Sample Undertaking to Reimburse Cost Advanced for Company UniformAtty Elvin
Under Article 113 of the Labor Code, no employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees.
The following are the exceptions:
- 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;
- 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
- In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.
Deduction on account of company uniform is not one of those expressly enumerated. Hence, requiring the employee to wear uniform and deducting said amount may pose serious issue with the worker which may even call the attention of the Department of Labor and Employment (DOLE).
Below is a sample Payslip which may raise issues with the authorities:
Does it mean that the parties cannot enter into an agreement where the employees become monetarily obligated to the company? The parties can. For instance, the company may grant cash advance, charge employees for liabilities on account of losses, damages, etc.
What supports this idea?
Under paragraph (c) of Art. 113, one of the exceptions to the rule that deduction is not allowed is when the employer is authorized by law. The employer can withhold pay prior to payment to him of the obligations of the employee.
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. (Milan vs. NLRC, G.R. No. 202961, February 04, 2015)
Clearly, a company uniform can fall within the debt obligation of the employee to the employer. However, the employer has to provide evidence that this is a clear obligation. One of the best proofs is a document supporting the stipulation.
For instance, the company policy may provide:
“Employees should come to work wearing the designated uniform of the company. The employee may purchase the uniform required or have it made by the accredited suppliers following the established specifications. The company may advance to the employee the cost of the purchase subject to payment or reimbursement by the employee.”
Sample provision in the employment contract:
“The employee agrees to wear the clothing or uniform according to the specifications established by the company policy. The company may advance the cost of purchase or payment for the tailoring subject to reimbursement by the employee based on the terms agreed upon.”
I, JUAN TU III, hereby undertake as follows:
- I freely and voluntarily agreed to comply with the company requirements on the wearing of uniform;
- I understand and acknowledge that prior to employment I was aware of the company’s uniform policy the cost of which is to be shouldered by the employee. As a condition for acceptance of my application for employment, I freely agreed to comply with the said policy;
- Hence, I hereby acknowledge that the company advanced the sum of PhP5,000.00 for the purchase of a set of company uniform in accordance with the established specifications;
- I will pay the company per month at PhP1,000.00 per month for the five (5) months;
- In case of termination of my services, for whatever reason, I agree that the balance, if any, of the said amount shall be deducted from my final pay or any benefit for that matter;
- I attest that this is a voluntary agreement and that the said arrangement does not constitute an illegal or unlawful deduction.
(Sgd.) JUAN TU III
Hence, the Payslip of Juan without the deduction on account of uniform may appear as follows:
However, after receiving his pay, Juan gives payment for PhP1,000.00 as 1 of 5 of the installment payments. The company may issue acknowledgment receipt (AR) for the payment of uniform. This AR may be done every month until the amount is paid in full.
Sample Acknowledgment Receipt:
September 24, 2019
This is to acknowledge receipt of the amount of PhP1,000.00 from Juan Tu III as installment payment for the amount advanced by the company for the purchase/making of his uniform.
Installment No.: 1 of 5
Ma. Tin D. Sadedakan