Disclaimer: The information provided here is for general informational purposes only and does not constitute legal advice. For specific concerns or complicated circumstances, it is always best to consult a qualified lawyer or approach the Department of Labor and Employment (DOLE) directly.

Overview

When an employee in the Philippines resigns from their job, they are still entitled to receive certain benefits mandated by law. One of the most commonly discussed statutory benefits is the 13th Month Pay. Additionally, employees may be entitled to other unpaid wages and benefits (often referred to collectively as “final pay” or “last pay”), which can include unpaid salaries, cash conversions of unused leave credits, pro-rated 13th month pay, and other company-specific benefits, if provided under a collective bargaining agreement or company policy.

Below is a comprehensive guide discussing how to claim the unpaid 13th month pay and other benefits after resignation.

1. What is the 13th Month Pay?

The 13th Month Pay is a mandatory benefit in the Philippines provided for under Presidential Decree No. 851. It is generally equivalent to one-twelfth (1/12) of the basic salary an employee earns within a calendar year. The concept behind this law is to help employees cope with expenses during the holiday season, though the timing of payment can vary.

1.1 Legal Basis

Presidential Decree No. 851: This decree requires employers to pay all rank-and-file employees a 13th month pay.
Labor Advisory Issuances by DOLE: Over the years, DOLE has released various guidelines clarifying coverage, exclusions, and calculation methods.

1.2 Coverage

Rank-and-file employees (those who are not managerial employees) are entitled to 13th month pay.
This entitlement applies to those who have worked for at least one month during the calendar year, even if they have resigned before the official payout date.

1.3 Exemptions

Employees already receiving the equivalent of a 13th month pay in a calendar year via profit-sharing or productivity bonus schemes that meet certain criteria may be exempted (though this is relatively uncommon and must meet specific conditions).
Managerial employees (those who primarily manage the enterprise or a department/subdivision, and have the authority to hire/fire or effectively recommend such actions) are not covered by the 13th month pay law. However, some companies offer 13th month pay to managers as part of their policies.

2. Entitlement After Resignation

Even if you have resigned before December, you are still entitled to a pro-rated 13th month pay for the portion of the year you worked. This means:

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

However, in practical application, many companies compute it based on monthly accruals. For example:

[ \text{Pro-rated 13th Month Pay} = \left(\frac{\text{Basic Monthly Salary} \times \text{Number of Months Worked}}{12}\right) ]

If you worked for the company for 6 months within that calendar year, you are entitled to half of your usual 13th month pay.

Example

Basic monthly salary: PHP 20,000
Months worked in the calendar year (before resignation): 6
Pro-rated 13th month pay:
[ \frac{20,000 \times 6}{12} = PHP 10,000. ]

3. Other Benefits (Final Pay)

In addition to the 13th month pay, the final pay (also referred to as “back pay” or “last pay”) can include:

Unpaid wages or salary up to the last working day.
Pro-rated 13th month pay (as discussed).
Cash conversion of unused leave credits if the company policy or employment contract stipulates payment for unused Vacation Leave (VL) or Sick Leave (SL).
Separation pay (if it applies to the circumstances of the resignation, e.g., if the resignation is due to retrenchment or authorized causes, or if there is a company policy granting separation pay for certain resignations).
Other monetary benefits stipulated in a Collective Bargaining Agreement (CBA), employment contract, or company policy (e.g., allowances, incentives, bonuses).

3.1 Company-Specific Policies

Apart from what the law requires, many employers have internal policies that outline additional benefits. Always review your employment contract, employee handbook, or any relevant policies to ensure you understand all the benefits you may be entitled to receive after resignation.

4. Deadline and Manner of Payment

4.1 Statutory Deadline for 13th Month Pay

Under Presidential Decree No. 851, the 13th month pay must be paid on or before December 24 every year.
However, if an employee resigned before the payout date (e.g., mid-year), the employer typically includes the pro-rated 13th month pay in the employee’s final pay.

4.2 Typical Timeline for Final Pay

DOLE Labor Advisory No. 6, Series of 2020 suggests that final pay should be released within thirty (30) days from the date of separation or resignation, unless a shorter period is stipulated in the company policy, employment contract, or CBA.

4.3 Common Delays

Some companies may delay releasing the final pay due to:

Ongoing clearance procedures
Verification of accountabilities (e.g., company property, unpaid loans)
Internal bureaucracy or administrative processes

Remember: Despite administrative delays, the law generally expects employers to provide final pay within a reasonable period (commonly thirty days after clearance).

