Dear Attorney,

I am reaching out to seek advice regarding an employment issue. My girlfriend worked at a company for two years, but resigned four years ago. Recently, she requested her Certificate of Employment (COE) and asked about her final pay. The company, however, refused to release her final pay and stated that she still owes them for equipment issued to her during her employment. They insist on charging her for this equipment, but they have not processed or paid her final pay. Shouldn't the company have deducted the equipment costs from her final pay upon her resignation? Why is she still being charged after so many years?

I would appreciate your guidance on this matter.

Sincerely,
A Concerned Party

Insights

In cases like this, the law governing final pay and deductions for company-provided equipment in the Philippines revolves around the terms of the employment contract and existing labor laws.

Final Pay and its Timely Release:
Under Philippine labor law, when an employee resigns, the employer is required to release the final pay, which may include unpaid wages, accrued leave, and other monetary benefits. According to the Department of Labor and Employment (DOLE) guidelines, this final pay should be released within 30 days from the date of resignation, unless the employment contract or company policy specifies otherwise.

Deductions for Company Equipment:
As per DOLE regulations, employers are permitted to deduct from an employee’s final pay any liabilities, including the cost of equipment that was not returned or was damaged, provided that these deductions are stipulated in the employment contract or company policy. The employer must have documented proof of the equipment's value and that it was provided to the employee.

Why the Company May Still Be Charging for Equipment:
The fact that the company is still charging for the equipment four years after the resignation could be due to several reasons:

No Prior Deduction Made: If the employer failed to deduct the equipment cost from the final pay at the time of resignation, they may be attempting to recover these costs now. However, this should have been addressed immediately upon the employee’s exit.
Unreturned Equipment: If your girlfriend did not return the equipment, the company might have a valid claim to recover its cost. The employer should have followed up on this earlier, as it is unusual to raise such an issue long after the resignation.

Possible Violations and Legal Recourse:
It is important to note that withholding the final pay indefinitely or without valid justification may be considered a violation of labor laws. Your girlfriend may file a complaint with the DOLE for non-payment of final pay. The agency can mediate and investigate whether the company has a legitimate reason for delaying the release of her final pay and whether the deductions for the equipment are justified.

The delay in processing both the final pay and the equipment charges could also indicate inefficiency or non-compliance with standard HR procedures. If the employer did not promptly handle these matters, your girlfriend may have legal grounds to contest the deductions or at least negotiate their reduction, especially if the equipment's current value has depreciated over time.

Steps to Take:

Contact the Company: Your girlfriend should formally request the release of her final pay and question the continued charges for the equipment. If possible, provide evidence that the equipment was returned or negotiate the amount being charged.
File a Complaint: If the company refuses to release her final pay or continues to demand payment for the equipment, she can file a complaint with the DOLE for mediation or resolution.

This situation underscores the importance of ensuring that final pay is processed within the legally required timeframe and that all issues, including equipment returns, are resolved upon resignation. Further legal advice or assistance from the DOLE may be necessary if the company remains uncooperative.