1. The wage deduction made by Boss Paul was not legal.

According to 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, one of the exception is in case 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.

In this case, the salary deduction made by Boss Paul is not an allowable deduction
under the law as it was not Boss Paul who insured Peter and is not the one who makes
payment to Hulo Gan Insurance for insurance premium. Hence, wage deduction of P500
made by Boss Paul was not legal.

2. Yes, an employer can legally make deductions from the salary of his employees under
the circumstances provided by Article 113 of the Labor Code.

According to the Article 113 of the Labor Code, legal deductions that an employer may
make from the wages of his employees are: (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.

Deduction for value of meals and other facilities, in cases where the employee is
indebted to the employer, where such indebtedness has become due and demandable,
court awards, withholding tax, salary deductions of a member of a legally established
cooperative, and SSS, medicare and Pag-Ibig contributions and such other deductions
are also authorized by existing laws.

3. I do not agree with the employees. In Philippine Graphic Arts, Inc. vs. NLRC , G.R. No.
L-80737, September 29,1988, the Court upheld the validity of the reduction of working
hours when it was proven that the employer was suffering from business losses.

Here, due to COVID-19 pandemic, Isla Ganda Travel and Tour Company experienced
serious business losses and is in verge of closing down and implemented 3-days work a
week in good faith, to save the business.

Thus, the reduction of workdays resulting to reduced wages was valid wage reduction.

4. If the business was found to be not experiencing serious losses, I agree with the
employees.

In Litton Commercial vs. Hellera, et al., G.R. No. 163147, October 10, 2007, financial
losses must be shown before a company can validly opt to reduce the work hours of its
employees. If it was not proved that Isla Ganda Travel and Tour Company is not
experiencing serious losses, the reduction is salaries due to reduced workday was not
justified.
5. 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.

Example: Mr. Dami Benta is a sales agent in HolCom Cement Company. HolCom issued
Mr. Dami Benta a company car as service vehicle to be used for company purposes.
.However, HolCom required Mr. Dami Benta to make a deposit of P1000 monthly from
which deduction shall be made for any loss or damage of the issued car.

The act of the employer requiring its employee to make deposits from which deductions
shall be made for the reimbursement of loss of or damage to tools, materials or
equipment supplied is prohibited under the law. In addition, requiring of deposits is not a
recognized practice in cement industry or is not necessary or desirable as determined by
the Secretary of Labor.

6. Under Article 114 of the Labor Code, employer shall not 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. The exception is
that it is engaged in such trade 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.

According to the implementing rules, payments for lost or damaged equipment is

deductible from the employee’s salary if four conditions are met, namely:
(1) the employee is clearly shown to be responsible for the loss or damage;
(2) the employee is given ample opportunity to show cause why deduction should not be
made;
(3) the amount of the deduction is fair and reasonable and shall not exceed the actual
loss or damage; and
(4) the deduction from the employee’s wage does not exceed 20 percent of the
employee’s wages in a week.

7. The practice is not legal. According to Article 117 of the Labor Code, it shall be unlawful
to make any deduction from the wages of any employee for the benefit of the employer
or his representative or intermediary as consideration of a promise of employment or
retention in employment. Therefore, the practice of security agencies to deduct 25%
from the security guard’s salary as the agency’s share in procuring job placement for the
guard is illegal and a violation of the said Labor Code provision.