In the Philippine employment landscape, the termination of the employer-employee relationship—whether through resignation or dismissal—often leads to friction regarding the settlement of final accounts. To streamline this process and protect workers' rights, the Department of Labor and Employment (DOLE) issued Labor Advisory No. 06, Series of 2019, which provides definitive guidelines on the release of final pay and employment certification.

I. The "30-Day Rule" for Final Pay

Prior to 2019, there was no specific statutory period for the release of final pay, often leading to months of delay. Labor Advisory No. 06-19 established a clear timeframe:

Standard Timeline: Final pay must be released within thirty (30) days from the date of separation from employment.
Exceptions: This 30-day period applies unless there is a more favorable company policy or a collective bargaining agreement (CBA) that mandates a shorter period.

II. Components of Final Pay

"Final Pay" (also known as "Last Pay" or "Back Pay") is not merely the salary for the last days worked. Under Philippine law, it is an accumulation of various benefits earned by the employee, including:

Unpaid Salary: Wages for the actual days worked prior to separation.
Pro-rated 13th Month Pay: Calculated from the beginning of the calendar year up to the date of separation (Total Basic Salary earned / 12).
Service Incentive Leave (SIL): Cash conversion of unused SIL (5 days per year for those who have rendered at least one year of service), if applicable.
Separation Pay: Only if the termination is due to authorized causes (e.g., redundancy, retrenchment, or disease) or as part of a settlement.
Tax Refund: Any excess withholding tax collected by the employer during the taxable year.
Other Benefits: Cash conversions of vacation/sick leaves if provided by company policy or contract, and any other bonuses or commissions earned.

III. The Certificate of Employment

Regardless of the reason for termination (even if the employee was dismissed for "just cause"), the employer is legally obligated to issue a Certificate of Employment.

Timeline: The certificate must be issued within three (3) days from the time of the request by the employee.
Content: The certificate must state the period of the employee’s engagement, the type of work performed, and the date of termination.

IV. The Employer’s Right to "Clearance"

A common point of contention is whether an employer can withhold final pay pending "clearance."

Philippine jurisprudence (notably Milan vs. NLRC) recognizes the employer's right to withhold final pay as a form of "management prerogative," provided it is for the purpose of ensuring the employee returns company property or settles liquidated debts.

The Balancing Act: While the employer can require a clearance process, this process must not exceed the 30-day window mandated by DOLE. The employer cannot indefinitely withhold pay simply because a clearance form remains unsigned if the employee has already surrendered all accountabilities.
Valid Deductions: Employers may deduct "liquidated" debts (debts certain and demandable, like salary loans or the value of unreturned laptops) from the final pay.

V. Legal Remedies for Non-Compliance

If an employer fails to release the final pay within the 30-day period or refuses to issue a Certificate of Employment, the employee has several avenues for redress:

SENA (Single Entry Approach): The employee may file a request for assistance with the nearest DOLE provincial or regional office for mandatory conciliation-mediation.
Labor Arbiter: If SENA fails, the employee may file a formal complaint for "Non-payment of Final Pay" with the National Labor Relations Commission (NLRC).
Penalty: Employers found in violation may be liable for the principal amount plus legal interest (currently 6% per annum) and potentially attorney's fees if the employee was forced to litigate to recover their wages.

VI. Conclusion

The 30-day mandate is a mandatory labor standard designed to ensure that workers have the financial means to support themselves during their transition between jobs. While employers have the right to protect their property through a clearance process, this right is subordinate to the statutory duty to pay wages and benefits earned in a timely manner. Both parties are encouraged to facilitate the turnover of accountabilities promptly to avoid legal complications.