monthly allowances. The "No work, no pay" principle does not apply in the instant case. The petitioner’s members received their regular salaries during this period. It is clear from the aforequoted provision of law that it contemplates a "no work" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem, absent themselves during semestral breaks. Rather, they are constrained to take mandatory leave from work. For this they cannot be faulted nor can they be begrudged that which is due them under the law. To a certain extent, the private respondent can specify dates when no classes would be held. Surely, it was not the intention of the framers of the law to allow employers to withhold employee benefits by the simple expedient of unilaterally imposing "no work" days and consequently avoiding compliance with the mandate of the law for those days. ARTICLE 85. Meal periods. (not less than sixty (60) minutes time-off) ARTICLE 86. Night shift differential. - 10% (between 10pm to 6:00am). Night Shift Differ- ential cannot be waived). ARTICLE 87. Overtime work. - 25%-regular; 30%-holiday or rest day. ARTICLE 88. Undertime not offset by overtime. ARTICLE 89. Emergency overtime work. ARTICLE 90. Computation of additional compensation. Computation of overtime – in- cludes “regular wage” only. 3. Weekly rest periods. ARTICLE 91. Right to weekly rest day. - 24 consecutive hours after every six (6) con- secutive normal workdays. ARTICLE 92. When employer may require work on a rest day. ARTICLE 93. Compensation for rest day, Sunday or holiday work. – Rest day, holiday - 30%; 50% - holiday work falls on the employee’s scheduled rest day. 4. Holidays, SIL and Service Charges. ARTICLE 94. Right to holiday pay. - All except establishments regularly employing less than ten (10) workers; 100% if worked. ARTICLE 95. SIL- 5 days if 1 year service. ARTICLE 96. Service charges. - 85% - employees; 15% mngt; hotels, resto etc. Amended by R. A. No. 11360 which provides that service charges collected by hotels, restau- rants and other similar establishments be distributed in full to all covered employees except managerial employees. This took effect sometime in September 2019. 5. Wages. ARTICLE 97. Definitions. — Wage must be capable of being expressed in terms of money, whether fixed or ascer- tained on a time, task, piece, or commission basis, or other method of calculating the same and includes the fair and reasonable value, as determined by the Secretary of Labor and Employ- ment, of board, lodging, or other facilities customarily furnished by the employer to the employ- ee. ARTICLE 99. Regional minimum wages. Page 10 ! of 40 !  ARTICLE 100. Prohibition against elimination or diminution of benefits. ARTICLE 101. Payment by results. Payment of wages. — HOW? ARTICLE 102. Forms of payment. – Legal tender. Except in check or money or- der if customary. WHEN? ARTICLE 103. Time of payment. 2x a month. Not less frequency of more than a month. WHERE? ARTICLE 104. Place of payment. At the place or near the place of undertak- ing. TO WHOM PAID? ARTICLE 105. Direct payment of wages to the workers to whom they are due. Exceptions. (a) In cases of force majeure rendering such payment impossible or under other special circumstances to be determined by the Secretary of Labor and Employment in ap- propriate regulations, in which case, the worker may be paid through another person under writ- ten authority given by the worker for the purpose; or (b) Where the worker has died, in which case, the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. The claimants, if they are all of age, shall execute an af- fidavit attesting to their relationship to the deceased and the fact that they are his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be executed on his behalf by his natural guardian or next-of-kin. The affidavit shall be presented to the employer who shall make payment through the Secretary of Labor and Employment or his representative. The representative of the Secretary of Labor and Employment shall act as referee in dividing the amount paid among the heirs. The payment of wages under this Article shall absolve the em- ployer of any further liability with respect to the amount paid. Solidary liability of employer with contractor or subcontractor (ARTICLE 106). “labor-only” contracting? “Outsourcing”? ARTICLE 107. Indirect employer. ARTICLE 108. Posting of bond. ARTICLE 109. Solidary liability. Prohibition regarding wages. ARTICLE 112. Non-interference in disposal of wages. ARTICLE 113. Wage deduction. - No deductions, exception: (a) premium on the insur- ance; (b) For union dues; and (c) Authorization. ARTICLE 114. Deposits for loss or damage. - Not allowed with exceptions. ARTICLE 115. Limitations. - If deductions for loss or damage is allowed employee must be heard first. ARTICLE 116. Withholding of wages and kickbacks prohibited. ARTICLE 117. Deduction to ensure employment. ARTICLE 118. Retaliatory measures. ARTICLE 119. False reporting. 6. Leaves. — What are leaves? These are days when employees may still be paid despite their absence from work. Leaves Under Law: (6.1) Service Incentive Leave (SIL) Service Incentive Leave Pay is the benefit of employees to avail of leave with pay for 5 days provided she has rendered service for at least one year (Art. 95). (6.2) Solo Parents' Leave Persons who fall under the definition of solo parents and who have rendered service of at least one year are entitled to 7 working days of leave to attend to their parental duties. (6.3) Maternity Leave - R. A. 11210 Page !11 of ! 40  WHAT ARE THE IMPROVEMENTS UNDER THE EXPANDED MATERNITY LEAVE LAW? Increase in Number of Days ▪ 105 days of paid leave for a married woman who gives birth ▪ 120 days of paid leave for a single or unmarried woman who gives birth ▪ 60 days of paid leave for a married or single woman who undergoes miscarriage or emergency termination of pregnancy ▪ Additional 30 days of unpaid leave is offered as an option if you like to extend your ma- ternity leave ▪ Up to 7 days of paid leave (taken from your 105 or 120 days) can be allocated to the fa- ther of your child, whether you’re married to him or not, so he can help you care for your baby. ▪ In case the father is not available, a relative within the 4th degree of consanguinity or the current partner sharing the same household with the mother can be chosen as alternate caregiver. The same number of days for Normal Delivery and Cesarean Section. 105 days for a married mother, 120 days for a single mother, whether normal or CS delivery. No More Limits You can enjoy this leave for all your pregnancies or miscarriages Before this is limited to 4 pregnancies/miscarriages. Now, the limit was removed. Avail- able in all pregnancies/miscarriages. “Eligible” means at least 3 valid monthly contributions were paid within the 12-month pe- riod prior to the semester of child delivery or miscarriage. (6.4) Paternity Leave (R. A. 8187) The law provides for paternity leave of 7 days with full pay to all married male employees in the private and public sectors. It is only available for the first four (4) deliveries of the legiti- mate spouse with whom the employee is cohabiting. (6.5) Leaves under RA 9262 Women victims of violence provided under R.A. 9262 of the Anti-Violence against Women and their Children Act are entitled to a paid leave of absence from work up to 10 days. (6.6) Leaves under RA 9710 The Magna Carta of Women introduced a 2-month leave for women with full pay based on gross monthly compensation, for women employees who undergo surgery caused by gyne- cological disorders, provided that they have rendered continuous aggregate employment ser- vice of at least six (6) months for the last twelve (12) months. 