CBA vs. 13th Month Pay

WHAT ARE PRINCIPLES THAT GOVERN BETWEEN A COLLECTIVE BARGAINING AGREEMENT AND 13TH MONTH PAY?

For purposes of computing the 13th month pay, “basic salary” includes all remunerations or earnings paid by the employer for services rendered but 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, maternity leave, overtime, premium, night differential and holiday pay, premiums for work done on rest days and special holidays and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective bargaining agreement, company practice or policy, the same are treated as part of the basic salary of the employees.

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