Peninsula Employees Union (PEU) vs. Esquivel, et al. Case Digest

Peninsula Employees Union (PEU) vs. Michael B. Esquivel, et al.

G.R. No. 218454. December 1, 2016

Facts:

On December 13, 2007, Peninsula Employees Union' (PEU) Board of Directors passed Local Board Resolution No. 12, series of 20078 authorizing, among others, the affiliation of PEU with NUWHRAIN, and the direct membership of its individual members thereto. On the same day, the said act was submitted to the general membership, and was duly ratified by 223 PEU members. Beginning January 1, 2009, PEU-NUWHRAIN sought to increase the union dues/agency fees from one percent (1% ) to two percent (2%) of the rank and file employees' monthly salaries, brought about by PEU's affiliation with NUWHRAIN, which supposedly requires its affiliates to remit to it two percent (2%) of their monthly salaries.

The non-PEU members objected to the assessment of increased agency fees arguing that: (a) the new CBA is unenforceable since no written CBA has been formally signed and executed by PEU-NUWHRAIN and the Hotel; (b) the 2% agency fee is exorbitant and unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory requirements for such increase.

Issues:

1. Whether PEU-NUWHRAIN has right to collect the increased agency fees.
2. Whether PEU-NUWHRAIN failed to comply with the mandatory requirements for such increase.
3. Whether the agency is exorbitant and unreasonable.

Rulings

1. Yes. The recognized collective bargaining union which successfully negotiated the CBA with the employer is given the right to collect a reasonable fee called "agency fee" from non-union members who are employees of the appropriate bargaining unit, in an amount equivalent to the dues and other fees paid by union members, in case they accept the benefits under the CBA. While the collection of agency fees is recognized by Article 259 (formerly Article 248) of the Labor Code, as amended, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the established principle that non-union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the bargaining union. In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed.

2. Yes. Case law interpreting Article 250 (n) and ( o ) of the Labor Code mandates the submission of three (3) documentary requisites in order to justify a valid levy of increased union dues. These are: (a) an authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (b) the secretary's record of the minutes of the meeting, which shall include the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees; and (c) individual written authorizations for check-off duly signed by the employees concerned. In the present case, however, PEU-NUWHRAIN failed to show compliance with the foregoing requirements. It attempted to remedy the "inadvertent omission" of the matter of the approval of the deduction of two percent (2%) union dues from the monthly basic salary of each union member.

While the matter of implementing the two percent (2%) union dues was taken up during the PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008, there was no sufficient showing that the same had been duly deliberated and approved. The minutes of the Assembly itself belie PEU-NUWHRAIN's claim that the increase in union dues and the corresponding check-off were duly approved since it merely stated that "the [two percent (2%)] Union dues will have to be implemented," meaning, it would still require the submission of such matter to the Assembly for deliberation and approval.

3. Yes. Having failed to establish due deliberation and approval of the increase in union dues from one percent ( 1 % ) to two percent (2% ), as well as the deduction of the two percent (2%) union dues during PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008, there was nothing to confirm, affirm, or ratify through the July 1, 2010 GMR. Contrary to the ruling of the OSEC in its March 6, 2012 Order, the July 1 2010 GMR, by itself, cannot justify the collection of two percent (2%) agency fees from the non-PEU members beginning July 2010. The Assembly was not called for the purpose of approving the proposed increase in union dues and the corresponding check-off, but merely to "confirm and affirm" a purported prior action which PEU-NUWHRAIN, however, failed to establish.

Corollarily, no individual check-off authorizations can proceed therefrom, and the submission of the November 2008 check-off authorizations becomes inconsequential. Jurisprudence states that the express consent of the employee to any deduction in his compensation is required to be obtained in accordance with the steps outlined by the law, which must be followed to the letter; however, PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is no legal basis to impose union dues and agency fees more than that allowed in the expired CBA, i.e., at one percent (1 %) of the employee's monthly basic salary.