4.
UNION FUNDS
Art. 250. Rights and conditions of membership in a
labor organization. (From 241)
The following are the rights and conditions of
membership in a labor organization:
a) No arbitrary or excessive initiation fees shall be
required of the members of a legitimate labor
organization nor shall arbitrary, excessive or
oppressive fine and forfeiture be imposed;
b) The members shall be entitled to full and detailed
reports from their officers and representatives of
all financial transactions as provided for in the
constitution and by-laws of the organization;
c) The members shall directly elect their officers,
including those of the national union or federation,
to which they or their union is affiliated, by secret
ballot at intervals of five (5) years. No qualification
requirements for candidacy to any position shall
be imposed other than membership in good
standing in subject labor organization. The
secretary or any other responsible union officer
shall furnish the Secretary of Labor and
Employment with a list of the newly-elected
officers, together with the appointive officers or
agents who are entrusted with the handling of
funds, within thirty (30) calendar days after the
election of officers or from the occurrence of any
change in the list of officers of the labor
organization; (As amended by Section 16,
Republic Act No. 6715, March 21,
d) The members shall determine by secret ballot,
after due deliberation, any question of major
policy affecting the entire membership of the
organization, unless the nature of the organization
or force majeure renders such secret ballot
impractical, in which case, the board of directors
of the organization may make the decision in
behalf of the general membership;
e) No labor organization shall knowingly admit as
members or continue in membership any
individual who belongs to a subversive
organization or who is engaged directly or
indirectly in any subversive activity;
f) No person who has been convicted of a crime
involving moral turpitude shall be eligible for
election as a union officer or for appointment to
any position in the union;
g) No officer, agent or member of a labor
organization shall collect any fees, dues, or other
contributions in its behalf or make any
disbursement of its money or funds unless he is
duly authorized pursuant to its constitution and
by-laws;
h) Every payment of fees, dues or other
contributions by a member shall be evidenced by
a receipt signed by the officer or agent making the
collection and entered into the record of the
organization to be kept and maintained for the
purpose;
i) The funds of the organization shall not be applied
for any purpose or object other than those
expressly provided by its constitution and by-laws
or those expressly authorized by written resolution
adopted by the majority of the members at a
general meeting duly called for the purpose;
j) Every income or revenue of the organization shall
be evidenced by a record showing its source, and
every expenditure of its funds shall be evidenced
by a receipt from the person to whom the
payment is made, which shall state the date,
place and purpose of such payment. Such record
or receipt shall form part of the financial records of
the organization. Any action involving the funds of
the organization shall prescribe after three (3)
years from the date of submission of the annual
financial report to the Department of Labor and
Employment or from the date the same should
have been submitted as required by law,
whichever comes earlier: Provided, That this
provision shall apply only to a legitimate labor
organization which has submitted the financial
 report requirements under this Code: Provided,
further, that failure of any labor organization to
comply with the periodic financial reports required
by law and such rules and regulations
promulgated thereunder six (6) months after the
effectivity of this Act shall automatically result in
the cancellation of union registration of such labor
organization; (As amended by Section 16,
Republic Act No. 6715, March 21, 1989)
k) The officers of any labor organization shall not be
paid any compensation other than the salaries
and expenses due to their positions as specifically
provided for in its constitution and by-laws, or in a
written resolution duly authorized by a majority of
all the members at a general membership
meeting duly called for the purpose. The minutes
of the meeting and the list of participants and
ballots cast shall be subject to inspection by the
Secretary of Labor or his duly authorized
representatives. Any irregularities in the approval
of the resolutions shall be a ground for
impeachment or expulsion from the organization;
l) The treasurer of any labor organization and every
officer thereof who is responsible for the account
of such organization or for the collection,
management, disbursement, custody or control of
the funds, moneys and other properties of the
organization, shall render to the organization and
to its members a true and correct account of all
moneys received and paid by him since he
assumed office or since the last day on which he
rendered such account, and of all bonds, securities
and other properties of the organization entrusted
to his custody or under his control. The rendering
of such account shall be made: 1. At least once a
year within thirty (30) days after the close of its
fiscal year; 2. At such other times as may be
required by a resolution of the majority of the
members of the organization; and 3. Upon
vacating his office. The account shall be duly
audited and verified by affidavit and a copy
thereof shall be furnished the Secretary of Labor.
m) The books of accounts and other records of the
financial activities of any labor organization shall
be open to inspection by any officer or member
thereof during office hours;
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 in 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) Other than for mandatory activities under the
Code, no special assessments, attorneys 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; and
p) It shall be the duty of any labor organization and
its officers to inform its members on the provisions
of its constitution and by-laws, collective
bargaining agreement, the prevailing labor
relations system and all their rights and
obligations under existing labor laws.
For this purpose, registered labor organizations may
assess reasonable dues to finance labor relations
seminars and other labor education activities.
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of
union registration or expulsion of officers from office
whichever is appropriate. At least thirty percent
(30%) of the members of a union or any member or
members specially concerned may report such
 violation to the Bureau. The Bureau shall have the
power to hear and decide any reported violation to
mete the appropriate penalty. Criminal and civil
liabilities arising from violations of above rights and
conditions of membership shall continue to be under
the jurisdiction of ordinary courts.
Art. 280. Improved offer balloting.
In an effort to settle a strike, the Department of
Labor and Employment shall conduct a referendum
by secret ballot on the improved offer of the
employer on or before the 30th day of the strike.
When at least a majority of the union members vote
to accept the improved offer the striking workers
shall immediately return to work and the employer
shall thereupon readmit them upon the signing of the
agreement.
In case of a lockout, the Department of Labor and
Employment shall also conduct a referendum by
secret balloting on the reduced offer of the union on
or before the 30th day of the lockout. When at least
a majority of the board of directors or trustees or the
partners holding the controlling interest in the case
of a partnership vote to accept the reduced offer, the
workers shall immediately return to work and the
employer shall thereupon readmit them upon the
signing of the agreement. (Incorporated by Section
28, Republic Act No. 6715, March 21, 1989)
Book V, Rule XIIIAdministration of Trade Union
Funds and Actions Arising Therefrom
Section 1. Right of union to collect dues and
agency fees. - The incumbent bargaining agent shall
continue to be entitled to check-off and collect dues and
agency fees despite the pendency of a representation
case, other inter/intra-union disputes or related labor
relations disputes.
Section 2. Visitorial power under Article 274. - The
Regional or Bureau Director may inquire into the
financial activities of any legitimate labor organization
and examine their books of accounts and other records
to determine compliance with the law and the
organization's constitution and by-laws. Such
examination shall be made upon the filing of a request or
complaint for the conduct of an accounts examination by
any member of the labor organization, supported by the
written consent of at least twenty (20%) percent of its
total membership.
Section 3. Where to file. - A request for examination
of books of accounts of independent labor unions,
chartered locals and workers associations pursuant to
Article 274 shall be filed with the Regional Office that
issued its certificate of registration or certificate of
creation of chartered local.
A request for examination of books of accounts of
federations or national unions and trade union centers
pursuant to Article 274 shall be filed with the Bureau.
Such request or complaint, in the absence of allegations
pertaining to a violation of Article 241, shall not be
treated as an intra-union dispute and the appointment of
an Audit Examiner by the Regional or Bureau Director
shall not be appealable.
Section 4. Actions arising from Article 241. - Any
complaint or petition with allegations of mishandling,
misappropriation or non-accounting of funds in violation
of Article 241 shall be treated as an intra-union dispute.
It shall be heard and resolved by the Med-Arbiter
pursuant to the provisions of Rule XI.
Section 5. Prescription. - The complaint or petition for
audit or examination of funds and book of accounts shall
prescribe within three (3) years from the date of
submission of the annual financial report to the
Department or from the date the same should have been
submitted as required by law, whichever comes earlier.
Section 6. Decision. - A decision granting the conduct
of audit shall include the appointment of the Audit
Examiner and a directive upon him/her to submit his/her
report and recommendations within ten (10) days from
termination of audit. The decision granting the conduct
of audit is interlocutory and shall not be appealable. The
decision denying or dismissing the complaint or petition
 for audit may be appealed within ten (10) days from
receipt thereof pursuant to the provisions prescribed in
Rule XI.
Section 7. Pre-audit conference. - Within twenty-four officers of the labor organization, the Audit Examiner shall:
(24) hours from receipt of the decision granting the
conduct of audit, the Regional Director shall summon the
parties to a pre- audit conference conducted by the Audit
Examiner to determine and obtain the following:
a) Sources of funds covered by the audit;
b) The banks and financial institutions where the
labor organization maintains its account;
c) Union books of accounts and financial statements;
d) Disbursement vouchers with supporting receipts,
invoices and other documents;
e) Income and revenue receipts;
f) Cash books;
g) Minutes of general membership meeting and board
meetings;
h) Other relevant matters and documents.
The first pre-audit conference shall be scheduled within
ten (10) days from receipt by the Audit Examiner of the
decision granting the conduct of an audit.
Section 8. Issuance of subpoena. - The Regional
Director may compel any party to appear or bring the
required financial documents in a conference or hearing
through the issuance of a subpoena ad testificandum or
subpoena duces tecum. He/She may also require the
employer concerned to issue certifications of union dues
and other assessments remitted to the union during the
period of audit.
Section 9. Conduct of audit examination. - Where
book of accounts are submitted by the parties, the Audit
Examiner shall:
a) Examine the transactions reflected in the
disbursement vouchers;
b) Determine the validity of the supporting
documents attached to the vouchers consistent
with the union's constitution and by-laws, relevant
resolutions of the union and the Labor Code;
c) Trace recording and posting in the disbursement
book;
d) Record observations or findings of all financial
transactions.
Where no book of accounts are maintained by the
a) Examine the transactions reflected in the
disbursement vouchers;
b) Determine the validity of the supporting
documents attached to the vouchers consistent
with the labor organization's constitution and by-
laws, relevant board resolutions, and the Labor
Code;
c) Prepare working papers or worksheet/s;
d) Record and post all financial transactions reflected
in the cash vouchers in the working papers or
worksheet/s; and
e) Record observations or findings of all financial
transactions.
The Audit Examiner shall conduct an inventory of all
physical assets acquired by the labor organization, if
any, and on the basis of his/her findings prepare his/her
audited financial report or statement reflecting the true
and correct financial accounts and balances of the labor
organization with relevant annexes attached.
Section 10. Period of audit. - The Audit Examiner
shall have sixty (60) days from the date of first pre- audit
conference within which to complete the conduct of
audit, unless the volume of financial records, the period
covered by the audit and other circumstances warrant
the extension thereof. In such a case, the Audit Examiner
shall notify the Med-Arbiter or the Bureau Director, as
the case may be, of such fact at least ten (10) days
before the expiration of the sixty (60) day period.
Section 11. Audit Report. - The Audit Examiner shall
make a report of his/her findings to the parties involved
and the same shall include the following:
a) Name of the labor organization;
b) Name of complainant(s) or petitioner(s) and
respondent(s);
c) Name of officers of the labor organization during
the period covered by the audit report;
d) Scope of the audit;
 e) List of documents examined;
f) Audit methods and procedures adopted; and
g) Findings and recommendations.
Section 12. Completion of audit. - A copy of the audit
report shall be forwarded by the Audit Examiner to the
Med-Arbiter or the Bureau Director, as the case may be,
within ten (10) days from termination of the audit,
together with the entire records of the case and all
documents relative to the conduct of the audit.
Section 13. Decision after audit. - The Med-Arbiter or
the Bureau Director shall render a decision within twenty
(20) days from receipt of the audit report. All issues
raised by the parties during the conduct of the audit
shall be resolved by the Med-Arbiter. The decision shall
be released in the same manner prescribed in Section
15, Rule XI.
When warranted, the Med-Arbiter or Bureau Director
shall order the restitution of union funds by the
responsible officer(s) in the same decision.
