Tuesday, April 15, 2008

Suggestions in Implementing Leave Policies in the Philippines

The Philippine labor code provides that "every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay". This is the minimum requirement of the law on this benefit. If you are managing a company that competes for people with other companies, this is one benefit that you need to look into. A lot of companies provide 15 days vacation leave, 15 days sick leave, between 3 to 7 days emergency leave credits, not to mention birthday leaves and bereavement leaves. All other things being equal, if you offer lower leave credits, this could be a cause for disappointment and may cause some candidates to decline your offer. But as sure as businesses are diverse,Considerations for implementing leave policies are also diverse. If you are reviewing your existing policy or looking to create a new one, you might find the following suggestions useful.

How Many?
Before considering the number of leave credits you will propose to management for approval, you will need to consider the impact of leaves to the business you are in because not all businesses are created equal in this aspect. Some companies can afford to give more leave credits because the occasional absence of employees have less effect on the bottomline. Other companies on the hand rely on the presence of employees for productivity and profitability. Let me cite some examples. In some retail companies, other employees can cover for other employees while they are absent. The impact would be in the increase of burden to the present employees, nevertheless, the work still gets done. Some companies already factor-in force majeures in manpower planning hence, the cost of leaves is the slack they create in anticipation of these eventualities. The impact is smaller compared to other companies say in the medical transcription business for example where the absence of one employee on a given day can be computed in specific amount of income opportunity lost. Another example would be companies employing consultants paid by the hour. This should be considered in deciding the number of days you can allow your employees to take a paid leave of absence. If you cannot afford to be competitive in giving leave credits, don't worry, you can always augment your benefits in other ways for as long as the employees understand why and how you are still competitive even if you offer lower leave credits.

VL/SL/EL Vs. Service Incentive Leave
If you are implementing the former, I don't know if you notice that some employees who ran out of VL credits all of sudden become sickly. Need I explain why? This I believe is the beauty of not categorizing your leave credits. In my company we give service incentive leaves(They are more than five by the way). It is up to the employees how they want to use them. This way they don't need to lie about being sick if they run out of VL leave credits. However we have a policy about availing them properly. If they are using the SIL to take a long vacation they need to seek approval from their supervisors at least one week in advance. There are also seperate rules for SL and EL.

To convert or not to convert

What is the essence of providing leave benefits? Answer, to offer employees opportunities to take respite from work, to rest and return to work refreshed and envigorated, so why motivate them to encash their leave credit? Business need maybe, or maybe because the leave credits are awfully many, they can't use all of them up. What ever the reason, I'm personally against allowing the employees to convert all of their leave credits to cash. If you allow them to do that, they will take a vacation right at work. I had several schemes in my previous companies. In one company, we only allow them to convert 5 leave credits to cash. the rest they must take. We even schedule the leaves of employees who are notoriously work-a-holic. In one company, we allow up to 50% because we give more leaves. The key here is to make sure that the main purpose of this benefit is not defeated. You might also want to consider increasing the amount of leave credits as employees pile up tenure in your company. This can help in employee retention.

Health Bonus
If you don't agree with me on the Service Incentive Leave and want to keep your leave categories, fine! Here's a way to dissuade employees from malingering. Convert unused sick leave credits to cash and call it Health Bonus. This is not original. We had this in one of my previous employers.

Stick to your policy
A properly written leave availment policy details the procedures for availing and the implication of nonconformance. A lot of times this is ignored and it's mostly management's fault. If the policy says that VL notice should be given one week in advance, make sure it happens. If employees are required to give medical clearance after a prolonged sickness, make sure it happens. Otherwise the policy will become a joke. The supervisors and managers should be aware that they can approve and disapprove leaves as the circumstance warrants and in fair consideration of the employee's situation. I have encountered situations when managers take this things for granted at the expense of productivity.

Terminal Leave
When employees' resign, do you allow them to take terminal leaves in lieu of the 30-day notice? I suggest that you should have a policy that clearly indicates that this is not the norm. That company reserves the right to require the employee to report for work and go through the turnover process for the whole duration and that allowing employees to take leaves of absence during the notice period is the prerogative of the company after considering the exigencies of the business. What happens to unused leaves, you might ask. You can always convert them to cash.

That's all for now... My mind just went blank. If you have additional suggestions or comments, please feel free to write some comments below. If you need help in putting together a policy, let me know... my rates are very reasonable... wink, wink.

See you next post.

100 comments:

Anonymous said...

Hi.

I filed my resignation on April 16, 2008 effective May 31, 2008. I plan to go on terminal leave starting May 9, 2008. Can apply the unused sick leave credits for my terminal leave.

As of today, I still have unused leave credits (VL=21.25/SL=21.25/EL=4).

