Entitlement of AWOL Employees to 13ᵗʰ Month Pay in the Philippines An Integrated Legal Article
1. 13ᵗʰ Month Pay: Legislative Foundation and General Rules
| Key Instrument | Salient Points |
|---|---|
| Presidential Decree (PD) 851 – “Requiring All Employers to Pay Their Employees a 13ᵗʰ Month Pay” (16 Dec 1975) | • Covers all rank-and-file employees in the private sector, regardless of status or method of wage payment, who have worked at least one (1) month during the calendar year. • Exempts only: (a) Government and GOCC workers already enjoying analogous benefits, (b) employers already paying the equivalent of 13ᵗʰ month, (c) household helpers, (d) employees paid purely on commission or boundary (later modified by jurisprudence). |
| Implementing Rules & Regulations (IRR) of PD 851 (Ministry of Labor Memorandum Order No. 28, 1976; subsequent DOLE issuances) | • Defines 13ᵗʰ month pay = 1/12 of total basic salary earned within the year. • Must be paid on or before 24 December each year. |
| Labor Advisory (LA) No. 6-20 (Final Pay Guidelines) & LA No. 21-20 (13ᵗʰ Month Pay) | • Clarify that employees who resign, retire, or are terminated for any cause—including just causes such as Abandonment/AWOL—are entitled to a proportionate 13ᵗʰ month pay based on months actually worked. • Final pay, inclusive of proportionate 13ᵗʰ month pay, must be released within 30 days from the date of separation, unless a shorter period is fixed by CBA or company policy. |
Statutory Character. Unlike bonuses or profit-sharing, 13ᵗʰ month pay is a statutory benefit; parties may enhance but never diminish it. Any agreement to waive or forfeit it is void for being contrary to law and public policy.
2. AWOL and Abandonment of Work
| Legal Basis | Elements |
|---|---|
| Article 297 [282] of the Labor Code (Just Causes) | Abandonment is recognized as “willful breach” of the employment contract. |
| Jurisprudential Tests (e.g., Auto Bus Transport Systems, Inc. v. Bautista, G.R. 156367, 16 May 2005) | (1) Failure to report for work without valid reason; and (2) Clear intention to sever the employment relationship, deduced from overt acts. |
Due Process Reminder. Even with clear AWOL, the employer must still observe the two-notice rule (notice to explain & notice of termination) and an opportunity to be heard. Failure to do so converts dismissal into procedurally illegal, triggering nominal damages.
3. Core Question: Does AWOL Forfeit 13ᵗʰ Month Pay?
Short Answer: No. An employee dismissed for just cause, including AWOL/abandonment, retains all statutory monetary benefits already earned prior to dismissal. The employer’s right to impose disciplinary sanctions does not extend to clawing back accrued 13ᵗʰ month pay.
3.1 Legal Anchor
Section 2(a), PD 851 IRR – entitlement hinges on months actually worked, not on how the employment ended.
Article 116, Labor Code – prohibits withholding of wages except as authorized by law or the employee. 13ᵗʰ month pay, being “wages” by definition (Art. 97), enjoys the same protection.
Jurisprudence
- Leyte IV Electric Cooperative, Inc. v. Lequin (G.R. 149243, 23 Oct 2007) – employees illegally dismissed get 13ᵗʰ month pay for the entire period up to reinstatement; by parity, those validly dismissed get what has accrued up to termination.
- Shoemart, Inc. v. NLRC (G.R. 74229, 11 Aug 1989) – dismissal for breach does not bar recovery of proportionate 13ᵗʰ month pay.
- Phil. Global Communications, Inc. v. De Vera (G.R. 144790, 17 May 2004) – benefits already earned are demandable despite valid dismissal.
3.2 Practical Effect
| Scenario | 13ᵗʰ Month Pay Coverage |
|---|---|
| AWOL occurred March 15, 2025; dismissal effective April 1, 2025 | Employee is entitled to 1/12 of total basic salary earned Jan 1 – Mar 31, 2025. No entitlement for April–Dec because no work rendered. |
| Employee already received half-month advance bonus | Advance may be offset against the proportionate 13ᵗʰ month pay, if clearly documented as such. |
| Employee owes company cash advances | Employer may deduct authorized amounts pursuant to Art. 113 (lawful deductions) provided the employee is informed; unauthorized deductions constitute illegal withholding. |
4. Computation & Illustrative Example
Formula (PD 851 IRR): 13ᵗʰ Month Pay = (Σ Basic Salary Received during the year) ÷ 12
Example: Rank-and-file clerk earning ₱20,000 basic/month, present Jan – Mar 2025 (3 months), then AWOL.
| Month | Basic Salary Earned | Running Total |
|---|---|---|
| Jan | ₱20,000 | ₱20,000 |
| Feb | ₱20,000 | ₱40,000 |
| Mar | ₱20,000 | ₱60,000 |
| Apr–Dec | ₱0 | ₱60,000 |
Proportionate 13ᵗʰ Month Pay = ₱60,000 ÷ 12 = ₱5,000
Note: Include only basic pay—exclude allowances, overtime, leave conversions, unless company policy treats them as basic.