7. Post employment / Termination of employment. Security of tenure. Regular and casual employment. (1) the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except: (a) where the employment has been fixed for a specific project or under- taking the completion or termination of which has been determined at the time of the engagement of the employee; or (b) where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. Page 12 ! of 40 !  (2) any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Probationary employment. Not to exceed six (6) months from the date the employee started working. Termination by employer Just causes: i. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. ii. Gross and habitual neglect by the employee of his duties. iii. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. iv. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. v. Other causes analogous to the foregoing. Authorized causes: i. Closure of establishment and reduction of personnel. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the sepa- ration pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. ii. Disease as ground for termination. The separation pay is equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. Termination by employee. a. An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. b. An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: 1. Serious insult by the employer or his representative on the honor and person of the employee; 2. Inhuman and unbearable treatment accorded the employee by the em- ployer or his representative; 3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his fami- ly; and 4. Other causes analogous to any of the foregoing. References: Presidential Decree 442 or the Labor Code of the Philippines; Labor Code of the Philippines, Book 1 and Book 2, Azucena; Implementing Rules and Regulations of P.D. 442. Page 13 ! of 40 !  Lesson 2. Republic Act No. 11199 or known as the “Social Social Security Act of 2018”. Week: 5th to 7th Week. Learning Objectives: 1. To understand the basic concepts of the law. 2. To know and understand the terminologies and definitions used in the law. 3. To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will know the basic knowledge on the SSS Law and the corresponding benefits thereof. 2. Students will know the scope of applications of the law and the coverage thereof. Methodology: On-Line Discussions: R. A. 11199 repealed R. A. 1161 as amended by R. A. 8282. R. A. 11199 is now the cur- rent and existing social security law. 1. Section 9. — Coverage. (a) Coverage in the SSS shall be compulsory upon all employees including kasamba- hays or domestic workers not over sixty (60) years of age and their employers. (b) 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. Section 9-A. Compulsory Coverage of the Self-Employed. — Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commis- sion under such rules and regulations as it may prescribe, including, but not limited to the follow- ing: (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" in Section 8(d) of this Act; (d) Professional athletes, coaches, trainers and jockeys; and (e) Individual farmers and fishermen. Section 9-B. Compulsory Coverage of Overseas Filipino Workers (OFWs) - (a) Coverage in the SSS shall be compulsory upon all sea-based and land-based OFWs as defined under Republic Act No. 8042, otherwise known as the Migrant Workers and Over- seas Filipinos Act of 1995. as amended by Republic Act No. 10022: Provided, That they are not over sixty (60) years of age. (b) Manning agencies are agents of their principals and are considered as employers of sea-based OFWs. (c) Land-based OFWs are compulsory members of the SSS and considered in the same manner as self-employed persons under such rules and regulations that the Commission shall prescribe. (d) The Department of Foreign Affairs (DFA), the Department of Labor and Employment (DOLE) and all its agencies involved in deploying OFWs for employment abroad are mandated to negotiate bilateral labor agreements with the OFWs’ host countries to ensure that the em- Page 14 ! of 40 ! ployers of land-based OFWs, similar to the principals of sea-based OFWs, pay the required SSS contributions, in which case these land-based OFWs shall no longer be considered in the same manner as self-employed persons in this Act. Instead, they shall be considered as com- pulsorily covered employees with employer and employee shares in contributions that shall be provided for in the bilateral labor agreements and their implementing administrative agreements: Provided, That in countries which already extend social security coverage to OFWs, the DFA through the Philippine embassies and the DOLE shall negotiate further agreements to serve the best interests of the OFWs. (e) The DFA, the DOLE and, the SSS shall ensure compulsory coverage of OFWs through bilateral social security and labor agreements and other measures for enforcement. (f) Upon the termination of their employment overseas, OFWs may continue to pay con- tributions on a voluntary basis to maintain their rights to full benefits. (g) Filipino permanent migrants, including Filipino immigrants, permanent residents and naturalized citizens of their host countries may be covered by the SSS on a voluntary basis. 2. Section 10. — Effective Date of Coverage. 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: Provided, That the compulsory cover- age of the self-employed person shall take effect upon his registration with the SSS. 3. Section 11. — Effect of Separation from Employment. When an employee under compulsory coverage is separated from employment, his em- ployer’s contribution on his account and his obligation to pay contributions arising from that em- ployment shall cease at the end of the month of separation, but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to pay the total contributions to maintain his right to full benefit. 4. Section 11-A. — Effect of Interruption of Business or Professional Income. If the self-employed member realizes no income in any given month, he shall not be re- quired to pay contributions for that month. He may, however, be allowed to continue paying con- tributions under the same rules and regulations applicable to a separated employee member: Provided, That no retroactive payment of contributions shall be allowed other than as prescribed under Section 22-A hereof. 5. Benefits available. Section 12. Monthly Pension.