Verceles vs BLR\

G.R. No. 152322; February 15, 2005

FACTS: Private respondents Rodel E. Dalupan, et al 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.
Through a collective reply, they denied the allegations and further sent a letter informing the officers
of UEEA informing them that the memorandum was vague and without legal basis. UEEA issued
another memorandum giving the private respondents another seventy-two hours from
receipt within which to properly reply because the collective reply letter was not responsive to
the first memorandum. Their failure would be construed as an admission of the truthfulness and veracity of the
charges. The same was still denied by the respondents.
O n 0 9 O c t o b e r 1 9 9 7 , E r n e s t o V e r c e l e s , i n h i s c a p a c i t y a s p r e s i d e n t o f t h e ass
ociation, through a Memorandum, informed Rodel Dalupan,
e t a l
. , t h a t t h e i r membership in the association has been suspended and shall take effect
immediately upon receipt thereof. A result of which, a complaint for illegal suspension was filed
by the private respondents before the Department of Labor and Employment, National Capital Region(DOLE-
NCR). The Regional Director of the latter rendered a decision adverse to the petitioners. The petitioners
appealed to the BLR-DOLE, but the same and the motion for reconsideration were denied. When appealed
before the Court of Appeals, said petition was still denied due course for lack of merit. Hence, the
petition is now elevated to the Supreme Court by way of petition for review on certiorari.

ISSUE: W hether or not the assent of 30% of the members of the union is required to confer
jurisdiction upon the BLR or LRD in intra-union conflicts.

RULING: The Court ruled in the negative. The 30% support requirement needed to report violations of
rights and conditions of union membership, as found in the last
paragrapho f A r t i c l e 2 4 1 o f t h e L a b o r C o d e , i s n o t m a n d a t o r y . T h e
c o u r t r e i t e r a t e d i t s pronouncements made in the case of Rodriguez vs Dir., BLR, as follows:

“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
sameLabor 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."
NOTE:Kindly relate this case to quest ion # 1. The answer is NO. Please refer to the
aboveruling
G.R. No. 152322 February 15, 2005
ERNESTO C. VERCELES, DIOSDADO F. TRINIDAD, SALVADOR G. BLANCIA, ROSEMARIE DE
LUMBAN, FELICITAS F. RAMOS, MIGUEL TEAÑO, JAIME BAUTISTA and FIDEL ACERO, as
Officers of the University of the East Employees’ Association v. 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
FACTS: The case arose from a memorandum filed by Petitoners against Private Respondent for
allegedly spreading false rumors and creating disinformation among the members of the said
association.
The rumors, according to Petitioners happened when Private respondents, in filing a complaint before
the DOLE-NCR complained of petitioners’ refusal to render financial and other reports, and deliberate
refusal to call general and special meetings. According to the findings of CA, 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. The last association’s meeting was conducted
on 21 April 1995, and the copy of the minutes thereon was submitted to BLR-DOLE only on 24
February 1998.

Petitioners do not hide the fact that they belatedly submitted their financial reports and the minutes of
their meetings to the DOLE.

Petitioners’ Contention: 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. 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.

ISSUE: Whether or not 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?
RULING: 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 union’s/association’s books of accounts and other documents pertaining to the
union funds, and to regularly conduct special and general membership meetings in accordance with
the union’s constitution and by-laws.

The passage of General Assembly Resolution No. 10 dated 10 December 1997 and Resolution No.
8, Series of 2000, which supposedly cured the lapses committed by the association’s officers and
reiterated the approval of the general membership of the acts and collateral actions of the
association’s officers cannot redeem the petitioners from their predicament. The obligation to hold
meetings and render financial reports is mandated by UEEA’s 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 UEEA’s 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.
SAN MIGUEL CORP EMPLOYEES UNION VS SAN MIGUEL PACKING EMPLOYEES UNION . G.R.
No. 171153

Topic: Union Registration Requirements

QUICKIE SUMMARY: SM Packing Employees Union is a LOCAL or CHAPTER of PDMP which

seeks to be an INDEPENDENT LABOR ORGANIZATION. For its registration AS A CHAPTER, the
applicable law to them is the D.O. No. 9 which no longer requires the submission of the names of at
least 20% of all its employees in the bargaining unit. San Mig Corp Union claims that SM Packing
failed to meet the requirements set forth by Art 234 of the Labor Code which mandates the
submission of the 20% names and that the Implementing Rules of D.O. No. 9 is violative of Art 234 of
the Labor Code because it provides a less stringent rule (which does not require the submission of
the 20% names). SC ruled that the requirements for the registration of an INDEPENDENT LABOR
UNION and the requirements for the creation of a LOCAL or CHAPTER are different. Since SM
Packing seeks to be a legitimate labor organization, D.O No. 9 is not the one applicable, but Art 234
of the Labor Code.

