Employer Options When an Employee Avails Leave During the Resignation Notice Period (Philippine Context)

This guide explains, in practical terms, what employers in the Philippines can and cannot do when a resigning employee requests or takes leave while serving a notice period. It is general information, not legal advice.

1) The Legal Groundwork

Voluntary resignation & the 30-day notice. Under the Labor Code, an employee may resign by giving the employer written notice at least 30 days in advance, unless the resignation is for a just cause (e.g., serious insult, inhuman treatment, commission of a crime by the employer). The 30-day notice exists to allow reasonable turnover and business continuity. It is not a statutory requirement to render 30 actual working days; it is a period of advance notice measured in days from receipt of the notice, unless the parties agree otherwise.

Employer waiver / earlier effectivity. An employer may accept immediate or earlier effectivity and waive the full 30 days. Once accepted, separation follows the agreed effectivity date.

Leaves: statutory vs. company-granted.

Statutory leaves (cannot be denied if eligibility requirements are met):
- Service Incentive Leave (SIL): 5 days with pay per year for eligible employees (usable generally as vacation/sick leave; scheduling may be coordinated to avoid undue disruption).
- Expanded Maternity Leave (EML): 105 days (with possible extensions/allocations); primarily SSS-funded with employer salary-differential obligations subject to statutory exemptions.
- Paternity Leave: 7 days (separate from any maternity leave allocation).
- Solo Parent Leave: 7 working days per year (eligibility/documentation required).
- VAWC Leave: 10 days for victims under RA 9262.
- Special Leave for Women for gynecological surgery (per RA 9710 IRR).
Company-granted leaves (e.g., vacation leave beyond SIL, company sick leave, emergency leave): governed by policy/CBAs and generally subject to management scheduling approval.

2) Does Leave “Pause” or “Extend” the 30-Day Notice?

As a rule of thumb: no. The law speaks of advance notice, not “30 working days of service.” Once notice is received, the countdown runs continuously to the effectivity date, whether or not the employee is physically reporting, unless the parties agree to move the date.

That said, employers may control whether non-statutory leave is approved during that period, consistent with policy and business needs (see next section). What you control is attendance, not the notice clock.

3) Employer Options, From Most to Least Restrictive

Below are the practical choices employers usually exercise—combine them as needed and document each step.

A. Enforce the Notice Period (Keep the Effectivity Date)

Approve only critical or statutory leaves; deny discretionary vacation leave (VL) where operationally necessary per policy.
Require turnover: specific deliverables, knowledge transfer, shadowing, access handover.
Direct work modality: on-site, hybrid, or remote as business requires (consistent with policy).
If the employee absents without approved leave, treat as unauthorized absence (AWOL) under your code of conduct (just cause procedures still apply if imposing any sanction that affects pay).

B. Approve Leave but Keep the Effectivity Date

Approve: sick leave supported by medical evidence; statutory leaves (EML, paternity, solo parent, VAWC, women’s special leave) when requirements are met.
Plan for continuity: assign a proxy, reassign approvals, and intensify turnover before the leave starts.
Effectivity stays: The resignation still takes effect on the original date unless you both agree to adjust.

C. Deny Discretionary Leave During Notice

Legitimate if grounded in policy and business necessity. Communicate denial in writing, linking to policy and explaining operational reasons.
Offer encashment (if policy allows) or post-dated encashment through final pay for unused, monetizable credits (e.g., SIL; company VL if encashable).
Do not deny statutory leaves when eligibility is met.

D. Waive the Remaining Notice (“Early Release”)

Mutual agreement to accelerate effectivity (e.g., immediate or a nearer date).
Settle pay and benefits up to the new effectivity date; proceed to clearance.
Tip: Use when continued presence poses risk or the role can be vacated safely.

E. “Garden Leave” (Paid Non-Work During Notice)

By agreement (or per policy), keep the effectivity date but excuse the employee from reporting, with pay and benefits continuing until separation.
Appropriate when you want business protection (e.g., sensitive client data) without invoking disciplinary suspension.
Do not use “preventive suspension” to achieve garden leave—preventive suspension is a due-process tool for investigations and has strict limits.

F. Offset or Require Use of Leave Credits to Cover Absences

Only if policy or agreement allows.
Clarify that offsetting leave changes attendance/pay, not the notice clock, unless you and the employee explicitly agree to advance the effectivity date.

4) Rules of Thumb by Type of Leave During Notice

Leave Type	May Employer Deny?	Notes During Notice
Statutory (EML, paternity, solo parent, VAWC, women’s special leave)	No, if eligibility & documentation are met	Coordinate with SSS/benefit rules; effectivity date generally does not shift unless mutually changed.
Sick leave (company-granted)	Generally no, if medically justified per policy	Require medical certificate/fit-to-work; plan turnover early.
SIL (5 days)	Scheduling can be coordinated; avoid undue disruption	If not used, monetize at year-end/separation per rules.
Vacation leave beyond SIL	Yes, if policy allows and for business necessity	Offer encashment if policy permits; document denial and reasons.

