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30% assent of union membership not mandatory to file complaint

[G.R. No. 152322. February 15, 2005.]


ERNESTO C. VERCELES, DIOSDADO F. TRINIDAD, SALVADOR G. BLANCIA, ROSEMARIE DE
LUMBAN, FELICITAS F. RAMOS, MIGUEL TEAO, JAIME BAUTISTA and FIDEL ACERO, as Officers of
the University of the East Employees' Association, petitioners, vs. BUREAU OF LABOR RELATIONSDEPARTMENT OF LABOR AND EMPLOYMENT, DEPARTMENT OF LABOR AND EMPLOYMENTNATIONAL CAPITAL REGION, RODEL E. DALUPAN, EFREN J. DE OCAMPO, PROCESO TOTTO, JR.,
ELIZABETH ALARCA, ELVIRA S. MANALO, and RICARDO UY, respondents.
DECISION
CHICO-NAZARIO, J p:
Before Us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the
Decision 1 and Resolution 2 rendered by the Court of Appeals, dated 24 October 2001 and 15 February 2002,
respectively.

The Facts
Private respondents Rodel E. Dalupan, Efren J. De Ocampo, Proceso Totto, Jr., Elizabeth Alarca, and Elvira S.
Manalo are members of the University of the East Employees' Association (UEEA). On 15 September 1997, they
each received a Memorandum from the UEEA charging them with spreading false rumors and creating
disinformation among the members of the said association. They were given seventy-two hours from receipt of
the Memorandum to submit their Answer. 3
The acts of the respondents allegedly fall under General Assembly Resolution No. 4, Series of 1979, to wit:
1. Circulating false rumors about the progress of the negotiations for collective bargaining; cAaDHT
2. Creating distrust or loss of trust and confidence of members in the Association;
3. Creating dissension among the members;
4. Circulating false rumors about the work of the Association or sabotaging the same;
5. Withholding from the Association and/or members material information as to their rightful entitlement to
benefits and/or money claims;
6. Acting as a spy against the Association or divulging confidential matters to persons not entitled thereto;
7. Such other offenses, which may injure or disrupt the functions of the Association. 4
Through a collective reply dated 19 September 1997, private respondents denied the allegations. Thereafter, on
23 September 1997, they sent a letter dated 22 September 1997 to the Chairman and Members of UEEA's
Disciplinary Committee, informing them that the Memorandum of 15 September 1997 was vague and without
legal basis, therefore, no intelligent answer may be made by them. They likewise stated that any sanction that
will be imposed by the committee would be violative of their right to due process. 5
The Disciplinary Committee issued another Memorandum, dated 24 September 1997, giving the respondents
another seventy-two hours from receipt within which to properly reply, explaining that the collective reply letter
and supplemental answer which were earlier submitted were not responsive to the first Memorandum. Their
failure would be construed as an admission of the truthfulness and veracity of the charges. 6
On 01 October 1997, the respondents issued a denial for the second time, and inquired from the Disciplinary
Committee as to whether they were being formally charged. 7

On 09 October 1997, Ernesto Verceles, in his capacity as president of the association, through a Memorandum,
informed Rodel Dalupan, et al., that their membership in the association has been suspended and shall take
effect immediately upon receipt thereof. Verceles said he was acting upon the disciplinary committee's finding of
aprima facie case against them. 8 Respondent Ricardo Uy also received a similar memorandum on 03 November
1997. 9
On 01 December 1997, a complaint 10 for illegal suspension, willful and unlawful violation of UEEA constitution
and by-laws, refusal to render financial and other reports, deliberate refusal to call general and special meetings,
illegal holdover of terms and damages was filed by the respondents against herein petitioners Ernesto C.
Verceles, Diosdado F. Trinidad, Salvador G. Blancia, Rosemarie De Lumban, Felicitas Ramos, Miguel Teao,
Jaime Bautista and Fidel Acero before the Department of Labor and Employment, National Capital Region (DOLENCR). IHaECA
A few days after the filing of the complaint, i.e., on 10 December 1997, a resolution 11 was passed by UEEA
which reads as follows:
RESOLUTION
WHEREAS, the Association has gone thru a most arduous, difficult, and trying times in working to obtain the
best terms and conditions of employment for its members, specifically for the period 1992 to 1996;
WHEREAS, said difficulties are in the form of near strikes, cases with the Department of Labor and Employment
and its agencies, as well as with the Supreme Court;
WHEREAS, the general membership (has) shown exceptional patience and perseverance and generally (had)
demonstrated full trust and confidence in the Association officers and accordingly approved the manner and/or
actions undertaken in pursuing said difficult task of arriving at a most beneficial agreement for the general
membership;
NOW, THEREFORE, be it resolved as it is hereby resolved that:
xxx xxx xxx
b) the general membership reiterate its loyalty to the Association and commends the Association officers for
their effort expended in working for the benefit of the whole membership. cEATSI
APPROVED.
Manila. 10 December 1997.
On 22 November 1999, a decision 12 was rendered by Regional Director Maximo B. Lim, adverse to petitioners,
the dispositive portion of which reads:
WHEREFORE, premises considered, respondent[s] [are] hereby ordered:
1. to immediately lift suspension imposed upon the complainants;
2. to hold a general membership meeting wherein they (respondents) make open and available the
union's/association's books of accounts and other documents pertaining to the union funds [and] thereby explain
the financial status of the union;
3. to regularly conduct special and general membership meetings in accordance with the union's constitution and
by-laws;
4. to immediately hold/conduct an election of officers in accordance with the union's constitution and by-laws.
Accordingly, the claims of complainants for damages [are] hereby ordered dismissed for lack of
jurisdiction. IaSCTE
2

However, within ten (10) days upon receipt of this Order, the complainants are hereby directed to submit a
written report whether or not the respondents had complied with this Order.
The petitioners appealed to the Bureau of Labor Relations of the Department of Labor and Employment (BLRDOLE). During the pendency of this appeal, or on 07 April 2000, an election of officers was held by the UEEA.
The appeal, eventually, was dismissed for lack of merit in a Resolution 13 dated 22 September 2000, the
decretal portion of which reads:
WHEREFORE, the appeal is hereby DISMISSED for lack of merit and the decision dated 22 (November) 1999 of
Regional Director Maximo B. Lim, DOLE-NCR, is AFFIRMED.
Meanwhile, Resolution No. 8, Series of 2000, was passed by the UEEA, wherein the members allegedly reiterated
their support and approval of the acts and collateral actions of the officers. 14
A Motion for Reconsideration 15 was filed by the petitioners with the BLR-DOLE, but was denied in a
Resolution 16 dated 15 January 2001.
A special civil action for certiorari 17 was thereafter filed before the Court of Appeals citing grave abuse of
discretion amounting to lack or excess of jurisdiction. In a Resolution 18 dated 22 February 2001, the Court of
Appeals dismissed the petition outright for failure to comply with the provisions of Section 1, Rule 65 in relation
to Section 3, Rule 46 of the 1997 Rules of Civil Procedure. A Motion for Reconsideration 19 was filed which was
granted in a Resolution 20 dated 24 April 2001, thus, reinstating the petition.
On 24 October 2001, the Court of Appeals rendered a Decision 21 dismissing the petition, the dispositive portion
of which reads:
WHEREFORE, premises considered, the instant petition is DENIED DUE COURSE and DISMISSED for lack of
merit. No pronouncement as to costs.
A Motion for Reconsideration 22 was thereafter filed by the petitioners. In a Resolution 23 dated 15 February
2002, the Court of Appeals modified its earlier decision. The decretal portion of which states:
WHEREFORE, the questioned decision of this court is MODIFIED. The 22 September 2000 and 15 January 2001
resolutions of the BLR insofar as they affirmed the part of the 22 November 1999 decision of the Regional
Director of DOLE-NCR ordering the immediate holding of election are HEREBY ANNULLED AND SET ASIDE. All
the other aspects of the assailed Resolutions are AFFIRMED.
Not satisfied, the petitioners filed a petition for review on certiorari 24 before this Court.

The Issues
The petitioners raise the following issues:
1. WHETHER OR NOT THERE IS REVERSIBLE ERROR IN THE COURT OF APPEALS' UPHOLDING THE DOLE-NCR
AND BLR-DOLE DECISIONS BASED ONLY ON THE COMPLAINT AND ANSWER;
2. WHETHER OR NOT IT IS REVERSIBLE ERROR FOR THE COURT OF APPEALS TO HOLD THE ELECTION OF
APRIL 7, 2000 AS INVALID AND A NULLITY; AaCcST
3. WHETHER OR NOT IT IS REVERSIBLE ERROR TO UPHOLD BLR-DOLE'S FINDING THAT THE SUSPENSION
WAS ILLEGAL; and
4. WHETHER OR NOT THE ALLEGED NON-HOLDING OF MEETINGS AND ALLEGED NON-SUBMISSION OF
REPORTS ARE MOOT AND ACADEMIC, AND WHETHER THE DECISION TO HOLD MEETINGS AND SUBMIT
REPORTS CONTRADICT AND OVERRIDE THE SOVEREIGN WILL OF THE MAJORITY. 25

The Court's Rulings


3

We shall discuss the issues in seriatim.


First Issue: was the court a quo correct in upholding the DOLE-NCR and BLR-DOLE decisions based only on the
complaint and answer?
Petitioners contend that the complaint filed by the private respondents in DOLE-NCR was a mere recital of bare,
self serving and unsubstantiated allegations. Both parties did not submit position papers, and the DOLE-NCR
resolved the case based only on the complaint and answer. Also, by failing to submit a reply to the answer,
private respondents, in effect admitted the petitioners' controversion of the charges. 26 They further argue that
the private respondents did not exhaust administrative remedies and that the requirement of support by at least
30% of the members of the association for the filing of a complaint for any violation of the constitution and bylaws and rights and conditions of membership, pursuant to Section 1, Rule XIV, Article I, Department Order No.
9 of DOLE, was not complied with. 27

Private respondents, on the other hand, assert that the records show that despite their failure to submit their
position papers, they nonetheless moved that the case be resolved by DOLE-NCR based on the complaint,
answer and available exhibits or annexes integrated with the aforesaid pleadings. 28 The principle of nonexhaustion of administrative remedies that would warrant the dismissal of the case should not operate against
them because they were deprived of their right to due process when they were indefinitely suspended without
the benefit of a formal charge which is sufficient in form and substance. 29 The respondents also point out that
the thirty percent (30%) support requirement pursuant to Section 1, Rule XIV, Article I, Department Order No.
9, is not applicable to them because their complaint was primordially predicated on their suspension while the
rest of the causes of action were mere collateral consequences of the principal cause of action. 30
It is worthy to note that the BLR-DOLE, in its Resolution dated 22 September 2000, underscored the negligence
of herein petitioners not only in the submission of their pleadings but also in attending the hearings called for
the purpose. 31 Even the Court of Appeals, in its decision, made this observation, thus: DACaTI
It is apparent, however, that petitioners were to blame for their predicament. They repeatedly failed to appear in
a series of conferences scheduled by the DOLE-NCR, asked for resetting of hearings, and requested for
extension of time to file its answer. Hence, when they again did not attend a hearing on a date they themselves
asked for, private respondents (complainants therein) moved for the submission of the case based on their
complaint, position paper and annexes attached thereto.
When DOLE-NCR directed the parties to submit their respective position papers, petitioners again moved for
extension of time to file the same. When another notice was given to the parties to comply with the directive,
petitioners prayed for another extension of time. (Private respondents, however, reiterated their earlier motion
to have the case resolved based on available pleadings.) After six (6) months or so, petitioners finally filed not
their position paper but their answer. 32
The Court of Appeals was justified in upholding the DOLE-NCR and BLR-DOLE decisions based on the complaint
and answer. We cannot accept petitioners' line of reasoning that since no position papers were submitted, no
decision may be made by the adjudicating body. As ruled by Regional Director Maximo B. Lim in his decision, the
complaint and the answer thereto were adopted as the parties' position papers. Thereafter, the case shall be
deemed submitted for resolution. 33
Labor laws mandate the speedy disposition of cases, with the least attention to technicalities but without
sacrificing the fundamental requisites of due process. 34 The essence of due process is simply an opportunity to
be heard. 35 In this case, it cannot be said that there was a denial of due process on the part of the petitioners
because they were given all the chances to refute the allegations of the private respondents, and the delay in
the proceedings before the DOLE-NCR was clearly attributable to them.

