DOLE Labor Advisory No. 06 Series of 2020: Guidelines on the Payment of Final Pay and Issuance of Certificate of Employment

In Labor Advisory No. 06 Series of 2020 dated 31 January 2020, the Department of Labor and Employment directs that (a) an employee’s final pay be released within thirty (30) days from the date of separation or termination of employment, unless there is a more favorable company policy, individual or collective agreement thereto; and (b) a Certificate of Employment be released by the employer within three (3) days from the time it was requested by the employee.

“Final pay” refers to the sum or totality of all the wages or monetary benefits due the employee, regardless of the cause of separation from employment.

“Certificate of Employment” refers to a certificate specifying the duration of an employee’s engagement (and date of termination, if applicable), as well as type of work done.

While the instant recent Advisory directs that the employee shall receive his or her final pay within thirty (30) days from the date of separation or termination in the absence of a more favorable company policy, individual or collective agreement for the employee relating to payment of final pay upon separation, case law (Milan v. NLRC, G.R. No. 202961, February 04, 2015) recognizes the right of the employer to establish reasonable clearance procedures.

The same case recognizes the right of an employer to withhold payment of final pay to answer for an employee’s debts, obligations, or accountabilities to the employer that have already become due. In such case, the employee’s benefits are not reduced but only subjected to the condition of returning the employer’s properties based on the principle of unjust enrichment.

Any issue or dispute arising out of the payment of final pay or the issuance of certificate of employment shall be filed before the nearest DOLE Regional/Provincial/ Field Office which has jurisdiction over the workplace.

Click here to read the entire Labor Advisory No. 06 series of 2020.