GALVADORES VS. TRAJANO

TOPIC: Mandatory Activity; Payment of attorney’s fees and special assessments

FACTS:

1.  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 P1M, 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.

2.  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.

3.  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.

4.  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.

5.  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 to P155.00) per employee as attorney's fees of respondents counsel. 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 given legal effect by a mere Board resolution but needs the ratification by the general membership of the Union.

6.    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.

7.  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, Counsel moved for the payment of his legal fees under the September 7, 1983 contract.

8. Petitioners questioned the plebiscite on the ground that Question No. 2 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:

9. “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?”

10. 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

11. This Decision is assailed by petitioners principally on the ground that the individual written authorization of an 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.

12.  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,

ISSUE: Whether or not compulsory arbitration is a “mandatory activity?

RULING: NO.

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.

“(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.”

DISPOSITIVE: GALVADORES et al won.

DOCTRINE: Article 222 (b) does not exempt a CBA, later placed under compulsory arbitration, from the ambit of its prohibition. Hence, individual written authorizations for check-offs are not dispensed with, even if the CBA provides so.

“(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 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.”