Long has it been held by the Supreme Court in the Solid Mills, Inc., case that that the institution of clearance procedures has legal bases:
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 employee’s departure. As a general rule, employers are prohibited from withholding wages from employees. The Labor Code provides:
Art. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages 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 worker’s consent.
The Labor Code also prohibits the elimination or diminution of benefits. Thus:
Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this 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. (Emphasis supplied)
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."
"Accountability," in its ordinary sense, means obligation or debt. The ordinary meaning of the term "accountability" does not limit the definition of accountability to those incurred in the worksite. As long as the debt or obligation was incurred by virtue of the employer-employee relationship, generally, it shall be included in the employee’s accountabilities that are subject to clearance procedures.
It may be true that not all employees enjoyed the privilege of staying in respondent Solid Mills’ property. However, this alone does not imply that this privilege when enjoyed was not a result of the employer-employee relationship. Those who did avail of the privilege were employees of respondent Solid Mills. Petitioners’ possession should, therefore, be included in the term "accountability."
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. Petitioners do not categorically deny respondent Solid Mills’ ownership of the property, and they do not claim superior right to it. What can be gathered from the findings ofthe Labor Arbiter, National Labor Relations Commission, and the Court of Appeals is that respondent Solid Mills allowed the use of its property for the benefit of petitioners as its employees. Petitioners were merely allowed to possess and use it out of respondent Solid Mills’ liberality. The employer may, therefore, demand the property at will.
The return of the property’s possession became an obligation or liability on the part of the employees when the employer-employee relationship ceased. Thus, respondent Solid Mills has the right to withhold petitioners’ wages and benefits because of this existing debt or liability. In Solas v. Power and Telephone Supply Phils., Inc., et al., this court recognized this right of the employer when it ruled that the employee in that case was not constructively dismissed. Thus:
There was valid reason for respondents’ withholding of petitioner’s salary for the month of February 2000. Petitioner does not deny that he is indebted to his employer in the amount of around 95,000.00. Respondents explained that petitioner’s salary for the period of February 1-15, 2000 was applied as partial payment for his debt and for withholding taxes on his income; while for the period of February 15-28, 2000, petitioner was already on absence without leave, hence, was not entitled to any pay.
The law does not sanction a situation where employees who do not even assert any claim over the employer’s property are allowed to take all the benefits out of their employment while they simultaneously withhold possession of their employer’s property for no rightful reason. Withholding of payment by the employer does not mean that the employer may renege on its obligation to pay employees their wages, termination payments, and due benefits. The employees’ benefits are also not being reduced. It is only subjected to the condition that the employees return properties properly belonging to the employer. This is only consistent with the equitable principle that "no one shall be unjustly enriched or benefited at the expense of another."
These benefits were properly withheld by respondent Solid Mills because of their refusal to return its property.
To simplify:
The employer, by law and jurisprudence, is entitled to withhold IN THE MEANTIME any amount due to the employee until such a time that said employee shall have cleared himself of any liability.
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