Filing Complaints for Non-Payment of Service Incentive Leave by Agencies in the Philippines

This article explains the legal basis, coverage, exemptions, liabilities of manpower/placement agencies and their principals, complaint forums and procedures, evidence, computation, deadlines, and practical templates—so you can confidently pursue a claim for unpaid Service Incentive Leave (SIL) in the Philippine private-sector setting.

1) The legal concept of Service Incentive Leave (SIL)

What it is. Service Incentive Leave is a statutory benefit granting at least five (5) days of leave with pay to an eligible employee after one (1) year of service, whether the service is continuous or broken.

How it may be used. SIL is a versatile leave—it may be used as vacation or sick leave at the employee’s option, subject to reasonable company procedures (e.g., prior notice for vacation leave, proof of illness for sick leave).

Cash conversion. If unused by year-end, SIL is commutable to its cash equivalent based on the employee’s current daily wage. Many disputes arise because the conversion is not done automatically or is delayed.

Accrual. The right to use each year’s 5 SIL days arises after completing one year of service. The claim to convert unused SIL arises at the end of that year (if you remain employed and conversion is due) or upon separation (all unused SIL should be paid out). Companies may allow carry-over, but the law guarantees at least cash conversion if not used.

2) Coverage and key exemptions

Covered: In general, rank-and-file employees in the private sector who have rendered at least one year of service are covered—including those deployed by manpower/outsourcing agencies to client sites.

Common exemptions (verify carefully):

Employees already enjoying paid vacation leave of at least 5 days a year. If a company grants, for example, 10 vacation days with pay to all rank-and-file employees from Year 1, that usually satisfies the SIL minimum (no double-payment).
Field personnel and similarly situated workers whose hours cannot be determined with reasonable certainty (and certain task/commission-based arrangements when they fall into that category). The label in the contract is not decisive; actual work conditions are.
Some small establishments (depending on the factual headcount threshold set by regulations) have historically been exempted—but this is narrowly construed and often contested. If you regularly see >9 workers on the payroll or in operations, assume coverage and let the employer prove otherwise.
Separate regimes exist for domestic workers (kasambahay) and government employees; the discussion here focuses on private-sector employment and agency deployment.

Managerial employees? SIL is a rank-and-file minimum. True managerial employees can be outside the SIL floor if they receive superior leave packages; otherwise, disputes turn on whether the role is truly managerial.

3) Manpower/outsourcing agencies: who pays?

Primary responsibility. The agency (contractor), as the direct employer on paper, is primarily responsible for paying SIL to its deployed employees.

Solidary liability with the principal. If the arrangement is labor-only contracting (or the contractor violates contractor rules), the principal can be treated as the employer and become solidarily liable for statutory benefits such as SIL. Even in legitimate contracting, regulations frequently impose solidary liability for unpaid wages and mandated benefits. Practically, you can claim against both agency and principal; payment by either extinguishes the liability.

Clues that point to labor-only contracting: The agency does not have substantial capital or investments, the workers perform tasks directly related to the principal’s business, and/or the principal controls the means and methods of the work. These are fact-intensive; gather proof early.

4) What non-payment looks like

No SIL credited after one year of service.
SIL is credited but conversion is not paid for unused days at year-end or upon separation.
Employer insists “SIL is already included in your monthly pay.” (This is not a valid reason by itself; the employer must show a clear policy providing at least 5 paid days or an equivalent paid leave program.)
Employer misclassifies workers as field personnel, contractors, or probationary trainees to avoid SIL, despite fixed schedules and supervision.

5) Amount to claim: computations that stick

Daily-paid or monthly-paid—same principle: compute using your regular daily wage (basic wage only, excluding overtime, premium pay, allowances not integrated into basic wage).

Per year conversion (if unused): Unpaid SIL (days) × Current Daily Wage
If partially used: (5 − SIL days used) × Current Daily Wage
Upon separation: All unused SIL over entire tenure × Final Daily Wage

Examples

Daily wage ₱610; you used 2 SIL days; 3 unused → ₱1,830 (3 × ₱610).
Monthly salary ₱20,000; divisor 26 → daily wage = ₱769.23. Unused 5 → ₱3,846.15.