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 namely San Miguel
Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel
Packaging Products (SMPP)

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang

Pilipino.Thereafter, respondent filed three separate petitions for certification election to represent
SMPP, SMCSU, and SMBP. All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.

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. 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) and
234(c) of the Labor Code.

DOLE-NCR Regional Director Maximo B. Lim 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

Bureau of Labor Relations: Reversed DOLE NCR and declared that SM Packing Employees shall
hereby remain in the roster of legitimate labor organizations

CA affirmed BLR

· Petitioner’s contention: 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. 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 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.
ISSUE: W/N SM Packing Employees met the requirements and thus, must remain a legitimate labor
organization

RULING: NO, SM Packing Employees failed to meet the requirement. Hence, they cannot be
declared as a legitimate labor organization

RATIO: A perusal of the records reveals that respondent is registered with the BLR as a local or
chapter of PDMP. The applicable Implementing Rules (Department Order No. 9) enunciates a two-
fold procedure for the creation of a chapter or a local. The first involves the affiliation of an
independent union with a federation or national union or industry union. The second, finding
application in the instant petition, involves the direct creation of a local or a chapter through the
process of chartering. The Implementing Rules stipulate that a local or chapter may be directly
created by a federation or national union.

Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9,
violated Article 234 of the Labor Code when it provided for less stringent requirements for the creation
of a chapter or local. Article 234 of the Labor Code provides that an independent labor organization
acquires legitimacy only upon its registration with the BLR: xxx 3) The names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to
operate; xxx

It is emphasized that the foregoing pertains to the registration of an independent labor organization,
association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark
case of Progressive Development Corporation v. Secretary, Department of Labor and Employment,
declared that when an unregistered union becomes a branch, local or chapter, some of the
aforementioned requirements for registration are no longer necessary or compulsory.
Whereas an applicant for registration of an independent union is mandated to submit, among
other things, the number of employees and names of all its members comprising at least 20%
of the employees in the bargaining unit where it seeks to operate, as provided under Article 234
of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no
longer required of a branch, local or chapter. The intent of the law in imposing less requirements
in the case of a branch or local of a registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in order to increase the local unions
bargaining powers respecting terms and conditions of labor.

DISPOSITIVE: San Miguel Corp Union won. The Certificate of Registration of San Miguel Packaging
Union is ORDERED CANCELLED, and DROPPED from the rolls of legitimate labor organizations.

DOCTRINE: When an unregistered union becomes a branch, local or chapter, some of the
requirements for registration are no longer necessary or compulsory. Whereas an applicant for
registration of an independent union is mandated to submit, among other things, the number of
employees and names of all its members comprising at least 20% of the employees in the bargaining
unit where it seeks to operate.
SAN MIGUEL CORPORATION EMPLOYEES UNION—PHILIPPINE TRANSPORT v. SAN MIGUEL
PACKAGING PRODUCTS EMPLOYEES UNION—PAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO, GR No. 171153, 2007-09-12
Facts:
Department of Labor and Employment (DOLE)... which upheld the Certificate of Registration of
respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA
NG MANGGAGAWANG PILIPINO (SMPPEU PDMP);
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)
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).
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.
DOLE-NCR... 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.[
Respondent appealed to the BLR
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 filed with the Court of Appeals
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 by-laws, 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.
Issues:
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
Ruling:
There is merit in petitioner's contentions.
A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of
PDMP
Hence, respondent was directly chartered by PDMP.
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.)
This Court, in the landmark case of Progressive 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]
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
organization[37] 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
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.
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.
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.
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,... 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.
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.
Principles:
A legitimate labor organization[19] 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 representative[23] 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]
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
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
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.)
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.

Eduardo Mariño, et.,al. v. Gil Gamilla et.,al.

G.R. No. 149763, July 7, 2009
Facts :
Petitioners were among the executive officers and directors of the UST Facult
y U n i o n (USTFU), the bargaining representative of the faculty members of the
university. Respondents were professors and likewise members of USTFU. The 1986 CBA
expired on May 1988. Thereafter, a bargaining negotiations un sued between UST and the
petitioners. As the parties were not able to reach agreement, a deadlock was declared
by USTFU and filed a notice of strike. The DOLE issued order laying the terms and
conditions for a new CBA and said CBA were entered in 1991 effective
June1988. Subsequently, a MOA was executed whereby faculty members belonging to the CBA will
begranted additional economic benefits. Respondent filed a complaint with the Med
Arbiter for the explusion of the petitioner’s group that they violated the rights and
conditions of membership of USTFU.

