HR 101: Employment Certificates

Did you know that, as employees, you have the right to ask for and obtain a Certificate of Employment under the Labor Code?

According to Section 6 (and Rule XXIII Book 5 of the Omnibus Rules Implementing the Labor Code), an employee who has been dismissed or has resigned is entitled to receive, upon request, a certificate from the employer detailing the dates of their employment and termination, as well as the types of work they performed.

As HR Practitioners, part of our daily tasks includes handling requests for a Certificate of Employment and preparing it promptly for signature and release. The company issues several types of Certificates of Employment:

Standard COE

The standard Certificate of Employment (COE) includes: (1) the employee's name, (2) their current or past position, (3) dates of employment, and (4) the reasons for issuing the certificate.

Occasionally, it may also include the job description and duties the employee was responsible for during their tenure, as well as confirmation of clearance from all accountabilities.

This document is primarily used for employment purposes as part of the onboarding paperwork requested by a new employer. It can also serve as a requirement for sponsoring an employee to temporarily work with the parent company abroad (work visa) or for individuals applying for overseas employment or migration.

Amid the ongoing COVID-19 pandemic, employers can now issue a COE to enable employees to pass through police checkpoints or travel from their home to the office during Enhanced or Modified Community Quarantine, or to apply for a quarantine pass through their local barangays. The COE can be shown at checkpoints along with their company ID.

COE with Compensation:

The second category encompasses the employee's gross salary (calculated monthly or annually and multiplied by 13 months) and/or any company benefits that can be converted into cash at year's end, such as Vacation, Sick Leaves, Commissions, Incentives, etc.

This document serves for the employee's applications for personal or housing loans, credit cards, tourist visas, and immigration. It also demonstrates that the employee has a stable income and employment, indicating their ability to repay loans or travel.

Certificate for Remittances:

An employee may also request a Certificate of Employer remittance for Salary or Multipurpose Loan payments to the Social Security System or Pag-ibig Fund.

This certificate is provided to the new employer to continue loan deductions (although these government agencies require that the remaining loan amount be deducted from the employee's final pay, some companies do not comply with this).

If, for some reason, the company or hospital is not connected to the PhilHealth portal, it can prepare a certificate of remittance covering at least nine (9) months 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 a 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 not be allowed to sign on behalf of the company.

There should be some lead time to request and release 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 the release from the company's end or are we allowed to request 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 the COE, unless you have not gone through the company's clearance procedures (aka went on AWOL). If you did not go through the process and you need one, it would be more advisable that you contact your former company and go through the entire process.

Some companies refuse to issue a COE to anyone who has worked for a brief 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 must indicate the bare facts being requested. No need to go further.

If you have something to say about the former employee's character or behavior, do not state this in his COE (the background check will address this should the current employer come 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 a 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 I will try to answer them.

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