Thanks for your help.
Willy

Ed Ebreo said...

Depends on the policy of your company. Some companies have turnover policies for resigning employees. It is your company's prerogative to approve or disapprove your terminal leave or your use of your sick leave credits especially if you are not sick.

I hope this helps clarify things for you

Bea said...

Hi Ed! I just discovered your blog and I found it to be very useful and helpful! Keep on posting pleeeeease.

Anonymous said...

Hi Ed, I found your site interesting anf informative. Hope you continue the power of spreading your knowledge.

I just want to ask a question. Is monetized Service Incentive Leave taxable?

Thank you and more power.

Tess

Ed Ebreo said...

Hi Tess, I went to my accountant and she said that only five days are tax free, more than that is taxed... I am apparently not the person to be asked regarding taxation! :D

Anonymous said...

Hi, Sir Ed. I am new to my present company, barely a month in my new work. In my previous company, I got 15 days VL and SL and I get to avail of it in 6 months soon after I get regularized. I told the HR in my current company that those are the benefits I get and I assumed since she didn't say anything that it is the same for this company. When I signed my job offer it says there I get VL and SL but it did not indicate the number of days since I assumed it was the same. Now I find out that they only give 11 days of SL and VL and I get to avail of it one year after regularization--meaning 18 months after hiring. Can I go and talk to my HR at this point to talk about re-computation of my benefits? Because the overall package I'm getting now is less than in my previous job and had I known prior I would not have been agreeable to it. Kindly advise.

Ed Ebreo said...

Hi Anonymous, By all means go to your HR and complain about the lack of clarity. However, don't expect them to add leave creadits to you just like that. Policies like this don't change easily. I suggest that you renegotiate your compensation due to the discrepancy. Moving forward, it's important to know these details before accepting an offer so you won't feel cheated in the end.

Anonymous said...

Thank you, Sir Ed. Will definitely do moving forward. Have a great day and more power to you and your site! :)

Anonymous said...

Hi!
I am working in a private manufacturing company somewhere in cavite and due to low volume and sales, they have decided to cut our working days to 4 working days this month instead of 5 working days, but those unattended work will be deducted on our SL/VL benefits, isn't it against our labor code?

Ed Ebreo said...

This is not against the labor code. If your employer informed the Department of Labor and Employment that they will do this because they are in distress, then the action is above board. You might want to check with them on this.

Hi!
I am working in a private manufacturing company somewhere in cavite and due to low volume and sales, they have decided to cut our working days to 4 working days this month instead of 5 working days, but those unattended work will be deducted on our SL/VL benefits, isn't it against our labor code?

Anonymous said...

my company told me to bring a medical certificate kht isang araw lang ako nagabsent.allowed ba un ng batas?

Ed Ebreo said...

I don't know of any law regulating the requirement of medical certificates for employees who are absent from their job. Some companies require them after two days of absence, others for one day and then others don't require them at all. What I know is, company policies for as long as they are not unreasonable and unfair is honored by the government especially if they are properly communicated to and received by employees. I agree that requiring employees to submit a medical certificate after one day of absence is a bit too strict but it is not too unreasonable for the government to intervene. But then, I could be wrong. It's just my opinion.

anna said...

i agree with you about NOT categorizing the leaves. the labor code does not specify anything about Vacation and Sick Leaves. I think i will implement that Service Incentive Leave (since this is the one that is mandatory) here in our business. service incentive = vacation & sick leaves. great idea! =)

Anonymous said...

hi sir ed. i am planning to resign in my job this coming june. i worked here for almost four years (on august it will be my fourth year) how will my backpay be computed in terms of the number of sl/vl? as per our policy, if it is on the 4th year, you'll get 14 sl and 14 vl. will they pay the whole sl/vl?

juvieanne said...

Hi Sir Ed,

I'm glad that I found your blog spot It is very informative. I have a question about sick leave. Is it practical to provide a sickness certificate to my employer even if my sick leave rendered is only half day or one day? May I know when to give sickness certification to my employer? Please help. thanks!

Ed Ebreo said...

@Juvieanne: Are you being asked by your employer to submit a medical certificate for half day or one day of absence? What does your company policy say? What I usually see is companies require medical certificate when employees are absent for more than a day. However I also had a chance to work in a company where we were required to produce a medical certificate even if we were absent for a just a day. However who do not have to spend anything for it because all we had to do is go to the company clnic and have a physician take a look at our conditions for free.

Anonymous said...

