LABOR RELATIONS FEB 19 DIGESTS
Department of Labor and Employment, National Capital Region (DOLE-
III. Pages 176 to 296
1. 30% ASSENT OF UNION MEMBERSHIP NOT MANDATORY
TO FILE COMPLAINT
ERNESTO C. VERCELES, DIOSDADO F. TRINIDAD, SALVADOR G.
BLANCIA, ROSEMARIE DE LUMBAN, FELICITAS F. RAMOS,
MIGUEL TEAÑO, JAIME BAUTISTA and FIDEL ACERO, as Officers
of the University of the East Employees'
Association, petitioners, vs. BUREAU OF LABOR RELATIONS-
DEPARTMENT OF LABOR AND EMPLOYMENT, DEPARTMENT OF
LABOR AND EMPLOYMENT-NATIONAL CAPITAL REGION, RODEL
E. DALUPAN, EFREN J. DE OCAMPO, PROCESO TOTTO, JR.,
ELIZABETH ALARCA, ELVIRA S. MANALO, and RICARDO
UY, respondents. [G.R. No. 152322. February 15, 2005.]
FACTS: Private respondents Rodel E. Dalupan, Efren J. De Ocampo,
Proceso Totto, Jr., Elizabeth Alarca, and Elvira S. Manalo are members
of the University of the East Employees' Association (UEEA). On 15
September 1997, they each received a Memorandum from the UEEA
charging them with spreading false rumors and creating disinformation
among the members of the said association. In their collective reply,
they denied the allegations. Later on, a Memorandum was issued by
petitioner Ernesto Verceles in his capacity as president of the
association, informing Dalupan that their membership in the association
has been suspended and shall take effect immediately upon receipt
thereof. Verceles said he was acting upon the disciplinary committee's
finding of a prima facie case against them. 
Later on, 01 December 1997, a complaint for illegal suspension, willful
and unlawful violation of UEEA constitution and by-laws, refusal to
render financial and other reports, deliberate refusal to call general and
special meetings, illegal holdover of terms and damages was filed by
the Dalupan et al against Verceles and other petitioners Diosdado F.
Trinidad, Salvador G. Blancia, Rosemarie De Lumban, Felicitas
Ramos, Miguel Teaño, Jaime Bautista and Fidel Acero before the
Page 1 of 14
NCR).
DOLE RULING: In favor of Dalupan, adverse to Verceles.
BLR-DOLE RULING: Dismissed the appeal. Affirming the DOLE ruling.
CA RULING: Dismissing the petition. Affirming the DOLE and BLR-
DOLE rulings.
PETITIONER’S CONTENTION: Verceles et al argue that Dalupan et al
did not exhaust administrative remedies and that the requirement of
support by at least 30% of the members of the association for the filing
of a complaint for any violation of the constitution and by-laws and
rights and conditions of membership, pursuant to Section 1, Rule XIV,
Article I, Department Order No. 9 of DOLE, was not complied with.
RESPONDENT’S CONTENTION: The thirty percent (30%) support
requirement pursuant to Section 1, Rule XIV, Article I, Department
Order No. 9, is not applicable to them because their complaint was
primordially predicated on their suspension while the rest of the causes
of action were mere collateral consequences of the principal cause of
action.
ISSUE: Whether the 30% assent of union membership is not
mandatory in filing a complaint?
RULING: YES, the 30% assent of union membership is not
mandatory in filing a complaint. In the case of Rodriguez v.
Director, Bureau of Labor Relations, it is held that the 30%
requirement is not mandatory. In this case, the Court, speaking
through Chief Justice Andres R. Narvasa, held in part: The
respondent Director's ruling, however, that the assent of 30% of
the union membership, mentioned in Article 242 of the Labor
Code, was mandatory and essential to the filing of a complaint for
any violation of rights and conditions of membership in a labor
organization (such as the arbitrary and oppressive increase of
LABOR RELATIONS FEB 19 DIGESTS
union dues here complained of), cannot be affirmed and will be
reversed. The very article relied upon militates against the
proposition. It states that a report of a violation of rights and
conditions of membership in a labor organization may be made by
"(a)t least thirty percent (30%) of all the members of a union or any
member or members specially concerned." The use of the
permissive "may" in the provision at once negates the notion that
the assent of 30% of all the members is mandatory. More decisive
is the fact that the provision expressly declares that the report
may be made, alternatively by "any member or members specially
concerned." And further confirmation that the assent of 30% of the
union members is not a factor in the acquisition of jurisdiction by
the Bureau of Labor Relations is furnished by Article 226 of the
same Labor Code, which grants original and exclusive jurisdiction
to the Bureau, and the Labor Relations Division in the Regional
Offices of the Department of Labor, over "all inter-union and intra-
union conflicts, and all disputes, grievances or problems arising
from or affecting labor management relations," making no
reference whatsoever to any such 30%-support requirement.
Indeed, the officials mentioned are given the power to act "on all
inter-union and intra-union conflicts (1) "upon request of either or
both parties" as well as (2) "at their own initiative."  Pambansang Diwa Ng Manggagawang Pilipino (SMPPEU-PDMP) is
Page 2 of 14
2. 20% ASSENT OF EMPLOYEES ON REGISTRATION OF
INDEPENDENT LABOR ORGANIZATION/CHARTERING BY
TRADE UNION CENTER
SAN MIGUEL CORPORATION EMPLOYEES UNION–PHILIPPINE
TRANSPORT AND GENERAL WORKERS ORGANIZATION
(SMCEU–PTGWO), petitioner, vs. SAN MIGUEL PACKAGING
PRODUCTS EMPLOYEES UNION–PAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEU–PDMP), respondent. 1 [G.R.
No. 171153. September 12, 2007.]
FACTS: Petitioner San Miguel Corporation Employees Union-Philippine
Transport and General Workers Organisation (SMCEU-PTGWO) is the
incumbent bargaining agent for the bargaining unit comprised of the
regular monthly-paid rank and file employees of the three divisions of
San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff
Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San
Miguel Packaging Products (SMPP), in all offices and plants of SMC,
including the Metal Closure and Lithography Plant in Laguna. It had
been the certified bargaining agent for 20 years — from 1987 to 1997.
