SERVICE INCENTIVE LEAVE

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.

IMPLEMENTING RULES, BOOK III, RULE V

Sec. 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.

Government employees, whether employed by the National Government or any of its political
subdivisions, including those employed in government-owned and/or controlled corporations
with original charters or created under special laws;

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

1. General Househelp 2. Yaya 3. Cook 4. Gardener 5. Laundry person 6. Driver

7. Any person who performs work occasionally or sporadically

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

1. Their primary duty is to manage the establishment in which they are employed or of a
department or subdivision thereof;

2. They customarily and regularly direct the work of two or more employees therein; and

3. They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to hiring, firing, and promotion, or any other change of status of other
employees are given particular weight.

(D) Field personnel and those whose time and performance is unsupervised by the employer;

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.

A careful perusal of said provision of law will result in the conclusion that the grant of a service
incentive leave has been delimited by the Implementing Rules and Regulations of the Labor
Code to apply only to those employees not explicitly excluded by Section 1 of Rule V.. The
phrase “other employees whose performance is unsupervised by the employer” must not be
understood as a separate classification of employees to which service incentive leave may not
be granted. Rather, it serves as an amplification of the interpretation of the definition of field
personnel under the Labor Code as those “whose actual hours of work in the field cannot be
determined with reasonable certainty (Auto Bus Transport System, Inc. v. Bautista 458 SCRA 578
2005)

The same is true with respect to the phrase “those who are engaged on task or contract
basis, purely commission basis. Said phrase should be related with “field personnel”,
applying the rule on ejusdem generis that general and unlimited terms are restrained
and limited by the particular terms that they follow.

Ejusdem Generis - "Where specific words are followed by a general expression, the
general expression is limited to the shared characteristics of the specific words, even
though the general expression may ordinarily have a much broader meaning. To
effectively use this rule of statutory interpretation, the shared characteristics of the
specific words should be identified as precisely as possible.

(E) Those who are already enjoying the benefit therein

(F) Those enjoying vacation leave with pay for at least five days

(G) Those employed in establishment regularly employing less than ten employees.

To claim exemption from payment of service incentive leave pay, it is the employer’s duty to
prove that it is covered under the exemption. Thus, where the employer claims that the
employee is not entitled to service incentive leave pay inasmuch as establishment employing
less than 10 employees are exempted from paying service incentive leave pay, it has the duty to
prove that there were less than ten employees in the company.

A. Meaning of “one year of service

” The phrase “one year of service” of the employee means service within twelve (12) months,
whether continuous or broken, reckoned from the date the employee started working. The
period includes authorized absences, unworked weekly rest days, and paid regular holidays. If
through individual or collective agreement, company practice or policy, the period of the
working days is less than twelve (12 ) months, said period shall be considered as one year for the
purpose of determining the entitlement to the service incentive leave.
B. 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.

C. Usage/Conversion to Cash

Under the Omnibus rule, the service incentive leave shall be commutable to its money
equivalent if not used or exhausted at the end of the year.

The service incentive leave may be used for sick and vacation leave purposes. The unused
service incentive leave is commutable to its money equivalent at the end of the year. In
computing, the basis shall be the salary rate at the date of conversion. The use and conversion
of this benefit may be on a pro rata basis. (DOLE Handbook)

D. Manner of availment

The service incentive leave may be used for sick and vacation leave purposes. And, at the end of the
year, the unused SIL may be commuted to cash.

Illustration: Yu Donowt was hired by ISDALAYAR Co. as a software engineer on January 1 2018
and have decided to resign on July 1, 2019. Assuming that Yu Donowt has not used or
commuted any of his accrued SIL with a daily a salary of 2,300 on his first year in the company
and later increased to 3,000 on the succeeding year. How much is he entitled to the conversion
of his accrued SIL, upon his resignation

SIL earned as of 31 December 2018 5 days

Proportionate SIL for January to June 2019 (6/12) x 5 days 2.5 days
Total accrued SIL as of July 1 2019 7.5 days

FAQS
1. Are part-time workers entitled to the full five days SIL, or should the entitlement be on pro-
rata basis?

Part time workers are entitled to full five days SIL (BWC Advisory Opinion)

The reason is that the Labor Code speaks of numbers of months worked in a year, not number of
hours worked in a day, as basis for entitlement.

2. Does the grant of vacation or sick leave with pay of at least five days may be credited as
compliance with Article 95 of the Labor Code?

Yes. the grant of vacation or sick leave with pay of at least five days may be credited as
compliance with SIL. For example, if a company is giving its employees 15 days vacation leave,
five days of which is with pay. The five-days paid vacation leave may be credited as SIL.
3. Are all engaged on a contractual basis not entitled to SIL?