Section 14. Appeal. - Appeal from the decision of the
Med- Arbiter denying the conduct of audit and from the
results of the audit may be filed by any of the parties
with the Bureau. Decisions rendered by the Bureau after
the conduct of audit in the exercise of its original
jurisdiction may be appealed to the Office of the
Secretary. Both shall be resolved in accordance with the
provisions of Section 16, Rule XI.
Section 15. Period of inquiry or examination. - No
complaint for inquiry or examination of the financial and
book of accounts as well as other records of any
legitimate labor organization shall be entertained during
the sixty (60) day freedom period or within thirty (30)
days immediately preceding the date of election of union
officers. Any complaint or petition so filed shall be
dismissed.
Payment of Attorneys Fees
Art. 228. Appearances and Fees. (From 222)
a) Non-lawyers may appear before the Commission
or any Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or members
thereof.
b) No attorneys fees, negotiation fees or similar
charges of any kind arising from any collective
bargaining agreement shall be imposed on any
individual member of the contracting union:
Provided, However, that attorneys 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. (As amended by
Presidential Decree No. 1691, May 1, 1980)
(From 111)
a) In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages
recovered.
b) It shall be unlawful for any person to demand or
accept, in any judicial or administrative
proceedings for the recovery of wages, attorneys
fees which exceed ten percent of the amount of
wages recovered.
Art. 250. (From 241 g,h,m,n,o)
g) No officer, agent or member of a labor
organization shall collect any fees, dues, or other
contributions in its behalf or make any
disbursement of its money or funds unless he is
duly authorized pursuant to its constitution and
by-laws;
h) Every payment of fees, dues or other
contributions by a member shall be evidenced by
a receipt signed by the officer or agent making the
collection and entered into the record of the
organization to be kept and maintained for the
purpose;
 m) The books of accounts and other records of the fees should be deducted from the amount awarded, at the rate
financial activities of any labor organization shall of 10%, applying the Labor Code provisions on wages. Bank
be open to inspection by any officer or member and union employees alike assail these resolutions. The Court
thereof during office hours; held that the reliance on the aforementioned provisions is
n) No special assessment or other extraordinary fees mistaken and that it should be the union dues which should
may be levied upon the members of a labor shoulder the payment of attorneys fees.
organization unless authorized by a written DOCTRINE: The case is covered squarely by the mandatory
resolution of a majority of all the members in a and explicit prescription of Article 222 which is another
general membership meeting duly called for the guarantee intended to protect the employee against
purpose. The secretary of the organization shall unwarranted practices that would diminish his compensation
record the minutes of the meeting including the without his knowledge and consent. Art.. 222. Appearances and
list of all members present, the votes cast, the Fees. - x x x. (b) No attorney's fees, negotiation fees or similar
purpose of the special assessment or fees and the charges of any kind arising from any collective bargaining
recipient of such assessment or fees. The record negotiations or conclusion of the collective agreement shall be
shall be attested to by the president. imposed on any individual member of the contracting
o) Other than for mandatory activities under the union. Provided, however, that attorney's fees may be charged
Code, no special assessments, attorneys fees, against union funds in an amount to be agreed upon by the
negotiation fees or any other extraordinary fees parties. Any contract, agreement or arrangement of any sort to
may be checked off from any amount due to an the contrary shall be null and void.
employee without an individual written
authorization duly signed by the employee. The (Its a really short case, but everythings important, concisely
authorization should specifically state the amount, said. This is basically the full text.)
purpose and beneficiary of the deduction;
FACTS:
PACIFIC BANKING CORPORATION v. JACOBO CLAVE July 10, 1979 - The Deputy Minister rendered a decision
March 7, 1984| Aquino, J. | Union Funds - Payment of Attorneys
directing Pacific Banking Corporation (Corporation) and the
Fees
Pacific Banking Corporation Employees Organization
Digester: Roa, Annamhel Monique
(PABECO) to execute a CBA, following a deadlock.
o The parties had been negotiating since 1979 for a
SUMMARY: The corporation and the union filed an appeal in CBA for the years 1979-1981
the Office of the President regarding the terms and conditions
The union was represented in the negotiations by its
of their CBA. The parties had been negotiating with the
president, Paula S. Paug, allegedly assisted as consultant by
assistance of a lawyer, Atty. Saavedra, who filed his attorneys
the president of the National Union of Bank Employees
lien subsequent to the negotiations. The employees asked for a
(NUBE) with which it was formerly affiliated.
substantial amount to be deducted from their benefits as
stipulated in the CBA to pay for Saavedras attorneys fees. A lawyer, Juanito M. Saavedra, recorded his participation in
Initially, the Office through the Executive Assistant issued a the case when he filed a motion for reconsideration and a
resolution adopting a hands-free approach, saying the matter is supplemental motion. No action was taken on these
to be decided between the parties. However, in later motions.
resolutions, it consistently adopted the position that attorneys The parties appealed to the Office of the President (OP).
CBA negotiations were resumed.
 o Saavedra claims that for these negotiations, he wage shall not exceed 10% of the amount awarded. The
filed a memorandum, and says he exerted much fees may be deducted from the total amount due the
effort to expedite the decision. winning party."
March 1980 - The Office of the President issued a resolution o Resolution 3: Clave held that it is the legal
directing the parties to execute a CBA. obligation of the bank to turn over to the union
June 3, 1980 - CBA was ultimately finalized. Monetary treasurer 10% of the award as Saavedra's fees.
benefits of more than 14M pesos were involved in the three- o Resolution 4: April 13, 1981 - Deputy Presidential
year CBA, according to the bank's counsel. Executive Assistant Joaquin T. Venus, Jr. ordered
Even before this formalization of the CBA, Atty. Saavedra as the bank to pay the union treasurer the said
early as March 1980 already filed in the case his notice of attorney's fees less the amounts corresponding to
attorney's lien. the protesting employees. He held that the
The union officials requested the bank to withhold following Article 222 of the Labor Code, as
amended by Presidential Decree No. 1691,
around P345,000 out of the total benefits as 10% attorney's
effective May 1, 1980 (before the formalization of
fees of Saavedra. (Initial; it was said in the case that the
the CBA award) had NO retroactive effect to the
claim may go up to 1M pesos and that the banks did not
case:
have a problem with paying it at first.)
"ART. 222. Appearances and Fees. - x x x. (b)
Office of the President through the Executive Assistant
No attorney's fees, negotiation fees or similar
issued 4 resolutions:
charges of any kind arising from any collective
o Resolution 1: May 29, 1980 - Presidential
bargaining negotiations or conclusion of the
Executive Assistant Jacobo C. Clave refused to collective agreement shall be imposed on any
intervene in the matter. He ruled that the individual member of the contracting union. Provided,
payment of attorney's fees was a question that however, that attorney's fees may be charged
should be settled by the union and its lawyer against union funds in an amount to be agreed upon
themselves. by the parties. Any contract, agreement or
o Resolution 2: He "clarified" that attorney's fees arrangement of any sort to the contrary shall be null
may be deducted from the total benefits and paid and void." (271, PD 442; 220, PD 626; 222, PD 1691).
to Saavedra in accordance with the following Bank assailed the said resolutions by means of certiorari.
provisions of the Labor Code:
NUBE and 13 employees of the bank, members of the
"Art. 111. Attorney's fees. - (a) In cases of
PABECO, intervened in this case and prayed that the said
unlawful withholding of wages the culpable party may be
resolutions be declared void and that said sum of P345,000
assessed attorney's fees equivalent to ten percent of the
be paid directly to the employees or union members.
amount of wages recovered.
"(b) It shall be unlawful for any person to demand
RULING: Thee petition is granted. xxx The questioned amount
or accept, in any judicial or administrative proceedings
of about P345,000, with its increments, if any, should be paid
for the recovery of wages, attorney's fees which exceed
by the bank directly to its employee. No costs.
ten percent of the amount of wages recovered."
and of Rule VIII, Book III of the Implementing Rules and
Whether the Office of the President has jurisdiction to
Regulations as follows:
make an adjudication re: Saavedras attorneys fees
"Sec. 11. Attorney's fees. - Attorney's fees in any
NO.
judicial or administrative proceedings for the recovery of
 The case was appealed with respect to the CBA terms and
conditions, not with respect to attorney's fees. Although the
fees were a mere incident, nevertheless, the jurisdiction to
fix the same and to order the payment thereof was outside
the pale of Clave's appellate jurisdiction. He was right in
adopting a hands-off attitude in his first resolution and
holding that the payment of the fees was a question
between the lawyer and the union.
Granting they had jurisdiction, whether Art. 111 of the
Labor Code was applicable, as held by Exec. Assis. Clave
NO.
Presidential Executive Assistant Clave should have noticed
that Article 111 refers to a proceeding for the recovery of
wages and not to CBA negotiations. The two are different or
distinct proceedings.
Whether Saavedras attorneys fees may be deducted
from the benefits of the employees as provided in the
CBA NO.
The case is covered squarely by the mandatory and explicit
prescription of article 222 which is another guarantee
intended to protect the employee against unwarranted
practices that would diminish his compensation without his
knowledge and consent.
Art.. 222. Appearances and Fees. - x x x. (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 con-
tracting 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." (271, PD 442; 220, PD 626; 222, PD 1691
Other provisions of the Labor Code animated by the same SUMMARY: In the renegotiated CBA, Manila Water agreed to
intention are the following:
"ART. 242. Rights and conditions of membership in however, was forced to enter into litigation as Manila Water
a labor organization. - The following are the rights and was not able to comply with its obligation. The LA and NLRC
conditions of membership in a labor organization:
"x x x 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 assessment or fees. The record shall be
attested to lay the president;
"(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 the
employee. The authorization should specifically state the
amount, purpose and beneficiary of the deduction; and
"x x x x x x x x x." (288,
PD 442; 291, PD 570-A; 240, PD 626; 241, PD 850).
There is no doubt that lawyer Saavedra is entitled to the
payment of his fees but article 222 ordains that union funds
should be used for that purpose. The amount of P345,000
does not constitute union funds. It is money of the
employees. The union, not the employees, is obligated to
Saavedra.
KAISAHAN AT KAPATIRAN NG MGA MANGGAGAWA AT
KAWANI SA MWC-EAST ZONE UNION and EDUARDO
BORELA, representing its members vs. MANILA WATER
COMPANY, INC.
November 16, 2011 | Brion, J. | Attorneys fees
Digester: Santiago, Angelo
give its employees an amelioration allowance. The Union,
ordered Manila Water to pay attorneys fees. CA struck that
part out, considering that there was a MOA between the two
parties which explicitly stated that the 10% attorneys fees
paid by the members/employees is separate and distinct from
the obligation of the company to pay the 10% awarded
attorneys fees which we also gave to our counsel as part of
our contingent fee agreement. The Court held that the
attorneys fees contracted under the MOA does not have any
bearing at all to the attorneys fees awarded by the NLRC under
Article 111 of the Labor Code. Even if the same provision caps
the award of attorneys fees as indemnity, the Court holds that Thereafter, Manila Water integrated the AA, but not the
the award of attorneys fees may exceed 10% on the basis of
quantum meruit.
DOCTRINE: Re: Art. 111: In the first place, the fees mentioned 2003. April 15. The Union and file a complaint against the
here are the extraordinary attorneys fees recoverable as
indemnity for damages sustained by and payable to the
prevailing part[y]. In the second place, the ten percent (10%)
attorneys fees provided for in Article 111 LC and Section 11,
Rule VIII, Book III of the Implementing Rules is the maximum
of the award that may thus be granted. Article 111 thus fixes
only the limit on the amount of attorneys fees the victorious
party may recover in any judicial or administrative
proceedings.
Beyond the limit fixed by Article 111 of the Labor Code, such as
between the lawyer and the client, the attorneys fees may
exceed ten percent (10%) on the basis of quantum meruit, as
in the present case.