The argument that there was failure to exhaust administrative remedies cannot be sustained. One of the
instances when the rule of exhaustion of administrative remedies may be disregarded is when there is a violation
of due process. 36 In this case, the respondents have chronicled from the very beginning that they were
indefinitely suspended without the benefit of a formal charge sufficient in form and substance. Therefore, the
rule on exhaustion of administrative remedies cannot squarely apply to them.
On the matter concerning the 30% support requirement needed to report violations of rights and conditions of
union membership, as found in the last paragraph of Article 241 of the Labor Code, 37 must be strictly
observed. We have already made our pronouncement in the case of Rodriguez v. Director, Bureau of Labor
Relations 38that the 30% requirement is not mandatory. In this case, the Court, speaking through Chief Justice
Andres R. Narvasa, 39 held in part:
The respondent Director's ruling, however, that the assent of 30% of the union membership, mentioned in
Article 242 of the Labor Code, was mandatory and essential to the filing of a complaint for any violation of rights
and conditions of membership in a labor organization (such as the arbitrary and oppressive increase of union
dues here complained of), cannot be affirmed and will be reversed. The very article relied upon militates against
the proposition. It states that a report of a violation of rights and conditions of membership in a labor
organization may be made by "(a)t least thirty percent (30%) of all the members of a union or any member or
members specially concerned." The use of the permissive "may" in the provision at once negates the notion that
the assent of 30% of all the members is mandatory. More decisive is the fact that the provision expressly
declares that the report may be made, alternatively by "any member or members specially concerned." And
further confirmation that the assent of 30% of the union members is not a factor in the acquisition of jurisdiction
by the Bureau of Labor Relations is furnished by Article 226 of the same Labor Code, which grants original and
exclusive jurisdiction to the Bureau, and the Labor Relations Division in the Regional Offices of the Department
of Labor, over "all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or
affecting labor management relations," making no reference whatsoever to any such 30%-support requirement.
Indeed, the officials mentioned are given the power to act "on all inter-union and intra-union conflicts (1) "upon
request of either or both parties" as well as (2) "at their own initiative."
Second Issue: was the election held on 07 April 2000 valid or a nullity?
This issue arose from the fact that the original decision of the DOLE-NCR dated 22 November 1999, ordered
petitioners, among other things, to "immediately hold/conduct an election of officers . . ." Petitioners, it must be
recalled, appealed from the DOLE-NCR decision to the BLR-DOLE. During the pendency of the appeal, however,
an election of officers was held on 07 April 2000. Subsequently, the BLR-DOLE affirmed the decision of the
DOLE-NCR, but with the pronouncement that ". . . the supposed election conducted on (07) April 2000 is null
and void and cannot produce legal effects adverse to appellants." 40
The petitioners contend that since the election was held on 07 April 2000, and the original complaint before the
DOLE-NCR was filed on 01 December 1997, the former could not have been the subject of the complaint. There
was, according to petitioners, reversible error in the BLR-DOLE's adding to the DOLE-NCR's decision, the
nullification of the 07 April 2000 election. The BLRDOLE should have limited itself to affirming, modifying or
setting aside and canceling the provisions of the dispositive portion of the DOLE-NCR's decision which was
subject of the appeal. The election was held because the term of the petitioners (extended for five years
under Republic Act No. 6715 41 ) expired on 07 April 2000. As amended by Republic Act 6715, paragraph (c) of
Article 241 of the Labor Code now reads: cTACIa
(c) The members shall directly elect their officers in the local union, as well as their national officers in the
national union or federation to which they or their local union is affiliated, by secret ballots at intervals of five (5)
years.
It just so happened that the holding of the election coincided with the DOLE-NCR decision. 42

The private respondents, in answer to this, point out that the 07 April 2000 election, as appearing in the 22
September 2000 Resolution of the BLR-DOLE, was set aside not on the flimsy reason that there was no
complaint to invalidate it, but due to the appeal of the petitioners questioning the BLR-DOLE's order. The appeal
effectively suspended the effect of the DOLE-NCR Regional Director's order for the immediate holding of election
of officers in accordance with the union's constitution and by-laws. 43
On this matter, the Court of Appeals made the following observation:
Consequently, the Regional Director of DOLE-NCR erred in ordering the immediate holding of election of officers
of UEEA, and the Bureau of Labor Relations (BLR)-Department of Labor and Employment, insofar as it affirmed
this particular order, committed an act amounting to grave abuse of discretion.
Nonetheless, despite of this finding, the election of UEEA officers on 7 April 2000 cannot acquire a semblance of
legality. First, it was conducted pursuant to the aforesaid (erroneous) order of the Regional Director as
manifested by the petitioners. Second, it was purposely done to pre-empt the resolution of the case by the BLR
and to deprive private respondents their substantial right to participate in the election. Third, petitioners cannot
be allowed to take an inconsistent position to later on claim that the election of 7 April 2000 was held because it
was already due while previously declaring that it was made in line with the order of the Regional Director, for
this would go against the principle of fair play.
Thus, while the BLR was wrong in affirming the order of the Regional Director for the immediate holding of
election, it was right in nullifying the 7 April 2000 UEEA election of officers. It was simply improper for the
petitioners to implement the said order which was then one of the subjects of their appeal in the BLR. To hold
otherwise would be to dispossess the BLR of its inherent power to control the conduct of the proceedings of
cases pending before it for resolution. 44

Based on the prevailing facts of this case, we affirm the foregoing findings of the court a quo. We cannot hold
the election of 07 April 2000 valid as this would make us condone an iniquitous act. Said election was perceptibly
done to hinder any resolution or decision that would be made by BLR-DOLE. The Regional Director indeed
ordered the immediate holding of an election in its Order dated 22 November 1999. The records show that the
petitioners questioned this order of the Regional Director before the BLR-DOLE by way of appeal, 45 and yet,
they conducted the election, allegedly because it was due under Republic Act No. 6715. Why this was done by
the petitioners escapes us. But as rightfully observed by the BLR-DOLE: SDHAEC
. . . Indeed, it is obvious that the general membership meeting and election of officers was done purposely to
pre-empt our resolution of this case and, more importantly, the participation of appellees in the election. This
cannot be tolerated. 46
Third Issue: was the indefinite suspension of the private respondents illegal?
We rule in the affirmative.
The petitioners posit the theory that the records do not support the findings of the BLR-DOLE that no
investigation was conducted making the suspension illegal because of lack of due process.
It is best to remind the petitioners that this Court, as we have held in a long line of decisions, is not a trier of
facts. 47 The instant case is a petition for review on certiorari48 where only questions of law may be raised.
The exceptions 49 to this rule find no application here. This being the case, the findings of fact of the DOLE-NCR
and the BLR-DOLE as affirmed by the Court of Appeals to the effect that no investigation was conducted, shall
not be disturbed. As properly held by the court a quo:
Petitioners have failed to show that the findings of facts and conclusions of law of both the DOLE-NCR and BLRDOLE were arrived at with grave abuse of discretion or without substantial evidence. A careful review of the
6

pleadings before Us reveals that the decision and resolutions of the concerned agencies were correctly anchored
in law and on substantial evidence. 50
Fourth Issue: is the non-holding of meetings and non-submission of reports by the petitioners moot and
academic, and whether the decision to hold meetings and submit reports contradict and override the sovereign
will of the majority? cETDIA
We do not believe so.
This issue was precipitated by the Court of Appeals decision affirming the order of DOLE Regional Director
Maximo B. Lim for the petitioners to hold a general membership meeting wherein they make open and available
the union's/association's books of accounts and other documents pertaining to the union funds, and to regularly
conduct special and general membership meetings in accordance with the union's constitution and bylaws. 51 It is to be recalled that the private respondents, when they filed a complaint before the DOLE-NCR also
complained of petitioners' refusal to render financial and other reports, and deliberate refusal to call general and
special meetings.
Petitioners do not hide the fact that they belatedly submitted their financial reports and the minutes of their
meetings to the DOLE. The issue of belatedly submitting these reports, according to the petitioners, had been
rendered moot and academic by their eventual compliance. Besides, this has been the practice of the
association.52 Moreover, the petitioners likewise maintain that the passage of General Assembly Resolution No.
10 dated 10 December 1997 and Resolution No. 8, Series of 2000, following the application of the principle that
the sovereign majority rules, cured any liability that may have been brought about by their belated actions. 53
As found by the Court of Appeals, the financial statements for the years 1995 up to 1997 were submitted to
DOLE-NCR only on 06 February 1998 while that for the year 1998 was submitted only on 16 March
1999. 54 The last association's meeting was conducted on 21 April 1995, and the copy of the minutes thereon
was submitted to BLR-DOLE only on 24 February 1998. EATcHD
The passage of General Assembly Resolution No. 10 dated 10 December 1997 and Resolution No. 8, Series of
2000, 55 which supposedly cured the lapses committed by the association's officers and reiterated the approval
of the general membership of the acts and collateral actions of the association's officers cannot redeem the
petitioners from their predicament. The obligation to hold meetings and render financial reports is mandated by
UEEA's constitution and by-laws. This fact was never denied by the petitioners. Their eventual compliance, as
what happened in this case, will not release them from the obligation to accomplish these things in the future.
Prompt compliance in rendering financial reports together with the holding of regular meetings with the
submission of the minutes thereon with the BLR-DOLE and DOLE-NCR will negate any suspicion of dishonesty on
the part of UEEA's officers. This is not only true with UEEA, but likewise with other unions/associations, as this
matter is imbued with public interest. Undeniably, transparency in the official undertakings of union officers will
bolster genuine trade unionism in the country.
WHEREFORE, in view of all the foregoing, the Decision and Resolution of the Court of Appeals subjects of the
instant case, are affirmed. Costs against the petitioners.
SO ORDERED.
||| (Verceles v. Bureau of Labor Relations-DOLE, G.R. No. 152322, [February 15, 2005], 491 PHIL 520-539)

20% assent of employees on registration of Independent Labor Organization/chartering by trade


union center
[G.R. No. 171153. September 12, 2007.]
7

SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND GENERAL


WORKERS ORGANIZATION (SMCEUPTGWO), petitioner, vs. SAN MIGUEL PACKAGING PRODUCTS
EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEU
PDMP), respondent. 1
DECISION
CHICO-NAZARIO, J p:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner SAN MIGUEL
CORPORATION EMPLOYEES UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION
(SMCEU-PTGWO) prays that this Court reverse and set aside the (a) Decision 2 dated 9 March 2005 of the Court
of Appeals in CA-G.R. SP No. 66200, affirming the Decision 3 dated 19 February 2001 of the Bureau of Labor
Relations (BLR) of the Department of Labor and Employment (DOLE) which upheld the Certificate of Registration
of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEUPDMP); and (b) the Resolution 4 dated 16 January 2006 of the Court of
Appeals in the same case, denying petitioner's Motion for Reconsideration of the aforementioned Decision.
The following are the antecedent facts:
Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank
and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate
Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in
all offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna. It had been the
certified bargaining agent for 20 years from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP issued
Charter Certificate No. 112 to respondent on 15 June 1999.5 In compliance with registration requirements,
respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality. 6 Upon
submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local
or Chapter PDMP-01 by the BLR on 6 July 1999. 7Thereafter, respondent filed with the Med-Arbiter of the DOLE
Regional Officer in the National Capital Region (DOLE-NCR), three separate petitions for certification election to
represent SMPP, SMCSU, and SMBP. 8 All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit. 9
On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's
registration and its dropping from the rolls of legitimate labor organizations. In its petition, petitioner accused
respondent of committing fraud and falsification, and non-compliance with registration requirements in obtaining
its certificate of registration. It raised allegations that respondent violated Articles 239 (a), (b) and (c) 10 and
234 (c) 11 of the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but
a trade union center, hence, it cannot directly create a local or chapter. The petition was docketed as Case No.
NCR-OD-9908-007-IRD. 12
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of fraud
and misrepresentation, and irregularity in the submission of documents by respondent. Regional Director Lim
further ruled that respondent is allowed to directly create a local or chapter. However, he found that respondent
did not comply with the 20% membership requirement and, thus, ordered the cancellation of its certificate of
registration and removal from the rolls of legitimate labor organizations. 13 Respondent appealed to the BLR. In
a Decision dated 19 February 2001, it declared:
As a chartered local union, appellant is not required to submit the number of employees and names of all its
members comprising at least 20% of the employees in the bargaining unit where it seeks to operate. Thus, the
revocation of its registration based on non-compliance with the 20% membership requirement does not have
any basis in the rules.
8

Further, although PDMP is considered as a trade union center, it is a holder of Registration Certificate No. FED11558-LC issued by the BLR on 14 February 1991, which bestowed upon it the status of a legitimate labor
organization with all the rights and privileges to act as representative of its members for purposes of collective
bargaining agreement. On this basis, PDMP can charter or create a local, in accordance with the provisions of
Department Order No. 9. IEHScT
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director dated July 14,
2000, canceling the registration of appellant San Miguel Packaging Products Employees Union-Pambansang Diwa
ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED and SET ASIDE. Appellant shall hereby remain in the
roster of legitimate labor organizations. 14
While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and
misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the Regional
Director's ruling that the 20% membership is a requirement for respondent to attain legal personality as a labor
organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a Resolution rendered on
19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for Reconsideration
and affirmed its Decision dated 19 February 2001. 15
Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the
Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R.
SP No. 66200. The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the
Decision of the BLR, ruling as follows:
In Department Order No. 9, a registered federation or national union may directly create a local by submitting to
the BLR copies of the charter certificate, the local's constitution and by-laws, the principal office address of the
local, and the names of its officers and their addresses. Upon complying with the documentary requirements, the
local shall be issued a certificate and included in the roster of legitimate labor organizations. The [herein
respondent] is an affiliate of a registered federation PDMP, having been issued a charter certificate. Under the
rules we have reviewed, there is no need for SMPPEU to show a membership of 20% of the employees of the
bargaining unit in order to be recognized as a legitimate labor union.
xxx xxx xxx
In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the petition is
DISMISSED. 16 DHECac
Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for
Reconsideration of the aforementioned Decision.
Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole
issue of: DHaECI
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
RULING THAT PRIVATE RESPONDENT IS NOT REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES
AND NAMES OF ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE
BARGAINING UNIT WHERE IT SEEKS TO OPERATE.
The present petition questions the legal personality of respondent as a legitimate labor organization. aICHEc
Petitioner posits that respondent is required to submit a list of members comprising at least 20% of the
employees in the bargaining unit before it may acquire legitimacy, citing Article 234 (c) of the Labor Code which
stipulates that any applicant labor organization, association or group of unions or workers shall acquire legal
personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following requirements: aCTHEA
a. Fifty pesos (P50.00) registration fee;
9

b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
c. The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
d. If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification
and the list of the members who participated in it. 17
Petitioner also insists that the 20% requirement for registration of respondent must be based not on the number
of employees of a single division, but in all three divisions of the company in all the offices and plants of SMC
since they are all part of one bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective Bargaining
Agreement (CBA), 18 quoted hereunder:
ARTICLE 1
SCOPE
Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all

regular rank and file employees paid on the basis of fixed salary per month and employed by the COMPANY in its
Corporate Staff Units (CSU), San Miguel Brewing Products (SMBP) and San Miguel Packaging Products (SMPP)
and in different operations existing in the City of Manila and suburbs, including Metal Closure and Lithography
Plant located at Canlubang, Laguna subject to the provisions of Article XV of this Agreement provided however,
that if during the term of this Agreement, a plant within the territory covered by this Agreement is transferred
outside but within a radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro Manila, the
employees in the transferred plant shall remain in the bargaining unit covered by this Agreement. (Emphasis
supplied.)

Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership requirement since it
based its membership on the number of employees of a single division only, namely, the SMPP. HSDIaC
There is merit in petitioner's contentions.
A legitimate labor organization 19 is defined as "any labor organization duly registered with the Department of
Labor and Employment, and includes any branch or local thereof." 20 The mandate of the Labor Code is to
ensure strict compliance with the requirements on registration because a legitimate labor organization is entitled
to specific rights under the Labor Code, 21 and are involved in activities directly affecting matters of public
interest. Registration requirements are intended to afford a measure of protection to unsuspecting employees
who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds
or use the labor organization for illegitimate ends. 22 Legitimate labor organizations have exclusive rights under
the law which cannot be exercised by non-legitimate unions, one of which is the right to be certified as the
exclusive representative 23 of all the employees in an appropriate collective bargaining unit for purposes of
collective bargaining. 24 The acquisition of rights by any union or labor organization, particularly the right to file
a petition for certification election, first and foremost, depends on whether or not the labor organization has
attained the status of a legitimate labor organization. 25 aAHISE
A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP and
was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was directly chartered by PDMP.
The procedure for registration of a local or chapter of a labor organization is provided in Book V of the
Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June
1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended by
10

D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification election
was filed with the BLR in 1999; and that of petitioner on 17 August 1999. 26 DSAICa
The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter or a local. The
first involves the affiliation of an independent union with a federation or national union or industry union. The
second, finding application in the instant petition, involves the direct creation of a local or a chapter through the
process of chartering. 27 cEDaTS
A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE
Regional Office or to the BLR two copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's constitution and bylaws is the same as that of the federation or national union, this fact shall be indicated accordingly. SACTIH
All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President. 28 DTEHIA
The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national
union. A duly constituted local or chapter created in accordance with the foregoing shall acquire legal personality
from the date of filing of the complete documents with the BLR. 29 The issuance of the certificate of registration
by the BLR or the DOLE Regional Office is not the operative act that vests legal personality upon a local or a
chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete
documentary requirements enumerated in Section 1, Rule VI. 30 CAIHTE
Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated
Article 234 of the Labor Code when it provided for less stringent requirements for the creation of a chapter or
local. This Court disagrees.
Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon
its registration with the BLR: TaCIDS
Any applicant labor organization, association or group of unions or workers shall acquire legal personality and
shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the

bargaining unit where it seeks to operate;


(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification,
and the list of the members who participated in it. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an independent labor organization, association
or group of unions or workers.
However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case
of Progressive Development Corporation v. Secretary, Department of Labor and Employment, 31 declared that
11

when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for
registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent
union is mandated to submit, among other things, the number of employees and names of all its members
comprising at least 20% of the employees in the bargaining unit where it seeks to operate, as provided under
Article 234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer
required of a branch, local or chapter. 32 The intent of the law in imposing less requirements in the case of a
branch or local of a registered federation or national union is to encourage the affiliation of a local union with a
federation or national union in order to increase the local union's bargaining powers respecting terms and
conditions of labor. 33
Subsequently, in Pagpalain Haulers, Inc. v. Trajano 34 where the validity of Department Order No. 9 was
directly put in issue, this Court was unequivocal in finding that there is no inconsistency between the Labor
Code and Department Order No. 9. IEaHSD
As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and
misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof
to declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed, on
several occasions, pronounced that registration based on false and fraudulent statements and documents confer
no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper.
Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no
rights. 35
This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud
and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful
scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of
the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies
with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as
the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally
accorded not only great respect but even finality. 36
Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a
local or chapter as it is not a legitimate labor organization, it being a trade union center.
Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization.
Firstly, this line of reasoning attempts to predicate that a trade union center is not a legitimate labor
organization. In the process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same
contention premises that a trade union center cannot directly create a local or chapter through the process of
chartering.
Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor
organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter. Article
212 (h) of the Labor Code, as amended, defines a legitimate labor organization 37 as "any labor organization
duly registered with the DOLE, and includes any branch or local thereof." 38 On the other hand, a trade union
center is any group of registered national unions or federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining; or for participating in the formulation of social
and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with
Rule III, Section 2 of the Implementing Rules. 39
The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a
union, its legal personality cannot be subject to collateral attack. 40 It may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.
The aforementioned provision is enunciated in the following: DaTISc
12

Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed registered and
vested with legal personality on the date of issuance of its certificate of registration. Such legal personality
cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for
cancellation in accordance with these Rules. SCEHaD
PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the BLR
on 14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a legitimate
labor organization subsists. Once a union acquires legitimate status as a labor organization, it continues to be
recognized as such until its certificate of registration is cancelled or revoked in an independent action for
cancellation. 41 It bears to emphasize that what is being directly challenged is the personality of respondent as
a legitimate labor organization and not that of PDMP. This being a collateral attack, this Court is without
jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization, 42 and
continues to be recognized as such until its certificate of registration is successfully impugned and thereafter
cancelled or revoked in an independent action for cancellation.
We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union
center.
This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot
directly create a local or chapter.
After an exhaustive study of the governing labor law provisions, both statutory and regulatory, 43 we find no
legal justification to support the conclusion that a trade union center is allowed to directly create a local or
chapter through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this
Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law does
not include the power to correct by reading into the law what is not written therein. 44
Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social
justice, 45 the provisions of the Labor Code and the Implementing Rules have been subject to several
amendments, and they continue to evolve, considering that labor plays a major role as a socio-economic force.
TheLabor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481.
Incidentally, the term trade union center was never mentioned underPresidential Decree No. 442, even as it was
amended by Republic Act No. 6715. The term trade union center was first adopted in the Implementing Rules,
under Department Order No. 9.
Culling from its definition as provided by Department Order No. 9, a trade union center is any group of
registered national unions or federations organized for the mutual aid and protection of its members; for
assisting such members in collective bargaining; or for participating in the formulation of social and employment
policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of
the Implementing Rules. 46 The same rule provides that the application for registration of an industry or trade
union center shall be supported by the following:
(a) The list of its member organizations and their respective presidents and, in the case of an industry union, the
industry where the union seeks to operate;
(b) The resolution of membership of each member organization, approved by the Board of Directors of such
union;
(c) The name and principal address of the applicant, the names of its officers and their addresses, the minutes
of its organizational meeting/s, and the list of member organizations and their representatives who attended
such meeting/s; and

13

(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents of the
member organizations, provided that where the ratification was done simultaneously with the organizational
meeting, it shall be sufficient that the fact of ratification be included in the minutes of the organizational
meeting. 47
Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or
affiliates, each of which must be a duly certified or recognized collective bargaining agent; 48 a trade union
center, on the other hand, is composed of a group of registered national unions or federations. 49
The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation or
national union" may directly create a local or chapter. The provision reads: HScCEa
Section 1. Chartering and creation of a local/chapter. A duly registered federation or national union may
directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the
following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws
is the same as that of the federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President. 50
Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or
chapter through chartering a duly registeredfederation or a national union. Department Order No. 9 defines a
"chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal
personality through a charter certificate, issued by a duly registered federation or national union and reported to
the Regional Office in accordance with Rule III, Section 2-E of these Rules. 51
Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending
for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the
Philippines" lapsed 52 into law on 25 May 2007 and became effective on 14 June 2007. 53 This law further
amends the Labor Code provisions on Labor Relations.
Pertinent amendments read as follows:
SEC. 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the
Philippines, is hereby further amended to read as follows:
ART. 234. Requirements of Registration. A federation, national union or industry or trade union center or an
independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law
to legitimate labor organizations upon issuance of the certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
14

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and
the list of the members who participated in it.
SEC. 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows:
ART. 234-A. Chartering and Creation of a Local Chapter. A duly registered federation or national union may
directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter.
The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the
date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the
submission of the following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the principal office of the chapter; and TAacHE
(b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and by-laws are the
same as that of the federation or the national union, this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter
and attested by its president. (Emphasis ours.)ICTaEH
Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for
chartering or creating a local or chapter, namely Article 234-A, still makes no mention of a "trade union
center." IDaEHC

Also worth emphasizing is that even in the most recent amendment of the implementing rules, 54 there was no
mention of a trade union center as being among the labor organizations allowed to charter. ISaCTE
This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of
statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things
are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a
statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other
exceptions or effects are excluded. 55 Where the terms are expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters. 56 Such is the case here. If its intent were
otherwise, the law could have so easily and conveniently included "trade union centers" in identifying the labor
organizations allowed to charter a chapter or local. Anything that is not included in the enumeration is excluded
therefrom, and a meaning that does not appear nor is intended or reflected in the very language of the statute
cannot be placed therein. 57 The rule is restrictive in the sense that it proceeds from the premise that the
legislating body would not have made specific enumerations in a statute if it had the intention not to restrict its
meaning and confine its terms to those expressly mentioned. 58 Expressium facit cessare tacitum. 59 What is
expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object or thing
omitted must have been omitted intentionally. aSTcCE
Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor
organizations to directly create a chapter or local through chartering is given to a federation or national union,
then a trade union center is without authority to charter directly. DAEaTS
The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and
voluntary organization of a strong and united labor movement, 60 and thus assure the rights of workers to selforganization. 61 The mandate of the Labor Code in ensuring strict compliance with the procedural requirements
for registration is not without reason. It has been observed that the formation of a local or chapter becomes a
handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it
becomes a convenient device for a small group of employees to foist a not-so-desirable federation or union on
unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free
15

unionism. 62 As a legitimate labor organization is entitled to specific rights under the Labor Code and involved in
activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties
affected. 63 However, as this Court has enunciated in Progressive Development Corporation v. Secretary of
Department of Labor and Employment, it is not this Court's function to augment the requirements prescribed by
law. Our only recourse, as previously discussed, is to exact strict compliance with what the law provides as
requisites for local or chapter formation. 64
In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power to directly
create a local or chapter. Thus, SMPPEU-PDMP cannot be created under the more lenient requirements for
chartering, but must have complied with the more stringent rules for creation and registration of an independent
union, including the 20% membership requirement.
WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the Court of Appeals in CAGR SP No. 66200 is REVERSED and SET ASIDE. The Certificate of Registration of San Miguel Packaging Products
Employees UnionPambansang Diwa ng Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP
DROPPED from the rolls of legitimate labor organizations.
Costs against petitioner.
SO ORDERED.
||| (San Miguel Corp. Employees Union-PTGWO v. San Miguel Packaging Products Employees Union-PDMP, G.R.

No. 171153, [September 12, 2007], 559 PHIL 549-576)

Individual authorization of employee mandatory/Payment of Attorneys fees


[G.R. No. 149763. July 7, 2009.]
EDUARDO J. MARIO, JR., MA. MELVYN P. ALAMIS, NORMA P. COLLANTES, and FERNANDO
PEDROSA, petitioners, vs. GIL Y. GAMILLA, RENE LUIS TADLE, NORMA S. CALAGUAS, MA. LOURDES
C. MEDINA, EDNA B. SANCHEZ, REMEDIOS GARCIA, MAFEL YSRAEL, ZAIDA GAMILLA, and AURORA
DOMINGO, respondents.
DECISION
CHICO-NAZARIO, J p:
Assailed in this Petition for Review on Certiorari, 1 under Rule 45 of the Rules of Court, are (1) the
Decision 2 dated 16 March 2001 of the Court of Appeals in CA-G.R. SP No. 60657, dismissing petitioners' Petition
for Certiorari under Rule 65 of the Rules of Court; and (2) the Resolution 3 dated 30 August 2001 of the
appellate court in the same case denying petitioners' Motion for Reconsideration.
I
FACTS
The Petition at bar arose from the following factual and procedural antecedents.

(1)Case No. NCR-OD-M-9412-022


At the time when the numerous controversies in the instant case first came about, petitioners Atty. Eduardo J.
Mario, Jr., Ma. Melvyn P. Alamis, Norma P. Collantes, and Fernando Pedrosa were among the executive officers
and directors (collectively called the Mario Group) of the University of Sto. Tomas Faculty Union (USTFU), a
labor union duly organized and registered under the laws of the Republic of the Philippines and the bargaining
representative of the faculty members of the University of Santo Tomas (UST). 4
16

Respondents Gil Y. Gamilla, Rene Luis Tadle, Norma S. Calaguas, Ma. Lourdes C. Medina, Edna B. Sanchez,
Remedios Garcia, Mafel Ysrael, Zaida Gamilla, and Aurora Domingo were UST professors and USTFU members.
The 1986 Collective Bargaining Agreement (CBA) between UST and USTFU expired on 31 May 1988. Thereafter,
bargaining negotiations ensued between UST and the Mario Group, which represented USTFU. As the parties
were not able to reach an agreement despite their earnest efforts, a bargaining deadlock was declared and
USTFU filed a notice of strike. Subsequently, then Secretary of the Department of Labor and Employment
(DOLE) Franklin Drilon assumed jurisdiction over the dispute, which was docketed as NCMB-NCR-NS-02-117-89.
The DOLE Secretary issued an Order on 19 October 1990, laying the terms and conditions for a new CBA
between the UST and USTFU. In accordance with said Order, the UST and USTFU entered into a CBA in 1991,
which was to be effective for the period of 1 June 1988 to 31 May 1993 (hereinafter 1988-1993 CBA). In keeping
with Article 253-A 5 of the Labor Code, as amended, the economic provisions of the 1988-1993 CBA were
subject to renegotiation for the fourth and fifth years.
Accordingly, on 10 September 1992, UST and USTFU executed a Memorandum of Agreement (MOA), 6 whereby
UST faculty members belonging to the collective bargaining unit were granted additional economic benefits for
the fourth and fifth years of the 1988-1993 CBA, specifically, the period from 1 June 1992 up to 31 May 1993.
The relevant portions of the MOA read:
MEMORANDUM OF AGREEMENT
xxx xxx xxx
1.0.The University hereby grants additional benefits to Faculty Members belonging to the collective bargaining
unit as defined in Article I, Section 1 of the Collective Bargaining Agreement entered into between the parties
herein over and above the benefits now enjoyed by the said faculty members, which additional benefits shall
amount in the aggregate to P42,000,000.00[.]
2.0.Under this Agreement the University shall grant salary increases, to wit:
2.1.THIRTY (P30.00) PESOS per lecture unit per month to covered faculty members retroactive to June 1,
1991;
2.2.Additional THIRTY (P30.00) PESOS per lecture unit per month on top of the salary increase granted in
[paragraph] 2.1 hereof to the said faculty members effective June 1, 1992;
2.3.In the case of a covered faculty member whose compensation is computed on a basis other than lecture
unit per month, he shall receive salary increases that are equivalent to those provided in paragraphs 2.1 and 2.2
hereof, with the amount of salary increases being arrived at by using the usual method of computing the said
faculty member's basic pay;
3.0.The UNIVERSITY shall likewise restore to the faculty 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 said deductions in salary relate to the union activities that were held in the aforestated
payroll periods, and provided further that the amounts involved shall be taken from the P42 Million (sic)
economic package.
4.0.A portion of the P42,000,000.00 economic package amounting to P2,000,000.00 shall be used to satisfy all
obligations that remained outstanding and unpaid in the May 17, 1986 Collective Bargaining Agreement.
5.0.Any unspent balance of the aggregate of P42,000,000.00 as of October 15, 1992, shall, within two weeks, be
remitted to the Union[:] CSTDIE
5.1.The unspent balance mentioned in paragraph 5.0 inclusive of earnings but exclusive of check-offs, shall be
used for the salary increases herein granted up to May 31, 1993, for increases in hospitalization, educational and
retirement benefits, and for other economic benefits.
17

