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MONSOD, Toby C.

Re: Exhaustion of Leave Credits


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RESOLUTION NO. 02-0184
Assistant Secretary Toby C. Monsod of the Department of Trade and Industry (DTI), Makati City,
requests an opinion on whether she can exhaust her remaining accrued vacation and sick leave credits
immediately prior to the effectivity of her resignation from the government service. The letter-request of Asst.
Secretary Monsod reads, in part, as follows:
"This is to seek clarification on how terminal leave may be applied when there is voluntary
resignation from government service. Specifically, whether an outgoing employee may exhaust
her remaining sick and vacation leave credits prior to the effectivity of the resignation, rather
than monetize them upon the effectivity of the resignation.
"Last December, I resigned from government service, stating in my resignation letter (and in
subsequent clarification) that I would commence my terminal leave on December 24,
therefore making my resignation effective February 16 or 33.4 working days after. The 33.4
working days is the number of unused sick and vacation leave credits I hadand while using
this up, I would remain on the payroll of government.
"In short, my intention was to exhaust my leave credits prior tot he effectivity of my
resignation rather than monetize them. I thought this would be the simplest procedure for all
concerned.
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Asst. Secretary Monsod represents that she has an accrued vacation and sick leave credits totalling
33.4 days. Sometime in December 2001, she tendered her resignation from the service but signified that she
will exhaust her entire leave credits starting December 24, 2001 thereby making the effectivity date of her
resignation to be on February 16, 2002 or 33.4 days thereafter. It is the intention of Asst. Secretary Monsod
to deplete her accrued leave credits prior to the effectivity date of her resignation such that she will
remain under government payroll instead of receiving in lump sum the money value of her accrued leave
credits. The Personnel Office of the DTI, however, insists that this is improper and not legally feasible.
Hence, the instant request.
Under CSC Memorandum Circular No. 41, s. 1998, terminal leave "refers to money value of the total
accumulated leave credits of an employee based on the highest salary rate received prior to or upon
retirement/voluntary separation. Additionally, Sections 35 and 37, Rule XVI of the Omnibus Rules
Implementing Book V of the Administrative Code of 1987, as amended by said CSC MC, provide, as
follows:
Sec. 35. Terminal leave. Terminal leave is applied for by an official or an employee
who intends to sever his connection with his employer. Accordingly, the filing of application for
terminal leave requires as a condition sine qua non, the employees resignation, retirement or
separation from the service without any fault on his part. It must be shown first that public
employment cease by any of the said modes of severances.
x x x
"Sec. 37. Payment of terminal leave. - Any official/employee of the government who
retires, voluntarily resigns, or is separated from the service through no fault of his own, and
who is not otherwise covered by special law, shall be entitled to the commutation of his leave
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credits exclusive of Saturdays, Sundays and Holidays without limitation and regardless of the
period when the credits were earned.
It is explicit from the aforequoted provisions that terminal leave refers to the payment in full of the
money value of the accrued vacation and sick leave credits of an official or employee upon her severance
from her employment either by resignation, retirement or separation without any fault on her part. Hence,
should an official or employee desire to receive the entire money value of her unused leave credits, she must
first terminate her employment with the government.
Significantly, however, there is no specific provision of law or rule that prohibits an official or employee
from exhausting her unused leave credits prior to the effectivity of her separation from government service.
This being so, the Commission rules that Asst. Secretary Monsod exhaust her accrued leave credits
vacation and sickimmediately before her separation from the service. She may, thus, cease from reporting
for work until the depletion of her entire leave credits and thereafter be deemed separated from the service.
WHEREFORE, the Commission hereby rules that DTI Assistant Secretary Toby C. Monsod may
exhaust her accrued leave credits immediately before the effectivity of her resignation on February 16, 2002.
Quezon City, February 6, 2002
(Signed)

KARINA CONSTANTINO-DAVID
Chairman
(Signed)

JOSE F. ERESTAIN, JR.


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Commissioner
(Signed)

J. WALDEMAR V. VALMORES
Commissioner
Attested by:
(Signed)

ARIEL G. RONQUILLO
Director III
CPS/AGR/pvp/cm4-2002
FPG/KPZ/Y9/w23
Monsod/vog
O 02-0013

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