Leave pay woes

Dear Atty. Vlad,

I used to work with a manufacturing company in Valenzuela City. I was employed there for seven years. During my entire stay, I did not use any my leaves nor was I paid any unused leaves. Last week, I resigned from my work. When I was asking and demanding for my last pay, my employer gave me my last salary, proportionate 13th month pay and service incentive leave pay for three years only.  When I asked why I was only given the equivalent of three years SILP, my employer told me that prescription has already set in. Is my employer correct?  Please help me.

Michael

Dear Michael,

As I understand, you have not used any of your leaves during the entire seven years that you worked with your company. Neither were you paid your service incentive leave pay for the said period. As such, you are claiming for payment of your SILP for seven years or the equivalent of 35 days of service incentive leave pay.

The Supreme Court in the case of Lourdes C. Rodriguez vs Park N Ride Inc. Nicest (Phils.) Inc./Grand Leisure Corp./Sps. Vicente & Estelita B. Javier, 20 March 2017, G.R. No. 222980 (citing the case of Auto Bus Transport System Inc. vs Bautista; 497 Phil. 863, 2005), explained:

"However, Auto Bus Transport System, Inc. v. Bautista clarified the correct reckoning of the prescriptive period for service incentive leave pay:

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that the three-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the employee's services, as the case may be.

The above construal of Art. 291,
vis-a-vis the rules on service incentive leave, is in keeping with the rudimentary principle that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. (Emphasis supplied).

Thus, the prescriptive period with respect to petitioner's claim for her entire service incentive leave pay commenced only from the time of her resignation or separation from employment. Since petitioner had filed her complaint on 7 October 2009, or a few days after her resignation in September 2009, her claim for service incentive leave pay has not prescribed. Accordingly, petitioner must be awarded service incentive leave pay for her entire 25 years of service — from 1984 to 2009 — and not only three years' worth (2006 to 2009) as determined by the Court of Appeals."

Applying the above-cited Decision of the Supreme Court, your employer is wrong in asserting that prescription has already set in.  The three-year prescriptive period only sets in from the time of demand. Since you made the demand at the time of your resignation, it was well within the three-year prescriptive period. As such, you are entitled to Service Incentive Leave Pay equivalent to seven years or 35 days of Service Incentive Leave Pay.

I hope that I was able to help you based on what you shared with me.

Atty. Vlad del Rosario