Hi Sir Ed,

My leaves effective date was May 17. I passed my leave form last May 4 to give our HR and the President time to approve or disapprove my leave. For the days in between, the approval for my leave was still not addressed. I had asked them several times about my form and they only said that it was still in the president's table. Come May 14 in the afternoon, ( I was on field that day and I was already expecting that due to long period of no approval, that it should be considered as approved already), my software manager not the HR, texted me that my leave was disapproved. Because of the late issue, I was forced to be absent from work since I can't reschedule my plans already. I was also told that it is considered as AWOL. Would you consider this as fair judgement or result?

Ed Ebreo said...

The President had to decide on your leave application? That one is funny if you are not reporting directly to the President. Ideally it should be your immediate superior who should make a decision on your leave approval because the person is the one who knows how your taking a leave of absence will impact on operations. What was the reason it was disapproved? Did they tell you? You deserve to know after following the company's procedures for leave application.

My personal opinion is it's not fair to hold your leave request and disapprove it in the last minute. Note however that I have limited appreciation of your situation. You cannot use my opinion to argue your way out of being charged with AWOL. So, what are you going to do about it? are you going to defend yourself? are you going to assert your right? While I believe you should, that is entirely up to you.

Melody said...

Hi. just want to clarify things.. IS the incentive leave the same as the so called 'vacation leave'?

Ed Ebreo said...

@Melody, yes. All the leave credits you get because of your tenure qualify as service incentive leaves. The labor code set the minimum at 5 days per year. Most companies give more and they categorize them into vacation, sick, and emergency leaves.

Anonymous said...

Hi
I need a professional opinion. I filed for a vacation leave,more than a week before my actual leave but my boss denied it. Our policy said it is our privilage to go on VL. i think that my boss is mad at me taht is why he disapprove it. Is there a particular law in the labor code about this?

thanks

Ed Ebreo said...

@anonymous, your boss has the authority to disapprove your leave request provided that he/she has reasonable basis for doing so like, too many people requested for a leave of absence on that given day or if volume of work requires that all employees have to be available on that day. If no reasonable basis exist for the disapproval of your leave application, I suggest that you seek counsel with HR. If your boss continue to disallow you to use your benefit and HR is not helping you, then you should go to the department of labor with your grievance.

Anonymous said...

Hi, just want to ask regarding to Sick Incentive Leave. Do 15 days Vacation Leave and 15 days Sick Leave were both Mandatory Leave given to an employee more than 1 Year working in a company?? Incase you're more than a year working in a certain company, and still you only have 5 days leave will be fair with you?

thanks.

Anonymous said...

Hi sir ed. i would like to ask about how to have a vacation leave to our comapany, is it possible to grant my request for 1 month (30 days)? My relatives in australia send the invitations for me, my cousins and my mother. Thanks. Pls. reply to my e-mail account for I'm not usually browsing to other site aside to my e-mail. thanks. - n.i.c.o.lazana@gmail.com

Margreth said...

Hi Sir Ed, I would like to ask about availing of terminal leave upon resignation notice. Our company has a fiscal year policy, so we ended it last September and this month is the first month for year 2011. The unused leaves for the year 2010 must be used on or before March 2011 otherwise, it will be forfeited. However, I have another 30 days of leave to avail for the year 2011. I am planning to resign next month, but would like to avail of my terminal leave. I will give a 60-day notice, but will be working only for 30 days. The last 30 days would be my terminal leave already using both my unused 2010 leave and the 2011 leave benefit. Am I allowed to use my 2011 leave benefit as part of the terminal leave, whereas, FY 2011 has just started? Is this within the labor law? Thanks.

Ed Ebreo said...

@Margreth, it all boils down to what your company policy says and not the labor code. The labor code only requires companies to give 5 service incentive leaves upon the employee's one year of employment. Yours is clearly more than that. Please look at your company policy and be guided by what it says.

Anonymous said...

Hi Mr. Ed, I was hired last Oct 2009 and regularized after 6 months (april 2010) and according to labor code VL & SL will be given at least 1 year of service. Ive already completed my 1 year of service and usually for the 1st year they gave 12/12 VL/SL in our company. But according to our HR since Im started in the month of October I can only avail 2/2 SL/VL for this year and I'll received the 12/12 VL/SL next year 2011. Is this correct? or I should avail the whole 12/12 this year? Tnx.

Ed Ebreo said...

You should have the whole leave credit because you already worked one year in the company. Maybe you should ask for clarification. One question you might want to ask is when are they giving you the whole leave credit. If they say on January 2011, then maybe they are prorating your leave credits so they can adjust it at the beginning of next year. If they say that your 12/12 leave credit will come in October next year, then something is wrong with that because it looks like you will miss a total of 20 (10+10)days of leave credits.

Anonymous said...

