TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
Ml.
of i! ;■ tl’ .'il.iv;*
25 JUL21 AlO :31
I
SENATE
S. No. 727
RKCLi.XDbV
Introduced by Senator FRANCIS N. PANGIUNAN
AN ACT
INCREASING THE SERVICE INCENTIVE LEAVE OF EMPLOYEES, AMENDING 
FOR THE PURPOSE ARTICLE 95 OF PRESIDENTIAL DECREE NO. 442, AS 
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES
EXPLANATORY NOTE
Classified by the World Health Organization as an occupational phenomenon, 
burn-out "is a syndrome conceptualized as resulting from chronic workplace stress 
that has not been successfully managed." This phenomenon refers specifically to an 
occupational context characterized by feelings of energy depletion or exhaustion, 
increased mental distance from one's job, or feelings of negativism or cynicism 
related to one's job and reduced professional efficacy.
The Labor Code, as amended, currently grants five (5) days of service 
incentive leave per year to every employee who has rendered at least one (1) year 
of service. Employees may use these service incentive leaves to prevent burnout in 
the workplace. Taking more leaves may even boost one's productivity levels.
In a research study made by the U.S. Travel Association, which was cited by 
the Harvard Business Review, employees who took fewer than ten (10) vacation 
leaves per year had a 34.6% likelihood of receiving a raise or bonus in a three-year


period of time while those who took ten (10) or more vacation leaves per year had 
almost double the chance of receiving a raise or bonus which is at 65.4%.1
In line with the health and productivity benefits of giving leaves to 
employees, this bill seeks to increase the number of mandatory service incentive 
leaves from five (5) per year to ten (10) per year.
In view of the foregoing, the passage of this bill is earnestly sought.
FRANCIS'NTPANGILINAN
Sehator
1 Harvard Business Review, The Data-Driven Case for Vacation, https://hbr.org/2016/07/the-data- 
driven-case-for-vacation


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
TWEIMTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
ifXfirp of 11.p
25 JIJL21 A10:31
SENATE
S. No. 727
WTBVED i:
Introduced by Senator FRANCIS N. PANGILINAN
AN ACT
INCREASING THE SERVICE INCENTIVE LEAVE OF EMPLOYEES, AMENDING 
FOR THE PURPOSE ARTICLE 95 OF PRESIDENTIAL DECREE NO. 442, AS 
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled:
SECTION 1. Article 95 of Presidential Decree No. 442, as amended, is hereby 
amended to read as follows:
"Article 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] TEN days with
pay, PROVIDED THAT, THE EMPLOYEE SHALL BE ENTITLED 
TO CONVERT ONLY FIVE DAYS OF LEAVE TO ITS MONEY 
EQUIVALENT IF NOT USED OR EXHAUSTED AT THE END OF 
THE YEAR.
(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] TEN 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."


1 
Sec. 2. Implementing Rules and Regulations. - Within ninety (90) days from the
2 
approval of this Act, the Department of Labor and Employment, in consultation with
3 
relevant stakeholders, shall promulgate the implementing rules and regulations of this
4 
Act.
5 
Sec. 3. Repealing Clause. - All statutory laws, orders, issuances, rules and
6 
regulations, and/or parts thereof which are inconsistent with the provisions of this Act
7 
are hereby repealed or modified accordingly.
8 
Sec. 4. Separability Clause. - If any portion or provision of this Act is declared
9 
invalid or unconstitutional, the portions or provisions which are not affected shall
10 
remain valid and effective.
11 
Sec. 5. Effectivity. - This Act shall take effect after fifteen (15) days following
12 
its publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,