Simplified Query: Is it legal to withhold salary because an employee did not submit a resignation letter and did not sign a contract?
In the Philippines, the practice of withholding an employee's salary under the circumstances where they have not submitted a resignation letter or have not signed an employment contract is generally considered illegal. Philippine labor laws strongly protect the rights of workers, including their right to timely and complete payment of wages.
According to the Labor Code of the Philippines, specifically Article 116, it is unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat, or by any other means whatsoever without the worker’s consent. Therefore, the act of withholding an employee's salary because they did not sign a contract or because they are being asked to submit a resignation letter is contrary to this provision.
Moreover, the Department of Labor and Employment (DOLE) emphasizes that wages shall be paid directly to the workers to whom they are due, except in cases where the worker has expressly authorized the deduction in writing. Such deductions typically cover lawful causes such as insurance premiums, union dues, or savings deposits previously agreed upon under terms that do not provide an undue burden on the employee.
Additionally, the scenario suggests a misunderstanding or misapplication of employment contracts. In the Philippines, whether an employee has signed a formal contract or not, their engagement and employment are governed by the provisions of the Labor Code, which provides protection against unauthorized wage deductions. The absence of a signed contract does not invalidate an employee's entitlement to wages nor justify withholding them.
Employers are advised to handle resignations and contract signings in accordance with the principles of fairness and due process as outlined in the Labor Code. Any grievances or disciplinary actions that involve salary or contract issues should be addressed through proper dialogue and legal processes, not by withholding wages.
It is recommended for employees facing such issues to seek assistance from the DOLE or a legal professional specializing in labor law to address any violations of their rights effectively. Employers should also seek legal advice to ensure their human resources policies comply with labor laws to avoid potential disputes and penalties.