How Companies Credit Previous Service for Employee Tenure

1) What “bridging” means (and what it doesn’t)

In Philippine HR and labor practice, “bridging” (or “crediting previous service”) is an arrangement where an employer recognizes an employee’s prior period(s) of service—despite a break in employment—for purposes of computing tenure-based benefits (e.g., retirement, leave accrual ceilings, longevity pay, redundancy selection, benefit vesting, or other service-award programs).

Bridging is often confused with:

Security of tenure / employment status (regular, probationary, project, fixed-term).
Reinstatement and backwages after illegal dismissal (which is a legal continuity concept, not merely a discretionary HR credit).
Statutory benefits not dependent on tenure (e.g., 13th month pay is not based on length of service, but on actual salary earned within the calendar year).

Key idea: Bridging is usually about benefit computation, not necessarily about legal continuity of employment—unless the law, a contract, a CBA, or jurisprudence treats service as continuous in a given scenario.

2) Where “bridging” gets its legal force

In Philippine labor law, an employee’s right to have prior service credited typically comes from one or more of these sources:

Law Some benefits are expressly tenure-based (e.g., retirement under the Retirement Pay Law—minimum years of service), or tied to service milestones (e.g., Service Incentive Leave after one year of service).
Contract / Job Offer / Company Policy / Employee Handbook Employers may voluntarily grant bridging for rehired employees, transferees, or those absorbed after reorganization.
Collective Bargaining Agreement (CBA) Unionized workplaces often define “continuous service,” “credited service,” breaks in service rules, and portability within a bargaining unit.
Company Practice (the non-diminution principle) If bridging has become a consistent and deliberate company practice over time (not a one-off mistake), it can harden into a benefit that may not be unilaterally withdrawn.
Equity and jurisprudence (fact-specific) Courts and labor tribunals may look at whether there was true separation or whether the “break” was a device to defeat tenure and benefits (e.g., repeated contracting patterns, or “paper breaks”).

Practical consequence: A company can choose to bridge in many situations—but once bridging is anchored in policy, CBA, contract, or established practice, it becomes much harder to retract.

3) The “break in service” question: when prior service is typically credited

Philippine practice varies by employer, but these are the most common fact patterns:

A. Resignation → later rehire by the same employer

Default legal position: Resignation ends the employment relationship. A rehire is generally a new employment unless the employer voluntarily credits prior service or there are circumstances suggesting the separation was not truly voluntary/real.
Common policy approach: Bridging is allowed if the employee is rehired within a set period (e.g., within 6 months, 1 year, 2 years) and left in good standing.

B. End of a fixed-term/probationary contract → immediate re-engagement

If a worker is repeatedly re-engaged for work that is usually necessary/desirable to the employer’s business, the arrangement may raise misclassification or regularization issues.
Even where the employer insists each engagement is separate, tribunals may treat the relationship as effectively continuous depending on facts.

C. Project employment / seasonal employment

In legitimate project or seasonal arrangements, employment may end upon project completion or season end.
However, repeated re-engagement over many cycles can create disputes about whether the employee has become regular (at least as to the activity) and whether service should be treated as continuous for some benefits.

D. Retrenchment / redundancy / closure → rehire

Separation pay is typically due (if the authorized cause is valid and statutory conditions are met).
For later rehire, bridging is usually policy-driven—some employers credit prior service for retirement/tenure awards; others restart tenure.

E. Transfer within corporate group / affiliates

A move from Company A to Company B (affiliate) is not automatically continuous service unless:
- there is a formal secondment (employee remains employed by the home company), or
- there is a tripartite agreement or policy recognizing portability, or
- the facts show the “transfer” is functionally the same employer (rare; depends on control and legal personality issues).

F. Contractor → principal (absorption or “regularization” by the client)

If the contracting arrangement is legitimate, absorption is typically new employment with the principal unless bridging is granted by policy.
If the arrangement is found to be labor-only contracting or otherwise improper, the worker may be deemed an employee of the principal from the start—creating a strong basis to treat service as effectively continuous (again, fact-specific).

