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7) Special Steel Products, Inc. vs.

G.R. No. 143304 - 8 July 2004
ART. 116 - Withholding of Wages and i!"#a!"s
Facts: $%e!ial $teel &'odu!ts( )n!.( is a do*esti! !o'%o'ation engaged in the %'in!i%al
#usiness of i*%o'tation( sale( and *a'"eting of +,-./R steel %'odu!ts. Res%ondents
0o'"ed fo' %etitione' as assistant *anage' and sales*an. 1illa'eal o#tained a !a' loan
f'o* +an" of 2o**e'!e 0ith %etitione' as su'ety 0he'ein they a'e 3ointly and se4e'ally
ag'eed to %ay the #an" in install*ent #asis. )n Janua'y 1556( 1illa'eal 'esigned and 3oined
-i-G'ade )ndust'ial and Te!hni!al &'odu!ts as /7e!uti4e 4i!e-%'esident.
Res%ondent $o 0as s%onso'ed #y %etitione' to attend a t'aining !ou'se in a%fen#e'g(
Aust'ia !ondu!ted #y +,-./R. )t 'e0a'ded $o8s outstanding sales %e'fo'*an!e. When
$o 'etu'ned( the %etitione' as"ed 'es%ondent $o to sign a *e*o'andu* to 0o'" fo' the
!o*%any fo' th'ee yea's. Afte' 2 yea's and 4 *onths( $o 'esigned f'o* the
!o*%any. &etitione' o'de'ed 'es%ondents an a!!ounting of the 4a'ious 2h'ist*as
gi4ea0ays they 'e!ei4ed. )n 'etu'n( 'es%ondents also de*anded %ay*ent of thei'
se%a'ation #enefits( !o**issions( *oneta'y #enefits #ut %etitione' 'efused and 0ithheld
the 13th *onth %ay and othe' #enefits.
,n A%'il 16( 1556( 'es%ondents filed 0ith the .a#o' A'#ite'9 in due !ou'se( the .a#o'
A'#ite' 'ende'ed a :e!ision )N ;A1,R ,; $o and 1illa'eal. &etitione' filed a *otion fo'
'e!onside'ation #ut 0as denied -en!e( %etitione' filed 0ith the 2ou't of A%%eals a
%etition fo' !e'tio'a'i. ,n ,!to#e' 25( 1555( the 2ou't of A%%eals 'ende'ed a :e!ision
dis*issing the %etition and affi'*ing the assailed N.R2 :e!ision. &etitione' filed a
*otion fo' 'e!onside'ation #ut 0as denied #y the A%%ellate 2ou't in a Resolution dated
<ay 8( 2000. -en!e( this %etition.
Issue: W,N the e*%loye' !an 0ithhold its e*%loyee8s 0ages and #enefits as lien to
%'ote!t its inte'est as su'ety in the !a' loan and fo' e7%enses in the t'aining a#'oad.
Held/Ratio: No( the e*%loye' !annot 0ithhold 'es%ondent8s 13th *onth %ay and othe'
*oneta'y #enefits. A'ti!le 116 of the .a#o' 2ode( as a*ended( %'o4ides=
>Withholding of 0ages and "i!"#a!"s %'ohi#ited. )t shall #e unla0ful fo' any %e'son(
di'e!tly o' indi'e!tly( to 0ithhold any a*ount f'o* the 0ages ?and #enefits@ of a
0o'"e' o' indu!e hi* to gi4e u% any %a't of his 0ages #y fo'!e( stealth( inti*idation(
th'eat o' #y any othe' *eans 0hatsoe4e' 0ithout the 0o'"e'8s !onsent.A
The a#o4e %'o4ision is !lea' and needs no fu'the' elu!idation. )ndeed( %etitione' has no
legal autho'ity to 0ithhold 'es%ondents8 13th *onth %ay and othe' #enefits. What an
e*%loyee has 0o'"ed fo'( his e*%loye' *ust %ay. Thus( an e*%loye' !annot si*%ly
'efuse to %ay the 0ages o' #enefits of its e*%loyee #e!ause he has eithe' defaulted in
%aying a loan gua'anteed #y his e*%loye'9 o' 4iolated thei' *e*o'andu* of ag'ee*ent9
o' failed to 'ende' an a!!ounting of his e*%loye'8s %'o%e'ty.
WHEREFORE( the %etition is :/N)/:. The :e!ision dated ,!to#e' 25( 1555 and
Resolution dated <ay 8( 2000 of the 2ou't of A%%eals in 2A-G.R. $& No. B05B6 a'e
he'e#y A;;)R</:. SO ORERE.
Vitug, (Chairman), Corona, and Carpio-Morales, JJ., !on!u'.