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This article was originally published on June 1, 2022 and has been updated to reflect recent legal developments.

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

AT A GLANCE:

Final Pay shall be released within thirty (30) days from the date of separation or termination of employment, in order to effectively harmonize  the management prerogative of the employer and the right of the employee, unless there is a more favorable company policy, individual or collective agreement thereto. While a Certificate of Employment is issued by the employer within three (3) days from the time of the request by the employee.

The Department of Labor and Employment (DOLE) Labor Advisory No. 06 Series of 2020, otherwise known as the “Guidelines on the Payment of Final Pay and Issuance of Certificate of Employment” defines both the “Certificate of Employment” and “Final Pay” as follows: 

A Certificate of Employment (COE) 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. For purposes of this advisory, an employee whose employment is not yet terminated may also ask for a Certificate of Employment. 

On the other hand, Final Pay, Last Pay, or Back Pay means 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:

1. Unpaid earned salary of the employee;
2. Cash conversion of unused Service Incentive Leave (SIL)
3. Cash conversions of remaining unused vacation, sick or other leaves pursuant to a company policy, or individual or collective agreement, if applicable;
4. Pro-rated 13th month pay;
5. Separation pay pursuant;
6. Retirement pay;
7. Income tax claim for the excess of taxes withheld, if applicable;
8. Other types of compensation stipulated in an individual or collective agreement, if any; and
9. Cash Bond/s or any kind of deposit/s due for return to the employee, if any.

Under the same Labor Advisory, the Final Pay shall be released within thirty (30) days from the date of separation or termination of employment, in order to effectively harmonize  the management prerogative of the employer and the right of the employee, unless there is a more favorable company policy, individual or collective agreement thereto.

With respect to the issuance of a Certificate of Employment, the Labor Advisory mandates that the same shall be issued by the employer within three (3) days from the time of the request by the employee. 

Finally, the Labor Advisory provides the enforcement mechanism wherein any issue or claim dispute arising out 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 DOLE’s existing enforcement mechanism.

Related Articles: Clearance Process of Employees as Management Prerogative

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.

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