G.R. No.

152322

February 15, 2005

2. Creating distrust or loss of trust and confidence of members in the Association; 3. Creating dissension among the members; 4. Circulating false rumors about the work of the Association or sabotaging the same; 5. Withholding from the Association and/or members material information as to their rightful entitlement to benefits and/or money claims; 6. Acting as a spy against the Association or divulging confidential matters to persons not entitled thereto; 7. Such other offenses, which may injure or disrupt the functions of the Association.4 Through a collective reply dated 19 September 1997, private respondents denied the allegations. Thereafter, on 23 September 1997, they sent a letter dated 22 September 1997 to the Chairman and Members of UEEAs Disciplinary Committee, informing them that the Memorandum of 15 September 1997 was vague and without legal basis, therefore, no intelligent answer may be made by them. They likewise stated that any sanction that will be imposed by the committee would be violative of their right to due process.5 The Disciplinary Committee issued another Memorandum, dated 24 September 1997, giving the respondents another seventy-two hours from receipt within which to properly reply, explaining that the collective reply letter and supplemental answer which were earlier submitted were not responsive to the first Memorandum. Their failure would be construed as an admission of the truthfulness and veracity of the charges.6 On 01 October 1997, the respondents issued a denial for the second time, and inquired from the Disciplinary Committee as to whether they were being formally charged.7 On 09 October 1997, Ernesto Verceles, in his capacity as president of the association, through a Memorandum, informed Rodel

ERNESTO C. VERCELES, DIOSDADO F. TRINIDAD, SALVADOR G. BLANCIA, ROSEMARIE DE LUMBAN, FELICITAS F. RAMOS, MIGUEL TEAO, 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. DECISION CHICO-NAZARIO, J.: Before Us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Decision1 and Resolution2 rendered by the Court of Appeals, dated 24 October 2001 and 15 February 2002, respectively. The 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. They were given seventy-two hours from receipt of the Memorandum to submit their Answer.3 The acts of the respondents allegedly fall under General Assembly Resolution No. 4, Series of 1979, to wit: 1. Circulating false rumors about the progress of the negotiations for collective bargaining;

Dalupan, et al., 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 committees finding of aprima facie case against them.8 Respondent Ricardo Uy also received a similar memorandum on 03 November 1997.9 On 01 December 1997, a complaint10 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 respondents against herein petitioners Ernesto C. Verceles, Diosdado F. Trinidad, Salvador G. Blancia, Rosemarie De Lumban, Felicitas Ramos, Miguel Teao, Jaime Bautista and Fidel Acero before the Department of Labor and Employment, National Capital Region (DOLE-NCR). A few days after the filing of the complaint, i.e., on 10 December 1997, a resolution11 was passed by UEEA which reads as follows: RESOLUTION WHEREAS, the Association has gone thru a most arduous, difficult, and trying times in working to obtain the best terms and conditions of employment for its members, specifically for the period 1992 to 1996; WHEREAS, said difficulties are in the form of near strikes, cases with the Department of Labor and Employment and its agencies, as well as with the Supreme Court; WHEREAS, the general membership (has) shown exceptional patience and perseverance and generally (had) demonstrated full trust and confidence in the Association officers and accordingly approved the manner and/or actions undertaken in pursuing said difficult task of arriving at a most beneficial agreement for the general membership; NOW, THEREFORE, be it resolved as it is hereby resolved that: ...

b) the general membership reiterate its loyalty to the Association and commends the Association officers for their effort expended in working for the benefit of the whole membership. APPROVED. Manila. 10 December 1997. On 22 November 1999, a decision12 was rendered by Regional Director Maximo B. Lim, adverse to petitioners, the dispositive portion of which reads: WHEREFORE, premises considered, respondent[s] [are] hereby ordered: 1. to immediately lift suspension imposed upon the complainants; 2. to hold a general membership meeting wherein they (respondents) make open and available the unions/associations books of accounts and other documents pertaining to the union funds [and] thereby explain the financial status of the union; 3. to regularly conduct special and general membership meetings in accordance with the unions constitution and bylaws; 4. to immediately hold/conduct an election of officers in accordance with the unions constitution and by-laws. Accordingly, the claims of complainants for damages [are] hereby ordered dismissed for lack of jurisdiction. However, within ten (10) days upon receipt of this Order, the complainants are hereby directed to submit a written report whether or not the respondents had complied with this Order. The petitioners appealed to the Bureau of Labor Relations of the Department of Labor and Employment (BLR-DOLE). During the pendency of this appeal, or on 07 April 2000, an election of officers

was held by the UEEA. The appeal, however, was dismissed for lack of merit in a Resolution13 dated 22 September 2000, the decretal portion of which reads: WHEREFORE, the appeal is hereby DISMISSED for lack of merit and the decision dated 22 (November) 1999 of Regional Director Maximo B. Lim, DOLE-NCR, is AFFIRMED. Meanwhile, Resolution No. 8, Series of 2000, was passed by the UEEA, wherein the members allegedly reiterated their support and approval of the acts and collateral actions of the officers.14 A Motion for Reconsideration15 was filed by the petitioners with the BLR-DOLE, but was denied in a Resolution16dated 15 January 2001. A special civil action for certiorari17 was thereafter filed before the Court of Appeals citing grave abuse of discretion amounting to lack or excess of jurisdiction. In a Resolution18 dated 22 February 2001, the Court of Appeals dismissed the petition outright for failure to comply with the provisions of Section 1, Rule 65 in relation to Section 3, Rule 46 of the 1997 Rules of Civil Procedure. A Motion for Reconsideration19 was filed which was granted in a Resolution20 dated 24 April 2001, thus, reinstating the petition.1awphi1.nt On 24 October 2001, the Court of Appeals rendered a Decision21 dismissing the petition, the dispositive portion of which reads: WHEREFORE, premises considered, the instant petition is DENIED DUE COURSE and DISMISSED for lack of merit. No pronouncement as to costs. A Motion for Reconsideration22 was thereafter filed by the petitioners. In a Resolution23 dated 15 February 2002, the Court of Appeals modified its earlier decision. The decretal portion of which states: WHEREFORE, the questioned decision of this court is MODIFIED. The 22 September 2000 and 15 January 2001 resolutions of the BLR insofar as they affirmed the part of the 22 November 1999 decision of the Regional Director of DOLE-NCR ordering the immediate holding

of election are HEREBY ANNULLED AND SET ASIDE. All the other aspects of the assailed Resolutions are AFFIRMED. Not satisfied, the petitioners filed a petition for review on certiorari24 before this Court. The Issues The petitioners raise the following issues: 1. WHETHER OR NOT THERE IS REVERSIBLE ERROR IN THE COURT OF APPEALS UPHOLDING THE DOLE-NCR AND BLR-DOLE DECISIONS BASED ONLY ON THE COMPLAINT AND ANSWER; 2. WHETHER OR NOT IT IS REVERSIBLE ERROR FOR THE COURT OF APPEALS TO HOLD THE ELECTION OF APRIL 7, 2000 AS INVALID AND A NULLITY; 3. WHETHER OR NOT IT IS REVERSIBLE ERROR TO UPHOLD BLR-DOLES FINDING THAT THE SUSPENSION WAS ILLEGAL; and 4. WHETHER OR NOT THE ALLEGED NON-HOLDING OF MEETINGS AND ALLEGED NON-SUBMISSION OF REPORTS ARE MOOT AND ACADEMIC, AND WHETHER THE DECISION TO HOLD MEETINGS AND SUBMIT REPORTS CONTRADICT AND OVERRIDE THE SOVEREIGN WILL OF THE MAJORITY.25 The Courts Rulings We shall discuss the issues in seriatim. First Issue: was the court a quo correct in upholding the DOLE-NCR and BLR-DOLE decisions based only on the complaint and answer? Petitioners contend that the complaint filed by the private respondents in DOLE-NCR was a mere recital of bare, self serving and unsubstantiated allegations. Both parties did not submit position papers, and the DOLE-NCR resolved the case based only on the

complaint and answer. Also, by failing to submit a reply to the answer, private respondents, in effect admitted the petitioners controversion of the charges.26 They further argue that the private respondents did not exhaust administrative remedies and that the requirement of support by at least 30% of the members of the association pursuant to Section 1, Rule XIV, Article I, Department Order No. 9 of DOLE, was not complied with.27 Private respondents, on the other hand, assert that the records show that despite their failure to submit their position papers, they nonetheless moved that the case be resolved by DOLE-NCR based on the complaint, answer and available exhibits or annexes integrated with the aforesaid pleadings.28 The principle of nonexhaustion of administrative remedies that would warrant the dismissal of the case should not operate against them because they were deprived of their right to due process when they were indefinitely suspended without the benefit of a formal charge which is sufficient in form and substance.29 The respondents also point out that 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.30 It is worthy to note that the BLR-DOLE, in its Resolution dated 22 September 2000, underscored the negligence of herein petitioners not only in the submission of their pleadings but also in attending the hearings called for the purpose.31 Even the Court of Appeals, in its decision, made this observation, thus: It is apparent, however, that petitioners were to blame for their predicament. They repeatedly failed to appear in a series of conferences scheduled by the DOLE-NCR, asked for resetting of hearings, and requested for extension of time to file its answer. Hence, when they again did not attend a hearing on a date they themselves asked for, private respondents (complainants therein) moved for the submission of the case based on their complaint, position paper and annexes attached thereto. When DOLE-NCR directed the parties to submit their respective position papers, petitioners again moved for extension of time to file the same. When another notice was given to the parties to comply

