My mother is celebrating her 60th birthday this month and we’re excitedly scouting for a place to hold her simple thanksgiving dinner. While we were on it, I suddenly remembered to ask if she has claimed her terminal leave benefit from her previous employer. My mother, you see, resigned 9 years and 8 months ago from government service. She winced and said “Not yet.” That prompted me to write about this topic.
A Terminal Leave is filed by a government employee who retires, resigns, or separates from the service for whatever cause. By filing this, the employee applies for the commutation of all earned vacation and sick leave credits so that he/she can enjoy its monetary equivalent.In CSC Resolution No. 98-2449 (Ninfa N. Ward; September 23, 1998), the Civil Service Commission clarified that accumulated leave credits are considered as earned salaries of the employee, making the latter entitled to its monetary equivalent as a matter of right. That is also the reason why terminal leave benefits can be released even if the employee claiming it – (1) has a pending administrative or criminal case; or (2) has been convicted of a case which includes the penalty of forfeiture of retirement benefits.
Under existing rules, the terminal leave benefit is based on the highest monthly salary received by the employee at any time during his employment. The formula to be used is:
TLB = S x D x CF
Where: TLB = Terminal leave benefits
S = Highest monthly salary
D = No. of accumulated vacation and sick leave credits
CF = Constant Factor of .0481927
Employee A earns a monthly salary at the rate of P15,000.00. He was demoted to a position with a monthly rate of P12,000.00. If he resigns while occupying the lower-paying position, his terminal leave benefits will still be computed at the rate of P15,000.00. If he has 95 accumulated leave credits at the time of his resignation, his terminal leave benefit will be P68,674.59, using the following computation:
P15,000.00 x 95 x .0481927 = P68,674.59
Finally, remember that the request for payment of terminal leave benefits must be made within TEN years from the effective date of retirement, resignation or separation. Otherwise the right prescribes and the employee can no longer claim the benefit.
I hope that those who, like my mother, do not know about this benefit find this post helpful.
Source: Sections 35 to 40, CSC Memorandum Circular No. 41, s. 1998
Note (Jan 15, 2016): The constant factor has been changed from .0478087 to .0481927 by CSC Resolution No. 1501530 dated December 21, 2015 and circularized through MC No. 2, s. 2016. The resolution was published on January 7, 2016 and will be effective on January 22, 2016.