Labor Law 1

Maria Aireen J Moya

Article 114 – Deposits for
Loss or Damage

Article 115 - Limitations

Art. 114 - Deposits for loss or damage
No employer shall require his worker to make
deposits from which deductions shall be made for
the reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer,
except when the employer is engaged in such trades,
occupations or business where the practice of
making deductions or requiring deposits is a
recognized one, or is necessary or desirable as
determined by the Secretary of Labor and
Employment in appropriate rules and regulations.
Deductions for loss or damage
The employer may make wage deductions or require
the employees to make deposits from which
deductions shall be made, subject to the following
conditions:
1. That the employee concerned is clearly shown to be
responsible for the loss or damage;
2. That the employee is given reasonable opportunity to show
cause why deduction should be made;
3. That the amount of such deductions is fair and reasonable and
shall not exceed the actual loss or damage; and
4. That the deduction from the wages of the employee does not
exceed twenty percent (20%) of the employee’s wages in a week.
 Five J Taxi v NLRC, GR No 111474
22 August 1994
Illegal Deposit
General Rule:
A taxi company that requires its drivers to make a daily
deposits to defray any shortage in their “boundary” is
covered by the general prohibition

Exception:
There is no dispute that as a matter of practice in the
taxi industry, after a tour of duty, it is incumbent upon
the driver to restore the unit he has given to the same
clean condition when he took it out.
 Dentech Manufacturing Corp, et al vs NLRC, et al.,
254 Phil 595
Posting of cash bonds and making deductions
Art 114 of the Labor Code prohibits an employer from requiting
his employees to file a cash bond or to make deposits, subject to certain
exceptions: "when the employer is engaged in such trades, occupations
or business where the practice of making deductions or requiring
deposits is a recognize done, or is necessary or desirable as determined
by the Secretary of Labor in appropriate rules and regulations.“
Dentech have not satisfactorily disputed the applicability of this
provision of the Labor Code to the case at bar and further failed to show
that the company is authorized by law to require the private
respondents to file the cash bond in question. It’s to the effect that the
proceeds of the cash bond had already been given to a certain
carinderia to pay for the accounts of the private respondents there in
do not merit serious consideration. In fact, no evidence or receipt
has been shown to prove such payment.
 Nina Manufacturing and Metal Arts Inc vs Montecillo, GR 188169
28 November 2011
Article 114 exception
…when the employer is engaged in such trades, occupations or business where the
practice of making deposits is a recognized one, or is necessary or desirable as
determined by the Secretary of Labor in appropriate rules and regulations
RULING:
In case of deposit, that it is engaged in a trade, occupation or business
where such requirement is a recognized practice. Niña Jewelry obviously failed
in this respect. Surely, mere invocation of management prerogative cannot
exempt it from compliance with the strict requirements of law. Accordingly,
Niña Jewelry's unilateral imposition of cash deposit or salary deduction on the
petitioners is illegal.
When Niña Jewelry refused to give assignment to the petitioners or to
admit them back to work because they failed to give cash deposit or agree to a
salary deduction, it was deemed to have constructively dismissed the
petitioners. Obviously, such deposit or salary deduction was imposed as a
condition for the petitioners' continuing employment. Non-compliance
indubitably meant termination of the petitioners' employment.
Art. 115 - Limitations
No deduction from the deposits of an
employee for the actual amount of the loss
or damage shall be made unless the
employee has been heard thereon, and his
responsibility has been clearly shown.
 THE RIGHT TO BE HEARD
“Audie Alteram Partem”
No Man should be condemned
unheard

It is a settled ruled that no one shall be

personally bund until he has been
afforded the opportunity to be heard.
An employer cannot make deduction unless
the following conditions are complied with:

A. The employee concerned must be clearly

shown to be responsible for the loss or
damage

B. The employee should be given reasonable

opportunity to show why deduction
should not be made
End of presentation…

Good evening!