— (a) The monthly pension shall be the highest of the following amounts: (1) The sum of the following: (i) Three hundred pesos (₱300.00); plus (ii) Twenty percent (20%) of the average monthly salary credit; plus (iii) Two percent (2%) of the average monthly salary credit for each credited year of service in excess of ten (10) years; or (2) Forty percent (40%) of the average monthly salary credit; or (3) One thousand pesos (₱1,000.00): Provided, That the monthly pension shall in no case be paid for an aggregate amount of less than sixty (60) months. (b) Notwithstanding the preceding paragraph, the minimum pension shall be One thou- sand two hundred pesos (₱1,200.00) for members with at least ten (10) credited years of ser- vice and Two thousand four hundred pesos (₱2,400.00) for those with twenty (20) credited years of service: Provided, That the Commission, upon determination of actuarial soundness, may provide pension increase than the amounts specified herein. (c) Additional Benefit Allowance. - An additional monthly benefit allowance amounting to One thousand pesos (₱1,000.00) shall be given to all retirement, death, and disability pension- ers receiving monthly pensions in or after January two thousand seventeen (2017) (Pursuant to Page 15 ! of 40 ! Memorandum from the Executive Secretary dated 22 February 2017, by authority of the Presi- dent of the Republic of the Philippines). Section 12-A. — Dependents’ Pension. Where monthly pension is payable on account of death, permanent total disability or re- tirement, dependents’ pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos (₱250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding five (5), beginning with the youngest and without substitution: Provided, That where there are legitimate and illegitimate children, the former shall be preferred. Section 12-B. — Retirement Benefits. - (a) A member who has paid at least one hundred twenty (120) monthly contributions pri- or to the semester of retirement and who: (1) has reached the age of sixty (60) years and is al- ready separated from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension: Pro- vided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS. (b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from em- ployment and is not continuing payment of contributions to the SSS on his own. (c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act. (d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his sec- ondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pen- sions corresponding to the balance of the five-year guaranteed period, excluding the depen- dents’ pension. (e) The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could; have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires. Section 13. — Death Benefits. Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36) times the monthly pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or secondary beneficiaries shall be en- titled to a lump sum benefit equivalent to the monthly pension times the number of monthly con- tributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. Section 13-A. — Permanent Disability Benefits. (a) Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of disability, he shall be entitled to the monthly pen- sion: Provided, That if he has not paid the required thirty-six (36) monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. A member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self- employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. Page 16 ! of 40 !  (b) The monthly pension and dependents’ pension shall be suspended upon the reem- ployment or resumption of self-employment or the recovery of the disabled member from his permanent total disability or his failure to present himself for examination at least once a year upon notice by the SSS. (c) Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period exclud- ing the dependents’ pension. Section 13-B. — Funeral Benefit. A funeral grant equivalent to Twelve thousand pesos (₱12,000.00) shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree. Section 14. — Sickness Benefit. (a) A member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to ninety per- cent (90%) of his average daily salary credit, subject to the following conditions: (1) In no case shall the daily sickness benefit be paid longer than one hundred twenty (120) days in one (1) calendar year, nor shall any unused por- tion of the one hundred twenty (120) days of sickness benefit granted under this section be carried forward and added to the total number of compensable days allowable in the subsequent year; (2) The daily sickness benefit shall not be paid for more than two hundred forty (240) days on account of the same confinement; and (3) The employee member shall notify his employer of the fact of his sickness or injury within five (5) calendar days after the start of his confine- ment unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is not necessary: Provided, That if the mem- ber is unemployed or self-employed, he shall directly notify the SSS of his confinement within five (5) calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confine- ment shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification. (b) The compensable confinement shall begin on the first day of sickness, and the pay- ment of such allowances shall be promptly made by the employer every regular payday or on the fifteenth and last day of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full pay to the credit of the employee member shall have been exhausted. (c) One hundred percent (100%) of the daily benefits provided in the preceding para- graph shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof: Provided, That the employer has notified the SSS of the con- finement within five (5) calendar days after receipt of the notification from the employee mem- ber: Provided, further, That if the notification to the SSS is made by the employer beyond five (5) calendar days after receipt of the notification from the employee member, said employer shall Page 17 ! of 40 ! be reimbursed only for each day of confinement starting from the tenth calendar day immediate- ly preceding the date of notification to the SSS: Provided, finally, That the SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one (1) year from the last day of confinement. (d) Where the employee member has given the required notification but the employer fails to notify the SSS of the confinement or to file the claim for reimbursement within the period prescribed in this section resulting in the reduction of the benefit or denial of the claim, such employer shall have no right to recover the corresponding daily allowance he advanced to the employee member as required in this section. (e) The claim of reimbursement shall be adjudicated by the SSS within a period of two (2) months from receipt thereof: Provided, That should no payment be received by the employer within one (1) month after the period prescribed herein for adjudication, the reimbursement shall thereafter earn simple interest of one percent (1%) per month until paid. (f) The provisions regarding the notification required of the member and the employer as well as the period within which the claim for benefit or reimbursement may be filed shall apply to all claims filed with the SSS. Section 14-A. — Maternity Leave Benefit. - See R. A. 11210 or the Expanded Maternity Leave Law. Section 14-B. — Unemployment. Insurance or Involuntary Separation Benefits. A member who is not over sixty (60) years of age who has paid at least thirty-six (36) months contributions twelve (12) months of which should be in the eighteen-month period im- mediately preceding the involuntary unemployment or separation shall be paid benefits in the form of monthly cash payments equivalent to fifty percent (50%) of the average monthly salary credit for a maximum of two (2) months: Provided, That an employee who is involuntarily unem- ployed can only claim unemployment benefits once every three (3) years: Provided, further, That in case of concurrence of two or more compensable contingencies, only the highest benefit shall be paid, subject to the rules and regulations that the Commission may prescribe. 