with the directive, petitioners prayed for another extension of time. (Private respondents, however, reiterated their earlier motion to have the case resolved based on available pleadings.) After six (6) months or so, petitioners finally filed not their position paper but their answer.32 The Court of Appeals was justified in upholding the DOLE-NCR and BLR-DOLE decisions based on the complaint and answer. We cannot accept petitioners line of reasoning that since no position papers were submitted, no decision may be made by the adjudicating body. As ruled by Regional Director Maximo B. Lim in his decision, the complaint and the answer thereto were adopted as the parties position papers. Thereafter, the case shall be deemed submitted for resolution.33 Labor laws mandate the speedy disposition of cases, with the least attention to technicalities but without sacrificing the fundamental requisites of due process.34 The essence of due process is simply an opportunity to be heard.35 In this case, it cannot be said that there was a denial of due process on the part of the petitioners because they were given all the chances to refute the allegations of the private respondents, and the delay in the proceedings before the DOLE-NCR was clearly attributable to them. The argument that there was failure to exhaust administrative remedies cannot be sustained. One of the instances when the rule of exhaustion of administrative remedies may be disregarded is when there is a violation of due process.36 In this case, the respondents have chronicled from the very beginning that they were indefinitely suspended without the benefit of a formal charge sufficient in form and substance. Therefore, the rule on exhaustion of administrative remedies cannot squarely apply to them. On the matter concerning the 30% support requirement needed to report violations of rights and conditions of union membership, as found in the last paragraph of Article 241 of the Labor Code,37 we likewise cannot sanction the petitioners. We have already made our pronouncement in the case of Rodriguez v. Director, Bureau of Labor Relations38 that the 30% requirement is not mandatory. In this case, the Court, speaking through Chief Justice Andres R. Narvasa,39 held in part:

The respondent Directors 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 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 maybe 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." Second Issue: was the election held on 07 April 2000 valid or a nullity? This issue arose from the fact that the original decision of the DOLENCR dated 22 November 1999, ordered petitioners, among other things, to "immediately hold/conduct an election of officers . . ." Petitioners, it must be recalled, appealed from the DOLE-NCR decision to the BLR-DOLE. During the pendency of the appeal, however, an election of officers was held on 07 April 2000. Subsequently, the BLR-DOLE affirmed the decision of the DOLENCR, but with the pronouncement that ". . . the supposed election conducted on (07) April 2000 is null and void and cannot produce legal effects adverse to appellants."40

The petitioners contend that since the election was held on 07 April 2000, and the original complaint before the DOLE-NCR was filed on 01 December 1997, the former could not have been the subject of the complaint. There was, according to petitioners, reversible error in the BLR-DOLEs adding to the DOLE-NCRs decision, the nullification of the 07 April 2000 election. The BLRDOLE should have limited itself to affirming, modifying or setting aside and canceling the provisions of the dispositive portion of the DOLE-NCRs decision which was subject of the appeal. The election was held because the term of the petitioners (extended for five years under Republic Act No. 671541 ) expired on 07 April 2000. As amended by Republic Act 6715, paragraph (c) of Article 241 of the Labor Code now reads: (c) The members shall directly elect their officers in the local union, as well as their national officers in the national union or federation to which they or their local union is affiliated, by secret ballots at intervals of five (5) years. It just so happened that the holding of the election coincided with the DOLE-NCR decision.42 The private respondents, in answer to this, point out that the 07 April 2000 election, as appearing in the 22 September 2000 Resolution of the BLR-DOLE, was set aside not on the flimsy reason that there was no complaint to invalidate it, but due to the appeal of the petitioners questioning the BLR-DOLEs order. The appeal effectively suspended the effect of the DOLE-NCR Regional Directors order for the immediate holding of election of officers in accordance with the unions constitution and by-laws.43 On this matter, the Court of Appeals made the following observation: Consequently, the Regional Director of DOLE-NCR erred in ordering the immediate holding of election of officers of UEEA, and the Bureau of Labor Relations (BLR)-Department of Labor and Employment, insofar as it affirmed this particular order, committed an act amounting to grave abuse of discretion. Nonetheless, despite of this finding, the election of UEEA officers on 7 April 2000 cannot acquire a semblance of legality. First, it was conducted pursuant to the aforesaid (erroneous) order of the

Regional Director as manifested by the petitioners. Second, it was purposely done to pre-empt the resolution of the case by the BLR and to deprive private respondents their substantial right to participate in the election. Third, petitioners cannot be allowed to take an inconsistent position to later on claim that the election of 7 April 2000 was held because it was already due while previously declaring that it was made in line with the order of the Regional Director, for this would go against the principle of fair play. Thus, while the BLR was wrong in affirming the order of the Regional Director for the immediate holding of election, it was right in nullifying the 7 April 2000 UEEA election of officers. It was simply improper for the petitioners to implement the said order which was then one of the subjects of their appeal in the BLR. To hold otherwise would be to dispossess the BLR of its inherent power to control the conduct of the proceedings of cases pending before it for resolution.44 Based on the prevailing facts of this case, we affirm the foregoing findings of the court a quo. We cannot hold the election of 07 April 2000 valid as this would make us condone an iniquitous act. Said election was perceptibly done to hinder any resolution or decision that would be made by BLR-DOLE. The Regional Director indeed ordered the immediate holding of an election in its Order dated 22 November 1999. The records show that the petitioners questioned this order of the Regional Director before the BLR-DOLE by way of appeal,45 and yet, they conducted the election, allegedly because it was due under Republic Act No. 6715. Why this was done by the petitioners escapes us. But as rightfully observed by the BLR-DOLE: . . . Indeed, it is obvious that the general membership meeting and election of officers was done purposely to pre-empt our resolution of this case and, more importantly, the participation of appellees in the election. This cannot be tolerated.46 Third Issue: was the indefinite suspension of the private respondents illegal? We rule in the affirmative.

The petitioners posit the theory that the records do not support the findings of the BLR-DOLE that no investigation was conducted making the suspension illegal because of lack of due process. It is best to remind the petitioners that this Court, as we have held in a long line of decisions, is not a trier of facts.47 The instant case is a petition for review on certiorari48 where only questions of law may be raised. The exceptions49 to this rule find no application here. This being the case, the findings of fact of the DOLE-NCR and the BLRDOLE as affirmed by the Court of Appeals to the effect that no investigation was conducted, shall not be disturbed. As properly held by the court a quo: Petitioners have failed to show that the findings of facts and conclusions of law of both the DOLE-NCR and BLR-DOLE were arrived at with grave abuse of discretion or without substantial evidence. A careful review of the pleadings before Us reveals that the decision and resolutions of the concerned agencies were correctly anchored in law and on substantial evidence.50 Fourth Issue: is the non-holding of meetings and non-submission of reports by the petitioners moot and academic, and whether the decision to hold meetings and submit reports contradict and override the sovereign will of the majority? We do not believe so. This issue was precipitated by the Court of Appeals decision affirming the order of DOLE Regional Director Maximo B. Lim for the petitioners to hold a general membership meeting wherein they make open and available the unions/associations books of accounts and other documents pertaining to the union funds, and to regularly conduct special and general membership meetings in accordance with the unions constitution and by-laws.51 It is to be recalled that the private respondents, when they filed a complaint before the DOLENCR also complained of petitioners refusal to render financial and other reports, and deliberate refusal to call general and special meetings. Petitioners do not hide the fact that they belatedly submitted their financial reports and the minutes of their meetings to the DOLE. The

issue of belatedly submitting these reports, according to the petitioners, had been rendered moot and academic by their eventual compliance. Besides, this has been the practice of the association.52 Moreover, the petitioners likewise maintain that the passage of General Assembly Resolution No. 10 dated 10 December 1997 and Resolution No. 8, Series of 2000, following the application of the principle that the sovereign majority rules, cured any liability that may have been brought about by their belated actions.531awphi1.nt As found by the Court of Appeals, the financial statements for the years 1995 up to 1997 were submitted to DOLE-NCR only on 06 February 1998 while that for the year 1998 was submitted only on 16 March 1999.54 The last associations meeting was conducted on 21 April 1995, and the copy of the minutes thereon was submitted to BLR-DOLE only on 24 February 1998. The passage of General Assembly Resolution No. 10 dated 10 December 1997 and Resolution No. 8, Series of 2000,55 which supposedly cured the lapses committed by the associations officers and reiterated the approval of the general membership of the acts and collateral actions of the associations officers cannot redeem the petitioners from their predicament. The obligation to hold meetings and render financial reports is mandated by UEEAs constitution and by-laws. This fact was never denied by the petitioners. Their eventual compliance, as what happened in this case, shall not release them from the obligation to accomplish these things in the future. Prompt compliance in rendering financial reports together with the holding of regular meetings with the submission of the minutes thereon with the BLR-DOLE and DOLE-NCR shall negate any suspicion of dishonesty on the part of UEEAs officers. This is not only true with UEEA, but likewise with other unions/associations, as this matter is imbued with public interest. Undeniably, transparency in the official undertakings of union officers will bolster genuine trade unionism in the country. WHEREFORE, in view of all the foregoing, the Decision and Resolution of the Court of Appeals subjects of the instant case, are affirmed. Costs against the petitioners. SO ORDERED.