No. Only those that are engaged on a contractual being classified as field personnel

Petitioner CIT claimed that teachers are not entitled to SIL because they are engaged by the
school on contractual basis. The claim was not sustained. It was held that the phrase “those who
are engaged on task or contract basis” as mentioned in the Omnibus Rules should be read in
relation to “field personnel”. Teachers, not being field personnel, are entitled to SIL (CIT vs.
Ople, 1987)

4. When does the prescriptive period of claiming the monetization of SIL commence?

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave,
we can conclude that the three year prescriptive period commences, not at the end of the year
when the employee becomes entitled to the commutation of his service incentive leave, but
from the time when the employer refuses to pay its monetary equivalent after demand of
commutation or upon termination of the employee’s services, as the case may be. Petitioner’s
contention that respondent is not entitled to the grant of service incentive leave just because he
was paid on purely commission basis is misplaced. What must be ascertained in order to resolve
the issue of propriety of the grant of service incentive leave to respondent is whether or not he
is a field personnel. (CIT vs. Ople, 1987)
Maternity Leave Benefits a daily cash allowance granted to female members who gave birth
via normal delivery or caesarean section or suffered miscarriage, regardless of civil status or
legitimacy of the child.

LAWS THAT COVERED MATERNITY LEAVE BENEFITS

- Art. 131 of the LC
- RA No. 1161 (Sec. 14-A) also known as Social Security Law as amended by RA 7322 and
RA 8282
- Republic Act No. 1161 Social Security Law

 MATERNITY BENEFITS UNDER THE OLD LAW: RA 1161 AKA SOCIAL

SECURITY LAW
ELIGIBILITY –

To qualify for the grant of the maternity benefit, the female member must meet the following
requirements

A. Has paid at least three (3) monthly contributions in the twelve-month period immediately
preceding the semester of childbirth or miscarriage; [Sec 14-A]
B. Has notified her employer of the pregnancy and expected date of childbirth, which notice
shall be transmitted to the SSS in accordance with the rules and regulations issued by the
Commission; and [Sec 14-A, (a)

RULES ON MATERNITY NOTIFICATION.

The following rules shall apply:

A. The female member, upon confirmation of pregnancy, shall immediately inform her
employer of such (if employed) or the SSS directly (if unemployed/SE/VM/OFWs/NW
spouse) and the expected date of childbirth;[Sec 14-A (a)]

B. The employer shall, in turn, notify the SSS through the prescribed manner; and

C. Failure to notify the SSS of the female member’s pregnancy shall not bar herfrom receiving
the benefit if shehas been confined in the hospital/lying-in clinics/birthing facility duly
licensed by the Department of Health (DOH) for delivery or completion of miscarriage
(dilation and curettage or expulsion of fetus). SEC4.

AMOUNT OF MATERNITY BENEFIT –

The daily maternity leave cash allowance shall be equivalent to one hundred percent (100%) of
the ADSC (Average Daily Salary Credit) and shall be paid for a compensable period of: (Sec 14-
 A)i.Sixty (60) days for normal delivery/miscarriage; or Seventy-eight (78) days for caesarean
delivery

LIMITATIONS ON THE GRANT OF MATERNITY BENEFITS

The maternity benefits provided for under the Social Security Act of 2018shall be paid only for
the first (1st) four (4) deliveries or miscarriages.

The payment of daily maternity benefits shall be a bar to the recovery of sickness benefits under
the Social Security Act of 2018 for the same period for which daily maternity benefits have been
received. [Sec 14-A (c)]

MANNER OF PAYMENT.

The full payment of maternity benefits shall be advanced by the employer within thirty (30) days
from the filing of the maternity leave application. [Sec 14-A (b)]

The SSS shall immediately reimburse the employer of one hundred percent (100%) of the
amount of maternity benefits advanced to the employee by the employer upon receipt of
satisfactory proof of such payment and legality thereof. [Sec 14-A (e)]

The SSS shall pay directly the female member whose contingency occurred during employment
but who is currently unemployed, temporary laid off, or when her company is on lock-out or
there is labor strike in her company.

The SSS shall pay directly the unemployed/SE/VM/OFWs/NW spouse

member.

LIABILITY OF AN EMPLOYER.

If the employee member should give birth or suffer miscarriage without the required
contributions having been remitted for her by her employer to the SSS, or without the latter
having been previously notified by the employer of the time of the pregnancy, the employer
shall pay to the SSS damages equivalent to the benefits which said female employee member
would otherwise have been entitled to. [Sec 14-A (f)]

PRESCRIPTIVE PERIOD FOR FILINGOF MATERNITY CLAIM.