6. Section 15. — Non-Transferability of Benefits. The SSS shall promptly pay the benefits provided in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act: Provided, That the SSS shall pay the retirement benefits on the day of contingency to qualified members who have submitted the necessary documents at least six (6) months before: Provided, further, That the beneficiary who is a national of a foreign country which does not extend benefits to a Filipino beneficiary residing in the Philippines, or which is not recognized by the Philippines, shall not be entitled to receive any benefit under this Act: Provided, further, That notwithstanding the foregoing, where the best interest of the SSS will be served, the Commission may direct payments without regard to na- tionality or country of residence: Provided, further, That if the recipient is a minor or a person incapable of administering his own affairs, the Commission shall appoint a representative under such terms and conditions as it may deem proper: Provided, further, That such appointment shall not be necessary in case the recipient is under the custody of or living with the parents or spouse of the member in which case the benefits shall be paid to such parents or spouse, as representative payee of the recipient. Such benefits are not transferable and no power of attor- ney or other document executed by those entitled thereto in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits: Provided, further That in case of death benefits, if no beneficiary qualifies under this Act, said benefits shall be paid to the legal heirs in accordance with the law of succession. Page 18 ! of 40 !  References: Republic Act No. 11199 or known as the “Social Social Security Act of 2018”. Exercises: Situational questions. Each answer must be supported by a legal basis. 1. What is the difference when an employee was dismissed for just cause than he was dismissed for an authorized cause? 2. A works as an Executive Staff in Garments Manufacturing Company. His tour of duty is from 8am to 5pm. On December 5, 2011, considering the high demands of orders, he worked until 12 midnight. What are the corresponding benefits A should receive? 10 points. 3. A is a truck driver in Forwarding Company. One time, he delivered some goods and articles to one of their clients. While the goods and articles are being unloaded, A slept on the truck. Is the time wherein A was sleeping compensable time? 10 points. 4. A is a radio talent in DZ-PUP. They executed a contract with the station fixing therein his salary, day-off and other benefits. When the contract expires, it was no longer renewed. A now is claiming that he was illegally dismissed. Is A’s contention valid? 10 points. 5. A escorts delivery of live cattles being delivered from Zamboanga to Manila. Consid- ering that the travel usually lasts for 3 days, they were given instructions from the office how they will feed and how they will maintain the safety and health of the cattles. Thereafter, for no reason at all, they were no longer given escorts assignments. A is now claiming that he was illegally dismissed. Is this correct? 10 points. Lesson 3. — Republic Act No. 11032 otherwise known as the “The Ease of Doing Business and Efficient Government Service Delivery Act of 2018”. Week: 8th Week. Learning Objectives: 1. To understand the basic concepts of the law. 2. To know and understand the terminologies and definitions used in the law. 3. To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will be apprised of the streamline procedure for issuance of local business permits, licenses, or clearances. 2. They will know the provision on citizen’s charter, coverage of the law, automatic approval or extension of permits and licenses. 3. They will also know the accountability of heads of offices and agencies which now includes even those government offices located abroad. Methodology: On-Line Discussions: This essentially a revamped version of 2007’s R.A. 9485 or the Anti-Red Tape Act of 2007. The following are the essential features of the law: 1. Coverage. all government offices and agencies including local government units (LGUs), government-owned or controlled corporations and other government instrumentalities, whether located in the Philippines or abroad, that provide services covering business and non- business related transactions as defined in this Act. Page 19 ! of 40 !  This effectively places all Philippine embassies and consulate offices located all over the world. This offers protection for OFWs. 2. Zero-Contact Policy. Except during the preliminary processing of a request and evalu- ation of the sufficiency of submitted requirements, no government officer or employee shall have any contact IN ANY MANNER, unless strictly necessary, with any applicant or requesting party concerning an application or request. This removes any chance of “under-the-table” transac- tions (i.e. bribes) during the course of processing an application or request. To further solidify the Zero-Contact Policy, the Department of Information and Communications Technology is working on a web-based, software-enabled business registration system that, when completed, will be the first (and possibly sole) point of contact everyone will have with any government of- fice, agency, LGU, or GOCC here and abroad. 3. Bigger accountability for receiving officers. With the updates, receiving officers (i.e. the people you usually talk to at a government office’s many “windows”) can now be held liable, as they will be required to do the following: Inform you of any deficiencies in the requirements you just submitted. Assign your application/request a unique identification number that will henceforth be used throughout that agency when referring to your application/request. (Reference number for the transaction). Give you an acknowledgment receipt with the seal of the agency, the name of the re- sponsible officer/employee, his/her unit and designation, and the date and time of receipt of your request. It also helps that every single employee you will transact with will be issued an ID. Any denial of application or request for access to government service shall be fully ex- plained in writing, stating the name of the person making the denial and the grounds upon which such denial is based. Any denial of application or request is deemed to have been made with the permission or clearance from the highest authority having jurisdic- tion over the government office or agency concerned. 4. Shorter processing times. Requires to set processing times for each type of transac- tion: — Simple transactions (anything that requires nothing more than a ministerial action or an inconsequential issue that asks for nothing more than a resolution) should be acted on within 3 days. — Complex transactions (those that require evaluation in the resolution of complicated issues) should last no more than 7 days in their agency/office. Actions or requests that involve activities which could be a threat to public health, safety, morals, policy, or a highly technical ap- plication should be done within 20 days or as determined by the agency concerned, whichever is shorter. 