Q&A: Service Incentive Leave

An employee (undsclosed firm/industry) sent an email yesterday asking about the number of Vacation Leave (VL) and Sick Leave (SL) credits someone  in a private firm is entitled to have or earn in a year.

His previous employer allegedly gave him 20 days of VL and 10 days of SL per year, accrued monthly.  In comparison, the company he currently works for only gives 10 VL and 10 SL, with cash conversion of the unused VLs only.

He was comparing notes with another office mate who was (again, allegedly) getting 30 days of VL but no SL, with  cash conversion for unused leaves at the end of the year.

He wanted to file a complaint with their management but held off until he could get all his facts in order.

So – which is which?  Which company was giving the correct benefit to its employees?  Could he file a complaint against his current (and former) employers for failure to provide the proper leave benefits?

We could always refer to jurisprudence for this, but the baseline would always be in the Labor Code.

ART. 95. Right to service incentive leave.

a)       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.

b)       This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment.

c)       The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action.

So the minimum guaranteed is FIVE DAYS (and in this case, all-inclusive of the so-called VL and SL – no distinction between either).  Anything in excess is voluntary and an exercise of Management prerogative already.

The Labor Code has no provision on the commutation or the conversion to cash of unused service incentive leave.  But the IRR by DOLE requires it.

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