Below is a comprehensive discussion of the labor rules and best practices related to leave approval during holidays under Philippine law. This overview is based on the Labor Code of the Philippines, relevant Department of Labor and Employment (DOLE) issuances, and common employer practices. Please note that this material is for general informational purposes only and is not a substitute for professional legal advice.

1. Overview of Leave and Holiday Concepts

Before discussing how leaves interact with holidays, it is important to distinguish between types of leaves and types of holidays recognized under Philippine labor law.

1.1. Service Incentive Leave (SIL)

Legal Basis: Article 95 of the Labor Code.
Key Points:
- Every employee who has worked at least one year with an employer is entitled to five (5) days of paid Service Incentive Leave per year.
- The Labor Code does not require employers to provide vacation or sick leave beyond the mandated SIL, but many employers offer more generous leave benefits by policy or through a Collective Bargaining Agreement (CBA).

1.2. Vacation Leave and Sick Leave

Legal Basis: Not explicitly required by the Labor Code (beyond the 5-day SIL).
Key Points:
- These leaves are commonly granted as company benefits or negotiated in CBAs.
- Policies on accrual, usage, approval processes, and carry-over vary from one employer to another.

1.3. Regular Holidays vs. Special Non-Working Holidays

Legal Basis: Proclamations issued by the President each year, often based on Executive Order No. 292 (Administrative Code of 1987), as well as other special laws or proclamations.
Key Points:
- Regular Holidays (e.g., New Year’s Day, Araw ng Kagitingan, Labor Day, Christmas Day) typically grant employees 100% pay if they do not work on that day, and double pay (200%) for the first eight hours if they do work.
- Special Non-Working Holidays (e.g., Ninoy Aquino Day, All Saints’ Day, selected local holidays): no work, no pay applies unless a company policy or union contract states otherwise; if an employee is required to work, payment is typically 130% of the daily wage.

These distinctions are essential to understanding how leave approvals and pay calculations will apply in scenarios where a holiday falls during an employee’s leave period or when an employee requests a leave specifically covering a holiday.

2. General Rules on Leave Approval During Holidays

2.1. Employer’s Prerogative vs. Employee Right

Management Prerogative: The employer generally has the right to approve or deny vacation leave requests based on operational requirements. Although employees have the right to use accrued leave benefits, their requests for specific dates must typically be approved by management.
Service Incentive Leave Entitlement: While an employer may schedule or regulate the timing of an employee’s five-day SIL (or similar leaves provided by company policy), an employee who has accrued leave credits has a right to utilize them at some reasonable point. However, the specific days remain subject to the employer’s scheduling discretion unless otherwise stated in a company policy or CBA.

2.2. When a Holiday Falls Within an Approved Leave

A common question arises: if a regular or special holiday falls on a day within the employee’s approved leave period (e.g., a week-long vacation leave), how is it counted or paid?

No Uniform Statute: The Labor Code does not specifically address whether a holiday within an approved leave period should be deducted from the employee’s leave credits. This is generally governed by company policy or a CBA.
Typical Company Policies:
- Policy 1: Do not charge the holiday against the employee’s leave credits. The holiday is treated as a paid holiday, and only the working days are charged to the leave credits.
- Policy 2: Treat every calendar day taken off as part of the leave, including the holiday. Under this approach, the employee’s leave credits are reduced by all the days in the leave period—even if a holiday occurs.
Best Practice for Clarity: Clearly state in the company handbook or policy whether holidays are to be deducted from an employee’s leave credits. DOLE typically honors company rules or established practice, provided they are not less favorable than the law’s minimum requirements.

2.3. Entitlement to Holiday Pay

DOLE Guidance: Under DOLE’s general rules, employees are entitled to holiday pay (for regular holidays) if they are on paid leave on the day immediately preceding the holiday. Conversely, if an employee is absent without leave (AWOL) immediately before a holiday, the employer might have grounds to disqualify them from holiday pay.
Authorized Leave: If an employee is on an “authorized” paid leave (e.g., approved sick leave or vacation leave) immediately before the holiday, the holiday pay for a regular holiday should still be granted.
Special Non-Working Holiday: For special non-working days, the principle of “no work, no pay” applies unless a company policy states otherwise. If the employee is on a paid leave that overlaps with a special non-working holiday, most companies do not grant additional holiday pay on top of the normal daily pay—again, the specifics are determined by company policy.

