In the Philippines, the right to receive wages on time is not just a contractual obligation but a matter of social justice protected by the Constitution and the Labor Code of the Philippines. When an employer fails to pay salaries on time, it triggers a range of legal protections and remedies for the affected employees.
1. Mandatory Frequency of Payment
Under Article 103 of the Labor Code, wages must be paid at least once every two weeks or twice a month at intervals not exceeding sixteen (16) days. If, on account of force majeure or circumstances beyond the employer's control, payment cannot be made on the scheduled date, the employer must pay the wages immediately after such causes have ceased.
2. Administrative Remedies: DOLE Assistance
The first line of defense for an employee is filing a Request for Assistance (RFA) through the SENA (Single Entry Approach) program of the Department of Labor and Employment (DOLE).
- SENA Mediation: A mandatory 30-day conciliation-mediation process aimed at reaching an amicable settlement.
- Compliance Visit/Inspection: Under the Visitorial and Enforcement Power (Article 128), the Secretary of Labor or authorized representatives can inspect establishments. If a violation regarding unpaid wages is found, the DOLE can issue a Compliance Order requiring the employer to pay the arrears.
3. Judicial Remedies: The National Labor Relations Commission (NLRC)
If mediation fails or the claim involves a monetary amount exceeding the jurisdiction of DOLE regional directors (usually involving termination issues), the case is elevated to a Labor Arbiter at the NLRC.
- Money Claims: Employees can sue for the recovery of unpaid wages, including 13th-month pay, holiday pay, and service incentive leaves.
- Legal Interest: In cases of delayed payment, the courts often award a 6% per annum legal interest on the total amount due, reckoned from the time of judicial or extrajudicial demand.
- Attorney's Fees: Under Article 111 of the Labor Code, in cases of unlawful withholding of wages, the culpable party may be assessed attorney's fees equivalent to ten percent (10%) of the amount of wages recovered.
4. Constructive Dismissal
Persistent and unjustified failure to pay salaries can be grounds for a claim of Constructive Dismissal.
Legal Principle: Constructive dismissal occurs when an employer makes continued employment impossible, unreasonable, or unlikely. Non-payment of wages is a fundamental breach of the employment contract, allowing the employee to resign and sue for separation pay and damages as if they were illegally dismissed.
5. Criminal Liability under the Labor Code
While most wage disputes are civil or administrative, Article 288 of the Labor Code provides that any person violating any provision of the Code (including wage protection laws) may be penalized with a fine or imprisonment.
Furthermore, Article 315 of the Revised Penal Code (Estafa) may apply in specific instances where an employer receives funds intended for wages (e.g., in a subcontracting arrangement) but misappropriates those funds instead of paying the workers.
6. Summary of Key Protections
| Remedy Type | Action to Take | Primary Goal |
|---|---|---|
| Administrative | File SENA Request at DOLE | Fast settlement or Compliance Order |
| Judicial | File Position Paper at NLRC | Judgment for backwages + 10% Attorney's Fees |
| Contractual | Resignation due to Constructive Dismissal | Claim for Separation Pay and Damages |
7. Evidence Needed for Claims
To successfully pursue these remedies, employees should gather and preserve:
- Payslips (or lack thereof for the period in question).
- Timesheets or DTR (Daily Time Records).
- Employment Contract indicating the agreed wage rate and schedule.
- Demand Letter sent to the employer (proof of extrajudicial demand).