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Radio Communication of the Philippines Inc. vs. Secretary of Labor, [G.R. No.

77959
January 9, 1989]
Post under case digests, labor law at Friday, March 02, 2012 Posted by Schizophrenic Mind
Facts: On May 4, 1981, petitioner, a domestic corporation engaged in the telecommunications
business, filed with the National Wages Council an application for exemption from the coverage
of Wage Order No. 1. The application was opposed by respondent United RCPI
Communications Labor Association (URCPICLA-FUR), a labor organization affiliated with
the Federation of Unions of Rizal (FUR).
On May 22, 1981, the National Wages Council disapproved said application and ordered
petitioner to pay its covered employees the mandatory living allowance of P2.00 daily effective
March 22, 1981.
As early as March 13, 1985, before the aforesaid case was elevated to this
Court, respondent union filed a motion for the issuance of awrit of execution, asserting therein
its claim to 15% of the total backpay due to all its members as "union service fee" for having
successfully prosecuted the latter's claim for payment of wages and for reimbursement of
expenses incurred by FUR and prayed for the segregation and remittance of said amount to
FUR thru its National President.
On October 24, 1985, without the knowledge and consent ofrespondent union, petitioner entered
into a compromise agreementwith Buklod ng Manggagawa sa RCPI-NFL (BMRCPI-NFL) as the
new bargaining agent of oppositors RCPI employees. Thereupon, the parties filed a joint motion
praying for the dismissal of the decision of the National Wages Council for it had already been
novated by the Compromise Agreement re-defining the rights and obligations of the
parties. Respondent Union on November 7, 1985, countered by opposing the motion and
alleging that one of the signatories thereof - BMRCPI-NFL is not a party in interest in the case
but that it was respondent Union which represented oppositors RCPI employees all the way from
the level of the National Wages Council up the Supreme Court. Respondent Union, therefore,
claimed that the Compromise Agreement is irregular and invalid, apart from the fact that there
was nothing to compromise in the face of a final and executory decision.
Director Severo M. Pucan issued an Order dated November 25, 1985 awarding to URCPICLAFUR and FUR 15% of the total backpay of RCPI employees as their union service fees, and
directing RCPI to deposit said amount with the cashier of the Regional Office for proper
disposition to said awardees. Despite said order, petitioner paid in full the covered employees on
November 29, 1985, without deducting the union service fee of 15%. In an order dated May 7,
1986, NCR officer-in-charge found petitioner RCPI and its employees jointly and severally liable
for the payment of the 15% union service fee amounting to P427,845.60 to
private respondentURCPICLA-FUR and consequently ordered the garnishment of petitioner's
bank account to enforce said claim.
Secretary of Labor and Employment issued an order on August 18, 1986 modifying the order
appealed from by holding petitioner solely liable to respondent union for 10% of the awarded
amounts as attorney's fees.
Issue: Whether or not public respondents acted with grave abuse of discretion amounting to
lack of jurisdiction in holding the petitioner solely liable for "union service fee
to respondent URCPICLA-FUR.
Held: No. Attorney's fee due the oppositor is chargeable against RCPI. The defaulting employer
or government agency remains liable for attorney's fees because it compelled the complainant to
employ the services of counsel by unjustly refusing to recognize the validity of the claim.
(Cristobal vs. ECC)