FACTS:
1997. February 21: The Metropolitan Waterworks and
Sewerage System (MWSS) entered into a Concession
Agreement with Manila Water Company to privatize the
operations of the former.
Art. 6.1.3 of the Agreement: the concessionaire shall
grant [its] employees benefits no less favorable than
those granted to MWSS employees at the time of their
separation from MWSS
Among the benefits enjoyed by the EEs were:
o Amelioration allowance (AA) and
o Cost-of-living allowance (COLA)
RA 6758 (the Salary Standardization Law) however
discontinues the payment of both AA and COLA for they
have been integrated into the standardized salary.
2001. During the renegotiation of the CBA, the Union
demanded from Manila Water the payment of said
allowances.
Manila Water initially turned down the demand, but
subsequently agreed to an amendment of the CBA in
that it shall pay both allowances.
COLA as the COA disapproved it with the former having no
funds.
Company for payment of the AA, COLA, moral and
exemplary damages, legal interest, and attorneys fees.
LA
Manila Water to pay AA, COLA, 6% interest of total amount
awarded, 10% attys fees.
NLRC
On appeal, the NLRC affirmed LA. It set aside the award of
COLA. Manila Water still to pay the rest, including
attorneys fees.
Motion for Partial Reconsideration: MWSS pointed out that
the award of 10% attorneys fees to the petitioners is
already provided for in their MOA which mandated that
attorneys fees shall be deducted from the AA and CBA
receivables.
Petitioners oppose: MOA only covered the payment of
their share in the contracted attorneys fees, but did not
include the attorneys fees awarded by the NLRC.
o To prove their claim, they submitted Borelas
affidavit, which states:
2. The 10% attorneys fees paid by the
members/employees is separate and distinct
from the obligation of the company to pay
the 10% awarded attorneys fees which we
 also gave to our counsel as part of our
contingent fee agreement.
NLRC denied both parties MPR.
CA
Attorneys fees deleted.
The CA recognized the binding effect of the MOA
between the Company and the Union; it stressed that
any further award of attorneys fees is unfounded
considering that it did not find anything in the
Agreement that is contrary to law, morals, good
customs, public policy or public order.
This case falls under the extraordinary concept of attorneys Whether the CA can review the factual findings of the
fees (see SC ratio for discussion on the concepts of
attorneys fees)
NLRC ordered the Company, as losing party, to pay the
Union and its members ten percent (10%) attorneys
fees.
It found the award without basis under Article 111, LC,
which provides that attorneys fees equivalent to
10% of the amount of wages recovered may be
assessed only in cases of unlawful withholding of
wages.
o There was no unlawful withholding of wages or
bad faith attributable to Manila Water.
o Also, The additional grant of 10% attorneys fees
violates Art. 111 considering that the MOA
between the parties already ensured the payment
of 10% attorneys fees, deductible from the AA
and CBA receivables of the Unions members.
Thus, award of attorneys fees is with grave abuse of
discretion.
MR denied. Thus, this petition.
Petitioners argue: All the parties arguments and evidence
relating to the award of attorneys fees were carefully
studied and weighed by the NLRC. As a result, the NLRC
gave credence to Borelas affidavit claiming that the
attorneys fees paid by the Unions members are separate
and distinct from the attorneys fees awarded by the NLRC.
Manila Water: It argues that the CA correctly ruled that the
NLRC acted with grave abuse of discretion when it affirmed
the LAs award of attorneys fees despite the absence of a
finding of any unlawful withholding of wages or bad faith on
the part of the Company. It finally contends that the Unions
demand, together with the NLRC award, is unconscionable
as it represents 20% of the amount due or about P21.4
million.
RULING: Petition GRANTED. LAs award of attorneys fees
equivalent to 10% of total judgment reinstated.
NLRC in a Rule 65 petitionYES. (Skip!)
As a rule, the CA cannot undertake a re-assessment of the
evidence presented in the case in certiorari proceedings
under Rule 65 of the Rules of Court.
Mercado v. AMA Computer College-Paraaque City, Inc.:
CA may examine the factual findings of the NLRC to
determine whether or not its conclusions are supported
by substantial evidence, whose absence justifies a
finding of grave abuse of discretion.
Records show that the CA erred in ruling that the NLRC
gravely abused its discretion in awarding the petitioners
10% attorneys fees without basis in fact and in law.
Corollary to the above-cited rule is the basic approach in the
Rule 45 review of Rule 65 decisions of the CA in labor cases.
Montoya v. Transmed Manila Corporation: In a Rule 45
review, we consider the correctness of the assailed
CA decision, in contrast with the review for
jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of
questions of law raised against the assailed CA
decision
Whether the NLRC gravely abused its discretion in
awarding 10% attorneys fees to the petitioners. YES.
(Skip!)
Legal basis.
LC, Art. 111. Attorneys fees.
 (a) In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages
recovered.
(b) It shall be unlawful for any person to demand or
accept, in any judicial or administrative proceedings for
the recovery of wages, attorneys fees which exceed ten
percent of the amount of wages recovered.
Book III, Rule VIII, Sec. 8: Attorneys fees.Attorneys
fees in any judicial or admin. proceedings for the
recovery of wages shall not exceed 10% of the amount Labor union was forced to enter into litigation because of
awarded. The fees may be deducted from the total
amount due the winning party.
PCL Shipping Philippines, Inc. v. NLRC: There are two
commonly accepted concepts of attorneys feesordinary
and extraordinary.
Ordinary concept: reasonable compensation paid to a
lawyer by his client for he legal services the former
renders; compensation is paid for the cost and/or results
of legal services per agreement or as may be assessed.
Extraordinary concept: indemnity for damages
ordered by the court to be paid by the losing party
to the winning party. The instances when these may
be awarded are enumerated in Article 2208 of the Civil MOA provision that attorneys fees to be deducted from the AA
Code, specifically in its paragraph 7 on actions for
recovery of wages, and is payable not to the lawyer Traders Royal Bank (supra): In the first place, the fees
but to the client, unless the client and his lawyer
have agreed that the award shall accrue to the
lawyer as additional or part of compensation.
PCL Shipping Philippines, Inc. v. NLRC: Art. 111 of the LC
contemplates the extraordinary concept of attorneys fees.
Art. 111 an exception to the declared policy of strict
construction in the award of attorneys fees. Although an
express finding of facts and law is still necessary to
prove the merit of the award, there need not be any
showing that the employer acted maliciously or in bad
faith when it withheld the wages.
RTG Construction, Inc. v. Facto: Settled is the rule that in
actions for recovery of wages, or where an employee was In the present case, the 10% attorneys fees awarded by the
forced to litigate and, thus, incur expenses to protect
his rights and interests, a monetary award by way of
attorneys fees is justifiable under Article 111 of the
Labor Code; Section 8, Rule VIII, Book III of its IRR; and
paragraph 7, Article 2208 of the Civil Code.
The award of attorneys fees is proper, and there
need not be any showing that the employer acted
maliciously or in bad faith when it withheld the
wages. There need only be a showing that the
lawful wages were not paid accordingly.
Manila Waters nonperformance of obligation.
The union members are entitled to their AA benefits and
that these benefits were not paid by the Company.
That the Company had no funds is not a defense as this
was not an insuperable cause that was cited and
properly invoked.
As a consequence, the union members represented by
the Union were compelled to litigate and incur legal
expenses.
Thus, there is no difficulty in upholding the NLRCs award of
10% attorneys fees.
and CBA receivables.
mentioned [in Art. 111] are the extraordinary attorneys
fees recoverable as indemnity for damages sustained
by and payable to the prevailing part[y]. In the second
place, the 10% attorneys fees provided for in Article 111 of
the LC and Section 11, Rule VIII, Book III of the
Implementing Rules is the maximum of the award that
may thus be granted. Article 111 thus fixes only the
limit on the amount of attorneys fees the victorious
party may recover in any judicial or administrative
proceedings and it does not even prevent the NLRC from
fixing an amount lower than the 10% ceiling prescribed by
the article when circumstances warrant it.
NLRC on the basis of Article 111 of the Labor Code accrue to
 the Unions members as indemnity for damages and not to general membership meeting duly called for the
the Unions counsel as compensation for his legal services, purpose. The secretary of the organization shall
unless, they agreed that the award shall be given to record the minutes of the meeting including the
their counsel as additional or part of his list of all members present, the votes cast, the
compensation; purpose of the special assessment or fees and the
Here the Union bound itself to pay 10% attorneys fees recipient of such assessment or fees. The record
to its counsel under the MOA and also gave up the shall be attested to by the president.
attorneys fees awarded to the Unions members in favor o) Other than for mandatory activities under the
of their counsel. This is supported by Borelas affidavit Code, no special assessments, attorneys fees,
which stated that [t]he 10% attorneys fees paid by the negotiation fees or any other extraordinary fees
members/employees is separate and distinct from the may be checked off from any amount due to an
obligation of the company to pay the 10% awarded employee without an individual written
attorneys fees which we also gave to our counsel as authorization duly signed by the employee. The
part of our contingent fee agreement. authorization should specifically state the amount,
The limit to this agreement is that the indemnity for purpose and beneficiary of the deduction;
damages imposed by the NLRC on the losing party
(i.e., the Company) cannot exceed 10% Art. 228. (From 222 b)
The award cannot be taken to mean an additional grant of
attorneys fees, in violation of the 10% limit under Article b) No attorneys fees, negotiation fees or similar charges of
111 of the Labor Code since it rests on an entirely different any kind arising from any collective bargaining
legal obligation than the one contracted under the MOA. agreement shall be imposed on any individual member
Simply stated, the attorneys fees contracted under of the contracting union: Provided, However, that
the MOA do not refer to the amount of attorneys attorneys fees may be charged against union funds in
fees awarded by the NLRC; the MOA provision on an amount to be agreed upon by the parties. Any
attorneys fees does not have any bearing at all to contract, agreement or arrangement of any sort to the
the attorneys fees awarded by the NLRC under contrary shall be null and void. (As amended by
Article 111 of the Labor Code. Presidential Decree No. 1691, May 1, 1980)
Thus, beyond the limit fixed by Article 111 of the Labor
GABRIEL v. SECRETARY OF LABOR AND EMPLOYMENT
Code, such as between the lawyer and the client, the
March 16, 2000 | Quisumbing, J. | Requisite of Check-off;
attorneys fees may exceed ten percent (10%) on the basis
Payment of Special Assessment
of quantum meruit, as in the present case.
Digester: Santos, Ihna
Payment of Special Assessment
SUMMARY: The Executive Board of the Solid Bank Union
Art. 250. (From 241 n,o) decided to retain anew the services of Atty. Ignacio Lacsina as
union counsel in connection with the negotiations for a new
n) No special assessment or other extraordinary fees CBA. In its general membership meeting, majority of all union
may be levied upon the members of a labor members approved and signed a resolution confirming the
organization unless authorized by a written decision of the EB. After a new CBA was signed, the bank, on
resolution of a majority of all the members in a request of the union, made payroll deductions for attorneys
fees from the CBA benefits paid to the union members. Several
members of the union opposed this. Med-Arbiter ordered the
return or refund to the complainants the illegally deducted
amount of attorneys fees from the package of benefits due to
them under the new CBA. The SOLE modified this order and
ruled that the ordered refund shall be limited to those union
members who have not signified their conformity to the check-
off of attorneys fees and deleted the directive on the payment
of 5% attorneys fees. SC upheld SOLEs ruling. It also said that
workers through their union should be made to shoulder the
expenses incurred for the services of a lawyer and accordingly,
the reimbursement should be charged to the union's general
fund or account. No deduction can be made from the salaries of
the concerned employees other than those mandated by law.
DOCTRINE: In check-off, the employer, on agreement with the
Union, or on prior authorization from employees, deducts union
dues or agency fees from the latter's wages and remits them
directly to the union. It assures continuous funding; for the
labor organization.
