13th month computation

I would like to ask if leave of absence (with pay) is included in the computation of the 13th month pay of an employee? TIA!

Generally paid days are considered in computing 13th month pay.

Thank you so much!

it depends on the company, but by law, only the 5 days service incentive leave is payable.

ask ko lang po kung me vacation and sick leave ang company does it mean na wala na or di na kelangan pang bigyan si employee ng service incentive leave pay?
thanks po

ztyngray wrote:ask ko lang po kung me vacation and sick leave ang company does it mean na wala na or di na kelangan pang bigyan si employee ng service incentive leave pay?
thanks po

Hindi na.

The Labor Code says:

"This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment."

ztyngray wrote:ask ko lang po kung me vacation and sick leave ang company does it mean na wala na or di na kelangan pang bigyan si employee ng service incentive leave pay?
thanks po


Hindi na.

The Labor Code says:

"This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment."


_________________________________________





Thank you very much Sir, just a follow up question but different case.

If the Company offers Level 1 / Tier 1 employee an additional income and they will give it to you as a NON TAXABLE SKILL ALLOWANCE, for you to accept a job for Level 2 / Tier 2 employee. This offer was accepted by the employees and continously receiving the said "Skill Allowance" for more than a year. Then all of a sudden The company thru H.R. without prior notice deducted tax on the said allowance. Almost after 2 months when they started deducting tax that's the only time they informed the employees and also announced that they will DEDUCT all the months that it wasn't taxed and that would be from January 2014 to August 2014 they only announced it October 2014. By the way Company started to give this Skill Allowance August of 2013. And the reason is there was just a MISTAKE ON TAGGING on this Skill Allowance committed by their PAYROLL OFFICER. As per H.R. and Accounting this Skill Allowance should be a TAXABLE ALLOWANCE AND NOT NON TAXABLE! How come it would take more than a year before they know that there was a "Mistake" and the person they claim who commits this mistake already resigned. A clear mistake on their end so why would employees suffer for their mistake. But the main concern is the Company offers this SKILL ALLOWANCE as a NON TAXABLE ALLOWANCE although there was no written agreement but this offer was confirmed "verbally" by the same person who offers this to the employees during a meeting attended by both parties.

Since they will deduct the months that were not taxed and this allowance will be a Taxable Allowance from now on. So because of this changes there would be a decrease on employees income. Can we consider this as a violation of NON DIMUNITION OF BENEFITS, and a valid ground to file for a CONSTRUCTIVE DISMISSAL. (Company's decision on this matter is already final, although they are still trying to talk to the employees who were affected by their decision but there would be no changes anymore)

Thank you in advance for your quick response. Hopefully your legal expertise will enlighten us.

Godbless and more power!

Generally tech or skill premiums/allowances are still taxable income and any error on their part should be corrected. They may have failed to inform you prior but it is still their obligation to correct the computation.

I do not think any complaints on non-diminution of benefits or filing any constructive dismissal case will prosper.

ztyngray wrote:ask ko lang po kung me vacation and sick leave ang company does it mean na wala na or di na kelangan pang bigyan si employee ng service incentive leave pay?
thanks po


Hindi na.

The Labor Code says:

"This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment."


_________________________________________





Thank you very much Sir, just a follow up question but different case.

If the Company offers Level 1 / Tier 1 employee an additional income and they will give it to you as a NON TAXABLE SKILL ALLOWANCE, for you to accept a job for Level 2 / Tier 2 employee. This offer was accepted by the employees and continously receiving the said "Skill Allowance" for more than a year. Then all of a sudden The company thru H.R. without prior notice deducted tax on the said allowance. Almost after 2 months when they started deducting tax that's the only time they informed the employees and also announced that they will DEDUCT all the months that it wasn't taxed and that would be from January 2014 to August 2014 they only announced it October 2014. By the way Company started to give this Skill Allowance August of 2013. And the reason is there was just a MISTAKE ON TAGGING on this Skill Allowance committed by their PAYROLL OFFICER. As per H.R. and Accounting this Skill Allowance should be a TAXABLE ALLOWANCE AND NOT NON TAXABLE! How come it would take more than a year before they know that there was a "Mistake" and the person they claim who commits this mistake already resigned. A clear mistake on their end so why would employees suffer for their mistake. But the main concern is the Company offers this SKILL ALLOWANCE as a NON TAXABLE ALLOWANCE although there was no written agreement but this offer was confirmed "verbally" by the same person who offers this to the employees during a meeting attended by both parties.

Since they will deduct the months that were not taxed and this allowance will be a Taxable Allowance from now on. So because of this changes there would be a decrease on employees income. Can we consider this as a violation of NON DIMUNITION OF BENEFITS, and a valid ground to file for a CONSTRUCTIVE DISMISSAL. (Company's decision on this matter is already final, although they are still trying to talk to the employees who were affected by their decision but there would be no changes anymore)

Thank you in advance for your quick response. Hopefully your legal expertise will enlighten us.

Godbless and more power!




--------------------------------------



Greetings Sir,

Thank you very much for the quick response. So the Company is not liable for their mistake and will never be. Perhaps all future promises and even past promises pertaining to allowances and incentives can be remove and or lessen by the company? Well if this is the case I think I need to look for another Company.

By the way Sir, got this information about Non Diminution of Benifits through my research there's a case with almost the same scenario just like ours and it states:

The Labor Code provides:

“Art. 100. Prohibition against elimination or diminution of benefits – Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the promulgation of this Code.”

