G.R. No. 70067 - Galvadores vs. Trajano

Petitioner employees of the Philippine Long Distance Telephone Company (PLDT) and members of the Free Telephone Workers Union (now Manggagawa ng Komunikasyun sa Pilipinas) challenged a deduction imposed on their monetary benefits.
Respondents include the Director of the Bureau of Labor Relations, the Union, and Atty. Jose C. Espinas, who served as the Union’s legal counsel.

Respondent Counsel, who had represented the Union since 1964 on a contingent basis, was engaged through a letter dated September 7, 1983.
The letter stated that he would receive 10% of any improvement over PLDT’s last offer in the collective bargaining agreement (CBA) negotiations, with a supporting board resolution to follow.
PLDT’s “last offer” regarding wage increases was set at P230 for the first year, P100 for the second year, and P90 for the third year.

On September 9, 1983, the Minister of Labor and Employment assumed jurisdiction over the deadlocked bargaining negotiations and proceeded to resolve the issues via compulsory arbitration.
On October 23, 1983, the Minister of Labor awarded wage increases that improved upon PLDT’s last offer, including increased monthly wages and additional fringe benefits.
The improvements obtained from the arbitration served as the basis for the calculation of the contingent fee for the legal counsel.

On October 29, 1983, the Union’s Executive Board passed a resolution authorizing a deduction of P115 per employee to cover the legal services of Respondent Counsel.
Petitioners, representing a growing number of employees (from an initial 600 to 5,258), filed a letter-complaint on November 2, 1983, contesting the deduction—which was later corrected to P155 per employee—on several bases:

The deduction was deemed unreasonable.
It allegedly violated Article 242(o) of the Labor Code, which requires individual written authorization for check-offs.
The deduction process via a Board resolution and later a plebiscite did not fulfill the statutory requirements.

Respondents (the Union and Counsel) argued that the fee pertained solely to legal services during compulsory arbitration, distinguishing it from negotiation fees regulated under Article 242(o) of the Labor Code.
They maintained that the continuous presence of the counsel from September 8, 1983, until the arbitration decision on October 23, 1983, justified the fee.
Furthermore, the Union claimed that a plebiscite held on March 22, 1984, ratified their board resolution, thereby approving the deduction even though the question raised in the plebiscite was ambiguous.

On November 4, 1983, PLDT notified that the assessment had been withheld from the differential pay due to petitioners, pending proper authority to avoid involving management in the intra-union dispute.
On February 13, 1984, the Minister of Labor referred the dispute to the Bureau of Labor Relations since it was deemed an intra-union issue.
The Director of the Bureau of Labor Relations subsequently dismissed the employees’ complaint on February 18, 1985, relying on the plebiscite result which appeared to validate the deduction.

Article 222(b) of the Labor Code provides that no attorney’s fees or similar charges arising from collective bargaining should be imposed on individual union members; rather, such fees may be charged against union funds if agreed upon by the parties.
Article 242(o) mandates that any deduction from an employee’s monetary benefits requires an individual written authorization that specifies the amount, purpose, and beneficiary.
The Omnibus Rules Implementing the Labor Code further reinforce that any deduction from wages must have a basal legal authority and the employee’s explicit consent.

Petitioners challenged both the method of authorization (favoring individual written consent over a plebiscite) and the very imposition of the deduction from their monetary benefits.
They proposed that even if the fees were legally due, they should be charged against union funds rather than deducted directly from the amounts due to them as employees.

Whether the deduction (check-off) for attorney’s fees imposed on the monetary benefits of the PLDT employees violated Article 242(o) of the Labor Code by lacking individual written authorization.

Whether the context of compulsory arbitration, being a “mandatory activity,” exempts the deduction from the requirement of individual written authorization.

Whether, assuming the attorney’s fees were justified, they should properly be charged against union funds pursuant to Article 222(b) of the Labor Code rather than being deducted directly from employee benefits.

Whether the plebiscite and the subsequent Union resolution sufficiently satisfied the requisite legal consent required for check-offs from employees’ monetary benefits.