Tag Archives: proper treatment of unused vacation leave credits at the end of the year

Can Employers Legally Forfeit Unused Leave Benefits for 2010?


Manigong Bagong Company grants vacation leave benefits to its workers of thirty (30) days, non-commulative, non-convertible to cash in excess of ten (10) days. In 2010, the company issues a memo requiring employees to use the VL in excess of 10 or it shall be deemed forfeited thereafter.

Ab Sintero, an employee for five years, has used only 15 of his 30-day VL. When the company converted his 10 VL to cash, he is left with only 5 days. He did not use the remaining 5 days hence, it was forfeited by the company on December 31, 2010. Ab Sintero protested arguing that under the Labor Code, leave benefits are convertible to cash.

Question: Is Ab Sintero correct?

When the Labor Code mentions about leave benefits, it pertains to Service Incentive Leave. Vacation leave and sick leave are

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