Last 31 January 2020, the Department of Labor and Employment (DOLE) released Labor Advisory No. 06, series of 2020, which established uniform guidelines on the payment of Final Pay as well as the Issuance of Certificates of Employment by employers.
This overdue but very important advisory addresses a perennial question by employees on their right to Certificates of Employment (during and after employment) and the period within which employers must release their final pay.
While the practice of withholding the release of an employee's final pay is quite common, there has not been, until now, a prescribed period for its release. Usually, employees are just asked to accomplish "clearance procedures" before their final pay is given to them, and it is only after the clearance process is "done" that the processing of the final pay begins.
Although the purpose behind requiring employees to get their clearance is legitimate and perfectly within the prerogative of the employer - as recognized by the Supreme Court - the lack of a fixed period for its release have led some employers to abuse the same by intentionally prolonging the "clearance process" as a way of ensuring that employees do not get their final pay, among others. This is most especially true for some employers who do not even want to pay their employees at all or are bent on punishing (or retaliating against) their employees, regardless of their entitlement to their final or last pay.
Under Labor Advisory No. 06-20, this is no longer possible, as employers are required to release an employee's final pay within thirty (30) days from the date of his/her termination or separation from employment. The failure of an employer to do so will give an employee the right to institute a complaint, which will then be subject to the DOLE's existing enforcement mechanism.
Of course, nothing in this Labor Advisory prevents an employer from setting-off his claims against an employee from his/her last pay. What this does, however, is give the employer a fixed deadline within which to do so. It prevents a situation where the employee is left to wonder when he or she will be able to receive his/her last pay or if he or she will even receive it at all.
In addition to addressing the question on the period for release of an employee's final pay, Labor Advisory No. 06-20 also makes it imperative for employers to issue Certificate of Employment to their employees within three (3) days from receipt of the proper request. This applies to current and former employees (regardless of period) and certainly cannot be made dependent on the employee's separation from employment (as is the case with some employers).
Finally, albeit not explicitly worded as a directive , Labor Advisory No. 06-20 also states what a Certificate of Employment should, at minimum, contain, thus: (a) Date of Employee's Engagement/ Hiring, (b) Date of Termination of Employment; and (c) the type or types of work in which he/she is employed. This, however, does not prevent an employer from adding information to the Certificate, provided that it is relevant to the issuance thereof and subject to Data Privacy Laws.
Considering that it addresses widely-shared concerns by employees, Labor Advisory No. 06-2020 is certainly a welcome issuance from the Department of Labor and Employment.
(Aaron Jarveen O. Ho is the Managing Partner of HG Law. For questions or concerns, Atty. Ho may be reached through his e-mail address at email@example.com)