Below is a comprehensive legal-oriented article on the eligibility of on-call employees in the Philippines to receive 13th month pay. This discussion covers the legal framework, key principles, and practical considerations under Philippine labor laws.

13th Month Pay in the Philippines: A Brief Overview

Legal Basis
- The obligation of private-sector employers in the Philippines to grant 13th month pay stems from Presidential Decree No. 851 (PD 851), issued in 1975.
- Implementing rules and regulations (IRR) issued by the Department of Labor and Employment (DOLE) provide guidelines for determining eligibility, coverage, computation, and payment deadlines.
Coverage
- As a general rule, all rank-and-file employees in the private sector who have worked for at least one (1) month during a calendar year are entitled to receive 13th month pay.
- Managerial employees—those who primarily direct the management of the company—are explicitly excluded, but the burden of classifying an employee as “managerial” rather than “rank-and-file” lies with the employer.
- The 13th month pay must be paid on or before December 24 of each year.
Basic Formula
- The standard formula for computing 13th month pay is:
  [ \text{13th Month Pay} = \frac{\text{Total Basic Salary Earned During the Year}}{12} ]
- “Basic salary” generally excludes allowances, overtime pay, premium pay for holidays and rest days, and other monetary supplements that are not integrated into the basic pay.

Who Are On-Call Employees?

In practice, the term “on-call employees” refers to individuals who work only when needed by the employer, often on a sporadic or unpredictable schedule. This can include industries where labor demand fluctuates—such as hospitality, events, healthcare, or project-based sectors. Depending on company policy or the nature of work, on-call employees may or may not have a fixed number of work hours per week or month.

Determining Employer-Employee Relationship

Before determining eligibility for 13th month pay, the first question is whether an on-call person is legally considered an employee (under an employer-employee relationship) or an independent contractor. The Labor Code and Supreme Court jurisprudence apply the following “four-fold test” to determine if an employer-employee relationship exists:

Selection and engagement of the worker;
Payment of wages;
Power to dismiss; and
Power to control the worker’s conduct (most significant test).

If these factors confirm that the on-call person is an employee (even if employed under a flexible or irregular arrangement), then that person falls under the coverage of PD 851 as a rank-and-file employee. Conversely, if an on-call individual is engaged as an independent contractor or consultant with no employer-employee relationship, then 13th month pay would not apply.

Are On-Call Employees Entitled to 13th Month Pay?

1. General Entitlement

As long as an on-call worker is deemed a rank-and-file employee and has rendered service for at least one (1) month during the calendar year, they become entitled to a prorated 13th month pay.
The 13th month pay for on-call employees is computed based on the actual total basic wages they earn throughout the year, divided by 12.

2. Prorated 13th Month Pay for Irregular Work

Since on-call employees may not work the same number of hours or days each month, their total basic salary for the year may fluctuate.
To compute the 13th month pay, all wages corresponding to hours actually worked (or days/shifts rendered) must be summed up as “basic salary” from January 1 to December 31.
This total is then divided by 12 to arrive at the on-call employee’s 13th month pay.
Example:
- Total Basic Wages Earned from January to December = PHP 120,000
- 13th Month Pay = PHP 120,000 / 12 = PHP 10,000

3. Effect of Resignation or Termination on On-Call Employees

If an on-call employee resigns or is terminated during the year (for reasons other than just cause), they remain entitled to a prorated 13th month pay up to the last month of their service.
The calculation must be made according to the exact number of months (or fraction thereof) the employee actually worked in that calendar year.