3. Common Scenarios and How They Are Handled

3.1. Employee Requests Leave Covering a Holiday

Scenario: An employee seeks approval for leave from December 23 to December 27, wherein December 25 is a regular holiday (Christmas Day).
Company Options:
1. Do Not Deduct the 25th from Leave Credits: Deduct only the 23rd, 24th, 26th, and 27th from the employee’s leave credits. The 25th is paid as a holiday if the employee is entitled.
2. Deduct All Days, Including the 25th: If policy indicates that any day within the leave period is chargeable, the employee’s leave credits will decrease by all five days.
Legality: Both methods can be legal, but the first is more common and considered more favorable to the employee. Whatever the policy, it must be applied consistently and in a non-discriminatory manner.

3.2. Employee on Sick Leave or Maternity Leave During a Holiday

Sick Leave: If an employee is on paid sick leave during a regular holiday, they generally remain entitled to holiday pay (provided the policy or relevant rule allows it). This may mean the holiday is not deducted from the sick leave balance, although it depends on company policy or practice.
Maternity or Paternity Leave: Paid leaves mandated by law (e.g., under the Expanded Maternity Leave Law or Paternity Leave Act) are separate benefits. If a public holiday falls within the statutory leave period, the employee’s total leave duration does not get extended—but the employee will still receive the mandated leave pay.

3.3. Day-After-Holiday Leave

Holiday Pay Requirements: Under certain company policies, if an employee does not report to work the day immediately following a holiday without prior approval, the employer may disqualify them from receiving holiday pay.
Authorized vs. Unauthorized Leave: If the leave is approved, the employee is generally considered on authorized leave and would still be entitled to holiday pay (for regular holidays). If the leave is unauthorized, holiday pay could be forfeited.

4. Practical Tips for Employers and Employees

Document Policies Clearly: Employers should incorporate clear guidelines about holidays during leave periods in their employee handbook or collective agreement, including:
- Whether holidays within an approved vacation or sick leave period are deducted from leave credits.
- Requirements to qualify for holiday pay if the employee is on leave before or after the holiday.
Consistent Application: Once a policy is set, employers must apply it uniformly. Any inconsistency could lead to disputes or allegations of unfair labor practice.
Advance Notice: Employees seeking to use leave that spans holiday dates should request approval as early as possible, allowing the employer to plan for staffing needs.
Know the Difference Between Regular and Special Holidays: Employees should be aware that, while regular holidays are generally paid even if not worked (assuming eligibility requirements are met), special non-working holidays are subject to a “no work, no pay” rule unless company policy or a CBA provides otherwise.
Authorized vs. Unauthorized Absences: If an employee’s absence around a holiday is unauthorized, employers may apply stricter rules on holiday pay entitlement.

5. Key Legal References

Labor Code of the Philippines, as amended
- Article 95 (Service Incentive Leave)
- Articles 94 and 100 (Holiday Pay and Non-Diminution of Benefits)
DOLE Issuances
- Implementing Rules and Regulations for Holiday Pay
- Various Labor Advisories for yearly holiday schedules
Company Policies and Collective Bargaining Agreements (CBAs)
- Typically contain more specific stipulations on leave usage, accrual, and entitlement
Expanded Maternity Leave Law (Republic Act No. 11210)
Paternity Leave Act (Republic Act No. 8187)

6. Conclusion

In the Philippines, there is no single, one-size-fits-all rule on how holidays affect leave credits and pay. While the Labor Code and DOLE regulations outline minimum standards—particularly regarding holiday pay and Service Incentive Leave—many details about leave approval during holidays will come down to the employer’s internal policy or the terms of a Collective Bargaining Agreement.

Employers must ensure their policies comply with the Labor Code’s minimum requirements, particularly on holiday pay eligibility. Employees, on the other hand, should become familiar with their company’s leave rules—especially around regular and special non-working holidays—to understand how their leave credits and pay entitlements will be computed.

Disclaimer: This discussion is provided for general information and does not constitute legal advice. For specific issues or disputes, consulting with a qualified labor lawyer or directly with the Department of Labor and Employment is recommended.