The Philippines’ Labor Code does not use the exact term “vacation leave” as a distinct statutory benefit. What most employees and employers commonly refer to as “vacation leave” (VL) is either:
- The mandatory Service Incentive Leave (SIL) of at least 5 days with pay under Article 95 of the Labor Code, or
- The more generous company-provided vacation leave (usually 10–30 days per year depending on tenure and company policy) that most medium- to large-sized private employers grant to regular employees.
The critical turning point for leave entitlement is almost always regularization — the moment the employee successfully completes the probationary period and acquires regular status.
1. Probationary Period Under Philippine Law
- Maximum duration: 6 months from date of hiring (Article 296, Labor Code, as renumbered by RA 10151).
- Exception: Longer period allowed only if covered by a legitimate apprenticeship/training program approved by TESDA or DOLE.
- Employee who is allowed to continue working after the 6th month automatically becomes a regular employee by operation of law (Article 295, Labor Code; Mercado v. AMA Computer College, G.R. No. 183572, April 13, 2010).
2. Leave Entitlement During Probationary Period
| Benefit | Entitled During Probation? | Remarks |
|---|---|---|
| Service Incentive Leave (5 days) | NO | Requires at least 1 year of service (includes probationary period) |
| Company-provided VL/SL | Usually NO or very limited | Most companies start accrual only upon regularization |
| Emergency / bereavement leave | Depends on company policy | Many companies grant 3–5 days even to probationary employees |
| Mandatory benefits (SSS, PhilHealth, Pag-IBIG, holiday pay, OT, etc.) | YES | Probationary employees enjoy all statutory monetary benefits except security of tenure |
Common practice: During the first 6 months, employees are typically not allowed to file vacation or sick leave (except for emergencies). Some generous companies credit pro-rated leaves or allow leave filing after 3 months.
3. Leave Entitlement Immediately Upon Regularization
Once the employee becomes regular (usually on the 1st day of the 7th month), the following apply:
A. Mandatory Statutory Minimum (Article 95, Labor Code)
- Service Incentive Leave (SIL): 5 days with full pay per year.
- The 1-year service requirement is counted from the date of hiring, including the probationary period.
- Therefore, a regular employee becomes entitled to the 5-day SIL on or about the 1st anniversary of employment.
- SIL is cumulative and convertible to cash (DOLE Explanatory Bulletin on SIL, 1996; DOLE Department Advisory No. 02-04).
- Unused SIL must be paid upon separation from employment.
B. Company-Provided Vacation Leave & Sick Leave (Most Common Actual Practice)
Virtually all medium- and large-sized private companies in the Philippines grant benefits far exceeding the statutory minimum. The typical packages upon regularization are:
| Years of Service | Typical Vacation Leave (VL) | Typical Sick Leave (SL) | Total Credited Leaves |
|---|---|---|---|
| Upon regularization (0–1 year) | 15 days (most common) | 15 days | 30 days |
| After 1 year | 15–18 days | 15–18 days | 30–36 days |
| After 3–5 years | 18–20 days | 18–20 days | 36–40 days |
| After 10 years | 20–30 days (some up to 30) | 20–30 days | 40–60 days |
Accrual method (almost universal):
- 1.25 days VL and 1.25 days SL per month (15 days ÷ 12 months = 1.25)
- Accrual usually starts on the first day of regularization (7th month onwards)
- Some companies retroactively credit leaves from date of hire; others strictly from regularization date
Example: Employee hired January 1, 2025 → probation ends June 30, 2025 → becomes regular July 1, 2025.
- If company policy credits from regularization date:
July to December 2025 = 6 months × 1.25 = 7.5 days VL + 7.5 days SL credited by end of 2025. - On January 1, 2026 (1st anniversary), employee gets full 15 VL + 15 SL for 2026.
4. Key DOLE Clarifications & Jurisprudence
| Issue | DOLE/Supreme Court Ruling |
|---|---|
| Is SIL cumulative? | YES (DOLE Explanatory Bulletin, 1996; confirmed in numerous labor arbiter decisions) |
| Can company impose “use-it-or-lose-it” for VL? | Allowed for the excess over 5 days, but the mandatory 5-day SIL portion must remain convertible to cash |
| Can VL be forfeited if not used within the year? | Only the portion exceeding the mandatory 5-day SIL. The 5-day minimum must be paid if unused |
| Is the probationary period included in computing the 1-year service for SIL? | YES (continuous service from date of hiring) |
| Are managerial/supervisory employees entitled to SIL? | NO, if they already enjoy vacation leave with pay of at least 5 days (Book III, Rule I, Sec. 2(d), Omnibus Rules) |
| Field personnel, piece-rate workers, kasambahay | Generally exempt from SIL |
5. Conversion of Unused Leaves to Cash
| Situation | Vacation Leave (company-provided) | Service Incentive Leave (statutory 5 days) |
|---|---|---|
| Upon resignation/termination | Usually converted to cash (most companies) | MUST be converted to cash |
| Annual cash conversion (while employed) | Common in many companies (especially BPOs, multinational firms) | Allowed and encouraged by DOLE |
| Forfeiture allowed? | Only for excess over 5 days | NEVER — must be paid |
6. Special Cases
| Employee Type | Vacation Leave Entitlement After Probation/Regularization |
|---|---|
| Government employees | 15 days VL + 15 days SL from day 1 (CSC rules) |
| BPO/call center agents | Often 20–30 days total leaves + unlimited emergency leaves |
| Seafarers (POEA contracts) | 30 days paid vacation after 12-month contract + cash equivalent of unused |
| Domestic workers (Kasambahay Law) | 5 days SIL after 1 year (same as regular employees) |
| Part-time employees | Pro-rated based on hours rendered |
7. Best Practices for Employees
- Check your employment contract and company handbook immediately upon regularization — this is the primary source of your actual VL/SL credits.
- Leaves are almost always credited monthly; monitor your payslip or HR portal.
- File leaves in advance; approval is discretionary but cannot be unreasonably denied.
- Upon resignation, demand cash conversion of all unused VL/SL (including the mandatory 5-day SIL portion) in your final pay.
In summary: While the Labor Code only guarantees 5 days Service Incentive Leave after one full year of service (including probation), the overwhelming majority of private-sector regular employees in the Philippines actually receive 15 days vacation leave + 15 days sick leave per year starting from the date of regularization, with monthly accrual at 1.25 days each. This has become the de facto industry standard across almost all formal-sector employers.