Tip: If the company uses a different divisor (e.g., 27 or actual workdays), check consistency with their payroll rules and past payslips. In disputes, the employer’s own practice often controls.

6) Deadlines (prescriptive periods)

Money claims like unpaid SIL generally prescribe in three (3) years from the time the cause of action accrues.
For yearly conversion, count three years from the end of each year the conversion should have been paid (or from separation, if that’s when payment became due).
To be safe, file early and claim the last three years (or your entire tenure if shorter). Older years might be time-barred unless special tolling applies.

7) Evidence that wins cases

Bring duplicates; keep originals. Useful pieces include:

Employment papers (job offer, contract with the agency, deployment notice to principal).
Company policies and handbooks (to show or refute a “we already grant >=5 paid days” defense).
Payslips and payroll registers (to prove non-payment of SIL or show the divisor used).
Leave records (balances, approvals, denials, HRIS screenshots).
Timekeeping and schedules (to counter the “field personnel” defense).
Communications (emails, chats) showing requests for SIL conversion or HR refusals.
Co-worker affidavits (especially on headcount, control/supervision by principal, and common practices).

Burden of proof. Employees must show entitlement (employment, completion of a year, non-payment). Once shown, the employer must prove payment (they control payroll records). Gaps are resolved against the employer.

8) Where and how to file a complaint

You have two practical pathways (they can also complement each other):

A) Department of Labor and Employment (DOLE) route

Best when: You want quick compliance through inspection/conciliation, especially for current employees and group claims.

Single-Entry Approach (SEnA). File a Request for Assistance (RFA) with the DOLE Regional/Field Office where you work or where the employer operates. State parties (Agency and Principal), facts (tenure, non-payment), and specific amount claimed (see computations). A conciliation-mediation conference is set. Many SIL issues settle here.
Inspection & Compliance Orders. If unresolved, DOLE may conduct a Complaint Inspection. When a violation is found, DOLE can issue a Compliance Order directing payment—its visitorial and enforcement powers cover statutory monetary benefits like SIL, regardless of amount. Employers may appeal, but compliance is often faster than litigation.
Who to name. Name the agency and the principal (solidary liability angle). Provide both addresses/sites.

B) National Labor Relations Commission (NLRC) route (Labor Arbiter)

Best when: You’re separated from employment, there are multiple money claims (e.g., overtime, last pay, 13th month), or you anticipate defensive litigation.

Prepare a verified Complaint. Use the NLRC form for monetary claims against the agency and principal. Attach computations and evidence.
Mandatory conciliation/mediation (also called SEnA within the NLRC process in some regions) precedes hearings. If no settlement, the case proceeds to submission of position papers and, if necessary, hearings.
Reliefs. The Arbiter may award unpaid SIL, legal interest (from the time each amount fell due), attorney’s fees (commonly 10% when you engaged counsel), and other proven money claims.

Practical sequencing: Many workers start with DOLE SEnA (fast, low-cost). If the employer stonewalls or appeals to delay, consider elevating to the NLRC for a full adjudication while preserving your 3-year prescriptive window.

9) Strategy against common defenses

“We grant 5+ VL already.” Ask for the policy text and actual leave ledger. If only unpaid “leave” or offsetting of rest days is offered, that doesn’t satisfy SIL.
“You’re field personnel.” Show fixed schedules, bio-clock logs, supervisor instructions, team chats—anything demonstrating the employer controls your time and methods.
“Included in salary.” Demand clear payroll rules stating that at least five paid days are already allocated and how conversion is computed. Absent clarity and consistent practice, SIL remains due.
“We’re just the principal; go after the agency.” For deployed workers, cite solidary liability under contracting rules and attach proof of deployment, ID badges, and site supervision by the principal.

10) Step-by-step checklist (current employees)

Gather records (contracts, payslips, leave balances, screenshots).
Compute unpaid SIL for the last three years and YTD.
Send a written demand to both Agency and Principal (email + hard copy). Give 5–10 working days to comply.
File SEnA (DOLE) naming both parties; bring evidence and computations.
If unresolved, pursue DOLE inspection and/or file an NLRC complaint.
Keep working if you want to preserve employment; retaliation can be contested (e.g., illegal dismissal or unfair practice, depending on facts). Document everything.