Requisites for the validity of the special assessment for union's
incidental expenses, attorney's fees and representation
expenses (Art. 243):
(1) authorization by a written resolution of the majority of all
the members at the general membership meeting called for the
purpose
(2) secretary's record of the minutes of the meeting
(3) individual written authorization for check off duly signed by
the employees concerned
Attorneys fees may not be deducted or checked off from any
amount due to an employee without his written consent.
FACTS:
Petitioners Gabriel, Lualhati, Sia, Eugenio, Makisig, and
Salas comprise the Executive Board of the Solid Bank Union,
the duly recognized collective bargaining agent for the rank
and file employees of Solid Bank Corporation. In 1991, the
Unions EB decided to retain anew the services of Atty.
Ignacio Lacsina as union counsel in connection with the
negotiations for a new CBA. Accordingly, the board called a
general membership meeting for the purpose. At the said
meeting, majority of all union members approved and
signed a resolution confirming the decision of the EB.
As approved, the resolution provided that 10% of the total
economic benefits that may be secured through the
negotiations be given to Atty. Lacsina as attorneys fees. It
also contained an authorization for SolidBank Corporation to
check-off said attorney's fees from the first lump sum
payment of benefits to the employees under the new CBA
and to turn over said amount to Atty. Lacsina and/or his duly
authorized representative.
The new CBA was signed. The bank then, on request of the
union, made payroll deductions for attorneys fees from the
CBA benefits paid to the union members.
Private respondents, who are members of the union,
instituted a complaint against the petitioners and the union
counsel before the DOLE for illegal deduction of attorneys
fees as well as for the quantification of the benefits of the
new CBA.
Petitioners moved for the dismissal of the complaint citing
litis pendentia, forum shopping and failure to state a cause
of action as their grounds.
Med-Arbiter Paterno Adap of the DOLE-NCR issued an Order
directing the union officers and counsel to immediately
return or refund to the complainants the illegally deducted
amount of attorneys fees from the package of benefits due
to them under the new CBA. Said order also directed the
complainants to pay 5% of the total amount to be refunded
or returned by the union officers and counsel to them in
favor of Atty. Armando Morales, as attorneys fees, in
accordance with Sec. II, Rule VII, Book II of the Omnibus
Rules implementing the LC.
On appeal, SOLE rendered a resolution modifying the order
of the Med-Arbiter. It stated that the ordered refund shall
be limited to those union members who have not
signified their conformity to the check-off of
attorneys fees and deleted the directive on the payment
of 5% attorneys fees for lack of basis.
 On MR, SOLE affirmed said order with modification that the
union's counsel be dropped as a party litigant and that the
workers through their union should be made to shoulder the
expenses incurred for the attorney's services. Accordingly,
the reimbursement should be charged to the union's
general fund/account.
Hence, the present petition seeking to partially annul the
above-cited order of the public respondent for being
allegedly tainted with grave abuse of discretion amounting
to lack of jurisdiction.
RULING: Petition denied. Assailed order of SOLE affirmed.
Whether Block B will survive this semester YES.
Petitioners argue that the General Membership Resolution
authorizing the bank to check-off attorney's fee from the
first lump sum payment of the legal benefits to the
employees under the new CBA satisfies the legal
requirements for such assessment.
Private respondents, on the other hand, claim that the
check-off provision in question is illegal because it was
never submitted for approval at a general membership
meeting called for the purpose and that it failed to meet the
formalities mandated by the Labor Code.
In check-off, the employer, on agreement with the
Union, or on prior authorization from employees,
deducts union dues or agency fees from the latter's
wages and remits them directly to the union. It
assures continuous funding; for the labor
organization. As this Court has acknowledged, the system
of check-off is primarily for the benefit of the union and only
indirectly for the individual employees.
Art. 241 has three (3) requisites for the validity of
the special assessment for union's incidental
expenses, attorney's fees and representation
expenses. These are: 1) authorization by a written
resolution of the majority of all the 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 employees concerned.
Clearly, attorney's fees may not be deducted or
checked off from any amount due to an employee
without his written consent.
After a thorough review of the records, the Court found that
the General Membership Resolution of the Solid Bank Union
did not satisfy the requirements laid down by law and
jurisprudence for the validity of the 10% special assessment
for union's incidental expenses, attorney's fees and
representation expenses. There were no individual written
check off authorizations by the employees concerned and
so the assessment cannot be legally deducted by their
employer.
NOTES:
Art. 222 (b) No attorney's fees, negotiation fees or similar
charges of any kind arising from any collective bargaining
negotiations or conclusions 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.
Art. 241 (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 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.
Jurisprudence:
Palacol vs. Ferrer-Calleja: The express consent of employees
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.
 Stellar Industrial Services, Inc. vs. NLRC: A written individual Agreement (MOA) whereby UST faculty members belonging to
authorization duly signed by the employee concerned is a the CBA unit were granted additional economic benefits and at
condition sine qua non for such deduction. the same time stipulated a 10% check-off over said benefits to
ABS-CBN Supervisors Employees Union Members vs. ABS- cover union dues and special assessment for Labor Education
CBN Broadcasting Corporation, et. al.: (1) the prohibition Fund and attorneys fees. Respondents filed with the Med
against attorney's fees in Article 222, paragraph (b) of the Arbiter a complaint assailing, among others, the check-off for
Labor Code applies only when the payment of attorney's union dues and attorneys fees collected under the MOA for
fees is effected through forced contributions from the being violative of the rights and conditions of membership in
workers; and (2) that no deduction must be take from the USTFU. DOLE Regional Director, by virtue of an order
workers who did not sign the check-off authorization consolidating all the complaints by the respondents, rendered
Bank of the Philippine Islands Employees Union-Association among others a decision in favor of the latter and ruled that
Labor Union (BPIEU-ALU) vs. NLRC: The provision of Article the check-off collected as negotiation fees were invalid. Both
222 (b) of the Labor Code prohibits the payment of the BLR and CA, on appeal, affirmed said decision and ordered
attorney's fees only when it is effected through forced to return to the general membership the amount collected by
contributions from workers from their own funds as way of attorneys fees. The Court ruled against petitioners
distinguished from the union funds. The purpose of the finding the check-off made by Marino et al improper.
provision is to prevent imposition on the workers of DOCTRINE: The requisites for a valid levy and checkoff of
the duty to individually contribute their respective special assessments, laid down by Article 241(n) and (o),
shares in the fee to be paid the attorney for his respectively, of the Labor Code, as amended, have not been
services on behalf of the union in its negotiations complied with in the case at bar. To recall, these requisites are:
with management. The obligation to pay the (1) an authorization by a written resolution of the majority of all
attorney's fees belongs to the union and cannot be the union members at the general membership meeting duly
shunted to the workers as their direct responsibility. called for the purpose; (2) secretarys record of the minutes of
Neither the lawyer nor the union itself may require the meeting; and (3) individual written authorization for check
the individual worker to assume the obligation to pay off duly signed by the employee concerned.
attorney's fees from their own pockets. So categorical
is this intent that the law makes it clear that any agreement FACTS:
to the contrary shall be null and void ab initio. Petitioners are among the executive officers and directors of
University of Santo Tomas Faculty Union (USTFU), or
collectively known as the Marino Group, while respondents
Eduardo MARINO, Jr. et al v. Gil GAMILLA et al are composed of UST faculty and USTFU members.
July 7, 2009 | Chico-Nazario, J. | Requisites of Check-Off; The 1986 Collective Bargaining Agreement (CBA) between
Payment of Assessment UST and USTFU expired on May 1988. Thereafter,
Digester: Solis, Miguel bargaining negotiations ensued between UST and the
Mario Group, which represented USTFU. As the parties
SUMMARY: Petitioners are among the executive officers and were not able to reach an agreement despite their earnest
directors of University of Santo Tomas Faculty Union (USTFU) efforts, a bargaining deadlock was declared and USTFU filed
while respondents are composed of UST faculty and USTFU a notice of strike.
members. The dispute arose when UST and USTFU, Subsequently, then Secretary of the Department of Labor
represented by petitioners herein, entered a Memorandum of and Employment (DOLE) Franklin Drilon assumed
 jurisdiction over the dispute. The DOLE Secretary issued an Respondents alleged in their Complaint that the Mario
Order, laying the terms and conditions for a new CBA Group violated the rights and conditions of membership in
between the UST and USTFU. In accordance with said Order, USTFU, particularly by:
the UST and USTFU entered into a CBA in 1991, which was 1) investing the unspent balance of the P42 million
to be effective for the period of 1 June 1988 to 31 May 1993 economic benefits package given by UST without prior
(19881993 CBA). approval of the general membership;
In keeping with Article 253A of the Labor Code, as amended, 2) simultaneously holding elections viva voce;
the economic provisions of the 19881993 CBA were subject 3) ratifying the CBA involving the P42 million economic
to renegotiation for the fourth and fifth years. Accordingly, benefits package; and
on 10 September 1992, UST and USTFU executed a 4) approving the attorneys/agency fees worth P4.2
Memorandum of Agreement (MOA),whereby UST faculty million in the form of checkoff.
members belonging to the collective bargaining unit were
granted additional economic benefits for the fourth and fifth Respondents prayed that the Mario Group be declared
years of the 19881993 CBA, specifically, the period from 1 jointly and severally liable for refunding all collected
June 1992 up to 31 May 1993. The relevant portions of the attorneys/agency fees from individual members of USTFU
MOA read (See notes) and the collective bargaining unit; and that, after due
On 12 September 1992, the majority of USTFU members hearing, the Mario group be expelled as USTFU officers and
signed individual instruments of ratification, which directors.
purportedly signified their consent to the economic benefits
granted under the MOA. (See notes) RULING: Petition denied.
USTFU, through its President, Atty. Mario, wrote a letter to
the UST Treasurer requesting the release to the union of the Whether the check-off of union dues and special
sum of P4.2 million, which was 10% of the P42 million assessment of attorneys fees inserted in the written
economic benefits package granted by the MOA to faculty authorization ratifying the MOA benefits valid NO. The
members belonging to the collective bargaining unit. The economic benefits package granted under the MOA did
P4.2 million was sought by USTFU in consideration of its not constitute union funds from which attorneys fees
efforts in obtaining the said P42 million economic benefits could have been validly deducted.
package. UST remitted the sum of P4.2 million to USTFU on PETITIONER: The P4.2 million checkoff, from the P42 million
9 October 1992 economic benefits package, was lawfully made since the
After deducting from the P42 million economic benefits requirements of Article 222(b) of the Labor Code, as
package the P4.2 million checkoff to USTFU, the amended, were complied with by the Mario Group. The
amounts owed to UST, and the salary increases and individual paychecks of the covered faculty employees were
bonuses of the covered faculty members, a net not reduced and the P4.2 million deducted from the P42
amount of P6,389,145.04 remained. The remaining million economic benefits package became union funds,
amount was distributed to the faculty members on 18 which were then used to pay attorneys fees, negotiation
November 1994. fees, and similar charges arising from the CBA. In addition,
On 15 December 1994, respondents filed with the Med the P4.2 million constituted a special assessment upon the
Arbiter, DOLENational Capital Region (NCR), a Complaint for USTFU members, the requirements for which were properly
the expulsion of the Mario Group as USTFU officers and observed. The special assessment was authorized in writing
directors. by the general membership of USTFU during a meeting in
 which it was included as an item in the agenda. Petitioners
fault the Court of Appeals for disregarding the authorization
of the special assessment by USTFU members. There is no
law that prohibits the insertion of a written authorization for
the special assessment in the same instrument for the
ratification of the 10 September 1992 MOA. Neither is there
a law prescribing a particular form that needs to be
accomplished for the authorization of the special
assessment. The faculty members who signed the
ratification of the MOA, which included the authorization for
the special assessment, have high educational attainment,
and there is ample reason to believe that they affixed their
signatures thereto with full comprehension of what they
were doing.
