13th-month pay for employees on maternity leave

Dear PAO,

I am an employee of a private company for three years now. I would like to know if I am still entitled to a full 13th-month pay even if I will be on maternity leave for two months. Our human resource department said my benefit would be pro-rated. It is my understanding that the 13th-month pay will be pro-rated depending on the completed calendar year.
Dith

Dear Dith,

The maternity leave benefit is a grant mandated by law which is given to every married and unmarried pregnant covered female employee who has paid at least three monthly maternity contributions in the twelve-month period preceding the semester of her childbirth, abortion or miscarriage and who is currently employed. The 13-month pay benefit, on the other hand, is provided for by law to all rank-and-file employees regardless of the amount of basic salary that they receive in a month and regardless of their designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during a calendar year.

Applying the foregoing in your case, you will receive the full amount of your 13th-month pay if you are employed with the same employer for the whole calendar year. This is true even if you will be on your maternity leave for two months.

However, if you and your company have executed a written agreement or there is a collective bargaining agreement (CBA) of which you are bound to comply, stating that your 13th-month pay will be pro-rated for the months that you will not be in actual service, then the company may validly pro-rate your 13th-month pay. It is a well-settled rule that employers and employees may validly negotiate the terms of their agreement and are bound thereby after its due execution.

For purposes of computing your 13th-month pay, the maternity leave benefit is not included because the basis for said computation is only your basic salary, unless by agreement you and your company has consented to its inclusion in the computation.

According to law, basic salary means “all remunerations or earnings paid by the employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th-month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees.”

This provision is strengthened by a Supreme Court ruling holding that “for employees receiving regular wage, we have interpreted ‘basic salary’ to mean, not the amount actually received by an employee, but 1/12 of their standard monthly wage multiplied by their length of service within a given calendar year.
Thus, we exclude from the computation of ‘basic salary’ payments of sick, vacation and maternity leaves.”

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

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