The Department of Labor and Employment (DOLE) released the newest guidelines on how and when employees would be able to get their final pay and Certificate of Employment (CoE) issuance after they’ve separated from the company they were working with before.
In their newest Advisory No. 06 Series of 2020, they said that overall, this is about the final pay and COE issuance of employees:
Pursuant to Articles 4, 103, 116, 118 of the Labor Code of the Philippines, as amended, and Section 10, Rule XIV, Book of V of its Ombnibus Implementing Rules and Regulations, this advisory is hereby issued as guidelines on the payment of Final Pay and Issuance of Certificate of Employment as an Employee. “
What did the DOLE discuss?
In the four (4 ) part advisory, the Labor Department emphasized the schedules on when employees should get their final pay and their COEs after they’ve been resigned to the company they were working with.
Before we delve deeper into that, what is a final pay? What is a Certificate of Employment? The final pay or known to be back pay or last pay, refers to the total sum of all monetary benefits or wages which is due to an employee’s termination of employment.
It could be any of the following, as per the advisory:
- Retirement pay pursuant to Article 302 of the Labor Code, as renumbered, if applicable;
- Cash conversions of remaining unused Vacation Leaves (VLs), Sick Leaves (SLs), and other leaves pursuant to a company policy, or individual or collective agreement, if applicable;
- Cash conversions of unused Service Incentive Leave (SIL) pursuant to Article 95 of the Labor Code;
- Pro-rated 13th month pay pursuant to the Presidential Decree (PD) No. 851;
- Income tax claim for the excess of taxes withheld, if applicable;
- Cash Bonds or other types of deposits that are due or for return to the employee, if any;
- Separation pay pursuant to Articles 298-299 of the Labor Code, as renumbered, company policy, or individual or collective agreement, if applicable;
- Unpaid earned salary of the employee in question; and
- Other types of wages and compensation stipulated in and individual or collective agreement, if any
NOTE: The thirteenth (13th) month pay is a pay all employees get that is equivalent to the one-twelfth (1/12) of the total basic salary earned by the employee within the given calendar year; pursuant to PD 851 and its IRRs.
(SOURCE: DOLE ADVISORY NO. 06, S 2020)
Certificate of Employment (COE)
Now that you have a broader idea of what the final pay is, what’s the COE? Well, in its simplest and most basic terms, the COE or the Certificate of Employment is a document or a certificate that comes from the employer which specifies:
- Dates of the employee’s engagement and termination from the company
- Type/s of work the employee had when he or she was employed
- The monthly salary of the employee
When should the final pay and COE be received?
Based on the most recent update from the Labor Department, the COE shall be given to the employee within three (3) days from the time when it was requested by the employee. It should no more than be three (3) days.
The final pay, on the other hand, shall be released anywhere within thirty (30) days from the date of the separation or the termination of the employee’s employment. Exceptions that would arise would be when there are more favorable company policies directed to the employee.
What if a company fails to abide by these rules?
According to DOLE, issues, claims, and disputes that would arise connected to the final pay release, the issuance of the COE, shall b filed and submitted to the nearest DOLE Provincial/Regional/Field Office.
NOTE: The dispute needs to be submitted to where DOLE has the jurisdiction over the company or the workplace. This is for conciliation subject to the enforcement mechanism enforced by the Labor Department.
The advisory has been duly signed and approved by DOLE Secretary Silvestre H. Bello III on the 31st of January 2020.
Now, is your company holding your back or final pay longer than what the recommended schedule is? Do note, though, that the effectiveness of the advisory starts after this is published. Nevertheless, it has already been published so employees need to know their privilege.
Be aware of when you should receive your final pay, as well as your COE! Note that you can report an incident that would deem a company not following rules!