Marino v. Gil Y. Gamilla (2009)

Petitioners: EDUARDO J. MARIÑO, JR., MA. MELVYN P. ALAMIS, NORMA P. COLLANTES, AND
FERNANDO PEDROSA

Respondents: GIL Y. GAMILLA, RENE LUIS TADLE, NORMA S. CALAGUAS, MA. LOURDES C.
MEDINA, EDNA B. SANCHEZ, REMEDIOS GARCIA, MAFEL YSRAEL, ZAIDA GAMILLA, AND
AURORA DOMINGO

Ponente:CHICO-NAZARIO

Topic: Requisites of Check-Off; Payment of Special Assessment (skipped other issues– moot)
FACTS:

 Petitioners were among the executive officers and directors (Mariño Group) of theUniversity of
Sto. Tomas Faculty Union (USTFU), the bargaining representative of the faculty members of
UST.
 Respondents (Gamilla Group) were UST professors and USTFU members.
 On 10 September 1992, UST and USTFU executed a Memorandum of Agreement (MOA),
whereby UST faculty members belonging to the collective bargaining unit were granted
additional economic benefits for the fourth and fifth years of the 1988-1993 CBA, specifically,
the period from 1 June 1992 up to 31 May 1993.
 On 12 September 1992, the majority of USTFU members signed individual instruments of
ratification, which purportedly signified their consent to the economic benefits granted under
the MOA. Said instruments also included:
o In consideration of the efforts of the UST Faculty Union as the faculty members' sole
and exclusive collective bargaining representative in obtaining the said P42 million
package of economic benefits, a check-off of ten percent thereof covering union
dues, and special assessment for Labor Education Fund and attorney's fees from
USTFU members and agency fee from non-members for the period of the
Agreement is hereby authorized to be made in one lump sum effective immediately,
provided that two per cent (sic) shall be for [the] administration of the Agreement and
the balance of eight per cent (sic) shall be for attorney's fees to be donated, as pledged
by the USTFU lawyer to the Philippine Foundation for the Advancement of the Teaching
Profession, Inc. whose principal purpose is the advancement of the teaching profession
and teacher's welfare, and provided further that the deductions shall not be taken from
my individual monthly salary but from the total package of P42 million due under the
Agreement.
 USTFU, through its President, Mariño, wrote a letterdated 1 October 1992 to the UST
Treasurer requesting the release to the union of the sum of P4.2 million, which was 10% of the
P42 million economic benefits package granted by the MOA to faculty members belonging to
the collective bargaining unit. The P4.2 million was sought by USTFU in consideration of its
efforts in obtaining the said P42 million economic benefits package.
 UST remitted the sum of P4.2 million to USTFU on 9 October 1992.
 After deducting from the P42 million economic benefits package the P4.2 million check-off to
USTFU, the amounts owed to UST, and the salary increases and bonuses of the covered
faculty members, a net amount of P6,389,145.04 remained. The remaining amount was
distributed to the faculty members on 18 November 1994.
 On 15 December 1994, respondents filed with the Med-Arbiter, DOLE-National Capital Region
(NCR), a Complaint for the expulsion of the Mariño Group as USTFU officers and directors.
Respondents alleged in their Complaint that the Mariño Group violated the rights and
conditions of membership in USTFU, particularly by:
o 1) investing the unspent balance of the P42 million economic benefits package given by
UST without prior approval of the general membership;
o 2) simultaneously holding elections viva voce;
o 3) ratifying the CBA involving the P42 million economic benefits package; and
o 4) approving the attorney's/agency fees worth P4.2 million in the form of check-off.
 o Respondents prayed that the Mariño Group be declared jointly and severally liable for
refunding all collected attorney's/agency fees from individual members of USTFU and
the collective bargaining unit; and that, after due hearing, the Mariño group be expelled
as USTFU officers and directors.
 The case, along with three others involving the same parties, were consolidated and indorsed
to the Office of the Regional Director of the DOLE-NCR.
 The DOLE-NCR Regional Order declared that the check-off of P4.2 million collected by the
Mariño Group, as negotiation fees, was invalid. According to the MOA, the P42 million
economic benefits package was chargeable against the share of the faculty members in the
incremental proceeds of tuition fees collected and still to be collected. Under Republic Act No.
6728, 70% of the tuition fee increases should be allotted to academic and non-academic
personnel. Given that the records were silent as to how much of the P42 million economic
benefits package was obtained through negotiations and how much was from the statutory
allotment of 70% of the tuition fee increases, the entire amount was within the statutory
allotment, which could not be the subject of negotiation and, thus, could not be burdened by
negotiation fees.
 Thus, the judgment:
o A) Expelling [the Mariño Group] from their positions as officers of USTFU, and hereby
order them under pain of contempt, to cease and desist from performing acts as such
officers;
o B) Ordering [the Mariño Group] to jointly and severally refund to USTFU the amount of
P4.2 M checked-off as attorney's fees from the P42 M economic package.
 On appeal, the Bureau of Labor Relations (BLR) affirmed with modification “to the effect that
appellant USTFU officers [Mariño Group] are hereby ordered to return to the general
membership the amount of P4.2 million they have collected by way of attorney's fees.”
 The BLR added that as was held by the Supreme Court in Cebu Institute of Technology v.
Ople, RA 6728 has already provided for the minimum percentage of tuition fee increases to be
allotted for teachers and other school personnel. This allotment is mandatory and cannot be
diminished, although it may be increased by collective bargaining. It follows that only the
amount beyond that mandated by law shall be subject to negotiation fees and attorney's fees
for the simple reason that it was only this amount that the school employees had to bargain for.
 The BLR further reasoned that the P4.2 million collected by the Mariño Group was in the
