Are resigned or separated employees entitled to 13th month pay?

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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

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AT A GLANCE:

An employee who has resigned or whose services are terminated at any time before the time of payment of thirteenth month pay is entitled to this monetary benefit in proportion to the length of time he or she has worked during the year, reckoned from the rime he or she has started working during the calendar year up to the time of his or her resignation or termination from the service. (Revised Guidelines on the Implementation of 13th Month Pay Law)

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Question: Are resigned or terminated employees still entitled to 13th month pay?

Answer:

Yes. Under the law, an employee who has resigned or has been terminated before the payment of 13th month pay is still entitled to such benefit in proportion to the length of time he worked during the year.

The Revised Guidelines in the Implementation of the Thirteenth Month Pay Law provides that:

“An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service. Thus, if he worked only from January up to September his proportionate 13th month pay should be equivalent of 1/12 his total basic salary he earned during that period.” (Rule 6, 1st paragraph, Revised Guidelines on the Implementation of the 13th Month Pay Law)

In the case of Wilfredo Mariano v. G.V. Florida Transport (G.R. No. 240882, September 16, 2020), the Supreme Court reiterated the above rule, to wit:

“As regards the 13th month pay, an employee who has resigned, or whose services were terminated at any time before the payment of the 13th month pay, is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service.”

 

Question: May the resigned or terminated employee demand the payment of hi 13th month pay after his/her resignation or termination?

Answer:

Yes. The law says:

“The payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee relationship. This is consistent with the principle of equity that as the employer can require the employee to clear himself of all liabilities and property accountability, so can the employee demand the payment of all benefits due him upon the termination of the relationship.” (Rule 6, 2nd paragraph, Revised Guidelines on the Implementation of the 13th Month Pay Law)

 

Question: How does the DOLE monitor the employer’s compliance with the 13th Month Pay Law?

Answer:

Labor Advisory No. 18, Series of 2021 requires employers to make a report of compliance through the DOLE Establishment Report System at reports.dole.gov.ph, not later than January 15 of the following year. The report shall conform substantially with the following:

1. Name of establishment;
2. Address;
3. Principal product of business;
4. Total employment;
5. Total number of workers benefitted;
6. Amount granted per employee;
7. Total amount of benefits granted;
8. Name, position and telephone number of person giving information.

 

Read also: 13th Month Pay for Certain Types of Employees Under the Revised Guidelines on the Implementation of the 13th Month Pay Law

 

Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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