Executive Summary

Under Article 95 of the Labor Code (as renumbered) and its Implementing Rules, rank-and-file employees who have rendered at least one (1) year of service are entitled to five (5) days of Service Incentive Leave (SIL) with pay each year—unless they fall under specific exemptions. Company-employed truck drivers are generally covered if their hours and performance are reasonably supervised or can be determined with certainty (e.g., fixed routes, dispatch tickets, GPS/telemetry, trip logs, timekeeping). They may be excluded only when they qualify as field personnel whose hours cannot be determined with reasonable certainty and whose performance is essentially unsupervised, or when another statutory exemption applies.

The Legal Basis

Statutory Rule

Article 95, Labor Code: Grants five (5) days of paid SIL each year to employees who have rendered at least one year of service (whether continuous or broken), unless they are lawfully excluded.
Implementing Rules (Book III, Rule V): Flesh out eligibility, exclusions, commutation, and administration.

Key Features of SIL

Quantum: 5 days per year with pay.
When it vests: After completing one (1) year of service.
Commutation: Unused SIL is commutable to cash at the end of the year or upon separation, based on the employee’s current daily rate.
Interaction with other leave: If the employee already enjoys at least five (5) days of vacation leave with pay under company policy or a CBA, that generally satisfies the SIL requirement (no “double” leave).
Who administers: The employer, subject to labor standards enforcement by DOLE.

Who Are Exempt from SIL?

The Implementing Rules list narrow exclusions. Employees are not entitled to SIL if they are:

Field personnel and other employees whose performance is unsupervised by the employer, including those:
- engaged on task or contract basis,
- paid on a purely commission basis, or
- paid a fixed amount for specific work regardless of time consumed.
Those already enjoying at least five (5) days of vacation leave with pay.
Government employees (covered by civil service rules).
Historically, domestic workers were listed in the Rules, but they are now covered by RA 10361 (Batas Kasambahay), which grants them five (5) days of service incentive leave with pay after one year of service (separate regime).

Important: The “field personnel” exclusion is not a job title; it is a fact-intensive test. The employer has the burden to prove that the employee truly meets the two-part threshold: (a) work is performed away from the principal place of business and (b) actual hours cannot be determined with reasonable certainty—plus that performance is essentially unsupervised.

Are Truck Drivers “Field Personnel”?

The Controlling Tests

Truck drivers are covered by SIL unless the employer can show that the drivers are field personnel and unsupervised under the Implementing Rules’ strict standard.

Ask the following:

Can the company determine their working hours with reasonable certainty?
- Indicators of determinability: fixed or scheduled routes; dispatch times; trip tickets; gate-in/gate-out logs; tachograph/GPS data; weighbridge slips; delivery window time stamps; radio/app check-ins; required pre-/post-trip inspections; attendance/timekeeping; depot start/finish.
Is their performance supervised?
- Indicators of supervision: route plans; load manifests; dispatcher instructions; spot checks/roving inspectors; mandatory checkpoints; geofencing alerts; supervisor sign-offs at pickup/drop points; disciplinary control during trips.

If yes to determinability and supervision → Not field personnel → SIL applies. If no (e.g., genuinely open-ended routes, no practical way to track hours or performance, minimal employer control) → Possible field personnel → SIL may not apply.

Jurisprudential Guidance (Principles)

While case names vary across issues (overtime, premium pay, etc.), Philippine Supreme Court decisions have repeatedly emphasized that drivers and conductors with fixed routes/schedules and subject to dispatch/inspection are not field personnel because their hours are reasonably ascertainable and they remain under employer control. By analogy, most company truck drivers—especially those operating from depots under dispatch systems—are covered employees for labor standards purposes, including SIL.

Rule of Thumb: The more structured and monitored the trucking operation (dispatching, routing, logs, GPS), the stronger the case that drivers are entitled to SIL.

Common Truck-Driver Scenarios

Depot-based, fixed routes, trip tickets, GPS
- Coverage: Yes (SIL applies).
- Rationale: Hours and performance are trackable; supervision exists (dispatch, delivery windows, logs).
Retail van sales with defined beats and required daily remittances
- Coverage: Yes, generally.
- Rationale: Pre-set “beat plans,” check-ins, sales closures → determinable hours.
Long-haul provincial trips with dispatch orders, time-stamped waybills, and check-ins
- Coverage: Likely yes.
- Rationale: Even if away from the office, hours are reasonably ascertainable using standard controls.
On-call, per-trip drivers sent to ad hoc locations, paid per task, no logs or monitoring
- Coverage: Questionable (possible field personnel).
- Rationale: If the employer cannot reasonably determine actual hours and the driver operates without supervision, the exclusion may apply.
Owner-operators / independent contractors (genuine contracting)
- Coverage: No, if the relationship is truly independent contracting (no employer-employee relationship).
- Caveat: Many “contractor” arrangements are misclassified; legal tests (control, tools, integration into the business, etc.) apply. If an EER is found, SIL rules revive.