nature of attorney's fees or negotiation fees and, therefore, fell under the general prohibition
against such fees in Article 222(b)(now 228(b)) of the Labor Code, as amended. Also, the
exception to charging against union funds was not applicable because the P42 million
economic benefits package under the MOA was not union fund, as the same was intended not
for the union coffers, but for the members of the entire bargaining unit. The fact that the P4.2
million check-off was approved by the majority of USTFU members was immaterial in view of
the clear command of Article 222(b) that any contract, agreement, or arrangement of any sort,
contrary to the prohibition contained therein, shall be null and void.
 Petitioners filed with the Court of Appeals a Petition for Certiorariunder Rule 65 of the Rules of
Court.
 The CA affirmed, adding:
o Whether or not UST implemented the mandate of Republic Act 6728 voluntarily or
through the efforts and prodding of the Union does not and cannot change or alter a
 whit the nature of the economic package or the purpose or purposes of the allocation of
the said amount. For, if we acquiesced to and sustained Petitioners' stance, we will
thereby be leaving the compliance by the private educational institutions of the mandate
of Republic Act 6728 at the will, mercy, whims and caprices of the Union and the private
educational institution. This cannot and should not come to pass. xxx
o Moreover, [Section 5 of Rule X of] the CBL of the Union provides that:”Special
assessments or other extraordinary fees such as for payment of attorney's fees shall be
made only upon such a resolution duly ratified by the general membership by secret
balloting. x x x.”
o Also, Article 241(n) (now 250(n)) of the Labor Code, as amended, provides that no
special assessment shall be levied upon the members of the union unless authorized by
a written resolution of a majority of all the members at a general membership meeting
duly called for the purpose. xxx
o In "ABS-CBN Supervisors-Employees Union Members versus ABS-CBN Broadcasting
Corporation, 304 SCRA 489[Note: also cited by SC in this case]", our Supreme Court
declared that Article 241(n) of the Labor Code, as amended, speaks of three (3)
requisites, to wit: (1) authorization by a written resolution of the majority of all members
at the general membership meeting called for the purpose; (2) secretary's record of the
minutes of the meeting; and (3) individual written authorization for check-off duly signed
by the employee concerned.
o Contrary to the provisions of Articles 222(b) and 241(n) of the Labor Code, as amended,
and Section 5, Rule X of [the] CBL of the Union, no resolution ratified by the general
membership of [the] USTFU through secret balloting which embodied the award of
attorney's fees was submitted. Instead, the Petitioners submitted copies of the form for
the ratification of the MOA and the check-off for attorney's fees. xxx
o The aforementioned "ratification with check-off" form embodied the: (a) ratification of the
MOA; (b) check-off of union dues; and (c) check-off of a special assessment, i.e.,
attorney's fees and labor education fund. x x x. Patently, the CBL was not complied
with.
o Worse, the check-off for union dues and attorney's fees were included in the ratification
of the MOA. The members were thus placed in a situation where, upon ratification of the
MOA, not only the check-off of union dues and special assessment for labor education
fund but also the payment of attorney's fees were (sic) authorized.
 After its motion for reconsideration was denied, petitioners filed this petition.
 Petitioners argue that the P42 million economic benefits package granted to the covered
faculty members were additional benefits, which resulted from a long and arduous process of
negotiations between the Mariño Group and UST.
The BLR and the Court of Appeals were in error for considering the said amount as
purely sourced from the allocation by UST of 70% percent of the incremental proceeds
of tuition fee increases, in accordance with RA 6728. Said law was improperly applied
as a general law that decrees the allocation by all private schools of 70% of their tuition
fee increases to the payment of salaries, wages, allowances and other benefits of their
teaching & non-teaching personnel. It is clear from the title of the law itself that it only
covers government assistance to students and teachers in private education. Section 5
of RA 6728 unequivocally limits the scope of the law to tuition fee supplements and
 subsidies extended by the Government to students in private high schools. Thus, the
petitioners maintain that Republic Act No. 6728 has no application to the MOA executed
on 10 September 1992 between UST and USTFU, through the efforts of the Mariño
Group.
 Petitioners contend that the P4.2 million check-off, from the P42 million economic benefits
package, was lawfully made since the requirements of Article 222(b) of the Labor Code, as
amended, were complied with by the Mariño Group. The individual paychecks of the covered
faculty employees were not reduced and the P4.2 million deducted from the P42 million
economic benefits package became union funds, which were then used to pay attorney's fees,
negotiation fees, and similar charges arising from the CBA.
o In addition, the P4.2 million constituted a special assessment upon the USTFU
members, the requirements for which were properly observed. The special assessment
was authorized in writing by the general membership of USTFU during a meeting in
which it was included as an item in the agenda. Petitioners fault the CA for disregarding
the authorization of the special assessment by USTFU members. There is no law that
prohibits the insertion of a written authorization for the special assessment in the same
instrument for the ratification of the 10 September 1992 MOA. Neither is there a law
prescribing a particular form that needs to be accomplished for the authorization of the
special assessment. The faculty members who signed the ratification of the MOA, which
included the authorization for the special assessment, have high educational
attainment, and there is ample reason to believe that they affixed their signatures
thereto with full comprehension of what they were doing.

