Final Pay Withholding Due to AWOL

A comprehensive guide under Philippine labor law (updated June 2025)

1. What “final pay” means

“Final pay” (often called “last pay” or “back pay”) is the sum that an employer must release once the employment relationship ends, whatever the cause. DOLE Labor Advisory No. 06-20 (4 February 2020) defines its typical components:

Unpaid basic salary and any short periods worked in the last payroll cut-off
Pro-rated 13th-month pay (Art. III, P.D. 851 rules)
Monetized or convertible unused service incentive leave (Art. 95, Labor Code)
Any outstanding bonuses or profit-shares that have become unconditional
Retirement benefits (if the plan or Art. 302 applies)
Separation pay, if legally or contractually due
Refund of deposits or bonds

Statutory nature. These items represent earned wages or statutory benefits; they cannot be forfeited merely because the employee misbehaved, resigned without notice, or went on AWOL.

2. AWOL and “abandonment of work”

AWOL (Absent Without Official Leave) is company shorthand for an employee’s unexplained, unauthorized absence.
Abandonment of work is the legal just cause for dismissal under Art. 297(b) [formerly 282(b)] of the Labor Code. Abandonment requires two elements established in jurisprudence (e.g., Samarca v. Arc-Men Industries, G.R. 167988, 24 Jan 2007):
1. Intent to sever—a clear, deliberate refusal to return;
2. Unjustified absence without valid reason.

Because “AWOL” is not automatically “abandonment,” an employer must still observe due process (twin notices and opportunity to be heard) before dismissal—International Hardware, Inc. v. NLRC, G.R. 82981, 10 Dec 1990.

3. May an employer withhold final pay because the worker went AWOL?

Scenario	Rule	Legal basis
Employee simply left and failed to process clearance	Employer may delay release only to the extent necessary to ascertain final accountabilities (tools, cash box, etc.).	Art. 113 (lawful deductions) & DOLE LA 06-20 (30-day release “from date of separation or completion of clearance, whichever comes later”).
Valid money or property shortage is proven	Employer may deduct the specific amount of loss from final pay.	Art. 113(b) & (d) Labor Code; 2022 DOLE Handbook on Workers’ Statutory Monetary Benefits. Written authorization or official findings required.
Contract or CBA provides forfeiture of certain incentives for cause	Contractual benefits may be forfeited, but statutory items (salary, SIL, 13th month) cannot.	Art. 6 Civil Code (autonomy of contracts) but subject to Art. 1700 (labor contracts interpreted in favor of labor) and Art. 116 (prohibition on withholding wages).
No deduction ground, employer withholds anyway	Unlawful. Worker may file money claims (Art. 128 inspection power / Art. 129, 224) or a complaint for illegal deduction and moral damages.	Sy v. Neat, Inc., G.R. 217134, 15 Jan 2020 (illegal deduction even where employee dismissed for cause).

Key take-away: AWOL does not legalize blanket withholding. Only proved shortages, damages, or contractual forfeitures supported by policy and due process justify offsets; everything else must be released.

4. Time frame for payment

30 calendar days remains the benchmark under Labor Advisory 06-20. The count runs:

Resignation/termination with clearance: from completion of clearance
Termination for abandonment: from date the dismissal becomes final (i.e., last day to appeal the termination notice), provided the employee cooperates in clearance.

Failure to release within 30 days—without a valid deduction ground—subjects the employer to legal interest (6 % per annum, per Nacar v. Gallery Frames, G.R. 189871, 13 Aug 2013) plus possible nominal damages for violating labor standards.

5. Due-process checklist for lawful deductions related to AWOL

Show-cause memo detailing the absences and asking the employee to explain.
Notice of termination for abandonment when warranted.
Audit & inventory identifying specific shortages or unreturned property.
Written computation of the amount to be deducted; furnish the employee.
Employee’s written acknowledgment or, if absent, affidavits/documentary proof.
Apply deduction only to the undisputed or lawfully established amount; release the balance.

Skipping steps 1–2 invites a finding of illegal dismissal; skipping steps 3–5 leads to illegal deduction.

6. Common employer pitfalls

“No clearance, no release—forever.” Clearance is allowed, but the process must be reasonable and cannot be used to indefinitely refuse payment.
Automatic forfeiture clauses in company manuals that cover statutory benefits. Such clauses are void for being contrary to Art. 113 & 116.
One-size-fits-all deductions. The Labor Code demands itemized proof of loss.
Treating AWOL as resignation. Abandonment is a dismissal for cause; labeling it “resignation” deprives the worker of notice and may nullify the action.

7. Jurisprudence snapshot (selected cases)

Aliling v. Feliciano (G.R. 220384, 28 June 2021) – Final pay illegally withheld because employer failed to prove cash shortage; 10 % moral damages affirmed.
Sy v. Neat, Inc. (2020) – Employer cannot set-off speculative losses; deductions must be definite.
Samarca v. Arc-Men (2007) – Clarified the two elements of abandonment; absence alone insufficient.
R.B. Michael Press v. Galit (G.R. 153510, 13 Feb 2008) – Forfeiture of service incentive leave benefit declared void; SIL is statutory.

These rulings consistently underscore that earned wages follow the worker, even when the worker violates company rules.

8. Remedies for employees

File a money-claim or illegal deduction case at the DOLE Regional Office (≤ ₱5,000) or NLRC (if > ₱5,000, or combined with illegal dismissal).
Seek inspection—submit a request for a labor standards inspection under Art. 128.
Collect damages and interest—courts often award moral and exemplary damages where withholding is malicious.

9. Compliance tips for employers

Publish a clear, time-bound clearance workflow (e.g., 10 working-day audit window).
Embed due-process templates for AWOL/abandonment to avoid procedural lapses.
Keep contemporaneous records—security logs, emails, CCTV—to prove intent to abandon.
Issue partial releases: pay what is undisputed within 30 days; settle the balance once liabilities are fixed.

10. Conclusion

Going AWOL is a serious breach; it can justify dismissal. But it is not a license to withhold final pay wholesale. Philippine labor law draws a bright line:

Employees lose their jobs if abandonment is proven, but they do not lose the wages and statutory benefits they have already earned.

Employers may deduct only what the law explicitly allows and only after scrupulous due process. Anything beyond that is an illegal deduction, penalized by interest, damages, and regulatory sanctions.

Disclaimer: This article provides general information and is not a substitute for specific legal advice. For particular cases, consult a Philippine labor-law practitioner or the DOLE.