Respondent San Miguel Packaging Products Employees Union-
registered as a chapter of Pambansang Diwa ng Manggagawang
Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to SMPPEU-
PDMP on 15 June 1999. In compliance with registration
requirements, SMPPEU-PDMP submitted the requisite documents to
the BLR for the purpose of acquiring legal personality. Upon submission
of its charter certificate and other documents,SMPPEU-PDMP was
issued Certficate of Creation of Local or Chapter PDMP-01 by the BLR
on 6 July 1999. Thereafter, SMPPEU-PDMP filed with the Med-Arbiter
of the DOLE Regional Officer in the National Capital Region (DOLE-
NCR), three separate petitions for certification election to represent
SMPP, SMCSU, and SMBP. All three petitions were dismissed, on the
ground that the separate petitions fragmented a single bargaining unit.
On 17 August 1999, SMCEU-PTGWO filed with the DOLE-NCR a
petition seeking the cancellation of SMPPEU-PDMP's registration and
LABOR RELATIONS FEB 19 DIGESTS
its dropping from the rolls of legitimate labor organizations. In its
petition, SMCEU-PTGWO accused SMPPEU-PDMP of committing
fraud and falsification, and non-compliance with registration
requirements in obtaining its certificate of registration. It raised
allegations that SMPPEU-PDMP violated Articles 239 (a), (b) and (c) 10
and 234 (c) 11 of the Labor Code. Moreover, SMCEU-PTGWO claimed
that PDMP is not a legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or chapter. The petition
was docketed as Case No. NCR-OD- 9908-007-IRD.  requirements:
DOLE-NCR RULING: Found that SMPPEU-PDMP did not comply with
the 20% membership requirement and, thus, ordered the cancellation
of its certificate of registration and removal from the rolls of legitimate
labor organizations.  the labor organization, the minutes of the organizational meetings and
BLR RULING: Reversed the Regional Director's ruling that the 20%
membership is a requirement for respondent to attain legal personality
as a labor organization. As a chartered local union, appellant is not
required to submit the number of employees and names of all its
members comprising at least 20% of the employees in the bargaining
unit where it seeks to operate. Thus, the revocation of its registration
based on non-compliance with the 20% membership requirement does
not have any basis in the rules. Further, although PDMP is considered
as a trade union center, it is a holder of Registration Certificate No.
FED-11558-LC issued by the BLR on 14 February 1991, which
bestowed upon it the status of a legitimate labor organization with all
the rights and privileges to act as representative of its members for
purposes of collective bargaining agreement. On this basis, PDMP can
charter or create a local, in accordance with the provisions of
Department Order No. 9.
CA RULING: Dismissed the petition and affirmed BLR’s
decision. Under the rules we have reviewed, there is no need for
SMPPEU to show a membership of 20% of the employees of the
bargaining unit in order to be recognized as a legitimate labor union.
Page 3 of 14
PETITIONER’S CONTENTION: SMCEU-PTGWO posits
that SMPPEU-PDMP is required to submit a list of members comprising
at least 20% of the employees in the bargaining unit before it may
acquire legitimacy, citing Article 234 (c) of the Labor Code which
stipulates that any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to
the rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following
 
a. Fifty pesos (P50.00) registration fee;
b. The names of its officers, their addresses, the principal address of
the list of the workers who participated in such meetings;
c. The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
d. If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
e. Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification and the list of the members who
participated in it. 
Petitioner also insists that the 20% requirement for registration of
respondent must be based not on the number of employees of a single
division, but in all three divisions of the company in all the offices and
plants of SMC since they are all part of one bargaining unit. Petitioner
refers to Section 1, Article 1 of the Collective Bargaining Agreement
(CBA), quoted hereunder: 
ARTICLE 1 - SCOPE
LABOR RELATIONS FEB 19 DIGESTS
Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit
covered by this Agreement consists of all regular rank and le
employees paid on the basis of xed salary per month and employed by
the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing
Products (SMBP) and San Miguel Packaging Products (SMPP) and in
different operations existing in the City of Manila and suburbs, including
Metal Closure and Lithography Plant located at Canlubang, Laguna
subject to the provisions of Article XV of this Agreement provided
however, that if during the term of this Agreement, a plant within the
territory covered by this Agreement is transferred outside but within a
radius of fifty (50) kilometers from the Rizal Monument, Rizal Park,
Metro Manila, the employees in the transferred plant shall remain in the
bargaining unit covered by this Agreement. (Emphasis supplied.)
SMCEU-PTGWO thus maintains that SMPPEU-PDMP, in any case,
failed to meet this 20% membership requirement since it based its
membership on the number of employees of a single division only,
namely, the SMPP.  independent labor organization acquires legitimacy only upon its
ISSUE: Whether SMPPEU-PDMP should first comply with the 20%
assent of employees on its registration as an independent labor
organisation by trade union center?
RULING: YES, SMPPEU-PDMP should first comply with the 20%
assent of employees on its registration as an independent labor
organisation by trade union center.  In sum, although PDMP as a
trade union center is a legitimate labor organization, it has no
power to directly create a local or chapter. Thus, SMPPEU-PDMP
cannot be created under the more lenient requirements for
chartering, but must have complied with the more stringent rules
for creation and registration of an independent union, including
the 20% membership requirement. When an unregistered union
becomes a branch, local or chapter, some of the requirements for
registration are no longer necessary or compulsory. Whereas an
applicant for registration of an independent union is mandated to
submit, among other things, the number of employees and names
Page 4 of 14
of all its members comprising at least 20% of the employees in the
bargaining unit where it seeks to operate.
A perusal of the records reveals that respondent is registered with the
BLR as a local or chapter of PDMP. The applicable Implementing Rules
(Department Order No. 9) enunciates a two-fold procedure for the
creation of a chapter or a local. The first involves the affiliation of an
independent union with a federation or national union or industry union.
The second, finding application in the instant petition, involves the
direct creation of a local or a chapter through the process of chartering.
The Implementing Rules stipulate that a local or chapter may be directly
created by a federation or national union.
Petitioner insists that Section 3 of the Implementing Rules, as amended
by Department Order No. 9, violated Article 234 of the Labor Code
when it provided for less stringent requirements for the creation of a
chapter or local. Article 234 of the Labor Code provides that an
registration with the BLR: xxx 3) The names of all its members
comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate; xxx
It is emphasized that the foregoing pertains to the registration of an
independent labor organization, association or group of unions or
workers.
However, the creation of a branch, local or chapter is treated differently.
This Court, in the landmark case of Progressive Development
Corporation v. Secretary, Department of Labor and Employment,
declared that when an unregistered union becomes a branch, local or
chapter, some of the aforementioned requirements for registration are
no longer necessary or compulsory. Whereas an applicant for
registration of an independent union is mandated to submit, among
other things, the number of employees and names of all its members
comprising at least 20% of the employees in the bargaining unit where
it seeks to operate, as provided under Article 234 of the Labor Code
and Section 2 of Rule III, Book V of the Implementing Rules, the same
LABOR RELATIONS FEB 19 DIGESTS
is no longer required of a branch, local or chapter. The intent of the law
in imposing less requirements in the case of a branch or local of a
registered federation or national union is to encourage the affiliation of
a local union with a federation or national union in order to increase the
local unions bargaining powers respecting terms and conditions of
labor.
3. INDIVIDUAL AUTHORIZATION OF EMPLOYEE
MANDATORY/PAYMENT OF ATTORNEY’S FEES
EDUARDO J. MARIÑO, JR., MA. MELVYN P. ALAMIS, NORMA P.
COLLANTES, and FERNANDO PEDROSA, petitioners, vs. GIL
Y. GAMILLA, RENE LUIS TADLE, NORMA S. CALAGUAS, MA.
LOURDES C. MEDINA, EDNA B. SANCHEZ, REMEDIOS GARCIA,
MAFEL YSRAEL, ZAIDA GAMILLA, and AURORA
DOMINGO,respondents. [G.R. No. 149763. July 7, 2009.]
FACTS: Petitioners Atty. Eduardo J. Mariño, Jr., Ma. Melvyn P. Alamis,
Norma P. Collantes, and Fernando Pedrosa were among the executive
officers and directors (collectively called the Mariño Group) of the
University of Sto. Tomas Faculty Union (USTFU), a labor union duly
organized and registered under the laws of the Republic of the
Philippines and the bargaining representative of the faculty members of
the University of Santo Tomas (UST).  members belonging to the collective bargaining unit. The P4.2 million
Respondents Gil Y. Gamilla, Rene Luis Tadle, Norma S. Calaguas, Ma.
Lourdes C. Medina, Edna B. Sanchez, Remedios Garcia, Mafel Ysrael,
Zaida Gamilla, and Aurora Domingo were UST professors and USTFU
members.
The 1986 Collective Bargaining Agreement (CBA) between UST and
USTFU expired on 31 May 1988. Thereafter, bargaining negotiations
ensued between UST and the Mariño Group, which represented
USTFU. As the parties were not able to reach an agreement despite
their earnest efforts, a bargaining deadlock was declared and USTFU
filed a notice of strike. Subsequently, then Secretary of the Department
of Labor and Employment (DOLE) Franklin Drilon assumed jurisdiction
Page 5 of 14
over the dispute, which was docketed as NCMB-NCR-NS-02-117-89.
The DOLE Secretary issued an Order on 19 October 1990, laying the
terms and conditions for a new CBA between the UST and USTFU. In
accordance with said Order, the UST and USTFU entered into a CBA in
1991, which was to be effective for the period of 1 June 1988 to 31 May
1993 (hereinafter 1988-1993 CBA). In keeping with Article 253-A of the
Labor Code, as amended, the economic provisions of the 1988-1993
CBA were subject to renegotiation for the fourth and fifth years.
Accordingly, on 10 September 1992, UST and USTFU executed a
Memorandum of Agreement (MOA), whereby UST faculty members
belonging to the collective bargaining unit were granted additional
economic benefits for the fourth and fifth years of the 1988-1993 CBA,
specifically, the period from 1 June 1992 up to 31 May 1993.
On 12 September 1992, the majority of USTFU members signed
individual instruments of ratification, which purportedly signified their
consent to the economic benefits granted under the MOA = a check-off
of ten percent thereof covering union dues, and special assessment for
Labor Education Fund and attorney's fees from USTFU members and
agency fee from non-members
USTFU, through its President, petitioner Atty. Mariño, wrote a
letter dated 1 October 1992 to the UST Treasurer requesting the
release to the union of the sum of P4.2 million, which was 10% of the
P42 million economic benefits package granted by the MOA to faculty
was sought by USTFU in consideration of its efforts in obtaining the
said P42 million economic benefits package. UST remitted the sum of
P4.2 million to USTFU on 9 October 1992. 
After deducting from the P42 million economic benefits package the
P4.2 million check-off to USTFU, the amounts owed to UST, and the
salary increases and bonuses of the covered faculty members, a net
amount of P6,389,145.04 remained. The remaining amount was
distributed to the faculty members on 18 November 1994.
LABOR RELATIONS FEB 19 DIGESTS
On 15 December 1994, Gamilla and the others filed with the Med-
Arbiter, DOLE-National Capital Region (NCR), a Complaint for the
expulsion of the Mariño Group as USTFU officers and directors, which
was docketed as Case No. NCR-OD-M-9412-022. Respondents
alleged in their Complaint that the Mariño Group violated the rights and
conditions of membership in USTFU, particularly by: 1) investing the
unspent balance of the P42 million economic benefits package given by
UST without prior approval of the general membership; 2)
simultaneously holding elections viva voce; 3) ratifying the CBA
involving the P42 million economic benefits package; and 4) approving
the attorney's/agency fees worth P4.2 million in the form of check-off.