It is undisputed that oppositor (private respondent herein) was the counsel on record of the RCPI
employees in their claim for EC0LA under Wage Order No. 1 since the inception of the
proceedings at the National Wages Council up to the Supreme Court. It had, therefore, a
valid claim for attorney's fee which it called union service fee.
As is evident in the compromise agreement, petitioner was bound to pay only 30% of the amount
due each employee on November 30, 1985, while the balance of 70% would still be the subject
of renegotiation by the parties. Yet, despite such conditions beneficial to it, petitioner paid in full
the backpay of its employees on November 29, 1985, ignoring the service fee due the
private respondent. Worse, petitioner supposedly paid to one Atty. Rodolfo M. Capocyan the
10% fee that properly pertained to herein private respondent, an unjustified and baffling
diversion of funds.
Finally, petitioner cannot invoke the lack of an individual written authorization from the
employees as a shield for its fraudulent refusal to pay the service fee of private respondent. Be
that as it may, the lack thereof was remedied and supplied by the execution of thecompromise
agreement whereby the employees, expressly approved the 10% deduction and held petitioner
RCPI free from any claim, suit or complaint arising from the deduction thereof. When petitioner
was thereafter again ordered to pay the 10% fees to respondent union, it no longer had any
legal basis or subterfuge for refusing to pay the latter.
We agree that the Labor Code in requiring an individual written authorization as a prerequisite to
wage deductions seeks to protect the employee against unwarranted practices that would
diminish his compensation without his knowledge and consent. However, for all intents and
purposes, the deductions required of the petitioner and the employees do not run counter to the
express mandate of the law since the same are not unwarranted or without their knowledge and
consent. Also, the deductions for the union service fee in question are authorized by law and do
not require individual check-off authorizations.
GENERAL RUBBER AND FOOTWEAR CORPORATION, petitioner,
vs.
THE HON. FRANKLIN DRILON IN HIS CAPACITY AS THE MINISTER OF LABOR &
EMPLOYMENT and THE GENERAL RUBBER WORKERS' UNION-NATU, respondents.
FELICIANO, J.:
The present petition involves the question of whether or not union members who did not ratify a
waiver of accrued wage differentials are bound by the ratification made by a majority of the union
members.
On 26 December 1984, Wage Order No. 6 was issued, increasing the statutory minimum wage
rate (by P2.00) and the mandatory cost of living allowance (by P3.00 for non-agricultural
workers) in the private sector, to take effect on 1 November 1984, Petitioner General Rubber
and Footwear Corporation applied to the National Wages Council ("Council") for exemption from
the provisions of Wage Order No. 6. The Council, in an Order dated 4 March 1985, denied
petitioner's application, stating in part that:
[Y]ou are hereby ordered to pay your covered employees the daily increase
in statutory minimum wage rate of P 2.00 and living allowance of P3.00
effective November 1, 1984. ...
This decision is final. 1 (Emphasis supplied)

Petitioner filed a Motion for Reconsideration of this Order on 27 May 1985.


On 25 May 1985, some members of respondent General Rubber Workers' Union-NATU, led by
one Leopoldo Sto. Domingo, declared a strike against petitioner. 2 Three (3) days later, on 28
May 1985, petitioner and Sto. Domingo, the latter purporting to represent the striking workers,
entered into a Return-to-Work Agreement ("Agreement"), Article 4 of which provided:
4. The COMPANY agrees to implement in full Wage Order No. 6 effective
May 30, 1985, and agrees to withdraw the Motion for Reconsideration which
it filed with the National Wages Council in connection with the Application
for Exemption. In consideration, the UNION, its officers and members,
agrees not to demand or ask from the COMPANY the corresponding
differential pay from November 1, 1984 to May 29 1985 arising out of the
non-compliance of said wage order during the said period.3 (Emphasis
supplied)
This agreement was subsequently ratified on 30 July 1985 in a document entitled "Samasamang Kapasyahan sa Pagpapatibay ng Return-to-Work Agreement" 4 by some two hundred
and sixty-eight (268) members of respondent union, each member signing individually the
instrument of ratification.
Before the ratification of the Agreement, petitioner filed, on 5 June 1985, a Motion with the
Council withdrawing its pending Motion for Reconsideration of the Council's Order of 4 March
1985. By a letter dated 13 June 1985, the Council allowed the withdrawal of petitioner's Motion
for Reconsideration, which letter in part stated:
In view of your compliance with Wage Order No. 6 effective May 30,
1985 pursuant to the Return to Work Agreement ... , this Council interposes
no objection to your Motion to Withdraw ... 5 (Emphasis supplied)
Meanwhile, there were some one hundred (100) members of the union who were unhappy over
the Agreement, who took the view that the Council's Order of 4 March 1985 bad become final
and executory upon the withdrawal of petitioner's Motion for Reconsideration and who would not
sign the instrument ratifying the Agreement. On 10 July 1985, these minority union members
with respondent union acting on their behalf, applied for a writ of execution of the Council's
Order. 6
Petitioner opposed the Motion for a writ of execution, contending that the Council's approval of
its deferred compliance with the implementation of the Wage Order, 7 together with the majority
ratification of the Agreement by the individual workers, 8 bound the non-ratifying union members
represented by respondent union.
Respondent union countered that the Agreement despite the majority ratification was not
binding on the union members who had not consented thereto, upon the ground that ratification
or non-ratification of the Agreement, involving as it did money claims, was a personal right under
the doctrine of "Kaisahan ng Manggagawa sa La Campana v. Honorable Judge Ulpiano
Sarmiento and La Campana." 9
Finding for the Union members represented by respondent union, the then Ministry (now
Department) of Labor and Employment, in an order dated 20 September 1985 issued by
National Capital Region Director Severo M. Pucan, directed the issuance of a writ of execution
and required petitioner to pay the minority members of respondent union their claims for
differential pay under Wage Order No. 6, which totalled P90,090.00. 10