5. Limiting the number of signatories to (at most) three people. There were requests that used to require significantly more, which effectively denied you a chance at getting your applica- tion/request acted on. 6. Single unified business application form - The new law does away with entrepreneurs having to fill up multiple forms for various government agencies just to put up their business. The law mandates the use of a single form that incorporates past separate forms on local taxes, sanitary permit, zoning clearance, building clearance, fire clearance, and other usual local gov- ernment unit (LGU) requirements. There will be a unified form for business permits and busi- ness renewals. Page 20 ! of 40 !  7. Environmental and agricultural clearances, sanitary permits, and other local permits will be issued along with the business permit which shall be valid for one year. 8. Business one-stop shop - To put up a business, one need only visit one facility. The law orders local governments to put up a "one-stop shop" or a facility that puts zoning offices, business permit and licensing offices, the Bureau of Fire Protection, and treasury offices in one location. 9. Automatic Approval or Automatic Extension of License, Clearance, Permit, Certifica- tion or Authorization. – If a government office or agency fails to approve or disapprove an origi- nal application or request for issuance of license, clearance, permit, certification or authorization within the prescribed processing time, said application or request shall be deemed approved: Provided, That all required documents have been submitted and all required fees and charges have been paid. The acknowledgment receipt together with the official receipt for payment of all required fees issued to the applicant or requesting party shall be enough proof or has the same force and effect of a license, clearance, permit, certification or authorization under this automatic approval mechanism. References: R. A. 11032; attylaserna.blogspot.com. Lesson 4. Republic Act No. 8792 or the “Electronic and E-Commerce Act of 2000”. Week: 9th week. Learning Objectives: 1. To understand the basic concepts of the law. 2. To know and understand the terminologies and definitions used in the law. 3. To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will be apprised of the basics on E-Commerce Act. 2. Particularly, students will have knowledge as to the so-called Electronic Carriage of Goods and Electronic Transactions in Government. 3. They will know the legal recognition and communication of electronic messages and documents. Methodology: On-Line Discussions: 1. Scope of the application of the law. The law applies to any kind of data message and electronic document used in the con- text of commercial and non-commercial activities to include domestic and international dealings, transactions, arrangements, agreements contracts and exchanges and storage of information (Sec. 4.). 2. Definition of terms. — Electronic Data Message; Electronic Document; Electronic Sig- nature. "Electronic Data Message" refers to information generated, sent, received or stored by electronic, optical or similar means. ”Electronic Document" refers to information or the representation of information, data, figures, symbols or other modes of written expression, described or however represented, by Page 21 ! of 40 ! which a right is established or an obligation extinguished, or by which a fact may be prove and affirmed, which is receive, recorded, transmitted, stored, processed, retrieved or produced elec- tronically. "Electronic Signature" refers to any distinctive mark, characteristic and/or sound in elec- tronic form, representing the identity of a person and attached to or logically associated with the electronic data message or electronic document or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the intention of authenticat- ing or approving an electronic data message or electronic document. 3. Legal recognition and communication of electronic messages and documents. Legal Recognition of Electronic Data Messages - Information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the data message purporting to give rise to such legal effect, or that it is merely referred to in that electronic data message (Sec- tion 6). Legal Recognition of Electronic Documents - Electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing, and - (a) Where the law requires a document to be in writing, that requirement is met by an electronic document if the said electronic document maintains its integrity and reliability and can be authenticated so as to be usable for subsequent reference, in that - i. The electronic document has remained complete and unaltered, apart from the addition of any endorsement and any authorized change, or any change which arises in the normal course of communication, storage and dis- play; and ii. The electronic document is reliable in the light of the purpose for which it was generated and in the light of all relevant circumstances. (b) Paragraph (a) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the document not being presented or re- tained in its original from. (c) Where the law requires that a document be presented or retained in its original form, that requirement is met by an electronic document if - i. There exists a reliable assurance as to the integrity of the document from the time when it was first generated in its final form; and ii. That document is capable of being displayed to the person to whom it is to be presented: Provided, That no provision of this Act shall apply to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity (Section 7). Legal Recognition of Electronic Signatures. - An electronic signature on the electronic document shall be equivalent to the signature of a person on a written document if that signa- ture is proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic document, existed under which - (a) A method is used to identify the party sought to be bound and to indicate said party's access to the electronic document necessary for his consent or approval through the electronic signature; (b) Said method is reliable and appropriate for the purpose for which the electronic doc- ument was generated or communicated, in the light of all circumstances, including any relevant agreement; (c) It is necessary for the party sought to be bound, in or order to proceed further with the transaction, to have executed or provided the electronic signature; and (d) The other party is authorized and enabled to verify the electronic signature and to make the decision to proceed with the transaction authenticated by the same (Section 8). Page 22 ! of 40 !  