Tnx for the advise, as per our HR they will give me the 2/2 VL/SL for this year (2010) to be consumed til Dec 2010 and the whole 12/12 VL/SL will be given to me next year, starting January 2011 and to be consumed til Dec 2011. Is this correct? Tnx!

Ed Ebreo said...

More or less, I think it's right.

Anonymous said...

Hi Mr. Ebreo, My friend want to know if its mandatory to convert the Sick Leave that wasn't used for the whole year into cash. Coz in our company they converted it into cash, but in my friend company they didn't practice that thing. And another thing was, their company required them to attend the seminar/training every Saturday without pay. Was their company violating the Labor Code for this one? Thanks a lot.

Anonymous said...

We found this site so reliable and here is another question from my friend. Shes a sales executive and wants to know if its correct to deduct a 32% VAT on their commission, coz every time they received a commission their company automatically deduct the said 32% VAT. Thank you!

Ed Ebreo said...

I'm not a tax expert hence, I can't give you a competent answer regarding your question. Other readers, you have any idea?
Btw, What little I know about income tax is that the percentage of deduction is based on the total amount of compensation in a given period. The automatic 32% if it is too much or too little will be adjusted at the end of the year when the company annualizes its tax payment. That's why in some companies they get either some refund or will have more money deducted from their pay because they haven't paid enough tax.

Ed Ebreo said...

Conversion of sick leave to cash is a company initiative. It is not mandated by law. That's why the practice is different among companies. Nonpaying of overtime for sending people to training on weekends, that's the hairy part. Let me get back to you on that one. I just need to find me some reference.

James said...

Hi Ed,

I am from Malaysia. Is is a practice in the Philippines for doctors not issuing medical leave certificate for sick leave of 1 day? Thanks.

Ed Ebreo said...

@James, companies in the Philippines do not normally require a doctor's certificate for a one-day sick leave. But if they do, I don't think there is a particular practice here of not issuing a medical certificate when the patient needs it.

Anonymous said...

Hi, Ed :

You mentioned that unused leaves may be converted to cash. Just would like to clarify - this is an option, right?

Does that mean the other option is to forfeit unused leaves when an employee resigns?

Anonymous

Anonymous said...

Hi Sir,

Im an IT grad offered for P9000 monthly basic and P2500 rice allowance from a BPO Call Center in Ortigas. Is this in line with the current wage? I saw a site that stated the minimum wage is P404.00 and if i calculate the monthly rate should have been P10537.66 since I was not required/paid for Rest days. Also they are giving me 6 SL and 6 VL. the 6 SL was to converted to cash on the ff year if unused, is that taxable? My HR cousin said if it doesn't reach the 30000cap it should not be taxable. Is that correct? Thanks a million! :)

Ed Ebreo said...

You should ask your HR about how they compute your salary in connection with the minimum wage. It should make things clearer whether they are paying minimum or not. Re 30K tax cap. Your cousin is correct.

Anonymous said...

Hi Sir Ed,

Good day!

I would like to ask you if what our HR department has implemented a new policy that effective January 1, 2011 all regular employees will start earning one (1) day of paid leave for every month. If we have been in the company for more than a year now and we would like to take a vacation leave for 4 to 5 days this February, then only 2 days of the approved 4-5 days will be paid.

I have been with 5 companies now and this would be the first time that I have experienced this type of leave policy.

Please advise.

Thanks

Ed Ebreo said...

This is also my first time to hear such a policy. I'm not sure if they are violating anything unless I see the whole policy. I'm curious at what their intention is but I have no basis to say that what they did is a bad practice or bad idea.

Anonymous said...

Sir,

Our company doesn't have any HR department, are they violating any rules for not having HRD?

Thanks a lot

Ed Ebreo said...

There is no law requiring companies to have an HRD :)

Anonymous said...

hi sir ed,

Your site is really very helpful.Just want to ask if we are entitled for a birthday leave?is it anywhere in our labor code or depends on the company I work for?

I filed my birthday VL a month ahead( APRIL 2 ).I work for a BPO company,Our week starts on sunday .They made me work this week 6 days straight then 1 day OFF (today), tomorrow is my birthday and I received an email that they are declining my leave due to staffing issues, where in truth we are overflowing with hundreds of agents.

Do I have any rights to submit a formal complain about this?

Thank You

Ed Ebreo said...

Not all companies provide birthday leave benefits because it is not in the labor code. It is a management prerogative. Management also has a prerogative to disapprove a leave application if some business exigencies require that the person applying for it needs to be in the office. Staffing problems could be one reason for disapproving a leave application. If you have a policy for birthday leaves, you should be able to use the said leave on a day when being absent from work will not cause so much business disruption.

Anonymous said...

Good day! I will be on a 5 months study leave. I just wanted to know if I will still be entitled to leave credits during those months that I am on leave.

