Final Pay and Certificate of Employment Delays in the Philippines

In the Philippines, employers are legally required to provide both the Final Pay (sometimes referred to as “last pay”) and the Certificate of Employment (COE) to separated employees. While the laws and specific Department of Labor and Employment (DOLE) issuances do not always prescribe hard-and-fast deadlines for every scenario, there are established guidelines and common practices.

Below is an overview:


1. Final Pay

What Final Pay Usually Includes

  1. Unpaid salary or wages up to the last working day.
  2. Pro-rated 13th month pay (if separation occurs before year-end).
  3. Cash conversion of unused leave credits (depending on company policy or relevant Collective Bargaining Agreement, if applicable).
  4. Separation pay (if required by law or by company policy/contract).
  5. Other payables (bonuses that have accrued, allowances, etc., if contractually or legally mandated).

Timeline for Payment

  • DOLE Advisory No. 06-20 (Series of 2020) recommends releasing final pay within 30 days from the date of separation (resignation, termination, or end of contract), “unless a more favorable company policy, individual or collective agreement” provides an earlier release.
  • While 30 days is the guideline, some companies pay earlier if their internal processes allow it.

What to Do if There Is a Delay

  • Start by formally writing to or emailing your HR/Payroll Department requesting release of your final pay. Keep a copy for record purposes.
  • If delays persist without a clear explanation, you can approach the DOLE Regional/Field Office covering your employer’s location and lodge a complaint or request for assistance under the Single Entry Approach (SEnA).

2. Certificate of Employment (COE)

Purpose

  • A COE states the dates of employment and the position(s) held. It is not typically required to mention reasons for separation or performance details (unlike recommendation letters).
  • Employers are required to issue a COE upon an employee’s request under Article 159 (now Article 279) of the Labor Code and Section 10, Rule 14, Book V of the Omnibus Rules Implementing the Labor Code.

Timeline for Issuance

  • Unlike Final Pay, the Labor Code does not explicitly state the exact number of days within which the COE must be released.
  • However, many employers follow DOLE’s informal standard (from various clarifications and practice) of issuing the COE within three (3) business days upon request.
  • Because the COE is a simple document with basic details, excessive delays (weeks or months) could be deemed unreasonable.

What to Do if There Is a Delay

  1. Send a follow-up request (preferably in writing or via email) to your HR department or immediate supervisor.
  2. Refer to company policy or any employee handbook for specific COE timelines; some companies have internal rules about this.
  3. If the delay remains unresolved and you urgently need the COE for a new job application or other purposes, you may also approach DOLE, although COE disputes are typically simpler to resolve through direct communication with HR.

3. Dealing with Prolonged Delays

Practical Steps

  1. Written Requests: Always document your requests. Send polite, written reminders on both the final pay and COE, and keep copies.
  2. Check Company Policy or Union Agreements: Some organizations spell out their own timelines for releasing final pay and COE; if they are more favorable than DOLE’s guidelines, those policies should prevail.
  3. File a Complaint with DOLE: If all attempts at internal resolution fail, you can file a complaint at the DOLE Regional or Field Office.

Tips

  • Be clear and specific about what you’re asking for (e.g., itemized computation of final pay, official COE with exact dates of employment).
  • If separation occurs due to termination, ensure you understand whether you are entitled to separation pay or other monetary benefits (depending on the cause of termination).
  • Keep track of all correspondences for evidence if you need third-party intervention.

4. Key Takeaways

  1. Final Pay should generally be released within 30 days from separation under DOLE’s guidelines (unless company policy or contract requires it sooner).
  2. COE must be provided “upon request,” and while there is no strict statutory timeline, the common practice is within around 3 days.
  3. Delays in either final pay or COE issuance can be brought to the attention of DOLE if internal efforts to follow up are not successful.

By knowing the usual timelines and the steps to follow if there are delays, employees can better advocate for themselves and ensure they receive both their final pay and COE in a timely manner.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.