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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
First Regular Session

HOUSE BILL NO. 1338

introduced by Hon. Mark O. Go

EXPLANATORY NOTE

Labor force is an essential component of every social and economic growth. It is the policy
of the State, as enshrined in the Constitution, that the State affirms labor as a primary social
economic force and shall protect the rights of workers and promote their welfare.

At present, our laws do not require employers the granting of sickness and vacation leaves.
‘These work incentives are given based on the prerogative of the employers either by express
stipulation on the employee's contract or thru collective bargaining agreement. What the Labor
‘Code provide instead are service incentive leaves (SIL). An employee who has rendered at least one
year of service is entitled to a yearly service incentive leave of five (5) days with pay. However, the
same Code provides that an employer who grants employees with vacation leaves of at least five (5)
days shall already be deemed compliant with the mandatory granting of the SIL, thereby rendering
the mandatory leave credits at a minimum of only five days. With the increase in the number of
leave credits in the form of sick or vacation leaves left purely at the discretion of employers,
employees constrained by limited leave credits are left vulnerable to sickness, emergencies and other
fortuitous events that would cost them a day of paid work.

The granting of paid leaves is not only beneficial to the employees but economically
advantageous for employers as well. Such incentives boost the morale and satisfaction of employees
which are manifested in increased productivity. Leave credits also minimizes the risk of health and
safety issues among employees which may even be more costly for both employees and employers in
the long run.

Hence, immediate consideration and approval of this proposed measure is earnestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
First Regular Session

HOUSE BILL NoL338

troduced by Hon. Mark O. Go

AN ACT INCREASING THE SERVICE INCENTIVE LEAVE OF EMPLOYEES,
AMENDING FOR THE PURPOSE ARTICLE 95 OF PRESIDENTIAL DECREE N
442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES

Be it enacted by the Senate and House of Representatives 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.~—sservice_— incentive —ileave.——
(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.

“(b) This provisi

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 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.”

SEC. 2. Implementing Rules and Regulations. ~
of this Act, the Department of Labor and Employment shall promulgate the rules and regulations

in ninety (90) days from the approval

implementing the provisions of this Act which shall take effect thirty (30) days after its publication

in any newspaper of general circulation.


SEC. 3. Repealing Clause. — All laws, decrees, orders, rules and regulations and other
issuances or parts thereof which are inconsistent with the provisions of this Act are hereby repealed
or amended accordingly.

SEC. 4. Effectivity. — This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any newspaper of general circulation.

Approved,