Employers signal acceptability of service incentive leave bill

THE Employers Confederation of the Philippines (ECOP) said a bill doubling the service incentive leave (SIL) of regular employees to 10 days is “tolerable” for its membership because the measure represents a non-cash benefit that will not worsen inflation.

“An additional five days of leave is more tolerable. The reason is it is not inflationary and does not involve additional cash out. If ever it’s equivalent to declaring additional holidays,” ECOP chairman Sergio R. OrtizLuis, Jr. told BusinessWorld in a phone interview Thursday.

His remarks follow the thirdreading approval of House Bill 6770, which increases the SIL to 10 days, amending Article 95 of Presidential Decree No. 442, or the Labor Code of the Philippines.

He said that in general, ECOP does not favor Congressional intervention in the labor market, such as bills seeking to increase minimum wage, or to impose 14thmonth pay.

“(Legislators) think it’s benefitting the most number of workers. They cherry pick, especially sectoral representatives, (from labor practices in) other countries and they try to put it here, driving our costs higher,” Mr. Ortiz-Luis said.

He said additional costs for employers ultimately hurt minimum wage earners.

Labor groups, meanwhile, welcomed the passage of the bill, with the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) expressing hope it will be enacted by year-end.

“The SIL is one of the nonwage benefits given by employers to employees as a form of gratitude for the years of service rendered to make the company or business grow and thrive,” ALU-TUCP Spokesperson Alan A. Tanjusay told BusinessWorld in a phone message.

“Once it is enacted, it will motivate workers to be more productive in their work and remain loyal to the company,” he also said.

Another labor group, the Kilusang Mayo Uno, said the measure lacks a “clear mechanism” for its implementation.

“Any positive proposition to improve the workers’ lot is a welcome development,” KMU national chairman Elmer C. Labog said in a phone message. “On the other hand, there should be a clear mechanism to implement such positive decisions for workers.”

The bill, if enacted, will entitle employees with at least one year of service to 10 days of paid SIL every year.

The bill does not affect employees already enjoying 10 days of paid vacation leave, or workers in establishments operating with less than 10 employees. —