COURT: The pertinent legal provisions on a checkoff are
found in Articles 222(b) and 241(n) and (o) of the Labor
Code, as amended. (See notes)
Article 222(b) of the Labor Code, as amended, prohibits the
payment of attorneys fees only when it is effected through
forced contributions from the employees from their own
funds as distinguished from union funds. Hence, the
general rule is that attorneys 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.
Definition of check-off: A checkoff 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 latters 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. As this Court has acknowledged, the system of
checkoff is primarily for the benefit of the Union and, only
indirectly, for the individual employees.
The Court finds that, in the instant case, 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 attorneys 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 attorneys/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.
Petitioners line of argumentthat 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 attorneys fees, negotiation fees, or similar
charges from the CBAis absurd. Petitioners reasoning is
evidently flawed since the attorneys 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 attorneys 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 attorneys 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 attorneys fees and, thus, convert the latter
to union funds, which could then be used to pay for the said
attorneys fees.
 The Court further determines that the requisites for
a valid levy and checkoff of special assessments, laid
down by Article 241(n) and (o), respectively, of the
Labor Code, as amended, have not been complied
with in the case at bar. To recall, these requisites are:
(1) an authorization by a written resolution of the
majority of all the union members at the general
membership meeting duly called for the purpose;
(2) secretarys record of the minutes of the meeting;
and
(3) individual written authorization for check off duly
signed by the employee concerned.
Additionally, Section 5, Rule X of the USTFU Constitution and
ByLaws mandates that: Section 5. Special assessments or
other extraordinary fees such as for payment of attorneys
fees shall be made only upon a resolution duly ratified by
the general membership by secret balloting.
In an attempt to comply with the foregoing requirements,
the Mario Group caused the majority of the general
membership of USTFU to individually sign a document,
which embodied the ratification of the MOA between UST
and USTFU, dated 10 September 1992, as well as the
authorization for the checkoff of P4.2 million, from the P42
million economic benefits package, as payment for
attorneys fees. As held by the Court of Appeals, however,
the said documents constitute unsatisfactory compliance
with the requisites set forth in the Labor Code, as amended,
and in the USTFU Constitution and ByLaws, even though
individually signed by a majority of USTFU members.
The inclusion of the authorization for a checkoff of union
dues and special assessments for the Labor Education Fund
and attorneys 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 checkoff of union dues
and special assessments. As it were, the ratification of the
MOA carried with it the automatic authorization of the
checkoff 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 checkoff by a
majority of USTFU membership. Although the law does not
prescribe a particular form for the written authorization for
the levy or checkoff of special assessments, the
authorization must, at the very least, embody the genuine
consent of the union member.
The failure of the Mario Group to strictly comply with the
requirements set forth by the Labor Code, as amended, and
the USTFU Constitution and ByLaws, invalidates the
questioned special assessment. Substantial compliance is
not enough in view of the fact that the special assessment
will diminish the compensation of the union members. Their
express consent is required, and this consent must be
obtained in accordance with the steps outlined by law,
which must be followed to the letter. No shortcuts are
allowed. Viewed in this light, the Court does not hesitate to
declare as illegal the checkoff of P4.2 million, from the P42
million economic benefits package, for union dues and
special assessments for the Labor Education Fund and
attorneys 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 Mario Group, and who were
equally responsible for the illegal checkoff of the aforesaid
amount.
Under Article 222(b), attorneys 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 attorneys fees from the benefits awarded to
the employees. What the law requires is that the funds be
already deemed union funds even before the attorneys fees
are deducted or paid therefrom; it does not become union
 funds after the deduction or payment. To rule otherwise will (n) No special assessment or other extraordinary fees may
also render the general prohibition stated in Article 222(b) be levied upon the members authorized by a written
nugatory, because all that the union needs to do is to resolution of a majority of all the members at a general
deduct from the total benefits awarded to the employees membership meeting duly called for the purpose. The
the amount intended for attorneys fees and, thus, secretary of the organization shall record the minutes of
convert the latter to union funds, which could then be the meeting including the list of all members present, the
used to pay for the said attorneys fees. votes cast, the purpose of the special assessment or fees
Furthermore, the inclusion of the authorization for a check- and the recipient of such assessment or fees. The record
off of union dues and special assessments for the Labor shall be attested to by the president.
Education Fund and attorneys fees in the same document (o) Other than for mandatory activities under the Code, no
for the ratification of the MOA granting the economic special assessments, attorneys fees, negotiation fees or
benefits package, necessarily vitiated the consent of any other extraordinary fees may be checked off from any
USTFU members for there was no way for any individual amount due to an employee without an individual written
union member to separate his or her consent to the authorization duly signed by the employee. The
ratification of the MOA from his or her authorization of the authorization should specifically state the amount, purpose
check-off of union dues and special assessments. As it were, and beneficiary of the deduction.
the ratification of the MOA carried with it the automatic
authorization of the check-off of union dues and special MEMORANDUM OF AGREEMENT
assessments in favor of the union. xxxx1.0. The University hereby grants additional benefits to
Substantial compliance is not enough in view of the Faculty Members belonging to the collective bargaining unit
fact that the special assessment will diminish the as defined in Article I, Section 1 of the Collective Bargaining
compensation of the union members. Their express Agreement entered into between the parties herein over and
consent is required, and this consent must be obtained above the benefits now enjoyed by the said faculty members,
in accordance with the steps outlined by law, which which additional benefits shall amount in the aggregate to
must be followed to the letter. No shortcuts are P42,000,000.00[.]2.0. Under this Agreement the University
allowed. shall grant salary increases, to wit:2.1. THIRTY (P30.00) PESOS
per lecture unit per month to covered faculty members
NOTES: retroactive to June 1, 1991; 2.2. Additional THIRTY (P30.00)
Article 222 PESOS per lecture unit per month on top of the salary increase
(b) No attorneys fees, negotiation fees or similar charges granted in [paragraph] 2.1 hereof to the said faculty
of any kind arising from any collective bargaining members effective June 1, 1992; 2.3. In the case of a covered
negotiations or conclusion of the collective agreement shall faculty member whose compensation is computed on a basis
be imposed on any individual member of the contracting other than lecture unit per month, he shall receive salary
union: Provided, however, that attorneys fees may be increases that are equivalent to those provided in paragraphs
charged against unions funds in an amount to be agreed 2.1 and 2.2 hereof, with the amount of salary increases being
upon by the parties. Any contract, agreement or arrived at by using the usual method of computing the said
arrangement of any sort to the contrary shall be null and faculty members basic pay;
void.
3.0. The UNIVERSITY shall likewise restore to the faculty
Article 241 members the amounts corresponding to the deductions in
salary that were taken from the pay checks in the second half
of June, 1989 and in the first half of July, 1989, provided that teaching and nonteaching personnel for the
said deductions in salary relate to the union activities that were UNIVERSITY. 8.0. With this Agreement, the parties confirm
held in the aforestated payroll periods, and provided further that[:]
that the amounts involved shall be taken from the P42 Million
(sic) economic package. 8.1. the University has complied with the requirements of the
law relative to the release and distribution of the incremental
4.0. A portion of the P42,000,000.00 economic package proceeds of tuition fee increases as these incremental proceeds
amounting to P2,000,000.00 shall be used to satisfy all pertain to the faculty share in the tuition fee increase collected
obligations that remained outstanding and unpaid in the May during the SchoolYear 19911992; and,
17, 1986 Collective Bargaining Agreement.
8.2. the economic benefits herein granted constitute the full
5.0. Any unspent balance of the aggregate of P42,000,000.00 and complete financial obligation of the UNIVERSITY to the
as of October 15, 1992, shall, within two weeks, be remitted to members of its faculty for the period June 1, 1991 to May 31,
the Union[:]5.1. The unspent balance mentioned in 1993, pursuant to the provisions of the existing Collective
paragraph 5.0 inclusive of earnings but exclusive of checkoffs, Bargaining Agreement.
shall be used for the salary increases herein granted up to May
31, 1993, for increases in hospitalization, educational and 9.0. Subject to the provisions of law, and without reducing the
retirement benefits, and for other economic benefits. amounts of salary increases granted under paragraphs 2.0, 2.1,
2.2 and 2.3[,] the UNION shall have the right to a prorata
6.0. The benefits herein granted constitute the entire and lump sum checkoff of all sums of money due and payable to
complete package of economic benefits granted by the it from the package of economic benefits granted under this
UNIVERSITY to the covered faculty members for the balance of Agreement, provided that there is an authorization of a
the term of the existing collective bargaining agreement. majority of the members of the UNION and provided, further,
that the P42 million economic package herein granted shall not
7.0. It is clearly understood and agreed upon that the in any way be exceeded.
aggregate sum of P42 million is chargeable against the
share of the faculty members in the incremental 10.0. This Agreement shall be effective for a period of two (2)
proceeds of tuition fees collected and still to be years, starting June 1, 1991 and ending on May 31, 1993,
collected; Provided, however, that he (sic) commitment of the provided, however, that if for any reason no new collective
UNIVERSITY to pay the aggregate sum of P42 million shall bargaining agreement is entered into at the expiration date
subsist even if the said amount exceeds the proportionate hereof, this Agreement, together with the March 18, 1991
share that may accrue to the faculty members in the tuition fee Collective Bargaining Agreement, shall remain in full force and
increases that the UNIVERSITY may be authorized to collect in effect until such time as a new collective bargaining agreement
SchoolYear 1992 1993, and, Provided, finally, that the covered shall have been executed by the parties.
faculty members shall still be entitled to their proportionate
share in any undistributed portion of the incremental proceeds RATIFICATION OF THE USTUSTFU MEMORANDUM OF
of the tuition fee increases in SchoolYear 19921993, and AGREEMENT DATED SEPTEMBER 10, 1992 GRANTING A
incremental proceeds are, by law and pertinent PACKAGE OF THE P42 MILLION FACULTY BENEFITS WITH
Department of Education Culture and Sports (DECS) PROVISION FOR CHECKOFF. September 12, 1992 Date
regulations, required to be allotted for the payment of TO WHOM IT MAY CONCERN:I, the undersigned UST faculty
salaries, wages, allowances and other benefits of member, aware that the law
requires ratification and that without ratification by majority of fees may be checked off from any amount due
all faculty members belonging to the collective bargaining unit, to an employee without an individual written
the Memorandum of Agreement between the University of authorization duly signed by the employee.
Santo Tomas and the UST Faculty Union (or USTFU) dated The authorization should specifically state the
September 10, 1992 may be questioned and all the faculty amount, purpose and beneficiary of the
benefits granted therein may be cancelled, do hereby ratify deduction
the said agreement.
VENGCO v. Hon. TRAJANO, and TUMBUNGCO
Under the Agreement, the University shall pay P42 million over November 20, 1956 | Medialdea, J. | Attorneys fees deductions
a period of two (2) years from June 1, 1991 up to May 31, 1992. Digester: Sumagaysay, Rev

In consideration of the efforts of the UST Faculty Union as the SUMMARY: FOITAF entered into a compromise agreement
faculty members sole and exclusive collective bargaining whereby the company will pay to the union members P150,000
representative in obtaining the said P42 million package of for their ECOLA. Respondent union president received the
economic benefits, a checkoff of ten percent thereof money but 10% from the amount was deducted to pay for
covering union dues, and special assessment for Labor attorneys fees. The Court held that said deduction was illegal
Education Fund and attorneys fees from USTFU as there was no written consent for the same and the amicable
members and agency fee from nonmembers for the period settlement could not be considered a mandatory activity under
of the Agreement is hereby authorized to be made in one lump the code which would validate the deduction.
sum effective immediately, provided that two per cent (sic) DOCTRINE: It is very clear from the above-quoted provision
shall be for [the] administration of the Agreement and the [Art. 241] that attorney's fees may not be deducted or checked
balance of eight per cent (sic) shall be for attorneys fees to be off from any amount due to an employee without his written
donated, as pledged by the USTFU lawyer to the Philippine consent except for mandatory activities under the Code. A
Founda tion for the Advancement of the Teaching Profession, mandatory activity has been defined as a judicial process of
Inc. whose principal purpose is the advancement of the settling dispute laid down by the law.
teaching profession and teachers welfare, and provided further
that the deductions shall not be taken from my individual
FACTS:
monthly salary but from the total package of P42 million due
1981, the Management of the Anglo-American Tobacco
under the Agreement. ___________________________ Signature of
Faculty Member 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
5. MANDATORY ACTIVITY (ECOLA) and other benefits which were the subject of their
complaint before the Ministry of Labor. Respondent
Art. 250. (From 241 o) Emmanuel Timbungco (Timbungco, for short) who is the
union president received the money which was paid in
) Other than for mandatory activities under the installments.
