G.R. No. L-80485 November 11, 1988
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner, vs. DIRECTOR PURA FERRER-CALLEJA, RASIDALI C. ABDULLAH, ENFORCEMENT UNIT NCR ARBITRATION BRANCH, REYNALDO SANTOS, ET AL., respondents.

FACTS

Petitioner PNCC is the employer of the 388 private respondents, who are members of the PNCC Tollways Employees and Workers Union. The union’s Executive Board passed resolutions providing for its affiliation with a labor center and for the retention of Atty. Emmanuel Clave as labor advocate, with his compensation to be sourced from a special assessment equivalent to a percentage of the members’ monetary benefits. This assessment was to be collected via a check-off arrangement with PNCC. Relying on these resolutions and submitted individual check-off authorizations, PNCC deducted specified amounts from the salaries of affected employees beginning March 1985 and advanced a total of P120,000.00 to Atty. Clave.
The private respondents filed a petition with the DOLE against their union officers and PNCC, seeking to declare the assessment resolution null and void, to stop the deductions, and to obtain a refund of the amounts already collected. The case was certified to a Med-Arbiter. PNCC alleged it was not properly served with summons; notices were served on personnel assistants, a liaison officer, and a clerk, but not on its president, manager, secretary, or any director. Consequently, PNCC did not file any pleading or present its side. The Med-Arbiter ruled in favor of the employees, declaring the resolution void and ordering PNCC and the union to refund the deductions. This was affirmed by the Bureau of Labor Relations (BLR), which subsequently issued a writ of execution against PNCC.

ISSUE

The primary issues are: (1) Whether the BLR had jurisdiction over the case involving the validity and refund of check-off assessments; and (2) Whether petitioner PNCC was afforded due process.

RULING

The Supreme Court ruled that the BLR had jurisdiction. The case involved the interpretation and enforcement of a union constitution and by-laws regarding special assessments and check-offs, which constitutes an intra-union dispute under Article 226 of the Labor Code. This falls within the original and exclusive jurisdiction of the BLR Director, not the Labor Arbiter. The claim for refund is incidental to the main issue of the assessment’s validity.
However, the Court found that PNCC was denied due process. Service of summons was defective. Under the applicable NLRC rules, which apply the Rules of Court suppletorily, service upon a private corporation must be made on its president, manager, secretary, cashier, agent, or any director. The summonses served on a personnel assistant, liaison officer, and a clerk were insufficient, as these individuals were not the corporation’s authorized representatives for receiving judicial or quasi-judicial processes. Defective service meant PNCC was not duly notified and was deprived of its right to be heard and present evidence, such as its claim that only P155,800.00 was collected and that its advance payments should be credited. The subsequent filing of a motion for reconsideration on the writ of execution did not cure the initial denial of due process, as said motion was denied on technical grounds without addressing the merits. Therefore, the assailed orders and writs of execution against PNCC were set aside for being null and void.