Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5067

HOUSE BILL NO,

Introduced by Honorable Mark O. Go

EXPLANATORY NOTE

Labor force is an essential component of every social and economic growth
and development, 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 does 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 employees contract or thru collective
bargaining or agreement. What the Labor Code provides 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

Not only is the granting of paid leaves beneficial to the employees but
economically advantageous for employers as well. The granting of such incentives
boosts the morale and satisfaction of employees which are manisfested 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
tong run.

Hence, immediate consideration and approval of jopgged measure is
eamestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5067

HOUSE BILL NO. ~~

Introduced by Honorable Mark 0. Go

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 House of Representatives of the Philippines in
Congress assembled

Section 1. Article 95 of Presidential Decree No. 442, as amended, is hereby
further amended to read as follows:

“Article 95. Right to service incentive leave.

Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of TEN [five] days with pay.

This provision shall not apply to those who are already enjoying the benefit
herein provided, those enjoying vacation leave with pay of at least TEN [five]
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

The grant of benefit in excess of that provided herein shall not be made a
subject of arbitration or any court or administrative action.”

XXX XXX XXX


Section 2. Repealing Clause. - All laws, decrees, executive orders, letters of
implementations, rules and regulations or part or parts thereof inconsistent with any
provision of this Act are hereby repealed, modified, superseded or amended
accordingly.

Section 3. Effectivity.- This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in at least two (2) national newspapers of
general circulation, whichever comes earlier.

Approved,