5) What You Cannot Do

Unilaterally extend the effectivity date just because the employee took leave. (You may deny discretionary leave, but the notice clock keeps running.)
Withhold final pay as a penalty for “unserved notice,” absent a clear, lawful written authorization or a valid contractual/liquidated-damages basis. Deductions must comply with law and due process.
Deny statutory leave when the employee is eligible and has submitted required documents.
Use preventive suspension as a substitute for garden leave or to “pause” notice.
Refuse COE (Certificate of Employment) upon request; COEs must be issued within the regulatory timeframe.

6) Managing Risk: Documentation & Process Checklist

Acknowledge the resignation in writing: state the date of receipt and the effectivity date.
Decide on leave requests promptly:
- Approve statutory/medically justified leaves upon compliance.
- For discretionary VL, apply policy and state business grounds for denial/approval.
Turnover plan (attach to acknowledgment): tasks, deadlines, owners, access hand-backs, asset returns.
Security & confidentiality: adjust access; remind about NDA, IP, and non-solicit/non-compete (if any).
Final pay computation: wages to last day, pro-rated 13th month, SIL monetization and other encashable credits, tax, government contributions, approved deductions only (with written authorization where required).
Clearance: list accountabilities; do not use clearance to impose unlawful set-offs.
COE & documents: issue within the required period; furnish BIR Form 2316 and separation documents per rules.
If leave overlaps separation (e.g., maternity leave already commenced): coordinate benefits with SSS/PhilHealth and handle salary differential and benefits per statute and any applicable exemptions; document any agreements on effectivity.
Record everything: resignation letter, acknowledgment, leave approvals/denials, turnover sign-offs, clearance, and release documents.

7) Frequently Encountered Scenarios

Q1: The employee files VL to cover the entire 30-day notice. Can we refuse? Yes, if your policy allows denial for business needs. Approve only what operations can afford; offer encashment/monetization where applicable.

Q2: The employee goes on medically certified sick leave for two weeks during notice. Can we extend the effectivity date? No, not unilaterally. The notice period keeps running. You may require medical documentation and organize turnover around the absence.

Q3: The employee starts maternity leave four days after submitting resignation. Grant maternity leave if eligible and manage payroll/SSS coordination. The resignation still takes effect on the agreed date unless you both change it in writing.

Q4: Can we deduct “salary in lieu of notice” if the employee walks out? Only if you have a clear, lawful written basis (e.g., a contract or policy expressly authorizing a specific deduction/liquidated damages) and you comply with due-process and deduction rules. Otherwise, pursue damages through lawful means—not by unilateral wage set-off.

Q5: Can we place the employee on paid “garden leave” for the rest of the notice? Yes, by agreement or policy. Pay and benefits continue; effectivity stays the same.

8) Model Clauses & Letters (Short Samples)

A. Acknowledgment of Resignation & Turnover

We acknowledge receipt of your resignation on [date] with effectivity on [date]. Your last working day remains [date]. Please complete the attached Turnover Plan by [date], including delivery of [items]. Access to [systems] will be adjusted on [date]. Your final pay and monetized leaves (if any) will be processed in accordance with company policy and applicable law.

B. Denial of Discretionary Leave During Notice

We received your leave request dated [date] for [dates]. In line with [Policy/CBA section] and due to operational requirements related to your turnover of [projects], the request is disapproved. You may opt for encashment/monetization of unused credits per policy.

C. Approval of Statutory/Medical Leave During Notice

Your [type of statutory/medical] leave from [dates] is approved upon submission of [required documents]. Your resignation remains effective on [date], unless otherwise mutually agreed in writing.

D. Garden Leave Confirmation

Effective [date], you are excused from reporting for work through [effectivity date], with regular pay and benefits, to protect business interests and facilitate transition. Please remain available for reasonable remote turnover support.

9) Best-Practice Policies to Adopt (Proactive)

Notice-period playbook: fixed turnover checklists, knowledge-transfer templates, access off-boarding timelines.
Clear leave rules during notice: which leaves may be denied, documentation standards, and monetization rules.
Garden leave option for sensitive roles.
No-unlawful-deductions commitment, with escalation to Legal/HR before any set-off.
Training & communications for managers to handle resignations consistently and lawfully.

10) Quick Employer Decision Tree

Is the leave statutory or medically justified? → Yes: Approve (with documentation). Keep effectivity unless mutually changed. → No (discretionary VL): Go to 2.
Will approval materially hinder turnover/operations? → Yes: Deny with written reasons; offer monetization if available. → No: Approve and adjust turnover; effectivity unchanged.
Do you want the employee out sooner for business protection? → Consider early release (waiver) or garden leave.
Any talk of deductions for unserved notice? → Ensure clear written authorization and legal basis—or don’t deduct.

Final Notes

The notice period is a clock, not a quota of workdays. Leaves affect attendance and pay; they don’t freeze the clock unless both sides agree.
Statutory leaves trump scheduling preferences.
When in doubt, document, apply policy consistently, and escalate to legal counsel for edge cases (e.g., overlapping maternity benefits, complex deductions, or training bonds).