Palacol v. Calleja

Facts:

- Manila CCBPI Sales Force Union is the CB agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and Sales Office of Coca-Cola Bottlers Phils.

- Under the new CBA, employees were granted a general salary increase to be given in lump sum- The Union President submitted to Coca-Cola the ratification by the union members of the new

CBA and authorization for the company to deduct union dues equivalent to Php 20/month + 10% by way of special assessment from the CBA lump-sum pay granted

- As per the Union’s Board resolution, the special assessment was for putting up a cooperative and credit union, purchase vehicles and other items needed for the officers and the general membership, and payment for services rendered by union officers, consultants. However, there was a proviso stating that the “matter of allocation shall be at the discretion of the incumbent President”

- The Authorization and CBA ratification was obtained through a secret referendum, with 672 members authorizing the 10% special assessment (170 opposed). However, two more groups of members (170 and 185) subsequently manifested their intention of withdrawing or disauthorizing the deduction of any amount from their CBA lump sum

- At this point, there were a total of 528 objectors, with the remainder of 272 supporters- Coca-Cola filed with the BLR an action for interpleader in order to resolve the conflicting claims

of the parties- Palacol et al, filed a motion/complaint for intervention, claiming to be among those union

members who either did not sign any individual written authorization or those who subsequently withdrew their signatures

o 10% special assessment was a violation of Art. 241(o)1 in relation to Art. 222(b)2

- Union countered that the deductions not only have the popular indorsement and approval of the general membership, but likewise complied with the legal requirements of Art. 241(n)3 and (o) since the board resolution had been duly approved in a general membership meeting and that the collection of a special fund for labor education and research is mandated

- Med-Arbiter: return the amount to personnel, deduction was unauthorized- BLR, on appeal: special assessment was authorized

Issue(s):

w/n the deduction of the special assessment by the Union was made in accordance with the LC

1 Art. 241. Rights and conditions of membership in a labor organization.(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;2 Art. 222. Appearances and Fees.(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 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.3 Art. 241. Rights and conditions of membership in a labor organization. (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessments or fees. The record shall be attested to by the president;

Held:

No. Union has failed to comply with the procedure to legitimize the special assessment under Art. 241(n). It did not submit to the company a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. In addition, it had the minutes recorded by a union director instead of the union secretary. Neither did those minutes list the members present as well as the votes cast.

What the Union did – holding 3 local membership meetings on separate occasions, on different dates, and at various venues – was contrary to the requirements of a general membership meeting. Likewise, merely submitting the minutes of the local membership meetings to the company to authorize the deduction instead of the written resolution adopted at the general meeting fell short of the legal requirements. Therefore, the levy of the special assessment under (n) is invalid.

On the purpose of the levy:

Only the collection of a special fund for labor and education research is mandated. The two other purposes (purchase of vehicles and other items, and payment of services rendered by union officers) should be supported by the regular union dues. Moreover, the payment of services is prohibited by Art. 222(b), falling under the category of “similar charge”. The additional proviso giving the President unlimited discretion to allocate the proceeds is also susceptible of abuse and must be disallowed.

Can a special assessment be validly deducted by a labor union from the lump-sum pay of its members, granted under a collective bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the same by a majority of the union members?

No. Even assuming that it was validly levied, and granting that individual written authorizations were obtained by the Union, there can be no valid check-off considering that the majority of the union members had already withdrawn their individual authorizations. A withdrawal of individual authorizations is equivalent to no authorization at all (cf. Galvadores v. Trajano).

Re: the form of the withdrawals:

Union – disauthorizations are not valid for being collective in form

SC – there is nothing in the law which requires that the disauthorization must be in individual form