G.R. No. 85333 February 26, 1990 CARMELITO L. PALACOL, ET AL., petitioners, vs. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI SALES FORCE UNION, and COCACOLA BOTTLERS (PHILIPPINES), INC., respondents. Wellington B. Lachica for petitioners. Adolpho M. Guerzon for respondent Union.

way of special assessment, from the CBA lump-sum pay granted to the union members. The last one among the aforementioned is the subject of the instant petition. As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the special assessment sought to be levied is "to put up a cooperative and credit union; purchase vehicles and other items needed for the benefit of the officers and the general membership; and for the payment for services rendered by union officers, consultants and others." 2 There was also an additional proviso stating that the "matter of allocation ... shall be at the discretion of our incumbent Union President." This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in separate local membership meetings on various dates. 3 The total membership of the Union was about 800. Of this number, 672 members originally authorized the 10% special assessment, while 173 opposed the same. 4 Subsequently however, one hundred seventy (170) members of the Union submitted documents to the Company stating that although they have ratified the new CBA, they are withdrawing or disauthorizing the deduction of any amount from their CBA lump sum. Later, 185 other union members submitted similar documents expressing the same intent. These members, numbering 355 in all (170 + 185), added to the original oppositors of 173, turned the tide in favor of disauthorization for the special assessment, with a total of 528 objectors and a remainder of 272 supporters. 5 On account of the above-mentioned disauthorization, the Company, being in a quandary as to whom to remit the payment of the questioned amount, filed an action for interpleader with the Bureau of Labor Relations in order to resolve the conflicting claims of the parties concerned. Petitioners, who are regular rank-and-file employees of the Company and bona fide members of the Union, filed a motion/complaint for intervention therein in two groups of 161 and 94, respectively. They claimed to be among those union members who either did not sign any individual written authorization, or having signed one, subsequently withdrew or retracted their signatures therefrom.

GANCAYCO, J.: Can a special assessment be validly deducted by a labor union from the lump-sum pay of its members, granted under a collective bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the same by a majority of the union members? This is the main issue for resolution in the instant petition for certiorari. As gleaned from the records of the case, the pertinent facts are as follows: On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the Union), as the collective bargaining agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and Metro Manila Sales Office of the respondent Coca-Cola Bottlers (Philippines), Inc. (hereinafter referred to as the Company) concluded a new collective bargaining agreement with the latter. 1 Among the compensation benefits granted to the employees was a general salary increase to be given in lump sum including recomputation of actual commissions earned based on the new rates of increase. On the same day, the president of the Union submitted to the Company the ratification by the union members of the new CBA and authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00 every month and, in addition, 10% by

Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of the Labor Code. Article 222(b) provides as follows: ART. 222. Appearances and Fees. 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 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. On the other hand, Article 241(o) mandates that: ART. 241. Rights and conditions of membership in a labor organization. xxx xxx xxx (o) Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction;

As authority for their contention, petitioners cited Galvadores v. Trajano, 6 wherein it was ruled that no check-offs from any amount due employees may be effected without individual written authorizations duly signed by the employees specifically stating the amount, purpose, and beneficiary of the deduction. In its answer, the Union countered that the deductions not only have the popular indorsement and approval of the general membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the Labor Code in that the board resolution of the Union imposing the questioned special assessment had been duly approved in a general membership meeting and that the collection of a special fund for labor education and research is mandated. Article 241(n) of the Labor Code states that ART. 241. Rights and conditions of membership in a labor organization. xxx xxx xxx (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessments or fees. The record shall be attested to by the president; Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988 whereby he directed the Company to remit the amount it had kept in trust directly to the rank-and-file personnel without delay. On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed and set aside by the respondentDirector in a resolution dated August 19, 1988 upholding the claim of

the Union that the special assessment is authorized under Article 241 (n) of the Labor Code, and that the Union has complied with the requirements therein. Hence, the instant petition. Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting to lack or excess of jurisdiction when she held Article 241 (n) of the Labor Code to be the applicable provision instead of Article 222(b) in relation to Article 241(o) of the same law. According to petitioners, a cursory examination and comparison of the two provisions of Article 241 reveals that paragraph (n) cannot prevail over paragraph (o). The reason advanced is that a special assessment is not a matter of major policy affecting the entire union membership but is one which concerns the individual rights of union members. Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph (o), the Union has nevertheless failed to comply with the procedure to legitimize the questioned special assessment by: (1) presenting mere minutes of local membership meetings instead of a written resolution; (2) failing to call a general membership meeting; (3) having the minutes of three (3) local membership meetings recorded by a union director, and not by the union secretary as required; (4) failing to have the list of members present included in the minutes of the meetings; and (5) failing to present a record of the votes cast. 7 Petitioners concluded their argument by citing Galvadores. After a careful review of the records of this case, We are convinced that the deduction of the 10% special assessment by the Union was not made in accordance with the requirements provided by law. Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the instant case. The principle "that employees are protected by law from unwarranted practices that diminish their compensation without their known edge and consent" 8 is in accord with the constitutional principle of the State affording full protection to labor. 9

The respondent-Union brushed aside the defects pointed out by petitioners in the manner of compliance with the legal requirements as "insignificant technicalities." On the contrary, the failure of the Union to comply strictly with the requirements set out by the law 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. The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of Article 241 apply. Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both provisions must be complied with. Under paragraph (n), the Union must submit to the Company a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. In addition, the secretary of the organization must record the minutes of the meeting which, in turn, must include, among others, the list of all the members present as well as the votes cast. As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of paragraph (n). It held local membership meetings on separate occasions, on different dates and at various venues, contrary to the express requirement that there must be a general membership meeting. The contention of the Union that "the local membership meetings are precisely the very general meetings required by law" 10 is untenable because the law would not have specified a general membership meeting had the legislative intent been to allow local meetings in lieu of the latter. It submitted only minutes of the local membership meetings when what is required is a written resolution adopted at the general meeting. Worse still, the minutes of three of those local meetings held were recorded by a union director and not by the union secretary. The minutes submitted to the Company contained no list of the members present and no record of the votes cast. Since it is quite evident that the Union did not comply with the law at every turn, the only conclusion that may be made therefrom is that there was no valid levy of the special assessment pursuant to paragraph (n) of Article 241 of the Labor Code.

Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order that a special assessment may be validly checked-off. Even assuming that the special assessment was validly levied pursuant to paragraph (n), and granting that individual written authorizations were obtained by the Union, nevertheless there can be no valid check-off considering that the majority of the union members had already withdrawn their individual authorizations. A withdrawal of individual authorizations is equivalent to no authorization at all. Hence, the ruling in Galvadores that "no check-offs from any amounts due employees may be effected without an individual written authorization signed by the employees ... " is applicable. The Union points out, however, that said disauthorizations are not valid for being collective in form, as they are "mere bunches of randomly procured signatures, under loose sheets of paper." 11 The contention deserves no merit for the simple reason that the documents containing the disauthorizations have the signatures of the union members. The Court finds these retractions to be valid. There is nothing in the law which requires that the disauthorization must be in individual form. Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions of the Labor Code ... shall be resolved in favor of labor." 12 And as previously stated, labor in this case refers to the union members, as employees of the Company. Their mere desire to establish a separate bargaining unit, albeit unproven, cannot be construed against them in relation to the legality of the questioned special assessment. On the contrary, the same may even be taken to reflect their dissatisfaction with their bargaining representative, the respondent-Union, as shown by the circumstances of the instant petition, and with good reason. The Med-Arbiter correctly ruled in his Order that: The mandate of the majority rank and file have (sic) to be respected considering they are the ones directly affected and the realities of the high standards of survival nowadays. To ignore the mandate of the rank and file would enure to destabilizing industrial peace and harmony within the rank and file and the employer's fold, which we cannot countenance.

