Computing Length of Service for an Employee Who Died in an Accident During Lunch Break (Philippine context)

This guide explains—step by step—how HR and payroll should compute length of service (LOS) when a private-sector employee dies in an accident during the lunch break, and how that LOS figure is then used across final pay, government claims, and employer-provided plans in the Philippines. It also highlights common edge cases and documentation you’ll need.

Bottom line upfront: For purposes of length of service, you simply count from the employee’s hire date up to (and including) the date of death. The fact that the death happened during lunch break does not change how LOS is counted. Lunch break matters mainly for compensability under the Employee’s Compensation Program—not for tenure counting.

1) What “length of service” is—and where it matters

Length of service (LOS) is the continuous period the employee has been employed by the company, measured in calendar time (years/months/days), not hours worked. You’ll use LOS for:

Employer plans that key off tenure (e.g., retirement or death benefits under a company plan or CBA).
Pro-rated statutory/contractual benefits upon separation due to death (e.g., 13th-month pay pro-rata, conversion of unused Service Incentive Leave).
Recognition of service in COE, internal records, or for accrued longevity benefits where applicable.

Note: Separation pay under “authorized causes” in the Labor Code doesn’t apply to death (death is neither a just nor authorized cause—employment simply ends by impossibility). But a retirement plan/CBA may grant death benefits that are computed using LOS.

2) Core rule for computing LOS at death

Start date: The original date of employment (or the latest re-employment date if there was a break in service).
End date: The date of death (calendar date on the death certificate).
Method: Use the anniversary method:
- Count full years first (from hire date up to the last anniversary before death),
- then count the remaining full months,
- then remaining days.

Example Hire date: 15 March 2015 Date of death: 10 August 2025 LOS = 10 years, 4 months, 26 days.

Rounding?

There is no universal statutory rounding rule for LOS itself. However, specific computations (e.g., retirement pay under R.A. 7641 or separation pay when applicable) adopt the familiar rule: a fraction of at least six (6) months is considered one whole year. Apply rounding only if the benefit formula you’re using says so (e.g., many retirement/death benefit plans or CBAs do).

3) Does “lunch break” change LOS?

No. Lunch break doesn’t affect tenure because LOS is calendar-based, not “hours worked.”

Where lunch break does matter is compensability under the Employee’s Compensation Program (ECP) (administered by ECC through SSS/GSIS). An accident during lunch—especially within the company premises or while performing acts reasonably necessary for sustenance—can be compensable (“in the course of employment”). That affects ECC/SSS death benefits, not how many years of service you count.

4) Step-by-step HR checklist (private sector)

Freeze employment records on date of death.
- Confirm hire date (and rehire date if any).
- Confirm date of death.
Compute LOS (years–months–days), applying rounding only if the applicable benefit formula requires it.
Identify which payouts use LOS:
- Company retirement/death plan or CBA (LOS typically determines the benefit bracket).
- Pro-rated 13th-month pay (not LOS-based per se, but tenure sets the pro-ration period).
- Cash conversion of unused SIL (statutory 5 days/year after one year of service; more if company grants more).
- Other employer-granted longevity benefits tied to years of service (if any).
Government benefits (separate tracks):
- SSS: death, funeral, and EC (Employee’s Compensation) benefits—filed by beneficiaries; amount depends on contributions/coverage, not LOS.
- ECC: if death is work-connected (lunch break often qualifies under the “personal comfort” doctrine, esp. on-premises), there may be additional EC death benefits.
- PhilHealth: separate from LOS; check any applicable claims related to last confinement.
Prepare the Final Pay for release to the estate/heirs:
- Unpaid wages up to date of death, pro-rated 13th-month pay, leave conversions, cashable allowances per policy, and any plan-based death benefit (if employer-funded plan exists).
- Apply tax rules appropriately (e.g., 13th-month and other benefits exemption thresholds; check current TRAIN thresholds).
- Observe DOLE guidance on timeliness of final pay release (commonly within 30 days from separation, death included), subject to clearance and documentation.
Documentation from claimants (typical company practice):
- Death certificate; valid IDs of claimant(s).
- Proof of relationship/beneficiary (marriage/birth certificates, or designation under company plan).
- Proof of authority to receive (e.g., SPA, Affidavit of Self-Adjudication, or Extrajudicial Settlement for multiple heirs, depending on company policy and risk posture).
- SSS/ECC forms for government claims (filed by beneficiaries).

5) How LOS plugs into specific payouts

A) Employer retirement/death plan or CBA

If your plan/CBA grants death benefits based on years of service, use the LOS you computed.
Apply any plan-specified rounding (e.g., “≥6 months = 1 year”).
Follow the plan’s beneficiary designation and vesting rules.