Attribution of Electronic Data Message. - (1) An electronic data message or electronic document is that of the originator if it was sent by the originator himself. (2) As between the originator and the addressee, an electronic data message or elec- tronic document is deemed to be that of the originator if it was sent: (a) by a person who had the authority to act on behalf of the originator with respect to that electronic data message or electronic document; or (b) by an information system programmed by, or on behalf of the originator to operate automatically. (3) As between the originator and the addressee, an addressee is entitled to regard an electronic data message or electronic document as being that of the originator, and to act on that assumption, if: (a) in order to ascertain whether the electronic data message or electronic document was that of the originator, the addressee properly applied a proce- dure previously agreed to by the originator for that purpose; or (b) the electronic data message or electronic document as received by the addressee resulted from the actions of a person whose relationship with the originator or with any agent of the originator enabled that person to gain ac- cess to a method used by the originator to identify electronic data messages as his own. (4) Paragraph (3) does not apply: (a) as of the time when the addressee has both received notice from the originator that the electronic data message or electronic document is not that of the originator, and has reasonable time to act accordingly; or (b) in a case within paragraph (3) sub-paragraph (b), at any time when the addressee knew or should have known, had it exercised reasonable care of used any agreed procedure, that the electronic data message or electronic document was not that of the originator. (5) Where an electronic data message or electronic document is that of the originator or is deemed to be that of the originator, or the addressee is entitled to act on that assumption, then, as between the originator and the addressee, the addressee is entitled to regard the elec- tronic data message or electronic document as received as being what the originator intended to send, and to act on that assumption. The addressee is not so entitled when it knew or should have known, had it exercised treasonable care or used any agreed procedure, that the trans- mission resulted in any error in the electronic data message or electronic document as received. (6) The addressee is entitled to regard each electronic data message or electronic doc- ument received as a separate electronic data message or electronic document and to act on that assumption, except to the extent that it duplicates another electronic data message or elec- tronic document and the addressee knew or should have known, had it exercised reasonable care or used any agreed procedure, that the electronic data message or electronic document was a duplicate (Section 18). Time of Dispatch of Electronic Data Messages or Electronic Documents. - Unless other- wise agreed between the originator and the addressee, the dispatch of an electronic data mes- sage or electronic document occurs when it enters an information system outside the control of the originator or of the person who sent the electronic data message or electronic document on behalf of the originator (Section 21). Time of Receipt of Electronic Data Messages or Electronic Documents. - Unless other- wise agreed between the originator and the addressee, the time of receipt of an electronic data message or electronic document is as follows: a.) If the addressee has designated an information system for the purpose of receiving electronic data message or electronic document, receipt occurs at the time when the electronic data message or electronic document enters the designated information system: Provide, how- Page 23 ! of 40 ! ever, that if the originator and the addressee are both participants in the designated information system, receipt occurs at the time when the electronic data message or electronic document is retrieved by the addressee; b.) If the electronic data message or electronic document is sent to an information sys- tem of the addressee that is not the designated information system, receipt occurs at the time when the electronic data message or electronic document is retrieved by the addressee; c.) If the addressee has not designated an information system, receipt occurs when the electronic data message or electronic document enters an information system of the addressee. These rules apply notwithstanding that the place where the information system is located may be different from the place where the electronic data message or electronic document is deemed to be received (Section 22). 4. Electronic commerce in carriage of goods. Actions Related to Contracts of Carriage of Goods. - Without derogating from the provi- sions of part two of this law, this chapter applies to any action in connection with, or in pur- suance of, a contract of carriage of goods, including but not limited to: (a) (i) furnishing the marks, number, quantity or weight of goods; (ii) stating or declaring the nature or value of goods; (iii) issuing a receipt for goods; (iv) confirming that goods have been loaded; (b) (i) notifying a person of terms and conditions of the contract; (ii) giving instructions to a carrier; (c) (i) claiming delivery of goods; (ii) authorizing release of goods; (iii) giving notice of loss of, or damage to goods; (d) giving any other notice or statement in connection with the performance of the con- tract; (e) undertaking to deliver goods to a named person or a person authorized to claim de- livery; (f) granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods; (g) acquiring or transferring rights and obligations under the contract (Section 25). The general rule is that “where the law requires that any action referred to contract of carriage of goods be carried out in writing or by using a paper document, that requirement is met if the action is carried out by using one or more data messages or electronic documents“ (Section 26). 5. Electronic transactions in government. This simply mandates that all government agencies and instrumentalities, bureaus, of- fices, and agencies, shall create, maintain, accept, process, the filing and/or retention of per- mits, licenses, certificates of registration, among others, in the form of electronic data messages or electronic documents (Section 27). References: Republic Act No. 8792 or the “Electronic and E-Commerce Act of 2000”. Page 24 ! of 40 !  Lesson 5. Republic Act No. 3591 or known as the “Philippine Deposit Insurance Corporation (PDIC) Law” as amended by R.A. 9302 [August 12, 2004] and R.A. 9576 [April 29, 2009]). Week: 10th to 12th Week. Learning Objectives: 1. To understand the basic concepts of the law. 2. To know and understand the terminologies and definitions used in the law. 3. To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will be apprised on the basics about PDIC. 2. The insurable interest and the maximum liability of the PDIC for each depositor. 3. They will have knowledge as to what kind of deposits are covered and the requirements and the process of claims. Methodology: On-Line Discussions: What is the Philippine Deposit Insurance Corporation (PDIC)? The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591. The law underwent amendments by R.A. 9302 [August 12, 2004] and R.A. 9576 [April 29, 2009]). Under its Charter, the corporation is mandated to give bank deposi- tors protection and financial stability by providing permanent and continuing deposit insurance. What does the PDIC do? The Philippine Deposit Insurance Corporation has three basic functions: 1. Deposit insurer. 