Petitioner then moved to quash the writ of execution upon the ground that the Council's order
could not be the subject of a writ of execution, having been superseded by the Agreement. 11 In
another Order dated 15 January 1986. Director Pucan, reversed his previous order and
sustained petitioner's contention that the minority union members represented by respondent
union were bound by the majority ratification, holding that the Council's 20 September 1985
Order sought to be enforced by writ of execution should not have been issued. 12
Respondent union filed a Motion for Reconsideration, which was treated as an appeal to the
Minister of Labor. In a decision dated 19 December 1986, the Minister of Labor set aside the
appealed Order of Director Pucan. The Minister's decision held that:
It is undisputed that the 100 numbers did not sign and ratify the Return-toWork Agreement and therefore they cannot be bound by the waiver of
benefits therein. This, in essence, is the ruling of the High Tribunal in the La
Campana case. Accordingly, the benefits under Wage Order No. 6 due
them by virtue of the final and executory Order of the National Wages
Council dated March 4, 1985 subsists in their favor and can be subject for
execution.
xxx xxx xxx
The writ of execution dated September 20, 1985 ... was clearly based on the
final Order of the National Wages Council sought to be enforced in a Motion
for Execution filed by the union. While the Return-to-Work Agreement was
mentioned in the writ, the respondent allegedly failing 'to comply with the
above-stated Agreement which had become final and executory,' we find
the Agreement indeed not the basis for the issuance of the writ.
WHEREFORE, the Order of the Director dated January 15, 1986 is hereby
set aside. Let a writ of execution be issued immediately to enforce the
payment of the differential pay under Wage Order No. 6 from November 1,
1984 to May 29, 1985 of the 100 workers who did not sign any waiver, in
compliance with the final Order of the National Wages Council. The entire
record is hereby remanded to the Regional Director, National Capital
Region for this purpose.
SO ORDERED . 13 (Emphasis supplied)
Not pleased with the adverse decision of the Minister, petitioner filed the instant Petition
for Certiorari.
Petitioner argues once again that the National Wages Council's Order of 4 March 1985 did not
become final and executory because it had been superseded by the Return-to-Work Agreement
signed by petitioner corporation and the union. At the same time, petitioner also argues that the
Return-to-Work Agreement could not be enforced by a writ of execution, because it was a
contractual document and not the final and executory award of a public official or agency.
Petitioner's contention is more clever than substantial. The core issue is whether or not Article 4
of the Return-to-Work Agreement quoted above, could be deemed as binding upon all members
of the union, without regard to whether such members had or had not in fact individually signed
and ratified such Agreement. Article 4 of that Agreement provided for, apparently, a quid pro
quo arrangement: petitioner agreed to implement in full Wage Order No. 6 starting 30 May
1985 (and not 1 November 1984, as provided by the terms of Wage Order No. 6) and to
withdraw its previously filed Motion for Reconsideration with the National Wages Council; in turn,
the union and its members would refrain from requiring the company to pay the differential pay