Thank you.

Ed Ebreo said...

If your company policy entitles you...

arvin said...

Sir,

Greetings!

What is the legal duration of releasing a final pay? as per our HR they will release my final pay together with my COE within 2mos after i accomplish my exit clearance. is this legal?

Thanks

Ed Ebreo said...

I don't know of any specific rule that dictates the duration for payment of last pay. Companies should pay it as soon as they are able to clear the employee of any accountability. However, some companies normally take a while to pay because they have to allocate some fund for it. This is because cost of employee separation are not usually anticipated. Two-month wait is relatively normal.

arvin said...

Sir,

With regard to my previous question what is the labor code article 103,106 is all about?

katkat said...

Good day Mr. Ebreo! I hope you can find the time to answer my query:

My company is one of the few that sticks with the minimum 5 days SIL for an entire year, and we are given a one-day unpaid allowable absence as well. So that's a total of a meager six days that one can be out of work which is really pitiful compared to what other companies offer.


Our employee handbook states that: Teachers can avail of five (5) Service Incentive Leaves (paid) and one (1) Allowable Absence (not paid) after one (1) year of service. However, due to the nature of the work, only 2 non-consecutive leaves can be taken every 4 months.


If the company's policy is that an employee may take only 2 non-consecutive SILs within a trimester, is there any law or legal provision to contradict such a policy? Does the company have the right to restrict its employees' availment of SILs by giving a definite period on when and how many SILs can be availed?

Because of this policy the idea of a "long vacation" is impossible for us. Also, getting sick for two days in a row is an offense that would merit one a written warning, even with documentation presented.

I am thinking of writing a letter to our HRD to request for an increase of SILs commensurate to one's tenure and I'm doing research as of the moment. Thanks!

Anonymous said...

Good Day Sir!

Is it legal for a private company declaring suspension of work (like heavy rain/flood due to typhoon) then will be charged/deducted to VL for regular employees and if your VL was down to zero it will be no work no pay basis?

Thanks a lot...

Ed Ebreo said...

It all boils down to what your company policy says. You have to look at the business impact as well of paying off everyone despite the lack of production. If yours is a big company with a lot of regular workers, it has a huge impact on company profit. But that's just me talking. You have to look at what your company policy says.

Anonymous said...

Hi sir, in our company we have SL VL. Emergency leave is charge to SL before and now charge to vacation to save staff conversion of remaining SL credits to cash. If staff VL is already consumed, filed emergency leave will be without pay. Now we are planning to be flexible.If VL is consumed already then you can use your SL credits for filing emergency leave. pls comment on this. Tank you

Anonymous said...

Hi Sir Ed,
My present company requires 60-day notice for resignations. Can they legally enforce this? I filed mine on Oct.10 with November 25, 2011 as end date. This gives them 45 days notice of my resignation. But my superior refused to accept it requiring me to stay on until December 10.
If I agree to December 10, can I legally use my unused 16VLs to file for terminal leave for the last 3 weeks or so (November 17-Dec.10)?
I also have unused 15 SLs but I do not think I can use them for terminal leaves, or can I?
Thank you in advance!

Ed Ebreo said...

If you were oriented about this policy before signing your contract then I suppose it's legal. But again, I am not a lawyer. Can you use your unused leaves? You should if they allow you. The idea of a notice period is to have proper turnover. You won't be able to do that if you are on terminal leave.

Anonymous said...

Thanks for the quick response. I understand about the need for turnover and I think a month is enough for this, that's why I'm thinking of filing TL for the remainder of the 60-day notice. However, I have no one to turnover to since they will still source outside for my replacement and there really is no guarantee how long this can take. The 60 days can pass by and they may not find a replacement for me. In the meantime, I am keen on starting my new work in a different company - hopefully by December. I guess my question is, in the absence of somebody to turnover to, can they refuse my application for terminal leave for the portion of the 60-day notice? TAIA!

Anonymous said...

Hi ED,

I would just like to ask is SICK LEAVES are mandated by the government or are they given as plus benefits by management.

THanks

Ed Ebreo said...

Sick Leaves are not mandated by law. It's management prerogative.

Anonymous said...

hi sir ed, i just want to ask if we can demand to increase our leave credit... almost 4yrs n kami sa company but still 5days SIL pa din ang leave credit namin....tnx

Ed Ebreo said...

Of course, you can always demand! :) The question is if it will be heeded. There is no law that requires management to give more than what you are getting now. The only option you have if they don't give is to look for employers who are willing to give you more.

Anonymous said...

Hi Sir Ed! My name is Benj. I'm working now in a new company and new to HR as well. I'm seeking your expert advise now regarding HR matters. Kindly let me know where can i reach you. DO you have an email address? Mobile?

