On 3 February 2020, the Department of Labor and Employment (“DOLE”) issued Labor Advisory No. 6, Series of 2020, which provides the Guidelines on the Payment of Final Pay and Issuance of Certificate of Employment issued by the Department of Labor and Employment (“DOLE”).
Under DOLE Labor Advisory No. 06, Series of 2020, the DOLE now requires that final pay of an employee be released within thirty (30) days from the date of separation or termination of employment, unless there is a more favorable company policy, individual, or collective agreement thereto. Under the issuance, “final pay” (otherwise known as “last pay” or ”back pay”) refers to the sum or totality of all the wages or monetary benefits due the employee regardless of the cause of the termination of employment, including but not limited to:
a. Unpaid earned salary of the employee;
b. Cash conversion of unused Service Incentive Leave (“SIL”) pursuant to Article 95 of the Labor Code;
c. Cash conversions of remaining unused vacation, sick, or other leaves pursuant to a company policy, or individual or collective agreement, if applicable;
d. Pro-rated 13th month pay pursuant to Presidential Decree No. 851;
e. Separation pay pursuant to Articles 298-299 of the Labor Code, company policy, or individual or collective agreement, if applicable;
f. Retirement pay pursuant to Article 302 of the Labor Code, if applicable;
g. Income tax claim for the excess of taxes withheld, if applicable;
h. Other types of compensation stipulated in an individual or collective agreement, if any; and
i. Cash bond/s or any kind of deposit/s due for return to the employee, if any.
Meanwhile, as to issuance of certificates of employment, the DOLE requires employers to issue a certificate of employment within three (3) days from the time of the request by the employee. A “certificate of employment” refers to a certificate from the employer specifying the dates of an employee’s engagement and the termination of his/her employment and the type or types of work in which he/she is employed. The DOLE has clarified that an employee whose employment is not yet terminated may also ask for a certificate of employment.
Any issue, claim, or dispute arising out of or relating to the payment of final pay or issuance of certificate of employment shall be filed before the nearest DOLE Regional/Provincial/Field Office which has jurisdiction over the workplace, for conciliation and subject to the DOLE’s existing enforcement mechanisms.
1 Section II, DOLE Labor Advisory No. 06, Series of 2020.
2 Section I (2), DOLE Labor Advisory No. 06, Series of 2020.
3 Section III, DOLE Labor Advisory No. 06, Series of 2020.
4. Section I (1), DOLE Labor Advisory No. 06, Series of 2020.
6 Section IV, DOLE Labor Advisory No. 06, Series of 2020.