Code, no special assessments, attorneys fees, Thereafter, he distributed the amount among the union
negotiation fees or any other extraordinary members. Petitioners Ambrocio Vengco, Ramon Moises,
 Rafael Wagas and 80 others (Vengco, et al., for short) who accounts of the union is irrelevant considering that the issue
are union members noted that Timbungco was not involved in the case does not consist of union funds but
authorized by the union workers to get the money; and that back pay received by the union members from the
ten percent (10%) of the P150,000.00 had been deducted to company. Likewise, they pointed out that Timbungco did not
pay for attorney's fees without their written authorization in give the money to the union treasurer and consequently,
violation of Article 242(o) of the Labor Code. So, they the amount was not entered in the records of the union.
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 RULING: Petition is granted. The assailed Orders SET ASIDE.
al. filed a complaint with the Ministry of Labor praying for:
"(1) the expulsion of Emmanuel Timbungco as president of Whether Timbungco is guilty of illegally deducting 10%
the union for violation of (the) union constitution and by- attorneys' fees from petitioners' backwages YES.
laws and the rights and conditions of union members under Article 241 (o) of the Labor Code provides:
the Labor Code; (2) an order to require Timbungco to render o ART. 241. Rights and conditions of membership in
an accounting of how the P150,000.00 was distributed; and a labor organization. The following are the
(3) an order to require private respondent to publish in the rights and conditions of membership in a labor
bulletin board the list of the members and the organization.
corresponding amount they each received from the
P150,000.00." (o) Other than for mandatory activities under the
In his answer with counterclaim, Timbungco alleged among Code, no special assessment, attorney's fees,
others, that he was authorized by a resolution signed by the negotiation fees or any other extraordinary fees
majority of the union members to receive and distribute the may be checked off from any amount due an
P150,000.00 among the workers; that the computation of employee without an individual written
the benefits was based on the payroll of the company; that authorization duly signed by an employee. The
the ten percent (10%) attorney's fees was in relation to the authorization should specifically state the amount,
claim of the local union for payment of emergency cost of purpose and beneficiary of the deduction.
living allowance before the Ministry of Labor which is totally It is very clear from the above-quoted provision that
distinct and separate from the negotiation of the CBA; and attorney's fees may not be deducted or checked off
that the ten percent (10%) deduction was in accordance from any amount due to an employee without his
with Section II, Rule No. VIII, Book No. III of the Rules and written consent except for mandatory activities
Regulations implementing the Labor Code and therefore, no under the Code. A mandatory activity has been defined
authorization from the union members is required. as a judicial process of settling dispute laid down by
The Med-Arbiter dismissed the complaint for lack of merit. the law.
Vengco, et al. appeared before the Director of the Bureau of In the instant case, the amicable settlement entered into by
Labor Relations Trajano and granted the prayer. Upon MR, it the management and the union can not be considered as a
reversed and ordered an audit examination of the Books of mandatory activity under the Code. It is true that the union
Account of Kapisanan ng Manggagawa sa Associated Anglo- filed a claim for emergency cost of living allowance and
American Tobacco Corporation. other benefits before the Ministry of Labor. But this case
Vengco, et al, sought reconsideration of the aforementioned never reached its conclusion in view of the parties'
order. They contended that the examination of the books of agreement. It is not also shown from the records that
 Atty. Benjamin Sebastian was instrumental in forging amicable settlement and not in an administrative
the said agreement on behalf of the union members. proceeding.
Timbungco maintains that the "Kapasiyahan" gave him the
authority to make the deduction This contention is
unfounded. Contrary to his claim, the undated GALVADORES v. TRAJANO, FIWU, PLDT, ESPINAS
"Kapasiyahan" or resolution did not confer upon him September 15, 1986 | Melencio-Herrera, J. | Union Funds
the power to deduct 10% of the P150,000.00 despite (Mandatory Activity)
the alleged approval of the majority of the union Digester: Tan, Raya Grace
workers.
Moreover, the law is explicit. It requires the individual SUMMARY: The Union hired Atty. Espinas as counsel in the
written authorization of each employee concerned, to ongoing labor dispute at PLDT on a contingent fee basis. The
make the deduction of attorney's fees valid. Likewise, We Minister of Labor and Employment awarded across-the-board
find that the other "Kapasiyahan" dated September 18,1981 wage increases. The Executive Board of the Union passed a
submitted by Timbungco belied his claim that he was resolution requesting PLDT to deduct P115/employee for the
authorized by the union workers to receive the sum of legal services extended to the Union by Espinas. Petitioners
P150,000.00 on their behalf. assailed the deductions as unreasonable, violative of Art 242
The Kapasiyahan merely indicated the intention of the (o) LC, and without legal effect for lack of authorizations. BLR
workers to get their claim on the first week of December, dismissed their complaint for lack of merit. SC reversed.
1981 and to inform Timbungco of their intention. Clearly, DOCTRINE: No checkoffs from any amounts due employees
this statement can not be construed to confer upon may be effected without individual written authorizations duly
Timbungco the authority to receive the fringe benefits for signed by the employees specifically stating the amount,
the workers. Absent such authority, Timbungco should not purpose and beneficiary of the deduction. The benefits formed
have kept the money to himself but should have turned it part of the collective bargaining negotiations, which is not the
over to the Union Treasurer. He, therefore, exceeded his mandatory activity under the Code which dispenses with
authority as President of the Union. individual written authorizations for checkoffs.
Moreover, Book III, Rule VIII, Section II of the Implementing
Rules cited by Timbungco which dispenses with the required FACTS:
written authorization from the employees concerned does Atty. Jose Espinas has been the legal counsel of the
not apply in this case. This provision envisions a situation Manggagawa ng Komunikasyon sa Pilipinas since 1964,
where there is a judicial or administrative proceedings for hired on a case to case contingent fee basis.
recovery of wages. Upon termination of the proceedings, He received a letter from the Union President asking him to
the law allows a deduction for attorney's fees of 10% from appear as counsel in the ongoing labor dispute at PLDT for a
the total amount due to a winning party. fee of 10% of any improvement, with retroactive effect, of
In the herein case, the fringe benefits received by the union the PLDTs last offer to the deadlock in CBA negotiations.
members consist of back payments of their unpaid PLDTs last offer referred to on the wage increases was:
emergency cost of living allowances which are totally P230 for the first year of the proposed CBA, P100 for the
distinct from their wages. Allowances are benefits over and second, and P90 for the third.
above the basic salaries of the employees. In addition, the The Minister of Labor and Employment assumed jurisdiction.
payment of the fringe benefits were effected through an It awarded across-the-board wage increases of P330/mo
effective Nov 9, 1982, P155/for the second year, and P155
 for the third year + Christmas bonus of 1 month pay per RULING: Petition granted. BLR decision set aside. The
employee effective Dec 1983.
The Executive Board of the Union passed a resolution funds pursuant to Art 222(b) of the LC.
requesting PLDT to deduct P115/employee for the legal
services extended to the Union by Espinas. 5,258
petitioners filed a letter-complaint before the Mole
assailing the imposition of P130 (later corrected to P155)
per employee as attorneys fees; it is unreasonable and
violative of Art 242 (o) LC, and the deductions cannot be
given legal effect by a mere Board resolution but needs the
ratification by the general membership of the Union. (di ko
sure kung typo sa case ung 155 kasi sabi 115 ung
deduction)
Petitioners proposed to pay P10/employee but Espinas
refused.
PLDT filed notice that assessment had been withheld from
the differential pay due to petitioners but the same would
not be turned over to the Union without prior MOLE
authority. Dispute was referred to BLR for being intra-union
in nature.
Union filed a Manifestation to the effect that about 6,067
members of the Union ratified the resolution of the
legislative council in a plebiscite. Petitioners questioned the
plebiscite on the ground that Question No. 2 (see notes) was
misleading and deceptive.
BLR Director dismissed the complaint for lack of
merit.
Petitioners argument: individual written authorization of all NOTES:
the employees must first be obtained before any
assessment can be made against the monetary benefits
awarded to them pursuant to Art 242(o) LC; and assuming
that Atty. Espinas is entitled to attys fees, the same should
be taken from Union funds.
Respondents argument: Compulsory arbitration is a
mandatory activity and an exception to Art 242(o) LC and
that the Union members approved the questioned deduction
in the plebiscite.
attorneys fees herein involved may be charged against Union
WoN PLDT may be deducted P115/employee for attys
fees NO.
(see notes for provisions) Arts 222 (b), 242 (o) and Rule VII,
Sec 13 of the Omnibus Rules are clear. No checkoffs from
any amounts due employees may be effected without
individual written authorizations duly signed by the
employees specifically stating the amount, purpose and
beneficiary of the deduction. The required individual
authorizations in this case are wanting.
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
checkoffs, 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.
Employees are protected by law from unwarranted practices
that diminish their compensation without their knowledge
and consent.
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 attorneys 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?
Art 222 (b) LC: No attorneys 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 only ground for which a lawful strike can be held. Striking
attorneys fees may be charged against union funds in an workers who did not comply with the return to work order after
amount to be agreed upon by the parties. the case was certified to the NLRC for compulsory arbitration
Art 242 Rights and conditions of membership in a labor were suspended; union officers were dismissed. Court upheld
organization: (o) than for mandatory activities under the this dismissal as a valid exercise of the power of the NLRC to
Code, no special assessment, attorneys fees, negotiation order the removal of the officers of a union, and held that the
fees or any other extraordinary fees may be checked off officers of the union misinformed their members into staging
from any amount due an employee without individual an illegal strike
written authorization duly signed by the employee. The DOCTRINE: Under Art. 250(p) of the Labor Code, It shall be the
authorization should specifically state the amount, purpose duty of any labor organization and its officers to inform its
and beneficiary of the deduction. members on provisions of the constitution and by laws,
Omnibus Rules Implementing the Labor Code provide that collective bargaining agreement, the prevailing labor relations
deductions from wages of the employees may only be made system and all their rights and obligations under existing labor
by the employer in cases authorized by law, including laws. Violation of this duty is ground for cancellation of union
deductions for insurance premiums advanced by the registration or expulsion of an officer from office.
employer on behalf of the employees as well as union dues
where the right to checkoff is authorized in writing by the FACTS:
individual employee himself. The NLRC issued an arbitration award resolving certain
demands of the petitioner (Union) respecting working terms
and conditions. Due to disagreement on the interpretation
of the provisions of the award concerning vacation, sick
6. UNION INFORMATION/OBLIGATION leaves and standardization of wages, compliance was
delayed.
Art. 250. (From 241 p) In order to compel private respondent to immediately
implement the award, petitioner staged a strike on October
p) It shall be the duty of any labor organization and 25, 1975. It was lifted after the private respondent agreed
its officers to inform its members on the provisions to pay the disputed employees leaves during the period
of its constitution and by-laws, collective July 1, 1974 to June 30, 1975 in three installments, that is,
bargaining agreement, the prevailing labor 50% on December 20, 1975, 25% on February 25, 1976 and
relations system and all their rights and 25% on March 15, 1976.
obligations under existing labor laws. On whether a group of 91 workers who were unable to
complete 300 days of work within a 12month period was
CONTINENTAL CEMENT CORP. LABOR UNION v.
entitled to proportionate payment of vacation and sick leave
CONTINENTAL CEMENT CORP.
benefits: LA ruled that the award required private
August 30, 1990| Gancayco, J. | Union Information
respondent to make proportionate payments in favor of the
Digester: Valena, Maria Patricia
workers in question.