Your prompt response is very much appreciated

Ed Ebreo said...

you can send me email at edebreo@yahoo.com or contact me through 8933199 loc 112.

Edwin Pueblos said...

Sir,

My employee has already converted her previous year's (2011) SIL credits into cash. Now she was absent for 2 days during the first week and apparently, she no longer has leave credits to enjoy. Now she wants to charge it to her 2012 leave credits. Do i have the right to refuse this? I am not clear about Article 95 of the labor code regarding SIL for continuing employment.

Ed Ebreo said...

@Edwin, do you mean the first week of January? When do you start implementing employees' 2012 leave credits isn't right at the start of the year? Otherwise, why convert the employees' SIL to cash if the new set of SIL is not yet ready?

If the employee's leave credits for the year is given at the start of the year, I believe that your employee is fully entitled to it unless her leave application is disapproved because she did not follow the company's policy for applying for one.

I hope this helps.

Ed said...

Thank you for your reply Sir. Actually she has requested that all the leave credits that she earned in 2011 be converted to cash last december 2011. Now comes 2012 with no leave credits at all. She was absent last Jan. 3-4, 2012 and told us that it should be charged to her upcoming leave credits for 2012. Is this right?

Aft. 95 of the Labor code seems not very clear about accumulating leave credits for the year to be enjoyed in the following year. Or does it? I could have probably missed the interpretation.

Anonymous said...

Hi ed, i would like to ask if the 5days leaved is unused is can be converted into cash?? My other co worker who works for 7years and above to the company they convert it to cash but for other employees like me who is working for almost a year they did not convert our unused leave is that right?? Or it depends to the co. Policies???

Ed Ebreo said...

Please see Section 5 of the Implementing Rule on Service Incentive Leave. It should be convertible to cash for you too.

RULE V
Service Incentive Leave

SECTION 1. Coverage. — This rule shall apply to all employees except:

(a) Those of the government and any of its political subdivisions, including government-owned and controlled corporations;

(b) Domestic helpers and persons in the personal service of another;

(c) Managerial employees as defined in Book Three of this Code;

(d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof;

(e) Those who are already enjoying the benefit herein provided;

(f) Those enjoying vacation leave with pay of at least five days; and

(g) Those employed in establishments regularly employing less than ten employees.

SECTION 2. Right to service incentive leave. — Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

SECTION 3. Definition of certain terms. — The term "at least one-year service" shall mean service for not less than 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year.

SECTION 4. Accrual of benefit. — Entitlement to the benefit provided in this Rule shall start December 16, 1975, the date the amendatory provision of the Code took effect.

SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year.

SECTION 6. Relation to agreements. — Nothing in the Rule shall justify an employer from withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer's practices or policies.

Anonymous said...

Hi Ed,

In my scenario, I need to go to home to our province for personal matters and I have 15 vl(s). Can I use my VL? Is that would be possible?

Anonymous said...

In my previous concern I was not able to file as a VL since this is an emergency circumstances and I want to ask you if I'm going back to work like for example 10 working days can I file that as a vl? My supervisor told that they will put me into LOA.

Ed Ebreo said...

it all depends on what your company policy says. Please note that the law only focuses on the general rules. If your concern is not covered by the five-section rule I mentioned in my comment above, then you go to your company policy for answers.

Anonymous said...

hi ed,we would like to ask your opinion about our new policy made by our hrd-oic imposing that we,the employees,should not report on a half day work. For example: when an employee is not feeling well during the day is not allowed to report in the afternoon even if he/she is feeling better. Or if an employee is absent in the morning because of important matters/unavoidable circumstances and wanted to work in the afternoon is not permitted according to the HRD-OIC.
We would like to know if there is a certain law regarding this matter. Thank you!

Ed Ebreo said...

If it has management approval then it's binding. The law allows certain management prerogatives such as this,

Anonymous said...

Hi! Our company right now is in the transition period, where we would want to put things in place. With SIL's exceptions on "the Management", kindly clarify upto what level are the managers? If they are not entitled to SIL and the rand and file does, how about them? what does the Law requires/dictates?

Lanie

Anonymous said...

Hi Ed, i would like to ask about leave credits. Because in in our company we provide SL when the employee are being regularize after 6 months, then the employee can use VL after 1 year fro the date hired. But the president told that VL can give after 18months of service, meaning after you being regularize. Is it okay? or do we have a law regarding this?

Hoping for your response. Thank you and goodluck!

Ed Ebreo said...

The law pertaining to service incentive leave says employees who have worked in the company for one year earns 5 days of leave credits. If this is satisfied any additional leave credits condition is valid. However, giving leave credits 18 months after regularization won't make your company competitive in terms of benefits. It is possible to lose employees to companies who offer better package.