5. Steps to Claim Unpaid 13th Month Pay and Other Benefits

5.1 Review Employment Records and Company Policy

Check your payslips to verify what has already been paid or withheld.
Review your employment contract or employee handbook for any specific resignation or final pay clauses, especially those addressing 13th month pay and other benefits.
Confirm your leave records and how many remaining leave credits (if any) are convertible to cash.

5.2 Send a Written Request (if not automatically processed)

If your former employer does not automatically process your 13th month pay or final pay, you can send a formal demand letter or email. This letter should:

Politely remind the employer of your last day and your outstanding entitlements.
List the unpaid amounts (salary, 13th month pay, unused leave conversions, etc.) you believe you are owed.
Request a timeframe for the release of these amounts.

5.3 Clearance Procedure

Most companies require a clearance process for departing employees. This typically includes:

Returning company-owned equipment (laptop, company phone, IDs, etc.)
Settling outstanding company loans or accountabilities
Getting sign-offs from relevant departments (HR, Finance, IT, etc.)

Completing the clearance promptly helps avoid delays in the release of your final pay.

5.4 Keep Records

Always keep records of communications (emails, letters, text messages) related to your demand for unpaid benefits. This documentation may be critical if you need to escalate the matter.

6. Legal Remedies if Your Employer Refuses to Pay

If the employer refuses, neglects, or unduly delays payment of your final pay (which includes the 13th month pay), you may resort to legal remedies:

6.1 File a Complaint with DOLE

Regional Office or Field Office: Proceed to the DOLE office with jurisdiction over the location of your workplace.
Single Entry Approach (SEnA): DOLE usually requires the parties to undergo the SEnA for speedy, amicable settlement of labor issues.
Documentation: Present contracts, payslips, resignation letter, clearance forms, and any demand letters or communication.

6.2 File a Case with the National Labor Relations Commission (NLRC)

If mediation under SEnA fails or the employer still does not pay, you may file a formal labor complaint with the NLRC. This process can be more time-consuming, but it is the next step if amicable settlement is not possible.

6.3 Possible Penalties for Employers

Employers who fail to comply with the law on 13th month pay and final pay obligations may be subject to:

Administrative fines
Penalties imposed by DOLE or the NLRC
Orders to pay the due amounts plus legal interest or, in some cases, additional damages or attorney’s fees (depending on court or tribunal decisions)

7. Common Questions

7.1 Can I still receive my 13th month pay even if I only worked for a few months?

Yes. As long as you have worked for at least one month during the calendar year, you are entitled to pro-rated 13th month pay.

7.2 Do I get a pro-rated 13th month pay if I was under a probationary status?

Yes. Probationary employees are still considered rank-and-file employees; hence, they are covered by the 13th month pay law.

7.3 What if I was terminated for just cause? Am I still entitled to receive my 13th month pay?

Yes. Even if termination is due to just cause, the employee is entitled to the wages and benefits that have already accrued, including the pro-rated 13th month pay for the time actually worked.

7.4 Can my employer withhold my 13th month pay or final pay indefinitely due to clearance issues?

While an employer can temporarily withhold releasing final pay if there are legitimate accountabilities, it cannot indefinitely refuse to release your lawfully earned wages or 13th month pay. DOLE generally requires settlement within 30 days or within a reasonable timeframe once the clearance process is complete.

7.5 What documents should I prepare if I need to file a complaint?

Employment contract
Payslips (showing monthly salary, deductions, etc.)
Resignation letter and acceptance
Clearance documents (if any)
Company handbook (if possible)
Formal requests or demand letters for the unpaid amounts
Any communications (emails, messages) with HR or the employer

8. Key Takeaways

Know Your Rights: The law mandates a 13th month pay for rank-and-file employees. This applies even if you resigned before the payout date.
Pro-Rated Calculation: If you did not work the entire calendar year, your 13th month pay is computed based on the number of months actually worked.
Final Pay: In addition to the 13th month pay, you may be entitled to unpaid wages, leave conversions, and other benefits as part of your final pay.
Follow Proper Procedures: Complete your clearance, send a formal request for your unpaid benefits, and keep documented evidence of all communications.
Escalate if Necessary: If the employer refuses to pay, you have the option to file a complaint with DOLE and, if unresolved, proceed to the NLRC.

Conclusion

Resigning from a job in the Philippines does not mean forfeiting your entitlement to 13th month pay or other final pay components. The law protects employees’ rights to be fairly compensated for all wages and accrued benefits up to their last day of service. If you face any issues in claiming your pro-rated 13th month pay or final pay, follow the steps above, gather all relevant documents, and consider seeking assistance from DOLE or a legal professional to enforce your rightful claims.

Disclaimer: This article is not a substitute for professional legal counsel. If you encounter disputes or complexities regarding your final pay or 13th month pay, consult a lawyer or reach out to DOLE for personalized advice.