13th-month pay entitlement

Dear PAO,
I have heard from a friend that employees who resign after September are entitled to receive their 13th month pay—each of them to receive an equivalent to 1/12 of an employee’s salary. I have been trying to locate a document stating this rule but I have not found one. Please help me.
Thank you,
Angel

Dear Angel,
According to law, all rank and file employees are entitled to 13th-month pay regardless of the amount of the basic salary that they received in a month, if their employers are not otherwise exempted from the application of the law. Such employees are entitled to the benefit 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 (1) month during a calendar year.

A basic salary for the purpose of computing the 13th-month pay shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowance granted pursuant to Presidential Decree 525 or Letter of Instruction 174, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975.

The required 13th-month pay shall be paid not later than December 24 of each year. An employer, however, may give to his employees one half (1/2) of the required 13th-month pay before the opening of the regular school year and the other half on or before the 24th of December of every year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees. (No. 5 (b), Revised Guidelines on the 13th-month Pay Law)

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 to September his proportionate at 13th-month pay should be equivalent to 1/12 of his total basic salary he earned during that period.

Accordingly, 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 (No. 6, id).
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We wish to remind you that the above legal opinion is based solely on the facts you have narrated and our appreciation of the same. The opinion may vary when other facts are changed or elaborated. We hope that we have answered your questions.

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