Anonymous said...

Dear Ed,

In our company, unused sicked leave is forfeited right after the calendar year and not converted into cash.
Do we have the right to ask from management to convert it into cash? Does the management have the prerogative to do such forfeition?

Anonymous said...

Good day sir!
I just wanna ask if emergency leave still needs approval? Such as you need to be in a hospital because one of your family member was hospitalized and no other could attend to.?

Anonymous said...

is the SIL subject to tax? or non-tax?

rochelleest said...

Hi sir.. goodmorning.

I am just confused about this matter.

It is stated in the human resource development manual of our company that upon regularization, an employee is entitled to 5 sick leave and after one year of service is 5 vacation leave. All unused leave credits are convertible to cash at the end of the year.

Now, if an employee was hired on Nov 25, 2011, so he is entitled to 5 sick leave. If he did not use any of it until December 31, 2011, is it possible that he will have the 5 unused sick leave converted to cash?

Then on Nov. 25, 2012, he will have the 5 vacation leave and 5 sick leave. Is it also possible that if he did not use any of the leave, he will receive the money equivalent of 5 VL and 5 SL on December 31,2012?


Or is it computed on a pro rata basis?


Please enlighten mo on this issue..Thanks sir..

Edwin Ebreo said...

Leave policies normally come with guidelines. I suggest that you read your company's leave policy. There really is no law that covers your concern.

Anonymous said...

hi,sir ed question ko is our management requiring us to use all our vl until sept. hindi ba against sa law yun ang im requesting na kahit 1 week sa nov. i will use it because i have impt. matter on that month and it was disapproved ok ba yun they said i can use my 2013 vl instead..

Anonymous said...

Hello, I just wanted to ask how does the unused VL/SL affect 13th month pay.

The company I work would not allow us to use any VL/SL, if you don't report for work it will be treated as absent regardless if you file VL/SL.

Then at 2nd week of January of next year SL/VL are all converted into cash.

But with that policy isn't by deducting your absences the company is effectively reducing your basic salary earned, thus will lower the 13th month pay also?

joannacebu said...

Hi Sir Ebreo,

What is the usual policy regarding the time when an employee should file her vacation leave application form?

Anonymous said...

Hi Sir Ebreo,

I started as a trainee here in our Company last Dec. 2011. And then I signed my probitionary contract April of 2012. I got regularized Sept 2012. I got sick a few weeks ago so I filled and applied for a sick leave for those days that I was out and sick assuming that I aleady redered 1 year of service, but our Admin Manager rejected my application for SL because according to him, in our company policy, the 1 year continuous service will start upon regularization. I just want to clarify because in our labor code, is states that we are entitled for VLs SLs after 1 year of continuous service. Thus the 1 year continuous service in our labor code includes the "Trainee period"?

Thank you

Ryan

Anonymous said...

Hi Sir Ebreo,

I was deducted for two days for being absent on a Monday. Our HR told me that it is a policy that an employee will be deducted for two days if he or she is absent on a Monday or Friday. Another is that, if a teacher was absent for a day and has more than 4 hours teaching load on that day he or she was absent, he or she will be deducted of those teaching hours in excess of 4 hours despite having filed Sick Leave.

What is your point of view of the policies I mentioned above? A lot of employees complain but our HR would not create a venue for employees to clarify these issues.

Thank you for your time sir.

Rej Francia said...

Hi Mr. Ebreo,

Good day!

I'm a student taking up BSBA Major in Marketing Management and I'm just having some trouble with our case study regarding HR.
We don't really know anything about the benefits especially in claiming a sick leave or vacation leave. My prof is not yet discussing it to us.
Well,to make my question clear, I would like to tell the whole story... :)

Noel is a computer programmer in the company, he was delighted to know that part of the company's athletic program is a mixed doubles tennis tournament to be held at the corporate tennis court.
There is growing interest among employees who are tennis players in the company as it develops more productivity at work. The management themselves are all tennis enthusiasts, and they declared that they will have a "Tennis Holiday".
Noel joined the tournament, but on the final round, on a smash, Noel twisted his ankle badly. Despite the injury he continued to play until his team won the set. Noel's injury became worse and he had to be confined for 2 days in the hospital as the X-ray results showed hairline fractures.

Noel missed 2 days of his work activities, he has no more sick or vacation leave because company policy and ECC policy do not cover non-related work accidents.
What action should be done for his situation? What will it be the advantages and disadvantages to the company and to Noel?

I really need your help... :) PLEASE :)

Thank you for your time and effort sir.


