Employer sets rules in implementation of sick, vacation leaves

Dear PAO,

I am a BPO (Business Process Outsourcing) employee working for more than 3 years now. Currently, I am enjoying annual 15 days sick leave (SL), which is convertible to cash if unused, and 15 days vacation leave. I am hearing gossips about the changes of these benefits, to wit: (1) SL from 15 days to 10 days; (2) unused SL will not be convertible to cash unless all SL are not utilized; (3) VL shall be changed from 15 days to 20 days. Is the company violating any law regarding the change in these benefits?

Gideon Dear Gideon,

Every employer in a private enterprise may, at his option, grant and fix benefits which may be given to his employees provided that these are not below or less than the benefits granted by the Labor Code of the Philippines. There is no provision in the Labor Code which grants sick leave (SL) and vacation leave (VL) to employees in a private enterprise. It only mandates for service incentive leave (SIL) of five days with pay for employees who has rendered at least one year of service (Article 95, Labor Code of the Philip

pines). It is thus the prerogative of the employer if he would provide for other benefits not mentioned under the law such as sick leave and vacation leave. Hence, an employer who Dear PAO gives SL or VL to his/her employees which is less than those given by other employers do not violate any labor laws, rules or regulation. In the same manner, it is the employer who establishes the rules and regulations in the implementation of such grants.

However, once a benefit is being given to employees, the employer cannot take this back or reduce it unilaterally pursuant to Article 100 of the Labor Code on prohibition against elimination or diminution of benefits which provides that “nothing in this Book (Book III, Labor Code of the

Philippines) shall be construed to eliminate or in any way diminish supplements or other employee benefits being enjoyed at the time of promulgation of this Code ( Labor Code

of the Philippines).” The rule against diminution of benefits applies if it is shown that the grant of the benefit is based on an express policy or has ripened into a practice over a long period of time and that the practice is consistent and deliberate ( Central Azucarera De Tarlac v. Central Azucarera De Tarlac labor Union-NLU, G.R. No. 188949, 26 July 2010).

According to you, your employer is providing his employees annually with 15 days sick leave, which is convertible to cash if unused, and 15 days vacation leave. Pursuant to Article 100 of the Labor Code, the company cannot unilaterally reduce these benefits if the same is given based on an express policy or it has been the practice to grant the same to its employees. In case the rumors on change of benefits will be implemented in your office, your company will be violating the provisions of the Labor Code if the SL will be reduced from 15 days to 10 days or it will unfavorably change its rules in the conversion to cash of the unused leave credits. The change in vacation leave, being beneficial to employees is favored upon by law.

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.