Respondents prayed that the Mariño Group be declared jointly and
severally liable for refunding all collected attorney's/agency fees from
individual members of USTFU and the collective bargaining unit; and
that, after due hearing, the Mariño group be expelled as USTFU officers
and directors.
DOLE-NCR RULING: In favor of Gamilla. It ordered the following:
a) Expelling [the Mariño Group] from their positions as officers of
USTFU, and hereby order them under pain of contempt, to cease and
desist from performing acts as such officers;
b) Ordering [the Mariño Group] to jointly and severally refund to USTFU
the amount of P4.2 M checked-off as attorney's fees from the P42 M
economic package;
c) Ordering [the Mariño Group] to account for:
c.1) P2.0 M paid to USTFU in satisfaction of the remaining obligation of
the University under the 1986 CBA;
c.2) P7.0 M as consideration of the Compromise Agreement entered
into by USTFU involving certain labor cases;
Page 6 of 14
c.3) Interest/earnings of the P9,766,570.01 balance of the P42 M
invested/deposited by [the Mariño Group] with the PCI Capital
Corporation.
d) Ordering conduct of election of Union officers under the supervision
of this Department. 
BLR RULING: The BLR found no basis for the order of the DOLE-NCR
Regional Director to the Mariño Group to account for the amounts of P2
million and P7 million supposedly paid by UST to USTFU. The BLR,
however, agreed in the finding of the DOLE-NCR Regional Director that
the P42 million economic benefits package was sourced from the
faculty members' share in the tuition fee increases under Republic Act
No. 6728. Under said law, 70% of tuition fee increases shall go to the
payment of salaries, wages, allowances, and other benefits of teaching
and non-teaching personnel. BLR further reasoned that the P4.2 million
collected by the Mariño Group was in the nature of attorney's fees or
negotiation fees and, therefore, fell under the general prohibition
against such fees in Article 222 (b)33 of the Labor Code, as amended.
Also, the exception to charging against union funds was not applicable
because the P42 million economic benefits package under the 10
September 1992 MOA was not union fund, as the same was intended
not for the union coffers, but for the members of the entire bargaining
unit. The fact that the P4.2 million check-off was approved by the
majority of USTFU members was immaterial in view of the clear
command of Article 222 (b) that any contract, agreement, or
arrangement of any sort, contrary to the prohibition contained therein,
shall be null and void.
CA RULING: Affirmed BLR’s ruling.
PETITIONER’S CONTENTION: Mariño contends that the P4.2 million
check-off, from the P42 million economic benfits package, was lawfully
made since the requirements of Article 222 (b) of the Labor Code, as
amended, were complied with by the Mariño Group. The individual
paychecks of the covered faculty employees were not reduced and the
P4.2 million deducted from the P42 million economic benefits package
LABOR RELATIONS FEB 19 DIGESTS
became union funds, which were then used to pay attorney's fees,
negotiation fees, and similar charges arising from the CBA. In addition,
the P4.2 million constituted a special assessment upon the USTFU
members, the requirements for which were properly observed. The
special assessment was authorized in writing by the general
membership of USTFU during a meeting in which it was included as an
item in the agenda. Petitioners fault the Court of Appeals for
disregarding the authorization of the special assessment by USTFU
members. There is no law that prohibits the insertion of a written
authorization for the special assessment in the same instrument for the
ratification of the 10 September 1992 MOA. Neither is there a law
prescribing a particular form that needs to be accomplished for the
authorization of the special assessment. The faculty members who
signed the ratification of the MOA, which included the authorization for
the special assessment, have high educational attainment, and there is
ample reason to believe that they affixed their signatures thereto with
full comprehension of what they were doing.
ISSUE: Whether the individual authorisation of employee as to their
respective 4.2 million economics benefit package and deduction as
payment of attorney’s fees from the said amount is valid?
RULING: NO, the individual authorisation of employee as to their
respective 4.2 million economics benefit package and deduction
as payment of attorney’s fees from the said amount is invalid. The
failure of the Mariño Group to strictly comply with the
requirements set forth by the Labor Code, as amended, and the
USTFU Constitution and By-Laws, invalidates the questioned
special assessment. Substantial compliance is not enough in view
of the fact that the special assessment will diminish the
compensation of the union members. Their express consent is
required, and this consent must be obtained in accordance with
the steps outlined by law, which must be followed to the letter. No
shortcuts are allowed. Viewed in this light, the Court does not
hesitate to declare as illegal the check-off of P4.2 million, from the
P42 million economic benefits package, for union dues and
special assessments for the Labor Education Fund and attorney's
Page 7 of 14
fees. Said amount rightfully belongs to and should be returned by
petitioners to the intended beneficiaries thereof, i.e., members of
the collective bargaining unit, whether or not members of USTFU.
This directive is without prejudice to the right of petitioners to
seek reimbursement from the other USTFU officers and directors,
who were part of the Mariño Group, and who were equally
responsible for the illegal check-off of the aforesaid amount.
The Court further determines that the requisites for a valid levy and
check-off of special assessments, laid down by Article 241 (n) and (o),
respectively, of the Labor Code, as amended, have not been complied
with in the case at bar. To recall, these requisites are: (1) an
authorization by a written resolution of the majority of all the union
members at the general membership meeting duly called for the
purpose; (2) secretary's record of the minutes of the meeting; and (3)
individual written authorization for check-off duly signed by the
employee concerned. 
Additionally, Section 5, Rule X of the USTFU Constitution and By-Laws
mandates that:
Section 5. Special assessments or other extraordinary fees such as for
payment of attorney's fees shall be made only upon a resolution duly
ratified by the general membership by secret balloting.
In an attempt to comply with the foregoing requirements, the Mariño
Group caused the majority of the general membership of USTFU to
individually sign a document, which embodied the ratification of the
MOA between UST and USTFU, dated 10 September 1992, as well as
the authorization for the check-off of P4.2 million, from the P42 million
economic benefits package, as payment for attorney's fees. As held by
the Court of Appeals, however, the said documents constitute
unsatisfactory compliance with the requisites set forth in the Labor
Code, as amended, and in the USTFU Constitution and By-Laws, even
though individually signed by a majority of USTFU members.
