LETTER TO THE ATTORNEY

Dear Attorney,

I hope this letter finds you in good health and high spirits. I am writing on behalf of a dear friend who has recently encountered a troubling situation at work. Specifically, my friend was not given payment for one month’s worth of salary despite having rendered regular work hours. As a concerned observer, I want to explore the legal remedies and protections available under Philippine law.

My friend fulfilled all the duties expected of them, yet the employer withheld the agreed wages. Understandably, this has caused immense stress and financial strain. Out of an abundance of caution, I have omitted specific names of individuals and companies to safeguard any privileged information.

I humbly request your guidance on the legal options, processes, and potential claims that may be pursued under Philippine labor statutes, administrative regulations, and relevant jurisprudence. Your professional insight would be invaluable in helping my friend address the situation in a fair and lawful manner.

Thank you for taking the time to review this concern. I look forward to any advice or recommendations you can provide. I trust in your expertise and dedication to upholding justice for employees who might be vulnerable to unfair labor practices.

Respectfully,

A Concerned Employee

LEGAL ARTICLE ON THE NON-PAYMENT OF WAGES UNDER PHILIPPINE LAW

In the Philippines, the right to receive proper wages for services rendered is a fundamental aspect of employment. When an employer fails to compensate an employee for work performed, it not only contravenes the Labor Code of the Philippines but also violates the constitutional guarantee of just and humane conditions of work. This article provides an extensive discussion on the legal framework surrounding unpaid salaries, the remedies available, and the processes through which an aggrieved employee can assert their rights.

1. The Right to Wages Under Philippine Law

Under Article 94 and succeeding provisions of the Labor Code of the Philippines, every employee is entitled to receive compensation corresponding to hours worked. The Constitution of the Republic of the Philippines itself underscores the protection of labor and the promotion of social justice. Failure to pay an employee’s salary promptly and in full is considered a violation that can trigger administrative, civil, or even criminal liabilities for the employer under certain conditions.

Wages, as defined under Article 97(f) of the Labor Code, refer to all remuneration or earnings, however designated, for work or services performed by an employee. This remuneration includes basic pay, cost-of-living allowances, and other mandated benefits required by law or contract. Therefore, when an employer withholds payment without lawful cause, it exposes them to potential lawsuits and penalties.

2. Payment of Wages: General Rules and Frequency

The Labor Code prescribes that wages must be paid directly to the employees in legal tender, and not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. By extension, the practice of paying monthly salaries, especially for employees classified under certain wage schemes, must also adhere to this rule. When an employer fails to release a salary payment within the stipulated timeframe, it may already be deemed a violation.

Many employers in the Philippines provide a salary release schedule, such as semi-monthly (i.e., two times per month) or monthly. The critical legal requirement is that payment must not be unreasonably withheld. Any unexplained or unjustified delay can be considered a contravention of labor standards.

3. Grounds for Non-Payment or Withholding of Wages

In certain limited circumstances, employers may withhold wages for lawful purposes. Examples include authorized deductions for taxes, social security contributions, contributions to the Home Development Mutual Fund (Pag-IBIG), PhilHealth, union dues (if the employee is a union member), and other deductions authorized by law or by express written consent of the employee. However, the principle that wages should not be withheld entirely—unless specifically justified by law—remains paramount.

Employees are also protected against illegal salary deductions. Under Article 113 of the Labor Code, no employer can withhold or deduct wages unless permitted by the Code, the law, or regulations issued by the Secretary of Labor and Employment.

