MILAN v.

NLRC
G.R. No. 202961 February 04, 2015

FACTS:
1. Milan et.al are Solid Mills, Inc.s (Solid Mills) employees. They are represented by the National Federation of Labor
Unions (NAFLU), their collective bargaining agent.
2. As Solid Mills employees, Milan et.al. and their families were allowed to occupy SMI Village, a property owned by
Solid Mills. According to Solid Mills, this was [o]ut of liberality and for the convenience of its employees . . . [and]
on the condition that the employees would vacate the premises anytime the Company deems fit.
3. In September 2003, Milan et.al were informed that effective October 10, 2003, Solid Mills would cease its operations
due to serious business losses. NAFLU recognized Solid Mills closure due to serious business losses in the
memorandum of agreement dated September 1, 2003. The memorandum of agreement provided for Solid Mills grant
of separation pay less accountabilities, accrued sick leave benefits, vacation leave benefits, and 13th month pay to the
employees. The agreement was entered into with full knowledge by the parties of their rights under the law and they
bound themselves not to conduct any concerted action of whatsoever kind, otherwise the grant of financial assistance
as discussed above will be withheld.
4. Solid Mills filed its Department of Labor and Employment termination report on September 2, 2003.
5. Later, Solid Mills, through Alfredo Jingco, sent to Milan et.al individual notices to vacate SMI Village.
6. Milan et.al. were no longer allowed to report for work by October 10, 2003. They were required to sign a
memorandum of agreement with release and quitclaim before their vacation and sick leave benefits, 13th month pay,
and separation pay would be released. Employees who signed the memorandum of agreement were considered to
have agreed to vacate SMI Village, and to the demolition of the constructed houses inside as condition for the release
of their termination benefits and separation pay. Milan et.al. refused to sign the documents and demanded to be paid
their benefits and separation pay.
7. Hence, they filed complaints before the Labor Arbiter for alleged non-payment of separation pay, accrued sick and
vacation leaves, and 13th month pay. They argued that their accrued benefits and separation pay should not be
withheld because their payment is based on company policy and practice. Moreover, the 13th month pay is based on
law, specifically, Presidential Decree No. 851. Their possession of Solid Mills property is not an accountability that is
subject to clearance procedures. They had already turned over to Solid Mills their uniforms and equipment when
Solid Mills ceased operations.
8. On the other hand, Solid Mills argued that Milan et.al.s complaint was premature because they had not vacated its
property.
9. The Labor Arbiter ruled in favor of Milan et.al. According to the Labor Arbiter, Solid Mills illegally withheld
petitioners benefits and separation pay. The memorandum of agreement dated September 1, 2003 stated no condition
to the effect that petitioners must vacate Solid Mills property before their benefits could be given to them. Milan
et.al.s possession should not be construed as theiraccountabilities that must be cleared first before the release of
benefits. er.
10. Silodd Mills appealed to the National Labor Relations Commission. The National Labor Relations Commission
affirmed part of the decision but reversed and set aside another part and decided that Milan et.al.s monetary claims in
the form of separation pay, accrued 13th month pay for 2003, accrued vacation and sick leave pays are held in
abeyance pending compliance of their accountabilities to respondent company by turning over the subject lots they
respectively occupy at SMI Village Sucat Muntinlupa City, Metro Manila to Solid Mills. Linga and four other were
already paid their respective separation pays and benefits. Meanwhile, Teodora Mahilom already retired long before
Solid Mills closure. She was already given her retirement benefits.
11. The National Labor Relations Commission ruled that because of petitioners failure to vacate Solid Mills property,
Solid Mills was justified in withholding their benefits and separation pay.35 Solid Mills granted the petitioners the
privilege to occupy its property on account of petitioners employment.36 It had the prerogative to terminate such
privilege.37 The termination of Solid Mills and petitioners employer-employee relationship made it incumbent upon
petitioners to turn over the property to Solid Mills.
12. The Court of Appeals ruled that Solid Mills act of allowing its employees to make temporary dwellings in its
property was a liberality on its part. It may be revoked any time at its discretion.