6.0.The benefits herein granted constitute the entire and complete package of economic benefits granted by the
UNIVERSITY to the covered faculty members for the balance of the term of the existing collective bargaining
agreement.
7.0.It is clearly understood and agreed upon that the aggregate sum of P42 million is chargeable
against the share of the faculty members in the incremental proceeds of tuition fees collected and
still to be collected; Provided, however, that he (sic) commitment of the UNIVERSITY to pay the aggregate
sum of P42 million shall subsist even if the said amount exceeds the proportionate share that may accrue to the
faculty members in the tuition fee increases that the UNIVERSITY may be authorized to collect in School-Year
1992-1993, and, Provided, finally, that the covered faculty members shall still be entitled to their proportionate
share in any undistributed portion of the incremental proceeds of the tuition fee increases in School-Year 19921993, and incremental proceeds are, by law and pertinent Department of Education Culture and
Sports (DECS) regulations, required to be allotted for the payment of salaries, wages, allowances
and other benefits of teaching and non-teaching personnel for the UNIVERSITY.
8.0.With this Agreement, the parties confirm that[:]
8.1.the University has complied with the requirements of the law relative to the release and distribution of the
incremental proceeds of tuition fee increases as these incremental proceeds pertain to the faculty share in the
tuition fee increase collected during the School-Year 1991-1992; and,
8.2.the economic benefits herein granted constitute the full and complete financial obligation of the UNIVERSITY
to the members of its faculty for the period June 1, 1991 to May 31, 1993, pursuant to the provisions of the
existing Collective Bargaining Agreement.
9.0.Subject to the provisions of law, and without reducing the amounts of salary increases granted under
paragraphs 2.0, 2.1, 2.2 and 2.3[,] the UNION shall have theright to a pro-rata lump sum check-off of all
sums of money due and payable to it from the package of economic benefits granted under this Agreement,
provided that there is an authorization of a majority of the members of the UNION and provided, further, that
the P42 million economic package herein granted shall not in any way be exceeded. IEAacS
10.0.This Agreement shall be effective for a period of two (2) years, starting June 1, 1991 and ending on May
31, 1993, provided, however, that if for any reason no new collective bargaining agreement is entered into at
the expiration date hereof, this Agreement, together with the March 18, 1991 Collective Bargaining Agreement,
shall remain in full force and effect until such time as a new collective bargaining agreement shall have been
executed by the parties.
xxx xxx xxx
UNIVERSITY OF SANTO TOMASUST FACULTY UNION
BY:BY:
(signed)(signed)
FR. TERESO M. CAMPILLO, JR., O.P.ATTY. EDUARDO J.
TreasurerMARINO, JR.
President
Attested by[:]
(signed)
REV. FR. ROLANDO DELA ROSA, O.P. (Emphasis ours.)
On 12 September 1992, the majority of USTFU members signed individual instruments of ratification, 7 which
purportedly signified their consent to the economic benefits granted under the MOA. Said instruments uniformly
recited:

18

RATIFICATION OF THE UST-USTFU MEMORANDUM OF AGREEMENT DATED SEPTEMBER 10, 1992 GRANTING A
PACKAGE OF THE P42 MILLION FACULTY BENEFITS WITH PROVISION FOR CHECK-OFF.
September 12, 1992
Date
TO WHOM IT MAY CONCERN:
I, the undersigned UST faculty member, aware that the law requires ratification and that without ratification by
majority of all faculty members belonging to the collective bargaining unit, the Memorandum of Agreement
between the University of Santo Tomas and the UST Faculty Union (or USTFU) dated September 10, 1992 may
be questioned and all the faculty benefits granted therein may be cancelled, do hereby ratify the said
agreement.
Under the Agreement, the University shall pay P42 million over a period of two (2) years from June 1, 1991 up
to May 31, 1992. ITDSAE
In consideration of the efforts of the UST Faculty Union as the faculty members' sole and exclusive collective
bargaining representative in obtaining the said P42 million package of economic benefits, a check-off of ten
percent thereof covering union dues, and special assessment for Labor Education Fund and
attorney's fees from USTFU members and agency fee from non-members for the period of the
Agreement is hereby authorized to be made in one lump sum effective immediately, provided that two per cent
(sic) shall be for [the] administration of the Agreement and the balance of eight per cent (sic) shall be for
attorney's fees to be donated, as pledged by the USTFU lawyer to the Philippine Foundation for the
Advancement of the Teaching Profession, Inc. whose principal purpose is the advancement of the teaching
profession and teacher's welfare, and provided further that the deductions shall not be taken from my individual
monthly salary but from the total package of P42 million due under the Agreement.

_________________________
Signature of Faculty Member (Emphasis ours.)
USTFU, through its President, petitioner Atty. Mario, wrote a letter 8 dated 1 October 1992 to the UST
Treasurer requesting the release to the union of the sum of P4.2 million, which was 10% of the P42 million
economic benefits package granted by the MOA to faculty members belonging to the collective bargaining unit.
The P4.2 million was sought by USTFU in consideration of its efforts in obtaining the said P42 million economic
benefits package. UST remitted the sum of P4.2 million to USTFU on 9 October 1992. 9
After deducting from the P42 million economic benefits package the P4.2 million check-off to USTFU, the
amounts owed to UST, and the salary increases and bonuses of the covered faculty members, a net amount of
P6,389,145.04 remained. The remaining amount was distributed to the faculty members on 18 November 1994.
On 15 December 1994, respondents 10 filed with the Med-Arbiter, DOLE-National Capital Region (NCR), a
Complaint for the expulsion of the Mario Group as USTFU officers and directors, which was docketed as Case
No. NCR-OD-M-9412-022. 11 Respondents alleged in their Complaint that the Mario Group violated the
rights and conditions of membership in USTFU, particularly by: 1) investing the unspent balance of the P42
million economic benefits package given by UST without prior approval of the general membership; 2)
simultaneously holding elections viva voce; 3) ratifying the CBA involving the P42 million economic benefits
package; and 4) approving the attorney's/agency fees worth P4.2 million in the form of check-off. Respondents
prayed that the Mario Group be declared jointly and severally liable for refunding all collected attorney's/agency
fees from individual members of USTFU and the collective bargaining unit; and that, after due hearing, the
Mario group be expelled as USTFU officers and directors. SCHIac

(2)Case No. NCR-OD-M-9510-028


19

On 16 December 1994, UST and USTFU, represented by the Mario Group, entered into a new CBA, effective 1
June 1993 to 31 May 1998 (1993-1998 CBA). This new CBA was registered with the DOLE on 20 February 1995.
Respondents 12 filed with the Med-Arbiter, DOLE-NCR, on 18 October 1995, another Complaint against the
Mario Group for violation of the rights and conditions of union membership, which was docketed as Case No.
NCR-OD-M-9510-028. 13 The Complaint primarily sought to invalidate certain provisions of the 1993-1998
CBA negotiated by the Mario Group for USTFU and the registration of said CBA with the DOLE.

(3)Case No. NCR-OD-M-9610-001


On 24 September 1996, petitioner Norma Collantes, as USTFU Secretary-General, posted notices in some faculty
rooms at UST, informing the union members of a general assembly to be held on 5 October 1996. Part of the
agenda for said date was the election of new USTFU officers. The following day, 25 September 1996,
respondents wrote a letter 14 to the USTFU Committee on Elections, urging the latter to re-schedule the
elections to ensure a free, clean, honest, and orderly election and to afford the union members the time to
prepare themselves for the same. The USTFU Committee on Elections failed to act positively on respondents'
letter, and neither did they adopt and promulgate the rules and regulations for the conduct of the scheduled
election.
Thus, on 1 October 1996, respondents 15 filed with the Med-Arbiter, DOLE-NCR, an Urgent ExParte Petition/Complaint, which was docketed as Case No. NCR-OD-M-9610-001. 16 Respondents alleged in
their Petition/Complaint that the general membership meeting called by the USTFU Board of Directors on 5
October 1996, the agenda of which included the election of union officers, was in violation of the provisions of
the Constitution and By-Laws of USTFU. Respondents prayed that the DOLE supervise the conduct of the USTFU
elections, and that they be awarded attorney's fees.
On 4 October 1996, the Med-Arbiter DOLE-NCR, issued a Temporary Restraining Order (TRO) enjoining the
holding of the USTFU elections scheduled the next day.

(4)Case No. NCR-OD-M-9610-016


Also on 4 October 1996, the UST Secretary General headed a general faculty assembly attended by USTFU
members, as well as USTFU non-members, but who were members of the collective bargaining unit. During said
assembly, respondents were among the elected officers of USTFU (collectively referred to as the Gamilla Group).
Petitioners filed with the Med-Arbiter, DOLE-NCR, a Petition seeking injunctive reliefs and the nullification of the
results of the 4 October 1994 election. The Petition was docketed as Case No. NCR-OD-M-9610-016. ITCHSa
In a Decision dated 11 February 1997 in Case No. NCR-OD-M-9610-016, the Med-Arbiter DOLE-NCR, nullified the
election of the Gamilla Group as USTFU officers on 4 October 1996 for having been conducted in violation of the
Constitution and By-Laws of the union. This ruling of the Med-Arbiter was affirmed on appeal by the Bureau of
Labor Relations (BLR) in a Resolution issued on 15 August 1997. Respondents were, thus, prompted to file a
Petition for Certiorari before this Court, docketed as G.R. No. 131235.
While G.R. No. 131235 was pending, the term of office of the Gamilla Group as USTFU officers expired on 4
October 1999. The Gamilla Group then scheduled the next election of USTFU officers on 14 January 2000.
On 16 November 1999, the Court promulgated its Decision in G.R. No. 131235, affirming the BLR Resolution
dated 15 August 1997 which ruled that the purported election of USTFU officers held on 4 October 1996 was
void for violating the Constitution and By-Laws of the union. 17

(5)Case No. NCR-OD-M-9611-009


On 15 November 1996, respondents 18 filed before the Med-Arbiter, DOLE-NCR, a fourth Complaint/Petition
against the Mario Group, as well as the Philippine Foundation for the Advancement of the Teaching Profession,
Inc., Security Bank Corporation, and Bank of the Philippine Islands, which was docketed as Case No. NCR-ODM-9611-009. 19 Respondents claimed in their latest Complaint/Petition that they were the legitimate USTFU
20

officers, having been elected on 4 October 1996. They prayed for an order directing the Mario Group to cease
and desist from using the name of USTFU and from performing acts for and on behalf of the USTFU and the rest
of the members of the collective bargaining unit. THIAaD
DOLE Department Order No. 9 took effect on 21 June 1997, amending the Rules Implementing Book V of the
Labor Code, as amended. Thereunder, jurisdiction over the complaints for any violation of the union constitution
and by-laws and the conditions of union membership was vested in the Regional Director of the
DOLE. 20 Pursuant to said Department Order, all four Petitions/Complaints filed by respondents against the
Mario Group, particularly, Case No. NCR-OD-M-9412-022, Case No. NCR-OD-M-9510-028, Case No. NCR-OD-M9610-001, and Case No. NCR-OD-M-9611-009 were consolidated and indorsed to the Office of the Regional
Director of the DOLE-NCR.
On 27 May 1999, the DOLE-NCR Regional Director rendered a Decision 21 in the consolidated cases in
respondents' favor.
In Case No. NCR-OD-M-9412-022 and Case No. NCR-OD-M-9510-028, the DOLE-NCR Regional Director adjudged
the Mario Group, as the executive officers of USTFU, guilty of violating the provisions of the USTFU Constitution
and By-laws by failing to collect union dues and to conduct a general assembly every three months. The DOLENCR Regional Director also ruled that the Mario Group violated Article 241 (c) 22 and (l) 23 of the Labor Code
when they did not submit a list of union officers to the DOLE; when they did not submit/provide DOLE and the
USTFU members with copies of the audited financial statements of the union; and when they invested in a bank,
without prior consent of USTFU members, the sum of P9,766,570.01, which formed part of the P42 million
economic benefits package.
Additionally, the DOLE-NCR Regional Director declared that the check-off of P4.2 million collected by the Mario
Group, as negotiation fees, was invalid. According to the MOA executed on 10 September 1992 by UST and
USTFU, the P42 million economic benefits package was chargeable against the share of the faculty members in
the incremental proceeds of tuition fees collected and still to be collected. Under Republic Act No. 6728, 24 70%
of the tuition fee increases should be allotted to academic and non-academic personnel. Given that the records
were silent as to how much of the P42 million economic benefits package was obtained through negotiations and
how much was from the statutory allotment of 70% of the tuition fee increases, the DOLE-NCR Regional Director
held that the entire amount was within the statutory allotment, which could not be the subject of negotiation
and, thus, could not be burdened by negotiation fees.
The DOLE-NCR Regional Director further found that the principal subject of Case No. NCR-OD-M-9610-001
(i.e., violation by the Mario Group of the provisions on election of officers in the Labor Code and the USTFU
Constitution and By-Laws) had been superseded by the central event in Case No. NCR-OD-M-9611-009 (i.e., the
subsequent election of another set of USTFU officers consisting of the Gamilla Group). While there were two sets
of USTFU officers vying for legitimacy, the eventual ruling of the DOLE-NCR Regional Director, for the expulsion
of the Mario Group from their positions as USTFU officers, practically extinguished Case No. NCR-OD-M-9611009. EacHSA
The decretal portion of the 27 May 1999 Decision of the DOLE-NCR Regional Director reads:
WHEREFORE, premises considered, judgment is hereby rendered:
a)Expelling [the Mario Group] from their positions as officers of USTFU, and hereby order them under pain of
contempt, to cease and desist from performing acts as such officers;

