Letter:

Dear Attorney,

I hope this letter finds you well. I am writing to seek legal advice regarding an employee who has been absent without authorization for the past five days. As an employer, I am concerned about the appropriate legal steps we can take in this situation. Specifically, I would like to know whether it is permissible to withhold the salary of this employee due to their unauthorized absence.

Could you please provide detailed guidance on this matter, including any relevant labor laws or regulations that might apply? I would appreciate your insights on how to proceed in a lawful and fair manner.

Thank you for your time and expertise.

Sincerely,
A Concerned Employer

Legal Article: Salary Withholding Due to Unauthorized Absence Under Philippine Law

Under Philippine labor law, the issue of withholding an employee’s salary due to unauthorized absences is a complex matter that requires an understanding of both the employer’s rights and the employee’s protections. Employers must carefully navigate the provisions set forth in the Labor Code of the Philippines, as well as relevant jurisprudence, to ensure they act within the bounds of the law.

1. General Principles of Labor Law on Wage Payment

The general rule under Article 94 of the Labor Code of the Philippines is that wages are to be paid in full and on time. Salaries are a form of compensation provided to employees in exchange for services rendered, and an employer’s duty to pay wages is paramount. Employees have a right to be paid for the work they have completed, and withholding wages without legal justification can expose an employer to liability for wage claims or penalties under the law.

Unauthorized absences, however, present a unique challenge. When an employee is absent without permission or a valid excuse, they are, in essence, not performing the work that is the basis for their compensation. This creates a scenario where the employer must assess whether or not they are required to continue paying the employee, especially if the absence extends for several days.

2. The Concept of Unauthorized Absence and Abandonment of Work

In the context of labor law, "unauthorized absence" refers to situations where an employee is absent from work without obtaining prior approval from their employer or without a justifiable reason (such as illness or emergency). The critical distinction here is between absences that are legally justifiable (e.g., sick leave, vacation leave, or emergency leave) and those that are not.

An employee who is absent without authorization for five consecutive days may potentially face disciplinary action, depending on company policy and the specifics of the absence. If an employer can establish that the absence is without justification, it may be considered “absence without leave” (AWOL).

It is important to distinguish between a temporary unauthorized absence and "abandonment of work." Abandonment of work is defined as the deliberate and unjustified refusal of an employee to report for work over an extended period, showing an intention to sever the employer-employee relationship. The Supreme Court of the Philippines has held that for abandonment to exist, there must be two elements:

The failure to report for work or an absence without valid reason.
A clear intention to sever the employer-employee relationship.

In the case of five days of unauthorized absence, the employer must first establish whether this absence constitutes abandonment. Typically, abandonment requires a longer period of absence and clear evidence of the employee’s intention to no longer return to work. Five days of absence alone is generally insufficient to prove abandonment unless accompanied by other evidence, such as the employee’s refusal to communicate or respond to the employer’s inquiries.

3. Company Policies and Employment Contracts

One of the first places to look in resolving this issue is the employment contract and the company's policies on absenteeism. Employers generally have the right to impose disciplinary actions for unauthorized absences, provided these are included in company policies and are communicated to the employee at the time of hiring.

If an employer has a policy that explicitly allows for salary deductions or withholding in cases of unauthorized absence, they must ensure that such policies comply with the Labor Code. Section 113 of the Labor Code states that “no employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except in the following cases:”

For insurance premiums with the consent of the worker.
For union dues, provided the employee has consented.
In cases where the deductions are authorized by law or applicable regulations.

There is no explicit provision in the Labor Code that allows for salary deductions due to unauthorized absences unless the employer can show that the employee has failed to work the hours for which they are being compensated. In this context, withholding payment for the days during which the employee was absent may be justified, but it must be proportional and limited to the actual days missed. Employers should not withhold the entire salary unless the absence spans the full pay period.

4. Deductions and Salary Withholding: Legal Limits

The practice of withholding an employee’s salary must also consider the law's prohibition against withholding wages in a way that deprives the employee of their rightful compensation. Under the "no work, no pay" principle, an employer is not obligated to pay an employee for days when no work was rendered, such as in cases of unauthorized absences. However, the employer must still provide compensation for any work completed during the relevant pay period.

For example, if an employee has been absent without authorization for five consecutive days, the employer can withhold the salary for those five days. However, the employer cannot lawfully withhold the employee’s entire salary for the period unless the employee has not worked at all during that pay period. The employer must ensure that any salary deduction is directly related to the number of days missed, and withholding should only apply to the days the employee was absent without leave.

5. Due Process and Employee Rights

It is essential to note that under Philippine labor law, employees have due process rights that must be respected, even in cases of unauthorized absence. The Supreme Court has consistently ruled that an employer cannot terminate an employee or impose penalties such as salary withholding without affording the employee the opportunity to explain their side. This principle of due process requires the employer to:

Notify the employee in writing of the charges against them (i.e., the unauthorized absence).
Give the employee an opportunity to explain or defend themselves, usually in the form of a written explanation or through a formal hearing.
Make a decision based on substantial evidence, considering the employee's explanation and any supporting documents.

In cases where an employer chooses to impose penalties for unauthorized absences, these penalties must align with the company’s disciplinary procedures and the principles of fairness and proportionality. Unlawful deductions or improper salary withholding without due process may expose the employer to labor claims, complaints, or potential penalties.

6. Jurisprudence and Relevant Cases

There are several key cases where the Philippine courts have addressed issues related to absenteeism, salary withholding, and employment rights:

Perez v. PT&T (G.R. No. 152048, November 29, 2005): In this case, the Supreme Court ruled that absenteeism, when unjustified and repetitive, can constitute a valid cause for termination. However, the Court also reiterated the need for proper notice and due process before imposing penalties such as dismissal or salary deductions.
Sime Darby Pilipinas, Inc. v. Magsalin (G.R. No. 156618, March 2, 2007): This case reaffirmed the principle that abandonment of work must be accompanied by clear intent on the part of the employee to sever the employment relationship. The Court ruled that short periods of absence alone do not constitute abandonment unless there is additional evidence of intent to resign or abandon the position.

These cases underscore the importance of following due process in disciplinary matters and demonstrate that unauthorized absence, while grounds for potential penalties, does not automatically justify extreme measures like withholding an entire salary or immediate termination.

7. Conclusion and Best Practices

In conclusion, employers are generally allowed to withhold salary for days when an employee is absent without authorization, as long as the deductions are limited to the specific days missed. However, withholding an employee's entire salary or imposing deductions beyond what is reasonable and proportional can expose the employer to legal risks.

Employers should take the following steps to ensure compliance with labor laws:

Review the employment contract and company policies regarding absenteeism and salary deductions.
Ensure that any salary deductions are proportional to the actual days of unauthorized absence.
Follow due process by notifying the employee of the infraction and giving them the opportunity to explain.
Document all actions and communications related to the employee’s absence to protect against potential legal challenges.

Employers are encouraged to consult with legal counsel to ensure that their actions align with labor laws and to avoid any potential legal disputes.