LABOR RELATIONS FEB 19 DIGESTS
The inclusion of the authorization for a check-off of union dues and
special assessments for the Labor Education Fund and attorney's fees,
in the same document for the ratification of the 10 September 1992
MOA granting the P42 million economic benefits package, necessarily
vitiated the consent of USTFU members. For sure, it is fairly reasonable
to assume that no individual member of USTFU would casually turn
down the substantial and lucrative award of P42 million in economic
benefits under the MOA. However, there was no way for any individual
union member to separate his or her consent to the ratification of the
MOA from his or her authorization of the check-off of union dues and
special assessments. As it were, the ratification of the MOA carried with
it the automatic authorization of the check-off of union dues and special
assessments in favor of the union. Such a situation militated against the
legitimacy of the authorization for the P4.2 million check-off by a
majority of USTFU membership. Although the law does not prescribe a
particular form for the written authorization for the levy or check-off of
special assessments, the authorization must, at the very least, embody
the genuine consent of the union member.
Page 8 of 14
4. WHAT IS MANDATORY ACTIVITY?
CARLOS P. GALVADORES, ET AL., petitioners, vs. CRESENCIANO
B. TRAJANO, Director of the Bureau of Labor Relations,
MANGGAGAWA NG KOMUNIKASYON SA PILIPINAS (FIWU),
PHILIPPINE LONG DISTANCE COMPANY (PLDT), and JOSE C.
ESPINAS, respondents. [G.R. No. 70067. September 15, 1986.]
FACTS: Respondent Atty Jose Espinas has been the legal counsel of
respondent Manggagawa ng Komunikasyon sa Pilipinas (FIWU) since
1964. For his services, Atty Espinas was hired on a case to case
contingent fee basis. On September 7, 1983, Atty Espinas received a
letter from the FIWU President: "The Free Telephone Workers Union
once again request you to appear as counsel in the on going labor
dispute at PLDT. In consideration of your services therein, the union
binds itself to compensate you for your fees and expenses therein on a
contingent basis. The amount shall be 10% of any improvement, with
retroactive effect, of the PLDT's last offer to the deadlock in CBA
negotiations which we know will result in a compulsory arbitration. A
supporting board resolution will later confirm the letter." PLDT's "last
offer" referred to on the wage increases was: P230 for the first year of
the proposed CBA; P100 for the second year; and P90 for the third
year. Later on, a bargaining deadlock happened between PLDT and
FIWU, which was eventually resolved by compulsory arbitration. 
On October 23, 1983, the Minister of Labor awarded across-the-board
wage increases of P330/month effective November 9, 1982; P155/
month effective November 9, 1983, and P155/month effective
November 9, 1984, in addition to the Christmas bonus of 1-1/2 month
pay per employee effective December, 1983, and other fringe benefits.
As will be noted, there were improvements obtained from PLDT's "last
offer."
On October 29, 1983, the Executive Board of the Union passed a
resolution requesting PLDT to deduct P115.00 per employee for the
legal services extended to the FIWU by Atty Espinas.
LABOR RELATIONS FEB 19 DIGESTS
On November 2, 1983, petitioner employees initially numbering 600
and finally 5,258, filed a letter-complaint before the Ministry of Labor
and Employment through their authorized representative, petitioner
Carlos Galvadores, assailing the imposition of P130.00 (later corrected
P155.00) per employee as attorney's fees of respondent counsel.
Annexed to the complaint were the written statements of the employee
authorizing Galvadores to act for and in their behalf. The employees
took the position that the attorney's fees of Atty Espinas were not only
unreasonable but also violative of Article 242(o) of the Labor Code; and
that the deductions cannot be given legal effect by a mere Board
resolution but needs the ratification by the general membership of the
Union.
FIWU and Atty Espinas, on the other hand, proferred the argument that
the attorney's fees being exacted pertained to his services during
compulsory arbitration proceedings and cannot be considered as
negotiation fees or attorney's fees within the context of Article 242(o) of
the Labor Code; and that contrary to petitioner employees' claim that
Atty Espinas surfaced only as lawyer of the Union when the employees
themselves engaged in mass action to force a solution to the deadlock
in their negotiations, he appeared continuously from September 8, 1983
until the decision in the case was rendered on October 23, 1983.
Petitioner employees proposed a solution offering to pay P10.00 per
employee, but Atty Espinas refused.
In the meantime, on November 4, 1983, PLDT filed notice that
assessment had been withheld from the differential pay due petitioners
but that the same would not be turned over to the Union without prior
MOLE authority so as not to involve management in the intra-union
disagreement.
On February 13, 1984, the Minister of Labor referred the dispute to the
Bureau of Labor Relations for being intra-union in nature. Several
hearings were held by that Bureau.
On March 22, 1984, the Union filed a Manifestation to the effect that
about 6,067 members of the Union ratified the October 29, 1983
Page 9 of 14
resolution of the legislative council in a plebiscite called for that
purpose. On the basis thereof, Atty Espinas moved for the payment of
his legal fees under the September 7, 1983 contract.
Petitioners questioned the plebiscite on the ground that question No. 2,
which reads:
"Question No. 2. Do you approve of the use of P1 million (P500,000.00
to be withdrawn from PECCI and another P500,000.00 from IBAA) from
our CBA negotiation fund together with the attorney's fees (P1 million)
that was collected and to be loaned to the MKP/FTWU, as our
counterpart of the seed money to start the housing program as agreed
by the PLDT management and our union panel and included in the
award of the MOLE?"
was misleading and deceptive as it assumed that there was no dispute
regarding the deduction of attorney's fees from the monetary benefits
awarded to PLDT employees.
BLR RULING: Dismissed petitioners' complaint for lack of merit
reasoning that "the outcome of the plebiscite negates any further
question on the right of the union counsel to collect the amount of P115
from each of the employees involved."