Petitioner filed a notice of strike against private respondent
SUMMARY: Union members staged a strike without filing the
for its refusal to make the proportionate payments
requisite notice, and in connection to an issue other than any
mentioned.
unresolved economic issue in collective bargaining which is the
 Petitioner carried out its threatened strike on May 16, 1976.
The strike was settled on May 22, 1976 with private
respondent agreeing inter alia, to pay the 91 workers
concerned P25,000.00 for humanitarian reasons. Private
respondent, however, reserved the right to seek clarification
of its obligations under the NLRC award. Payment was made
on May 25, 1976.
Payment for vacation and sick leaves for the period July 1,
1975 to June 30, 1976 led to another problem. Prior to the
payment becoming due, private respondent negotiated with RULING: Petition granted.
petitioner for a staggered form of payment again. Petitioner
at first insisted that its members be paid in full; however, it Whether the strike staged by petitioner on June 12,
subsequently agreed to installment payments but gave
warning that payment of 50% of the benefits should be
made not later than July 12, 1976 and the remaining 50%.,
not later than the end of the month. Private respondent
requested an extension up to July 13, 1976 but this was
rejected by petitioner.
Petitioner staged a strike in the early of July 12, 1976,
picketing the entrance of the premises of private
respondent.
On July 13, 1976, the Minister of Labor issued an order thru
the Director of the BLR, directing the striking workers to
resume work under the terms and conditions prevailing
prior to the work stoppage. on July 14, 1976, only 11 out of
the total work force of about 120 workers in one shift
reported for work and were admitted by the company. On
July 15, 1976, petitioner filed an MR of the return towork
order or its suspension pending compliance by private
respondent with the 1975 NLRC award in favor of petitioner.
Picketing was resumed despite the presence of military
personnel who were called to assist in the implementation
of the returntowork order.
On July 23, 1976, the Minister of Labor certified the dispute Petitioner could have applied with the Bureau of Labor
between the parties to the NLRC for compulsory arbitration,
which under the LC had the effect of automatically enjoining
any strike by the Union or lockout by the private
respondent. Nonetheless, some 110 striking workers did not Whether the penalties meted out by the NLRC to the
return to work. Consequently, on July 26, 1976, private
respondent filed with the Department of Labor reports on
the dismissal of those who failed to comply with the return-
towork order.
On July 29, 1976, the president of petitioner and 7 other
officers requested admission to work but were informed that
their employment had been terminated by the company.
NLRC upheld the dismissal of the officers and changed the
penalty to suspension for the others; affirmed by the
Minister of Labor.
1976 until its lifting was illegal YES.
Private respondent was engaged in the manufacture of
cement which is no doubt a vital industry in which a strike
or lockout is prohibited under the foregoing aforestated
decree. And even assuming that private respondent was not
engaged in a vital industry, the strike that was staged by
petitioner was nonetheless illegal. It was not in connection
with any unresolved economic issue in collective bargaining
which is the only ground for which a lawful strike can be
held.
The issue at the time of the strike concerned merely the
implementation of an arbitration award of the NLRC. The
petitioner had a remedy by applying for a writ of execution
to enforce that award. Its resort to a strike was without
lawful basis. Moreover, under Section 1 of Presidential
Decree No. 823, there is a requirement of notice. The only
notice filed was in connection with a dispute that had been
settled by the Memorandum Agreement between the
parties dated May 22, 1976. A notice of strike is intended to
enable the BLR to try to settle the dispute amicably. The
strike on July 12, 1976 denied the Bureau this opportunity.
Relations for a writ of execution to enforce the award that
was already final and executory.
Union officers and the members are warranted by the
circumstances and the law YES.
 The strikers in question did not only violate the no strike
policy of the state in regard to vital industries; instead, they
repeatedly defied the orders of the Director of Labor
Relations and the Minister of Labor for them to return to
work. Their dismissal was recommended by the labor
arbiter. However, out of compassion, the NLRC and the
Minister of Labor only suspended them.
Regarding separation from work of the officers of the union:
The officers had the duty to guide their members to respect
the law. Instead, they urged them to violate the law and
defy the duly constituted authorities. Their responsibility is
greater than that of the members. Their dismissal from the
service is a just penalty for their unlawful acts.
It is within the power of the NLRC to order the removal of
the officers of petitioner (Art. 242, LC). The officers of
petitioner misinformed the members and led them into
staging an illegal strike. If the NLRC is to attain the objective
of the Labor Code to ensure a stable but dynamic and just
industrial peace6 the removal of undesirable labor leaders
must be effected.
7. ENFORMENT AND REMEDIES
Procedure Jurisdiction and Sanctions
Art. 250. (Last Paragraph)
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union
registration or expulsion of officers from office whichever
is appropriate. At least thirty percent (30%) of the
members of a union or any member or members
specially concerned may report such violation to the
Bureau. The Bureau shall have the power to hear and
decide any reported violation to mete the appropriate
penalty. Criminal and civil liabilities arising from
violations of above rights and conditions of membership
shall continue to be under the jurisdiction of ordinary
courts.
Art. 252. (From 242-A but not from labor code
cause I couldnt find it rather from the Labor Reviewer)
Reportorial Requirements. - The following are
documents required to be submitted to the Bureau by
the legitimate labor organization concerned:
e) Its constitution and by-laws, or amendments
thereto, the minutes of ratification, and the list of
members who took part in the ratification of the
constitution and by-laws within thirty (30) days
from adoption or ratification of the constitution and
by-lam or amendments thereto;
f) Its list of officers, minutes of the election of
officers, and list of voters within thirty (30) days
from election;
g) Its annual financial report within thirty (30) days
after the close of every fiscal year; and
h) Its list of members at least once a year or
whenever required by the Bureau.
Failure to comply with the above requirements shall not
be a ground for cancellation of union registration but
shall subject the erring officers or members to
suspension, expulsion from membership, or any
appropriate penalty.
Art. 289. (From 274)
Visitorial power. The Secretary of Labor and
Employment or his duly authorized representative is
hereby empowered to inquire into the financial activities
of legitimate labor organizations upon the filing of a
complaint under oath and duly supported by the written
consent of at least twenty percent (20%) of the total
membership of the labor organization concerned and to
examine their books of accounts and other records to
determine compliance or non-compliance with the law
and to prosecute any violations of the law and the union
constitution and by-laws: Provided, That such inquiry or
examination shall not be conducted during the sixty
(60)-day freedom period nor within the thirty (30) days
immediately preceding the date of election of union
officials. (As amended by Section 31, Republic Act No.
6715, March 21, 1989)
Art. 303. (From 288)
Penalties. Except as otherwise provided in this Code, or
unless the acts complained of hinge on a question of
interpretation or implementation of ambiguous
provisions of an existing collective bargaining
agreement, any violation of the provisions of this Code
declared to be unlawful or penal in nature shall be
punished with a fine of not less than One Thousand
Pesos (P1,000.00) nor more than Ten Thousand Pesos
(P10,000.00) or imprisonment of not less than three
months nor more than three years, or both such fine and
imprisonment at the discretion of the court.
In addition to such penalty, any alien found guilty shall
be summarily deported upon completion of service of
sentence. Any provision of law to the contrary
notwithstanding, any criminal offense punished in this
Code, shall be under the concurrent jurisdiction of the
Municipal or City Courts and the Courts of First Instance.
(As amended by Section 3, Batas Pambansa Bilang 70)
Art. 304. (From 289)
Who are liable when committed by other than
natural person. If the offense is committed by a
corporation, trust, firm, partnership, association or any
other entity, the penalty shall be imposed upon the
guilty officer or officers of such corporation, trust, firm,
partnership, association or entity.
Book V Rule XIV and XV
Omnibus Rules, Book V, Rule XIV Cancellation of
Registration of Labor OrganizationsNOTE: This rule
should be reconciled with the amendments introduced
by RA 9841, which limits the grounds for cancellation to
the 3 mentioned above (p. 23).
Section 1.Where to file. -Subject to the requirements
of notice and due process, the registration of any
legitimate independent labor union, chartered local and
workers' association may be cancelled by the Regional
Director, or in the case of federations, national or
industry unions and trade union centers, by the Bureau
Director, upon the filing of an independent complaint or
petition for cancellation.
Section 2. Who may file. - Any party-in-interest may
commence a petition for cancellation of registration,
except in actions involving violations of Article 241,
which can only be commenced by members of the labor
organization concerned.
Section 3. Grounds for cancellation. - The following
shall constitute grounds for cancellation of registration of
labor organizations:
a) Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto,
the minutes of ratification, the list of members
who took part in the ratification of the constitution
and by-laws or amendments thereto, the minutes
of ratification, the list of members who took part
in the ratification;
b) Failure to submit the documents mentioned in the
preceding paragraph within thirty (30) days from
adoption or ratification of the constitution and by-
laws or amendments thereto;
c) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of
the election of officers, the list of voters, failure to
submit these documents together with the list of
the newly elected or appointed officers and their
postal address within thirty (30) days from
election;
d) Failure to submit the annual financial report to the
Bureau within thirty (30) days after the close of
every fiscal year and misrepresentation, false
 entries or fraud in the preparation of the financial
report;
e) Acting as a labor contractor or engaging in the
"cabo" system, or otherwise engaging in any
activity prohibited by law;
f) Entering into collective bargaining agreements
which provide for terms and conditions of
employment below minimum standards
established by law;
g) Commission of any of the acts enumerated under
Article 241 of the Labor Code; provided that no
petition for cancellation based on this ground may
be granted unless supported by at least thirty
(30%) percent of all the members of the
respondent labor organization;
h) Asking for or accepting attorney's fees or
negotiation fees from the employer;
i) Other than for mandatory activities under the
Labor Code, checking off special assessments or
any other fees without duly signed individual
written authorizations of the members;
j) Failure to submit list of individual members to the
Bureau once a year or whenever required by the
Bureau;
k) Failure to comply with the requirements of
registration prescribed under Rules III and IV.
ART. 242-A. Reportorial Requirements. - The following are
documents required to be submitted to the Bureau by the
legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto,
the minutes of ratification, and the list of members who
took part in the ratification of the constitution and by-
laws within thirty (30) days from adoption or ratification
of the constitution and by-lam or amendments thereto;
(b) Its list of officers, minutes of the election of officers,
and list of voters within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after
the close of every fiscal year; and
(d) Its list of members at least once a year or whenever
required by the Bureau.
Failure to comply with the above requirements shall not be a
ground for cancellation of union registration but shall subject
the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty."
DUYAG V INCIONG
[GR NO. L-47775] | [JULY 5, 1980] | [AQUINO, J]
CASE SUMMARY/DOCTRINE
Several charges were filed against private respondents union
officers. LA ordered their expulsion from the union. This was
reversed by the Director of Labor Relations and ruled that the
power to remove the union officers rests in the members. Court
ruled that under Art 242, Bureau is expressly granted the
power.
Facts
Petitioners- JULIAN DUYAG, ARMANDO OLIVARES, JOSE
ECHEVARIA, ALEJANDRO SEVILLA and FELIMON GUINGON
Respondents - HON. AMANDO G. INCIONG, as Acting Director of
Labor Relation CARMELO C. NORIEL, as Director of Labor
Relations, RICA R. MANALAD, HONORATO K. LEANO, EDUARDO
AMPARO and SANTOS PUERTO
The petitioners are arrastre checkers of E. Razon, Inc. in
the South Harbor, Port Area, Manila as well as bona
fide members of the Associated Port Checkers and
Workers Union.
