A lot of employers get confused when they are supposed to issue a Certificate of Employment. Are you required by law to give them? If yes, what should be included? Are there instances where you can refuse to release them?
What is a Certificate of Employment?
They are pieces of paper that employees request from their employers which have certain claims with respect to the employment experience of the employee. They look like diplomas in some ways with some companies, while in others, they are simple memorandums.
Can you give me an idea what it looks like?
There is no specific format provided under the law. That depends on how you want it to look like under the doctrine of management prerogative. But let me show you an example:
"CERTIFICATE OF EMPLOYMENT
This is to certify that Mr./Ms. ____________________ has been employed with me as (Position) for 5 years from ____________ to _______________.
What does the law say about them?
They are mentioned in the law in Rule XXIII, Book V, of the Omnibus Rules Implementing the Labor Code:
"SECTION 6. Certification of employment. — A dismissed worker 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."
Two things to highlight here:
- Getting a certificate is a right given by the law. Therefore, employers cannot deny the grant of this certificate.
- While the right to get the certificate is granted by law, it does not follow that the employee can dictate what goes on the certificate. The content is up to the management to decide based on its records.
But what does it mean legally?
This document says three things legally:
- That the person was employed by the employer who issued the Certificate;
- That the employee was performing a specific function within the business; and
- The employee performed these functions within this time period.
Stated otherwise, it's the employer saying, "Hey, for anyone who's asking… yes, this person was my employee, and he did this for me during this time."
What are they used for?
I can think of 3 immediate ways where Certificates of Employment are used here in the Philippines. If you know more, please feel free to comment below.
Applying for new work
First use is when the employee applies for new work. Usually, when you are assessing whether an employee is qualified, you take a look at the previous work experience. This is where the certificate comes in. The certificate is the primary evidence needed to prove that yes, the applicant has experience in a specific field. The employer can use the document as a starting point for assessment.
Employees sometimes request for certificates of employment while they are still employed. Where do they use it? Typically, for loans and credit card applications. Banks want to know about their current employment and their capacity to pay. That's why they ask their employers to certify that they are indeed working and regularly receiving a salary.
In some cases, employees request the employer to include how much salary they are receiving in the certificate. That will prove to the bank that they are gainfully employed. As long as the employer doesn't mind, I don't see anything legally wrong with this as this is a valid exercise of management prerogative.
Another use for certificates of employment is convincing foreign governments to allow people to visit. Why? Having a stable job in the Philippines increases the probability that the tourist will return to the country after the vacation. That is why when people apply for visas, they include a certificate of employment along with it.
When should they be released
When the employee requests for the certificate of employment, there's no specific time line indicated in the law for its release. But when students and clients ask me for suggestions, I usually say give it a week or two. Provided there are no pending issues associated with it, then it should be given.
If an employee is leaving your company, I think the logical thing to do would be to give it on or close to the last day of the 30-day turnover period. That will make it coincide with the clearance process and giving the last pay.
But what if…
I get some questions on this when I deliver it live. Here are some of them:
Is the certificate the equivalent of a clearance?
No, these are two different things. From a legal standpoint, here's what they say:
Certificate of Employment says, "Yes, you worked for me." How well? Not indicated. Did it end well? Depends if the employer puts the manner of termination on the certificate (optional). Does it mention anything else? No, just the fact that you worked.
Clearance says, "Now that you're leaving the company, we checked if you have pending liabilities with us, and we found none. You're free to go." The clearance speaks more towards unfinished business, pending tasks and any liabilities left unsatisfied.
What if the new employer verifies. Should I entertain questions?
When the employee applies for work with a new employer, the new employer sometimes calls to verify the certificate of employment and to ask details.
Are you required to entertain verification questions? Legally, no. Your information is company property. You determine the extent of the information you put out and disclose.
Is it a good idea though? Yes.
Why? Down the line, you may find yourself in the position where you have to verify the credentials of people applying with you. And it makes the community of employers stronger by supporting each other with valuable info. Good karma works.
So just to recap, here are the finer points:
- Employees are entitled to Certificates of Employment under the law
- You cannot refuse the issuance of a Certificate
- However, you decide what it contains
- There is no specific format
- Release as soon as possible
Now that we've simplified Certificates of Employment for you, go out there and make better choices.