ISSUES:

 WoN the CA gravely abused its discretion when it upheld the application by the Regional
Director and the BLR of RA 6728 to the P42 million CBA package of economic benefits
o NO, the CA did not err. The parties themselves stipulated in Section 7 of the MOA they
signed on 10 September 1992 that:
 7.0. It is clearly understood and agreed upon that the aggregate sum of P42
million is chargeable against the share of the faculty members in the
incremental proceeds of tuition fees collected and still to be collected[;]
Provided, however, that he (sic) commitment of the UNIVERSITY to pay the
aggregate sum of P42 million shall subsist even if the said amount exceeds the
proportionate share that may accrue to the faculty members in the tuition fee
increases that the UNIVERSITY may be authorized to collect in School-Year
1992-1993, and, Provided, finally, that the covered faculty members shall still be
entitled to their proportionate share in any undistributed portion of the
incremental proceeds of the tuition fee increases in School-Year 1992-1993,
and which incremental proceeds are, by law and pertinent Department of
Education Culture and Sports (DECS) regulations, required to be allotted
for the payment of salaries, wages, allowances and other benefits of
teaching and non-teaching personnel for the UNIVERSITY.(Emphases
supplied.)
o The "law" in Section 7 of the MOA can only refer to Republic Act No. 6728, otherwise
known as the "Government Assistance to Students and Teachers in Private Education
 Act." Republic Act No. 6728 was enacted in view of the declared policy of the State, in
conformity with the mandate of the Constitution, to promote and make quality education
accessible to all Filipino citizens, as well as the recognition of the State of the
complementary roles of public and private educational institutions in the educational
system and the invaluable contribution that the private schools have made and will
make to education.The said statute primarily grants various forms of financial aid to
private educational institutions such as tuition fee supplements, assistance funds, and
scholarship grants.
o One such form of financial aid is provided under Section 5 of RA 6728:
 SEC. 5. Tuition Fee Supplement for Student in Private High School. –
 xxx
 (2) Assistance under paragraph (1), subparagraphs (a) and (b) shall be
granted and tuition fees under subparagraph (c) may be increased, on the
condition that seventy percent (70%) of the amount subsidized, allotted for
tuition fee or of the tuition fee increases shall go to the payment of salaries,
wages, allowances and other benefits of teaching and non-teaching
personnel except administrators who are principal stockholders of the
school, and may be used to cover increases as provided for in the collective
bargaining agreements existing or in force at the time when this Act is
approved and made effective: xxx
o Contrary to petitioners' argument, the right of private schools to increase their tuition fee
-- with their corresponding obligation to allocate 70% of said increase to the payment of
the salaries, wages, allowances, and other benefits of their employees -- is not limited to
private high schools. Section 9of RA 6728, on "Further Assistance to Students in Private
Colleges and Universities," is crystal clear in providing that: “d) Government assistance
and tuition increases as described in this Section shall be governed by the same
conditions as provided under Section 5 (2).”
o UST and USTFU stipulated in their MOA that the P42 million economic benefits
package granted by UST to the members of the collective bargaining unit represented
by USTFU, was chargeable against the 70% allotment from the proceeds of the tuition
fee increases collected and still to be collected by UST. As observed by the DOLE-NCR
Regional Director, and affirmed by both the BLR and the Court of Appeals, there is no
showing that any portion of the P42 million economic benefits package was derived
from sources other than the 70% allotment from tuition fee increases of UST.
o Given the lack of evidence to the contrary, it can be conclusively presumed that the
entire P42 million economic benefits package extended to USTFU came from the 70%
allotment from tuition fee increases of UST. Preceding from this presumption, any
deduction from the P42 million economic benefits package, such as the P4.2 million
claimed by the Mariño Group as attorney's/agency fees, should not be allowed, because
it would ultimately result in the reduction of the statutorily mandated 70% allotment from
the tuition fee increases of UST.
 WoN the CA gravely abused its discretion when it disallowed the lump-sum check-off
amounting to P4.2 million
o NO, the CA did not. Article 222(b) (now 228(b)) states: “(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 unions 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.”
 The general rule is that attorney's fees, negotiation fees, and other similar
charges may only be collected from union funds, not from the amounts that
pertain to individual union members.
 As an exception to the general rule, special assessments or other extraordinary
fees may be levied upon or checked off from any amount due an employee for as
long as there is proper authorization by the employee.
o Article 241(n)(now 250(n)) reads: “(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 assessment or fees. The record
