Cash bond

Dear Atty. Kathy,

I am a kitchen staff in Company A. Since last year, management suddenly deducted from our salary P300 per month. I asked my manager about this, and she said it was a cash bond to pay for damages in case we damage any tools, equipment, or other property of the Company. I requested for the return of the cash bond to me since I did not break or damage any restaurant property for one year, and I am not giving my consent for the deduction. My claim was denied because management said the cash bond policy is applicable to all employees, that deductions will continue as long as I am employed with the restaurant, and it will be an employee savings fund in the meantime until the end of my employment. Is the company allowed to do this?

Alaina

Dear Alaina,

Articles 112 and 113 of the Labor Code provide:

ART. 112. Non-Interference in Disposal of Wages. — No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel, or oblige his employees to purchase merchandise, commodities or other property from any other person, or otherwise make use of any store or services of such employer or any other person.

ART. 113. Wage Deduction. — No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:

(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;

(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and

(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.

Further, Department of Labor and Employment Department Order No. 195, Series of 2018 (DOLE D.O. No. 195-18) provides:

“SEC. 10. Wage deduction. — Deductions from the wages of the employees may be made by the employer in any of the following:

a. xxx

b. When the deductions are with written authorization of the employees for payment to THE EMPLOYER or a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly form the transaction.

It is clear from the above provisions of the Labor Code and DoLE D.O. No. 195-18 that an employer cannot interfere with the freedom of any employee to dispose of his or her wages; that the employer cannot unilaterally make any deductions except in the three instances provided in Article 113 of the Labor Code; and that deductions from wages may be made by the employer when the deductions are with written authorization of the employee for payment to the employer.

Based solely on your narration and subject to other circumstances, if any, it appears that the deduction is not under any of the exceptions allowed under Article 113 of the Labor Code, and that you did not give any written authorization for the deduction of the cash bond. Therefore, the company illegally deducted the P300.00 monthly cash bond from your salaries, and as a result, you are entitled to a reimbursement of the said monthly deductions.

(Marlon Butial Agapito versus Aeroplus Multi-Services Inc., et al., G.R. 248304, 20 April 2022.)

Atty. Kathy Larios