Dear Attorney,
I have been waiting for my final pay from my previous employer for two years now, but it has not been processed. I am no longer employed with them, and they have since changed their company name. What steps can I take to recover my final pay? Could you please explain my rights and how to pursue this matter legally?

Sincerely,
An Employee Awaiting Final Pay

Insights

Right to Final Pay in the Philippines

In the Philippines, an employee's final pay refers to the total amount due to a departing employee upon resignation, termination, or separation. It includes unpaid salary, 13th-month pay, unused service incentive leave credits, and other legally mandated benefits. Delays in the release of final pay, if unjustified, may violate labor standards, and the employee has legal recourse to pursue these claims.

Legal Basis for Final Pay

Under the Labor Code of the Philippines, an employee is entitled to their full final pay within a reasonable period, typically 30 days from the date of separation. The Department of Labor and Employment (DOLE) has issued guidelines that set this standard. Failure to release the final pay within this timeframe may be considered a violation of labor laws.

Steps to Claim Final Pay

If an employer fails to release the final pay, the employee can take the following steps:

Demand Letter: The first step is to formally demand the release of the final pay. A written demand letter to the former employer may resolve the issue. This letter should request the immediate processing and release of the final pay and include details of the employee's resignation or termination and any pending dues.
File a Complaint with DOLE: If the employer does not respond or continues to delay payment, the employee may file a complaint with the Department of Labor and Employment. DOLE has jurisdiction over monetary claims, including unpaid final pay. The employee can seek DOLE's assistance in resolving the dispute through mediation or conciliation.
Labor Arbitration: If the dispute remains unresolved, the employee can escalate the matter to the National Labor Relations Commission (NLRC) for compulsory arbitration. The NLRC can issue a ruling that orders the employer to pay the final pay and any applicable penalties for non-compliance.

Changing Company Name

In cases where the employer has changed its company name, the new entity may still be liable for the employee's final pay, especially if the rebranding or transfer did not involve a complete dissolution of the previous company. The successor employer may inherit the obligations of the original entity under the principle of "successor-in-interest." Employees should clarify whether the new entity has assumed responsibility for past liabilities.

Conclusion

Employees have the legal right to claim their final pay within a reasonable time frame, as established by labor law in the Philippines. If an employer fails to comply, legal remedies are available through DOLE and the NLRC. It is advisable for employees to document their efforts and seek legal assistance to ensure they receive their due compensation.