b)Ordering [the Mario Group] to jointly and severally refund to USTFU the amount of P4.2 M checked-off as
attorney's fees from the P42 M economic package;
c)Ordering [the Mario Group] to account for:
21

c.1.P2.0 M paid to USTFU in satisfaction of the remaining obligation of the University under the 1986 CBA;
c.2.P7.0 M as consideration of the Compromise Agreement entered into by USTFU involving certain labor cases;
c.3.Interest/earnings of the P9,766,570.01 balance of the P42 M invested/deposited by [the Mario Group] with
the PCI Capital Corporation.
d)Ordering conduct of election of Union officers under the supervision of this Department. 25
Petitioners interposed an appeal 26 before the BLR, which was docketed as BLR-A-TR-52-25-10-99.
In the meantime, the election of USTFU officers was held as scheduled on 14 January 2000, 27 in which the
Gamilla Group claimed victory. 28 On 3 March 2000, the Gamilla group, as the new USTFU officers, entered into
a Memorandum of Agreement 29 with the UST, which provided for the economic benefits to be granted to the
faculty members of the UST for the years 1999-2001. Said Agreement was ratified by the USTFU members on 9
March 2000.
On the same day, 9 March 2000, the BLR promulgated its Decision 30 in BLR-A-TR-52-25-10-99, the fallo of
which provides:
WHEREFORE, the appeal is GRANTED IN PART. Accordingly, the decision appealed from is
hereby MODIFIED to the effect that appellant USTFU officers are hereby ordered to return to the general
membership the amount of P4.2 million they have collected by way of attorney's fees.
Let the entire records of this case be remanded to the Regional Office of origin for the immediate conduct of
election of officers of USTFU. The election shall be held under the control and supervision of the Regional Office,
in accordance with Section 1 (b), Rule XV of Department Order No. 9, unless the parties mutually agree to a
different procedure consistent with ensuring integrity and fairness in the electoral exercise. TSEHcA
The BLR found no basis for the order of the DOLE-NCR Regional Director to the Mario Group to account for the
amounts of P2 million and P7 million supposedly paid by UST to USTFU. The BLR clarified that UST paid USTFU a
lump sum of P7 million. The P2 million of this lump sum was the payment by UST of its outstanding obligations
to USTFU under the 1986 CBA. This amount was subsequently donated by USTFU members to the Philippine
Foundation for the Advancement of the Teaching Profession, Inc. The remaining P5 million of the lump sum was
the consideration for the settlement of an illegal dismissal case between UST and the Mario Group. Hence, the
P5 million legally belonged to the Mario Group, and there was no need to make it account for the same. As to
the interest earnings of the sum of P9,766,570.01 that was invested by the Mario Group in a bank, the BLR
ruled that the same was included in the amount of P6,389,145.04 that was distributed to the faculty members
on 18 November 1994.
The BLR, however, agreed in the finding of the DOLE-NCR Regional Director that the P42 million economic
benefits package was sourced from the faculty members' share in the tuition fee increases under Republic Act
No. 6728. Under said law, 70% of tuition fee increases shall go to the payment of salaries, wages, allowances,
and other benefits of teaching and non-teaching personnel. As was held in the decision 31 and subsequent
resolution 32 of the Supreme Court in Cebu Institute of Technology v. Ople, the law has already provided for the
minimum percentage of tuition fee increases to be allotted for teachers and other school personnel. This
allotment is mandatory and cannot be diminished, although it may be increased by collective bargaining. It
follows that only the amount beyond that mandated by law shall be subject to negotiation fees and attorney's
fees for the simple reason that it was only this amount that the school employees had to bargain for.
The BLR further reasoned that the P4.2 million collected by the Mario Group was in the nature of attorney's
fees or negotiation fees and, therefore, fell under the general prohibition against such fees in Article 222
(b) 33 of the Labor Code, as amended. Also, the exception to charging against union funds was not applicable
because the P42 million economic benefits package under the 10 September 1992 MOA was not union fund, as
the same was intended not for the union coffers, but for the members of the entire bargaining unit. The fact
22

that the P4.2 million check-off was approved by the majority of USTFU members was immaterial in view of the
clear command of Article 222 (b) that any contract, agreement, or arrangement of any sort, contrary to the
prohibition contained therein, shall be null and void.
Lastly, as to the alleged failure of the Mario Group to perform some of its duties, the BLR held that the change
of USTFU officers can best be decided, not by outright expulsion, but by the general membership through the
actual conduct of elections.
Petitioners' Motion for Partial Reconsideration 34 of the foregoing Decision was denied by the BLR in a
Resolution 35 dated 13 June 2000.
Aggrieved once again, petitioners filed with the Court of Appeals a Petition for Certiorari 36 under Rule 65 of the
Rules of Court, which was docketed as CA-G.R. SP No. 60657. In a Resolution dated 26 September 2000, the
Court of Appeals directed respondents to file their Comment; and, in order not to render moot and academic the
issues in the Petition, enjoined respondents and all those acting for and on their behalf from enforcing,
implementing, and effecting the BLR Decision dated 9 March 2000.
On 16 March 2001, the Court of Appeals rendered its Decision in CA-G.R. SP No. 60657, favoring respondents.
According to the Court of Appeals, the BLR did not commit grave abuse of discretion, amounting to lack or
excess of jurisdiction, in ruling that the P42 million economic benefits package was merely the share of the
faculty members in the tuition fee increases pursuant to Republic Act No. 6728. The appellate court explained:
It is too plain to see that the 60% of the proceeds is to be allocated specifically for increase in salaries or wages
of the members of the faculty and all other employees of the school concerned. Under Section 5(2) of Republic
Act 6728, the amount had been increased to 70% of the tuition fee increases which was specifically allocated to
the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel of the
school[,] except administrators who are principal stockholders of the school and to cover increases as provided
for in the collective bargaining agreements existing or in force at the time the law became effective[.]
xxx xxx xxx
It is too plain to see, too, that under the "Memorandum of Agreement" between UST and the Union, . . ., the
P42,000,000.00 economic package granted by the UST to the Union was in compliance with the mandates of the
law and pertinent Department of Education, Culture and Sports regulation (sic) required to be allotted following
the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel of the
University[.]
xxx xxx xxx
Whether or not UST implemented the mandate of Republic Act 6728 voluntarily or through the efforts and
prodding of the Union does not and cannot change or alter a whit the nature of the economic package or the
purpose or purposes of the allocation of the said amount. For, if we acquiesced to and sustained Petitioners'
stance, we will thereby be leaving the compliance by the private educational institutions of the mandate
of Republic Act 6728 at the will, mercy, whims and caprices of the Union and the private educational institution.
This cannot and should not come to pass.
With our foregoing findings and disquisitions, We thus agree with the [BLR] that the aforesaid amount of
P42,000,000.00 should not answer for any attorney's fees claimed by the Petitioners. . . . .
xxx xxx xxx
Moreover, [Section 5 of Rule X of] the CBL of the Union provides that:
Section 5.Special assessments or other extraordinary fees such as for payment of attorney's fees shall be made
only upon such a resolution duly ratified by the general membership by secret balloting. . . . .
23

Also, Article 241(n) 37 of the Labor Code, as amended, provides that no special assessment shall be levied upon
the members of the union unless authorized by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose[.]
xxx xxx xxx
In "ABS-CBN Supervisors-Employees Union Members versus ABS-CBN Broadcasting Corporation, 304 SCRA 489",
our Supreme Court declared that Article 241(n) of the Labor Code, as amended, speaks of three (3) requisites,
to wit: (1) authorization by a written resolution of the majority of all members at the general membership
meeting called for the purpose; (2) secretary's record of the minutes of the meeting; and (3) individual written
authorization for check-off duly signed by the employee concerned.
Contrary to the provisions of Articles 222(b) and 241(n) of the Labor Code, as amended, and Section 5, Rule X
of [the] CBL of the Union, no resolution ratified by the general membership of [the] USTFU through secret
balloting which embodied the award of attorney's fees was submitted. Instead, the Petitioners submitted copies
of the form for the ratification of the MOA and the check-off for attorney's fees.
xxx xxx xxx
The aforementioned "ratification with check-off" form embodied the: (a) ratification of the MOA; (b) check-off of
union dues; and (c) check-off of a special assessment,i.e., attorney's fees and labor education fund. . . . .
Patently, the CBL was not complied with.

Worse, the check-off for union dues and attorney's fees were included in the ratification of the MOA. The
members were thus placed in a situation where, upon ratification of the MOA, not only the check-off of union
dues and special assessment for labor education fund but also the payment of attorney's fees were ( sic)
authorized. 38
In like manner, the Court of Appeals found no grave abuse of discretion, amounting to lack or excess of
jurisdiction, on the part of the BLR in ordering the conduct of elections under the control and supervision of the
DOLE-NCR. Said the appellate court:
We agree with the Petitioners that the elections of officers of the Union, before the Decision of the [BLR], had
been unfettered by any intervention of the DOLE. However, We agree with the Decision of the [BLR] for two (2)
specific reasons, namely: (a) the parties are given an opportunity to first agree on a different procedure to
ensure the integrity and fairness of the electoral exercise, before the DOLE, may supervise the
election[.] SCaDAE
xxx xxx xxx
Under Article IX of the CBL, the Board of Officers of the Union shall create a Committee on Elections, Comelec
for brevity, composed of a chairman and two (2) members appointed by the Board of Officers[.]
xxx xxx xxx
It, however, appears that the term of office of the Petitioners had already expired in September of 1996. In fact,
an election of officers was scheduled on October 6, 1996. However, on October 4, 1996, [respondents] and the
members of the faculty of UST, both union member and non-union member, elected [respondents] as the new
officers of the USTFU. The same was, however, (sic) nullified by the Supreme Court, on November 16, 1999.
However, as the term of office of the [respondents] had expired, on October 4, 1999, there is nothing to nullify
anymore. By virtue of an election, held on January 14, 2000, the [respondents] were elected as the new officers
of the Union, which election was not contested by the Petitioners or any other group in the union.
xxx xxx xxx
24

We are thus faced with a situation where one set of officers claim to be the legitimate and incumbent officers of
the Union, pursuant to the CBL of the Union, and another set of officers who claim to have been elected by the
members of the faculty of the Union thru an election alleged to have been supervised by the DOLE which
situation partakes of and is akin to the nature of an intra-union dispute[.] . . . .
Undeniably, the CBL gives the Board of Officers the right to create and appoint members of the Comelec.
However, the CBL has no application to a situation where there are two (2) sets of officers, one set claiming to
be the legitimate incumbent officers holding over to their positions who have not exercised their powers and
functions therefor and another claiming to have been elected in an election supervised by the DOLE and, at the
same time, exercising the powers and functions appended to their positions. In such a case, the BLR, which has
jurisdiction over the intra-union dispute, can validly order the immediate conduct of election of officers,
otherwise, internecine disputes and blame-throwing will derail an orderly and fair election. Indeed, Section 1(b),
[Rule XV], Book V of the Implementing Rules and Regulations of the Labor Code, as amended, by Department
Order No. 09, Series of 1997, 39 provides that, in the absence of any agreement among the members or any
provision in the constitution and by-laws of the labor organization, in an election ordered by the Regional
Director, the chairman of the committee shall be a representative of the Labor Relations Division of the Regional
Office[.] 40
Ultimately, the Court of Appeals decreed:
IN THE LIGHT OF ALL THE FOREGOING, the Petition is denied due course and is hereby DISMISSED. 41
Petitioners moved for reconsideration 42 of the Decision dated 16 March 2001 of the Court of Appeals, but it
was denied by the said court in its Resolution 43 dated 30 August 2001.
Petitioners elevated the case to this Court via the instant Petition, invoking the following assignment of errors:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR AND GRAVELY
ABUSED ITS DISCRETION WHEN IT UPHELD THE APPLICATION BY THE HONORABLE DIRECTOR OF THE
BUREAU OF LABOR RELATIONS OF THE PROVISIONS OF REPUBLIC ACT NO. 6728 TO THE P42 MILLION CBA
PACKAGE OF ECONOMIC BENEFITS OBTAINED BY THE UST FACULTY UNION FROM THE UNIVERSITY OF
SANTO TOMAS.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR AND GRAVELY
ABUSED ITS DISCRETION WHEN IT DISALLOWED THE LUMP-SUM CHECK-OFF AMOUNTING TO P4.2 MILLION
BY RULING THAT THE P42 MILLION CBA ECONOMIC PACKAGE OBTAINED BY THE UST FACULTY UNION WAS
MERELY AN ALLOCATION OF THE SEVENTY PER CENT (70%) OF THE TUITION INCREASES AUTHORIZED BY
LAW AND THE DEPARTMENT OF EDUCATION, CULTURE AND SPORTS.
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR AND GRAVELY
ABUSED ITS DISCRETION WHEN IT DISREGARDED THE PROVISIONS ON ELECTION OF UNION OFFICERS IN
THE CONSTITUTION AND BY-LAWS OF THE UST FACULTY UNION AND INSTEAD UPHELD THE DIRECTIVE OF
THE HONORABLE DIRECTOR OF THE BUREAU OF LABOR RELATIONS TO CONDUCT THE ELECTION OF UNION
OFFICERS UNDER THE CONTROL AND SUPERVISION OF THE REGIONAL DIRECTOR FOR THE NATIONAL
CAPITAL REGION OF THE DEPARTMENT OF LABOR AND EMPLOYMENT.
Essentially, in order to arrive at a final disposition of the instant case, this Court is tasked to determine the
following: (1) the nature of the P42 million economic benefits package granted by UST to USTFU; (2) the legality
of the 10% check-off collected by the Mario Group from the P42 million economic benefits package; and (3) the
25

validity of the BLR order for USTFU to conduct election of union officers under the control and supervision of the
DOLE-NCR Regional Director. ETDAaC
II
RULING

