G.R. No. 188169 ; November 28, 2011
NIÑA JEWELRY MANUFACTURING OF METAL ARTS, INC. (otherwise known as NIÑA MANUFACTURING AND METAL ARTS, INC.) and ELISEA B. ABELLA, Petitioners, vs. MADELINE C. MONTECILLO and LIZA M. TRINIDAD, Respondents.

FACTS

Petitioner Niña Jewelry Manufacturing of Metal Arts, Inc. employed respondents Madeline Montecillo and Liza Trinidad as goldsmiths. Due to incidents of theft involving goldsmiths, Niña Jewelry imposed a new policy on August 13, 2004, requiring goldsmiths to post cash bonds or deposits not exceeding 15% of their weekly salaries to answer for any loss or damage to gold entrusted to them. The deposits would be returned upon completion of work and after accounting. Niña Jewelry alleged it gave goldsmiths the option to instead sign an authorization allowing deduction from their salaries should a loss due to their fault be found. Respondents claimed they were given no option and were constructively dismissed, as continued employment was made conditional on posting the deposit. Niña Jewelry averred that on August 14, 2004, respondents stopped reporting for work in defiance of the not-yet-implemented policy. Respondents filed complaints for illegal dismissal, seeking reinstatement and backwages. The Labor Arbiter dismissed the complaints, finding no dismissal but ordering payment of proportionate 13th month pay. The NLRC affirmed the dismissal but deleted the 13th month pay award, finding respondents had voluntarily abandoned work and had unpaid loans offsetting any award. The Court of Appeals reversed the NLRC, ruling the deposit requirement was illegal under Article 114 of the Labor Code, constituting constructive dismissal, and ordered reinstatement with full backwages.

ISSUE

Whether the Court of Appeals erred in reversing the NLRC and finding that respondents were illegally dismissed.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals Decision. The deposit requirement imposed by Niña Jewelry was illegal. Article 114 of the Labor Code prohibits an employer from requiring a worker to make a deposit for loss or damage to tools, materials, or equipment supplied by the employer. The policy, whether framed as a cash bond or an authorization for deduction, violated this provision. It was a unilateral imposition that altered respondents’ employment terms to their prejudice. Respondents’ refusal to comply with this illegal policy and their consequent being barred from work constituted constructive dismissal. The defense of abandonment failed, as respondents immediately filed their complaint, negating any intent to abandon. The claim of unpaid loans, raised only on appeal and not substantiated, could not offset the award for illegal dismissal. Respondents were entitled to reinstatement without loss of seniority rights and to full backwages from the time compensation was withheld until actual reinstatement. The case was remanded to the Labor Arbiter for recomputation of the monetary award.