Resigned Employee’s 13th Month Pay Dilemma in the Philippines

Concern: The employee did not receive a 13th-month pay for 2022 and has also not received the 13th-month pay for 2023 due to resigning in September 2023.


∇ Legal Contemplator

Initial Observations:

  • The concern revolves around two separate instances of missing 13th-month pay:
    1. For the entire year of 2022.
    2. For the portion of 2023 during which the employee worked before resigning in September.
  • The 13th-month pay is a mandatory benefit under Philippine labor law.
  • The resignation does not automatically disqualify an employee from receiving a prorated 13th-month pay for the period worked during the year of resignation.

I should start by revisiting the legal foundation for the 13th-month pay under Philippine law. If the law is clear about when and how this pay should be given, it will help determine if there’s a valid claim here.

Building from the Basics:
The legal basis for the 13th-month pay is Presidential Decree No. 851, which requires all employers to provide a 13th-month pay to all employees receiving a monthly basic salary.

  • Key Provisions of PD 851:
    • It mandates that employers provide 13th-month pay no later than December 24 of each year.
    • It covers employees who have worked for at least one month during the calendar year.

This raises some immediate questions:

  1. Is there any exemption that might apply to the employer?
    • PD 851 lists certain exemptions, such as employers with less than 10 employees or those already granting equivalent bonuses.
    • If the employer does not fall under these exemptions, non-payment would likely violate the law.
  2. How does resignation affect entitlement?
    • Resigning mid-year does not exempt the employer from prorating the 13th-month pay based on the actual months worked.

Step-by-Step Thought Process:
Now, I should consider each year separately to ensure the situation is clear.


2022: The Missing 13th-Month Pay

  • Fact Review: The employee claims they did not receive their 13th-month pay for 2022 despite working the entire year.
  • Questions Raised:
    • Did the employer claim an exemption from PD 851 for this period?
      • If yes, on what grounds?
    • Was there a misunderstanding about whether the employee’s salary structure included the 13th-month pay?
    • Did the employer distribute the 13th-month pay as required but failed to properly communicate or release it to the employee?

Let me focus on the most probable issue: assuming the employer was not exempt, failing to provide the 13th-month pay would directly violate PD 851. But how can the employee verify this?

  • Employee Actions to Confirm Non-Payment:
    • Requesting a Certificate of Employment (COE) or payslip records. These documents would clarify whether the 13th-month pay was recorded or omitted.
    • Reviewing the employment contract to determine whether any provision waived or altered the obligation to provide 13th-month pay. (However, waivers of statutory benefits are typically void.)

Reasoning on Potential Violations:

  • If the employer claims an exemption but lacks legal grounds, they would be in breach of the law.
  • If they claimed the pay was already given but the employee never received it, this could be an issue of poor documentation or deliberate non-compliance.
  • If the employer neither claimed exemption nor provided the pay, this is a straightforward violation.

2023: Pro-Rated 13th-Month Pay for Resigned Employees

  • Fact Review: The employee resigned in September, meaning they worked nine months in 2023.
  • Key Legal Point:
    • The Department of Labor and Employment (DOLE) explicitly states that resigned or separated employees are entitled to prorated 13th-month pay based on the months they worked during the year.
    • This means the employer should have computed and paid the prorated amount at the time of final clearance or within the same calendar year.

Exploring Employer Compliance:

  • Was there a final settlement?
    • Upon resignation, employees typically undergo a clearance process, during which all remaining compensation, including prorated benefits, should be settled.
    • If the employer failed to release this benefit during the clearance process, they might be liable for non-compliance.

Exploring Employer Excuses:

  • Could the employer argue that resignation invalidates the right to a prorated 13th-month pay?
    • No, because DOLE guidelines explicitly contradict this argument.
  • Could they delay payment based on financial difficulties?
    • Financial incapacity is not a valid excuse under labor laws.

Verification Steps for the Employee:

  1. Reviewing the final payslip or settlement documents provided during clearance.
  2. Requesting clarification from the employer regarding the computation of the final pay, if any.
  3. Filing a complaint with DOLE if non-payment persists.

Considering Practical Challenges:
There are additional real-world complications to think about.

  • Access to Evidence: The employee may not have direct access to records proving non-payment, which might slow down the resolution process.
  • Employer Retaliation: If the employer is hostile to claims or uncooperative, the employee might face delays or added stress.

Possible Outcomes:

  1. Best Case: The employer acknowledges the mistake and pays the missing amounts.
  2. Moderate Case: DOLE mediates, and the employer agrees to a settlement.
  3. Worst Case: Legal escalation becomes necessary, prolonging the resolution.

Final Answer:

Rights and Next Steps for the Employee:

  1. 2022 13th-Month Pay:

    • If the employer is not exempt under PD 851, the employee has a right to claim this benefit.
    • The employee should gather proof of employment and non-payment (e.g., payslips, employment records) and file a complaint with DOLE.
  2. 2023 Pro-Rated 13th-Month Pay:

    • The employee is entitled to a prorated 13th-month pay for the months worked in 2023.
    • If unpaid, the employee can include this in the same DOLE complaint.

Legal Action:

  • Filing a formal complaint with DOLE is the most practical first step.
  • DOLE typically offers free mediation services to resolve disputes efficiently.

In conclusion, the employee has strong legal grounds to pursue both claims. The resolution will depend on documentation, DOLE intervention, and the employer’s willingness to cooperate.

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