4. Legal Remedies for Unpaid Salaries

When an employee experiences the non-payment or underpayment of wages, Philippine law provides several avenues for recourse:

Department of Labor and Employment (DOLE) Regional Office Complaint
Employees can file a labor complaint with the DOLE if they suspect that their wages have been unjustly withheld. The DOLE has mediation and conciliation services designed to promptly resolve labor issues, often referred to as the Single Entry Approach (SENA).
Through SENA, both employer and employee undergo mandatory conciliation-mediation proceedings aimed at amicable settlement within a prescribed timeframe. Should these sessions fail, the complaint may be endorsed to the National Labor Relations Commission (NLRC) for formal adjudication.
National Labor Relations Commission (NLRC) Complaint
If conciliation at the DOLE regional office level is unsuccessful, or if the dispute is deemed unresolvable through SENA, an employee may lodge a formal complaint with the NLRC. The NLRC has exclusive original jurisdiction over cases involving wages and other monetary claims, especially when the aggregate amount claimed exceeds a certain threshold.
The process of filing at the NLRC includes submitting a verified complaint or position paper, after which the adjudication process ensues. Ultimately, if the NLRC rules in favor of the employee, the employer may be directed to pay the unpaid wages plus any applicable damages or penalties.
Civil Action for Collection of Sum of Money
In situations where the dispute does not fall within the jurisdictional threshold of the NLRC, or where an employee has ceased to work for an employer, a civil action to recover unpaid wages may be filed in regular courts. However, this approach is less common, since the NLRC and DOLE have more specialized mechanisms for labor disputes.
Criminal Action
In extreme cases, deliberate refusal or willful non-payment of wages may be punishable under the Labor Code. Although seldom pursued, employers may face criminal liability if they persistently fail to settle wage obligations despite lawful demands or final orders.

5. Prescriptive Periods for Money Claims

Under Article 305 of the Labor Code (previously Article 305 is often cited as part of the omnibus amendments in labor law references), employees have a specific period within which they must file a money claim arising from an employer-employee relationship. Typically, money claims arising from labor standards violations prescribe in three (3) years from the time the cause of action accrued.

The prescriptive period underscores the importance of timely action. Once three (3) years have passed from the date wages were last due, an employee may lose the right to claim those unpaid salaries in a legal proceeding. Therefore, if your friend has only recently experienced non-payment for one month, it is crucial to address the issue promptly to avoid losing legal remedies in the future.

6. Evidentiary Requirements

For a claim of unpaid salaries, it is essential that the employee or complainant provide sufficient proof of the amount owed. This evidence commonly includes:

Employment Records – Contracts of employment, timesheets, payroll slips, or other official documentation specifying the daily, weekly, or monthly wage rate.
Payslips – Any payslips or records showing previous payments, indicating that the employee usually received a certain salary, which was not paid for the claimed month.
Company Policies or Written Communications – Internal memoranda or announcements describing the salary structure or the payment schedule.
Witness Testimonies – Colleagues or co-employees who can attest that the individual performed their duties and was entitled to wages.

Employers, on the other hand, may defend themselves by providing evidence of lawful causes for withholding wages or proof that the salary was already paid. Since labor proceedings in the Philippines are generally non-technical and are guided by the principle that labor laws should be construed liberally in favor of labor, an employee with a legitimate unpaid wage claim will often be given the benefit of the doubt, so long as sufficient prima facie evidence is presented.

7. Potential Damages and Penalties

An employer who fails to pay salaries in accordance with the law may be ordered to pay:

Unpaid Wages – The full amount due, including any shortfall from the mandated minimum wage or contractual wage rate.
Legal Interest – In certain cases, the court or labor tribunal may impose legal interest on unpaid wages.
Attorney’s Fees – Under certain conditions, employees may be awarded attorney’s fees equivalent to ten percent (10%) of the monetary award when they are compelled to litigate.
Moral and Exemplary Damages – In instances where bad faith, malice, or oppressive conduct by the employer can be demonstrated, the labor tribunals or courts may award additional damages. While not automatic, these damages seek to penalize unscrupulous behavior and serve as a warning against future violations.

8. Steps to Take Before Filing a Formal Case

Given the adversarial nature of formal legal proceedings, it is often advisable to undertake initial steps prior to litigation:

Send a Formal Demand Letter – Addressed to the employer, requesting immediate payment of the unpaid salary. This letter serves as a record of the employee’s effort to resolve the matter amicably.
Gather Documentary Evidence – Compile all pertinent documents (employment contracts, payslips, etc.). Ensuring the completeness of evidence saves time during the conciliation-mediation or adjudication stage.
Attempt an Amicable Settlement – Depending on the relationship with the employer, a mutual resolution may be preferable. Amicable settlement conserves resources and preserves goodwill.

