The New LABOR ADVISORY GUIDELINES ON THE PAYMENT OF FINAL PAY AND ISSUANCE OF CERTIFICATE OF EMPLOYMENT.

THE DEPARTMENT OF LABOR advisory is based on Articles 4, 103, 116, and 118 of the Labor Code of the Philippines as amended, and section 10 Rule XIV, Book V of the Omnibus Implementing Rules and Regulations of the Labor Code.

DOLE  said the advisory was made to effectively harmonize the management prerogative of the employer and the right of the employee in the release of final Pay within thirty (30) days from the date of Separation or termination. DOLE also said that upon request by the employee the certificate of employment should issue by the employer within three (3) days from the time of the request.

The Labor Advisory reiterates that the “Final Pay”, “Last Pay” or “Back Pay” is the sum of all the monetary benefits due to the employee. Regardless of the cause of separation from employment Final Pay includes, Unpaid earned salary, any conversion of the unused Service Incentive Leave, pursuant to Article 95 of the Labor Code,  or Cash conversions of remaining unused vacation, sick or other leaves pursuant to company policy, or individual, or collective agreement, if applicable. Employees may still have to get their pro-rated 13th month pay as per Presidential Decree 851, which can be computed as 1/12th of the total basic salary earned by the employee within the calendar year. Any excess collection of the withheld income tax can form part of the pay. The advisory considered other types of compensation stipulated in an individual or collective agreement if any; and Cash Bond/s or any kind of deposit/s due for return to the employee if any, must be released accordingly.

DOLE said, Final Pay also includes, Separation pay, pursuant to Articles 298-299 of the Labor Code as renumbered, or pursuant to existing and effective company policy, or based on the individual or collective agreement, when applicable. In addition, the retirement pay, pursuant to Articles 302 of the Labor Code, when applicable, is forms part of the final payment and must be released within the period specified by the order.

 EMPLOYEES are obliged to tender formal resignation at least one month in advance prior to the date of its effectivity.

Article 285 of the Labor Code of the Philippines which states that: “(a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. x x x”

In our case, our management will strictly observe the provision in employment contract signed; to protect the interest of those employees who will tender the 30-days’ notice

  1. Thus, you shall remain with the Company during the entire temporary period to satisfy the cost of training. In the case of resignation, you shall notify the Company in writing at least thirty days (30) prior to the effective date thereof by serving in person to his immediate superior a Notarized copy of the resignation letter. The thirty 30-days shall be counted from the actual receipt of the said document.  That, if you resign without serving the 30-day prior notice you shall reimburse the Company an amount representing the cost of liquidated damages. To effect the payment, you hereby authorize the Company to withhold whatever salary and/or benefits earned and apply the same against the liability.

Employees Right and the Proper way to resign

The management recognizes the employee’s right to resign anytime he wants.  But the law also says the proper way of doing it. The provision provided in Article 285, employees are obligated to give a 30-day notice for their employer before they leave. This is not a requirement but the law obligates the employees to stay for a period of 30 days. This allows the company to find and train replacement, and to properly distribute the workforce. However, the Law makes the resigning employee accountable if the employees fail to provide this 30-day notice. Those who leave immediately allows the company to charge any damages against the employee during the 30 days period. (e.g. Since the employee suddenly left, other employees had to pitch in to cover for his work and the company incurred overtime charges.)

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Barque Raul

I am an HR practitioner by profession. I have a passion for writing but definitely not a writer. I created this blog in 2008 just to journal my thoughts, ideas and my opinions that went through my mind.

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