G.R. No. 85333 February 26, 1990
Carmelito L. Palacol, et al., petitioners, vs. Pura Ferrer-Calleja, Director of the Bureau of Labor Relations, Manila CCBPI Sales Force Union, and Coca-Cola Bottlers (Phils.), Inc., respondents.

FACTS

The Manila CCBPI Sales Force Union concluded a new Collective Bargaining Agreement (CBA) with Coca-Cola Bottlers (Phils.), Inc., which included a lump-sum pay benefit for employees. On the same day, the Union submitted to the Company a ratification of the CBA and an authorization for the deduction of union dues and a 10% special assessment from this lump-sum pay. The assessment’s purpose, per a Union Board Resolution, was to fund a cooperative, purchase vehicles, and pay for services rendered by union officers and consultants. The authorization was initially obtained through a secret referendum, with 672 members approving and 173 opposing out of about 800 total members.
Subsequently, 355 union members submitted documents withdrawing their authorization for the deduction. This, combined with the original 173 oppositors, resulted in 528 members objecting to the special assessment. The Company, faced with conflicting claims, filed an interpleader action with the Bureau of Labor Relations. Petitioners, union members, intervened, arguing the assessment violated the Labor Code.

ISSUE

Whether the 10% special assessment levied on the CBA lump-sum pay is valid despite the subsequent disauthorization by a majority of union members.

RULING

The Supreme Court ruled the special assessment was invalid. The legal logic centers on strict compliance with the Labor Code’s provisions on special assessments and check-offs. While Article 241(n) allows special assessments if authorized by a majority in a general meeting, and the Union initially secured such approval, the subsequent mass withdrawal of authorization by the majority (528 members) effectively nullified this consent. The law requires the sustained authorization of the majority.
More critically, the assessment violated Article 241(o) and Article 222(b). Article 241(o) mandates that for check-offs (deductions) from amounts due an employee, an individual written authorization is required, specifying the amount, purpose, and beneficiary. The general referendum did not satisfy this requirement for a check-off from the specific CBA lump sum. Furthermore, Article 222(b) prohibits imposing “attorney’s fees, negotiation fees or similar charges” on individual members arising from CBA conclusion. The Court found that using the assessment to pay for services rendered by union officers and consultants constituted a “similar charge” expressly forbidden by this provision. The additional proviso granting the Union President unlimited discretion in allocating the funds further rendered the assessment improper. Consequently, the Company was ordered to remit the withheld funds directly to the employees.