Eligibility, Accrual, and Commutation

One Year of Service: The driver becomes eligible after completing 12 months (continuous or broken).
Annual Entitlement: 5 days SIL each year thereafter while employed and not excluded.
Commutation: Unused SIL is convertible to cash at year-end or upon separation, at the current daily rate.
Fractional Use: Employers may allow half-day/hourly charging (policy-based); the law sets the minimum, not the method of increments.
Carryover vs. Cash-Out: The Labor Code requires commutation; carryover into the following year is a matter of company policy/CBA (permissible but not mandated).
No Double Counting: If policy/CBA grants ≥ 5 days vacation leave with pay, that satisfies SIL; label is less important than the paid time off equivalent.

Pay, Coverage, and Interaction With Other Benefits

Daily Rate: SIL pay uses the employee’s current daily wage (basic pay; benefits excluded unless your policy says otherwise).
Absences Without Pay: SIL is separate from attendance discipline; it’s paid leave once approved/availed.
Holiday Pay, Overtime, Night Shift: SIL does not replace or waive other labor standards benefits; each entitlement stands on its own.
No offsetting: Employers cannot “zero-out” SIL by counting unpaid rest days or statutory holidays as SIL.

Documentation Employers Should Maintain (Trucking Context)

Employment status: Appointment letters, probationary/regularization notices.
Time and route records: Dispatch orders, trip tickets, GPS/tachograph logs, gate logs, waybills, POD (proof of delivery).
Leave ledger: Accrual, availment, balances, commutation.
Policies/CBA: PTO matrix showing that at least 5 paid days are granted to satisfy SIL.
Pay slips: Reflect SIL pay when availed or commuted.
Independent contractor vetting (if any): Contracts, proof of substantial capital/investment, control matrix—only if truly non-employee arrangements.

Practical Guidance & Compliance Tips

For Employers

Assume coverage for truck drivers unless the job truly meets the strict field-personnel exclusion.
Design routes and controls (dispatch windows, check-ins, GPS) that make hours determinable and show supervision—this actually supports coverage and labor-standards compliance.
Harmonize your PTO policy: Grant a minimum of 5 paid days (vacation or “SIL/PTO”) to all eligible rank-and-file employees with ≥1 year of service.
Automate commutation: Pay out unused SIL at year-end or upon separation.
Stay consistent: Apply the rule uniformly across drivers similarly situated; deviations are red flags.

For Truck Drivers/Employees

Keep personal copies of trip tickets, dispatch memos, GPS screenshots, and time stamps.
Track your one-year service milestone and confirm SIL posting in your leave ledger.
If denied SIL due to “field personnel” status, ask for the factual basis (e.g., “What about my GPS logs and scheduled routes?”).
If you already receive ≥ 5 days paid vacation leave, clarify whether this includes SIL to avoid duplication.

Computation Examples

Availed SIL day

Daily rate: ₱800
Availed 1 day SIL → ₱800 SIL pay (on top of regular payroll, as paid leave).

Year-end commutation

Daily rate at December: ₱900
Unused SIL: 3 days → ₱2,700 cash conversion.

Separation pay-out

Latest daily rate: ₱1,000
Unused SIL: 5 days → ₱5,000 added to final pay (separate from any statutory separation pay, if applicable).

Frequently Asked Questions (Truck-Driver Focus)

Q1: I’m a company driver with set routes and a dispatcher. Do I get SIL? Yes. Your hours are reasonably determinable and you’re supervised.

Q2: We’re paid per trip (pakyaw) and don’t punch a time clock. Are we excluded? Not automatically. If the company can still determine your hours (trip logs, GPS, delivery time stamps) and supervises performance, you’re not field personnel; SIL likely applies.

Q3: Our policy gives 10 paid vacation days. Do we still get a separate 5 SIL days? No separate grant is required. The 10 days satisfy the minimum SIL.

Q4: Can the company refuse to cash out unused SIL at year-end? No. The law requires commutation of unused SIL.

Q5: Are “boundary” or owner-operator drivers entitled to SIL? If there’s no employer-employee relationship (genuine independent contractor/lessor), SIL does not apply. But if control and integration show an employee relationship, SIL rules apply.

Q6: Does being on the road make me “field personnel”? No. “Field personnel” is about the inability to determine hours with reasonable certainty and lack of supervision—not simply working outside the office.

Checklist: Are Your Truck Drivers Covered by SIL?

Employee has ≥ 1 year of service
Not a government employee
Not a true independent contractor
Hours determinable (trip logs, GPS, dispatch)
Supervision present (instructions, route plans, spot checks)
PTO policy grants ≥ 5 days paid leave (if yes, SIL satisfied)
Unused SIL is cashed out at year-end/separation

If most boxes are checked, SIL applies.

Bottom Line

For Philippine employers and truck drivers alike, the default under the Labor Code is coverage: after one year of service, five (5) days of paid Service Incentive Leave must be granted or matched by equivalent paid vacation leave. Exclusion as “field personnel” is exceptional and must be proven with concrete facts showing both undeterminable hours and lack of supervision. In the highly structured and monitored reality of modern trucking—dispatch systems, route plans, GPS, and delivery time stamps—truck drivers are ordinarily entitled to SIL.