11) Step-by-step checklist (separated employees)

Secure final payslips, COE, and any quitclaim (do not sign a quitclaim that waives SIL unless you are fully paid and you understand it).
Compute all unused SIL for entire tenure at final daily wage.
Demand letter to Agency and Principal.
NLRC complaint (you can still try DOLE SEnA, but NLRC is often the main forum post-separation).
Claim legal interest from the date SIL should have been paid (year-end(s) or separation), plus attorney’s fees if applicable.

12) Template: concise demand letter (fill in specifics)

Subject: Demand for Payment of Unpaid Service Incentive Leave (SIL) To: [Agency’s HR/Payroll Email] and [Principal’s HR/Compliance Email]

I have been employed by [Agency Name] and deployed to [Principal Name / Site] as [Position] from [Start Date] to [Present/End Date]. I have completed more than one year of service and am entitled to five (5) days Service Incentive Leave with pay yearly.

Based on my records, the following SIL remained unpaid/未converted: [Year 1]: [x] days × ₱[daily wage] = ₱[amount] [Year 2]: … [Separation (if any)]: [x] days × ₱[final daily wage] = ₱[amount] Total: ₱[total].

Kindly remit payment within 10 working days from receipt of this letter and provide a payroll breakdown. Absent payment, I will file a complaint with DOLE/NLRC against both the Agency and Principal pursuant to solidary liability for statutory benefits.

Sincerely, [Name] [Address / Contact] [Employee/ID No.]

13) Filing forms & practical tips

SEnA (DOLE): Fill out the Request for Assistance completely. Identify both Agency and Principal, list specific amounts with per-year computations, and tick “non-payment of benefits.”
NLRC: Use the standard Complaint; attach Computation Sheet, Affidavit, and documentary exhibits (A—employment; B—payroll; C—leave ledger; D—deployment; E—emails).
Appear on time at conferences/hearings. If the employer says “paid already,” ask them to produce payroll records and signed leave slips—mere assertions aren’t proof.
Group complaints are efficient. If co-workers have identical circumstances, file jointly (but individual computations must still be attached).
Quitclaims: A quitclaim does not bar recovery if the waiver was involuntary, for grossly inadequate consideration, or was signed without full disclosure. If you signed one, bring it; it can often be overcome.

14) Remedies you can recover

Unpaid SIL (principal amount)
Legal interest (from the due date of each unpaid conversion or from separation)
Attorney’s fees (commonly 10% of amounts recovered if you hired counsel)
Solidary enforcement against Agency and Principal in proper cases

15) Frequently asked questions

Q: I’m monthly-paid. Do I still get SIL? A: Yes—unless your employer can prove you already receive at least five paid leave days annually or fall under a valid exemption.

Q: Our company grants 10 vacation days but unpaid sick leave. Is SIL still due? A: If those 10 vacation days are paid, the SIL minimum is satisfied—the law requires at least five paid days, not separate buckets.

Q: I used 5 sick days but HR deducted from pay. A: That suggests you weren’t given paid leave. You may claim SIL pay up to five days per year (less any paid days actually granted).

Q: I resigned two years ago. Can I still claim? A: Yes, if within three years from when payment became due (commonly at separation for all unused SIL).

Q: We’re ‘project-based’ under an agency. A: Project-based status does not waive SIL if you completed at least one year of service (even if broken) and no valid exemption applies.

16) Quick self-audit (for agencies and principals)

Do you credit 5 paid leave days starting after Year 1?
Do you auto-convert unused SIL at year-end and upon separation?
Are field personnel classifications properly documented?
Are payroll and leave ledgers retained and reproducible?
For deployments, is the principal aware of solidary exposure for statutory benefits?

17) Bottom line

If you’ve completed at least one year and didn’t receive either five paid leave days or cash conversion of unused days, you likely have a valid claim. Name both the agency and the principal, compute the last three years (or tenure), and pursue DOLE SEnA/inspection or NLRC. The law favors documentation: gather your records, be precise in computations, and insist on proof of actual payment—not just policy promises.