shall be attested to by the president.”
o And Article 241(o)(now 250(o)) provides: “(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.”
o A check-off is a process or device whereby the employer, on agreement with the Union,
recognized as the proper bargaining representative, or on prior authorization from the
employees, deducts union dues or agency fees from the latter's wages and remits them
directly to the Union. Its desirability in a labor organization is quite evident. The Union is
assured thereby of continuous funding. The system of check-off is primarily for the
benefit of the Union and, only indirectly, for the individual employees.
o The P42 million economic benefits package granted by UST did not constitute union
funds from whence the P4.2 million could have been validly deducted as attorney's fees.
The P42 million economic benefits package was not intended for the USTFU coffers,
but for all the members of the bargaining unit USTFU represented, whether members or
non-members of the union. A close reading of the terms of the MOA reveals that after
the satisfaction of the outstanding obligations of UST under the 1986 CBA, the balance
of the P42 million was to be distributed to the covered faculty members of the collective
bargaining unit in the form of salary increases, returns on paycheck deductions; and
increases in hospitalization, educational, and retirement benefits, and other economic
benefits. The deduction of the P4.2 million, as alleged attorney's/agency fees, from the
P42 million economic benefits package effectively decreased the share from said
package accruing to each member of the collective bargaining unit.
o Petitioners' line of argument - that the amount of P4.2 million became union funds after
its deduction from the P42 million economic benefits package and, thus, could already
be used to pay attorney's fees, negotiation fees, or similar charges from the CBA - is
absurd. Petitioners' reasoning is evidently flawed since the attorney's fees may only be
paid from union funds; yet the amount to be used in paying for the same does not
 become union funds until it is actually deducted as attorney's fees from the benefits
awarded to the employees. It is just a roundabout argument. What the law requires is
that the funds be already deemed union funds even before the attorney's fees are
deducted or paid therefrom; it does not become union funds after the deduction or
payment. To rule otherwise will also render the general prohibition stated in Article
222(b) nugatory, because all that the union needs to do is to deduct from the total
benefits awarded to the employees the amount intended for attorney's fees and, thus,
"convert" the latter to union funds, which could then be used to pay for the said
attorney's fees.
o The requisites for a valid levy and check-off of special assessments, laid down by
Article 241(n) and (o), respectively, of the Labor Code, as amended, and Section 5,
Rule X of the USTFU Constitution and By-Laws have not been complied with.
o The inclusion of the authorization for a check-off of union dues and special
assessments for the Labor Education Fund and attorney's fees, in the same document
for the ratification of the 10 September 1992 MOA granting the P42 million economic
benefits package, necessarily vitiated the consent of USTFU members. For sure, it is
fairly reasonable to assume that no individual member of USTFU would casually turn
down the substantial and lucrative award of P42 million in economic benefits under the
MOA. However, there was no way for any individual union member to separate his or
her consent to the ratification of the MOA from his or her authorization of the check-off
of union dues and special assessments. As it were, the ratification of the MOA carried
with it the automatic authorization of the check-off of union dues and special
assessments in favor of the union. Such a situation militated against the legitimacy of
the authorization for the P4.2 million check-off by a majority of USTFU membership.
Although the law does not prescribe a particular form for the written authorization for the
levy or check-off of special assessments, the authorization must, at the very least,
embody the genuine consent of the union member.
o The failure of the Mariño Group to strictly comply with the requirements set forth by the
Labor Code, as amended, and the USTFU Constitution and By-Laws, invalidates the
questioned special assessment. Substantial compliance is not enough in view of the
fact that the special assessment will diminish the compensation of the union members.
Their express consent is required, and this consent must be obtained in accordance
with the steps outlined by law, which must be followed to the letter. No shortcuts are
allowed.
o Viewed in this light, the Court does not hesitate to declare as illegal the check-off of
P4.2 million, from the P42 million economic benefits package, for union dues and
special assessments for the Labor Education Fund and attorney's fees. Said amount
rightfully belongs to and should be returned by petitioners to the intended beneficiaries
thereof, i.e., members of the collective bargaining unit, whether or not members of
USTFU. This directive is without prejudice to the right of petitioners to seek
reimbursement from the other USTFU officers and directors, who were part of the
Mariño Group, and who were equally responsible for the illegal check-off of the
aforesaid amount.

