Disclaimer: The following article is a general discussion of Philippine labor law concerning leave benefits after an employee’s resignation. It is for informational purposes only and should not be construed as formal legal advice. For specific concerns or disputes, consult with a qualified labor lawyer or the Department of Labor and Employment (DOLE).

1. Overview of Leave Benefits Under Philippine Labor Law

Under the Philippine Labor Code, there is only one type of leave benefit mandated for most private-sector employees: the Service Incentive Leave (SIL) of at least five (5) days per year, provided the employee has already rendered at least one (1) year of service. Other leaves (e.g., vacation leave, sick leave, emergency leave) are not directly mandated by law but may be granted at the employer’s discretion or provided under a collective bargaining agreement (CBA).

Beyond the SIL, there are several special statutory leaves that have been enacted by legislation over time, including maternity leave, paternity leave, parental leave for solo parents, leave for victims of violence against women and children (VAWC), and special leave for women under the Magna Carta of Women. Each statutory leave has distinct eligibility criteria and specific uses.

When it comes to resignation and its effect on leave benefits, the rules vary depending on (1) whether the leave benefit is statutory or company-provided, and (2) any express provisions in the company’s policy or in a CBA. Below is a detailed exploration of how leave benefits may be handled in the context of an employee’s resignation.

2. Service Incentive Leave (SIL)

2.1 Entitlement

Legal Basis: Articles 95 of the Labor Code of the Philippines (as renumbered) provides employees who have rendered at least one (1) year of service with five (5) days of paid Service Incentive Leave annually.
Coverage Exceptions: Certain employees are excluded, including managerial employees, field personnel (whose time and performance are unsupervised), and those already enjoying a benefit equivalent to or more than the statutory SIL under existing company policies.

2.2 Accumulation and Conversion to Cash

Accumulation: If company policy allows, unused SIL days may accumulate, although the Labor Code itself only provides the minimum standard of five (5) days per year without necessarily mandating accumulation or carry-over.
Conversion to Cash: Any unused SIL is often convertible to cash at the end of the year. By practice and DOLE advisories, if an employer has no established policy disallowing carry-over, employees can expect to be paid for any accrued and unused SIL.

2.3 Effect of Resignation

Unused SIL Upon Resignation: If an employee resigns, the general rule is that any unused SIL (if accumulated) or its equivalent must be commuted to cash and included in the employee’s final pay.
Company Policy: Some employers have policies that explicitly govern how SIL is computed and converted to cash upon separation. If the employer’s policy is more generous than the Labor Code (for instance, providing more than five days), the policy typically governs the conversion to cash.

3. Other Company-Provided Leaves (Vacation Leave, Sick Leave, Emergency Leave)

3.1 Nature of Company-Provided Leaves

These leaves are generally not mandated by the Labor Code beyond the basic five-day SIL.
Many employers voluntarily provide vacation leave (VL) and sick leave (SL) as part of their benefits package, or through a CBA.

3.2 Conversion to Cash and Policies

Whether unused VL or SL can be converted to cash upon resignation depends on company policy or CBA stipulations. Some companies allow full or partial conversion; others declare any unused days as forfeited.
Pro-Rated Leave: Some employers prorate the leave credits if an employee does not complete a full year of service. Check your company’s handbook or the relevant policy to determine if pro-rated leave can be converted upon resignation.

3.3 Final Pay Computation

If company policy or a CBA states that accrued VL/SL (beyond the mandatory SIL) is payable upon separation, then this will form part of the resigning employee’s final pay.
If the policy is silent or specifically disallows cash conversion, the employee may not receive payment for any unused company-provided leave.

4. Special Statutory Leaves

Apart from Service Incentive Leave, Philippine laws provide several special leave entitlements, each with its own purposes and eligibility requirements. Below is a brief overview of how these typically interact with resignation:

Maternity Leave (RA 11210)
- A female employee may avail of up to 105 days (or more, under certain conditions) of paid maternity leave for childbirth or pregnancy-related issues. Once the leave entitlement is fully utilized (or an employee has already started availing), resignation will not entitle her to “use” the leave after separation; i.e., the entitlement is for the period of active employment.
- If an employee resigns before claiming her maternity benefits, generally she loses her entitlement to future maternity leave from that employer, because the benefit is employer-granted under SSS reimbursement guidelines. She may still receive SSS maternity benefits if otherwise qualified, but direct employer-paid leave would not apply post-resignation.
Paternity Leave (RA 8187)
- Grants seven (7) days of paid leave for married male employees for the first four deliveries of the legitimate spouse. If the employee resigns or is no longer employed at the time of the child’s birth, there is no paternity leave benefit to claim from the former employer.
Parental Leave for Solo Parents (RA 8972)
- Solo parents may be entitled to an additional seven (7) working days of parental leave annually. This leave is available only while employed and cannot be claimed post-resignation. If any part of it remains unused, it typically is not converted to cash unless stated in a company policy.
Leave for Victims of Violence Against Women and Their Children (VAWC Leave)
- Under RA 9262, a female employee who is a victim of violence, or whose child is a victim, may avail of up to ten (10) days of leave. This leave is not convertible to cash unless company policy states otherwise, and it must be taken while still employed.
Special Leave Benefits for Women (Gynecological Leave, under the Magna Carta of Women)
- Female employees who undergo surgery for gynecological disorders are entitled to up to two (2) months of paid leave. This benefit applies only while the employee is in active service. Once the employee resigns or the employment relationship is severed, any unutilized portion is typically forfeited unless company policy says otherwise.

5. Resignation Procedures and the Use of Leave During the Notice Period

When an employee tenders a resignation notice (commonly 30 days in advance as required by the Labor Code unless waived by the employer), questions often arise whether the employee can still “use” or “consume” leave days during the notice period:

Employer Discretion: In many companies, taking leave during the notice period is subject to employer approval. Some companies disallow or limit the use of leave once an employee has already resigned, especially if continuity of work is critical.
Offset of Notice Period: In certain cases, an employer might allow the outgoing employee to use leave credits to offset the notice period. However, this depends purely on written policy or management discretion.
Possible Forfeiture or Conversion: If the resigning employee does not use their leave (due to business exigencies or company restrictions), the unused credits may be converted to cash upon separation if required by law (for the 5-day SIL) or company policy (for any additional leave credits).

6. Final Pay: Inclusions and Timing

6.1 Inclusions in Final Pay

Under DOLE guidelines (Labor Advisory No. 06, Series of 2020), the term “final pay” refers to the sum or totality of all the wages or monetary benefits due the employee regardless of the cause of the separation from employment. Typically, final pay includes:

Unpaid salaries and allowances up to the employee’s last day of work.
Pro-rated 13th month pay.
Cash conversion of unused leaves (SIL or other types of leave if allowed).
Any other amounts due (e.g., incentives, bonuses, or gratuities if stipulated in employment contracts or CBA).

6.2 Time Frame for Release of Final Pay

There is no single fixed statutory period in the Labor Code prescribing an exact number of days for the release of final pay. However, DOLE has recommended releasing final pay within 30 days from the date of separation or resignation, unless there is a more favorable arrangement agreed upon by the employer and employee.

7. Dispute Resolution and Enforcement

If an employer fails to pay the due benefits (including conversion of unused statutory leaves) or unjustly withholds the final pay, an employee may:

File a labor complaint for money claims before the National Labor Relations Commission (NLRC).
Seek assistance from the DOLE through its regional offices or Single Entry Approach (SEnA) for mediation.

8. Key Takeaways

Statutory Minimum: The Labor Code mandates only the 5-day Service Incentive Leave for most employees. Unused SIL is usually convertible to cash even after resignation.
Company-Granted Leaves: Vacation, sick, and other non-statutory leaves are granted at the employer’s discretion. Whether they are convertible to cash upon separation depends on company policy or CBA terms.
Special Statutory Leaves: Maternity, paternity, solo parent, VAWC, and gynecological leaves have specific rules for usage and eligibility. Generally, if unused, they are not convertible to cash unless the employer’s policy says otherwise.
Final Pay: Must include unpaid wages, prorated 13th month pay, and any cash-convertible leaves. Typically, employers are advised to release final pay within 30 days from the last day of service.
Discretion on Leave Usage: During the resignation notice period, the employer has discretion whether to approve or disapprove leave usage.
Legal Remedies: If employees believe their employer wrongfully withholds final pay or statutory benefits, they can file a complaint with the NLRC or request DOLE’s intervention.

9. Conclusion

Leave benefits in the Philippines post-resignation rest largely on two pillars: the statutory minimum (Service Incentive Leave) and the employer’s policy or CBA. The law guarantees the conversion to cash of any unused SIL, but beyond that, the handling of unused leaves depends on the generosity and explicit provisions of company rules. For any dispute or unclear interpretations regarding post-resignation leave benefits, the most prudent course is to review the employment contract, company handbook, or CBA provisions and, if necessary, consult with DOLE or a qualified labor lawyer.