Hi guys, I hope someone knowledgeable can answer my queries.
My current company has a 6 yr policy of converting unused sick leaves to its monetary value during resignation or termination from the company.
Then a new expat HR guy comes in and totally changed everything: we can encash our unused accumulated sick leaves until 2015, then beginning 2016, we are no longer entitled to this privilege.
1. They said that the encashment/payout will be taxable. Is this true? As I have read, this should not be treated as a de minimis benefit under a certain BIR ruling. It falls under the resignation and retirement ruling, treated as separation benefit or gratuity, in which case it is non-taxable except in cases of voluntary resignation by the employee. Company has initiated the encashment program, so why impose taxes on us? For what?
2. I have also read that there are situations however when a grant or benefit becoms demandable as a matter of right. For instance, the grant has been done over and over again, repeated again and again, without any condition. As such, it has become an integral part of the terms and conditions, which can no longer be withdrawn without the agreement of both parties. Are they right in unilaterally cancelling that sick leave encashment privilege?
Thanks guys for taking time to read. Your valuable inputs and comments are highly appreciated....
My current company has a 6 yr policy of converting unused sick leaves to its monetary value during resignation or termination from the company.
Then a new expat HR guy comes in and totally changed everything: we can encash our unused accumulated sick leaves until 2015, then beginning 2016, we are no longer entitled to this privilege.
1. They said that the encashment/payout will be taxable. Is this true? As I have read, this should not be treated as a de minimis benefit under a certain BIR ruling. It falls under the resignation and retirement ruling, treated as separation benefit or gratuity, in which case it is non-taxable except in cases of voluntary resignation by the employee. Company has initiated the encashment program, so why impose taxes on us? For what?
2. I have also read that there are situations however when a grant or benefit becoms demandable as a matter of right. For instance, the grant has been done over and over again, repeated again and again, without any condition. As such, it has become an integral part of the terms and conditions, which can no longer be withdrawn without the agreement of both parties. Are they right in unilaterally cancelling that sick leave encashment privilege?
Thanks guys for taking time to read. Your valuable inputs and comments are highly appreciated....