(increase in pay) due under Wage Order No. 6 corresponding to the preceding seven-month
period from 1 November 1984 to 29 May 1985.
Thus, Kaisahan ng Mangagawa sa La Campana v. Sarmiento, (supra) is practically on all fours
with the instant case. In La Campana, what was at stake was the validity of a compromise
agreement entered into between the union and the company. In that compromise agreement,
the union undertook to dismiss and withdraw the case it had filed with the then Court of Industrial
Relations, and waived its right to execute any final judgment rendered in that case. The CIR had
in that case, rendered a judgment directing reinstatement of dismissed workers and payment of
ten (10) years backwages. The Secretary of Labor held that that compromise agreement was
void for lack of ratification by the individual members of the union. The Supreme Court upheld
the decision of the Secretary of Labor, stating among other things that:
Generally, a judgment on a compromise agreement puts an end to a
litigation and is immediately executory. However, the Rules [of Court]
require a special authority before an attorney can compromise the litigation
of [his] clients. The authority to compromise cannot lightly be presumed and
should be duly established by evidence. (Esso Philippine, Inc. v. MME, 75
SCRA 91).
As aptly held by the Secretary of Labor, the records are bereft of showing
that the individual members consented to the said agreement. Now were the
members informed of the filing of the civil case before the Court of First
Instance. If the parties to said agreement acted in good faith, why did they
not furnish the Office of the president with a copy of the agreement when
they knew all the while that the labor case was then pending appeal
therein? Undoubtedly, the compromise agreement was executed to the
prejudice of the complainants who never consented thereto, hence, it is null
and void. The judgment based on such agreement does not bind the
individual members or complainants who are not parties thereto nor
signatories therein.
Money claims due to laborers cannot be the object of settlement or
compromise effected by a union or counsel without the specific individual
consent of each laborer concerned. The beneficiaries are the individual
complainants themselves. The union to which they belong can only assist
them but cannot decide for them. Awards in favor of laborers after long
years of litigation must be attended to with mutual openness and in the best
of faith. (Danao Development Corp. v. NLRC, 81 SCRA 487-505). Only thus
can we really give meaning to the constitutional mandate of giving laborers
maximum protection and security. It is about time that the judgment in Case
No. 584-V(7) be fully implemented considering the unreasonable delay in
the satisfaction thereof. This unfortunate incident may only weaken the
workingmen's faith in the judiciary's capacity to give them justice when
due. 14
xxx xxx xxx
(Emphasis supplied)
In the instant case, there is no dispute that private respondents had not ratified the Return-toWork Agreement. It follows, and we so hold, that private respondents cannot be held bound by
the Return-to-Work Agreement. The waiver of money claims, which in this case were accrued
money claims, by workers and employees must be regarded as a personal right, that is, a right
that must be personally exercised. For a waiver thereof to be legally effective, the individual