(1)The P42 million economic benefits package


Petitioners argue that the P42 million economic benefits package granted to the covered faculty members were
additional benefits, which resulted from a long and arduous process of negotiations between the Mario Group
and UST. The BLR and the Court of Appeals were in error for considering the said amount as purely sourced
from the allocation by UST of 70% percent of the incremental proceeds of tuition fee increases, in accordance
with Republic Act No. 6728. Said law was improperly applied as a general law that decrees the allocation by all
private schools of 70% of their tuition fee increases to the payment of salaries, wages, allowances and other
benefits of their teaching & non-teaching personnel. It is clear from the title of the law itself that it only covers
government assistance to students and teachers in private education. Section 5 of Republic Act No.
6728 unequivocally limits the scope of the law to tuition fee supplements and subsidies extended by the
Government to students in private high schools. Thus, the petitioners maintain that Republic Act No. 6728 has
no application to the MOA executed on 10 September 1992 between UST and USTFU, through the efforts of the
Mario Group.
The Court disagrees with petitioners' stance. TCEaDI
The provisions of Republic Act No. 6728 were not arbitrarily applied by the DOLE-NCR Regional Director, the
BLR, or the Court of Appeals to the P42 million economic benefits package granted by UST to USTFU,
considering that the parties themselves stipulated in Section 7 of the MOA they signed on 10 September 1992
that:
7.0.It is clearly understood and agreed upon that the aggregate sum of P42 million is chargeable
against the share of the faculty members in the incremental proceeds of tuition fees collected and
still to be collected[;] Provided, however, that he (sic) commitment of the UNIVERSITY to pay the aggregate
sum of P42 million shall subsist even if the said amount exceeds the proportionate share that may accrue to the
faculty members in the tuition fee increases that the UNIVERSITY may be authorized to collect in School-Year
1992-1993, and, Provided, finally, that the covered faculty members shall still be entitled to their proportionate
share in any undistributed portion of the incremental proceeds of the tuition fee increases in School-Year 19921993, and which incremental proceeds are, by law and pertinent Department of Education Culture
and Sports (DECS) regulations, required to be allotted for the payment of salaries, wages,
allowances and other benefits of teaching and non-teaching personnel for the
UNIVERSITY. 44 (Emphases supplied.)
The "law" in the aforequoted Section 7 of the MOA can only refer to Republic Act No. 6728, otherwise known as
the "Government Assistance to Students and Teachers in Private Education Act". Republic Act No. 6728 was
enacted in view of the declared policy of the State, in conformity with the mandate of the Constitution, to
promote and make quality education accessible to all Filipino citizens, as well as the recognition of the State of
the complementary roles of public and private educational institutions in the educational system and the
invaluable contribution that the private schools have made and will make to education. 45 The said statute
primarily grants various forms of financial aid to private educational institutions such as tuition fee supplements,
assistance funds, and scholarship grants. 46
One such form of financial aid is provided under Section 5 of Republic Act No. 6728, which states:
SEC. 5.Tuition Fee Supplement for Student in Private High School.

26

(1)Financial assistance for tuition for students in private high schools shall be provided by the government
through a voucher system in the following manner: CHDTEA
(a)For students enrolled in schools charging less than one thousand five hundred pesos (P1,500) per year in
tuition and other fees during school year 1988-89 or such amount in subsequent years as may be determined
from time to time by the State Assistance Council: The Government shall provide them with a voucher
equal to two hundred ninety pesos P290.00: Provided, That the student pays in the 1989-1990 school
year, tuition and other fees equal to the tuition and other fees paid during the preceding academic
year: Provided, further, That the Government shall reimburse the vouchers from the schools concerned within
sixty (60) days from the close of the registration period: Provided, furthermore, That the student's family resides
in the same city or province in which the high school is located unless the student has been enrolled in that
school during the previous academic year.

(b)For students enrolled in schools charging above one thousand five hundred pesos (P1,500) per year in tuition
and other fees during the school year 1988-1989 or such amount in subsequent years as may be determined
from time to time by the State Assistance Council, no assistance for tuition fees shall be granted by the
Government: Provided, however, That the schools concerned may raise their tuition fee subject to
Section 10 hereof.
(2)Assistance under paragraph (1), subparagraphs (a) and (b) shall be granted and tuition fees
under subparagraph (c) may be increased, on the condition that seventy percent (70%) of the
amount subsidized, allotted for tuition fee or of the tuition fee increases shall go to the payment of
salaries, wages, allowances and other benefits of teaching and non-teaching personnel except
administrators who are principal stockholders of the school, and may be used to cover increases as
provided for in the collective bargaining agreements existing or in force at the time when this Act
is approved and made effective:Provided, That government subsidies are not used directly for salaries of
teachers of nonsecular subjects. At least twenty percent (20%) shall go to the improvement or modernization of
buildings, equipment, libraries, laboratories, gymnasia and similar facilities and to the payment of other costs of
operation. For this purpose, schools shall maintain a separate record of accounts for all assistance received from
the government, any tuition fee increase, and the detailed disposition and use thereof, which record shall be
made available for periodic inspection as may be determined by the State Assistance Council, during business
hours, by the faculty, the non-teaching personnel, students of the school concerned, and Department of
Education, Culture and Sports and other concerned government agencies. (Emphases ours.)TEDHaA
Although Section 5 of Republic Act No. 6728 does speak of government assistance to students in private high
schools, it is not limited to the same. Contrary to petitioners' puerile claim, Section 5 likewise grants an
unmistakable authority to private high schools to increase their tuition fees, subject to the condition that seventy
(70%) percent of the tuition fee increases shall go to the payment of the salaries, wages, allowances, and other
benefits of their teaching and non-teaching personnel. The said allocation may also be used to cover increases in
the salaries, wages, allowances, and other benefits of school employees as provided for in the CBAs existing or
in force at the time when Republic Act No. 6728 was approved and made effective.
Contrary to petitioners' argument, the right of private schools to increase their tuition fee with their
corresponding obligation to allocate 70% of said increase to the payment of the salaries, wages, allowances, and
other benefits of their employees is not limited to private high schools. Section 9 47 of Republic Act No. 6728,
on "Further Assistance to Students in Private Colleges and Universities", is crystal clear in providing that:
d)Government assistance and tuition increases as described in this Section shall be governed by the same
conditions as provided under Section 5 (2).
Indeed, a private educational institution under Republic Act No. 6728 still has the discretion on the disposition of
70% of the tuition fee increase. It enjoys the privilege of determining how much increase in salaries to grant and
27

the kind and amount of allowances and other benefits to give. The only precondition is that 70% percent of the
incremental tuition fee increase goes to the payment of salaries, wages, allowances and other benefits of
teaching and non-teaching personnel. 48
In this case, UST and USTFU stipulated in their 10 September 1992 MOA that the P42 million economic benefits
package granted by UST to the members of the collective bargaining unit represented by USTFU, was
chargeable against the 70% allotment from the proceeds of the tuition fee increases collected and still to be
collected by UST. As observed by the DOLE-NCR Regional Director, and affirmed by both the BLR and the Court
of Appeals, there is no showing that any portion of the P42 million economic benefits package was derived from
sources other than the 70% allotment from tuition fee increases of UST.
Given the lack of evidence to the contrary, it can be conclusively presumed that the entire P42 million economic
benefits package extended to USTFU came from the 70% allotment from tuition fee increases of UST. Preceding
from this presumption, any deduction from the P42 million economic benefits package, such as the P4.2 million
claimed by the Mario Group as attorney's/agency fees, should not be allowed, because it would ultimately result
in the reduction of the statutorily mandated 70% allotment from the tuition fee increases of UST.
The other reasons for disallowing the P4.2 million attorney's/agency fees collected by the Mario Group from the
P42 million economic benefits package are discussed in the immediately succeeding paragraphs. EIAScH

(2)The P4.2 Million Check-off


Petitioners contend that the P4.2 million check-off, from the P42 million economic benefits package, was lawfully
made since the requirements of Article 222 (b) of the Labor Code, as amended, were complied with by the
Mario Group. The individual paychecks of the covered faculty employees were not reduced and the P4.2 million
deducted from the P42 million economic benefits package became union funds, which were then used to pay
attorney's fees, negotiation fees, and similar charges arising from the CBA. In addition, the P4.2 million
constituted a special assessment upon the USTFU members, the requirements for which were properly observed.
The special assessment was authorized in writing by the general membership of USTFU during a meeting in
which it was included as an item in the agenda. Petitioners fault the Court of Appeals for disregarding the
authorization of the special assessment by USTFU members. There is no law that prohibits the insertion of a
written authorization for the special assessment in the same instrument for the ratification of the 10 September
1992 MOA. Neither is there a law prescribing a particular form that needs to be accomplished for the
authorization of the special assessment. The faculty members who signed the ratification of the MOA, which
included the authorization for the special assessment, have high educational attainment, and there is ample
reason to believe that they affixed their signatures thereto with full comprehension of what they were doing.
Again, the Court is not persuaded.
The pertinent legal provisions on a check-off are found in Articles 222 (b) and 241 (n) and (o) of the Labor
Code, as amended.
Article 222 (b) states:
(b)No attorney's fees, negotiation fees or similar charges of any kind arising from any collective bargaining
negotiations or conclusion of the collective agreement shall be imposed on any individual member of the
contracting union: Provided, however, that attorney's fees may be charged against unions funds in an amount to
be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null
and void.
Article 241 (n) reads:
(n)No special assessment or other extraordinary fees may be levied upon the members of a labor organization
unless authorized by a written resolution of a majority of all the members at a general membership meeting duly
called for the purpose. The secretary of the organization shall record the minutes of the meeting including the
28

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. HCTEDa
And Article 241 (o) provides:
(o)Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees
or any other extraordinary fees may be checked off from any amount due to an employee without an individual
written authorization duly signed by the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction.
Article 222 (b) of the Labor Code, as amended, prohibits the payment of attorney's fees only when it is effected
through forced contributions from the employees from their own funds as distinguished from union
funds. 49 Hence, the general rule is that attorney's fees, negotiation fees, and other similar charges may only be
collected from union funds, not from the amounts that pertain to individual union members. As an exception to
the general rule, special assessments or other extraordinary fees may be levied upon or checked off from any
amount due an employee for as long as there is proper authorization by the employee.
A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the
proper bargaining representative, or on prior authorization from the employees, deducts union dues or agency
fees from the latter's wages and remits them directly to the Union. Its desirability in a labor organization is quite
evident. The Union is assured thereby of continuous funding. 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. 50
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 attorney's fees. The
P42 million economic benefits package was not intended for the USTFU coffers, but for all the members of the
bargaining unit USTFU represented, whether members or non-members of the union. A close reading of the
terms of the MOA reveals that after the satisfaction of the outstanding obligations of UST under the 1986 CBA,
the balance of the P42 million was to be distributed to the covered faculty members of the collective bargaining
unit in the form of salary increases, returns on paycheck deductions; and increases in hospitalization,
educational, and retirement benefits, and other economic benefits. The deduction of the P4.2 million, as alleged
attorney's/agency fees, from the P42 million economic benefits package effectively decreased the share from
said package accruing to each member of the collective bargaining unit.

Petitioners' line of argument that the amount of P4.2 million became union funds after its deduction from the
P42 million economic benefits package and, thus, could already be used to pay attorney's fees, negotiation fees,
or similar charges from the CBA is absurd. Petitioners' reasoning is evidently flawed since the attorney's fees
may only be paid from union funds; yet the amount to be used in paying for the same does not become union
funds until it is actually deducted as attorney's fees from the benefits awarded to the employees. It is just a
roundabout argument. What the law requires is that the funds be already deemed union funds even before the
attorney's fees are deducted or paid therefrom; it does not become union funds after the deduction or payment.
To rule otherwise will also render the general prohibition stated in Article 222 (b) nugatory, because all that the
union needs to do is to deduct from the total benefits awarded to the employees the amount intended for
attorney's fees and, thus, "convert" the latter to union funds, which could then be used to pay for the said
attorney's fees.
The Court further determines that the requisites for a valid levy and check-off of special assessments, laid down
by Article 241 (n) and (o), respectively, of the Labor Code, as amended, have not been complied with in the
case at bar. To recall, these requisites are: (1) an authorization by a written resolution of the majority of all the
union members at the general membership meeting duly called for the purpose; (2) secretary's record of the
minutes of the meeting; and (3) individual written authorization for check-off duly signed by the employee
concerned. 51
29

Additionally, Section 5, Rule X of the USTFU Constitution and By-Laws mandates that:
Section 5.Special assessments or other extraordinary fees such as for payment of attorney's fees shall be made
only upon a resolution duly ratified by the general membership by secret balloting.
In an attempt to comply with the foregoing requirements, the 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 check-off of P4.2 million, from the
P42 million economic benefits package, as payment for attorney's fees. As held by the Court of Appeals,
however, the said documents constitute unsatisfactory compliance with the requisites set forth in the Labor
Code, as amended, and in the USTFU Constitution and By-Laws, even though individually signed by a majority of
USTFU members.
The inclusion of the authorization for a check-off of union dues and special assessments for the Labor Education
Fund and attorney's fees, in the same document for the ratification of the 10 September 1992 MOA granting the
P42 million economic benefits package, necessarily vitiated the consent of USTFU members. For sure, it is fairly
reasonable to assume that no individual member of USTFU would casually turn down the substantial and
lucrative award of P42 million in economic benefits under the MOA. However, there was no way for any
individual union member to separate his or her consent to the ratification of the MOA from his or her
authorization of the check-off of union dues and special assessments. As it were, the ratification of the MOA
carried with it the automatic authorization of the check-off of union dues and special assessments in favor of the
union. Such a situation militated against the legitimacy of the authorization for the P4.2 million check-off by a
majority of USTFU membership. Although the law does not prescribe a particular form for the written
authorization for the levy or check-off of special assessments, the authorization must, at the very least, embody
the genuine consent of the union member.
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 By-Laws, invalidates the questioned special assessment. Substantial
compliance is not enough in view of the fact that the special assessment will diminish the compensation of the
union members. Their express consent is required, and this consent must be obtained in accordance with the
steps outlined by law, which must be followed to the letter. No shortcuts are allowed. 52
Viewed in this light, the Court does not hesitate to declare as illegal the check-off of P4.2 million, from the P42
million economic benefits package, for union dues and special assessments for the Labor Education Fund and
attorney's fees. Said amount rightfully belongs to and should be returned by petitioners to the intended
beneficiaries thereof, i.e., members of the collective bargaining unit, whether or not members of USTFU. This
directive is without prejudice to the right of petitioners to seek reimbursement from the other USTFU officers
and directors, who were part of the Mario Group, and who were equally responsible for the illegal check-off of
the aforesaid amount.

