Employers not required to grant vacation and sick leave benefits



Dear PAO,
I worked for a private company for 2 years. I submitted my resignation letter last February 5, 2013. I received my last salary on February 15, 2013. I just want to know if I will still be able to receive the cash equivalent of my unused vacation and sick leave which is 28 days in total. Will I also receive my 13th month pay? I will appreciate any advice you can extend. Thank you.

V. A.

Dear V. A.,
Our laws do not require employers to grant their employees vacation leave and sick leave benefits. What our laws require is the grant of service incentive leave of five days to those employees who have rendered at least one year of service. If an employee is given vacation leave with pay of at least five days, the provisions of the Labor Code, insofar as service incentive leave benefit is concerned, will no longer apply (Article 95, Labor Code of the Philippines). Instead, the terms provided under the company policy, the stipulations agreed upon in the employment contract, or the conditions stated under the collective bargaining agreement, whichever is applicable, shall apply.

Accordingly, it is advisable for you to examine the provisions of the company policy of your former employer relative to the grant of leave benefits and the commutation thereof to its cash equivalent since the company where you used to work grants employees vacation leave and sick leave benefits. If it is not stated in the policy, you may look into the provisions of your contract of employment, or the collective bargaining agreement, if your former company provided any.

Insofar as 13th month pay is concerned, we would like to emphasize that private employers are required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year. (Revised Guidelines of the Implementation of the 13th Month Pay Law) However, the following employers are still not mandated to provide the said benefit: (a) The Government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the Government; (b) Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance; (c) Employers of household helpers and persons in the personal service of another in relation to such workers; and (d) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers.

If your company does not belong to any of those exempted from the payment of 13th month pay, we submit that you may receive your pro-rated 13th month pay. As provided for under the Revised Guidelines of the Implementation of the 13th Month Pay Law, “An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service. x x x”

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.


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