2. Act as co-regulator of banks. 3. Receiver and liquidator of closed banks. What is maximum deposit insurance coverage of PDIC? Since June 2009, the Maximum Deposit Insurance Coverage or MDIC is P500,000 per depositor per bank. Simply, this means if a bank closes, then you can get up to P500,000 back from the PDIC. If you had P100,000 in a savings account upon the time the bank closed, then you’ll get all of the P100,000 back from the PDIC. However, if you had P700,000 in the account, then you will only get the MDIC or P500,000 back. What are covered by the PDIC Deposit Insurance? PDIC insures valid deposits in domestic offices of its member-banks. Deposits are con- sidered valid if, upon determination by PDIC, are recorded in the bank’s records, and are evi- denced by inflow of cash. By Deposit Types: ▪ Savings ▪ Special Savings ▪ Demand / Checking ▪ Negotiable Order of Withdrawal (NOW) ▪ Time Deposits Page 25 ! of 40 ! By Deposit Account: ▪ Single Account ▪ Joint Account ▪ Account “By”, “In Trust For” (ITF), and “For the Account of” (FAO) By Currency: ▪ Philippine Peso ▪ Foreign currencies considered as part of BSP’s international reserves Which banks are members of the PDIC? All operating banks are members of the PDIC. It is mandatory. So this includes commer- cial banks, savings banks, mortgage banks, development banks, rural banks, and cooperative banks. In addition, stock savings and loan associations are also included; as well as domestic branches of foreign banks. What specific risks to a bank does PDIC cover? The Philippine Deposit Insurance Corporation covers only the risk of a bank closure or- dered by the Monetary Board. Thus, bank losses due to theft, fire, closure by reason of strike or existence of public disorder, revolution or civil war, are not covered by PDIC. Do you need to pay any insurance premium to the PDIC to be covered? No. The insurance premium is paid by the banks, not by the depositors. What is NOT covered by the PDIC Deposit Insurance? Republic Act No. 9576 stipulates that PDIC will not pay deposit insurance for the follow- ing accounts or transactions: ▪ Investment products such as bonds, securities and trust accounts. ▪ Deposit accounts which are unfunded, fictitious or fraudulent. ▪ Deposit products constituting or emanating from unsafe and unsound banking practices. ▪ Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money Laundering Law. What is my PDIC deposit insurance coverage if I have several types of accounts in a bank? Your PDIC insurance coverage will not increase and will be up to P500,000 in total. The deposit insurance coverage is not determined on a per-account basis. The type of account (whether checking, savings, time or other form of deposit) has no bearing on the amount of in- surance coverage. Let us say that you have P1M in a savings account in Bank Alpha, and an- other P1M in a checking account also in Bank Alpha. If Bank Alpha closes, you will only get a total of P500,000 from PDIC. If I have deposits in different banks, what is my PDIC deposit insurance coverage? It will be up to P500,000 per bank. Deposits in different banking institutions are insured separately. However, if a bank has one or more branches, the main office and all branch offices are considered as one bank. Thus, if you have deposits at the main office and at one or more branch offices of the same bank, the deposits are added together when determining deposit in- surance coverage, the total of which shall not exceed P500,000. How can I claim PDIC deposit insurance if my bank closes? Depositors will be advised through media and posters at the premises of the closed bank on the schedule of distribution of claim forms by PDIC, receiving of claim forms by PDIC, and the prescriptive date of filing claims by the depositors. The depositor must then file his deposit insurance claim within 24 months from date of bank takeover. Failing to do so will forfeit their right to get the insured amount from the PDIC. Howev- er, they may still make a claim against the assets of the closed bank. Page 26 ! of 40 !  References: https://fitzvillafuerte.com/pdic-philippine-deposit-insurance-corporation.html; Republic Act No. 3591 or known as the “Philippine Deposit Insurance Corporation (PDIC) Law” as amended by R.A. 9302 [August 12, 2004] and R.A. 9576 [April 29, 2009]). Exercises: Situational questions. Each answer must be supported by a legal basis. 1. A files his application for a business permit for his newly put up ‘Sari-Sari Store’. If a government office or agency fails to approve or disapprove such application what are the corre- sponding rights of A? 2. Explain Electronic Data Message; Electronic Document; and Electronic Signature. 3. What are the essential differences with the new If A has several types of accounts in a bank what is his PDIC deposit insurance coverage? 4. If A has deposits in different banks, is his bank deposit per bank covered by the Ph- p500,000.00 PDIC insurance? 5. What are the deposits which are not covered by the PDIC insurance? Lesson 6. Republic Act No. 3765 or known as the “Truth in Lending Act”. Week: 13th week. Learning Objectives: 1. To understand the basic concepts of the law. 2. To know and understand the terminologies and definitions used in the law. 3. To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will have knowledge as to the information they ought to know before taking out credits. 2. Students are apprised that full disclosure of cost is necessary to whom credit is extended. Methodology: On-Line Discussions: What is the policy behind the Truth in Lending Act? The declared policy behind the law is to protect the people from lack of awareness of the true cost of credit by assuring full disclosure of such cost, with a view of preventing the unin- formed use of credit to the detriment of the national economy. Who are covered under the Truth in Lending Act? The law covers any creditor, which is defined as any person engaged in the business of extending credit (including any person who as a regular business practice make loans or sells or rents property or services on a time, credit, or installment basis, either as principal or as agent) who requires as an incident to the extension of credit, the payment of a finance charge. In that definition, what is meant by “credit”? It means any loan, mortgage, deed of trust, advance, or discount; any conditional sales contract; any contract to sell, or sale or contract of sale of property or services, either for present or future delivery, under which part or all of the price is payable subsequent to the making of such sale or contract; any rental-purchase contract; any contract or arrangement for the hire, bailment, or leasing of property; any option, demand, lien, pledge, or other claim against, or for Page 27 ! of 40 ! the delivery of, property or money; any purchase, or other acquisition of, or any credit upon the security of, any obligation of claim arising out of any of the foregoing; and any transaction or se- ries of transactions having a similar purpose or effect. In the same definition, what is meant by a “finance charge”? A finance charge includes interest, fees, service charges, discounts, and such other charges incident to the extension of credit as