Moreover, it will be recalled that precisely union dues are collected from the union members to be spent for the purposes alluded to by respondent. There is no reason shown that the regular union dues being now implemented is not sufficient for the alleged expenses. Furthermore, the rank and file have spoken in withdrawing their consent to the special assessment, believing that their regular union dues are adequate for the purposes stated by the respondent. Thus, the rank and file having spoken and, as we have earlier mentioned, their sentiments should be respected. Of the stated purposes of the special assessment, as embodied in the board resolution of the Union, only the collection of a special fund for labor and education research is mandated, as correctly pointed out by the Union. The two other purposes, namely, the purchase of vehicles and other items for the benefit of the union officers and the general membership, and the payment of services rendered by union officers, consultants and others, should be supported by the regular union dues, there being no showing that the latter are not sufficient to cover the same. The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of the Labor Code. The contention is impressed with merit. Article 222 (b) prohibits attorney's fees, negotiations fees and similar charges arising out of the conclusion of a collective bargaining agreement from being imposed on any individual union member. The collection of the special assessment partly for the payment for services rendered by union officers, consultants and others may not be in the category of "attorney's fees or negotiations fees." But there is no question that it is an exaction which falls within the category of a "similar charge," and, therefore, within the coverage of the prohibition in the aforementioned article. There is an additional proviso giving the Union President unlimited discretion to allocate the proceeds of the special assessment. Such a proviso may open the door to abuse by the officers of the Union considering that the total amount of the special assessment is quite considerable P1,027,694.33 collected from those union members who originally authorized the deduction, and P1,267,863.39 from those who did not authorize the same, or subsequently retracted their authorizations. 13 The former amount had already been remitted to the Union, while the latter is being held in trust by the Company.

The Court, therefore, stakes down the questioned special assessment for being a violation of Article 241, paragraphs (n) and (o), and Article 222 (b) of the Labor Code. WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau of Labor Relations dated August 19, 1988 is hereby REVERSED and SET ASIDE, while the order of the Med-Arbiter dated February 17, 1988 is reinstated, and the respondent Coca-Cola Bottlers (Philippines), Inc. is hereby ordered to immediately remit the amount of P1,267,863.39 to the respective union members from whom the said amount was withheld. No pronouncement as to costs. This decision is immediately executory. SO ORDERED.

G.R. No. 171153

September 12, 2007

SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEUPTGWO), petitioner, vs. SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP), respondent1. DECISION CHICO-NAZARIO, J.: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays that this Court reverse and set aside the (a) Decision2 dated 9 March 2005 of the Court of Appeals in CA-G.R. SP No. 66200, affirming the Decision3 dated 19 February 2001 of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE) which upheld the Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and (b) the Resolution4 dated 16 January 2006 of the Court of Appeals in the same case, denying petitioner's Motion for Reconsideration of the aforementioned Decision. The following are the antecedent facts: Petitioner 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 is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999.5 In compliance with registration requirements, respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality.6 Upon submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by the BLR on 6 July 1999.7 Thereafter, respondent 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.8 All three petitions were dismissed, on the ground that the separate petitions fragmented a single bargaining unit.9 On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's registration and its dropping from the rolls of legitimate labor organizations. In its petition, petitioner accused respondent of committing fraud and falsification, and non-compliance with registration requirements in obtaining its certificate of registration. It raised allegations that respondent violated Articles 239(a), (b) and (c)10 and 234(c)11 of the Labor Code. Moreover, petitioner 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-OD9908-007-IRD.12 On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of fraud and misrepresentation, and irregularity in the submission of documents by respondent. Regional Director Lim further ruled that respondent is allowed to directly create a local or chapter. However, he found that respondent 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.13 Respondent appealed to the BLR. In a Decision dated 19 February 2001, it declared: 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. FED11558-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. WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director dated July 14, 2000, canceling the registration of appellant San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor organizations.14 While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the Regional Director's ruling that the 20% membership is a requirement for respondent to attain legal personality as a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for Reconsideration and affirmed its Decision dated 19 February 2001.15 Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the Decision of the BLR, ruling as follows: In Department Order No. 9, a registered federation or national union may directly create a local by submitting to the BLR copies of the charter certificate, the local's constitution and bylaws, the principal office address of the local, and the names

of its officers and their addresses. Upon complying with the documentary requirements, the local shall be issued a certificate and included in the roster of legitimate labor organizations. The [herein respondent] is an affiliate of a registered federation PDMP, having been issued a charter certificate. 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. xxxx In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the petition is DISMISSED.16 Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for Reconsideration of the aforementioned Decision. Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole issue of: WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT 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. The present petition questions the legal personality of respondent as a legitimate labor organization. Petitioner posits that respondent 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 requirements:

a. Fifty pesos (P50.00) registration fee; b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and 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.17 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),18 quoted hereunder: ARTICLE 1 SCOPE Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all regular rank and file employees paid on the basis of fixed 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.) Petitioner thus maintains that respondent, 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. There is merit in petitioner's contentions. A legitimate labor organization19 is defined as "any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof."20 The mandate of the Labor Code is to ensure strict compliance with the requirements on registration because a legitimate labor organization is entitled to specific rights under the Labor Code,21 and are involved in activities directly affecting matters of public interest. Registration requirements are intended to afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends.22 Legitimate labor organizations have exclusive rights under the law which cannot be exercised by non-legitimate unions, one of which is the right to be certified as the exclusive representative23 of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining.24 The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization.25 A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was directly chartered by PDMP. The procedure for registration of a local or chapter of a labor organization is provided in Book V of the Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended by D.O. No.

9 should govern the resolution of the petition at bar since respondent's petition for certification election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.26 The applicable Implementing Rules 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.27 A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE Regional Office or to the BLR two copies of the following: (a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.28 The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national union. A duly constituted local or chapter created in accordance with the foregoing shall acquire legal personality from the date of filing of the complete documents with the BLR.29 The issuance of the certificate of registration by the BLR or the DOLE Regional Office is not the operative act that vests legal personality upon a local or a chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete documentary requirements enumerated in Section 1, Rule VI.30

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. This Court disagrees. Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon its registration with the BLR: 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 requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and 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. (Italics supplied.) 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 ofProgressive Development Corporation v. Secretary, Department of Labor and Employment,31 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 is no longer required of a branch, local or chapter.32 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 union's bargaining powers respecting terms and conditions of labor.33 Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department Order No. 9 was directly put in issue, this Court was unequivocal in finding that there is no inconsistency between the Labor Code and Department Order No. 9. As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof to declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed, on several occasions, pronounced that registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights.35 This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasijudicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.36

Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a local or chapter as it is not a legitimate labor organization, it being a trade union center. Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization. Firstly, this line of reasoning attempts to predicate that a trade union center is not a legitimate labor organization. In the process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that a trade union center cannot directly create a local or chapter through the process of chartering. Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended, defines a legitimate labor organization37 as "any labor organization duly registered with the DOLE, and includes any branch or local thereof."38 On the other hand, a trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.39 The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack.40 It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules. The aforementioned provision is enunciated in the following: Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules.

PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the BLR on 14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a legitimate labor organization subsists. Once a union acquires legitimate status as a labor organization, it continues to be recognized as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.41 It bears to emphasize that what is being directly challenged is the personality of respondent as a legitimate labor organization and not that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP. Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization,42 and continues to be recognized as such until its certificate of registration is successfully impugned and thereafter cancelled or revoked in an independent action for cancellation. We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union center. This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot directly create a local or chapter. After an exhaustive study of the governing labor law provisions, both statutory and regulatory,43 we find no legal justification to support the conclusion that a trade union center is allowed to directly create a local or chapter through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein.44 Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social justice,45 the provisions of the Labor Code and the Implementing Rules have been subject to several amendments, and they continue to evolve, considering that labor plays a major role as a socio-economic force. The Labor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481. Incidentally, the term trade union center was

never mentioned under Presidential Decree No. 442, even as it was amended by Republic Act No. 6715. The term trade union center was first adopted in the Implementing Rules, under Department Order No. 9. Culling from its definition as provided by Department Order No. 9, a trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.46 The same rule provides that the application for registration of an industry or trade union center shall be supported by the following: (a) The list of its member organizations and their respective presidents and, in the case of an industry union, the industry where the union seeks to operate; (b) The resolution of membership of each member organization, approved by the Board of Directors of such union; (c) The name and principal address of the applicant, the names of its officers and their addresses, the minutes of its organizational meeting/s, and the list of member organizations and their representatives who attended such meeting/s; and (d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents of the member organizations, provided that where the ratification was done simultaneously with the organizational meeting, it shall be sufficient that the fact of ratification be included in the minutes of the organizational meeting.47 Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or affiliates, each of which must be a duly certified or recognized collective bargaining agent;48 a trade union center, on the other hand, is composed of a group of registered national unions or federations.49

The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation or national union" may directly create a local or chapter. The provision reads: Section 1. Chartering and creation of a local/chapter. A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: (a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.50 Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or chapter through chartering a duly registered federation or a national union. Department Order No. 9 defines a "chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal personality through a charter certificate, issued by a duly registered federation or national union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules.51 Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines" lapsed52 into law on 25 May 2007 and became effective on 14 June 2007.53 This law further amends the Labor Code provisions on Labor Relations.

