Facts:

The case involves three petitions concerning employee-employer relations at the Bank of the Philippine Islands (BPI) and its employees’ unions. The first set of issues arises from G.R. Nos. 69746-47. Negotiations between the Bank of the Philippine Islands Employees Union-Metro Manila (BPIEU-MM) and BPI for a new collective bargaining agreement (CBA) evolved into conflict when BPIEU-MM indicated it would negotiate independently from its parent organization, the Associated Labor Unions (ALU). Subsequently, BPIEU-MM's President Carlito Reyes was suspended and replaced by interim President Rolando Valdez, prompting Reyes to disaffiliate from ALU. The conflict culminated in a deadlock over economic issues, leading to intervention by the Minister of Labor, culminating in an NLRC resolution on March 22, 1983, which mandated specific wage increases and benefits. The NLRC allowed the matter to be referred to a med-arbiter to resolve internal union disputes, which were later disputed

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Facts:

Intra-Union Dispute and Collective Bargaining Negotiations

• The controversy began during negotiations for a new collective bargaining agreement to replace the expiring one on March 31, 1982, between the Bank of the Philippine Islands (BPI) and its employees represented by the Bank of the Philippine Islands Employees Union-Metro Manila (BPIEU-Metro Manila) and its mother federation, the Associated Labor Unions (ALU).
• Serious differences arose between BPIEU-Metro Manila and ALU, prompting the union’s president, Carlito Reyes, to insist that his group negotiate independently with BPI.
• In response, ALU suspended the elective officers of BPIEU-Metro Manila, and subsequently, on November 16, 1982, Reyes and his followers—claiming to be the sole legal representatives—formally disaffiliated from ALU.
• As negotiations stalled over a wide range of economic issues, the dispute was certified by the Minister of Labor for compulsory arbitration and docketed at the National Labor Relations Commission (NLRC) as Certified Cases Nos. 0279 and 0281.
• The cases were later consolidated with a “Manifestation and Motion for Interpleader and to Consign Union Dues” filed by BPI, in view of the conflicting claims between the Reyes group and the group led by Rolando Valdez (who replaced Reyes as acting president).
• On March 22, 1983, the NLRC intervened by fixing wage increases and other economic benefits to be embodied in a new collective bargaining agreement, although the intra-union dispute was explicitly removed from its decision, being designated for determination by the labor arbitration process and the Bureau of Labor Relations.
• The Reyes group sought direct certification as the union through a petition with the Bureau of Labor Relations, which, on June 13, 1983, was denied on the ground that its disaffiliation from ALU was invalid for having been effected beyond the allowed freedom period.
• Subsequent petitions, including a petition for certiorari filed by the Reyes group and a petition for certiorari and injunction filed by the Valdez group, further complicated the matter, with temporary restraining orders issued and later lifted by the Court.

Employee Transfer and Dismissal

• Following its merger with the Commercial Bank and Trust Company in 1981, BPI closed its COMTRUST branch in Davao City and transferred operations to a branch in General Santos City.
• Under a pre-existing understanding, seven employees from the closed branch were absorbed and transferred to the General Santos City branch; however, three employees (Glenna Ongkiko, Arturo Napales, and Gregorio Gito) refused to transfer.
• BPI dismissed the three recalcitrant employees after failed persuasion efforts, triggering a strike by the Davao Chapter of BPIEU-ALU, which was subsequently joined by other local chapters in sympathy.
• On October 19, 1983, the Minister of Labor upheld the transfer and issued a return-to-work order, which was initially ignored by the striking workers.
• A subsequent return-to-work order from the NLRC eventually led BPI to readmit the three employees to their original positions in Davao City while preparations were made for the opening of the General Santos City branch.
• When the branch was inaugurated, BPI filed a motion with the NLRC for the transfer of these employees. Although two of the employees (Napales and Gito) agreed to transfer, two employees (Ongkiko and Lennie Aninon, the latter having earlier agreed to move but later reneged) resisted.
• The NLRC, considering the inherent managerial prerogative to transfer employees for the efficient and economic operation of business, granted the motion directing the transfer of the employees, finding no evidence of mala fides or any improper motive behind the management’s decision.

Attorney’s Lien and Deduction of Legal Fees

• Private respondent Atty. Ignacio Lacsina, who had been engaged as legal counsel by the union to negotiate a new collective bargaining agreement with BPI, filed a motion for the entry of an attorney’s lien based on his engagement agreement.
• The basis of Lacsina’s claim was a resolution dated August 26, 1982, ratifying his appointment and authorizing a deduction of 5% of the total economic benefits secured for the employees during the first year of the new collective bargaining agreement.
• On April 7, 1983, the Labor Arbiter ordered BPI to “check off” the corresponding 5% amount from the employees’ benefits and to turn over the deducted sum to Lacsina.
• BPI executed the deduction (amounting to P200.00 from each employee who authorized it), prompting the petitioners to challenge the order on the ground that such deductions were not authorized by the Labor Code.
• On April 15, 1983, the NLRC issued a resolution setting aside the check-off order and requiring the bank to safekeep the amounts deducted pending determination of the rights of the parties.
• An en banc resolution subsequently issued on September 27, 1983, ordered the release of the deducted funds to Lacsina—except for any portion without individual signed authorization—thereby validating the arrangement for those workers who had voluntarily authorized the deduction.
• The petitioners argued that under Article 222(b) of the Labor Code, attorney’s fees for collective bargaining negotiations should be charged against union funds, not deducted directly from the wages or benefits of individual workers.

Issue:

Legitimacy of Intra-Union Representation and Disaffiliation

• Whether the disaffiliation of the Reyes group from ALU was effective, given that it was effected beyond the permissible freedom period.
• Whether, in the absence of a valid disaffiliation, the Reyes group could assert itself as the sole and legitimate representative in collective bargaining negotiations with BPI.

Validity of the Employer’s Right to Transfer Employees

• Whether the exercise of the employer’s managerial prerogative in transferring employees from the Davao City branch to the General Santos City branch was proper and did not constitute an abuse of discretion.
• Whether the transfer, being strictly lateral with no diminution in rank or benefits, was justified by the operational requirements following the bank’s merger and the closure of the COMTRUST branch.

Legality of Attorney’s Fee Deductions from Employee Benefits

• Whether the deduction of attorney’s fees (amounting to 5% of the economic benefits) directly from the benefits of employees violated Article 222(b) of the Labor Code.
• Whether the arrangement whereby only those employees who voluntarily authorized the deduction were subjected to it, thereby not infringing upon the protection against forced contributions, complied with the statutory requirements.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)