ISSUE: Whether or not an employer is allowed to withhold terminal pay and benefits pending the employees return of
its properties

RULING/RATIO: Yes. The fact that majority of NAFLUs members were not occupants of respondent Solid Mills
property is evidence that possession of the property was not contemplated in the agreement. Accountabilities should be
interpreted to refer only to accountabilities that were incurred by petitioners while they were performing their duties as
employees at the worksite. Moreover, applicable laws, company practice, or policies do not provide that 13th month pay,
and sick and vacation leave pay benefits, may be withheld pending satisfaction of liabilities by the employee.

Requiring clearance before the release of last payments to the employee is a standard procedure among employers,
whether public or private. Clearance procedures are instituted to ensure that the properties, real or personal, belonging to
the employer but are in the possession of the separated employee, are returned to the employer before the employees
departure.

As a general rule, employers are prohibited from withholding wages from employees (Art. 116, Labor Code). The Labor
Code also prohibits the elimination or diminution of benefits (Art. 100, Labor Code).

However, our law supports the employers institution of clearance procedures before the release of wages. As an
exception to the general rule that wages may not be withheld and benefits may not be diminished, the Labor Code
provides: 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:
1. 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;
2. 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
3. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.

The Civil Code provides that the employer is authorized to withhold wages for debts due: Article 1706. Withholding of
the wages, except for a debt due, shall not be made by the employer. Debt in this case refers to any obligation due from
the employee to the employer. It includes any accountability that the employee may have to the employer. There is no
reason to limit its scope to uniforms and equipment, as petitioners would argue.

More importantly, respondent Solid Mills and NAFLU, the union representing petitioners, agreed that the release of
petitioners benefits shall be less accountabilities. Accountabilities of employees are personal. They need not be
uniform among all employees in order to be included in accountabilities incurred by virtue of an employer-employee
relationship. Milan et.al. do not categorically deny Solid Mills ownership of the property, and they do not claim superior
right to it. What can be gathered from the findings of the Labor Arbiter, National Labor Relations Commission, and the
Court of Appeals is that Solid Mills allowed the use of its property for the benefit of Milan et.al. as its employees. Milan
et.al were merely allowed to possess and use it out of Solid Mills liberality. The employer may, therefore, demand the
property at will.

DISPOSITIVE: Solid Mills won.

DOCTRINE: An employer is allowed to withhold terminal pay and benefits pending the employees return of its
properties. As a general rule, No employer, in his own behalf or in behalf of any person, shall make any deduction from
the wages of his employees. The following cases are considered exceptions:
1. 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;
2. 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
3. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and
Employment.
 Special Steel Products vs. Lutgardo Villareal & Frederick So
G.R. No.143304. July 8, 2004

Facts: Special Steel Products, Inc., is a domestic corporation engaged in the principal business of importation, sale, and
marketing of BOHLER steel products. Respondents worked for petitioner as assistant manager and salesman. Villareal
obtained a car loan from Bank of Commerce with petitioner as surety wherein they are jointly and severally agreed to pay
the bank in installment basis. In January 1997, Villareal resigned and joined Hi-Grade Industrial and Technical Products
as Executive vice-president.

Respondent So was sponsored by petitioner to attend a training course in Kapfenberg, Austria conducted by BOHLER. It
rewarded Sos outstanding sales performance. When So returned, the petitioner asked respondent So to sign a
memorandum to work for the company for three years. After 2 years and 4 months, So resigned from the company.
Petitioner ordered respondents an accounting of the various Christmas giveaways they received. In return, respondents
also demanded payment of their separation benefits, commissions, monetary benefits but petitioner refused and withheld
the 13th month pay and other benefits.

Issue: Whether or not the employer can withhold its employees wages and benefits as lien to protect its interest as surety
in the car loan and for expenses in the training abroad.

Ruling: The employer cannot withhold respondents 13th month pay and other monetary benefits.

Article 116 of the Labor Code, as amended, provides:

Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold
any amount from the wages (and benefits) of a worker or induce him to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever without the workers consent.

