In Philippine Jurisdiction, employees paid purely on commission basis are excluded from the coverage of employees entitled for holiday pay (under the Labor Code) and 13th month pay (P.D. 851 - 13th month pay law). In this episode, we give guidance on how commission is treated as a manner of payment of wages. There are two kinds of commissions. The first kind is considered as wages. This is the case for employees who are partly or fully paid on commission basis. The second kind is considered as an incentive or reward for achieving targets or quotas.

As regards the second kind of commission, since it's a form of incentive or reward, it can be changed and altered by the employer unilaterally for as long as the employee's vested rights are not violated. However, the employer cannot unfavorably and unilaterally change the commission incentive arrangement in the middle of the year because it might prejudice the employees who have already exerted their best efforts and are looking forward to receive such commission incentive. It's like changing the rules in the middle of the game, which is unfair.

Rank-and-file employees in the private sector in the Philippines shall be entitled to the statutory 13th month pay under Presidential Decree 851. This monetary benefit is required regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one (1) month during the calendar year. The "basic salary" of an employee for the purpose of computing the thirteenth-month pay shall include all remunerations or earnings paid by his or her employer for services rendered. It does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential and holiday pay, and cost of living allowance (COLA). However, these salary-related related benefits should be included as part of the basic salary in the computation of the thirteenth-month pay if these are treated as part of the basic salary of the employees, through individual or collective agreement, company practice or policy. In this episode, we share on additional guidelines issued by the Department of Labor and Employment (DOLE) on how wage and wage-related benefits, such as 13th month pay, can be adjusted.

Under Philippine jurisdiction, the term "Wage" refers to any monetary paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value of board, lodging, or other facilities customarily furnished by the employer to the employee. One of the usual question asked from us in our legal coaching sessions is whether the an allowance is part of the definition of wage or salary. In this episode, we will briefly discuss the difference between regular and special allowances given to employees.

The two-notice requirement for termination of employment should always work hand in hand. The charges as stated in the 1st written notice (to explain) must coincide with the charges found to be the grounds for suspension or termination of employment in the 2nd notice. Not having the same charge stated in the two notices may give rise to a possible labor case, and may eventually be a ground for declaring the termination illegal for not giving the employee ample opportunity to be heard, as required under existing Philippine Labor Law guidelines.

A lot of questions are still asked regarding how to legally terminate the employer-employee relationship. This episode gives a background on the 1st legal step required under the Philippine Labor Code. Here we enumerate what is required to be stated in the Notice of Charge for purposes of procedural due process in termination of employment.

Resignation without Just Cause is allowed under the Philippine Labor Code. This is consistent with the Philippine Constitution's prohibition of involuntary servitude (or slavery). Every person has the right against involuntary servitude under Philippine jurisdiction. Hence, anyone can resign even for no valid legal cause. However, non-compliance with the requirement of due notice gives rise to the employee's liability for damages or injury suffered by the employer.