SIL

In Fernandez v. Lhuillier (G.R. No. 105892, 28 January 1998), it was held that service incentive
leave is part of the award to the employee in an illegal dismissal case, viz:

Since a service incentive leave is clearly demandable after one year of service — whether
continuous or broken — or its equivalent period, and it is one of the benefits which would have
accrued if an employee was not otherwise illegally dismissed, it is fair and legal that its
computation should be up to the date of reinstatement as provided under Section 279 of the Labor
Code, as amended, which reads:

ART. 279. Security of Tenure. — An employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation is withheld from him up to the time of his actual reinstatement.

The service incentive leave of 5 days with pay is a legally mandated benefit provided to covered
employees who have rendered at least one year of service.

The legal basis for the service incentive leave is found in the Philippine Labor Code, viz:

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

(b) This 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 or in establishments exempted from granting this
benefit by the Secretary of Labor and Employment after considering the viability or financial
condition of such establishment.

(c) The grant of benefit in excess of that provided herein shall not be made a subject of arbitration
or any court or administrative action.