The above provision is clear and needs no further elucidation. Indeed, petitioner has no legal authority to withhold
respondents 13th month pay and other benefits. What an employee has worked for, his employer must pay. Thus, an
employer cannot simply refuse to pay the wages or benefits of its employee because he has either defaulted in paying a
loan guaranteed by his employer; or violated their memorandum of agreement; or failed to render an accounting of his
employers property.
CASE DETAILS
LILIA P. LABADAN vs. FOREST HILLS ACADEMY/NAOMI CABALUNA and PRESIDING COMISSIONER
SALIC B. DUMARPA, COMMISSIONER PROCULO T. SARMEN, COMMISSIONER NOVITO C. CAGAYAN
GR NO. 172295
December 23, 2008
J. Carpio Morales

SYLLABUS
1. Illegal Dismissal. While in cases of illegal dismissal, the employer bears the burden of proving that the
dismissal is for a valid or authorized cause, the employee must first establish by substantial evidence the fact of
dismissal.
2. Regular Holiday Pay. Respecting petitioners claim for holiday pay, Forest Hills contends that petitioner failed
to prove that she actually worked during specific holidays. Article 94 of the Labor Code provides, however,
that(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to
work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate.The
provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that the
provision entitling a worker to his regular rate on holidays applies even if he does not work.
3. Illegal Deduction. ART. 113(a). 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;
4. SSS Claims. Villar v. National Labor Relations Commission enlightens: The burden of proving payment of
monetary claims rests on the employer. The reason for the rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents which will show that overtime, differentials, service
incentive leave and other claims of workers have been paid are not in the possession of the worker but in the
custody and absolute control of the employer.26 (Underscoring supplied)

FACTS
-Lilia L. Labadan was an employee of Forest Hills Mission Academy from 1990 to 12002 as registar and secondary
school teacher.
-Labadan filed a complaint against Forest Hills and its administartor Naomi Cabaluna on 2003 for illegal dismissal, non-
payment of OT pay, holiday pay, allowances, 13th month pay, service incentive leave, illegal deductions and damages.
-She alleged that she was allowed to go on leave from Forest Hills despite exceeding her approved leave period as she
claimed that its extension was impliedly approved by the school principal as she recieved no warning or reprimand and
that she was in the payroll up to 2002.
-She also claims that tithes to the Seventh Day Adventist Church were being illegally deducted form her salary and were
not being paid the following things stated above and that her SSS contributions have not been remitted.
-Due to strained relations, she prayed for separation pay in lieu of reinstatement.
-Forest Hills contends that indeed, Labadan was permitted to go on leave in July 2001 however she did not report for
work after the expiration of the leave. She only appeared for SY2002-2003.
-As for illegal deductions, Forest Hills claimed that the Seventh Day Adventist Church requires to pay tithes of 10% of
their monthly salary in where Labadan was a member of that church and she never questioned the deduction.
-As for the other money claims, Forest Hills stated that Labadan did not profer enough evidence.
-The Labor Arbiter ruled in favor of Labadan. The NLRC however reversed the Labor Arbiters decision. The Court of
Appeals dismissed the petition for deficient amount of appellate docket fee, non-attachment of Affidavit of Service,
absence of written explanation why the petition was filed through registered mail instead of through personal service,
and non-attachment of copies of the Complaint and the Answer filed before the Labor Arbiter
ISSUES
1. Whether or not Labadan was illegally dismissed and is thus qualified to be awarded separation pay and
backwages.
2. Whether or not Labadan is entitled to Holiday Pay, Service Incentive Leave, 13th Month Pay, Overtime Pay and
Allowances.
3. Whether or not the 10% salary deduction to be given to the Seventh Day Adventist Church is Legal.
4. Whether or not Labadans SSS claims stand.
RULING/RATIO
1. LABADAN WAS NOT ILLEGALLY DISMISSED
While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is for a valid or
authorized cause, the employee must first establish by substantial evidence the fact of dismissal.

The records do not show that petitioner was dismissed from the service. They in fact show that despite petitioners
absence from July 2001 to March 2002 which, by her own admission, exceeded her approved leave, she was still
considered a member of the Forest Hills faculty which retained her in its payroll.

Petitioner argues, however, that she was constructively dismissed when Forest Hills merged her class with another "so
much that when she reported back to work, she has no more claims to hold and no more work to do. Petitioner, however,
failed to refute Forest Hills claim that when she expressed her intention to resume teaching, classes were already
ongoing for School Year 2002-2003.

Petitioners affidavit and those of her former colleagues, which she attached to her Position Paper, merely attested that
she was dismissed from her job without valid cause, but gave no particulars on when and how she was dismissed.

2. LABADAN IS ENTITLED TO ALL MONETARY CLAIMS EXCEPT OT PAY AND ALLOWANCES

Article 94 of the Labor Code provides that
(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation
equivalent to twice his regular rate

The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that
the provision entitling a worker to his regular rate on holidays applies even if he does not work.