It is this Decision that is assailed by petitioners principally on the
ground that the individual written authorization of all the employees
must first be obtained before any assessment can be made against the
monetary benefits awarded to them pursuant to Article 242(o) of the
Labor Code; and that assuming that Respondent Counsel is entitled to
attorney's fees, the same should be taken from Union funds.
In their Comment, respondents Union and Counsel argue that
compulsory arbitration is a "mandatory activity" and an exception to
Article 242 (o) of the Labor Code, and that the Union members
approved the questioned deduction in the plebiscite of January, 1984,
under the condition that P1 M of the same would be made available for
the Union's housing project.
LABOR RELATIONS FEB 19 DIGESTS
In his Comment, the Solicitor General agrees with petitioners that the
issue presented is squarely covered by Article 222(b) of the Labor
Code, as amended by P.D. No. 1691 so that attorney's fees, if legally
payable, can only be charged against Union funds.
ISSUE: Whether compulsory arbitration constitutes as a mandatory
activity?
RULING: NO,  compulsory arbitration does not constitutes as a
mandatory activity. Contrary to respondent Union's and Counsel's
stand, the benefits awarded to PLDT employees still formed part
of the collective bargaining negotiations although placed already
under compulsory arbitration. This is not the "mandatory activity"
under the Code which dispenses with individual written
authorizations for check-offs, notwithstanding its "compulsory"
nature. It is a judicial process of settling disputes laid down by
law. Besides, Article 222 (b) does not except a CBA, later placed
under compulsory arbitration, from the ambit of its prohibition.
The cardinal principle should be borne in mind that employees are
protected by law from unwarranted practices that diminish their
compensation without their knowledge and consent.
The Court resolved to give due course. Article 222(b) of the Labor Code
provides:
"Article 222. Appearance and Fees.
 objecting. The question asked in the plebiscite, besides not being
xxx xxx xxx
"(b) No attorney's fees, negotiation fees or similar charges of any kind
arising from any collective bargaining negotiations or conclusion of the
collective bargaining agreement shall be imposed on any individual
member of the contracting union; Provided, however, that attorney's
fees may be charged against union funds in an amount to be agreed
upon by the parties. Any contract, agreement or arrangement of any
sort to the contrary shall be null and void."
While Article 242 of the same Code reads:
Page 10 of 14
"Art. 242. Rights and conditions of membership in a labor organization.
— The following are the rights and conditions of membership in a labor
organization:
"xxx xxx xxx
"(o) Other than for mandatory activities under the Code, no special
assessment, attorney's fees, negotiation fees or any other extraordinary
fees may be checked off "from any amount due an employee without
individual written authorization duly signed by the employee. The
authorization should speci cally state the amount, purpose and
beneficiary of the deduction."
The Omnibus Rules Implementing the Labor Code also provide that
deductions from wages of the employees may only be made by the
employer in cases authorized by law, including deductions for insurance
premiums advanced by the employer on behalf of the employees as
well as union dues where the right to check-off is authorized in writing
by the individual employee himself.
The provisions are clear. No check-offs from any amounts due
employees may be effected without individual written authorizations
duly signed by the employees specifically stating the amount, purpose
and beneficiary of the deduction. The required individual authorizations
in this case are wanting. In fact, petitioner employees are vigorously
explicit, assumed that there was no dispute relative to attorney's fees.

LABOR RELATIONS FEB 19 DIGESTS
AMBROCIO VENGCO, RAMON MOISES, EUGENIA REYES,
RAFAEL WAGAS and 80 others per attached
list, petitioners, vs. HON. CRESENCIO B. TRAJANO, in his capacity
as Director of the Bureau of Labor Relations and EMMANUEL
TIMBUNGCO, respondents. [G.R. No. 74453. May 5, 1989.]
FACTS: Sometime in the latter part of 1981, the Management of the
Anglo-American Tobacco Corporation and the Kapisanan ng
Manggagawa sa Anglo-American Tobacco Corporation. (FOI-TAF)
entered into a compromise agreement whereby the company will pay to
the union members the sum of P150,000.00 for their claims arising from
the unpaid emergency cost of living allowance (ECOLA) and other
benefits which were the subject of their compliant before the Ministry of
Labor. Respondent Emmanuel Timbungco (Timbungco) who is the
union president received the money which was paid in installments.
Thereafter, Timbungco distributed the amount among the union
members. Petitioners Ambrocio Vengco, Ramon Moises, Rafael Wagas
and 80 others (Vengco, et al.) who are union members noted that
Timbungco was not authorized by the union workers to get the money;
and that ten percent (10%) of the P150,000.00 had been deducted to
pay for attorney's fees without their written authorization in violation of
Article 242(o) of the Labor Code. So, they demanded from Timbungco
an accounting of how the P150,000.00 was distributed to the members.
Timbungco did not give in to their demand. Thus Vengco, et al. led a
complaint with the Ministry of Labor praying for: "(1) the expulsion of
Timbungco as president of the union for violation of (the) union
constitution and by-laws and the rights and conditions of union
members under the Labor Code; (2) an order to require Timbungco to
render an accounting of how the P150,000.00 was distributed; and (3)
an order to require private respondent to publish in the bulletin board
the list of the members and the corresponding amount they each
received from the P150,000.00." (Memorandum for Petitioners, p. 150,
Rollo).
In his answer with counterclaim, Timbungco alleged among others, that
he was authorized by a resolution signed by the majority of the union
members to receive and distribute the P150,000.00 among the workers;
Page 11 of 14
that the computation of the benefits was based on the payroll of the
company; that the ten percent (10%) attorney's fees was in relation to
the claim of the local union for payment of emergency cost of living
allowance before the Ministry of Labor which is totally distinct and
separate from the negotiation of the CBA; and that the ten percent
(10%) deduction was in accordance with Section II, Rule No. VIII, Book
No. III of the Rules and Regulations implementing the Labor Code and
therefore, no authorization from the union members is required.
MED-ARBITER RULING: In favor of Timbungco. Issued an Order
dismissing the complaint for lack of merit.
