13th month pay of pregnant woman taking long maternity leave

Dear PAO,

Our company is giving a 13th month pay every May and December. Recently, we have a general assembly regarding the new 13th month pay guidelines. But it was not discussed clearly to us when it came to a pregnant woman who would take her maternity leave. Can you please enlighten me about the 13th month pay for a pregnant woman? Will she get half of it when she takes her leave? The speaker said if a pregnant woman will take her maternity leave for two months, she will not be entitled to half of her 13th month pay. Is this correct? If so, how about her remaining four months of work?

Arlene

Dear Arlene,

Thirteenth month pay is a benefit afforded by law to employees as an additional remuneration under Presidential Decree 851. As defined by the Rules and Regulations Implementing PD 851, 13th month pay shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year. Under PD 851, all employees covered shall pay to all their employees receiving a basic salary of not more than P1,000.00 a month a 13th-month pay not later than December 24 of every year. (Section 1, PD 851) However, this was amended by Memorandum Order 28, dated August 13, 1986, by requiring all employers to pay all their rank-and-file employees a 13th-month pay.

For purposes of understanding the above provision, there is a need to determine who are rank-and-file employees. The labor code distinguished managerial employees from rank-and-file employees, to wit:

“Managerial employee” is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book. (Article 212 (m), Labor Code of the Philippines)

This labor code provision is applicable to the 13th-month pay law and is used as the basis in delineating managerial employees from rank-and-file employees. (Revised Guidelines on the Implementation of the 13th-month Pay Law)

The term basic salary as mentioned in PD 851 is likewise of equal importance as this will be the basis in computing the 13th-month pay. In the case of San Miguel Corporation versus Hon. Amado Inciong, (103 SCRA 139), the Supreme Court had the occasion to rule on whether or not in the computation of the 13th-month pay under PD 851, payments for sick leave, vacation leave and maternity benefits, premium for work done on rest days and special holidays, including pay for regular holidays and night shift differentials should be considered. In the said case, the Supreme Court ruled that “while doubt may have been created by the prior Rules and Regulations Implementing PD 851 which defines basic salary to include all renume­rations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically, exclude from the definition of basic salary earnings and other renume­rations paid by an employer to an employee. The all-embracing phrase “earnings and other renumerations” which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works performed on rest days and special holidays, pays for regular holidays and night differentials.”

Thus, maternity leaves, not falling within the above definition of basic salary, are not included in the computation of the 13th-month pay. However, if there is an existing agreement between an employer and his employees to the effect that remunerations such as maternity benefits and the like shall be included in the computation of the 13th-month pay, then the agreement has the force and effect of law between them.

Applying the foregoing to your question, as maternity benefits do not form part of the basic salary of female employees and should not be considered in computing the latter’s 13th month pay, unless there is an existing agreement to the contrary, the computation of the 13th-month pay of a female employee who takes a maternity leave of two months must be one twelfth (1/12) of her basic salary earned during the calendar year excluding the maternity benefits received. She is therefore entitled to 13th-month pay during the 10-month period she was able to report for work. Payment may be done on a one time basis or on several/different occasions and must be completed on or before the 24th of December of that calendar year.

In your case, considering that the payment of your 13th-month pay is twice a year (mid-year and year end), if the two-month maternity leave falls on either of the two periods, half of the 13th-month pay shall be computed based on the basic salary earned for 4 months and the other half for six months or vice versa.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to guide you with our opinion on the matter. –Persida Acosta, Manila Times

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net or via text message (key in: Times dearpao <YOUR QUESTION> and send to 2299).