A claim for maternity leave benefit must be filed with the SSS within ten (10) years from the
date of delivery or miscarriage.
  MATERNITY LEAVE UNDER RA 11210 aka the 105-day Expanded Maternity
Leave Law

WHO ARE COVERED?

The 105- day EMLL shall cover the following:

1. Female workers in the Public Sector;

2. Female workers in the Private Sector;
3. Female workers in the Informal Economy;
4. Female members who are voluntary contributors to the Social Security System; and
5. Female national athletes.

WHAT BENEFITS ARE GRANTED?

The following benefits are granted under the 105-day Expanded Maternity Leave Law to the
corresponding sectors:

1. Paid leave benefit granted to a qualified female worker in the public sector, female worker in
the private sector covered by the SSS, including those in the informal economy for the duration
of:
a. 105 days for live childbirth, regardless of the mode of delivery and an additional 15 days
paid leave if the female worker qualifies as a solo parent under Republic Act No. 8972. Or
the Solo Parents Welfare Act of 2000
b. Sixty days paid leave for miscarriage and emergency termination of pregnancy;

Employed female workers shall receive full pay which consists of SSS maternity benefit computed
based on their average daily salary credit and salary differential to be paid by the employer, if any;

2. An option to extend for additional thirty days without pay in case of live childbirth

3. Paid maternity leave, allowances and benefits granted to female national athletes

4. Health care services for pre-natal, delivery, postpartum and pregnancy-related conditions
granted to female workers, particularly those who are neither voluntary nor regular members of
the SSS, as governed by the existing rules and regulations of the Philippine Health Insurance
Corporation (PhilHealth)

GRANT OF MATERNITY LEAVE

All covered females regardless of civil status, employment status, and the legitimacy of her child, shall
be granted 105 days maternity leave with full pay, and an additional 15 days with full pay in case the
female worker qualifies as a solo parent under RA 8972, or the Solo Parents Welfare Act of 2000.
In cases of miscarriage or emergency termination of pregnancy, 60 days maternity leave with full pay
shall be granted.
EXTENDED MATERNITY LEAVE
In cases of live childbirth, an additional maternity leave of 30 days without pay, can be availed of, at the
option of the female worker, provided that the employer shall be given due notice.
Due notice to the employer must be in writing and must be given at least 45 days before the end of the
female worker’s maternity leave. However, no prior notice shall be necessary in the event of a medical
emergency but subsequent notice shall be given to the employer.
The above period of extended maternity leave without pay shall not be considered as gap in the service.

FREQUENCY OF THE GRANT

Maternity leave shall be granted to a qualified female worker in every instance of pregnancy,
miscarriage or emergency termination of pregnancy regardless of frequency.

GRANT OF MATERNITY LEAVE BENEFITS AFTER TERMINATION OF EMPLOYMENT

Maternity leave with full pay shall be granted even if the childbirth, miscarriage, or emergency
termination of pregnancy occurs not more than 15 calendar days after the termination of an employee’s
service, as her right thereto has already accrued. Such period is not applicable when the employment of
the pregnant woman worker has been terminated without just cause, in which case the employer will
pay her the full amount equivalent to her salary for 105 days for childbirth and 60 days for miscarriage
or emergency termination of pregnancy based on her full pay, in addition to the other applicable daily
cash maternity benefits that she should have received had her employment not been illegally
terminated.

MATERNITY LEAVE OF A FEMALE WORKER WITH PENDING ADMINISTRATIVE CASE

The maternity leave benefits granted under RA 11210 and this Rules shall be enjoyed by a female
worker in the public sector and in the private sector even if she has a pending administrative case.

NON-DIMINUTION OF BENEFITS
Nothing in these Rules shall be construed as to diminish existing maternity benefits currently enjoyed
whether or not these are granted under Collective Bargaining Agreements, or present laws, if the same
are more beneficial to the female worker. Any other working arrangement which the female worker
shall agree to, during the additional maternity leave period, shall be allowed. Provided, that this shall be
consented to in writing by the female worker and shall primarily uphold her maternal functions and the
requirements of postnatal care.

SECURITY OF TENURE
Those who avail of the benefits of Republic Act No. 11210 or this Rules, whether in the public or private
sector, shall be assured of security of tenure. As such, the exercise of this option by them shall not be
used as a basis for demotion in employment or termination. The transfer to a parallel position or
reassignment from one organizational unit to another in the same agency or private enterprise shall be
allowed. Provided, that it shall not involve a reduction in rank, status, salary, or otherwise amount to
constructive dismissal.

NON-DISCRIMINATION
No employer whether in the public or private sector shall discriminate against the employment of
women in order to avoid the benefits provided for in this Rules.