Letter to a Lawyer

[Date]
Dear Attorney,

I hope this letter finds you well. I am reaching out to seek clarification regarding the entitlement of an employee who went on absence without official leave (AWOL) to receive the 13th month pay.

Specifically, I would like to know:

Is an AWOL employee entitled to a prorated 13th month pay for the months they have rendered service during the calendar year?
Are there any legal precedents, government regulations, or Department of Labor and Employment (DOLE) guidelines that provide clarity on this matter?
Does the AWOL status automatically disqualify an employee from receiving the benefit, even if they have worked for a portion of the year?

Thank you for your time and expertise. I look forward to your guidance.

Sincerely,
A Concerned Employer

Legal Analysis: Entitlement of AWOL Employees to 13th Month Pay in the Philippines

The question of whether an employee who has gone AWOL is entitled to the 13th month pay under Philippine law hinges on the interpretation of Presidential Decree No. 851 and its related implementing guidelines. Below, we provide an exhaustive discussion on the topic, including statutory provisions, case law, administrative guidelines, and the practical implications for employers and employees.

1. Overview of the 13th Month Pay Law

Presidential Decree No. 851, issued on December 16, 1975, mandates that all employers must provide their rank-and-file employees a 13th month pay, equivalent to one-twelfth (1/12) of their total basic salary earned within the calendar year. The essential elements of this law are as follows:

Who is Entitled: All rank-and-file employees, regardless of the nature of their employment and irrespective of how they are paid (monthly, daily, piece-rate, etc.), are entitled to the benefit, provided they have worked at least one month during the calendar year.
Calculation: The 13th month pay is computed as one-twelfth (1/12) of the basic salary earned by the employee during the calendar year.
Exclusions: Managerial employees, government employees already receiving equivalent benefits, employees of personal service employers, and employees paid purely on commission without a fixed salary are excluded.

The law does not explicitly disqualify AWOL employees but emphasizes the calculation of the benefit based on the total basic salary earned during the year.

2. Implications of AWOL on 13th Month Pay

An employee who goes AWOL (absence without official leave) stops reporting for work without notice or justification. This action has implications for their employment status and benefits, including the 13th month pay.

a. Entitlement to Prorated 13th Month Pay

Under DOLE guidelines, the 13th month pay is computed based on the total basic salary earned during the year. Therefore, even if an employee goes AWOL later in the year, they may still be entitled to a prorated 13th month pay for the months they rendered actual service, provided their AWOL status does not result in a retroactive termination of employment.

For example:

If an employee worked from January to September and went AWOL starting October, their 13th month pay should be based on the basic salary earned from January to September.

b. Grounds for Disqualification

If an employer terminates the employee's contract due to AWOL, the employee's entitlement to future benefits ceases from the date of termination. However, any benefits accrued prior to termination, such as the prorated 13th month pay, remain due. The employer must compute this amount up to the date the employee was deemed to have effectively separated from the company.

3. Relevant DOLE Guidelines and Opinions

DOLE's Labor Advisory No. 10, series of 2018, provides that the computation of 13th month pay is based on the total basic salary earned by an employee within the calendar year. It does not exempt AWOL employees explicitly but emphasizes that the benefit is calculated from actual service rendered.

Key Points from DOLE Opinions:

Service Rendered as Basis: An employee must have rendered service during the year to qualify for the 13th month pay.
No Waiver of Mandatory Benefits: An employer cannot waive or withhold an employee’s 13th month pay without valid cause, such as a judicial declaration of disqualification or retroactive dismissal.

4. Jurisprudence on AWOL and Benefits

Philippine jurisprudence supports the principle that benefits accrued during employment cannot be arbitrarily withheld. The following cases are instructive:

Macasero v. Southern Industrial Gases Philippines (G.R. No. 164538, February 27, 2007): The Supreme Court held that the computation of mandatory benefits must be strictly in accordance with the law, regardless of the employee’s separation circumstances.
Agabon v. NLRC (G.R. No. 158693, November 17, 2004): The Court emphasized that even employees terminated for cause are entitled to monetary benefits accrued prior to termination.

These rulings affirm that employees on AWOL retain entitlement to prorated 13th month pay unless their AWOL status is coupled with a cause for dismissal that voids their claim retroactively.

5. Employer Remedies and Compliance

Employers faced with AWOL employees should observe the following steps:

Document the AWOL Incident: Maintain records of the employee's unauthorized absences, notices served, and other related documentation.
Determine the Effective Date of Termination: Clearly establish when the employee is considered terminated to avoid disputes over accrued benefits.
Compute Prorated 13th Month Pay: Calculate the pay based on actual service rendered before the AWOL period, regardless of subsequent termination.
Seek Legal Advice: Employers should consult with labor lawyers to ensure compliance with DOLE regulations and avoid unnecessary legal exposure.

6. Summary

In summary, an AWOL employee is not automatically disqualified from receiving the 13th month pay. The entitlement is based on the total basic salary earned during the calendar year. Employers must:

Compute the prorated amount for months the employee rendered service.
Deduct no-pay periods caused by AWOL in the computation.
Pay any accrued benefits promptly to avoid labor disputes.

Employers should carefully follow DOLE guidelines and consult with legal counsel to avoid misinterpretations or errors in handling 13th month pay issues for AWOL employees.

This detailed legal analysis provides a comprehensive understanding of the rights and obligations surrounding the issue. If you have additional questions, please feel free to reach out for further clarification.