The petitioner is likewise entitled to service incentive leave under Article 95 of the Labor Code which provides that

(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive
leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation
leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or
in establishment exempted from granting this benefit by the Secretary of Labor after considering the viability or
financial condition of such establishment.

Labadan is also entitled to 13th month pay by virtue of PD No. 851.

As for petitioners claims for overtime pay, it must be denied, for other than the uncorroborated affidavits of her
colleagues, there is no concrete proof that she is entitled thereto. And so must her claim for allowances, no proof to her
entitlement thereto having been presented.

3. The deduction being made is illegal.

On the deduction of 10% tithe, Article 113 of the Labor Code instructs:

ART. 113. 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,

as does Rule VIII, Section 10 of the Rules Implementing Book III of the Labor Code reading:
SEC. 10. Deductions from the wages of the employees may be made by the employer in any of the following cases:
(a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the
employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the
employer or authorized in writing by the individual employee himself;
(b) When the deductions are with the written authorization of the employees for payment to a third person and
the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or
indirectly, from the transaction.

In the absence then of petitioners written conformity to the deduction of the 10% tithe from her salary, the deduction
made by Forest Hills was illegal.

4. LABADANS SSS CLAIMS IS WITH MERIT

Villar v. National Labor Relations Commission enlightens: The burden of proving payment of monetary claims rests
on the employer.

xxxx

The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents
which will show that overtime, differentials, service incentive leave and other claims of workers have been paid are
not in the possession of the worker but in the custody and absolute control of the employer.

Forest Hills having glossed over this claim, the same must be granted.

DECISION
WHEREFORE, the Court of Appeals Resolution of December 15, 2005 is SET ASIDE. The petition is GRANTED
insofar as petitioners claims for illegal deductions, holiday pay, service incentive leave pay, 13th month pay, and non-
remittance of SSS contributions are concerned. Respondents are accordingly ORDERED to refund to petitioner the
amount of the illegal deductions from her salary; to pay her holiday pay, service incentive leave pay, and 13th month
pay; to remit her contributions to the SSS; and to pay her attorneys fees equivalent to 10% of the final judgment award.
The case is accordingly REMANDED to the Labor Arbiter for computation of the amount of such money claims.

SO ORDERED.
 NI JEWELRY MANUFACTURING OF METAL ARTS, INC. (otherwise known as NI MANUFACTURING
AND METAL ARTS, INC.) and ELISEA B. ABELLA, Petitioners, v. MADELINE C. MONTECILLO and LIZA
M. TRINIDAD, Respondents.

FACTS:

The respondents were employed as goldsmiths by the petitioner Ni Jewelry Manufacturing of Metal Arts, Inc. (Ni
Jewelry). There were incidents of theft involving goldsmiths in Ni Jewelry's employ which prompted it to impose a policy
for goldsmiths requiring them to post cash bonds or deposits in varying amounts but in no case exceeding 15% of the
latter's salaries per week. The deposits were intended to answer for any loss or damage which Ni Jewelry may sustain by
reason of the goldsmiths' fault or negligence in handling the gold entrusted to them. The deposits shall be returned upon
completion of the goldsmiths' work and after an accounting of the gold received.

Ni Jewelry alleged that the goldsmiths were given the option not to post deposits, but to sign authorizations allowing the
former to deduct from the latter's salaries amounts not exceeding 15% of their take home pay should it be found that they
lost the gold entrusted to them. respondents alleged that they were constructively dismissed by Ni Jewelry as their
continued employments were made dependent on their readiness to post the required deposits. Ni Jewelry averred that the
respondents no longer reported for work and signified their defiance against the new policy which at that point had not
even been implemented yet.

On September 7, 2004, the respondents filed against Ni Jewelry complaints for illegal dismissal, reinstatement, payment
of backwages, attorneys fees and 13th month pay.

The Labor Arbiter dismissed the respondents' complaints for lack of merit but ordered Ni Jewelry to pay for their 13th
month pay. The NLRC affirmed the LAs decision and ruled that the case was of abandonment of work and not illegal
dismissal. The CA reversed the findings of the LA and the NLRC and stated that the respondents were constructively
dismissed.

