HR 101: Employment Certificates
Are you aware that you, as employees, have the right to request and receive a Certificate of Employment under the Labor Code?
Under Section 6 (and Rule XXIII Book 5 of the Omnibus Rules Implementing the Labor Code), a dismissed (or resigned) employee shall be entitled to receive, on request, a certificate from the employer specifying the dates of his engagement and termination of his employment and the type or types of work on which he is employed."
As an HR Practitioner, part of our daily routine is getting requests for a Certificate of Employment and preparing this as soon as possible for signature and release. There are different types of Certificate of Employment being issued by the company:
Standard COE
The standard COE contains the following: (1) Employee name, (2) current or previous position, (3) employment dates and (4) reasons for issuing the certificate.
Sometimes, it may also contain the job description/duties and responsibilities the employee was assigned to during his employment and if he/she has been cleared of all accountabilities.
This is used mostly for employment as part of the onboarding documents asked by the new company. It can also be used for sponsoring an employee to temporarily work with the mother company overseas (work visa).
With the ongoing COVID-19 pandemic, the employer can now issue a COE to allow its employees to commute through the police checkpoint or from their residence to the office during the Enhanced or Modified Community Quarantine or apply for a quarantine pass thru their barangays. The COE can be presented to the checkpoint together with their company ID.
COE with Compensation:
The second type includes the employee's gross salary (either monthly or annualized multiplied by 13 months) and/or any company benefits that can be converted to cash at the end of year such as Vacation, Sick Leaves, Commissions, Incentives, etc.
The document will be used by the employee to apply for personal or housing loans, credit cards, tourist visas and immigration. It also shows that the employee has a stable source of income and employment which makes the person capable of paying loans or travel.
Certificate for Remittances:
The employee can also request for Certificate of Employer remittance for Salary or Multipurpose Loan payment(s) to the Social Security System or Pag-ibig Fund.
This is submitted to the new employer to continue deduction of their loans (although it is required by the said government agencies that the remaining amount of the loan should be deducted on his final pay, some companies do not observe this).
Also, for some reason the company is not linked to the PhilHealth portal, the company can prepare a certificate of remittances of at least nine (9) months worth of PhilHealth contributions.
COE for Maternity Benefits:
This COE can also be used to certify that a female pregnant employee has not been given a monetary advance or Maternity Benefit by the company and if she resigned or her employment contract ended before she gives birth.
This certificate is submitted to the Social Security System as supporting document to process her maternity benefits personally.
Preparation and Release
Upon receiving the request, it will be prepared by Human Resources and signed by either the HR Manager or any authorized officer; should the HR representative is not allowed to sign in behalf of the company.
There should be some lead time to request and release of the said document. Under the Guidelines on the Payment of Final Pay and Issuance of Certificate of Employment (Labor Advisory No. 06 Series of 2020) issued last 31 January 2020, the employer shall issue a COE within three (3) days from the time the request was made.
Concerns regarding Employment Certificates:
There were questions raised about the COE in the Facebook HR Communities from the employees to the HR professionals; ranging from when will the release from the company's end, are we allowed to request for one if my contract is not complete or went AWOL, etc.
First; all employees - whether you are currently working with the company, resigned or terminated for cause have the right to request for the COE, unless you have not gone through the company's clearance procedures (aka went on AWOL). If you did not gone thru the process and you need one, it would be more advisable that you do contact your former company and go through the whole process.
Some companies refuse to issue a COE to anyone who has worked for a short time or duration. I highly suggest that HR practitioners give a COE even if they did work short term.
The contents of the said document should be as specified above and should not contain derogatory statements. You just have to indicate the bare facts being requested for. No need to go further.
If you have something to say about the former employee's character or behaviour, do not state this in his COE (the background check will address this should the current employer comes calling to verify information and ask for it).
Another question raised is: can you request HR to increase your pay (garnishing) in order that your loan or credit card application be approved or given a higher limit or amount. Personally, I would not suggest that you do this because it is considered falsification of information and your HR will not even cooperate with or refuse your request. Also, loan and credit card companies conduct reference checks to verify the information and can be very thorough in asking these.
As mentioned, the COE must be released three (3) days after the request has been made. In the past, it would take an average of five (5) working days to make the request or the HR Department has a schedule on the release of the said document (for example, Friday afternoon, in the previous company I worked for).
Questions about the COE? Do let me know and will try to answer this.
Reference:
Guidelines on the Payment of Final Pay and Issuance of Certificate of Employment (Labor Advisory No. 06 Series of 2020): https://www.dole.gov.ph/php_assets/uploads/2020/02/Labor-Advisory-No.-06-20-Guidelines-on-the-Payment-of-Final-Pay-and-Issuance-of-Certificate-of-Emplo.pdf