G. Illegal dismissal → reinstatement (or payroll reinstatement)

This is a special category. If an employee is ordered reinstated (or reinstated pending appeal), the law treats the employment as not having validly ended, and tenure and benefits implications can follow the concept of continuity, alongside backwages and related reliefs.

4) Benefit-by-benefit: what bridging affects in practice

4.1 Retirement pay (Retirement Pay Law)

Philippine retirement pay in the private sector is often governed by:

a company retirement plan (if any), and/or
the statutory floor under the Retirement Pay Law.

Why bridging matters: statutory retirement typically requires a minimum number of years of service. If prior service is not credited, a rehired employee may not meet the minimum sooner. Many employers bridge credited service for retirement computation, sometimes with conditions (break-in-service threshold, good standing, etc.).

Common design choices:

Credit all prior service with the same legal employer.
Credit service across affiliates only if there’s an explicit portability clause.
Treat long breaks (e.g., >2–5 years) as forfeiting prior service for retirement eligibility but sometimes still recognizing it for “service awards.”

4.2 Separation pay computations (authorized causes)

Separation pay for redundancy, retrenchment, closure not due to serious losses, etc., typically depends on years of service (often “one month pay per year” or “half-month pay per year,” depending on the cause).

Bridging issue: If an employee previously resigned and was later rehired, the “years of service” used for separation pay generally refers to service in the current employment—unless the company’s policy/CBA provides otherwise or the facts show continuity.

4.3 Service Incentive Leave (SIL)

SIL generally attaches after an employee has rendered at least one year of service (subject to coverage/exemptions). Bridging becomes relevant when:

a rehired employee is nearing the one-year mark again; or
the company provides leave more generous than SIL and ties it to tenure tiers.

Employers often decide:

Restart SIL qualifying year upon rehire, or
Bridge prior service so the employee is immediately eligible (more generous; usually policy-based).

4.4 13th month pay

13th month pay is generally based on basic salary actually earned during the calendar year and is due to rank-and-file employees (with typical rules on computation and exclusions). Bridging usually does not matter because 13th month is not a tenure milestone; it’s proportional to earnings within the year. Rehired employees typically receive the pro-rated amount for the months actually worked in that year.

4.5 Statutory social benefits (SSS, PhilHealth, Pag-IBIG)

Contributions are driven by law and payroll reporting. “Tenure” inside a company is not the controlling factor. Bridging may matter only indirectly (e.g., HR records, loan eligibility support documents), but contribution obligations depend on actual employment and compensation.

4.6 Other statutory leaves (maternity, paternity, solo parent, special leave for women, etc.)

Many statutory leave entitlements depend on conditions like:

employee status/coverage,
qualifying contributions (for SSS maternity), or
statutory eligibility criteria.

Company tenure bridging can be relevant where the employer’s internal policy provides more generous leave tiers based on length of service.

4.7 Regularization / probationary employment

A common tension: an employee is rehired and asks to be treated as “regular” immediately because they previously worked for the company.

Default: A rehire can be treated as a new probationary employment if the legal requirements for probation are met and the role fits.
But: If the rehired worker is essentially doing the same job and has already demonstrated fitness, or if the “rehire” is part of a pattern to avoid regularization, disputes may arise.
Important: Bridging for benefits does not automatically mean waiving probationary rules—but inconsistent treatment can create litigation risk.

4.8 Company-granted benefits (HMO, leave conversion, bonuses, longevity pay, stock plans)

This is where bridging is most commonly applied and most flexible:

HMO coverage waiting periods
leave accrual rates by tenure tier
longevity pay / service awards
profit sharing or bonuses conditioned on “years of service”
vesting in share plans (if offered)

These benefits are primarily governed by policy, contract, plan rules, and practice, subject to general labor standards (e.g., non-diminution, good faith, non-discrimination, and clear communication).

5) Common bridging policy models (what companies actually implement)

Model 1: Full credit, regardless of break

Prior service is always counted for tenure-based benefits.
Simple and employee-friendly.
Risk: could unintentionally create obligations if not clearly limited (especially across affiliates).

Model 2: Credit if rehired within a “bridgeable period”

Example rule: “Prior service is credited if rehired within 12 months of separation.”
Often requires “good standing” and no pending administrative case at separation.