NOTES:
GALVADORES, ET AL. v. TRAJANO
G.R. No. 70067. September 15, 1986

Petitioner – employees of PLDT CompanyRespondent Free Telephone Workers Union (FIWU) – Union
Respondent Atty. Espinas – Respondent Counsel

Facts:

•Respondent counsel has been the legal counsel of FIWU since 1964.
•He received a letter from the Union President requesting him to appear as counsel in the on-going
labor dispute in PLDT and the union bound itself to compensate him of 10% of any improvement in
the PLDT’s last offer to the deadlock in CBA negotiations
•PLDT’s “last offer” referred to on the wage increases was:P230 – first year of the proposed
CBA;P100 – for the 2ndyear; and P90 – for the 3rd
year
•
The Minister of Labor assumed jurisdiction over all unresolved issues in the bargaining
deadlock between PLDT and Union and proceeded to resolve the same by compulsory arbitration.
•
The Minister awarded across-the-board wage increases of P330/month for 1985; P155/month
for1983 and P155/month for 1984 and other fringe benefits.
As noted, there were improvementsobtained from PLDT’s “last offer”.

•
The Executive Board of the Union passed a resolution requesting PLDT to deduct P115.00
peremployee for the legal services of Respondent counsel.
•
Petitioners filed a letter-complaint before the MOLE assailing the imposition of P130.00
(latercorrected to P155.00) per employee as attorney’s fees for being unreasonable and violative of
Art.242 (o) of the Labor Code
o
They were also saying that deductions cannot be given legal effect by a mere Boardresolution but
needs the ratification by the general membership of the Union.
•
Respondent Union and Counsel proferred the argument that the attorney’s fees being
exacted pertained to his services during compulsory arbitration proceedings and cannot
be considered asnegotiation fees or attorney's fees within the context of Article 242(o) of the Labor
Code
o
Respondent Counsel also posits that he surfaced only as lawyer of the Union when theemployees
themselves engaged in mass action to force a solution to the deadlock in theirnegotiations
•
Minister of Labor referred to the BLR the dispute for being intra-union in nature.
•
Meanwhile, the Union held a plebiscite ratifying the Executive Board resolution.
•
Petitioners questioned the plebiscite on the ground that one of the questions was misleading
anddeceptive as it assumed that there was no dispute regarding the deduction of attorney’s fees
fromthe monetary benefits awarded to PLDT employees.
Issue:
W/N the individual written authorization of the employees must first be obtained before any
assessment can be made against monetary benefits awarded to them pursuant to Art. 242 (o) of the
Labor Code
Held & Ratio:YES. The required individual authorizations in this case are wanting
•
The Omnibus Rules Implementing the Labor Code provide that deductions from wages of the
employees may only be made by the employer in cases authorized by law.

•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 benefits awarded to PLDT employees still formed part of the collective bargaining negotiations
although placed already under compulsory arbitration.
o
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

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

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.

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 Anglo-American 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 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 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 Anglo-American 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.

Narvasa, Cruz, and Griño-Aquino, JJ., concur.

Gancayco, J., is on leave.

ACEDERA V. INTERNATIONAL CONTAINER TERMINAL SERVICES, INC.

Topic: Rights of Legitimate Labor Organization

FACTS:
Jerry Acedera, et al. are employees of International Container Terminal Services, Inc. (ICTSI) and are
members of Associated Port Checkers & Workers Union-International Container Terminal Services,
Inc.(APCWU-ICTSI), a duly registered labor organization. ICTSI entered into a five-year Collective
Bargaining Agreement (CBA) with APCWU which reduced the employees· work days from 304 to 250
days a year.

The Wage Board decreed wage increases in NCR which affected ICTSI. Upon the request of
APCWU to compute the actual monthly increase in the employee’s salary by multiplying the
mandated increase by 365days and dividing by12 months, ICTSI stopped using 304 days as divisor
and started using 365 days to determine the daily wage.

Later on, ICTSI entered into a retrenchment program which prompted APCWU to file a complaint
before the Labor Arbiter (LA) for ICTSI·s use of 365 days, instead of 250 days, as divisor in the
computation of wages. Acedera et al. filed a Motion to Intervene which was denied by the LA. On
appeal, National Labor Relations Commission (NLRC) affirmed LA·s decision. Acedera et al. filed a
petition for certiorari to the Court of Appeals (CA) which was dismissed.

LA: denied motion to intervene

NLRC: affirmed LA’s decision
CA: dismissed appeal

ISSUE/S:
1. Whether or not Acedera et al. have no legal right to intervene in the case as their intervention was
a superfluity

RULING: YES, there is unfair labor practice.

1. That APCWUacted in a representative capacity "for and in behalf of its Union members and other
employees similarly situated, the title of the case filed by it at the Labor Arbiters Office so expressly
states. While a party acting in a representative capacity, such as a union, may be permitted to
intervene in a case, ordinarily, a person whose interests are already represented will not be permitted
to do the same except when there is a suggestion of fraud or collusion or that there representative will
not act in good faith for the protection of all interests represented by him.

2. Acedera et al. cite the dismissal of the case filed by ICTSI, first by the Labor Arbiter, and later by
the Court of Appeals. The dismissal of the case does not, however, by itself show the existence of
fraud or collusion or a lack of good faith on the part of APCWU.