B) 13th-month pay (P.D. 851)

Compute pro-rata up to the date of death:

$$ \text{13th-month} = \frac{\text{Basic salary actually received Jan 1 – date of death}}{12} $$
Release to the heirs/estate together with final pay (subject to tax rules).

C) Service Incentive Leave (Labor Code)

If the employee had at least one (1) year of service, unused SIL (statutory 5 days/year, or higher if company grants more) is convertible to cash upon separation, including death.
The cash conversion rate is the current daily basic rate (or as per policy/CBA if more generous).

D) Other employer-granted benefits

Longevity pay, loyalty awards, gratuity, or risk allowances: follow company policy/CBA; apply LOS and any rounding prescribed there.

Not LOS-based: SSS/ECC death benefits are based on contributions and coverage, not length of service. Still, the fact that the accident occurred during lunch break may support work-related classification for ECC claims.

6) Edge cases and how to handle LOS

Probationary employees: Count actual calendar service up to date of death; probationary time counts toward LOS.
Project/fixed-term employees: LOS runs from contract start to death; if re-engaged across projects, follow company rules on bridging or treat as separate stints.
Rehired employees after a break: Unless your CBA/plan provides bridging, LOS normally restarts at the latest hire date for plan computations (keep a record of aggregate company service if your plan recognizes it).
Leaves without pay/disciplinary suspension: Employment usually continues (no break in LOS) unless company plan explicitly excludes such periods from credited service for plan computations.
Floating status (no work) up to 6 months: Employment continues; LOS typically continues unless your plan defines credited service differently.
AWOL prior to death: Verify if the employee had actually separated before death. If not, LOS generally runs through the date of death, but check plan rules on credited service and company policy on abandonment.
Government employees: Use Civil Service/GSIS and agency rules; concepts are similar but formulas/beneficiaries and leave commutation rules differ from private sector.

7) Worked examples

Example 1: Straight LOS and plan rounding

Hire: 20 Jan 2018
Death: 09 Sep 2025
LOS (anniversary method): 7 years, 7 months, 20 days.
If plan says “≥6 months = 1 year” for benefit years, count 8 years for the plan’s benefit bracket.

Example 2: Pro-rated 13th-month at death

Monthly basic: ₱30,000; paid Jan–Aug (death on 10 Aug)
Basic actually received Jan 1–Aug 10 ≈ ₱240,000 (assuming full Jan–Aug months paid; adjust if August is partial).
13th-month ≈ ₱240,000 / 12 = ₱20,000 (before considering tax exemptions/thresholds).

Example 3: SIL conversion

Entitled to 5 SIL days/year; had 2 unused days as of death.
Daily rate ₱1,200 → ₱2,400 SIL conversion payable to heirs.

8) Documentation & release logistics

Who gets paid? Follow your plan’s beneficiary designation for plan benefits. For final pay (wages, 13th-month, leave conversions), pay the heirs/estate; require standard proofs (death certificate, IDs, proof of relationship, authority to receive).
When to release? As a general rule of practice, release within 30 days from separation (death), subject to clearance and complete documents.
Withholding/taxes: Apply current tax rules (e.g., TRAIN thresholds for 13th-month/other benefits). Some death benefits under employer plans may be taxable/non-taxable depending on plan structure—coordinate with your tax adviser.

9) Lunch-break accidents: why they still matter (but not for LOS)

LOS: unaffected.
ECC/SSS: A lunch-break accident can be work-connected (especially on-premises or under the personal-comfort doctrine), supporting ECC death and funeral benefits on top of regular SSS death benefits. Make sure beneficiaries file both SSS and ECC claims promptly.

10) Practical HR workflow (at a glance)

Confirm hire and death dates → compute LOS.
Check plan/CBA for death/retirement formulas and rounding.
Compute final pay: unpaid wages, pro-rated 13th, SIL conversion, other cashables.
Coordinate with beneficiaries on SSS/ECC filings (separate from payroll).
Collect documents, route clearance, and release funds within standard timelines.

11) Frequently asked questions

Q: Do we count the day of death? A: Yes. For LOS, you count through the date of death (it is the end date of employment).

Q: We give “one month pay per year of service” as a death gratuity. Do we round partial years? A: Only if your policy/plan/CBA says so. A common rule mirrors retirement/separation computations (≥6 months = 1 year), but apply your document’s rule.

Q: The employee was on unpaid leave when they died. Does LOS stop? A: Employment is still in force unless there was a prior separation. LOS usually continues, but some plans exclude unpaid leaves from credited service; check the plan text.

Q: The accident happened off-premises during lunch. Does that change LOS? A: No for LOS. It may affect ECC compensability facts; gather details (on/off premises, authorized lunch outside, company transport, etc.) for ECC evaluation.

Final reminder

This is a general guide for the Philippines. Always check your company policy/CBA/plan documents for specific formulas, rounding, vesting, and beneficiary rules, and coordinate with your payroll, tax, and legal advisers for edge cases.