Model 3: Partial credit (cap or weighted credit)

Example: credit up to 3 years of prior service; or credit only for retirement eligibility, not for leave tiers.

Model 4: Credit only for certain benefits

Example: bridged for retirement and service awards, but not for bonus eligibility tiers or leave conversions.

Model 5: No credit (restart tenure)

Clean from an administration standpoint.
Must be applied consistently to avoid discrimination and must not violate an existing contract/CBA/practice.

6) Legal and compliance pitfalls

6.1 Non-diminution of benefits

If the employer has a history of crediting prior service in a consistent, deliberate way, employees may argue it has become a company practice that cannot be unilaterally withdrawn. This is a frequent flashpoint when:

HR changes the handbook, or
management tries to standardize “no bridging” after years of ad hoc approvals.

6.2 Unequal treatment / discrimination risk

While employers can set eligibility rules, selectively granting bridging without a defensible standard can trigger claims of unfair labor practice (in union contexts), discrimination, or bad faith.

6.3 “Paper breaks” to avoid tenure

If breaks are engineered to avoid regularization or benefits—especially where work is continuous and necessary/desirable—employees may challenge the arrangement as circumvention.

6.4 Affiliate crediting without clear plan rules

Crediting service across affiliates can create disputes about:

who pays retirement liabilities,
whether “credited service” implies the same employer,
whether tenure-based entitlements were promised.

A portability policy should be explicit that it is for benefit computation only and does not collapse separate corporate personalities (unless that is intentionally done via formal arrangements).

6.5 Documentation and data privacy

Crediting prior service requires verifying employment history. Employers should handle employee records with appropriate confidentiality and only collect what is necessary for the stated HR purpose.

7) How to structure a bridging clause (practical drafting points)

A good bridging policy (handbook, offer letter addendum, or plan rule) usually clarifies:

Definition of credited service
- “Total length of service with the Company” vs “credited service for retirement only.”
Eligible separation types
- Resignation in good standing
- End of contract
- Redundancy/retrenchment
- Exclusions (e.g., dismissal for just cause)
Maximum break allowed
- Specify calendar days/months/years.
Benefits covered
- Retirement, leave tiering, service awards, HMO waiting period, etc.
Effective date and transition
- Whether it applies retroactively, and how pending cases are handled.
Approval authority
- HR Head, Compensation & Benefits, or a committee; avoid purely discretionary grants without standards.
No implied continuity clause (if desired)
- If the intent is not to treat the employment as continuous for legal status, say so clearly:
  - “Crediting is solely for benefit computation and does not alter the nature of separation or employment status.”

8) For employees: how to request bridging (and what to prepare)

If you want prior service credited, the strongest bases are:

Your contract/offer (written promise)
Handbook/HR policy (current at the time of rehire, or explicitly incorporated)
CBA provisions (if applicable)
Proof of consistent company practice (e.g., comparable employees whose service was bridged)
Employment documents: COE, clearance, resignation acceptance, rehire letter, prior employee ID, service award records.

A practical approach is to request HR to confirm—in writing—whether prior service will be credited for:

retirement eligibility/computation,
leave tiers,
service awards/longevity,
benefit waiting periods.

9) Disputes: where bridging issues are usually litigated

Bridging disputes commonly surface in:

retirement pay claims,
separation pay computations,
leave conversion/monetization claims,
“regularization” and security-of-tenure disputes when the “break” is challenged.

The forum and remedy depend on the cause of action, but these are typically handled through labor dispute mechanisms (administrative and adjudicatory), with outcomes heavily dependent on:

written rules/policies,
consistency of application,
the reality of the working arrangement (not just labels).

10) Bottom line

In the Philippines, crediting previous service is usually not automatic after a genuine separation—unless it is required by law, contract, CBA, or established company practice, or the facts show the “break” is not a true break (e.g., circumvention scenarios).

For employers, the safest approach is a clear, written bridging policy with objective rules and consistent application. For employees, the strongest path is to anchor the request in written commitments and demonstrable practice, and to distinguish between “crediting service for benefits” and “legal continuity of employment.”

If you want, I can also provide:

a “model bridging policy” template (employer-facing), or
a “rehire offer addendum” clause set that cleanly separates benefit crediting from employment status.