Vengco, et al. appealed the aforesaid order to the Bureau of Labor
Relations.
BLR RULING: In favor of Vengco. Reversed the Med-Arbiter's Order.
Accordingly, respondent Emmanuel Timbungco is hereby ordered to
render a full accounting of the One Hundred Fifty Thousand Pesos
(P150,000.00) he received from the management of Anglo-American
Tobacco Corporation in behalf of the members of the Kapisanan ng
mga Manggagawa sa Associated Anglo-American Tobacco Corporation
(FOITAF) and to publish in the union's bulletin board the list of all
recipient union members and the respective amounts they have
received, within ten (10) days from receipt hereof. Further, Timbungco
is hereby expelled as president of the Kapisanan ng Manggagawa sa
Anglo American Tobacco Corporation (FOITAF). Lastly, the
counterclaim interposed by the Timbungco's counsel, Atty. Benjamin
Sebastian is hereby ordered dismissed.
In his comment, Timbungco reiterates the defenses he raised in his
answer to the complaint filed against him before the Med-Arbiter. In
addition, Timbungco claims that he already filed an accounting report
on the P150,000.00 with the Bureau of Labor Relations which
enumerated the names of the workers and the corresponding amounts
they received with their respective signatures opposite their names, the
sub-total of the amount of benefits received per department and the
grand total of the amount distributed duly certified by the Union
LABOR RELATIONS FEB 19 DIGESTS
Treasurer and Secretary and duly noted by Timbungco as Union
President.
The Solicitor General, in his comment, agrees with Vengco, et al. and
recommends that the petition be given due course.
ISSUE: Whether the amicable settlement entered into by the parties is
considered mandatory activity?
RULING: NO, the amicable settlement entered into by the parties is
not considered mandatory activity. In the instant case, the
amicable settlement entered into by the management and the
union can not be considered as a mandatory activity under the
Code. It is true that the union filed a claim for emergency cost of
living allowance and other benefits before the Ministry of Labor.
But this case never reached its conclusion in view of the parties'
agreement. It is not also shown from the records that Atty.
Benjamin Sebastian was instrumental in forging the said
agreement on behalf of the union members.
It is very clear from the above-quoted provision that attorney's fees may
not be deducted or checked off from any amount due to an employee
without his written consent except for mandatory activities under the
Code. A mandatory activity has been defined as a judicial process of
settling dispute laid down by the law. (Carlos P. Galvadores, et al. vs.
Cresenciano B. Trajano, Director of the Bureau of Labor Relations, et
al., G.R. No. L-70067, September 15, 1986, 144 SCRA 138).  proceedings, the law allows a deduction for attorney's fees of 10% from
Timbungco maintains that the "Kapasiyahan" gave him the authority to
make the deduction. This contention is unfounded. Contrary to his
claim, the undated "Kapasiyahan" or resolution did not confer upon him
the power to deduct 10% of the P150,000.00 despite the alleged
approval of the majority of the union workers. Likewise,the other
"Kapasiyahan" dated September 18, 1981 submitted by Timbungco
belied his claim that he was authorized by the union workers to receive
the sum of P150,000.00 on their behalf. Moreover, the law is explicit. It
Page 12 of 14
requires the individual written authorization of each employee
concerned, to make the deduction of attorney's fees valid.
The pertinent portion of the said "Kapasiyahan" provides:
"3. Na sa dahilang hindi bigla ang pagbabayad sa nasabing "CLAIM"
bukod pa sa marami kaming naghati-hati sa nasabing halaga
ipinapasiya naming na kusang-loob na kunin ang aming bahagi sa
aming kapisanan sa unang linggo ng Disyembre, 1981 at ito'y
ipinaalam namin sa Pangulo ng Kapisanan na si Ginoong Emmanuel
Timbungco." (p. 47, Rollo)
The above-quoted statement merely indicated the intention of the
workers to get their claim on the first week of December, 1981 and to
inform Timbungco of their intention. Clearly, this statement can not be
construed to confer upon Timbungco the authority to receive the fringe
benefits for the workers. Absent such authority, Timbungco should not
have kept the money to himself but should have turned it over to the
Union Treasurer. He, therefore, exceeded his authority as President of
the Union.LLjur
Moreover, Book III, Rule VIII, Section II of the Implementing Rules cited
by Timbungco which dispenses with the required written authorization
from the employees concerned does not apply in this case. This
provision envisions a situation where there is a judicial or administrative
proceedings for recovery of wages. Upon termination of the
the total amount due to a winning party. In the herein case, the fringe
benefits received by the union members consist of back payments of
their unpaid emergency cost of living allowances which are totally
distinct from their wages. Allowances are benefits over and above the
basic salaries of the employees (University of Pangasinan Faculty
Union vs. University of Pangasinan, G.R. No. L-63122, February 20,
1984, 127 SCRA 691). We have held that such allowances are
excluded from the concept of salaries or wages (Cebu Institute of
Technology (CIT) vs. Ople, G.R. No. L-58870, December 18, 1987, 156
SCRA 629). In addition, the payment of the fringe benefits were
LABOR RELATIONS FEB 19 DIGESTS
effected through an amicable settlement and not in an administrative
proceeding.
The submission by Timbungco of an accounting report on the
distribution of P150,000.00 is of no moment in the face of our findings
that the deduction of 10% for attorney's fees is illegal and void for
failure to comply with the requirements of the law.
5. POWER OF UNION TO REPRESENT ITS MEMBERS IN
LABOR CASES
JERRY E. ACEDERA, ANTONIO PARILLA, AND OTHERS LISTED IN
ANNEX "A," 1 petitioners-appellants, vs. INTERNATIONAL
CONTAINER TERMINAL SERVICES, INC. (ICTSI), NATIONAL
LABOR RELATIONS COMMISSION and HON. COURT OF
APPEALS, respondents-appellants. [G.R. No. 146073. January 13,
2003.]