ISSUES:

I. Whether or not the CA grossly erred in giving due course to the petition despite the fact that the decision of the NLRC
was in accord with the evidence presented and laws applicable

II. Whether or not the CA gravely erred in finding that the respondents were constructively dismissed

HELD:

(1) In Yolanda Mercado, et al. v. AMA Computer College-Paraque City, Inc., it was held that this Court is bound
by the CA's factual findings. The rule, however, admits of exceptions, among which is when the CA's findings are
contrary to those of the trial court or administrative body exercising quasi-judicial functions from which the
action originated. The case before us falls under the aforementioned exception.

Essentially, the issues raised by the respondents for resolution by the CA were anchored on an alleged misappreciation of
facts and evidence by the NLRC and the LA when they both ruled that abandonment of work and not constructive
dismissal occurred. We agree with the petitioners that what the respondents sought was a re-evaluation of evidence,
which as a general rule cannot be properly done in a petition for certiorari under Rule 65, save in cases where substantial
evidence to support the NLRC's findings are wanting. Here, substantial evidence support the LA's and the NLRC's
findings that no dismissal occurred. Hence, the CA should not have given due course to and granted the petition for
certiorari under Rule 65 filed by the respondents before it.

(2) Constructive dismissal occurs when there is cessation of work because continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a
clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. In a Joint
Affidavit executed by goldsmiths under Ni Jewelry's employ, they expressly stated that the respondents were not
terminated from employment. A goldsmith expressed that the company's president even called to inquire from
him why the respondents were not reporting for work. We observe that the respondents had neither ascribed any
ill-motive on the part of their fellow goldsmiths nor offered any explanation as to why the latter made declarations
adverse to their cause. Hence, the statements of the respondents' fellow goldsmiths deserve credence. This is
especially true in the light of the respondents' failure to present any notice of termination issued by the petitioners.

Moreover, the petitioners did not whimsically or arbitrarily impose the policy to post cash bonds or make deductions from
the workers' salaries. As attested to by the respondents' fellow goldsmiths in their Joint Affidavit, the workers were
convened and informed of the reason behind the implementation of the new policy. Instead of airing their concerns, the
respondents just promptly stopped reporting for work.

Nevertheless, while the petitioners are not absolutely precluded from imposing the new policy, they can only do so upon
compliance with the requirements of the law. In other words, the petitioners should first establish that the making of
deductions from the salaries is authorized by law, or regulations issued by the Secretary of Labor. Further, the posting of
cash bonds should be proven as a recognized practice in the jewelry manufacturing business, or alternatively, the
petitioners should seek for the determination by the Secretary of Labor through the issuance of appropriate rules and
regulations that the policy the former seeks to implement is necessary or desirable in the conduct of business.
SHS Perforated Materials, Inc. vs. Diaz
G.R. No. 185814 October 13, 2010
Mendoza, J.

FACTS:
SHS is a start-up corporation organized and existing under the Philippines and registered with the PEZA. Petitioner
Hartmannshenn, a German national, is its president, in which capacity he determines the administration and direction of
the day-to-day business affairs of SHS. Petitioner Schumacher, also a German national, is the treasurer and one of the
board directors. As such, he is authorized to pay all bills, payrolls, and other just debts of SHS of whatever nature upon
maturity. Schumacher is also the EVP of the European Chamber of Commerce of the Philippines (ECCP) which is a
separate entity from SHS. Both entities have an arrangement where ECCP handles the payroll requirements of SHS to
simplify business operations and minimize operational expenses. Thus, the wages of SHS employees are paid out by
ECCP, through its Accounting Services Department headed by Taguiang.

Respondent Diaz was hired by petitioner SHS as Manager for Business Development on probationary status from July 18,
2005 to January 18, 2006, with a monthly salary of P100,000.00. He was tasked to perform sales/marketing functions,
represent the company in its events, perform all functions, duties and responsibilities to be assigned by the employer in
due course, among others. In addition to the above-mentioned responsibilities, respondent was also instructed by
Hartmannshenn to report to the SHS office and plant at least two (2) days every work week to observe technical processes
involved in the manufacturing of perforated materials, and to learn about the products of the company, which respondent
was hired to market and sell.

