VENGCO vs TRAJANO (May 5, 1989)

[AMBROCIO VENGCO, RAMON MOISES, EUGENIA REYES, RAFAEL WAGAS and 80 others per attached list, petitioners vs. HON. CRESENCIANO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations and EMMANUEL TIMBUNGCO, respondents.] Ponente: Medialdea, J. Nature: Petition for certiorari FACTS: -The Management of the Anglo-American Tobacco Corporation and the Kapisananng Manggagawasa Anglo-American Tobacco Corporation (FOITAF) entered into a compromise agreement. -The company is to pay the union members 150k for their claims arising from unpaid emergency cost of living allowance (ECOLA) and other benefits which were the subject of their complaint before the Ministry of Labor. -Timbungco (Union President) received the money in installments and distributed it among the members. Vengco et al (union members) aver that Timbungco was not authorized to get the money and that 10% attorneys fees had been deducted from the 150k without their written authorization in violation of 241 (o). They demanded accounting from Timbungco which the latter did not give. -Vengco et al filed a complaint against Timbungco with the Ministry of Labor. - Timbungco alleged among others, that he was authorized by a resolution signed by the majority of the union members to receive and distribute the 150k among workers; that the 10% attorney's fees was in relation to the claim for payment of ECOLA before the MoL which is totally distinct and separate from the negotiation of the CBA; and that the deduction was in accordance with Section II, Rule No. VIII, Book No. III of the Rules and Regulations implementing the Labor Code and therefore, no authorization from the union members is required. -Med Arbiter dismissed the complaint for lack of merit -Vengco et al appealed to the Bureau of Labor Relations -Director Trajano of the Bureau of Labor Relations granted the appeal and ordered Timbungco to render a full accounting of the 150k and to publish in the unions bulletin board the recipient union mems and the respective amount they received -Timbungco filed a MfR.Vengco et al filed opposition to said motion. -Officer in Charge Calaycay set aside the decision and ordered an audit examination of the Books of Account of the union. -Vengco sought recon contending that the examination of the books of accounts of the union is irrelevant considering that the issue involved in the case does not consist of union funds but back pay and that Timbungco did not remit the money to the union treasurer so the amount was not entered in the records of the union. -Trajano denied the motion for recon and affirmed the audit of the Books of Account. -Hence this petition ISSUES 1. WON Timbunco is guilty of illegally deducting 10% attorneys fees from backwages YES. 2. WON Trajano gravely abused discretion amounting to lack of jurisdiction in ordering examination of union books instead of affirming his previous order expelling Timbungco and ordering him to render accounting - YES

RATIO: 1. Art.241 states that no attorneys fees may be checked off from any amount due an employee without individual written authorization duly signed by employee which states amount, purpose, and beneficiary of deduction. Attorneys fees may not be deducted except for mandatory activities1. Here, the amicable settlement entered by management and union cant be a mandatory activity. Although union did claim for ECOLA before Ministry of Labor, this case never reached its conclusion in view of the parties agreement. It was also not shown that Atty. Sebastian was instrumental in forging the said agreement. Also, Timbungco says that the Kapasiyahan gave him authority to deduct but the Kapasiyahan was defective (it was not dated, pages were not captioned, did not state purpose) and so the signatories were not properly apprised and had no knowledge of the deduction. The Kapasiyahan merely indicated intention of workers to get claim on first week and cant confer authority upon Timbungco authority to receive benefits for them. Lastly, BookIII,RuleVIII,SecII of IRR (cited by Timboncgo) which disposes of the written authorization, does not apply because such applies when theres judicial or administrative proceedings for recovery of wages. In this case, the benefits consist of unpaid ECOLA2 which are distinct from wages. Also, the payment of benefits were effected through settlement and not administrative proceedings. 2. Timbungco should bear consequences and be expelled. Also, the issue does not touch on union dues or funds and money turned over was not given to the treasurer nor entered into the books, thus orders have no basis.

DISPOSITIVE:

ACCORDINGLY, the petition is granted. The assailed Orders dated May 23, 1983 of Officer-in-Charge Victoriano R. Calaycay of the Bureau of Labor Relations, and April 2, 1986 of respondent Director Cresenciano B. Trajano of the same Bureau are REVERSED and SET ASIDE and the latter's decision dated December 29, 1982 is hereby reinstated. No costs. SO ORDERED. VOTE: 1st Division. Narvasa, Cruz, and Grio-Aquino, JJ., concur. Gancayco, J., is on leave.

1 Judicial process of settling dispute laid down by the law 2 Allowances are benefits over and above basic salaries.