consent or ratification of the workers or employees involved must be shown. Neither the officers
nor the majority of the union had any authority to waive the accrued rights pertaining to the
dissenting minority members, even under a collective bargaining agreement which provided for a
"union shop." The same considerations of public policy which impelled the Court to reach the
conclusion it did in La Campana, are equally compelling in the present case. The members of
the union need the protective shield of this doctrine not only vis-a-vis their employer but also, at
times, vis-a-vis the management of their own union, and at other times even against their own
imprudence or impecuniousness.
It should perhaps be made clear that the Court is not here saying that accrued money claims
can never be effectively waived by workers and employees. What the Court is saying is that, in
the present case, the private respondents never purported to waive their claims to accrued
differential pay. Assuming that private respondents had actually and individually purported to
waive such claims, a second question would then have arisen: whether such waiver could be
given legal effect or whether, on the contrary, it was violative of public policy. 15 Fortunately, we
do not have to address this second question here.
Since Article 4 of the Return-to-Work Agreement was not enforceable against the nonconsenting union members, the Order of the National Wages Council dated 4 March 1985
requiring petitioner to comply with Wage Order No. 6 from 1 November 1984 onward must be
regarded as having become final and executory insofar as the non-consenting union members
were concerned. Enforcement by writ of execution of that Order was, therefore, proper. It follows
further that the decision of 19 December 1986 of the respondent Minister of Labor, far from
constituting a grave abuse of discretion or an act without or in excess of jurisdiction, was fully in
accordance with law as laid down in La Campana and here reiterated.
WHEREFORE, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs
against petitioner.
ANG TIBAY v COURT OF INDUSTRIAL RELATIONS
69 Phil 635
LAUREL; February 27, 1940
FACTS
- The respondent National Labor Union, Inc. prayed for the vacation of the judgment rendered
by the majority of this Court and the remanding of the case to the Court of Industrial
Relations for a new trial. The union avers that: Teodoro's claim that there was shortage of
leather soles in ANG TIBAY making it necessary for him to temporarily lay off the members of
the union is entirely false and unsupported by the records of the Bureau of Customs and
the Books of Accounts of native dealers in leather; that the National Worker's Brotherhood of
ANG TIBAY is a company or employer union dominated by Teodoro, the existence and
functions of which are illegal; that the employer Toribio Teodoro was guilty of unfair labor
practice for discriminating against the National Labor Union, Inc., and unjustly favoring the
National Workers' Brotherhood; that important documents attached are inaccessible to the
respondents.
ISSUE
WON the union was denied procedural due process by the CIR
HELD NO.
The CIR, a special court created under CA 103, is more an administrative than a part of the
integrated judicial system of the nation. It is not intended to be a mere receptive organ of the
Government. Unlike a court of justice which is essentially passive, acting only when its
jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the
function of the CIR is more active, affirmative and dynamic. It not only exercises judicial or

quasi - judicial functions in the determination of disputes between employers and


employees but its functions in the determination of disputes between employers and
employees but its functions are far more comprehensive and expensive. It has jurisdiction
over the entire Philippines, to consider, investigate, decide, and settle any question, matter
controversy or dispute arising between, and/or affecting employers and employees or
laborers, and regulate the relations between them. It may appeal to voluntary arbitration in the
settlement of industrial disputes; may employ mediation or conciliation for that purpose, or
recur to the more effective system of official investigation and compulsory arbitration in
order to determine specific controversies between labor and capital industry and in
agriculture. There is in reality here a mingling of executive and judicial functions, which is a
departure from the rigid doctrine of the separation of governmental powers.
The CIR is not narrowly constrained by technical rules of procedure, and the Act requires it to
"act according to justice and equity and substantial merits of the case, without regard to
technicalities or legal forms and shall not be bound by any technicalities or legal forms and
shall not be bound by any technical rules of legal evidence but may inform its mind in such
manner as it may deem just and equitable." It shall not be restricted to the specific relief
claimed or demands made by the parties to the industrial or agricultural dispute, but may
include in the award, order or decision any matter or determination which may be deemed
necessary or expedient for the purpose of settling the dispute or of preventing further industrial
or agricultural disputes. And in the light of this legislative policy, appeals to this Court have
been especially regulated by the rules recently promulgated by the rules recently promulgated
by this Court to carry into the effect the avowed legislative purpose.
The fact, however, that the CIR may be said to be free from the rigidity of certain procedural
requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard
the fundamental and essential requirements of due process in trials and investigations of an
administrative character. There are primary rights which must be respected even in
proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of
the party interested or affected to present his own case and submit evidence in support
thereof. The liberty and property of the citizen shall be protected by the rudimentary
requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce
evidence tending to establish the rights which he asserts but the tribunal must consider
the evidence presented.
(3) While the duty to deliberate does not impose the obligation to decide right, it
does imply a necessity
which cannot be disregarded, namely, that of having something to support it is a
nullity, a place when directly attached. This principle emanates from the more
fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a
limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion, but t
he evidence must be
substantial. It means such relevant evidence as a reasonable mind accept as adequate to
support a conclusion. Mere uncorroborated hearsay or rumor does not constitute substantial
evidence.
(5) The decision must be rendered on the evidence presented at the hearing, or at
least contained in the record and disclosed to the parties affected. Only by
confining the administrative tribunal to the evidence disclosed to the parties, can the latter
be protected in their right to know and meet the case against them. It should not, however,
detract from their duty actively to see that the law is enforced, and for that purpose, to