During respondents employment, Hartmannshenn was often abroad and, because of business exigencies, his instructions
to respondent were either sent by electronic mail or relayed through telephone or mobile phone. When he would be in the
Philippines, he and the respondent held meetings. As to respondents work, there was no close supervision by him.
However, during meetings with the respondent, Hartmannshenn expressed his dissatisfaction over respondents poor
performance. Respondent allegedly failed to make any concrete business proposal or implement any specific measure to
improve the productivity of the SHS office. In addition, respondent was said not to have returned Hartmannshenn's calls
and e-mails, to which Diaz denied.

Hartmannshenn instructed Taguiang not to release respondents salary. Later that afternoon, respondent called and
inquired about his salary. Taguiang informed him that it was being withheld and that he had to immediately communicate
with Hartmannshenn. The next day, respondent served on SHS a demand letter and a resignation letter, citing illegal and
unfair labor practices.

ISSUES:
WON the temporary withholding of respondents salary/wages by petitioners was a valid exercise of management
prerogative

HELD:
FIRST ISSUE- NO. Management prerogative refers to the right of an employer to regulate all aspects of employment,
such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding
transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of work. Although
management prerogative refers to the right to regulate all aspects of employment, it cannot be understood to include the
right to temporarily withhold salary/wages without the consent of the employee. To sanction such an interpretation would
be contrary to Article 116 of the Labor Code.

Any withholding of an employees wages by an employer may only be allowed in the form of wage
deductions under the circumstances provided in Article 113 of the Labor Code, as set forth below:

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.

As correctly pointed out by the LA, absent a showing that the withholding of complainants wages falls under the
exceptions provided in Article 113, the withholding thereof is thus unlawful.

The Court finds petitioners evidence insufficient to prove that respondent did not work from November 16 to November
30, 2005. As can be gleaned from respondents Contract of Probationary Employment and the exchanges of electronic
mail messages between Hartmannshenn and respondent, the latters duties as manager for business development entailed
cultivating business ties, connections, and clients in order to make sales. Such duties called for meetings with prospective
clients outside the office rather than reporting for work on a regular schedule. In other words, the nature of respondents
job did not allow close supervision and monitoring by petitioners. Neither was there any prescribed daily monitoring
procedure established by petitioners to ensure that respondent was doing his job. Therefore, granting that respondent
failed to answer Hartmannshenns mobile calls and to reply to two electronic mail messages and given the fact that he
admittedly failed to report to work at the SHS plant twice each week during the subject period, such cannot be taken to
signify that he did not work from November 16 to November 30, 2005.
Apodaca vs NLRC (1989)
February 14, 2013 markerwins Corporation Law, Mercantile Lawcorpo, merc

Facts: Petitioner was employed in respondent corporation. Respondent Jose M. Mirasol persuaded petitioner to subscribe
to 1,500 shares of respondent corporation at P100.00 per share or a total of P150,000.00. He made an initial payment of
P37,500.00. Petitioner was appointed President and General Manager of the respondent corporation. However, he
resigned. Petitioner instituted with the NLRC a complaint against private respondents for the payment of his unpaid
wages, his cost of living allowance, the balance of his gasoline and representation expenses and his bonus compensation.
Private respondents admitted that there is due to petitioner the amount of P17,060.07 but this was applied to the unpaid
balance of his subscription in the amount of P95,439.93. Petitioner questioned the set-off alleging that there was no call or
notice for the payment of the unpaid subscription and that, accordingly, the alleged obligation is not enforceable. The
labor arbiter ruled in favor of the petitioner. Then, NLRC held that a stockholder who fails to pay his unpaid subscription
on call becomes a debtor of the corporation and that the set-off of said obligation against the wages and others due to
petitioner is not contrary to law, morals and public policy.

Issue: WON the corporation can validly offset the unpaid shared in lieu of the wages?

Held: No. The unpaid subscriptions are not due and payable until a call is made by the corporation for payment. Private
respondents have not presented a resolution of the board of directors of respondent corporation calling for the payment of
the unpaid subscriptions. It does not even appear that a notice of such call has been sent to petitioner by the respondent
corporation. No doubt such set-off was without lawful basis, if not premature. As there was no notice or call for the
payment of unpaid subscriptions, the same is not yet due and payable. Lastly, the NLRC has no jurisdiction to determine
such intra-corporate dispute between the stockholder and the corporation as in the matter of unpaid subscriptions. This
controversy is within the exclusive jurisdiction of the Securities and Exchange Commission.