PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 1 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

I. OBJECTIVE

To provide guideline to employees and department heads in applying and

approving request for prolonged leave of absence.

II. RATIONALE

Prolonged leave is intended to allow regular employees of Luen Thai with urgent
personal situations to take time off to deal with these circumstances.

III. DEFINITION OF TERMS

A. Regular Employees. Employees who have successfully completed the 3

to 6 months probationary period with permanent status and who are hired
to perform activities which are usual and necessary in the business
operation of Luen Thai.

B. Prolonged Leave of Absence. Absence from work for at least 30 days but
not to exceed 180 days due to medical reasons, attendance to self
development programs, and other important serious cases.

C. Important or Serious Case. Cases or occurrences when prolonged leave

of absence shall be granted such as:

1. Medical reasons – that the employee requesting for a prolonged

leave is:

1.1 suffering from an illness which prevents him/ her from

performing his work duties for a long period;

1.2 scheduled to undergo a major operation (e.g. abdominal

surgery, orthopedic cases) which requires an ample time of
rest; and

1.3 suffering from any complications of pregnancy (e.g.

hyperemesis gravidarum or morning sickness, pre-
eclampsia, eclampsia, etc.)
 PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 2 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

2. Attendance to self-development programs

2.1 review for a board, bar, or any examination leading to a

degree

2.2 attendance to short-term courses related to the employee’s

current responsibilities

3. Other important or serious cases

Circumstances which require the direct attention of the employee,

such as settlement of legal matters, the need to care for a sick
immediate family member, etc.

D. Return Rights. The guarantee that an employee on prolonged leave of

absence can return to work with the Company and assume any vacant
position of no less seniority and responsibility as last job without
diminution in pay.

IV. COVERAGE

This Policy and Procedure shall apply to all regular employees of Luen Thai in
the Philippines.

V. POLICY

A. General

1. The duration of prolonged leave of absence is for a minimum of

thirty (30) days and a maximum of one hundred eighty (180) days.
Maternity leave of 60 to 78 days does not fall under prolonged
leave of absence.

2. Prolonged leave of absence, except medically related, is charged to

earned vacation leave, if any. Otherwise, this is leave without pay.

3. Prolonged leave of absence due to medical reasons is deducted

from sick leave credits. Upon exhaustion of sick leave credits, the
leave
 PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 3 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

shall be charged either to vacation leave or the employee claim for

Social Security sickness benefits.

4. The employee on prolonged leave of absence is entitled to return

rights as herein defined. Hence, the replacement has to be on a
contractual or temporary status to accommodate the returning
employee after the prolonged leave.

5. The employee’s seniority or years of service with the Company

continues to accrue during prolonged leave, whether the leave of
absence is with pay or without pay.

6. The employee can terminate his/her employment with Luen Thai

while on prolonged leave. In case of resignation after the lapse of
the approved prolonged leave, the ’30-day written notice policy on
resignation’ shall apply.

7. All benefits accruing to the employee, such as leave entitlements,

Company contributions to SSS, Pag-Ibig Fund, continue to
accumulate provided that the leave is with pay. Otherwise, accrual
of the benefits is suspended.

8. Failure to return to work after the prolonged leave of absence shall

be construed that the employee abandoned his work. In this case,
termination of service shall be imposed after observance of due
process.

9. An employee on prolonged leave of absence cannot enter into an

employment contract with another company. Employment with
other company while on prolonged leave of absence is a ground for
termination from service.

B. Points to be Considered in Approving for Prolonged Leave

1. Reason(s) given for the request of leave is important and serious,

and the duration of such absence is warranted. The department
head, however, may deny the request in cases where the workload
of the department requires the presence of the employee
concerned.
 PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 4 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

2. Availability of a replacement who can be hired on a temporary

basis. The contract of the replacement shall be co-terminus with
the leave of the incumbent.

3. If no replacement is needed, capability of the rest of the existing

stall to absorb the employee’s workload without duly jeopardizing
the department’s operations.

C. Documents Required for Prolonged Leave of Absence

1. Application for Leave

2. Clearance Form
3. Any one of the following documents (depending on the reason of
leave)

3.1 Prolonged leave of absence due to medical reason

3.1.1 Medical Certificate with supporting documents such

as laboratory findings, x-ray, ultrasound results,
authenticated by the Company physician or
company accredited medical doctor.

3.2 Prolonged leave of absence due to attendance to self-

development programs

3.2.1 Certification from the school or learning institution

that the employee is enrolled for a review class or
for a short-term course; and

3.2.2 Ratings in the examination recently taken (to be

submitted immediately upon release of examination
results) or Certification of Completion.

3.3 Prolonged leave of absence due to other important and

serious cases.

3.3.1 Letter request from the employee indicating

reason(s) of the request; and
3.3.2 Other documents deemed necessary by the respective
department head to support the reason(s) of the request
 PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 5 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

D. Limitations of Prolonged Leave of Absence

1. An employee is allowed to go on prolonged leave of absence with

an interval of six (6) months.

Illustrative example:

2000

Employee A was permitted to go on prolonged leave of absence

from July up to December 2000

2001

Employee A maybe allowed to go on prolonged leave of absence

on any month starting July 2001

2. Management reserves the right to approve or deny an employee’s

application for prolonged leave of absence due to operational
requirements.

E. Employee Clearance

1. The employee should secure clearance from his/her respective

immediate supervisor, department head, and the Human Resources
Department at least one (1) week before the effectivity of the
prolonged leave.

2. To be cleared by the Human Resources Department, the employee

should surrender his/her Company ID and uniform, if any.

F. Specimen Signature of Authorized Signatories

1. All division/department heads are required to submit Specimen

Signature Form (Exhibit “A”) of all authorized signatories in the
Application for Leave. Signatures on the application not appearing
on the Specimen Signature Form shall not be honored.
 PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 6 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

2. Changes in authorized signatories should be reported to the Human

Resources Department Through submission of a new Specimen
Signature Form.

VI. PROCEDURES

A. The employee secures and accomplishes an Application for Leave

(Exhibit “B”) from the Human Resources Department at least one (1)
month before the effectivity date of leave or as prescribed by approving
authorities.

B. The employee submits the Application for Leave and the necessary
documents to his/her immediate supervisor for endorsement to the
department head.

C. At least one week before the effectivity of leave, the employee secures
clearance from his/her respective immediate supervisor,
department/division head, and the Human Resources Department.
Uniforms (if any) and Company ID are required to be surrendered to the
Human Resources Department.

D. The employee submits the following documents to the Human Resources

Department:

1. Duly approved Application for leave

2. Necessary document as identified in Item V-C of this P&P
3. Duly approved Clearance Form

E. The Human Resources Department encodes the Application for Leave and
forwards the report to Payroll Section for payment.

VII. SPECIAL PROVISIONS

A. All existing practice or policy inconsistent with this Policy and Procedure
are hereby modified accordingly.

B. An employee who goes on prolonged leave without prior approval is

considered on absence without official leave, a grave offense punishable
by dismissal from service.
 PHILIPPINE LUEN THAI HOLDINGS CORPORATION

Subject: PROLONGED LEAVE DRC NO: HRP-013

Issue 1; Revision 0; Page 7 of 8 Effective Date: February 1, 2001

Approved by: WILLIE TAN

C. Application for prolonged leave without the required documents,

including the duly accomplished Clearance Form, is subject to salary
deduction and disciplinary action.

D. Periodic review of this Policy and Procedure maybe done and changes,
variations, or modifications to this P&P maybe effected only by the
authorized signatory.

VIII. FLOWCHART