use the authorized legal methods of securing evidence and informing itself of facts material
and relevant to the controversy. Boards of inquiry may be appointed for the purpose of
investigating and determining the facts in any given case, but their report and decision are only
advisory. (6) The CIR or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply
accept the views of a subordinate in arriving at a decision.
(7) The CIR should, in all controversial questions, render its decision in such a manner
that the parties to the proceeding can know the various issues involved, and the
reasons for the decision rendered. The performance of this duty is inseparable from the
authority conferred upon it.
- In the right of the foregoing fundamental principles, except as to the alleged agreement
between the Ang Tibay and the National Worker's Brotherhood, the record is barren and does
not satisfy the thirst for a factual basis upon which
to predicate, in a national way, a conclusion of law.
- This result, however, does not now preclude the concession of a new trial prayed for the
by respondent National Labor Union, Inc. The interest of justice would be better served if the
movant is given opportunity to present at the hearing the documents referred to in his
motion and such other evidence as may be relevant to the main issue involved. The
legislation which created the CIR is new. The failure to grasp the fundamental issue
involved is not entirely attributable to the parties adversely affected by the result. Accordingly,
the motion for a new trial is grant ed, and the entire record of the case shall be remanded to the
CIR.
Ang Tibay v CIR (1940) 69 Phil 635
J. Laurel
Facts:
Toribio claimed to have laid off workers due to the shortage of leather soles in the Ang Tibay
factory.
The Court of industrial relations forwarded a motion for recon with the supreme court.
In pursuit of a retrial in the Court of Industrial Relations, the national labor union, the respondent,
averred:
1. The shortage of soles has no factual basis
2. The scheme was to prevent the forfeiture of his bond to cover the breach of obligation with the
Army
3. The letter he sent to the army was part of this scheme
4. The company union was an employer dominated one.
5. laborers rights to CBA is indispensable.
6. Civil code shouldnt be used to interpret a legislation of American industrial origins.
7. Toribio was guilty of unfair labor practice for favoring his union.
8. Exhibits are inaccessible to respondents.
9. The exhibits can reverse the judgment.
Issue: Is the Court of Industrial Relations the proper venue for the trial?
Held: Yes. Case remanded to the CIR
Ratio:
There was no substantial evidence that the exclusion of the 89 laborers here was due to their
union affiliation or activity.
The nature of the CIR is that of an administrative court with judicial and quasi-judicial functions
for the purpose of settling disputes and relations between employers and employees. It can
appeal to voluntary arbitration for dispute. It can also examine the industries in a locality by order
of the president.
There is a mingling of executive and judicial functions, which constitutes a departure from the
separation of powers.

The Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and
is not bound by technical rules of legal procedure. It may also include any matter necessary for
solving the dispute.
The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity
of certain procedural requirements does not mean that it can, in justifiable cases before it,
entirely ignore or disregard the fundamental and essential requirements of due process in trials
and investigations of an administrative character.
Some examples that it must follow are:
1. right to a hearing
2. consideration of evidence by the court
3. duty to deliberate implies a necessity which cannot be disregarded, namely, that of having
something to support it is a nullity, a place when directly attached
4. substance of evidence and the non-binding aspect of judicial decisions in an admin court so
as to free them from technical rules
5. the decision must be rendered at the evidence presented at the hearing. The court may also
delegate some powers to other judicial bodies.
6. The court must act on its own decision at reaching a controversy. It mustnt merely accept the
views of a subordinate.
7. The court must clearly state the issues and the rationale for the decision.
The record is barren and doesnt satisfy a factual basis as to predicate a conclusion of law.
Evidence was still inaccessible.
The motion for a new trial should be granted and sent to the CIR.