Concern:
I recently read your article on final pay, and I have some questions. Is the 30-day time frame for releasing final pay counted as calendar days or business days? Additionally, can the company or agency alter this time frame in a way that is not favorable to the employee?

∇ Legal Contemplator

Starting with Small Observations

Okay, let’s begin with the basics. When we talk about “final pay,” it generally refers to the total amount owed to an employee after they leave the company. This typically includes unpaid wages, accrued leave, prorated 13th-month pay, and other monetary benefits owed under the law or a contract. In the Philippines, the Labor Code and Department of Labor and Employment (DOLE) guidelines play significant roles in determining how final pay is handled.

The 30-day rule mentioned seems to align with DOLE’s guidelines, specifically Labor Advisory No. 06-2020, which clarifies that final pay should ideally be released within 30 days from the date of separation unless there are existing agreements to the contrary.

Calendar Days or Business Days?

Let’s think about what 30 days means. Calendar days include weekends and holidays, while business days only count working days (typically Monday to Friday, excluding public holidays). DOLE’s advisory does not explicitly state whether the 30-day time frame refers to calendar or business days. This is a key ambiguity. Without explicit clarification, how should we interpret it?

Defaulting to Calendar Days:
Government-related time frames in the Philippines often use calendar days unless specified otherwise. For example, in filing complaints or appeals with DOLE or other agencies, calendar days are the norm unless business days are explicitly mentioned.
Examining Practical Implications:
If companies were allowed to interpret the 30 days as business days, the time frame could extend significantly. For instance, 30 business days could translate to approximately six weeks, causing delays for employees relying on this money to transition to a new job or meet financial obligations.
Customs and Precedents:
It’s worth checking whether there are precedents or interpretations from DOLE regional offices or labor arbiters. Does DOLE historically treat the 30-day requirement for final pay as calendar days? Unfortunately, this would require more direct references to rulings or advisories, which aren’t immediately available here.
Uncertain but Logical Assumption:
Given that final pay is tied to the separation of employment—a moment of financial vulnerability for employees—it feels reasonable to assume that calendar days would be the intended interpretation. This provides a stricter and employee-friendly deadline for employers.

Can the Company Change the Time Frame?

Now let’s move on to the second question: can a company or agency alter the time frame for releasing final pay, especially in a way that disadvantages the employee?

Labor Law Protections:
The law prioritizes the welfare of employees, encapsulated in the principle of "social justice." Employers cannot simply impose conditions that strip employees of their rights under the Labor Code or DOLE guidelines. Altering the release time frame unilaterally could be seen as a violation of labor standards.
Existing Agreements:
However, DOLE’s Labor Advisory No. 06-2020 does state that the 30-day rule applies “unless there is a more favorable company policy, individual or collective agreement.” This raises the question: does this allow employers to create agreements that extend the time frame? The language here suggests the intent is to accommodate agreements that benefit the employee, not disadvantage them. A longer release period would hardly qualify as “favorable.”
Delays and Exceptions:
Companies might face unavoidable delays due to complexities like finalizing tax computations or verifying claims for benefits. However, they must communicate these reasons clearly to the employee. Failure to release final pay within a reasonable time—even with valid reasons—could expose the employer to legal liability.

Doubts and Further Questions

Would DOLE intervene? If an employee files a complaint for delayed final pay, how does DOLE interpret the guidelines in practice? Does it enforce strict 30-day compliance as calendar days, or does it allow flexibility?
What about penalties? If a company delays beyond the 30-day limit, what remedies are available to the employee? Are there specific fines or damages awarded, or is the resolution limited to merely compelling payment?

Conclusion

After considering the issue from multiple angles, I lean toward the following interpretations:

The 30 days for releasing final pay should likely be counted as calendar days, aligning with broader labor standards and employee-friendly interpretations of similar rules. However, due to the lack of explicit clarification in the advisory, this remains somewhat uncertain.
Companies cannot alter the 30-day time frame to disadvantage employees. Any agreement to extend the period must explicitly benefit the employee, not the employer. Otherwise, it could be challenged as a violation of labor laws.

To resolve these questions definitively, consulting DOLE directly or reviewing recent arbitral decisions might shed light on practical applications of the rule. Employees experiencing delays should document their communications with the employer and seek assistance from DOLE if the situation isn’t resolved promptly.