They filed with Regional Office of the Department of
Labor a complaint containing several charges against the
private respondents (President, treasurer, vice-president
and auditor of the union)
 The charges are the following:
1. Unauthorized increases in union dues.
For arrastre checkers, the monthly union dues
amount to ten pesos, as fixed in the union's
constitution and bylaws. They increased the union
dues to nineteen pesos without the approval of three-
fourths of all the members of the board of directors,
as required in article VII of the union's constitution.
Also, a deduction of eight pesos and fifty centavos
was made from the mid-year bonus without any
board resolution authorizing such deduction. In prior
years, no deduction for union dues was made from
the mid-year bonus.
Moreover, their collection was not covered by any
check-off authorization nor evidenced by any receipt
The med-arbiter concluded that the increases in
union dues and the deduction from the mid-year
bonus are void.
2. Withholding of union members' share in the profits
amounting to P18,640.09.
E. Razon, Inc. paid to the union the sum of
P25,684.61 as its share of the profits (profit-share)
but union members only received P19,974 and the
P5,710.61 had not been accounted for.
The Labor Arbiter found other amounts were withheld
by the respondents from the union's profit-shares for
subsequent periods.
However, during the pendency of the case, the
private respondents submitted a resolution wherein
more than ninety percent of the union members
allegedly ratified the deductions from the mid-year
bonus and profit-shares and authorized future
deductions
Although the said resolution rendered this aspect of
the case moot, it cannot obliterate the violations of
the constitution and by-laws and the Labor Code
already committed by respondents. The deduction of
union dues from the mid-year bonus and the
withholding of part of the profit-shares were illegal
and improper at the time they were made.
3. Disbursements exceeding P500 which were not
authorized by the board of directors.
Respondents Manalad and Leao, also without prior
board authorization, withdrew on twenty-three
occasions union funds in the aggregate sum of
P43,026.80. The sum of P3,500 was paid to
respondent Amparo pursuant to a resolution which
was approved by only six members of the board of
directors, instead of fourteen members, as required in
the constitution.
4. Maladministration of welfare fund.
Manalad allowed the application of the funds of the
union's Welfare Plan to the following extraneous
purposes. These disbursements were not authorized
by the board of directors.
a) On March 31, and April 6 and 14, 1973, the sum of
P5,000 was taken from the Pacific Memorial Plan
collections and loaned to the union's Cooperative
Credit Union, Inc.
b) On October 7, 1973, the sum of P1,500 was
loaned to the same cooperative for organizational
expenses.
c) On August 7, 1971, the sum of P200 was taken
from the welfare fund for advance representation
expenses of Manalad.
d) On December 18, 1971, the sum of P1,600 was
taken from the welfare fund to cover cash
advances to Marcelino Melegrito to be repaid upon
the release of his credit union loan on March 8,
1973.
5. Membership in another union.
Respondents Manalad, Amparo and Puerto are also
officers of the Philippine Technical Clerical
Commercial Employees Association, another labor
 union.Their membership in the latter union is WON the Bureau of Labor Relations have the power to remove
manifestly violative of section 9, article III of the erring UNION officers - YES.
constitution which provides that an elected officer
shall be deemed disqualified if he becomes a member The last paragraph of Article 242 of the Labor Code provides
of another organization. that any violation of the rights and conditions of union
membership as enumerated in paragraphs (a) to (p) of Article
6. Conflict of interest on the part of Manalad. 242, "shall be a ground for cancellation of union registration
Respondent Manalad organized a family corporation or expulsion of officer from office, whichever is appropriate. At
known as the Comet Integrated Stevedoring Services, least thirty percent (30%) of all the members of a union or
Inc. whose rank-and-file employees are also members any member or members specially concerned may report such
of the arrastre checkers' union. Thus, Manalad has violation to the Bureau (of labor Relations). The Bureau shall
functioned in the dual capacity of labor leader and have the power to hear and decide any reported violation to
employer, not to mention the fact that he is also an mete the appropriate penal
officer of another labor union, PTCCEA.
a. The Director of Labor Relations erred in holding that, as a
The med-arbiter ordered the removal of the matter of policy, the tenure of union office being a
private respondents as officers of the union and "political question is, generally, a matter outside his
directed them to reimburse to the members Bureau's jurisdiction and should be passed upon by the
thereof the amounts illegally collected from them. union members themselves.
The private respondents appealed to the Director of b. The Director should apply the law and not make policy
Labor Relations. considerations prevail over its clear intent and meaning.
The Director ruled that the power to remove the union "The majority of the laws need no interpretation or
officers rests in the members and that the Bureau of construction. They require only application, and if there
Labor Relations generally has nothing to do with the were more application and less construction, there would
tenure of union officers which "is a political question". be more stability in the law, and more people would
But he directed the Labor Organization Division of the know what the law is." (Lizarraga Hermanos vs. Yap Tico)
Bureau to examine the books of account and financial c. The labor officials should not hesitate to enforcement
records of the union and to submit a report on such strictly the law and regulations governing trade unions
examination. even if that course of action would curtail the so-called
That decision of the Director is assailed in these special union autonomy and freedom from government
civil actions of certiorari and prohibition. The petitioners interference.
pray that the four union officers be expelled. d. For the protection of union members and in order that
the affairs of the union may be administered honestly,
labor officials should be vigilant and watchful in
ISSUE
monitoring and checking the administration of union
affairs.
WON the Bureau of Labor Relations have the power to remove
e. Laxity, permissiveness, neglect and apathy in
erring UNION officers - YES.
supervising and regulating the activities of union officials
would result in corruption and oppression.
RATIO
 f. It is necessary and desirable that the Bureau of Labor
Relations and the Ministry of Labor should exercise close
and constant supervision over labor unions, particularly
the handling of their funds, so as to forestall abuses and
venalities.
COURT SAYS: ON EXAMINATION OF UNION BOOKS AND
RECORDS
Director acted correctly in ordering an examination of the
books and records of the union.
The examination should include a verification of the charge
that the petty loans extended by the union to its members
were usurious and that the fee for the issuance of cheeks is
unwarranted since the loans were made in cash.
DECISION
The portion of the decision of the med-arbiter, removing
respondents Manalad, Leano and Puerto as union
officers, is affirmed. (Respondent Amparo is no longer an
officer of the union.)
The portion of the decision of the Director of Labor
Relations, directing the Bureau's Labor Organization
Division to examine the books of accounts and records of
the Associated Port Checkers and Workers Union and to
submit a report on such examination within a reasonable
time is affirmed.
Petitioners are entitled to a refund of the union dues
illegally collected from them.
7. UNION LEAVE
MALAYAN EMPLOYEES ASSOCIATION-FFW and RODOLFO
MANGALINO, petitioners, vs. MALAYAN INSURANCE
COMPANY, INC., respondent.
Petitioner: (Union) Malayan Employees Association-FFW
Respondent: (Company) Malayan Insurance Company, Inc
petitioner Malayan Employees Association-FFW is
the exclusive bargaining agent of rank-and-file
employees of respondent Malayan Insurance
Company, Inc.
a provision in the unions CBA allows union officials to
avail of union leaves with pay for a total of ninety-man
days per year for the purpose of attending
o grievance meetings,
o Labor-Management Committee meetings,
o annual National Labor Management Conferences,
o labor education programs and seminars,
o and other union activities
The company issued a rule in November 2002 requiring
not only the prior notice that the CBA expressly
requires, but prior approval by the department head
before the union and its members can avail of union
leaves
This was placed in effect without objection from the
union until a union officer, Rodolfo Mangalino, filed
union leave applications in January and February, 2004.
His department head denied the application because
they were undermanned but he still took the leave He
said he believed in good faith that he had complied with
the existing company practice and with the procedure
set forth in the CBA
The company suspended him for 1 week and 1 month for
his first and second offense respectively
The union raised the suspensions as a grievance issue
and went through all the grievance processes, including
the referral of the matter to the companys president,
Yvonne Yuchengco all internal remedies failed so
they went to NCMB for preventive mediation (also failed)
Parties went into voluntary arbitration on the following
issues
o whether or not Mangalinos suspensions were
valid; and
o whether or not Mangalino should be paid
backwages for the duration of the suspensions.
Voluntary Arbitrators ruled that the suspension for the
first offense was invalid while the second suspension
 valid but illicit in terms of penalty of thirty (30) days
suspension reduced the suspension to 10 days
Voluntary Arbitrator dela Fuente submitted the following
dissent
o The act of an employee can only be interpreted as
an utter display of arrogance and cannot be
allowed to pass without sanction unless the
employer wants anarchy
o For failing to comply with the requirements and
for going on such leave despite the express
disapproval of his superior, Mr. Mangalinos two
suspensions are valid and he is not entitled to any
backwages for the duration of his suspensions.
Company appealed to CA which was granted by CA and exercise of management prerogative
upheld the validity of Mangalinos suspension on the
basis of the companys prerogative to prescribe
reasonable rules to regulate the use of union leaves
Unions MR denied
Union appealed to SC alleging that CA committed GAD
when, despite the clear terms of the CBA grant of union
leaves, it disregarded the evidence on record and
recognized that the companys use of its management
prerogative as justification was proper.
ISSUE: WON CA committed GAD
Procedural: WON petition is barred by time limitation and has
lapsed to finality YES
Company asserted that
o union failed to attach the material portions of the
record as would support its petition, such as the
companys pleadings and the entirety of the
companys evidence.
o petition is barred by time limitation and has
lapsed to finality as it was filed sixty-two (62) days SC :
after the unions receipt of the CA decision.
SC
o Cannot extend liberality of application of rules
o Judgment already became final
o Given that a Rule 45 petition is appropriate in the
present case, the period of 60 days after notice of
judgment is way past the deadline allowed, so
that the CA decision had lapsed to finality by the
time the petition with us was filed. This reason
alone even without considering the companys
other technical objection based on the unions
failure to attach relevant documents in support of
the petition amply supports the denial of the
petition.
Substantive WON suspension was valid YES. Part of
company mainly contended that
o the regulation of the use of union leaves is within
the companys management prerogative and they
only exercised said prerogative when the required
the approval of department head
o Mangalino committed acts of insubordination
when he insisted on going on leave despite the
disapproval of his leave applications.
Union
o use of management prerogative was improper
because the CBA grant of the union leave
benefit did not require prior company
approval as a condition
o any change in the CBA grant requires union
conformity.
o unilateral change in the CBA terms violates Article
255 of the Labor Code, which guarantees the right
of employees to participate in the companys
policy and decision-making processes on matters
directly affecting their interests.
While it is true that the union and its members have
been granted union leave privileges under the CBA, the
grant cannot be considered separately from the
other provisions of the CBA, particularly the
provision on management prerogatives CBA
 reserved for the company the full and complete
authority in managing and running its business
prior notice is expressly required under the CBA
so that the company can appropriately respond to
the request for leave. In this sense, the rule
requiring prior approval only made express what
is implied in the terms of the CBA.
any doubt in resolving any interpretative conflict is
settled by subsequent developments in the course
of the parties implementation of the CBA,
specifically, by the establishment of the company
regulation in November 2002 requiring prior approval
before the union leave can be used
o union accepted this regulation without objection
since its promulgation
o the rule on its face is not unreasonable,
oppressive, nor violative of CBA terms.
no letter from the union complaining about the unilateral
change in policy or any request for a meeting to discuss
this policy appears on record.
The union and its members have willingly applied for
approval as the rule requires
Even Mangalino himself, in the past, had filed
applications for union leave with his department
manager, and willingly complied with the disapproval
without protest of any kind
requirement for prior approval was already in place and
established, and could no longer be removed except with
the companys consent or by negotiation and express
agreement in future CBAs
prior approval policy fully supported the validity of the
suspensions the company imposed on Mangalino
as an employee, Mangalino had the clear
obligation to comply with the management
disapproval of his requested leave while at the
same time registering his objection to the
company regulation and action.
he still went on leave, in open disregard of his superiors
orders, rendered Mangalino open to the charge of
insubordination, separately from his absence without
official leave.
Decision: Petition denied