Under Philippine labor laws, the relationship between an employer and an employee is not merely contractual but is impressed with public interest. When an employment relationship ends—whether through resignation or termination—the employer has specific statutory obligations regarding the release of final pay. Withholding these funds or "ghosting" an employee by blocking communication channels constitutes a violation of Department of Labor and Employment (DOLE) regulations and may subject the employer to administrative and civil liabilities.

I. The Right to Final Pay

Labor Advisory No. 06, Series of 2020 clarifies the definition and timeline for the release of final pay. Final pay (or "back pay") refers to all revenues due to the employee, regardless of the cause of termination of employment.

Components of Final Pay:

Unpaid Salary: Wages earned for the actual days worked before separation.
Pro-rated 13th Month Pay: .
Service Incentive Leave (SIL): Cash equivalent of unused vacation leaves (at least 5 days for every year of service) for those entitled.
Tax Refunds: Excess taxes withheld from the employee.
Separation Pay: If applicable (e.g., retrenchment, redundancy, or disease).
Cash Bond/Deposits: Any other garnishments or deposits returnable to the employee.

The 30-Day Rule

Unless a more favorable company policy or Individual Employment Contract exists, the final pay must be released within thirty (30) days from the date of separation.

II. The Legality of "Blocking" and Withholding

While an employer has the "Management Prerogative" to require a clearance process, this power is not absolute.

Clearance Process: Employers may withhold final pay pending the completion of a clearance (returning company property, turnover of turnover of responsibilities). However, this process must be reasonable and conducted in good faith.
Unjustified Withholding: If the employee has completed the clearance or if the employer is deliberately making the clearance impossible to achieve (e.g., by blocking the employee or refusing to acknowledge submissions), the withholding becomes illegal.
Blocking Communication: Labor tribunals view "blocking" an employee as an act of bad faith. It does not absolve the employer of the 30-day mandate. Communication lines must remain open specifically for the settlement of legal obligations.

III. Legal Remedies and Steps for Recourse

If an employer refuses to release final pay or has ceased communication, the following legal steps are available:

1. Formal Demand Letter

Before litigation, the employee should send a formal Demand Letter via registered mail or personal service with a received copy. This serves as proof that the employee attempted to settle the matter amicably and puts the employer in "legal delay."

2. SEnA (Single Entry Approach)

The most efficient route is filing a Request for Assistance through the SEnA program at the nearest DOLE provincial or regional office.

Nature: It is a 30-day mandatory conciliation-mediation process.
Goal: To reach an amicable settlement without going to a full-blown labor case.

3. Formal Labor Case (NLRC)

If SEnA fails, the employee can file a formal Complaint with the National Labor Relations Commission (NLRC) for:

Non-payment of wages and benefits.
Damages (Moral and Exemplary) if the withholding was done malevolently or oppressively.
Attorney's fees (typically 10% of the total award).

IV. Potential Penalties for Employers

The Philippine Supreme Court has consistently ruled that withheld wages are a form of property right. Employers found to have acted in bad faith may be liable for:

Legal Interest: Usually 6% per annum from the time of judicial or extrajudicial demand.
Solidary Liability: In certain cases, corporate officers may be held personally liable if they acted with malice or bad faith in withholding the employee's pay.
Administrative Fines: Sanctions from DOLE for violation of labor standards.

V. Issuance of Certificate of Employment

Per Labor Advisory No. 06-20, the employer is also mandated to issue a Certificate of Employment within three (3) days from the time of the request, regardless of the status of the clearance, provided the employee has been separated from the company. Blocking an employee to prevent this request is a direct violation of this advisory.