Bonus forfeiture

Dear Atty. Maan,

My husband was terminated from his job due to alleged misconduct, which was never proven. A month after his dismissal, he received his final pay; however, we noticed that his final pay only included his prorated 13th month pay and did not include the Christmas bonus, which was given to the company’s employees. Is he entitled to this bonus despite the reason for his dismissal?

Marian

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Dear Marian,

Book Six, Rule I, Section 7 of the Omnibus Rules Implementing the Labor Code refers to separation pay and existing rights, benefits, and privileges of an employee:

SECTION 7. Termination of employment by employer. — The just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits, and privileges he may have under the applicable individual or collective agreement with the employer or voluntary employer policy or practice.

In Marcos v. National Labor Relations Commission,[137] employees who were dismissed from employment due to labor saving methods were deemed entitled to service awards, anniversary bonuses, and prorated performance bonuses that they had earned before separation from work.

In the recently decided case of Meralco vs Argentera G.R. No. 224729, 8 February 2021, the Supreme Court ruled to wit:

“An employer cannot unilaterally declare the forfeiture of wages, benefits, and privileges that have accrued in favor of a dismissed employee. The employer must prove the basis for the forfeiture through its policies, employee contracts, or its collective bargaining agreement. Without such proof, there is no basis to forfeit accrued monetary benefits as of the date of termination. To do so would violate Article 100[139] of the Labor Code, since the benefits have already accrued to the employee. Xxx

Without an express provision on the forfeiture of benefits in a company policy or contractual stipulation under an individual or collective contract, the employee’s rights, benefits, and privileges are not automatically forfeited upon dismissal. The employee’s termination from employment is without prejudice to the “rights, benefits, and privileges [they] may have under the applicable individual or collective agreement with the employer or voluntary employer policy or practice.”

From the foregoing, without an express provision on the forfeiture of benefits in a company policy or contractual stipulation under an individual or collective contract, your husband should still be entitled to his Christmas Bonus.

Hope this helps.

Atty. Mary Antonnette Baudi