(3)Election of new officers


Having been overtaken by subsequent events, the Court need no longer pass upon the issue of the validity of
the order of BLR for USTFU to conduct its long overdue election of union officers, under the control and
supervision of the DOLE-NCR Regional Director.
The BLR issued such an order since USTFU then had two groups, namely, the Mario Group and the Gamilla
Group, each claiming to be the legitimate officers of USTFU.
The DOLE-NCR Regional Director, in his Decision dated 27 May 1999, decreed that the Mario Group be expelled
from their positions as USTFU officers. But then, the BLR, in its Decision promulgated on 9 March 2000, declared
that the change of officers could best be decided, not by expulsion, but by the general membership of the union
through the conduct of election, under the control and supervision of the DOLE-NCR Regional Director. In its
assailed Decision dated 16 March 2001, the Court of Appeals agreed with the BLR judgment in its ruling that the
conduct of an election, under the control and supervision of the DOLE-NCR Regional Director, is necessary to
30

settle the question of who, as between the officers of the Mario Group and of the Gamilla Group, are the
legitimate officers of the USTFU. DTEIaC
The Court points out, however, that neither the Decision of the BLR nor of the Court of Appeals took into
account the fact that an election of USTFU officers was already conducted on 14 January 2000, which was won
by the Gamilla Group. There is nothing in the records to show that the said election was contested or made the
subject of litigation. The Gamilla Group had exercised their powers as USTFU officers during their elected term.
Since the term of union officers under the USTFU Constitution and By-Laws was only for three years, then the
term of the Gamilla Group already expired in 2003. It is already beyond the jurisdiction of this Court, in the
present Petition, to still look into the subsequent elections of union officers held after 2003.
The election of the Gamilla Group as union officers in 2000 should have already been recognized by the BLR and
the Court of Appeals. The order for USTFU to conduct another election was only a superfluity. The issue of who
between the officers of the Mario Group and of the Gamilla Group are the legitimate USTFU officers has been
rendered moot by the succeeding events in the case.
WHEREFORE, premises considered, the Petition for Review under Rule 45 of the Rules of Court is
hereby DENIED. The Decision dated 16 March 2001 and the Resolution dated 30 August 2001 of the Court of
Appeals in CA-G.R. SP No. 60657, are hereby AFFIRMED WITH MODIFICATIONS. Petitioners are
hereby ORDERED to reimburse, jointly and severally, to the faculty members of the University of Sto. Tomas,
belonging to the collective bargaining unit, the amount of P4.2 million checked-off as union dues and special
assessments for the Labor Education Fund and attorney's fees, with legal interest of 6% per annum from 15
December 1994, until the finality of this decision. The order for the conduct of election for the officers of the
University of Sto. Tomas Faculty Union, under the control and supervision of the Regional Director of the
Department of Labor and Employment-National Capital Region, is hereby DELETED. No costs.
SO ORDERED.
||| (Mario, Jr. v. Gamilla, G.R. No. 149763, [July 7, 2009], 609 PHIL 549-586)

What is Mandatory Activity?


[G.R. No. 70067. September 15, 1986.]
CARLOS P. GALVADORES, ET AL., petitioners, vs. CRESENCIANO B. TRAJANO, Director of the Bureau
of Labor Relations, MANGGAGAWA NG KOMUNIKASYON SA PILIPINAS (FIWU), PHILIPPINE LONG
DISTANCE COMPANY (PLDT), and JOSE C. ESPINAS, respondents.

Dante A. Carandang for petitioners.


Jose C. Espinas for respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION, LABOR CODE; RIGHTS AND CONDITIONS OF MEMBERSHIP; CHECK-OFF
MAY NOT BE AFFECTED WITHOUT INDIVIDUAL WRITTEN AUTHORIZATION. The provisions of Arts. 222(b)
and 240 (c) of the Labor Code and Section 13, Rule VIII of the Omnibus Rules Implementing the Labor Code are
clear. No check-offs from any amounts due employees may be effected without individual written authorizations
duly signed by the employees specifically stating the amount, purpose and beneficiary of the deduction. The
required individual authorizations in this case are wanting. Infact, petitioner employees are vigorously objecting.
The question asked in the plebiscite, besides not being explicit, assumed that there was no dispute relative to
attorney's fees, down by law. Article 222(b) does not except a CBA, later placed under compulsory arbitration,
from the ambit of its prohibition. The cardinal principle should be borne in mind that employees are protected by
31

law from unwarranted practices that diminish their compensation without their knowledge and consent. (Pacific
Banking Corp. vs. Clave, 128 SCRA 112 [1984])
2. ID.; ID.; ID.; BENEFITS FORMING PART OF THE COLLECTIVE BARGAINING AGREEMENT; NOT THE
"MANDATORY ACTIVITY" CONTEMPLATED IN THE CODE. Contrary to respondent Union's and Counsel's
stand, the benefits awarded to PLDT employees still formed part of the collective bargaining negotiations
although placed already under compulsory arbitration. This is not the "mandatory activity" under the Code which
dispenses with individual written authorizations for check-offs, notwithstanding its "compulsory" nature.
RESOLUTION
MELENCIO-HERRERA, J p:
Petitioner employees of the Philippine Long Distance Telephone Company (PLDT) and members of respondent
Free Telephone Workers Union, now the Manggagawa ng Komunikasyon sa Pilipinas (simply referred to
hereinafter as the Union), question the legality of the check-off for attorney's fees amounting to P1 M, more or
less, of respondent Atty. Jose C. Espinas (hereinafter referred to as "Respondent Counsel") from the monetary
benefits awarded to PLDT employees in a deadlocked collective bargaining agreement negotiations between the
PLDT and the Union.
The case stemmed from the following facts:
Respondent Counsel has been the legal counsel of respondent Union since 1964. For his services, he was hired
on a case to case contingent fee basis. On September 7, 1983, he received a letter from the Union President
reading:
"The Free Telephone Workers Union once again request you to appear as counsel in the on going labor dispute
at PLDT. In consideration of your services therein, the union binds itself to compensate you for your fees and
expenses therein on a contingent basis. The amount shall be 10% of any improvement, with retroactive effect,
of the PLDT's last offer to the deadlock in CBA negotiations which we know will result in a compulsory
arbitration. A supporting board resolution will later confirm the letter." 1
PLDT's "last offer" referred to on the wage increases was: P230 for the first year of the proposed CBA; P100 for
the second year; and P90 for the third year. 2
On September 9, 1983, the Minister of Labor and Employment assumed jurisdiction over all unresolved issues in
the bargaining deadlock between PLDT and the Union and proceeded to resolve the same by compulsory
arbitration.
On October 23, 1983, the Minister of Labor awarded across-the-board wage increases of P330/month effective
November 9, 1982; P155/month effective November 9, 1983, and P155/month effective November 9, 1984, in
addition to the Christmas bonus of 1-1/2 month pay per employee effective December, 1983, and other fringe
benefits. As will be noted, there were improvements obtained from PLDT's "last offer."
On October 29, 1983, the Executive Board of the Union passed a resolution requesting PLDT to deduct P115.00
per employee for the legal services extended to the Union by Respondent Counsel.
On November 2, 1983, petitioners initially numbering 600 and finally 5,258, filed a letter-complaint before the
MOLE through their authorized representative, petitioner Carlos Galvadores, assailing the imposition of P130.00
(later corrected P155.00) per employee as attorney's fees of respondent counsel. Annexed to the complaint were
the written statements of the employee authorizing Galvadores to act for and in their behalf. Petitioners took the
position that the attorney's fees of respondent counsel were not only unreasonable but also violative of Article
242(o) of the Labor Code; and that the deductions cannot be given legal effect by a mere Board resolution but
needs the ratification by the general membership of the Union.

32

Respondents Union and Counsel, on the other hand, proferred the argument that the attorney's fees being
exacted pertained to his services during compulsory arbitration proceedings and cannot be considered as
negotiation fees or attorney's fees within the context of Article 242(o) of the Labor Code; and that contrary to
petitioners' claim that Respondent Counsel surfaced only as lawyer of the Union when the employees themselves
engaged in mass action to force a solution to the deadlock in their negotiations, he appeared continuously from
September 8, 1983 until the decision in the case was rendered on October 23, 1983. Petitioners proposed a
solution offering to pay P10.00 per employee, but Respondent Counsel refused.
In the meantime, on November 4, 1983, PLDT filed notice that assessment had been withheld from the
differential pay due petitioners but that the same would not be turned over to the Union without prior MOLE
authority so as not to involve management in the intra-union disagreement.
On February 13, 1984, the Minister of Labor referred the dispute to the Bureau of Labor Relations for being
intra-union in nature. Several hearings were held by that Bureau.
On March 22, 1984, the Union filed a Manifestation to the effect that about 6,067 members of the Union ratified
the October 29, 1983 resolution of the legislative council in a plebiscite called for that purpose. On the basis
thereof, Respondent Counsel moved for the payment of his legal fees under the September 7, 1983 contract.
Petitioners questioned the plebiscite on the ground that question No. 2, which reads:
"Question No. 2. Do you approve of the use of P1 million (P500,000.00 to be withdrawn from PECCI and another
P500,000.00 from IBAA) from our CBA negotiation fund together with the attorney's fees (P1 million) that was
collected and to be loaned to the MKP/FTWU, as our counterpart of the seed money to start the housing
program as agreed by the PLDT management and our union panel and included in the award of the MOLE?"
was misleading and deceptive as it assumed that there was no dispute regarding the deduction of attorney's fees
from the monetary benefits awarded to PLDT employees.
On February 18, 1985, respondent Director of the Bureau of Labor Relations dismissed petitioners' complaint for
lack of merit reasoning that "the outcome of the plebiscite negates any further question on the right of the union
counsel to collect the amount of P115 from each of the employees involved."
It is this Decision that is assailed by petitioners principally on the ground that the individual written authorization
of all the employees must first be obtained before any assessment can be made against the monetary benefits
awarded to them pursuant to Article 242(o) of the Labor Code; and that assuming that Respondent Counsel is
entitled to attorney's fees, the same should be taken from Union funds.
In their Comment, respondents Union and Counsel argue that compulsory arbitration is a "mandatory activity"
and an exception to Article 242 (o) of the Labor Code, and that the Union members approved the questioned
deduction in the plebiscite of January, 1984, under the condition that P1 M of the same would be made available
for the Union's housing project.
In his Comment, the Solicitor General agrees with petitioners that the issue presented is squarely covered by
Article 222(b) of the Labor Code, as amended by P.D. No. 1691 so that attorney's fees, if legally payable, can
only be charged against Union funds.
The Court resolved to give due course.
Article 222(b) of the Labor Code provides:
"Article 222. Appearance and Fees.
xxx xxx xxx
"(b) No attorney's fees, negotiation fees or similar charges of any kind arising from any collective bargaining
negotiations or conclusion of the collective bargaining agreement shall be imposed on any individual member of
33

the contracting union; Provided, however, that attorney's fees may be charged against union funds in an amount
to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be
null and void."
While Article 242 of the same Code reads:
"Art. 242. Rights and conditions of membership in a labor organization. The following are the rights and
conditions of membership in a labor organization:
"xxx xxx xxx
"(o) Other than for mandatory activities under the Code, no special assessment, attorney's fees, negotiation fees
or any other extraordinary fees may be checked off "from any amount due an employee without individual
written authorization duly signed by the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction."
The Omnibus Rules Implementing the Labor Code also provide that deductions from wages of the employees
may only be made by the employer in cases authorized by law, including deductions for insurance premiums
advanced by the employer on behalf of the employees as well as union dues where the right to check-off is
authorized in writing by the individual employee himself. 3

The provisions are clear. No check-offs from any amounts due employees may be effected without individual
written authorizations duly signed by the employees specifically stating the amount, purpose and beneficiary of
the deduction. The required individual authorizations in this case are wanting. In fact, petitioner employees are
vigorously objecting. The question asked in the plebiscite, besides not being explicit, assumed that there was no
dispute relative to attorney's fees.
Contrary to respondent Union's and Counsel's stand, the benefits awarded to PLDT employees still formed part
of the collective bargaining negotiations although placed already under compulsory arbitration. This is not the
"mandatory activity" under the Code which dispenses with individual written authorizations for check-offs,
notwithstanding its "compulsory" nature. It is a judicial process of settling disputes laid down by law. Besides,
Article 222 (b) does not except a CBA, later placed under compulsory arbitration, from the ambit of its
prohibition. The cardinal principle should be borne in mind that employees are protected by law from
unwarranted practices that diminish their compensation without their knowledge and consent. 4
ACCORDINGLY, the assailed Decision of February 18, 1985 rendered by respondent Director of the Bureau of
Labor Relations, is hereby SET ASIDE. The attorney's fees herein involved may be charged against Union funds
pursuant to Article 222(b) of the Labor Code, as may be agreed upon between them.
SO ORDERED.
||| (Galvadores v. Trajano, G.R. No. 70067 (Resolution), [September 15, 1986], 228 PHIL 138-145)

[G.R. No. 74453. May 5, 1989.]


AMBROCIO VENGCO, RAMON MOISES, EUGENIA REYES, RAFAEL WAGAS and 80 others per
attached list, petitioners, vs. HON. CRESENCIO B. TRAJANO, in his capacity as Director of the Bureau
of Labor Relations and EMMANUEL TIMBUNGCO, respondents.

Jose T. Maghari for petitioners.


