Employer Demand for ATM Card Return Upon Resignation in the Philippines
Everything a Philippine HR practitioner, labor lawyer, or resigning employee needs to know
1. Background: Why the issue exists
Over the last two decades, most Philippine employers shifted from cash or cheque payroll to “pay-card” systems—ATM cards issued under a payroll deposit account opened in the name of each employee. Employers often fund the first card’s cost and route wages through a single depository bank for convenience, AMLA compliance, and easier BIR tracking.
When a worker resigns, some employers habitually ask for the “return” of the ATM card together with uniforms, IDs, laptops, and other company-owned items. The request is usually motivated by:
- fear that the card might still be used for auto-crediting salaries if payroll files are not updated in time;
- a mistaken belief that because the company paid for the card, it “owns” it; or
- an attempt—sometimes deliberate—to secure leverage over the employee’s final pay and clearance.
This practice intersects several independent legal regimes: labor standards on wages, civil-law ownership rules, banking regulations on deposit accounts, and data-privacy principles.
2. Nature and Ownership of a Payroll ATM Card
Bank property, depositor’s right of use
- Per standard cardholder agreements approved by the Bangko Sentral ng Pilipinas (BSP), the physical ATM card remains property of the issuing bank. The employee, as depositor, merely has the contractual right to hold and use it.
Employer is neither depositor nor owner
- The employer’s role ends once it credits funds. It is not a joint depositor; it therefore has no legal title to repossess nor custody rights over the card.
Civil Code implications
- Under Art. 428 (ownership) and Art. 439 (possession), only the person with a juridical right may demand delivery of a movable. An employer cannot compel delivery of property it does not own.
3. Labor-Standards Framework
| Provision | Key rule | Relevance to ATM-card withholding |
|---|---|---|
| Labor Code, Art. 102 (Forms of payment) | Wages shall be paid in legal tender. Payment through a bank is allowed only with the employee’s written consent. | Once consent is given, wages become personal funds the moment they hit the payroll account. |
| Art. 113–116 (Deductions & Withholding) | Employer may not make any deduction or withhold wages, except those allowed by law or authorized in writing. | Holding the instrument that grants access to wages is treated by the DOLE as constructive withholding. |
| Labor Advisory 06-20 (Final Pay & CoE) | Final pay must be released within 30 days from effectivity of separation, subject only to valid deductions. | Demanding return of the card as a pre-condition breaches this timeline. |
| DO 174-17 & 183-17 (Rules on contractor employees) | Principal is jointly liable for wage violations. | Even principals that merely “recommend” ATM retrieval face liability if the contractor actually withholds pay. |
4. BSP & AMLA Rules
- BSP Circular 681 (2009) opened the door to payroll (non-maintaining-balance) deposits, stressing that the account remains under the sole control of the employee-depositor.
- AMLA (Republic Act 9160, as amended) imposes Know-Your-Customer (KYC) obligations on banks—not on employers. An employer therefore cannot cite AMLA to justify retaining an employee’s card.
- Card cancellation or destruction may be done only by the bank, often upon account closure or replacement.
5. Data-Privacy Angle
The ATM card typically bears the employee’s name and part of the account number or PAN. Forcing its surrender creates an additional data-privacy risk: the employer gains physical possession of a device that can be skimmed, photographed, or cloned.
The National Privacy Commission’s Advisory Opinions (e.g., A.O. 2018-040) treat a bank account number as personal information. Employers are mere data processors of payroll data; possession should be minimised under the “proportionality” principle in Sec. 11(d) of the Data Privacy Act (RA 10173).
6. DOLE & Jurisprudence
Although no Supreme Court case is directly on point, two strands of jurisprudence are instructive:
| Case | Gist | Take-away |
|---|---|---|
| Abbott Laboratories v. Alcaraz (G.R. 195872, Apr 22 2014) | Company property (laptop) may be withheld from departing employee until clearance. | Distinguishes company-owned items from employee property. ATM card is not company-owned. |
| Del Monte Phil. v. Honrado (G.R. 175587, Apr 17 2013) | Requiring employees to sign blank pay slips to “facilitate deductions” was an unlawful deduction. | Analogous: physically retaining a pay instrument is an indirect deduction/withholding. |
| DOLE-NCR Advisory Opinions (various field office rulings 2015-2023) | Field offices consistently order companies to release final pay even if the employee still “holds” the ATM. | Show DOLE’s administrative stance: the request is permissible, but conditioning clearance on it is not. |
7. Practical Scenarios & Liability Exposure
| Employer action | Legal risk | Typical remedy for employee |
|---|---|---|
| Politely requests card return, but still releases final pay via cheque if card not returned | None—request is voluntary. | Hand card to bank or destroy it. |
| Refuses to release final pay unless card is surrendered | Wage-withholding (Art. 116); DOLE money claims, 30% legal interest, and possible criminal prosecution under Art. 303 (old 288). | File money-claim or SENA mediation; may escalate to NLRC. |
| Keeps the card and withdraws erroneous future credits | Possible estafa/theft and violation of bank secrecy. | Bank files complaint; employee has civil action for damages. |
| Contractor practice endorsed by principal | Solidary liability under Art. 109. | Sue both contractor and principal. |
8. Best-Practice Checklist for Employers
- Stop calling it a “return.” Ask the resigning employee to deactivate or destroy the card after confirming no balance remains.
- Issue a stop-credit memo to payroll processor at least five banking days before the employee’s last pay cycle.
- Provide alternatives for final pay—e-wallet transfer, crossed cheque, or cash—not conditional on card turnover.
- Document employee consent if you really need the card (e.g., card has company logo and access badge function).
- Update clearance forms: separate company property checklist from personal payroll instrument.
9. Employee Options When the Card Is Demanded
- Politely decline and cite that the account is personal; offer to sign an undertaking that the card will be cut or returned directly to the bank.
- Withdraw remaining balance and request the bank to close the account; surrender the card to the bank, then show proof of closure to HR.
- If pay is withheld, file a Single-Entry Approach (SENA) request at the nearest DOLE field office; this usually speeds up release.
- Escalate to NLRC via money-claim if mediation fails; claims accrue 10 % attorney’s fees plus legal interest.
10. Conclusion
Under Philippine law, an employer cannot lawfully compel a resigning worker to surrender a payroll ATM card as a pre-condition to releasing wages, separation benefits, or the certificate of employment. The card is the bank’s property; the account (and any funds inside) belong exclusively to the employee. Any conditional withholding violates Labor Code Articles 113–116 and exposes the company—and potentially its officers—to money claims, administrative fines, and criminal prosecution.
Employers may ask for the card’s return for housekeeping reasons, but they must simultaneously guarantee that final pay will be released, and within the 30-day window, regardless of the employee’s decision. Aligning HR practice with the legal boundaries above protects both parties and promotes a clean, compliant off-boarding process.