FACTS: Petitioners-appellants Jerry Acedera,et al. are employees of
herein private respondent International Container Terminal Services,
Inc. (ICTSI) and are officers/members of Associated Port Checkers &
Workers Union-International Container Terminal Services, Inc. Local
Chapter (APCWU-ICTSI), a labor organization duly registered as a
local affiliate of the Associated Port Checkers & Workers Union
(APCWU). When ICTSI started its operations in 1988, it determined the
rate of pay of its employees by using 304 days, the number of days of
work of the employees in a year, as divisor. On September 28, 1990,
ICTSI entered into its two successive Collective Bargaining Agreement
(CBA) with APCWU, each CBA with a term of five years. In accordance
with the above-quoted provision of the CBA, the employees' work week
was reduced to five days or a total of 250 days a year. ICTSI, however,
continued using the 304-day divisor in computing the wages of the
employees.
On November 10, 1990, the Regional Tripartite Wage and Productivity
Board (RTWPB) in the National Capital Region decreed a P17.00 daily
Page 13 of 14
wage increase for all workers and employees receiving P125.00 per
day or lower in the National Capital Region. The then president of
APCWU, together with some union members, thus requested the
ICTSI's Human Resource Department/Personnel Manager to compute
the actual monthly increase in the employees' wages by multiplying the
RTWPB mandated increase by 365 days and dividing the product by 12
months, to which ICTSI heeded and stopped using 304 days as divisor
and started using 365 days in determining the daily wage of its
employees and other consequential compensation, even if the
employees' work week consisted of only five days as agreed upon in
the CBA.
In early 1997, ICTSI went on a retrenchment program and laid off its
on-call employees. This prompted the APCWU-ICTSI to file a notice of
strike which included as cause of action not only the retrenchment of
the employees but also ICTSI's use of 365 days as divisor in the
computation of wages. The dispute respecting the retrenchment was
resolved by a compromise settlement while that respecting the
computation of wages was referred to the Labor Arbiter.
On February 26, 1997, APCWU, on behalf of its members and other
employees similarly situated, filed with the Labor Arbiter a complaint
against ICTSI which was dismissed for APCWU's failure to file its
position paper. Upon the demand of herein petitioners-appellants,
APCWU filed a motion to revive the case which was granted. APCWU
thereupon filed its position paper on August 22, 1997. On December 8,
1997, petitioners-appellants filed with the Labor Arbiter a Complaint-in-
Intervention with Motion to Intervene.
LA RULING: It denied petitioners-appellants' Complaint-in- Intervention
with Motion for Intervention upon a finding that they are already well
represented by APCWU.
NLRC RULING: Reversed the LA’s ruling and dismissed APCWU's
complaint for lack of merit. The denial of petitioners-appellants'
intervention was, however, affirmed.
LABOR RELATIONS FEB 19 DIGESTS
CA RULING: Dismissed APCWU's petition on the following grounds:
failure to allege when its motion for reconsideration of the NLRC
decision was led, failure to attach the necessary appendices to the
petition, and failure to file its motion for extension to file its petition
within the reglementary period.
PETITIONER’S CONTENTIONS: Petitioners-appellants anchor their
right to intervene on Rule 19 of the 1997 Rules of Civil Procedure,
Section 1 of which reads:
Section 1. Who may intervene. — A person who has legal interest in the
matter in litigation, or in the success of either of the parties, or an
interest against both, or is so situated to be adversely affected by a
distribution or other disposition of property in the custody of the court or
of an o cer thereof may, with leave of court, be allowed to intervene in
the action. The court shall consider whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original
parties, and whether or not the intervenor's right may be fully protected
in a separate proceeding.
They stress that they have complied with the requisites for intervention
because (1) they are the ones who stand to gain or lose by the direct
legal operation and effect of any judgment that may be rendered in this
case; (2) no undue delay or prejudice would result from their
intervention since their Complaint-in-Intervention with Motion for
Intervention was filed while the Labor Arbiter was still hearing the case
and before any decision thereon was rendered; and (3) it was not
possible for them to le a separate case as they would be guilty of forum
shopping because the only forum available for them was the Labor
Arbiter.
ISSUE: Whether the members of APCWU may be permitted to
intervene even if the APCWU is already representing them?
RULING: NO, the members of APCWU may not be permitted to
intervene even if the APCWU is already representing them. To
reiterate, for a member of a class to be permitted to intervene in a
Page 14 of 14
representative action, fraud or collusion or lack of good faith on
the part of the representative must be proven. It must be based on
facts borne on record. Mere assertions, as what petitioners-
appellants proffer, do not suffice.
 A labor union is one such party authorized to represent its members
under Article 242(a) of the Labor Code which provides that a union may
act as the representative of its members for the purpose of collective
bargaining. This authority includes the power to represent its members
for the purpose of enforcing the provisions of the CBA. That APCWU
acted in a representative capacity "for and in behalf of its Union
members and other employees similarly situated," the title of the case
led by it at the Labor Arbiter's Office so expressly states.
While a party acting in a representative capacity, such as a union, may
be permitted to intervene in a case, ordinarily, a person whose interests
are already represented will not be permitted to do the same except
when there is a suggestion of fraud or collusion or that the
representative will not act in good faith for the protection of all interests
represented by him.
Petitioners-appellants cite the dismissal of the case led by ICTSI, first
by the Labor Arbiter, and later by the Court of Appeals. The dismissal of
the case does not, however, by itself show the existence of fraud or
collusion or a lack of good faith on the part of APCWU. There must be
clear and convincing evidence of fraud or collusion or lack of good faith
independently of the dismissal. This, petitioners-appellants failed to
proffer. Petitioners-appellants likewise express their fear that APCWU
would not prosecute the case diligently because of its "sweetheart
relationship" with ICTSI. There is nothing on record, however, to
support this alleged relationship which allegation surfaces as a mere
afterthought because it was never raised early on. It was raised only in
petitioners- appellants' reply to ICTSI's comment in the petition at bar,
the last pleading submitted to this Court, which was led on June 20,
2001 or more than 42 months after petitioners- appellants led their
Complaint-in-Intervention with Motion to Intervene with the Labor
Arbiter.