In TSPIC Corp v. TSPIC Employees Union[6], the Supreme Court laid down the elements of diminution of benefits: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer.

Jurisprudence has not laid down any rule requiring a specific number of years on what constitutes “long period”. But in a 2004 case[7] decided by the Supreme Court, it was held that two (2) years is considered as a long period of time.

In Sevilla Trading Company vs. A.V.A. Tomas E. Semana[8], for almost three (3) years, petitioner Sevilla Trading Company (“Sevilla Trading”) included the following benefits in the computation of the 13th month pay:

the overtime premium for regular overtime, legal and special holidays,
legal holiday pay, premium pay for special holidays
night premium
bereavement leave pay
union leave pay
maternity leave pay
paternity leave pay
company vacation and sick leave pay
cash conversion of unused company vacation and sick leave.

This computation is beyond what is prescribed under the 13th Month Pay Law[9]. Under the same law and its implementing rules, only the basic salary, i.e. excluding what is provided as fringe benefits or allowances, of an employee is used as a basis in the determination of his 13th month pay and any compensation or remuneration which is deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus.

Sevilla Trading, upon discovery of the mistake of its payroll officer, applied the provisions of the law on 13th month pay and excluded the above-mentioned benefits from the computation. Hence, this reduced the 13th month pay received by its employees, causing the employees’ union to contest the matter. The Supreme Court ruled that the inclusion of Sevilla Trading over the years of non-basic benefits of its employees in the computation of the 13th month pay may only be construed as a voluntary act on its part and putting the blame on its personnel is inexcusable. The High Court proceeded to declare that such practice of Sevilla Trading constitutes a voluntary practice which cannot be unilaterally withdrawn by the employer without violating Art. 100 of the Labor Code.

Similarly, in the recent case of Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU[10], petitioner Central Azucarera de Tarlac had been giving the 13th month pay to its employees on the basis of their basic monthly salary together with their overtime pay, night premium pay and vacation and sick leaves. However, in 2006, after almost thirty (30) years, the petitioner Company changed the basis of the computation to only the basic monthly pay. The labor union questioned the change in the computation. The High Court held that the practice of Central Azucarera de Tarlac in giving 13th-month pay based on the employees’ gross annual earnings which included the basic monthly salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost thirty (30) years and has ripened into a company policy or practice which cannot be unilaterally withdrawn.


The scenario might be different but there's one thing in common. The Company blamed their Payroll Officer. Do you think we can use this case as an example? If not what are other options for us?


Thank you very much again. God bless

I need advice. I signed preventive suspension for 30 days which ended last nov 30. They said that the decision to wether i will be terminated will come out on the 10th of December. My concerns are the following.

1. Should i be able to file an immediate now that im no longer suspended?
2. If i dont resign and and just wait for the decision? Shouls i be paid for the days that im waiting.
3. Should i be given 13th month on Dec 15 since im still an employee and that my suspension is already finished?

Correction: our 13th month is given out on the 5th of december. Should i be able to get my 13th month since im still an employee and that the suspension i signed is finished? Or they still have the right to put it on hold until the decision is given out?

Correction: our 13th month is given out on the 5th of december. Should i be able to get my 13th month since im still an employee and that the suspension i signed is finished? Or they still have the right to put it on hold until the decision is given out?

ismaelpalaruan@gmail.com wrote:I need advice. I signed preventive suspension for 30 days which ended last nov 30. They said that the decision to wether i will be terminated will come out on the 10th of December. My concerns are the following.

1. Should i be able to file an immediate now that im no longer suspended?
2. If i dont resign and and just wait for the decision? Shouls i be paid for the days that im waiting.
3. Should i be given 13th month on Dec 15 since im still an employee and that my suspension is already finished?

1. You can file - but it is still management's decision if they will accept it. Generally immediate resignations are not allowed since you have to comply with the 30-day notice.

2. If preventive suspension is until Nov 30 only, you should be reporting back to work already on Dec 1 and be paid for the days worked. If they say you are still on preventive suspension but do not give you formal notice, you might be entitled to file a complaint for either illegal suspension or constructive dismissal.

3. You are entitled to the prorated 13th month pay when it is released.

Thanks council. But when i talked to our HR they said all salary and even 13th month will be on hold for all employees that has a pending terminable case. I even argued that I already rendered my 30 days suspension and that Im still an employee since they have not given the final decision yet. But they are saying that it will be on hold and that i can get it only on my backpay.

ismaelpalaruan@gmail.com wrote:Thanks council. But when i talked to our HR they said all salary and even 13th month will be on hold for all employees that has a pending terminable case. I even argued that I already rendered my 30 days suspension and that Im still an employee since they have not given the final decision yet. But they are saying that it will be on hold and that i can get it only on my backpay.

Ask them for documentation - email or formal paper - regarding what they said.

Then bring it to DOLE/NLRC and file for constructive dismissal.

Since they say that you will get your money as part of your backpay then they already have made a decision to terminate you but have not just served it.

Unahan mo na sila.

I already did request for it but they refuse to provide any written documentation. What should I do?

ismaelpalaruan@gmail.com wrote:I already did request for it but they refuse to provide any written documentation. What should I do?

Kung hindi sila magbibigay ng documentation then yung sinasabi nila ay hindi totoo, so dapat ibigay sa iyo ang 13th month pay.

But the problem is they might still hold my 13th month.

ismaelpalaruan@gmail.com wrote:But the problem is they might still hold my 13th month.

ireklamo mo pag na-terminate ka

Can they hold my 13th month if they extend my suspension?