may be prescribed by the Monetary Board of the Bangko Sentral ng Pilipinas through regulations. What are the information required to be furnished to the debtor or borrower? The creditor or lender is required to inform the debtor or borrower of the following facts: (1) the cash price or delivered price of the property or service to be acquired; (2) the amounts, if any, to be credited as down payment and/or trade-in; (3) the difference between the amounts set forth under clauses (1) and (2); (4) the charges, individually itemized, which are paid or to be paid by such person in connection with the transaction but which are not incident to the extension of credit; (5) the total amount to be financed; (6) the finance charge expressed in terms of pesos and centavos; and (7) the percentage that the finance bears to the total amount to be financed expressed as a simple annual rate on the outstanding unpaid balance of the obligation. When and how should these information be furnished to the debtor or borrower? The information enumerated above must be disclosed to the debtor or borrower prior to the consummation of the transaction. The information must be clearly stated in writing. What is the effect on the obligation in case of violations to the Truth in Lending Act? The contract or transaction remains valid or enforceable, subject to the penalties dis- cussed below. What are the penalties in case of violation? 1. Any creditor who violates the law is liable in the amount of P100 or in an amount equal to twice the finance charged required by such creditor in connection with such transaction, whichever is the greater, except that such liability shall not exceed P2,000 on any credit transac- tion. The action must be brought within one year from the date of the occurrence of the violation. 2. The creditor is also liable for reasonable attorney’s fees and court costs as determined by the court. 3. Any person who willfully violates any provision of this law or any regulation issued thereunder shall be fined by not less than P1,00 or more than P5,000 or imprisonment of not less than 6 months, nor more than one year or both. However, no punishment or penalty under this law shall apply to the Philippine Govern- ment or any agency or any political subdivision thereof. References: R. A. No. 3765; https://pnl-law.com/blog/truth-in-lending-act-explained/. Page 28 ! of 40 !  Lesson 7. Republic Act No. 1405 or known as “An Act Prohibiting Disclosure of or Inquiry into Deposits with any Banking Institution (“Bank Secrecy Law”). Week: 14th week. Learning Objectives: 1. To understand the basic concepts of the law. 2To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. Students will be apprised on the basics of Secrecy of Bank Deposits. 2. Unclaimed Balances particularly as to what kind of deposits are covered. 3. Students will learn what are the instances however when these deposits may be inquired into. 4. Students will know the basic understanding of unclaimed balances, and where these unclaimed balances go. Methodology: On-Line Discussions: What is bank secrecy? Is it absolute? Are there any exceptions? Republic Act No. 1405, otherwise known as An Act Prohibiting Disclosure of or Inquiry into Deposits with any Banking Institution (“Bank Secrecy Law”), was approved in September 9, 1955. This law was enacted to encourage individuals to deposit their money in banks instead of hoarding them. What are the covered deposits? The Bank Secrecy Law protects all deposits of whatever nature in banks or banking in- stitutions in the Philippines as well as investments in government bond. This law prohibits any person, subject to the exceptions, from disclosing to any person any information, relative to the funds or properties belonging to the depositors in the custody of the bank. Simply put, no one can just go to your bank and ask for your bank balance. The exception are the following: 1. Written permission or consent in writing by the depositor; 2. In cases of impeachment; 3. Upon order of the court in cases of bribery or dereliction of duty of public officials; 4. Upon order of the court in cases where the money deposited or invested is the sub- ject matter of the litigation; 5. Upon a subpoena issued by the Ombudsman concerning an investigation it is con- ducting, provided that there must already be a case pending in court, the account be clearly identified, the inspection be limited to the subject matter of the pending case; and the bank per- sonnel and the depositor must be notified to be present during the inspection; 6. The BIR can inquire into bank deposits in an application for compromise of tax liability or determination of a decedent’s gross estate; 7. The Anti-Money Laundering Council (“AMLC”) can examine bank accounts pursuant to a court order, where there is probable cause that the deposits are related to an unlawful activ- ity or money laundering offense; 8. The AMLC can examine bank accounts, WITHOUT a court order, where there is probable cause that the deposits are related to certain crimes such as kidnapping for ransom, Page 29 ! of 40 ! violation of the Dangerous Drugs Act, hijacking, destructive arson, murder and violations of RA 6235 (acts inimical to civil aviation); 9. The Bangko Sentral can examine bank accounts in the course of its periodic or spe- cial examination regarding compliance with Anti-Money Laundering Law. What are the penal provisions for violating the bank secrecy law. A n y person violating this law may be imprisoned for not more than five (5) years, or meted a fine not exceeding P20,000.00 or both. References: R. A. No. 1405; https://ndvlaw.com/philippine-bank-secrecy-law-simplified/. Exercises: Situational questions. Each answer must be supported by a legal basis. 1. A obtained a loan from XYZ Bank/ What are the information required to be furnished to him relative to his loan application? 2. In case the bank failed to provide the needed information to be disclosed to its bor- rower, will it affect the validity of their contract? 3. A’s wife wanted to know the financial status of her husband. Can he inquire from the bank of her husband considering that they are husband and wife? 4. What are the covered deposits under the Bank Secrecy Act? 5. What are those deposits which are not protected by the Bank Secrecy Act? Lesson 8. Republic Act No. 9160 otherwise known as The Anti-Money Laundering Act of 2001, as amended by R. A. 10365. Week: 15th Week. Learning Objectives: 1. To understand the basic concepts of the law. 2To know the rights and the corresponding obligations set out in the law. Learning Outcomes: 1. The students will learn what are the unlawful activities. 2. The students will learn what are the coverage of the law; whhat are the suspicious transactions; what are the money laundering offenses. 3. The students are apprised as to the need to comply with the record or reportorial requirements. 4. The students will know what are the power of the Council. 5. The students will know the penal provisions in case of violations. Methodology: On-Line Discussions: Rationale for Enacting the Law The Philippines, while striving to sustain economic development and poverty alleviation through, among others, corporate governance and public office transparency, must contribute its share and play a vital role in the global fight agains