Dear Attorney,
I would like to ask about the situation concerning immediate resignation. If I submit my immediate resignation, am I still entitled to receive my pro-rated 13th month pay and any unused paid time off (PTO)? I have been on a work pause for more than three weeks now, and I want to understand if these benefits will be affected by my resignation status.
Sincerely,
An Employee Seeking Clarification
Insights
In the Philippines, an employee who resigns, whether immediately or with notice, may still be entitled to certain benefits such as the pro-rated 13th month pay and payment for unused paid time off (PTO), depending on specific conditions.
Pro-Rated 13th Month Pay:
Under Presidential Decree No. 851, all rank-and-file employees are entitled to a 13th month pay, which should be provided no later than December 24 of each year. This benefit must be given regardless of an employee’s resignation, provided that they have worked for at least one month within the calendar year. The computation is pro-rated based on the actual months worked. Even if an employee resigns before December, the employer is still obligated to pay the pro-rated 13th month for the time worked during that year.
For example, if the employee worked for six months, they would be entitled to half of their basic monthly salary as the 13th month pay.
Unused PTO (Leave Credits):
The law does not automatically grant employees paid time off or vacation leave. However, many companies in the Philippines offer such benefits as part of their policies or employment contracts. If an employer provides PTO, and the employee has unused leave credits at the time of resignation, it is a common practice for these to be converted into cash.
However, the actual conversion of unused leave credits will depend on the company's policy. Some employers may require that any remaining PTO be forfeited if not used before resignation. It is important for the employee to review their employment contract or the company's employee handbook to verify if PTO can be encashed.
Work Pause Considerations:
A work pause, such as a suspension of operations or temporary closure, may affect the calculation of both the 13th month pay and PTO. If the employee was not actively working during the pause but was still considered employed, the duration of this pause might still be counted for the purpose of computing the 13th month pay. As for the PTO, it will again depend on the company’s policy.
In summary, an employee who immediately resigns can still receive pro-rated 13th month pay for the months worked and may also be entitled to compensation for unused PTO, depending on the employer’s policies and the specifics of the employment contract. Employees should review company guidelines and consult with a labor lawyer to fully understand their rights before resigning.