In the Philippine legal landscape, resignation is the voluntary act of an employee to sever the employer-employee relationship. While the act is voluntary, the Labor Code of the Philippines and prevailing jurisprudence ensure that employees do not leave empty-handed. Upon the effective date of resignation, several mandatory and contractual benefits become due and demandable.

1. Mandatory Legal Entitlements

Regardless of the reason for resignation (provided it is not to circumvent disciplinary proceedings), an employee is entitled to the following under Philippine law:

Pro-rated 13th Month Pay: Under Presidential Decree No. 851, all rank-and-file employees are entitled to a 13th month pay. Upon resignation, this is computed based on the total basic salary earned during the calendar year divided by 12.
Final Salary (Last Pay): The employee must receive their unpaid wages for the actual days worked up to the last day of employment.
Service Incentive Leave (SIL) Pay: Employees who have rendered at least one year of service are entitled to five days of SIL with pay per year. If these are unused at the time of resignation, they must be converted to cash. This applies unless the employer already provides vacation leave benefits of at least five days.
Tax Refunds: If the employer withheld more tax than what is due for the year (based on the shortened employment period), the excess must be returned to the employee.

2. Mandatory Government Contributions

The employer is obligated to ensure that all statutory contributions are up to date until the last month of service.

Social Security System (SSS)
Philippine Health Insurance Corporation (PhilHealth)
Home Development Mutual Fund (Pag-IBIG)

Upon separation, the employer must provide the employee with proof of these contributions and a Certificate of Separation from Employment to facilitate the employee's future claims or updates with these agencies.

3. Separation Pay: A Critical Distinction

A common misconception is that all resigning employees are entitled to separation pay. Under the Labor Code, an employee who voluntarily resigns is generally not entitled to separation pay. Separation pay is typically mandated only in cases of authorized causes for termination (e.g., redundancy, retrenchment, or closure of business). However, there are two exceptions where a resigning employee may receive it:

Employment Contract/CBA: If the employment contract or a Collective Bargaining Agreement (CBA) explicitly states that separation pay will be given upon resignation.
Company Policy: If the employer has an established practice or policy of granting separation pay to resigning employees (often called a "Gratuity Pay").

4. Retirement Benefits

Under Republic Act No. 7641, an employee who has reached the age of 60 (optional) or 65 (compulsory) and has served at least five years in the company is entitled to retirement pay. If an employee resigns at this age and meets these criteria, their "resignation" is effectively a retirement, triggering the payment of retirement benefits.

5. Procedural Requirements

To ensure the seamless release of these benefits, both parties must adhere to specific procedures:

The 30-Day Notice Rule: Article 300 [285] of the Labor Code requires an employee to provide a written notice of resignation at least one month in advance. Failure to do so may make the employee liable for damages, though it does not forfeit their earned wages or 13th month pay.
Clearance Process: The release of the "Final Pay" is usually contingent upon the completion of a clearance process. This involves returning company property (laptops, IDs, uniforms) and settling any outstanding accountabilities.
DOLE Circular No. 06, Series of 2020: This Department of Labor and Employment circular mandates that the final pay and Certificate of Employment must be released within thirty (30) days from the date of separation, unless a more favorable company policy exists.

6. Certificate of Employment

Regardless of the nature of the resignation, every employee has the right to request and receive a Certificate of Employment (COE) stating the period of employment, the type of work performed, and the date of termination.

7. Taxability of Final Pay

While 13th month pay and other benefits are exempt from tax up to a limit of PHP 90,000, any amount exceeding this threshold, as well as the basic salary for the final period, is subject to standard income tax rates. Separation pay due to involuntary causes is generally tax-exempt, but voluntary resignation benefits usually follow regular taxation rules.