Dear Attorney,
I worked for a company for several years but was informed that I am no longer eligible to receive my final pay because of a supposed three-year rule on claiming it. I would like to know if there is any legal basis for this and if I still have a chance to claim my final pay despite the time that has passed.
Sincerely,
Concerned Employee
Insights
In the Philippines, an employee's final pay, also referred to as "last pay," generally includes all unpaid compensation, such as salaries, overtime, unused service incentive leaves, and separation benefits, if applicable. It is the amount due to an employee upon termination of their employment, whether by resignation, retirement, or dismissal.
Statute of Limitations for Money Claims
According to Article 291 of the Labor Code of the Philippines, all money claims arising from an employer-employee relationship must be filed within three years from the time the cause of action accrues. This means that if an employee is entitled to receive their final pay but does not file a claim within the prescribed three-year period, they may lose their right to recover it.
This statute of limitations serves as a protection for both employees and employers to ensure timely claims. Once the three-year period lapses, the employee's claim becomes barred by prescription, and they can no longer pursue legal action to collect their final pay, unless certain exceptions apply.
Counting the Three-Year Period
The three-year period typically starts from the day the employee's right to final pay arises—commonly the date of termination, resignation, or retirement. This is why it is crucial for employees to promptly claim their final pay and, if necessary, file legal action within this period to avoid forfeiting their entitlements.
Possible Exceptions
There are certain exceptions where the period may be tolled, paused, or extended, such as in cases of fraud or when the employee was unaware of their rights due to misinformation or coercion. However, these are often difficult to prove and require strong legal arguments.
Final Pay in Practice
Employers in the Philippines are obligated to release the final pay within a reasonable period. The Department of Labor and Employment (DOLE) typically advises employers to process final pay within 30 days from the employee’s separation from the company. However, delays may occur, and employees should be vigilant in following up on their entitlements.
In conclusion, if an employee does not claim their final pay within the three-year period from the date of separation, their claim may no longer be enforceable. It is advisable to consult a labor lawyer to assess whether any exceptions apply to the case and to explore available legal remedies.