5. Release through “Final Pay”
- Timeline. Under LA No. 6-20, employers must release the final pay (including accrued 13ᵗʰ month) within 30 calendar days from separation, absent a more beneficial CBA/company rule.
- Documentation. Employers commonly require: clearance form, return of company property, and accounting of shortages. While clearance is standard, it cannot be used to delay payment beyond the 30-day rule.
- Certificate of Employment (COE). Must be issued within 3 days from request, even if the employee was AWOL.
6. Forfeiture, Deductions & Offsetting
| Rule | Explanation |
|---|---|
| No Forfeiture of Statutory Benefits | Any policy or contract clause purporting to cancel earned 13ᵗʰ month pay for employees dismissed for just cause is void under Art. 22 of the Civil Code (prohibition against unjust enrichment) and Art. 116 of the Labor Code. |
| Lawful Deductions | Employer may deduct: (a) tax; (b) SSS/PhilHealth/Pag-IBIG arrears; (c) debts or losses with written authorization; (d) proven cash shortages (after due process). |
| Set-off of Advances | Permissible if: (1) advance pertains to 13ᵗʰ month pay, or (2) expressly agreed as salary loan repayable via deductions. |
7. Enforcement & Penalties
- Administrative Routes – Employee may file a money claim under Art. 128 (Visitorial Power) or Art. 224 [217] (NLRC jurisdiction).
- Criminal Liability – PD 851 treats willful refusal to pay as unlawful withholding of wages (Art. 303-305), carrying fines/prison or both.
- Corporate Officer Liability – Responsible officers may be held solidarily liable when the company is unable to satisfy the judgment (Maglutac v. NLRC, G.R. 114938, 4 Apr 1997).
8. Comparative Table: Benefits upon Separation
| Benefit | Resignation | AWOL/Just-Cause Dismissal | Authorized-Cause Dismissal |
|---|---|---|---|
| 13ᵗʰ Month Pay | Pro-rata | Pro-rata | Pro-rata |
| Service Incentive Leave conversion | Up to last day worked | Up to last day worked | Up to last day worked |
| Separation Pay | None (unless CBA/company policy) | None (just cause) | Yes (½ or 1 month per year, Art. 298) |
| Nominal Damages | N/A | Possible if procedural due process lacking | Possible if procedural due process lacking |
9. Frequently Asked Questions
Q: Does the employee have to “clear” first before receiving 13ᵗʰ month pay? A: Clearance is an internal tool for deductions; it cannot defeat the 30-day rule nor withhold statutory pay indefinitely.
Q: If the employee was AWOL starting November and dismissed December, must the employer still pay the full 13ᵗʰ month by 24 December? A: No. The obligation is proportionate and forms part of final pay, which may be released any time on or before the 30-day deadline—even after 24 December—because the employee is no longer on the payroll.
Q: Are managerial employees AWOL entitled? A: Managers are exempt from PD 851 to begin with; hence the question does not arise. They may, however, recover any contractual “Christmas bonus” if already earned under company policy.
Q: Can an employer credit unused leave conversions against 13ᵗʰ month pay? A: They may net out amounts payable to the employee, provided a clear payroll reconciliation is shown and the employee receives a breakdown.
10. Best-Practice Pointers for Employers
- Maintain contemporaneous attendance records to substantiate abandonment and payroll cut-off dates.
- Serve the twin notices even if the employee cannot be located (send to last known address; post notice).
- Compute and release final pay promptly, furnishing a detailed payslip.
- Document deductions with the employee’s prior written consent or statutory basis.
- Train payroll officers on PD 851, LA 6-20 & 21-20 updates to avoid inadvertent violations.
11. Conclusion
Absent Without Official Leave (AWOL) is a serious breach that can validly end an employment relationship. But it is not a ground for forfeiting statutory benefits already earned, foremost of which is the 13ᵗʰ month pay mandated by PD 851. Philippine labor policy tilts strongly toward the protection of wages; thus, even employees dismissed for abandonment remain entitled to a pro-rata 13ᵗʰ month pay computed up to their last actual day of service. Employers who ignore this expose themselves to money claims, penalties, and even personal liability of corporate officers. Conversely, employees should understand that entitlement extends only to the period they have actually worked and that lawful deductions may still apply. Familiarity with the governing rules, paired with observance of due process, ensures that both labor and management stay on firm legal ground.