Special Considerations and Common Issues

Status vs. Label
- The nomenclature “on-call” does not, in itself, automatically remove the obligation to pay the 13th month wage. Even if an employer labels a worker as “casual,” “part-time,” “project-based,” “per diem,” or “on-call,” the determining factor is still whether an employer-employee relationship exists and whether the worker is classified as rank-and-file.
Commissions and Other Incentives
- For on-call employees who receive a blend of basic pay and incentives (e.g., tips, commissions), only the portion categorized as “basic salary” forms part of the 13th month pay computation.
- If the entire compensation is purely commission-based without a fixed basic wage (and the worker is classified as a commissioned agent or an independent contractor), 13th month pay may not be required.
Field Personnel Exemption
- Under PD 851’s IRR, “field personnel” who are consistently away from the principal place of business and whose performance is unsupervised by the employer are typically excluded from coverage if they are paid in a manner that is not considered “basic wage” (e.g., purely on commission).
- On-call employees who occasionally perform off-site duties but remain subject to the control and supervision of the employer (e.g., required to regularly report after or before tasks, or required to follow specific instructions) are generally not categorized as excluded field personnel.
Project or Seasonal Arrangements
- Some on-call workers are hired to meet seasonal demand (e.g., holiday rush, peak tourism season, event-based projects). If they work more than one month within the calendar year, they become entitled to prorated 13th month pay covering the duration of the project or season.
Payment Schedule
- The law and DOLE guidelines require that the 13th month pay be paid out on or before December 24. However, some employers opt to pay it on a pro-rata or semi-annual basis (e.g., half in June, half in December). This practice is permissible as long as full compliance is completed by December 24.
- In case an on-call employee’s engagement ends before December, the 13th month pay due (prorated) is usually paid upon separation or as part of the final pay.
Record-Keeping
- Employers should maintain accurate records of actual hours or days worked by on-call employees and track corresponding wages paid. These records are critical in determining the correct basis for 13th month pay.
- In any dispute, the burden typically falls on the employer to show that it has properly computed and remitted the required 13th month pay.

Legal Remedies in Case of Non-Compliance

Filing a Complaint at DOLE
- If an on-call employee believes they have been unjustly denied 13th month pay, they may file a complaint at the National Labor Relations Commission (NLRC) or the DOLE Regional Office where the workplace is located.
Penalties for Non-Payment
- Under the Labor Code and related regulations, an employer who fails to pay the 13th month wage may be subjected to administrative fines, penalties, or possible damages following labor dispute adjudication.

Best Practices for Employers and On-Call Employees

Clear Employment Contracts
- Employers should provide written contracts or agreements clarifying terms: scope of work, wage structure, and acknowledgment of benefits, including 13th month pay entitlements.
- On-call employees should review and keep a copy of their contracts to understand their compensation structure and confirm the existence of an employer-employee relationship.
Compliance with Labor Standards
- Employers should treat on-call workers as they would treat full-time rank-and-file employees in terms of compliance with statutory requirements.
- Regularly compute and release 13th month pay by the statutory deadline.
Monitoring of Working Days/Hours
- Employers must keep a daily time record (DTR) or a reliable system for logging hours worked by on-call employees. This ensures accurate computation of basic salary and, consequently, the 13th month pay.
Communication and Transparency
- Clear communication on how 13th month pay is computed for on-call employees avoids misunderstandings. Employers can issue payslips that reflect the portion of income considered as basic wages.

Conclusion

In the Philippines, “on-call employees” are not explicitly categorized separately under the law; rather, entitlement to labor benefits like 13th month pay rests on whether the worker is in a valid employer-employee relationship and is classified as rank-and-file. If those conditions are met—regardless of how sporadic or flexible the work schedule is—on-call employees are entitled to 13th month pay, computed on the total basic wages actually earned during the calendar year.

Ensuring that both employers and employees understand these regulations fosters a compliant, fair, and transparent work arrangement. Where doubt arises, consulting official DOLE guidance or seeking professional legal advice is prudent to clarify the specifics of individual on-call arrangements.

Disclaimer: This article is intended for general informational purposes and does not constitute legal advice. For specific issues or disputes regarding 13th month pay or on-call employment, consult a qualified legal professional or the Department of Labor and Employment (DOLE).