Resignation is a voluntary act of termination initiated by the employee. Under Philippine labor law, particularly the Labor Code (Presidential Decree No. 442, as amended), an employee has the absolute right to resign at any time, with or without cause, provided proper procedure is followed. After four (4) years of continuous service, the employee is unquestionably a regular employee and is entitled to all statutory monetary benefits accrued up to the effective date of resignation.

The following discussion covers all mandatory and customary benefits that must be paid upon voluntary resignation, the legal rules on computation and release of final pay, consequences of improper resignation, and established practices under DOLE regulations and Supreme Court jurisprudence as of December 2025.

I. Legal Basis of Resignation

Article 300 (formerly Art. 285), Labor Code – “An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least thirty (30) days in advance. The employer upon whom no such notice was served may hold the employee liable for damages.”
With just cause (serious insult, inhuman treatment, commission of crime, etc.), no 30-day notice is required, and the resignation may be immediate.
Resignation is effective upon lapse of the 30-day notice period or upon acceptance by the employer if earlier.

II. Mandatory 30-Day Notice Rule and Consequences of Non-Compliance

Written notice is mandatory for resignation without cause.
Failure to render/serve the full 30 days renders the employee liable for damages equivalent to the salary the employer would have to pay a replacement during the unserved period (San Miguel Properties v. Secretary, G.R. No. 165675, 2006).
Employer may lawfully deduct the amount corresponding to the unserved notice period from the employee’s final pay (DOLE Handbook on Worker’s Statutory Monetary Benefits, 2024 edition).
Employer cannot refuse to accept resignation or force the employee to withdraw it (Phil. Wireless v. Montevirgen, G.R. No. 220014, 2018).

III. Final Pay Release Deadline

Under DOLE Department Order No. 238, series of 2023 (Guidelines on the Payment of Final Pay), the employer must release the final pay not later than fifteen (15) calendar days from the date of separation.
Clearance process must be completed within a reasonable period; undue delay or refusal to clear the employee is illegal withholding and entitles the employee to interest of 6% per annum plus possible moral/exemplary damages (DOLE Explanatory Bulletin on Final Pay, 2024).

IV. Components of Final Pay Upon Resignation After 4+ Years (All Amounts Are Mandatory Unless Stated Otherwise)

Unpaid Salaries/Wages up to Last Day Worked
- Includes basic salary, overtime pay, holiday pay, night shift differential, rest day premium, etc., that remain unpaid.
Pro-rated 13th Month Pay (Presidential Decree No. 851, as amended)
- Formula:
  (Total Basic Salary earned in the calendar year of resignation ÷ 12) × number of months worked in the year (including fractions of 15 days or more counted as full month).
- Example: Employee resigns effective October 31, 2025 with total basic salary from Jan–Oct 2025 of ₱360,000 → 13th month = (₱360,000 ÷ 12) × 10 = ₱300,000.
- Paid regardless of manner of separation (resignation, termination, retirement).
Cash Conversion of Unused Service Incentive Leave (SIL) – Article 95, Labor Code
- Minimum of 5 days SIL with pay per year.
- After 4 full years, employee is entitled to cash equivalent of all accumulated and unused SIL (maximum accumulation depends on company policy; law allows accumulation).
- Many companies provide more generous leave credits (e.g., 15 VL + 15 SL). The entire unused balance of whatever leave credits the company grants must be paid in cash upon separation if company policy or practice allows monetization.
Pro-rated Performance/Incentive/Christmas/Mid-year Bonuses
- If the company has an established practice or policy of granting 14th month, 15th month, mid-year bonus, or performance bonus, the resigned employee is entitled to the pro-rated amount.
- Supreme Court has consistently ruled that bonuses that have ripened into company practice are demandable and must be pro-rated upon resignation (American Wire v. CA, G.R. No. 155059, 2005; Wesleyan University-Phils. v. Guillermo, G.R. No. 191805, 2014).
Rice Subsidy, Meal Allowance, Uniform Allowance, etc.
- If these are given regularly and form part of compensation, pro-rated amounts must be included.
Reimbursement of Business Expenses
- All documented and approved expenses incurred in the course of employment.
Other Contractual Benefits
- Signing bonus pro-ration (rare), housing allowance, car plan amortization adjustments, HMO coverage up to last day, etc.

V. Benefits That Are NOT Legally Required Upon Voluntary Resignation

Separation Pay – Separation pay is mandatory only in authorized causes of termination (installation of labor-saving devices, redundancy, retrenchment, closure, disease) or illegal dismissal. Voluntary resignation does not entitle the employee to separation pay unless expressly provided by company policy or CBA (Art. 297, Labor Code; Philippine Long Distance Telephone Co. v. Ylagan, G.R. No. 155692, 2005).
Retirement Pay under RA 7641 – Payable only upon reaching optional (60) or compulsory (65) retirement age with at least 5 years of service. Resignation before retirement age does not qualify.
Unemployment Benefits (SSS) – Under RA 11199 (Social Security Act of 2018), unemployment insurance benefit is available only for involuntary separation. Purely voluntary resignation disqualifies the employee.

VI. Tax Treatment of Final Pay

All amounts are subject to withholding tax on compensation except the following which are tax-exempt:
- Retirement benefits under RA 7641 or approved company plan
- Separation pay due to authorized causes
- SSS/GSIS/PHIC/Pag-IBIG benefits
- De minimis benefits
The employer is required to issue BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) upon separation.

VII. Post-Employment Obligations of Employer

Issue Certificate of Employment (COE) upon request – must state inclusive dates, position(s) held, and salary received (mandatory under DOLE Labor Advisory No. 06-20).
Remit final SSS, PhilHealth, Pag-IBIG contributions and issue payslips/contribution records.
Provide SSS Form R-1A (Employment Report) if requested.

VIII. Common Illegal Practices by Employers (and Remedies)

Undue delay in clearance/final pay → file money claim at DOLE-NLRC for final pay + 6% legal interest + damages.
Forcing employee to sign quitclaim waiving rights for less than full amount → quitclaim is invalid if unconscionable (More Maritime Agencies v. NLRC, G.R. No. 172053, 2009).
Deducting cash bond or alleged shortages without due process → illegal (Art. 113–115, Labor Code).

IX. Recommended Steps for a Clean Resignation After 4 Years

Submit formal resignation letter at least 30 days before intended last day.
Coordinate immediate superior/HR for clearance form.
Keep copies of all payslips, leave records, and acknowledgment receipts.
Upon receipt of final pay, verify computation against your own records.
If discrepancies exist, send demand letter within 3 years (prescriptive period for money claims under Art. 306, Labor Code).

In summary, while voluntary resignation after four years does not carry separation or retirement pay, the employee is legally entitled to a complete, accurate, and timely final pay consisting of all earned wages, pro-rated 13th month pay, monetized unused leaves, pro-rated bonuses that form part of regular compensation, and all other accrued benefits under law, company policy, or established practice. Any shortfall is recoverable with interest and possible damages through the DOLE-NLRC Single Entry Approach (SEnA) or regular labor arbitration.