Dear Atty. Angela,
I have a friend who borrowed money from me and even issued a promissory note saying that he will pay me within six months and in the event that he fails, he would allow me to make arrangements for salary deduction in his company. I relied on his word and believed that he will pay me as soon as he gets his expected commission. However, he only paid me a portion of what he owed and I could no longer reach him. Is it possible that I request a salary deduction from his salary in the company based on the promissory note he gave me? Please help.
Mari
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Dear Mari,
Unfortunately, law prohibits employers to make deductions on salaries for debts contracted by employees.
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, except for the following cases: 1) 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) the employer is authorized by law or regulations issued by the Secretary of Labor and Employment (Article 113, Labor Code).
There is a certain exception to this rule but this requires the employee himself to serve a written authorization for the payment to a third person and that the employer assents.
In 2018, DoLE Secretary Silvestre H. Bello III issued Department Order 195, Series of 2018: “Rule Amending Section 10 of Rule VIII of the Implementing Rules and Regulations of the Labor Code on Wage Deduction.” The amended rule on wage deduction now states that: “When the deductions are with WRITTEN AUTHORIZATION by the employees for the payment to the employer or third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction.”
However, based on facts, you were not able to obtain the authorization of your friend or that of his employer. As such, you are not entitled to any salary deduction which the law strictly protects.
Atty. Angela Antonio