Pertinent amendments read as follows: SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby further amended to read as follows: ART. 234. Requirements of Registration. A federation, national union or industry or trade union center or an independent union 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 requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (c) In case the applicant is an independent union, 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 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. SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows: ART. 234-A. Chartering and Creation of a Local Chapter. A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the

local chapter. The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate. The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate: (a) The names of the chapter's officers, their addresses, and the principal office of the chapter; and (b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and by-laws are the same as that of the federation or the national union, this fact shall be indicated accordingly. The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president. (Emphasis ours.) Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for chartering or creating a local or chapter, namely Article 234-A, still makes no mention of a "trade union center." Also worth emphasizing is that even in the most recent amendment of the implementing rules,54 there was no mention of a trade union center as being among the labor organizations allowed to charter. This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded.55 Where the terms are expressly limited to certain matters, it may not, by interpretation or construction, be extended to other matters.56 Such is the case here. If its intent were otherwise, the law

could have so easily and conveniently included "trade union centers" in identifying the labor organizations allowed to charter a chapter or local. Anything that is not included in the enumeration is excluded therefrom, and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein.57 The rule is restrictive in the sense that it proceeds from the premise that the legislating body would not have made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.58 Expressium facit cessare tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object or thing omitted must have been omitted intentionally. Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor organizations to directly create a chapter or local through chartering is given to a federation or national union, then a trade union center is without authority to charter directly. The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and voluntary organization of a strong and united labor movement,60 and thus assure the rights of workers to self-organization.61 The mandate of the Labor Code in ensuring strict compliance with the procedural requirements for registration is not without reason. It has been observed that the formation of a local or chapter becomes a handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free unionism.62 As a legitimate labor organization is entitled to specific rights under the Labor Code and involved in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties affected.63 However, as this Court has enunciated in Progressive Development Corporation v. Secretary of Department of Labor and Employment, it is not this Court's function to augment the requirements prescribed by law. Our only recourse, as previously discussed, is to exact strict compliance with what the law provides as requisites for local or chapter formation.64

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. WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET ASIDE. The Certificate of Registration of San Miguel Packaging Products Employees UnionPambansang Diwa ng Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations. Costs against petitioner. SO ORDERED.

G.R. No. 132400

January 31, 2005

EDUARDO J. MARIO, JR., MA. MELVYN P. ALAMIS and UST FACULTY UNION, petitioners, vs. GIL GAMILLA, DUPONT ASERON and JUSTINO CARDENAS, respondents. DECISION TINGA, J.: This is a petition for review under Rule 45 assailing the Decision1 of the Court of Appeals in CA-G.R. SP No. 43701,2 setting aside the order and the writ of preliminary mandatory injunction issued by the lower court. The facts of the case are as follows: Sometime in May 1986, the UST Faculty Union (USTFU) entered into an initial collective bargaining agreement with the University of Santo Tomas (UST) wherein UST undertook to provide USTFU with a free office space at Room 302 of its Health Center Building.3 On 21 September 1996, the officers and directors of USTFU scheduled a general membership meeting on 5 October 1996 for the election of the union officers. However, respondent Gamilla and some faculty members filed a Petition4 with the Med-Arbitration Unit of the Department of Labor and Employment (DOLE) seeking to stop the holding of the USTFU election.5 Meanwhile, on 2 October 1996, Rev. Fr. Rodel Aligan, O.P., Secretary General of the UST, issued a Memorandum to the Deans, Regents, Principals and Heads of Departments regarding the holding of a faculty convocation on 4 October 1996.6 On 4 October 1996, Med-Arbiter Tomas Falconitin issued a temporary restraining order (TRO) in Case No. NCR-OD-M-9610001, enjoining the holding of the election of the USTFU officers and directors. However, denying the TRO they themselves sought, Gamilla and some of the faculty members present in the 4 October

1996 faculty convocation proceeded with the election of the USTFU officers. On the other hand, the scheduled election for 5 October 1996 did not push through by virtue of the TRO.7 In the succeeding week, on 11 October 1996, petitioners filed with the DOLE a petition for prohibition, injunction, with prayer for preliminary injunction and temporary restraining order,8 seeking to invalidate the election held on 4 October 1996. Two months later, on 4 December 1996, UST and USTFU, represented by Gamilla and his co-officers, entered into a collective bargaining agreement (CBA) for a period of five (5) years from 1 June 1996 up to 31 May 2001. The CBA was ratified on 12 December 1996.9 In another front, the Med-Arbiter issued a TRO dated 11 December 1996, enjoining Gamilla and his fellow officers to "cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors" of USTFU.10 On 27 January 1997, at around eleven in the morning (11:00 a.m.), respondents Gamilla, Cardenas and Aseron, with some other persons, served a letter of even date on petitioners Mario and Alamis, demanding that the latter vacate the premises located at Room 302, Health Center Building, USTthe Office of USTFU. However, only the office messenger was in the office at the time. After coercing the office messenger to step out of the office, Gamilla and company padlocked the door leading to the unions office.11 On 5 February 1997, petitioners filed with the Regional Trial Court (RTC) of Manila a Complaint12 for injunction and damages with a prayer for preliminary injunction and temporary restraining order over the use of the USTFU office. At the 11 February 1997 hearing on the application for TRO before the trial court, respondents through a consolidated motion to dismiss sought the dismissal of the complaint on the ground of forumshopping and prayed that the trial court suspend the application for injunctive relief until it shall have resolved the motion to dismiss.13l^vvphi1.net

On the same date, Med-Arbiter Falconitin rendered a decision,14 declaring the 4 October 1996 election and its results null and void ab initio. The decision was appealed to the Bureau of Labor Relations which affirmed the same.15 Respondents brought the matter to this Court via a special civil action for certiorari.16 The Court promulgated its decision,17 dismissing the petition on 16 November 1999. On 3 March 1997, the RTC issued the assailed order,18 to wit: WHEREFORE, upon plaintiffs filing a bond in the amount of P50,000.00, let a writ of preliminary mandatory injunction issue requiring defendants their representatives and agents or other persons acting in their behalf to remove the padlocks on the door of the UST Faculty Union office located at Room 302, Health Center Bldg., UST, Espaa, Manila and to refrain from preventing/disturbing in any manner whatsoever the plaintiffs in entering the said premises. In the meantime, defendants are hereby ordered to submit their answer to the complaint within fifteen (15) days from receipt hereof. On 5 March 1997, after petitioners as plaintiffs therein had posted the requisite bond, the RTC issued a writ of preliminary mandatory injunction.19 On 19 March 1997, respondents filed a Petition for Certiorari20 before the Court of Appeals, claiming that the orders dated 3 and 5 March 1997 were void ab initio for lack of jurisdiction and on the ground that they were issued in violation of due process of law.21 The Court of Appeals stated that the basic issue of the case was whether the RTC of Manila had jurisdiction over the subject matter of Civil Case No. 97-81928.22 It agreed with respondents disquisition that petitioners cause of action in the complaint before the trial court is inextricably linked and intertwined with the issue of who are the legitimate officers of the USTFU, which issue was then being litigated before the DOLE. The appellate court held that Civil Case No. 97-81928 and Case No. NCR-OD-M-9610-016 appear to be the same, with the observation that the civil case merely "grew out" from the labor case. It also cited the prohibition against the issuance of injunction in any case involving or growing out of a labor dispute, unless otherwise provided by law.23 It added that it would have been more appropriate for the RTC to determine whether it had jurisdiction over the subject case before

issuing the assailed orders.24 The dispositive portion of the decision reads: WHEREFORE, premises considered, the petition is hereby GRANTEDand the assailed order (dated March 3, 1997) and the writ of preliminary mandatory injunction (dated March 5, 1997) SET ASIDEand the respondent judge ordered to DISMISS Civil Case No. 97-81928. SO ORDERED.25 (Emphasis in the original.) Petitioners Motion for Reconsideration26 was denied. Hence, this petition. Petitioners assert that the RTC has jurisdiction to decide Civil Case No. 97-81928, as the determination of the legality and propriety of padlocking the doors of the USTFU office and preventing the free and unhampered ingress to and egress from the said premises, as alleged in the complaint, are matters incapable of pecuniary estimation.27 Moreover, they claim that the civil case was premised on causes of action belonging to the USTFU which are to be resolved not by reference to the Labor Code or other labor relations statutes. They stress that the causes of action involve a tortious act and the corresponding claim for damages that are both governed by the civil law and fall under the jurisdiction of regular courts.28 Petitioners add that not all controversies involving members of the same union are to be decided by the labor tribunal. They add that in the instant case, the pendency of the labor case should not militate against the civil case they filed since the criminal and civil aspects of a violation of Article 241 of the Labor Code29 can be litigated separately and independently from the administrative aspect of a breach of the rights and conditions of membership.30 Anent the ruling of the Court of Appeals on the writ of injunction issued by the trial court, petitioners state that Art. 254 of the Labor Code31 on prohibition against injunctions is not applicable to the instant case since the controversy cannot be categorized as a labor dispute. They argue that the injunction was called for considering that they "have rights to be protected and preserved," which however,

