AWOL Employee Entitlement to 13th Month Pay in the Philippines
(Disclaimer: This article is for general informational purposes only and does not constitute legal advice. For specific concerns, always consult a qualified attorney or the Department of Labor and Employment (DOLE) for guidance.)

1. Introduction

In the Philippines, the 13th month pay is both a statutory and widely expected employee benefit mandated primarily by Presidential Decree No. 851 (PD 851). Under this law, rank-and-file employees who meet certain conditions are entitled to receive an extra monetary benefit—commonly referred to as the 13th month pay—on or before December 24 of each year.

However, questions often arise regarding employees who go on “Absent Without Official Leave” (AWOL). Specifically, employers and employees may wonder whether AWOL affects 13th month pay entitlement and how any prorated amounts should be computed. This article aims to provide a comprehensive discussion on these issues.

2. What is 13th Month Pay?

2.1 Definition and Legal Basis

Presidential Decree No. 851 (issued in 1975) requires all employers to pay their rank-and-file employees a 13th month pay, subject to certain exceptions.
The Implementing Rules and Regulations (IRR) of PD 851 clarify the computation and coverage, stating that every rank-and-file employee is entitled to one-twelfth (1/12) of their total basic salary earned within the calendar year.

2.2 Coverage

Rank-and-File Employees: Regardless of the nature of their employment (whether regular, contractual, project-based, seasonal, or casual), they are entitled to receive 13th month pay as long as they have worked for at least one month during the calendar year.
Managers or Managerial Employees: They are generally excluded from the benefit since the law specifically covers rank-and-file employees.
Other Exceptions: There may be special exceptions if the employer is a government-owned or controlled corporation, or if the employer’s total assets do not exceed a specified amount (in very limited cases under PD 851’s IRR). However, in practice, most private sector employees receive 13th month pay.

3. Understanding AWOL (Absent Without Official Leave)

3.1 Definition of AWOL

“AWOL” refers to an employee’s failure to report to work without providing prior notice or obtaining an approved leave.
AWOL is typically treated as a disciplinary or administrative issue that can lead to sanctions or even termination of employment if it violates company policies or labor regulations.

3.2 Effects of AWOL on Employment Status

In many companies, going AWOL can be grounds for termination if the employee does not respond to return-to-work directives or notice to explain. This effectively separates the employee from service.
Once an employee is separated (by termination or by failing to return), this separation triggers the computation of final pay, which may include any proportionate 13th month pay earned up to the last day worked.

4. Entitlement to 13th Month Pay for AWOL Employees

4.1 Fundamental Principle

Under Philippine law, the right to 13th month pay accrues based on actual work rendered. Regardless of the reasons surrounding an employee’s eventual departure—be it resignation, retrenchment, or termination—the law generally requires employers to pay out the portion of 13th month pay that the employee has already earned for the period that they actually worked within the calendar year.

4.2 Prorated Computation for AWOL Employees

When an employee goes AWOL and is deemed separated from the company (either by resignation, dismissal, or abandonment of work), that employee is typically still entitled to a pro-rated 13th month pay for the months or days actually worked during the calendar year. The common formula is:

[ \text{Pro-rated 13th Month Pay} = \frac{\text{Total Basic Salary Earned}}{12} ]

Determine the cut-off date. The employer should identify the last day the employee was physically present and rendering service.
Compute total basic salary. Add all the basic salaries (excluding allowances not included in “basic salary,” such as overtime pay, holiday pay, and other bonuses) that the employee earned from January 1 up to the last day worked.
Apply the fraction (1/12). The total basic salary for that period is then divided by 12 to get the 13th month pay portion.

Example

Suppose an employee went AWOL after working from January 1 to June 30.
During that time, their total basic salary earned was PHP 150,000.
Pro-rated 13th month pay = PHP 150,000 ÷ 12 = PHP 12,500.

4.3 Exceptions or Special Considerations

Offsetting Liabilities: If the AWOL employee has outstanding liabilities to the employer (e.g., unreturned equipment, cash advances), an employer might lawfully offset these from the final pay, subject to due process and consistent with DOLE regulations. However, the employer must ensure that any deductions are valid and documented.
Company Policies: Some employers have internal policies that impose stricter administrative sanctions for AWOL, but company policy cannot override the statutory right to 13th month pay for the period actually worked.
Clearance Process: Even if the employee is AWOL, the employer often must still conduct a clearance or final settlement process. The failure of the employee to comply with clearance formalities does not automatically negate the statutory right to earned wages and benefits (including the prorated 13th month pay).

5. Legal and Jurisprudential Guidance

5.1 DOLE Interpretations

The Department of Labor and Employment (DOLE) has consistently interpreted PD 851 to mean that any fraction of a year worked must be compensated in proportion to the number of months (or days) actually worked.
Labor advisories issued by DOLE often clarify that separation from service—whether voluntary or involuntary—does not invalidate the employee’s right to receive accrued 13th month pay.

5.2 Supreme Court Decisions

While case law tends to focus more on other benefits and wages for terminated employees, the Supreme Court has emphasized that the 13th month pay is a statutory benefit that cannot simply be forfeited at an employer’s discretion.
If a case is elevated to the NLRC or the courts, they typically look at whether the employee actually performed work during the applicable period. If so, the employee is entitled to the proportionate 13th month pay.

6. Practical Implications for Employers and Employees

6.1 For Employers

Ensure Proper Documentation: Maintain time records, payroll, and other employment documents that detail exactly how long the employee worked.
Observe Due Process: If terminating an employee due to AWOL, follow the procedures required by law (notice to explain, opportunity to respond) before finalizing separation.
Compute Final Pay: Include pro-rated 13th month pay in the final pay computation. If there are legitimate deductions, apply them in line with DOLE regulations.
Avoid Automatic Forfeitures: Do not assume that an employee loses 13th month pay entitlements solely by reason of AWOL. Only the portion that has actually accrued must be paid.

6.2 For Employees

Know Your Rights: Understand that the 13th month pay is a legal right for time already worked.
Keep Records: Maintain personal copies of payslips, schedules, and other evidence of employment to support any claim for unpaid wages or benefits.
Address AWOL Issues Quickly: If an employee goes AWOL due to an emergency or unavoidable circumstances, it’s often better to communicate with the employer to avoid potential dismissal or complications in final pay.

7. Conclusion

Even if an employee goes AWOL, the right to a prorated 13th month pay for the period actually worked is preserved under Philippine law. Employers cannot unilaterally forfeit this statutory benefit, as it is mandated by PD 851 and its implementing rules. When separation from the company occurs—regardless of the cause—employers must compute and pay any accrued 13th month pay and follow all due processes for final pay.

Ultimately, both employers and employees benefit from a clear understanding of the rules governing 13th month pay. Employers reduce the risk of labor disputes by adhering to these legal requirements, while employees are assured they receive the compensation they have rightfully earned. If any doubt or conflict arises, seeking guidance from DOLE or a qualified labor law practitioner remains the best course of action.

References

Presidential Decree No. 851
Implementing Rules and Regulations of PD 851
Department of Labor and Employment (DOLE) Advisories and Guidelines
Philippine Supreme Court Jurisprudence on Labor and Employment

(Note: This article is provided for general informational purposes only and should not be taken as legal advice. Consult with a labor law practitioner or the appropriate government agency for specific concerns.)