Gabriel v. Secretary of Labor GR No.115949

Topic: Union Funds- Payment of atty’s fees and special assessments

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FACTS:

1.  Petitioners comprise the Executive Board of the SolidBank Union, the duly recognized collective bargaining agent for the rank and file employees of Solid Bank Corporation.

2.     Private respondents are members of said union.

3.   The union’s Executive Board decided to retain anew the service of Atty. Ignacio P. Lacsina (now deceased) as union counsel in connection with the negotiations for a new Collective Bargaining Agreement (CBA); majority of all union members approved and signed a resolution confirming the decision of the executive board to engage the services of Atty. Lacsina as union counsel.

4.   As approved, the resolution provided that ten percent (10%) of the total economic benefits that may be secured through the negotiations be given to Atty. Lacsina as attorney’s fees. It also contained an authorization for SolidBank Corporation to check-off said attorney’s fees from the first lump sum payment of benefits to the employees under the new CBA and to turn over said amount to Atty. Lacsina and/or his duly authorized representative.

5.  The bank then, on request of the union, made payroll deductions for attorney’s fees from the CBA benefits paid to the union members in accordance with the abovementioned resolution.

6.   Private respondents instituted a complaint against the petitioners and the union counsel before the Department of Labor and Employment (DOLE) for illegal deduction of attorney’s fees as well as for quantification of the benefits in the 1992 CBA.

7.    Med-arbiter granted the complaint; Secretary partially granted and the Order of the Med-Arbiter dated 22 April 1993 is hereby modified as follows: (1) that the ordered refund shall be limited to those union members who have not signified their conformity to the check-off of attorney’s fees; and (2) the directive on the payment of 5% attorney’s fees should be deleted for lack of basis.

8.      Hence, this petition.

ISSUE: WON the deductions made by petioner-company is valid.

HELD: NO

Private respondent’s contention: claim that the check-off provision in question is illegal because it was never submitted for approval at a general membership meeting called for the purpose and that it failed to meet the formalities mandated by the Labor Code.

In check-off, the employer, on agreement with the Union, or on prior authorization from employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the union. It assures continuous funding; for the labor organization. As this Court has acknowledged, the system of check-off is primarily for the benefit of the union and only indirectly for the individual employees.

The pertinent legal provisions on check-offs are found in Article 222 (b) and Article 241 (o) of the Labor Code.

Art. 222 (b) states:

No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining negotiations or conclusions of the collective agreement shall be imposed on any individual member of the contracting union: Provided, however, that attorney’s fees may be charged against unions funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void.

Art. 241 (o) provides:

Other than for mandatory activities under the Code, no special assessment, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction.

Art. 241 has three (3) requisites for the validity of the special assessment for union’s incidental expenses, attorney’s fees and representation expenses. These are: 1) authorization by a written resolution of the majority of all the members at the general membership meeting called for the purpose; (2) secretary’s record of the minutes of the meeting; and (3) individual written authorization for check off duly signed by the employees concerned.
Clearly, attorney’s fees may not be deducted or checked off from any amount due to an employee without his written consent.

After a thorough review of the records, we find that the General Membership Resolution of October 19, 1991 of the SolidBank Union did not satisfy the requirements laid down by law and jurisprudence for the validity of the ten percent (10%) special assessment for union’s incidental expenses, attorney’s fees and representation expenses. There were no individual written check off authorizations by the employees concerned and so the assessment cannot be legally deducted by their employer.

From all the foregoing, we are of the considered view that public respondent did not act with grave abuse of discretion in ruling that the workers through their union should be made to shoulder the expenses incurred for the services of a lawyer. And accordingly the reimbursement should be charged to the union’s general fund or account. No deduction can be made from the salaries of the concerned employees other than those mandated by law.

DISPOSITIVE: Labor Union lost. Petition denied.

DOCTRINE: Attorneys fees may not be deducted or checked off from any amount due to an employee without his written consent.