"were violated, invaded and trampled upon" by respondents through the acts complained of.32 Petitioners claim that respondents were not denied their day in court when the trial court did not resolve the issue of jurisdiction before proceeding with the hearing on the application for injunctive order. According to them, respondents were given the chance to present their evidence in support of their opposition to the injunction and TRO, but respondents chose not to avail of this opportunity.33 Lastly, they add that respondents Gamilla, Cardenas and Aseron had no right to act for and in behalf of the USTFU for the following reasons, to wit: Gamillas claim to the USTFU presidency was declared non-existent by the labor tribunals; Cardenas was the chief of the security force in the university and not a faculty member; and, Aseron was a Barangay Chairman and not a member of the UST faculty.34 Thus, petitioners claim that USTFU was improperly included as petitioner in the petition35 before the Court of Appeals. Accordingly, petitioners assert that the Court of Appeals erred and gravely abused its discretion when: I. It ruled that the regional trial court had no jurisdiction over Civil Case No. 97-81928; II. It ruled that Civil Case No. 97-81928 is a labor dispute cognizable by the DOLE; III. It granted the petition for certiorari in CA-G.R. SP No. 43701, set aside the orders issued by the trial court, and ordered the dismissal of the civil case; IV. It ruled that Art. 254 of the Labor Code is applicable to the matters involved in Civil Case No. 97-81928; V. It ruled that respondents were denied their day in court; and VI. It ruled that the Motion for Reconsideration filed in CA-G.R. SP No. 43701 was pro-forma.36

On the other hand, respondents maintain that the regional trial court had no jurisdiction over the issue as to who has the right to use the union office because the same is inextricably linked and intertwined with the issue as to who are the legitimate and duly elected officers of the USTFU, which was then the subject of another case before the DOLE.37 Furthermore, respondents insist that the trial court violated their right to due process when it refused to determine the issue of jurisdiction before issuing its assailed orders.38 Respondents submit that the only issue in the instant petition is whether the RTC has jurisdiction over Civil Case No. 97-81928.39 There is merit in the petition but only in part. Jurisdiction over a subject matter is conferred by law and determined by the allegations in the complaint40 and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.41 Central to the assailed decision of the Court of Appeals is its adoption of respondents argument that the issue in Civil Case No. 97-81928 is "inextricably linked and intertwined with the issue as to who are the lawful officers of the USTFU," which is within the exclusive jurisdiction of the Secretary of Labor; and that "the use of the union office is a mere incident of the labor dispute." 42 Specifically, the Court of Appeals held: . . . .The two cases (Civil Case No. 97-81928 and Case No. NCROD-M-9610-016) appear the same. While ostensibly, the complaint filed with the trial court was branded injunction and damages, the action challenged the legitimacy of petitioners election as officers of the UST Faculty Union, with the plaintiff therein (respondent herein) seeking to enjoin them (petitioners herein) from claiming and acting as such (elected officers of the union) and to have the election proceedings of October 4, 1996 invalidated and declared null and void. Taking note of plaintiffs (private respondents) previous moves before the Department of Labor, Civil Case No. 97-81928 appear (sic) to have grown out therefromhence, said case clearly falls outside of the competence of the trial court.43 Another reason that militates against the trial courts assumption of jurisdiction over the case is Article 254 of the Labor Code that states:

Art. 254. Injunction prohibited.No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code.441awphi1.nt As pointed out by petitioners, the Court of Appeals erroneously categorized the instant matter as a labor dispute. Such labor dispute includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.45 Jurisdiction over labor disputes, including claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations is vested in Labor Arbiters and the National Labor Relations Commission (NLRC).46 On the other hand, an intra-union dispute refers to any conflict between and among union members. It encompasses all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, not excepting cases arising from chartering or affiliation of labor organizations or from any violation of the rights and conditions of union membership provided for in the Labor Code.47 In contrast, an inter-union dispute refers to any conflict between and among legitimate labor organizations involving questions of representation for purposes of collective bargaining; it includes all other conflicts which legitimate labor organizations may have against each other based on any violations of their rights as labor organizations.48Like labor disputes, jurisdiction over intra-union and inter-union disputes does not pertain to the regular courts. It is vested in the Bureau of Labor Relations Divisions in the regional offices of the Department of Labor. Case No. NCR-OD-M-9610-016 entitled "Eduardo J. Mario, Jr., et al. v. Gil Gamilla, et al." before the BLR is neither a labor nor an interunion dispute. It is clearly an intra-union dispute. The case before the trial court, Civil Case No. 97-81928 entitled Eduardo J. Mario, Jr. et al. v. Gil Gamilla, et al.,49 on the other hand, is a simple case for damages, with an accompanying application for injunction. The complaint essentially bears the

following allegations: that despite an outstanding temporary restraining order prohibiting the holding of an election of officers, respondent Gamilla and others proceeded to hold a purported election; that there was a case pending before the DOLE questioning the validity of the supposed election; and, that respondent Gamilla with two other persons (later learned to be respondents Aseron and Cardenas) compelled the office messenger to vacate the premises of the USTFU office, and thereafter padlocked the room. Petitioners alleged respondents act of padlocking the office was without lawful basis, and had prevented them from entering the office premises, thereby denying them access to personal effects, documents and records needed in the on-going cases both in the DOLE and in the complaint a quo, and ultimately precluding the union from serving its members. Fundamentally, the civil case a quo seeks two reliefsone is for the removal of the padlocks on the office door and restraining respondents from blocking petitioners access to the premises, while the other is for the recovery of moral and exemplary damages. Prior to the institution of the civil case, petitioners filed before the Med-Arbitration Unit of the DOLE-NCR a petition for prohibition, injunction with a prayer for preliminary injunction and temporary restraining order against herein respondents for the latters assumption of office as elected USTFU officers. Specifically, they prayed that respondents be enjoined from claiming to be the duly elected officers of the union and from performing acts for and in behalf of the union. The propriety of padlocking the unions office, the relief sought by the petitioner in the civil case, is interwoven with the issue of legitimacy of the assumption of office by the respondents in light of the violation of the unions constitution and by-laws, which was then pending before the Med-Arbiter. Necessarily, therefore, the trial court has no jurisdiction over the case insofar as the prayer for the removal of the padlocks and the issuance of an injunctive writ is concerned. It is a settled rule that jurisdiction, once acquired, continues until the case is finally terminated.50 The petition with the Med-Arbiter was filed ahead of the complaint in the civil case before the RTC. As such, when the petitioners filed their complaint a quo, jurisdiction over the injunction and restraining order prayed for had already been lodged

with the Med-Arbiter. The removal of padlocks and the access to the office premises is necessarily included in petitioners prayer to enjoin respondents from performing acts pertaining to union officers and on behalf of the union. In observance of the principle of adherence of jurisdiction, it is clear that the RTC should not have exercised jurisdiction over the provisional reliefs prayed for in the complaint. A review of the complaint shows that petitioners disclosed the existence of the petition pending before the Med-Arbiter and even attached a copy thereof.51 The trial court was also aware of the decision of the Med-Arbiter dated 11 February 1997, declaring the supposed union officers election void ab initio and ordering respondents to cease and desist from discharging the duties and functions of the legitimate officers of the USTFU. The trial court even obtained a copy of the said decision two (2) days after its promulgation.52 Still, it continued the hearing on the application for injunction and eventually issued the assailed orders. At this juncture, the Court notes that a key question in this case has already been settled by the Court in its decision in UST Faculty Union, et al. v. Bitonio, Jr., et al.53 In that case, it was ruled that the 04 October 1996 election was void for having been conducted in violation of the unions constitution and by-laws. Nevertheless, the complaint a quo could not have validly proceeded at the time of its filing of the said case due to petitioners lack of cause of action. As to the alleged inclusion of the USTFU as petitioner in the petition before the Court of Appeals, suffice it to say that the right to use the unions name as well as to represent it has been settled by our decision in UST Faculty Union, et al. v. Bitonio, Jr., et al. Petitioners, as the rightful officers of the USTFU, and not respondents, have the right to represent USTFU in the proceedings. Let us go back to the claim for damages before the lower court. Art. 226 of the Labor Code provides, thus: The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or

interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. Thus, unlike the NLRC which is explicitly vested with the jurisdiction over claims for actual, moral, exemplary and other forms of damages,54 the BLR is not specifically empowered to adjudicate claims of such nature arising from intra-union or inter-union disputes. In fact, Art. 241 of the Labor Code ordains the separate institution before the regular courts of criminal and civil liabilities arising from violations of the rights and conditions of union membership. The Court has consistently held that where no employer-employee exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes, or any collective bargaining agreement, it is the regional trial court that has jurisdiction.551awphi1.nt Administrative agencies are tribunals of limited jurisdiction and as such, can exercise only those powers which are specifically granted to them by their enabling statutes. Consequently, matters over which they are not granted authority are beyond their competence.56 While the trend is towards vesting administrative bodies with the power to adjudicate matters coming under their particular specialization, to ensure a more knowledgeable solution of the problems submitted to them, this should not deprive the courts of justice their power to decide ordinary cases in accordance with the general laws that do not require any particular expertise or training to interpret and apply.57In their complaint in the civil case, petitioners do not seek any relief under the Labor Code but the payment of a sum of money as damages on account of respondents alleged tortuous conduct. The action is within the realm of civil law and, hence, jurisdiction over the case belongs to the regular courts.58 WHEREFORE, the Petition is hereby GRANTED IN PART. The Decision of the Court of Appeals setting aside the Order dated 3 March 1997 and the writ of preliminary mandatory injunction dated 5 March 1997 is hereby AFFIRMED. The case is REMANDED to the trial court for further proceedings in accordance with this Decision. No costs. SO ORDERED.

G.R. No. 74453 May 5, 1989 AMBROCIO VENGCO, RAMON MOISES, EUGENIA REYES, RAFAEL WAGAS and 80 others per attached list, petitioners vs. HON. CRESENCIANO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations and EMMANUEL TIMBUNGCO, respondents. Jose T. Maghari for petitioners. Benjamin C. Sebastian for private respondent.

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. filed a complaint with the Ministry of Labor praying for: "(1) the expulsion of Emmanuel 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; 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. On July 19, 1982, Med-Arbiter Willie B. Rodriguez issued an Order dismissing the complaint for lack of merit. (p. 33, Rollo) Vengco, et al. appealed the aforesaid order to the Bureau of Labor Relations. On December 29, 1982, respondent Director of the Bureau of Labor Relations Cresenciano B. Trajano (Trajano, for short) rendered a decision, the dispositive portion of which states: Wherefore, premises considered, the instant appeal is hereby granted and the Med-Arbiter's Order dated 19 July 1982 hereby set aside. Accordingly, respondent Emmanuel Timbungco is hereby ordered to render a full accounting of the One Hundred Fifty Thousand

MEDIALDEA, J.: This is a petition for certiorari which seeks to annul: (1) the Order of respondent Director of the Bureau of Labor Relations dated May 23, 1983 in BLR Case No. A-0179-82 entitled "Ambrocio Vengco, et al. vs. Emmanuel Timbungco" setting aside the decision dated December 29, 1982; and (2) the Order dated April 2, 1986 denying the motion for reconsideration of the Order dated May 23, 1983. The antecedent facts are as follows: Sometime in the latter part of 1981, the Management of the AngloAmerican Tobacco Corporation and the Kapisanan ng Manggagawa sa Anglo-American Tobacco Corporation (FOITAF) 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 complaint before the Ministry of Labor. Respondent Emmanuel Timbungco (Timbungco, for short) who is the union president received the money which was paid in installments. Thereafter, he distributed the amount among the union members. Petitioners Ambrocio Vengco, Ramon Moises, Rafael Wagas and 80 others (Vengco, et al., for short) 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

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, respondent is hereby expelled as president of the Kapisanan ng Manggagawa sa Anglo American Tobacco Corporation (FOITAF). Lastly, the counterclaim interposed by the respondent's counsel, Atty. Benjamin Sebastian is hereby ordered dismissed. So decided. (P. 50, Rollo.) Timbungco filed a motion for reconsideration of the abovequoted decision while Vengco, et al. filed their opposition to the said motion. On May 23, 1983, Officer-in-Charge Victoriano R. Calaycay issued an Order which held, thus: Wherefore premises considered, our resolution dated 29 December 1982 is hereby set aside. However, an audit examination of the Books of Account of Kapisanan ng Manggagawa sa Associated AngloAmerican Tobacco Corporation (FOITAF) is hereby ordered. SO RESOLVED. (p. 62, Rollo) Vengco, et al, sought reconsideration of the aforementioned order. They contended that the examination of the books of accounts of the union is irrelevant considering that the issue involved in the case does not consist of union funds but back pay received by the union members from the company. Likewise, they pointed out that Timbungco did not give the money to the union treasurer and consequently, the amount was not entered in the records of the union.

On April 2, 1986, Trajano issued an order which affirmed the resolution of May 23, 1983 and denied the motion for reconsideration for lack of merit. (p. 58, Rollo) Hence, the present recourse by Vengco, et al. The issues raised in this case are as follows: (1) Whether or not Timbungco is guilty of illegally deducting 10% attorneys' fees from petitioners' backwages; and (2) Whether or not Trajano gravely abused his discretion amounting to lack of jurisdiction in ordering examination of union books instead of affirming his previous Order expelling Timbungco from the union and ordering him to render an accounting of P150,000.00 received by him. (p. 151, Rollo) In the resolution of June 4, 1986, We required the respondents to comment on the petition. In his comment, Timbungco reiterates the defenses he raised in his answer to the complaint filed against him before the Med-Arbiter In addition, he 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 Treasurer and Secretary and duly noted by Timbungco as Union President. (p. 73, Rollo) The Solicitor General, in his comment, agrees with Vengco, et al. and recommends that the petition be given due course. (p. 100, Rollo) Timbungco filed a reply to the aforesaid comment of the solicitor General which restates the arguments raised in his comment. (p. 121, Rollo) The petition is meritorious.

Article 241 (o) of the Labor Code provides: ART. 241. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor organization. x x x. (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 an individual written authorization duly signed by an employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction. x x x. 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). 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. 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. A reading of the said resolution (p. 75, Rollo) yields the same conclusion arrived at by

Trajano who declared it defective. We quote with approval Trajano's findings on this point: Further, a cursory examination of the alleged resolution shows that it is quite defective. Not only that it is not dated but also that, with the exception of the first page, the remaining pages were not captioned and did not state the very purpose for which it was prepared. Thus, the alleged signatories were not properly apprised thereof. There is, therefore, truth in complainant's contention that they never authorized, more so, they had no knowledge of the deduction of 10% attorney's fees until it was actually effected. Consequently, the deduction was not valid. (p. 45, Rollo) Moreover, the law is explicit. It requires the individual written authorization of each employee concerned, to make the deduction of attorney's fees valid. Likewise, We find that 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 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.

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 proceedings, the law allows a deduction for attorney's fees of 10% from 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 effected through an amicable settlement and not in an administrative proceeding. The submission by Timbungco of an accounting report on the distribution of P 150,000.00 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. Considering the aforestated violations of Timbungco, there can be no question that he should bear the consequences of his acts. We find that the penalty of expulsion from the union presidency imposed upon Timbungco is justified. In view of the foregoing, We hold that the Orders dated May 23, 1983 and April 2, 1986 were issued with grave abuse of discretion. The herein controversy involves the propriety of the 10% deduction from the fringe benefits of the union workers which they received from the management in settlement of their claims. Such issue does not touch on union dues or funds. Besides, the sum of P150,000.00 was not entered into the records of the Union since, as earlier stated, the money was not turned over by Timbungco to the Union Treasurer. Consequently the said Orders have no basis. ACCORDINGLY, the petition is granted. The assailed Orders dated May 23, 1983 of Officer-in-Charge Victoriano R. Calaycay of the Bureau of Labor Relations, and April 2, 1986 of respondent Director

Cresenciano B. Trajano of the same Bureau are REVERSED and SET ASIDE and the latter's decision dated December 29, 1982 is hereby reinstated. No costs. SO ORDERED.

