14th Month

is the 14th month pay mandatory for private companies to give to their employees? i work in a trading company. in our company, we have been given an agreement that the 14th is a guaranteed payment. due to recent financial problem in which our accountant run away with some of the money, we have undergone an audit immediately due to this instance and being a sales admin, the GM has requested that we focus our attention to the audit due to some missing documents. also, some suppliers were not paid in time resulting in delay of our incoming shipments, resulting in delay deliveries to clients. in view of this, our GM advised that in order for no delays to be encountered in the future, he advised that in case delays were encountered in future deliveries, starting Jan2011, the 14th month will be forfeited ( as in 1 wrong move and it's gone)..has this legal basis?

there is no law requiring 14th month pay. however, much depends on what is stated on this agreement that it is guaranteed. if it is guaranteed and there is no discretion whether to give it or not, then it is not a benefit but part of your annual salary. it becomes demandable as an employee right to receive it.

the proper recourse for management in dealing with infractions is to follow due process and make the punishment commensurate to the offense.

there was no discretion before but they will be imposing the qualification by 2011,does this mean they can w/draw what they have signed before?

you cannot prevent them from withdrawing it, but you can make it clear to management that employees will file a money claim if they do so.

I agree with attyLLL that there's no law requiring the employer to pay 14th month pay, however, if it were given by the company for a quite long time it will now become a company policy and ripen into a right which is demandable by employees where the employer cannot arbitrarily withdrawn from them.

Infractions made by some employees will not justify the withdrawal of the same. The employer has other available remedy provided by law.

does it constitute ULP? we have not signed anything agreeing to the forfeiture of the 14th month pay but they informed us verbally. We were laterally transferred to this new comapany and are still adapting the policies and regulations of the former office.

"does it constitute ULP? we have not signed anything agreeing to the forfeiture of the 14th month pay but they informed us verbally."


No, it is not ULP. Unfair Labor Practice refers to acts committed by the management that prohibits or restricts the right of the workers to organize a union.

Also, jurisprudence has it that when a benefit given to labor has become customary, it becomes demandable by the workers as a matter of right. If management withholds it, there is a violation of the principle of non-diminution of benefits.

ULP is interference by management with a union.

this new fact of being in a new company changes things. were you paid separation pay from you old company?

"does it constitute ULP? we have not signed anything agreeing to the forfeiture of the 14th month pay but they informed us verbally."

As correctly mentioned by attyLLL and and zulfikarl, ULP has something to do with acts of the employer in interfering employees right to self-organization. However, also, a gross and flagrant violation of the economic terms and conditions of the collective bargaining agreement (CBA) constitutes ULP. The test is whether or not the 14th month pay is concluded in your CBA? if Yes, that constitutes ULP.