Ranzel E.J. Francia

arnold said...

good morning sir ED, I just want to ask if VL/SL are reset every 1st month of the year?

Anonymous said...

Sir Ed,
Recently our company just suddenly change policy on SL-VL. Before, when an employee resigned in 1st quarter of the year, he/she will get all the remaining SL-VL w/c is convertible to cash. Now, the company changes it to pro-rated. Does it fall under diminution of benefits? Btw, the previous policy started almost 15 years ago.

Thank you.

Anonymous said...

I'm working in the government agency. WE have new deputy commissioner for administrative. After one week of her appointment, she declared through memorandum that all employees who have less than five vacation leave will be not be included in the payroll . Is it legal? Is there a legal basis for this memorandum?

michelle anne ramirez vicente said...

Hi, i just had a miscarriage, so i was given my sss benefits, 2 months leave. I was supposed to be back on april 30, but i filed another extension leave for personal reasons. I filed a letter stating my request that ill be back on may 27, 2013 which i did.. There is neither a yes or a no from the HR department, but what they wanted is for me to file an extension leave stating that it is because of health reasons, but i refused because it is not the truth...as i returned, i filed my resignation effective june 25, but today, i was called by HR that i am asked to leave on the 3rd of June...i think it is unfair on my part..by the way i am on my 7th year on this company...i need guidance on this. Please

Edwin Ebreo said...

@Michelle

The reason why they want you to stop reporting on June 3 is because they see no reason for you to stay longer as you just came from an extended vacation and probably have nothing to turnover. They are therefore, waiving the 30-days notice and is allowing you to go immediately. What you can do is ask them to allow you to work up to the 23rd because you are not ready to go yet. They might (but necessarily) offer to waive your 30 days notice and pay you for the days you are supposed to report for work. Is there a legal issue here? I don't think so but again, I am not a lawyer so I'm not sure.

Anonymous said...

Good Day Sir,

our company issued a memorandum to slash down our leave (15 SL & 15 VL) which we enjoyed for a couple of years to 5 SIL & 5 SL at the current. and they said they are now adopting the requirement of the LABOR which is 5 days SIL and they are just adding 5 days SL to all qualified employee..
NOW MY QUESTION IS, IS OUR COMPANY NOT ABIDING THE LABOR CODE?

Edwin Ebreo said...

I don't think that's legal. Check this site for more information on non-diminution of benefits: http://www.laborlaw.usc-law.org/2010/06/01/non-diminution-of-benefits/

Anonymous said...

Hi sir ED.. May lilipatan na po akong Work then gusto nila start ako within 15 days then i pass may resignation with 15 days notice then di pumayag ang boss ko.. pede ko bang gamitin na lng ung natitira kong vacation leave to cover up lng ung remaining days?


Thanks in advance...

Anonymous said...

gud a.m ask ko lng po kung may right ang private employer na i approve or disapprove ang vacation leave. Meron po ba nag fi file ng leave na 1 year before? salamat po.

Edwin Ebreo said...

On the first question, yes. On the second question, pwede naman.

Anonymous said...

Hello.

My co-worker resigned just recently and she won't sign/accept her resignation/last pay kasi kulang daw. She's fighting for the 5 days service incentive leave to be included in her last pay, because she worked for our company after a year. Does she has the right to do so? Does our company has the right not to give it to her? Because as our company policy ( verbal policy, not written) service incentive leave of 10 days equivalent is given to us every year but right after two years of service to the company. Will she (my ex co-worker) get what she's fighting for?

Kat said...

Hi Ed,

Great blog! It's very helpful for both employees and employers.

We offer 10 SL and 10VL to our regular employees. My employee overused her SL (11SL) while she still has 9 VL left. Can I deduct the excess SL from VL? Or should the excess 1 SL be considered as absence without pay?

We don't have any company policies yet if these things happen. We have a basic rule of 10 SL and 10 VL (with at least 1 week notice for VL).

Thank you!

Anonymous said...

Hi Ed,

I really appreciate you blog. very insightful and informative.

if you could kindly give some advice about my situation. I've been absent for almost a week already due to family emergency (my daughter was admitted at the hospital due to pneumonia). On the first day of my absence, i called up my supervisor about it and he approved.
However, the HR contacted me yesterday asking when I'd be back for work. I have no exact date to give them since my daughter is still at the hospital. HR said that I need to report back for work because the company operations is being hampered due to my absence but I still cannot report yet. I explained that only my wife and I are left to tend our daughter. They insist that I need to find ways otherwise, they will serve AWOL memo (saying my supervisor approved only 2 days since I didn't inform him anymore about my situation on the third day - which was true).

Is my reason not valid?
Can they fire me for this?
Is it by the law?

Thank you in advance.


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