Dear Attorney,
I am writing to seek legal advice regarding an issue involving a contract for manpower services. Our company, as the client, has engaged the services of a manpower provider, and we recently discovered an overpayment in the salary of one of the service provider’s employees assigned to us. The overpayment was made due to an internal error, and now, we are considering deducting the overpaid amount directly from the employee's salary in the upcoming payroll period.
Can we, as the client, legally deduct this overpayment from the employee’s salary, or does this require the involvement of the service provider?
Sincerely,
A Concerned Client
Insights
In the context of manpower service contracts in the Philippines, the relationship between the client and the manpower provider’s employees is indirect. The employees are legally employed by the service provider, not by the client. Consequently, the client generally does not have the authority to unilaterally deduct any amount from the wages of the manpower provider's employees.
The Labor Code of the Philippines provides explicit protections for employees regarding wage deductions. Under Article 113 of the Labor Code, deductions from an employee’s salary can only be made in certain limited circumstances, such as those required by law (e.g., taxes, social security contributions) or when expressly authorized by the employee in writing for specific purposes.
In this case, any overpayment recovery must be addressed by the service provider, as they are the direct employer. If an overpayment has occurred, the proper course of action would be for the client to notify the service provider, who can then handle the situation according to the terms of their employment contract with the employee and the applicable labor laws.
Additionally, unapproved deductions could expose the client to legal risks, including potential claims for illegal deductions, unfair labor practices, or breaches of contractual obligations. The client could also be held liable for interfering with the employee's right to receive their full and lawful compensation.
The appropriate step would be to coordinate directly with the manpower service provider to rectify the overpayment. The provider would then have the responsibility to recover the excess salary from their employee, ensuring that the recovery is conducted in compliance with Philippine labor laws, which may include securing the employee's written consent to any deduction or arranging an alternative repayment agreement.
In conclusion, while it may seem practical to deduct overpaid amounts directly from an employee’s salary, it is not within the legal rights of the client to do so. Any attempts to recover overpayments must go through the manpower service provider, who should handle the process in accordance with labor regulations to avoid any legal repercussions.