Letter to a Lawyer

Dear Attorney,

Good day! I would like to seek your advice regarding an issue with my employer. I started working as a pharmacy assistant on August 21, 2024. On September 3, 2024, I informed my manager verbally of my intent to resign because I could no longer handle the workload and had found a better opportunity elsewhere. My contract states I must complete at least one month before resigning, but there was no specific clause about rendering an additional one month after filing my resignation.

Despite this, my employer insisted I render another month, and I continued working until September 23. Due to extreme difficulty with the job, I was unable to report for work after September 24, which my manager was aware of. However, they decided not to release my wages for the September 5–19 and September 20–23 cutoffs, stating that these will be withheld and included in my final pay.

I would like to understand if their action of withholding my wages for two cutoffs is legal and what remedies I may have under Philippine law. Your guidance would be highly appreciated.

Sincerely,
A Concerned Employee

Legal Analysis: Withholding Wages and Final Pay Under Philippine Law

Under Philippine labor laws, the timely and complete payment of wages is a fundamental right of employees. The Labor Code of the Philippines, relevant labor advisories, and jurisprudence collectively establish the rights of employees regarding wage withholding, resignation policies, and final pay. Below is a comprehensive discussion of the key issues in your case:

1. Right to Timely Payment of Wages

Article 103 of the Labor Code of the Philippines provides that wages must be paid at least once every two weeks or twice a month at intervals not exceeding sixteen days. Delayed payment of wages, whether intentional or due to negligence, constitutes a violation of the law.

The withholding of wages earned for services already rendered, regardless of the employer’s reasons, violates this provision. Employers are only permitted to withhold wages in specific, legally sanctioned circumstances (e.g., to satisfy tax obligations or court orders).

Key Points:

Wages for the periods September 5–19 and September 20–23 were earned and should have been paid within the regular payroll schedule.
Withholding wages for inclusion in a final pay, without lawful basis, violates labor standards.

Relevant Jurisprudence:
In Paguio vs. Philippine Long Distance Telephone Co. (G.R. No. 173846, 2008), the Supreme Court underscored the importance of paying employees on time and rejected unjustified withholding of wages, emphasizing that wages are the lifeblood of the worker.

2. Validity of the Employer's Claim to Withhold Wages as Part of Final Pay

Under Department of Labor and Employment (DOLE) Advisory No. 11, Series of 2014, employers must release final pay within 30 days from the employee’s separation. Final pay typically includes:

Last wages earned.
Pro-rated 13th-month pay.
Cash conversions of unused leave credits, if applicable.

However, employers cannot unilaterally decide to withhold wages already earned to include them in the final pay. This is considered unlawful unless explicitly agreed upon by the employee or mandated by company policy supported by a signed agreement.

Analysis of Your Situation:

Your earned wages for September 5–23 are part of regular pay and are not conditional upon the completion of the resignation period.
The employer’s justification to withhold these wages is not supported by law or best practices.
Final pay refers to amounts accrued at the conclusion of employment, including benefits and separation entitlements, not regular wages already earned.

3. Rendering of Service During Resignation Period

Under Article 285 of the Labor Code, an employee may terminate employment without just cause by providing the employer at least one month’s written notice, unless a different notice period is agreed upon in the employment contract. This ensures a smooth transition for both parties.

Key Considerations:

Your employment contract requires at least one month of service before resignation but does not explicitly require a notice period of an additional month.
The employer’s insistence on rendering an additional month may be interpreted as excessive if not contractually stipulated.
Failure to complete the resignation period may expose you to liability for damages, but this does not permit the employer to withhold your wages as a penalty.

Relevant Case Law:
In Mendoza vs. Rural Bank of Lucban (G.R. No. 155421, 2007), the Supreme Court ruled that an employer’s failure to pay wages due to resignation disputes violated the employee’s rights. Employees are entitled to wages for actual services rendered.

4. Remedies Available to You

As an aggrieved employee, the following legal remedies and steps are available:

Filing a Complaint with DOLE

You may file a labor complaint with the DOLE National Capital Region Office for:

Recovery of unpaid wages for September 5–23.
Compensation for any damages caused by the withholding of wages.

The DOLE offers mediation services to resolve labor disputes swiftly without litigation. Employers found in violation may be directed to release the withheld wages immediately.

Filing a Complaint with the National Labor Relations Commission (NLRC)

If mediation fails, you may elevate your case to the NLRC to seek payment of your wages, along with damages for undue delay and emotional distress.

Civil and Criminal Liability of Employers

Under Article 116 of the Labor Code, withholding wages without legal justification is subject to penalties. Employers may also face administrative sanctions for labor law violations.

5. Practical Considerations

Documentation

Preserve copies of your employment contract, payslips, and communications with your employer.
Note any verbal agreements or notices, and provide witnesses if necessary.

Timing

Final pay must be released within 30 days of separation. If this period lapses without payment, immediate action is advised.

Costs

DOLE mediation services are generally free of charge. Legal representation for NLRC cases is optional but advisable for complex disputes.

Conclusion

Your employer's actions appear to contravene Philippine labor laws. The withholding of wages already earned for September 5–23 lacks legal basis and violates your rights as an employee. Immediate recourse through DOLE is recommended to expedite the resolution of your complaint. Additionally, the employer’s insistence on an extended resignation period, absent contractual stipulation, further raises questions about their compliance with lawful employment practices.

Should you require further assistance, a detailed consultation with an attorney or a visit to the nearest DOLE office is advised to protect your rights and pursue just compensation.