G.R. No. 70067 September 15, 1986 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. Dante A. Carandang for petitioners. Jose C. Espinas for respondents. RESOLUTION

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. 1 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. 2 On September 9, 1983, the Minister of Labor and Employment assumed jurisdiction over all unresolved issues in the bargaining deadlock between PLDT and the Union and proceeded to resolve the same by compulsory arbitration. On October 23, 1983, the Minister of Labor awarded across-theboard wage increases of P 330/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 1/2 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 Union by respondent Counsel. On November 2, 1983, petitioners initially numbering 600 and finally 5,258, filed a letter-complaint before the MOLE through their authorized representative, petitioner Carlos Galvadores assailing the imposition of P130.00 (later corrected to P155.00) per employee as attorney's fees of respondents counsel. Annexed to the complaint were the written statements of the employee authorizing Galvadores to act for and in their behalf. Petitioners took the position that the attorney's fees of respondent counsel were not only unreasonable but also violative of Article 242(o) of the Labor Code; and that he deductions cannot given legal effect by a mere Board resolution but needs the ratification by the general membership of the Union. Respondents Union and Counsel, on the other hand, proferred the argument that the attorney s fees being exacted pertained to his

MELENCIO-HERRERA, J.: Petitioner employees of the Philippine Long Distance Telephone Company (PLDT) and members of respondent Free Telephone Workers Union, now the Manggagawa ng Komunikasyon sa Pilipinas (simply referred to hereinafter as the Union), question the legality of the check-off for attorney's fees amounting to P1M, more or less, of respondent Atty. Jose C. Espinas (hereinafter referred to as "Respondent Counsel") from the monetary benefits awarded to PLDT employees in a deadlocked collective bargaining agreement negotiations between the PLDT and the Union. The case stemmed from the following facts: Respondent Counsel has been the legal counsel of respondent Union since 1964. For his services, he was hired on a case to case contingent fee basis. On September 7, 1983, he received a letter from the Union President reading: 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.

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 petitioners' claim that Respondent Counsel 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. Petitioners proposed a solution offering to pay P10.00 per employee, but Respondent Counsel 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. February 13, 1984, the Minister of Labor referred the dispute to the Bureau of Labor Relations for being intra-union 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 resolution of the legislative council in a plebiscite called for that purpose. On the basis thereof, Counsel 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. On February 18, 1985, respondent Director of the Bureau of Labor Relations 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 an 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 P lM of the same would be made available for the Union's housing project. 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. The Court resolved to give due course. Article 222(b) of the Labor Code provides: Article 222. Appearance and Fees. 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: 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 specifically 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. 3 The provisions are clear. No check-offs from any amounts due employees may be effected without individual written authorizations duly signed by the employee 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 objecting. The question asked in the plebiscite, besides not being explicit, assumed that there was no dispute relative to attorney's fees. 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. 4 ACCORDINGLY, the assailed Decision of February 18, 1985 rendered by respondent Director of the Bureau of Labor Relations, is hereby SET ASIDE. The attorney's fees herein involved may be charged against Union funds pursuant to Article 222(b) of the Labor Code, as may be agreed upon between them. SO ORDERED.

G.R. No. 74453 May 5, 1989 AMBROCIO VENGCO, RAMON MOISES, EUGENIA REYES, RAFAEL WAGAS and 80 others per attached list, petitioners vs. HON. CRESENCIANO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations and EMMANUEL TIMBUNGCO, respondents. Jose T. Maghari for petitioners. Benjamin C. Sebastian for private respondent.

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. filed a complaint with the Ministry of Labor praying for: "(1) the expulsion of Emmanuel 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; 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. On July 19, 1982, Med-Arbiter Willie B. Rodriguez issued an Order dismissing the complaint for lack of merit. (p. 33, Rollo) Vengco, et al. appealed the aforesaid order to the Bureau of Labor Relations. On December 29, 1982, respondent Director of the Bureau of Labor Relations Cresenciano B. Trajano (Trajano, for short) rendered a decision, the dispositive portion of which states: Wherefore, premises considered, the instant appeal is hereby granted and the Med-Arbiter's Order dated 19 July 1982 hereby set aside. Accordingly, respondent Emmanuel Timbungco is hereby ordered to render a full accounting of the One Hundred Fifty Thousand

MEDIALDEA, J.: This is a petition for certiorari which seeks to annul: (1) the Order of respondent Director of the Bureau of Labor Relations dated May 23, 1983 in BLR Case No. A-0179-82 entitled "Ambrocio Vengco, et al. vs. Emmanuel Timbungco" setting aside the decision dated December 29, 1982; and (2) the Order dated April 2, 1986 denying the motion for reconsideration of the Order dated May 23, 1983. The antecedent facts are as follows: Sometime in the latter part of 1981, the Management of the AngloAmerican Tobacco Corporation and the Kapisanan ng Manggagawa sa Anglo-American Tobacco Corporation (FOITAF) 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 complaint before the Ministry of Labor. Respondent Emmanuel Timbungco (Timbungco, for short) who is the union president received the money which was paid in installments. Thereafter, he distributed the amount among the union members. Petitioners Ambrocio Vengco, Ramon Moises, Rafael Wagas and 80 others (Vengco, et al., for short) 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

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, respondent is hereby expelled as president of the Kapisanan ng Manggagawa sa Anglo American Tobacco Corporation (FOITAF). Lastly, the counterclaim interposed by the respondent's counsel, Atty. Benjamin Sebastian is hereby ordered dismissed. So decided. (P. 50, Rollo.) Timbungco filed a motion for reconsideration of the abovequoted decision while Vengco, et al. filed their opposition to the said motion. On May 23, 1983, Officer-in-Charge Victoriano R. Calaycay issued an Order which held, thus: Wherefore premises considered, our resolution dated 29 December 1982 is hereby set aside. However, an audit examination of the Books of Account of Kapisanan ng Manggagawa sa Associated AngloAmerican Tobacco Corporation (FOITAF) is hereby ordered. SO RESOLVED. (p. 62, Rollo) Vengco, et al, sought reconsideration of the aforementioned order. They contended that the examination of the books of accounts of the union is irrelevant considering that the issue involved in the case does not consist of union funds but back pay received by the union members from the company. Likewise, they pointed out that Timbungco did not give the money to the union treasurer and consequently, the amount was not entered in the records of the union.

On April 2, 1986, Trajano issued an order which affirmed the resolution of May 23, 1983 and denied the motion for reconsideration for lack of merit. (p. 58, Rollo) Hence, the present recourse by Vengco, et al. The issues raised in this case are as follows: (1) Whether or not Timbungco is guilty of illegally deducting 10% attorneys' fees from petitioners' backwages; and (2) Whether or not Trajano gravely abused his discretion amounting to lack of jurisdiction in ordering examination of union books instead of affirming his previous Order expelling Timbungco from the union and ordering him to render an accounting of P150,000.00 received by him. (p. 151, Rollo) In the resolution of June 4, 1986, We required the respondents to comment on the petition. In his comment, Timbungco reiterates the defenses he raised in his answer to the complaint filed against him before the Med-Arbiter In addition, he 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 Treasurer and Secretary and duly noted by Timbungco as Union President. (p. 73, Rollo) The Solicitor General, in his comment, agrees with Vengco, et al. and recommends that the petition be given due course. (p. 100, Rollo) Timbungco filed a reply to the aforesaid comment of the solicitor General which restates the arguments raised in his comment. (p. 121, Rollo) The petition is meritorious.

Article 241 (o) of the Labor Code provides: ART. 241. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor organization. x x x. (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 an individual written authorization duly signed by an employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction. x x x. 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). 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. 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. A reading of the said resolution (p. 75, Rollo) yields the same conclusion arrived at by

Trajano who declared it defective. We quote with approval Trajano's findings on this point: Further, a cursory examination of the alleged resolution shows that it is quite defective. Not only that it is not dated but also that, with the exception of the first page, the remaining pages were not captioned and did not state the very purpose for which it was prepared. Thus, the alleged signatories were not properly apprised thereof. There is, therefore, truth in complainant's contention that they never authorized, more so, they had no knowledge of the deduction of 10% attorney's fees until it was actually effected. Consequently, the deduction was not valid. (p. 45, Rollo) Moreover, the law is explicit. It requires the individual written authorization of each employee concerned, to make the deduction of attorney's fees valid. Likewise, We find that 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 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.

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 proceedings, the law allows a deduction for attorney's fees of 10% from 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 effected through an amicable settlement and not in an administrative proceeding. The submission by Timbungco of an accounting report on the distribution of P 150,000.00 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. Considering the aforestated violations of Timbungco, there can be no question that he should bear the consequences of his acts. We find that the penalty of expulsion from the union presidency imposed upon Timbungco is justified. In view of the foregoing, We hold that the Orders dated May 23, 1983 and April 2, 1986 were issued with grave abuse of discretion. The herein controversy involves the propriety of the 10% deduction from the fringe benefits of the union workers which they received from the management in settlement of their claims. Such issue does not touch on union dues or funds. Besides, the sum of P150,000.00 was not entered into the records of the Union since, as earlier stated, the money was not turned over by Timbungco to the Union Treasurer. Consequently the said Orders have no basis. ACCORDINGLY, the petition is granted. The assailed Orders dated May 23, 1983 of Officer-in-Charge Victoriano R. Calaycay of the Bureau of Labor Relations, and April 2, 1986 of respondent Director

Cresenciano B. Trajano of the same Bureau are REVERSED and SET ASIDE and the latter's decision dated December 29, 1982 is hereby reinstated. No costs. SO ORDERED.