TITLE III

HOLIDAYS, SERVICE
INCENTIVE LEAVES
AND SERVICE
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CHARGES
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 CHAPTER 1

CRISTINA MAE ABRENCILLO MA. THERESA NICOLE R. AARON JOSCHKA BLARDONY

BAYUTAS

EARL MAXINE BAUTISTA PHILIP SEBASTIEN G MERWIN JESTER P.

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TAÑA REVADENERA
 ART. 94. Right to holiday pay.- (a) Every worker shall be paid his
regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;

CHAPTER The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular
rate;

03 ART. 95. Right to service incentive leave. (a) Every employee who has
rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.
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 The provision shall not apply to those who are already enjoying the benefit herein provided,
those enjoying vacation leave with pay of at least five days and those employed in
establishments regularly employing less than ten employees.

ART. 96. Service charges

All service charges collected by hotels, restaurants and similar establishments shall be distributed at
the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for
management. The share of the employees shall be equally distributed among them.

CONDITIONS OF EMPLOYMENT TITLE I-

WORKING CONDITIONS AND REST PERIODS

1. Regular and Muslim Holidays.

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Executive Order No. 203 (and the Administrative Code

of 1987 as well) specifies the ten (10) regular holidays.
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 R.A.NO. 9177 Presidential Decree No. 1088

Otherwise known as An Act Declaring the First Recognizes five (5) Muslim holidays which
Day of Shawwal a National Holiday for the shall be observed in the predominantly Muslim
Observance of Eid'ul Fitr, this important Islamic areas.
celebration became one of the national holidays
of the country.
2. Holiday Pay.
Subject to the exclusion under Article 82, and except in retail and service establishments employing less
than ten (10) workers, every employee is entitled to be paid his regular wage during regular holidays (100
%) if he does not work, and twice that rate (200%) if he works. Article 94 of the Labor Code and BO No.
203, in relation to Presidential Proclamation No. 1198, which became effective on 26 October 1973.
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 Case of Insular Bank of Asia and America Employees Union u. Inciong (132
SCRA 663) was decided by the Supreme Court. Article 94 of the Labor Code
was not meant to deny the benefit of holiday pay to monthly paid employees. It
merely established the presumption that they are uniformly paid by the month.

The law does not require employers to reckon a year at more than 365 days. An
employee is entitled to holiday pay on Maundy Thursday if he works on the same
day. Monthly-paid employees are entitled to an additional 100% if they did not
work that day.

3. Service Incentive Leave.

This benefit consists of five (5) days' leave with pay which the law requires
employers to grant to every employee who has rendered at least one (1) year of
service, except those who are already enjoying the same benefit, those enjoying
vacation leave with pay of at least five (5) days per year, and those employed in
establishments regularly employing less than ten (10) employees or in
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establishments exempted from granting this benefit by the Secretary of Labor and
Employment based on their viability or financial condition.
 In Serrano v. Severino Santos Transit (627 SCRA 483), the Supreme Court held that service
incentive leave does not apply to employees classified as "field personnel". The phrase "other
employees whose performance is unsupervised by the employer" must not be understood as
separate classification of employees.

4. Paternity Leave.

Paternity leave is another labor standards benefit and is included in this chapter for that reason,
although the Labor Code does not provide for it. The benefit is the subject of R.A. No. 8187
which took effect on 5 July 1996. It consists of seven (7) working days' paternity leave with full
pay, granted to married male employees in the public and private sectors for the first four (4)
deliveries of their legitimate spouses with whom they are cohabiting.

Paternity leave may be availed of before, during or after the delivery provided that the total number of
days shall not exceed seven (7) working days. The limit of four (4) deliveries is also a condition for
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entitlement to maternity leave under the Social Security Law.

 5. Service Charges.

Article 96 of the Labor Code applies to hotels, restaurants and similar

establishments which collect service charge from their customers as part of the
cost of good served or the service rendered to them. Under the Omnibus Rules
(Rule VI, Book III), the 85% of the service charge intended for the employees
is to be distributed equally among all personnel except those of managerial
character within the meaning of Article 82, that is to say managers and other
officers and members of the managerial staff. The latter category includes
supervisors.

Tips are amount of money given by customers to the people who

serve them, out of gratitude or simple recognition of the quality
of the service rendered. Service charge is an integral part of the
cost of the goods or service ordered by the customers and does
not form part of tips.
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 6.Other Leave Benefits under Special Laws.

a) Maternity leave (discussed under Article 131, infra.)

b) Solo parent's leave, under R.A. 8972, consisting of seven work days with full pay per year,
including basic salary and mandatory allowance fixed by wage order, due to one who is
left alone with the responsibility of parenthood, to enable him or her to perform parental
duties and responsibilities where physical presence is required.

c) Leave for women employees who are victims of violence under R.A. No. 9261 (Anti-
Violence against Women and their Children Act of 2004), consisting of up to ten days with
full pay. including basic salary and mandatory allowance fixed by wage order.

d) Special leave under R.A. No. 9713 for women who undergo surgery due to gynecological
disorders as certified by a competent physician, consisting of two months with full pay
based on her gross monthly compensation.
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