Benjamin C. Sebastian for private respondent.
SYLLABUS
34

1. LABOR LAWS AND SOCIAL LEGISLATION; LABOR UNIONS; ATTORNEY'S FEES MAY NOT BE DEDUCTED OR
CHECKED OFF WITHOUT WORKER'S WRITTEN CONSENT, EXCEPT FOR MANDATORY ACTIVITY; MANDATORY
ACTIVITY, DEFINED. It is very clear from Art. 241 of the Labor Code that attorney's fees may not be
deducted or checked off from any amount due to an employee without his written consent except for mandatory
activities under the Code. A mandatory activity has been defined as a judicial process of settling dispute laid
down by the law. (Carlos P. Galvadores, et al. vs. Cresenciano B. Trajano, Director of the Bureau of Labor
Relations, et al., G.R. No. L-70067, September 15, 1986, 144 SCRA 138).
2. ID.; ID.; ID.; CASE AT BAR IS NOT A MANDATORY ACTIVITY. The amicable settlement entered into by the
management and the union whereby the company will pay to the union members the sum of P150,000.00 for
their claims arising from the unpaid emergency cost of living allowance (ECOLA) and other benefits can not be
considered as a mandatory activity under the Code. It is true that the union filed a claim for emergency cost of
living allowance and other benefits before the Ministry of Labor. But this case never reached its conclusion in
view of the parties' agreement.
3. ID.; ID.; ID.; WRITTEN CONSENT IS DISPENSED WITH IN JUDICIAL OR ADMINISTRATIVE PROCEEDINGS
FOR RECOVERY OF WAGES. Book III, Rule VIII, Section II of the Implementing Rules cited by Timbungco
which dispenses with the required written authorization from the employees concerned does not apply in this
case. This provision envisions a situation where there is a judicial or administrative proceedings for recovery of
wages. Upon termination of the proceedings, the law allows a deduction for attorney's fees of 10% from the
total amount due to a winning party.
4. ID.; ID.; ID.; VIOLATION THEREOF JUSTIFIES LAWYER'S EXPULSION FROM UNION PRESIDENCY.
Considering the violations of Timbungco, (i.e. deducting attorney's fees from the workers' fringe benefits) there
can be no question that he should bear the consequences of his acts. We find that the penalty of expulsion from
the union presidency imposed upon Timbungco is justified.
5. ID.; EMERGENCY COST OF LIVING ALLOWANCE, EXCLUDED FROM SALARIES OR WAGES. In the herein
case, the fringe benefits received by the union members consist of back payments of their unpaid emergency
cost of living allowances which are totally distinct from their wages. Allowances are benefits over and above the
basic salaries of the employees (University of Pangasinan Faculty Union vs. University of Pangasinan, G.R. No. L63122, February 20, 1984, 127 SCRA 691). We have held that such allowances are excluded from the concept of
salaries or wages (Cebu Institute of Technology (CIT) vs. Ople, G.R. No. L-58870, December 18, 1987, 156
SCRA 629).
DECISION
MEDIALDEA, J p:
This is a petition for certiorari which seeks to annul: (1) the Order of respondent Director of the Bureau of Labor
Relations dated May 23, 1983 in BLR Case No. A-0179-82 entitled "Ambrocio Vengco, et al. vs. Emmanuel
Timbungco" setting aside the decision dated December 29, 1982; and (2) the Order dated April 2, 1986 denying
the motion for reconsideration of the Order dated May 23, 1983.
The antecedent facts are as follows:
Sometime in the latter part of 1981, the Management of the Anglo-American Tobacco Corporation and the
Kapisanan ng Manggagawa sa Anglo-American Tobacco Corporation. (FOI-TAF) entered into a compromise
agreement whereby the company will pay to the union members the sum of P150,000.00 for their claims arising
from the unpaid emergency cost of living allowance (ECOLA) and other benefits which were the subject of their
compliant before the Ministry of Labor. Respondent Emmanuel Timbungco (Timbungco, for short) who is the
union president received the money which was paid in installments. Thereafter, he distributed the amount
among the union members. Petitioners Ambrocio Vengco, Ramon Moises, Rafael Wagas and 80 others (Vengco,
et al., for short) who are union members noted that Timbungco was not authorized by the union workers to get
the money; and that ten percent (10%) of the P150,000.00 had been deducted to pay for attorney's fees
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without their written authorization in violation of Article 242(o) of the Labor Code. So, they demanded from
Timbungco an accounting of how the P150,000.00 was distributed to the members. Timbungco did not give in to
their demand. Thus Vengco, et al. filed a complaint with the Ministry of Labor praying for: "(1) the expulsion of
Emmanuel Timbungco as president of the union for violation of (the) union constitution and by-laws and the
rights and conditions of union members under the Labor Code; (2) an order to require Timbungco to render an
accounting of how the P150,000.00 was distributed; and (3) an order to require private respondent to publish in
the bulletin board the list of the members and the corresponding amount they each received from the
P150,000.00." (Memorandum for Petitioners, p. 150, Rollo).
In his answer with counterclaim, Timbungco alleged among others, that he was authorized by a resolution
signed by the majority of the union members to receive and distribute the P150,000.00 among the workers; that
the computation of the benefits was based on the payroll of the company; that the ten percent (10%) attorney's
fees was in relation to the claim of the local union for payment of emergency cost of living allowance before the
Ministry of Labor which is totally distinct and separate from the negotiation of the CBA; and that the ten percent
(10%) deduction was in accordance with Section II, Rule No. VIII, Book No. III of the Rules and Regulations
implementing the Labor Code and therefore, no authorization from the union members is required.
On July 19, 1982, Med-Arbiter Willie B. Rodriguez issued an Order dismissing the complaint for lack of merit. (p.
33, Rollo)
Vengco, et al. appealed the aforesaid order to the Bureau of Labor Relations.
On December 29, 1982, respondent Director of the Bureau of Labor Relations Cresenciano B. Trajano (Trajano,
for short) rendered a decision, the dispositive portion of which states:
"Wherefore, premises considered, the instant appeal is hereby granted and the Med-Arbiter's Order dated 19
July 1982 hereby set aside. Accordingly, respondent Emmanuel Timbungco is hereby ordered to render a full
accounting of the One Hundred Fifty Thousand Pesos (P150,000.00) he received from the management of
Anglo-American Tobacco Corporation in behalf of the members of the Kapisanan ng mga Manggagawa sa
Associated Anglo-American Tobacco Corporation (FOITAF) and to publish in the union's bulletin board the list of
all recipient union members and the respective amounts they have received, within ten (10) days from receipt
hereof. Further, respondent is hereby expelled as president of the Kapisanan ng Manggagawa sa Anglo American
Tobacco Corporation (FOITAF). Lastly, the counterclaim interposed by the respondent's counsel, Atty. Benjamin
Sebastian is hereby ordered dismissed.
So decided." (p. 50, Rollo.)
Timbungco filed a motion for reconsideration of the above-quoted decision while Vengco, et al. filed their
opposition to the said motion.
On May 23, 1983, Officer-in-Charge Victoriano R. Calaycay issued an Order which held, thus:
"Wherefore, premises considered, our resolution dated 29 December 1982 is hereby set aside. However, an
audit examination of the Books of Account of Kapisanan ng Manggagawa sa Associated Anglo-American Tobacco
Corporation (FOITAF) is hereby ordered.
SO RESOLVED." (p. 62, Rollo)
Vengco, et al, sought reconsideration of the aforementioned order. They contended that the examination of the
books of accounts of the union is irrelevant considering that the issue involved in the case does not consist of
union funds but back pay received by the union members from the company. Likewise, they pointed out that
Timbungco did not give the money to the union treasurer and consequently, the amount was not entered in the
records of the union.
On April 2, 1986, Trajano issued an order which affirmed the resolution of May 23, 1983 and denied the motion
for reconsideration for lack of merit. (p. 58, Rollo)
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Hence, the present recourse by Vengco, et al.


The issues raised in this case are as follows:
(1) Whether or not Timbungco is guilty of illegally deducting 10% attorneys' fees from petitioners' backwages;
and
(2) Whether or not Trajano gravely abused his discretion amounting to lack of jurisdiction in ordering
examination of union books instead of affirming his previous Order expelling Timbungco from the union and
ordering him to render an accounting of P150,000.00 received by him. (p. 151, Rollo)
In the resolution of June 4, 1986, We required the respondents to comment on the petition.
In his comment, Timbungco reiterates the defenses he raised in his answer to the complaint filed against him
before the Med-Arbiter. In addition, he claims that he already filed an accounting report on the P150,000.00 with
the Bureau of Labor Relations which enumerated the names of the workers and the corresponding amounts they
received with their respective signatures opposite their names, the sub-total of the amount of benefits received
per department and the grand total of the amount distributed duly certified by the Union Treasurer and
Secretary and duly noted by Timbungco as Union President. (p. 73, Rollo)
The Solicitor General, in his comment, agrees with Vengco, et al. and recommends that the petition be given due
course. (p. 100, Rollo)
Timbungco filed a reply to the aforesaid comment of the Solicitor General which restates the arguments raised in
his comment. (p. 121, Rollo)

The petition is meritorious.


Article 241(o) of the Labor Code provides:
"ART. 241. Rights and conditions of membership in a labor organization. The following are the rights and
conditions of membership in a labor organization.
xxx xxx xxx
"(o) Other than for mandatory activities under the Code, no special assessment, attorney's fees, negotiation fees
or any other extraordinary fees may be checked off from any amount due an employee without an individual
written authorization duly signed by an employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction.
xxx xxx xxx
It is very clear from the above-quoted provision that attorney's fees may not be deducted or checked off from
any amount due to an employee without his written consent except for mandatory activities under the Code. A
mandatory activity has been defined as a judicial process of settling dispute laid down by the law. (Carlos P.
Galvadores, et al. vs. Cresenciano B. Trajano, Director of the Bureau of Labor Relations, et al., G.R. No. L-70067,
September 15, 1986, 144 SCRA 138). In the instant case, the amicable settlement entered into by the
management and the union can not be considered as a mandatory activity under the Code. It is true that the
union filed a claim for emergency cost of living allowance and other benefits before the Ministry of Labor. But
this case never reached its conclusion in view of the parties' agreement. It is not also shown from the records
that Atty. Benjamin Sebastian was instrumental in forging the said agreement on behalf of the union members.
Timbungco maintains that the "Kapasiyahan" gave him the authority to make the deduction. This contention is
unfounded. Contrary to his claim, the undated "Kapasiyahan" or resolution did not confer upon him the power to
deduct 10% of the P150,000.00 despite the alleged approval of the majority of the union workers. A reading of
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the said resolution (p. 75, Rollo) yields the same conclusion arrived at by Trajano who declared it defective. We
quote with approval Trajano's findings on this point:
"Further, a cursory examination of the alleged resolution shows that it is quite defective. Not only that it is not
dated but also that, with the exception of the first page, the remaining pages were not captioned and did not
state the very purpose for which it was prepared. Thus, the alleged signatories were not properly apprised
thereof. There is, therefore, truth in complainant's contention that they never authorized, more so, they had no
knowledge of the deduction of 10% attorney's fees until it was actually effected. Consequently, the deduction
was not valid." (p. 45, Rollo)
Moreover, the law is explicit. It requires the individual written authorization of each employee concerned, to
make the deduction of attorney's fees valid.
Likewise, We find that the other "Kapasiyahan" dated September 18, 1981 submitted by Timbungco belied his
claim that he was authorized by the union workers to receive the sum of P150,000.00 on their behalf. The
pertinent portion of the said "Kapasiyahan" provides:
"3. Na sa dahilang hindi bigla ang pagbabayad sa nasabing "CLAIM" bukod pa sa marami kaming naghati-hati sa
nasabing halaga ipinapasiya naming na kusang-loob na kunin ang aming bahagi sa aming kapisanan sa unang
linggo ng Disyembre, 1981 at ito'y ipinaalam namin sa Pangulo ng Kapisanan na si Ginoong Emmanuel
Timbungco." (p. 47, Rollo)
The above-quoted statement merely indicated the intention of the workers to get their claim on the first week of
December, 1981 and to inform Timbungco of their intention. Clearly, this statement can not be construed to
confer upon Timbungco the authority to receive the fringe benefits for the workers. Absent such authority,
Timbungco should not have kept the money to himself but should have turned it over to the Union Treasurer.
He, therefore, exceeded his authority as President of the Union. LLjur
Moreover, Book III, Rule VIII, Section II of the Implementing Rules cited by Timbungco which dispenses with
the required written authorization from the employees concerned does not apply in this case. This provision
envisions a situation where there is a judicial or administrative proceedings for recovery of wages. Upon
termination of the proceedings, the law allows a deduction for attorney's fees of 10% from the total amount due
to a winning party. In the herein case, the fringe benefits received by the union members consist of back
payments of their unpaid emergency cost of living allowances which are totally distinct from their wages.
Allowances are benefits over and above the basic salaries of the employees (University of Pangasinan Faculty
Union vs. University of Pangasinan, G.R. No. L-63122, February 20, 1984, 127 SCRA 691). We have held that
such allowances are excluded from the concept of salaries or wages (Cebu Institute of Technology (CIT) vs.
Ople, G.R. No. L-58870, December 18, 1987, 156 SCRA 629). In addition, the payment of the fringe benefits
were effected through an amicable settlement and not in an administrative proceeding.
The submission by Timbungco of an accounting report on the distribution of P150,000.00 is of no moment in the
face of our findings that the deduction of 10% for attorney's fees is illegal and void for failure to comply with the
requirements of the law.
Considering the aforestated violations of Timbungco, there can be no question that he should bear the
consequences of his acts. We find that the penalty of expulsion from the union presidency imposed upon
Timbungco is justified. LexLib
In view of the foregoing, We hold that the Orders dated May 23, 1983 and April 2, 1986 were issued with grave
abuse of discretion. The herein controversy involves the propriety of the 10% deduction from the fringe benefits
of the union workers which they received from the management in settlement of their claims. Such issue does
not touch on union dues or funds. Besides, the sum of P150,000.00 was not entered into the records of the
Union since, as earlier stated, the money was not turned over by Timbungco to the Union Treasurer.
Consequently, the said Orders have no basis.
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ACCORDINGLY, the petition is granted. The assailed Orders dated May 23, 1983 of Officer-in-Charge Victoriano
R. Calaycay of the Bureau of Labor Relations, and April 2, 1986 of respondent Director Cresenciano B. Trajano of
the same Bureau are REVERSED and SET ASIDE and the latter's decision dated December 29, 1982 is hereby
reinstated. No costs.
SO ORDERED.
||| (Vengco v. Trajano, G.R. No. 74453, [May 5, 1989], 255 PHIL 147-155)

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