NIÑA JEWELRY MANUFACTURING OF METAL ARTS, INC vs MADELINE C. MONTECILLO and LIZA M.

TRINIDAD

Facts:

Madeline Montecillo (Madeline) and Liza Trinidad (Liza) were first employed as goldsmiths by the
petitioner. There were incidents of theft involving goldsmiths in Niña Jewelry's employ. On August 13,
2004, Niña Jewelry imposed 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 Niña 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. Niña 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. Niña Jewelry averred that on August 14, 2004, 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 Niña Jewelry complaints6 for illegal dismissal and
for the award of separation pay.

LA: Labor Arbiter Jose Gutierrez (LA Gutierrez) dismissed the respondents' complaints for lack of merit
but ordered Niña Jewelry to pay Madeline the sum of ₱3,750.00, and Liza, ₱6,250.00, representing their
proportionate entitlements to 13th month pay for the year 2004. The undisputed facts show that
complainants were piece workers of the respondent who are engaged in the processing of gold into
various jewelry pieces. Because of the nature of its business, respondent was plagued with too many
incidents of theft from its piece workers. The fact of complainants not being dismissed from
employment was duly attested to by his co-workers who executed their Joint Affidavit under oath,
Annex '4'.

NLRC: affirmed LA Gutierrez's dismissal of the amended complaints but deleted the award of 13th month
pay based on findings that the former had contracted unpaid individual loans from Niña Jewelry. [I]t was
complainants who refused to work with the respondents when they were required to post cash bond or
sign an authorization for deduction for the gold material they received and to be manufactured into
various jewelries.

CA: On January 9, 2009, the CA rendered the now assailed Decision11 reversing the findings of the LA and
the NLRC. The CA ruled:

Issue: WON the imposition of the deposit policy is valid.

Held:

No. The deposit policy is not valid.

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.

In the case at bar, The petitioners failed in this respect. It bears stressing that without proofs that
requiring deposits and effecting deductions are recognized practices, or without securing the Secretary
of Labor's determination of the necessity or desirability of the same, the imposition of new policies
relative to deductions and deposits can be made subject to abuse by the employers.

Thus, as it was not proven that the policy imposed was pursuant to art 114 of the LC, such is invalid.
FIVE J TAXI and/or JUAN S. ARMAMENTO vs. NATIONAL LABOR RELATIONS COMMISSION

Facts:

Private respondents Domingo Maldigan and Gilberto Sabsalon were hired by the petitioners as taxi
drivers 2 and, as such, they worked for 4 days weekly on a 24-hour shifting schedule. In less than 4
months after Maldigan was hired as an extra driver by the petitioners, he already failed to report for
work for unknown reasons. Later, petitioners learned that he was working for "Mine of Gold" Taxi
Company. With respect to Sabsalon, while driving a taxicab of petitioners on September 6, 1983, he was
held up by his armed passenger who took all his money and thereafter stabbed him. He was hospitalized
and after his discharge, he went to his home province to recuperate. In January, 1987, Sabsalon was re-
admitted by petitioners but his working schedule was made on an "alternative basis. On September 22,
1991, Sabsalon failed to remit his "boundary" of P700.00 for the previous day, abandoned his taxicab in
Makati without fuel refill worth P300.00 and failed to remit his "boundary" of P700.00 for the previous
day. Afterwards it was revealed that he was driving a taxi for "Bulaklak Company."

Sometime in 1989, Maldigan requested petitioners for the reimbursement of his daily cash deposits for
2 years, but herein petitioners told him that not a single centavo was left of his deposits as these were
not even enough to cover the amount spent for the repairs of the taxi he was driving. This was allegedly
the practice adopted by petitioners to recoup the expenses incurred in the repair of their taxicab units.
When Maldigan insisted on the refund of his deposit, petitioners terminated his services. Sabsalon, on
his part, claimed that his termination from employment was effected when he refused to pay for the
washing of his taxi seat covers.

On November 27, 1991, private respondents filed a complaint with the Manila Arbitration Office of the
National Labor Relations Commission charging petitioners with illegal dismissal and illegal deductions.
That complaint was dismissed, the labor arbiter holding that it took private respondents two years to file
the same and such unreasonable delay was not consistent with the natural reaction of a person who
claimed to be unjustly treated, hence the filing of the case could be interpreted as a mere afterthought.
Respondent NLRC concurred in said findings. It also held that the P15.00 daily deposits made by
respondents to defray any shortage in their "boundary" is covered by the general prohibition in Article
114 of the Labor Code

Issue: WoN the P15 daily deposits are allowed by law

Held:

No, they were not allowed by law

Art 114- 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 deposits is a recognized one, or is necessary or desirable as determined by the Secretary of
Labor in appropriate rules and regulations.

In this case, Art 114 does not apply to or permit deposits to defray any deficiency which the taxi driver
may incur in the remittance of his "boundary. When private respondents stopped working for
petitioners, the alleged purpose for which petitioners required such unauthorized deposits no longer
existed. In other case, any balance due to private respondents after proper accounting must be returned
to them with legal interest.

Thus, as the deposits were illegal, the petitioners must be refunded.

DENTECH MANUFACTURING CORPORATION and JACINTO LEDESMA vs NLRC

The herein petitioner Dentech Manufacturing Corporation is a domestic corporation organized under
Philippine laws which, before it became a corporate entity, was under the sole proprietorship of
Ledesma. The herein private respondents Torno are members of the Confederation of Citizens Labor
Union, a labor organization registered with the Department of Labor and Employment. They used to be
the employees of the petitioner firm, working therein as welders, upholsterers and painters. They were
employed in the firm before it became a corporate entity and were dismissed on February 14, 1985.

On June 26, 1985, the private respondents filed a Complaint with the arbitration branch of the
respondent against the petitioners for illegal dismissal and violation of PD 851. They sought 13th month
pay, separation pay, and the refund of the cash bond they filed with the company at the start of their
employment. On the other hand, the petitioners alleged in their Position Paper that the private
respondents were not dismissed from the firm on account of their union activities. The Labor Arbiter
ordered the reinstatement of the complainants. Both parties filed their respective appeals with the
NLRC which affirmed the Labor Arbiter ruling.

Issue: Whether or not the cash bonds are allowed by law.

Held:

No, the cash bonds are not allowed by law.

Art 114 provides:

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 in appropriate rules and regulations.

In this case, The petitioners have not satisfactorily disputed the applicability of this provision of the
Labor Code to the case at bar. Considering further that the petitioners failed to show that the company
is authorized by law to require the private respondents to file the cash bond in question, the refund
thereof is in order. The allegation of the petitioners 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 therein
does not merit serious consideration.

Therefore, as there is a lack of showing that the company is authorized by law to require respondents
such funds, a refund of such is due as the bonds are illegal.