If these preliminary measures prove unsuccessful, proceeding with a complaint before the DOLE or the NLRC is the next logical step.

9. The Single Entry Approach (SENA)

Pursuant to Department Order No. 151-16 and other relevant DOLE guidelines, the Single Entry Approach is a compulsory 30-day conciliation-mediation process aimed at encouraging disputing parties to come to a swift resolution. When the complaint is lodged, the assigned SENA officer schedules conferences for both parties to present their positions. If an agreement is reached, the parties sign a settlement, which may be converted into an enforceable document. If no settlement is reached, the matter proceeds to the appropriate adjudicatory body (e.g., NLRC).

SENA is designed to reduce docket congestion and expedite resolution of labor issues. It also affords parties a less formal, less intimidating means of discussing their claims and potential liabilities.

10. Filing a Case Before the National Labor Relations Commission (NLRC)

If settlement fails under SENA or if the claims exceed statutory thresholds, the employee may file a complaint with the appropriate NLRC Regional Arbitration Branch. The NLRC has original and exclusive jurisdiction over money claims involving an employer-employee relationship, including claims for unpaid wages. The typical steps in filing a case at the NLRC include:

Submission of Verified Complaint – The complainant must submit a verified complaint form or a complaint-affidavit detailing the cause of action and relief sought.
Mandatory Conciliation or Mediation Conference – The Arbiter will schedule a conference to ascertain the possibility of settlement.
Position Papers and Responsive Pleadings – If no settlement is reached, the Arbiter directs parties to file position papers, supporting affidavits, and documentary evidence.
Decision – The Labor Arbiter issues a decision based on evidence presented. If the decision is adverse or partially unsatisfactory, either party may appeal to the NLRC en banc.
Further Appeal – From the NLRC, decisions may be elevated to the Court of Appeals via a Rule 65 petition, and ultimately to the Supreme Court if warranted by legal or jurisdictional issues.

11. Effect of Resignation or Termination on the Claim

Even if the employee has resigned or was terminated, the entitlement to unpaid wages remains enforceable. Separation from service does not nullify an employer’s obligation to pay for work already rendered. An employee in such a situation should promptly file the appropriate claim to recover any outstanding compensation.

12. Best Practices and Preventive Measures

To avoid disputes relating to unpaid wages, both employers and employees should maintain detailed records. Employers must keep accurate payroll records, issue payslips reflecting all deductions, and ensure that all statutory contributions are properly remitted. Employees should also keep personal records of hours worked, job responsibilities, and correspondences regarding salary matters. When in doubt, consulting labor law specialists, reading official DOLE issuances, or approaching the Public Attorney’s Office (PAO) can significantly clarify confusion regarding wage entitlements.

13. Conclusion: Upholding the Right to Just Compensation

The non-payment of a month’s salary is a clear violation of the employee’s right to just compensation and can have profound financial repercussions for the affected individual. The Philippine labor justice system, anchored by the Labor Code and strengthened by administrative issuances, provides remedies to ensure that employees can claim what is lawfully theirs. From conciliation proceedings at the DOLE, to formal adjudication before the NLRC, the legal mechanisms exist to safeguard workers from exploitative and oppressive employment practices.

In conclusion, any employee who experiences withheld or unpaid wages should act promptly. Filing a complaint or seeking legal advice from a competent labor attorney can expedite resolution. Transparency in wage policies, adherence to statutory deadlines for payment, and good faith negotiation remain essential for fostering harmonious employer-employee relations. When disputes arise, Philippine laws are well-equipped to protect employees’ fundamental right to receive fair wages for the work they perform.

By understanding the principles and processes involved, employees and employers alike can better navigate the complexities of labor law and work collaboratively toward an equitable outcome. After all, fair remuneration is not only a legal obligation but also a cornerstone of a just, balanced, and socially responsible society.

Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. For advice specific to any particular case or concern, especially one involving non-payment of wages, it is best to consult directly with a qualified lawyer familiar with Philippine labor laws and regulations.