SERVICE INCENTIVE LEAVE (SIL)

Service Incentive Leave (SIL) is a 5 days leave with pay for every employee who has rendered at least 1 yr of service. It is commutable t...

Service Incentive Leave (SIL) is a 5 days leave with pay for every employee who has rendered at least 1 yr of service. It is commutable to its money equivalent if not used or exhausted at the end of year.

At least 1 year of service means 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. (Sec. 3, Rule V, Book III, IRR)

Service Incentive Leave (SIL) applies to every employee who has rendered at least 1 year of service. (Art. 95[a]), EXCEPT

  1. 1.  Government employees and any of its political subdivisions including Government Owned and Controlled Corporations (GOCCs),
    2.    Those already enjoying the benefit Domestic helpers and persons in the personal services of another,
    3.      Those already enjoying vacation leave with pay of at least 5 days,
    4.      Managerial employees
    5.    Field personnel and other employee whose performance is unsupervised by the employer
    6.      Employed in establishments regularly employing less than 10 workers
    7.      Exempt establishments
    8.   Engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount of performing work irrespective of the time consumed in the performance thereof. (Art. 95[b]) 


Teachers of private schools on contract basis are entitled to Service Incentive Leave (SIL). The phrase "those who are engaged on task or contract basis" should, however, 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. In one case (CIT vs. Ople, G.R. No. 70203, Dec. 18, 1987) , it was ruled that Cebu Institute of Technology teaching personnel cannot be deemed as field personnel which refers "to non‐agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. (Par. 3, Art. 82, LC).
Service Incentive Leave (SIL) is commutable to its monetary equivalent if not used or exhausted at the end of the year. It is aimed primarily at encouraging workers to work continuously and with dedication to the company.

The basis for cash conversion shall be the salary rate at the date of commutation. The availment and commutation of the SIL may be on a pro‐rata basis. (No. VI(c), DOLE Handbook on Worker’s Statutory Monetary Benefit)

Part-time workers entitled to the full benefit of the yearly 5 day SIL. Art. 95 of Labor Code speaks of the number of months in a year for entitlement to said benefit. (Bureau of Working Conditions Advisory Opinion to Phil. Integrated Exporter’s, Inc.)

Piece‐rate workers are entitled to the full benefit of the yearly 5 day SIL if:
a.       They are working inside the premises of the employer and
b.      Under the direct supervision of the employer.

However, they are not entitled if:
a.       They are working outside the premises of the employer,
b.    Hours spent in the performance of work cannot be ascertained with reasonable              certainty,
c.       They are not under the direct supervision of the employer.


It does not apply to employees with salaries above minimum wage. The difference between the minimum wage and the actual salary received by the employees cannot be deemed as their 13th month pay and SIL pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law. (JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2005.)

Illegally dismissed employees are entitled to SIL until actual reinstatement. (Integrated Contractor and Plumbing Works, Inc. v. NLRC, G.R.No. Aug.9, 2005)
In the case of Legally dismissed employees, employee who had not been paid of SIL from outset of employment is entitled only of such pay after a year from commencement of service until termination of employment or contract. (JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, July 8, 2005)

Source: Labor Code of the Philippines
The author takes no responsibility for the validity, correctness and result of this work. The information provided is not a legal advice and it should not be used  as a substitute for a competent legal advice from a licensed lawyer. See the disclaimer

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1 comments

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