3. There must be clear and convincing evidence of fraud or collusion o lack of good faith
independently of the dismissal. This, Acedera et al. failed to proffer. Acedera et al. likewise express
their fear that APCWU would not prosecute the case diligently because of its “sweetheart
relationship" with ICTSI. There is nothing on record,
however, to support this alleged relationship which allegation surfaces a
a mereafterthought because it was never raised early on. It was raised only in petitioners-appellants·
reply to ICTSI’s comment in the petition at bar, the last pleading submitted to this Court, which was
filed on June 20, 2001 or more than 42 months after petitioners-Appellants filed their Complaint-in-
Intervention with Motion to Intervene with the Labor Arbiter.

To reiterate, for a member of a class to be permitted to intervene in a

representative action, fraud or collusion or lack of good faith on the part of the representative must be
proven. It must be based on facts borne on record.
Mere assertions, as what petitioners-appellants proffer, do not suffice.

DISPOSITIVE: petition dismissed. In favor of INTERNATIONAL CONTAINER TERMINAL

SERVICES, INC. (ICTSI).

DOCTRINE: Ordinarily, a person whose interests are already represented will not be permitted to do
the same except when there is a suggestion of fraud or collusion or that the representative will not act
in good faith.

G.R. No. 146073 January 13, 2003

JERRY E. ACEDERA, ANTONIO PARILLA, AND OTHERS LISTED IN ANNEX "A,"

1
,
petitioners-appellants, vs.
INTERNATIONAL CONTAINERTERMINAL SERVICES, INC. (ICTSI), NATIONAL LABOR
RELATIONSCOMMISSION and HON. COURT OF APPEALS,
respondents-appellees.
Facts:
Ordinarily, a person whose interests are already represented will not bepermitted to do the same
except when there is a suggestion of fraud orcollusion or that the representative will not act in good
faith.Jerry Acedera, et al. are employees of International Container TerminalServices, Inc. (ICTSI)
and are members of Associated Port Checkers &Workers Union-International Container Terminal
Services, Inc.(APCWU-ICTSI), a duly registered labor organization. ICTSI entered into a five-year
CBA with APCWU which reduced the employees· work days from304 to 250 days a year.The Wage
Board decreed wage increases in NCR which affected ICTSI.Upon the request of APCWU to
compute the actual monthly increase in
the employee’s
salary by multiplying the mandated increase by 365 daysand dividing by 12 months, ICTSI stopped
using 304 days as divisor andstarted using 365 days to determine the daily wage.Later on, ICTSI
entered into a retrenchment program which promptedAPCWU to file a complaint before the LA for
ICTSI·s use of 365 days,instead of 250 days, as divisor in the computation of wages. Acedera etal.
filed a Motion to Intervene which was denied by the LA. On appeal,NLRC affirmed LA·s decision.
Acedera et al. filed a petition forcertiorari to the CA which was dismissed.
Issue:
Whether or not Acedera et al. have no legal right to intervene inthe case as their intervention was a
superfluity.
YESRatio:
Acedera et al. stress that they have complied with the requisites forintervention because (1) they are
the ones who stand to gain or lose bythe direct legal operation and effect of any judgment that may
berendered in this case, (2) no undue delay or prejudice would result fromtheir intervention since their
Complaint-in-Intervention with Motion forIntervention was filed while the Labor Arbiter was still
hearing the caseand before any decision thereon was rendered, and (3) it was notpossible for them to
file a separate case as they would be guilty of forumshopping because the only forum available for
them was the LaborArbiter.Acedera et al., however, failed to consider, in addition to the rule
onintervention, the rule on representation. A labor union is one such partyauthorized to represent its
members under Article 242(a) of the LaborCode which provides that a union may act as the
representative of itsmembers for the purpose of CBA. This authority includes the power torepresent
its members for the purpose of enforcing the provisions of theCBA.That APCWU acted in
a representative capacity "for and in behalf of itsUnion members and other employees similarly
situated, the title of thecase filed by it at the Labor Arbiters Office so expressly states.While a party
acting in a representative capacity, such as a union, may bepermitted to intervene in a case,
ordinarily, a person whose interests arealready represented will not be permitted to do the same
except whenthere is a suggestion of fraud or collusion or that the representative willnot act in good
faith for the protection of all interests represented byhim.Acedera et al. cite the dismissal of the case
filed by ICTSI, first by theLabor Arbiter, and later by the Court of Appeals. The dismissal of thecase
does not, however, by itself show the existence of fraud or collusionor a lack of good faith on the part
of APCWU. There must be clear andconvincing evidence of fraud or collusion or lack of good
faithindependently of the dismissal. This, Acedera et al. failed to proffer.Acedera et al. likewise
express their fear that APCWU would notprosecute the case diligent
ly because of its “sweetheart relationship"
with ICTSI. There is nothing on record, however, to support this allegedrelationship which allegation
surfaces as a mere afterthought because it