BIR Ruling [UN-094-94]

March 15, 1994 BIR RULING [UN-094-94] 2nd Indorsement Returned to the Assistant Commissioner, Administrative Service, the entire papers relative to the query raised by the Acting Assistant Revenue Service Chief, Administrative Service, whether the unused leave credits of the employees of the defunct Revenue Informations System Services, Inc. (RISSI), who were absorbed as regular employees of the Bureau of Internal Revenue (BIR) after the dissolution of RISSI, shall be carried into and cumulated with their leave credits earned as regular employees of the BIR. Since the Civil Service Commission's views on personnel benefits carries weight, this Office adopts the stand of the Civil Service Commission under its Resolution No. 93-132 dated November 5, 1992, to wit: xxx xxx xxx "1. In the granting of separation benefits to separated employees as provided for under R.A. 6656, what will be the reckoning date for purposes of computing their length of service? Are the services rendered at RISSI before it was abolished form part of their length of service even if such services were rendered or performed for a private entity or is it from the time the employees became BIR employees on hold over capacity when RISSI was dissolved? " Ans . While it is true that service rendered to RISSI are not government services, it is the view of the Commission that under EO 468, the BIR should pay their separation benefits. This is logical because the BIR has now the assets and liabilities of RISSI upon its dissolution. "However, let it be further clarified that for those who are absorbed by BIR and therefore not entitled to separation pay, it is the view of this Commission that the services at RISSI shall in the future be considered in the computation of their retirement benefits chargeable against the funds of the BIR. xxx xxx xxx "3. Commutation to cash entitlement for unspent or unused sick and vacation leaves is a policy of RISSI and this is among the recognized benefits given to all its employees. "Are RISSI employees who are absorbed by the BIR because they are not to be separated or retired from the service be entitled to such benefits? If so, what will form part of their commutation pay? Are the unspent leaves earned prior to RISSI's dissolution and leaves earned from date of dissolution but prior to formal integration form part of the commutation pay. " Ans . The answer to this item is the same as in Item 1. (refer to Page 4, CSC Resolution No. 94-132) Gleaned from the Answer to Question No. 3, since the benefits of RISSI employees who have opted to be absorbed by the BIR as regular employees are considered in the computation of their retirement benefits and considering that retirement benefits include unused vacation and sick leave credits standing to the credit of the employees at the time of retirement, it can be fairly inferred that leave credits earned at RISSI are carried into their leave credits earned during their services as regular employee in the Bureau of Internal Revenue. These leave credits can be availed of by the employee during their services in the BIR without necessarily waiting for their retirement for it would be absurd to allow such leave credits to be considered at retirement when there is a higher transmission of benefits and not to allow it as offsets of their routine applications for sick or vacation leaves of absence while in the service where there is less transmission of benefits because invariably the employees' salary now is lower than at the time of retirement. Moreover, social legislation such as the grant of leave credit benefits are always liberally construed in favor of the employees. Based on the foregoing, this Office is therefore of the opinion that the leave credits earned by employees of RISSI who were absorbed as regular employees of the BIR are allowed to be carried into or cumulated with the leave credits earned as regular employees of the BIR. cdtech LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue