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Radio Communication of the Philippines Inc. vs. Secretary of Labor, [G.R. No.

77959
January 9, 1989]
Post under case digests, labor law at Friday, March 02, 2012 Posted by Schizophrenic Mind
Facts: On May 4, 1981, petitioner, a domestic corporation engaged in the telecommunications
business, filed with the National Wages Council an application for exemption from the coverage
of Wage Order No. 1. The application was opposed by respondent United RCPI
Communications Labor Association (URCPICLA-FUR), a labor organization affiliated with
the Federation of Unions of Rizal (FUR).
On May 22, 1981, the National Wages Council disapproved said application and ordered
petitioner to pay its covered employees the mandatory living allowance of P2.00 daily effective
March 22, 1981.
As early as March 13, 1985, before the aforesaid case was elevated to this
Court, respondent union filed a motion for the issuance of awrit of execution, asserting therein
its claim to 15% of the total backpay due to all its members as "union service fee" for having
successfully prosecuted the latter's claim for payment of wages and for reimbursement of
expenses incurred by FUR and prayed for the segregation and remittance of said amount to
FUR thru its National President.
On October 24, 1985, without the knowledge and consent ofrespondent union, petitioner entered
into a compromise agreementwith Buklod ng Manggagawa sa RCPI-NFL (BMRCPI-NFL) as the
new bargaining agent of oppositors RCPI employees. Thereupon, the parties filed a joint motion
praying for the dismissal of the decision of the National Wages Council for it had already been
novated by the Compromise Agreement re-defining the rights and obligations of the
parties. Respondent Union on November 7, 1985, countered by opposing the motion and
alleging that one of the signatories thereof - BMRCPI-NFL is not a party in interest in the case
but that it was respondent Union which represented oppositors RCPI employees all the way from
the level of the National Wages Council up the Supreme Court. Respondent Union, therefore,
claimed that the Compromise Agreement is irregular and invalid, apart from the fact that there
was nothing to compromise in the face of a final and executory decision.
Director Severo M. Pucan issued an Order dated November 25, 1985 awarding to URCPICLAFUR and FUR 15% of the total backpay of RCPI employees as their union service fees, and
directing RCPI to deposit said amount with the cashier of the Regional Office for proper
disposition to said awardees. Despite said order, petitioner paid in full the covered employees on
November 29, 1985, without deducting the union service fee of 15%. In an order dated May 7,
1986, NCR officer-in-charge found petitioner RCPI and its employees jointly and severally liable
for the payment of the 15% union service fee amounting to P427,845.60 to
private respondentURCPICLA-FUR and consequently ordered the garnishment of petitioner's
bank account to enforce said claim.
Secretary of Labor and Employment issued an order on August 18, 1986 modifying the order
appealed from by holding petitioner solely liable to respondent union for 10% of the awarded
amounts as attorney's fees.
Issue: Whether or not public respondents acted with grave abuse of discretion amounting to
lack of jurisdiction in holding the petitioner solely liable for "union service fee
to respondent URCPICLA-FUR.
Held: No. Attorney's fee due the oppositor is chargeable against RCPI. The defaulting employer
or government agency remains liable for attorney's fees because it compelled the complainant to
employ the services of counsel by unjustly refusing to recognize the validity of the claim.
(Cristobal vs. ECC)

It is undisputed that oppositor (private respondent herein) was the counsel on record of the RCPI
employees in their claim for EC0LA under Wage Order No. 1 since the inception of the
proceedings at the National Wages Council up to the Supreme Court. It had, therefore, a
valid claim for attorney's fee which it called union service fee.
As is evident in the compromise agreement, petitioner was bound to pay only 30% of the amount
due each employee on November 30, 1985, while the balance of 70% would still be the subject
of renegotiation by the parties. Yet, despite such conditions beneficial to it, petitioner paid in full
the backpay of its employees on November 29, 1985, ignoring the service fee due the
private respondent. Worse, petitioner supposedly paid to one Atty. Rodolfo M. Capocyan the
10% fee that properly pertained to herein private respondent, an unjustified and baffling
diversion of funds.
Finally, petitioner cannot invoke the lack of an individual written authorization from the
employees as a shield for its fraudulent refusal to pay the service fee of private respondent. Be
that as it may, the lack thereof was remedied and supplied by the execution of thecompromise
agreement whereby the employees, expressly approved the 10% deduction and held petitioner
RCPI free from any claim, suit or complaint arising from the deduction thereof. When petitioner
was thereafter again ordered to pay the 10% fees to respondent union, it no longer had any
legal basis or subterfuge for refusing to pay the latter.
We agree that the Labor Code in requiring an individual written authorization as a prerequisite to
wage deductions seeks to protect the employee against unwarranted practices that would
diminish his compensation without his knowledge and consent. However, for all intents and
purposes, the deductions required of the petitioner and the employees do not run counter to the
express mandate of the law since the same are not unwarranted or without their knowledge and
consent. Also, the deductions for the union service fee in question are authorized by law and do
not require individual check-off authorizations.
GENERAL RUBBER AND FOOTWEAR CORPORATION, petitioner,
vs.
THE HON. FRANKLIN DRILON IN HIS CAPACITY AS THE MINISTER OF LABOR &
EMPLOYMENT and THE GENERAL RUBBER WORKERS' UNION-NATU, respondents.
FELICIANO, J.:
The present petition involves the question of whether or not union members who did not ratify a
waiver of accrued wage differentials are bound by the ratification made by a majority of the union
members.
On 26 December 1984, Wage Order No. 6 was issued, increasing the statutory minimum wage
rate (by P2.00) and the mandatory cost of living allowance (by P3.00 for non-agricultural
workers) in the private sector, to take effect on 1 November 1984, Petitioner General Rubber
and Footwear Corporation applied to the National Wages Council ("Council") for exemption from
the provisions of Wage Order No. 6. The Council, in an Order dated 4 March 1985, denied
petitioner's application, stating in part that:
[Y]ou are hereby ordered to pay your covered employees the daily increase
in statutory minimum wage rate of P 2.00 and living allowance of P3.00
effective November 1, 1984. ...
This decision is final. 1 (Emphasis supplied)

Petitioner filed a Motion for Reconsideration of this Order on 27 May 1985.


On 25 May 1985, some members of respondent General Rubber Workers' Union-NATU, led by
one Leopoldo Sto. Domingo, declared a strike against petitioner. 2 Three (3) days later, on 28
May 1985, petitioner and Sto. Domingo, the latter purporting to represent the striking workers,
entered into a Return-to-Work Agreement ("Agreement"), Article 4 of which provided:
4. The COMPANY agrees to implement in full Wage Order No. 6 effective
May 30, 1985, and agrees to withdraw the Motion for Reconsideration which
it filed with the National Wages Council in connection with the Application
for Exemption. In consideration, the UNION, its officers and members,
agrees not to demand or ask from the COMPANY the corresponding
differential pay from November 1, 1984 to May 29 1985 arising out of the
non-compliance of said wage order during the said period.3 (Emphasis
supplied)
This agreement was subsequently ratified on 30 July 1985 in a document entitled "Samasamang Kapasyahan sa Pagpapatibay ng Return-to-Work Agreement" 4 by some two hundred
and sixty-eight (268) members of respondent union, each member signing individually the
instrument of ratification.
Before the ratification of the Agreement, petitioner filed, on 5 June 1985, a Motion with the
Council withdrawing its pending Motion for Reconsideration of the Council's Order of 4 March
1985. By a letter dated 13 June 1985, the Council allowed the withdrawal of petitioner's Motion
for Reconsideration, which letter in part stated:
In view of your compliance with Wage Order No. 6 effective May 30,
1985 pursuant to the Return to Work Agreement ... , this Council interposes
no objection to your Motion to Withdraw ... 5 (Emphasis supplied)
Meanwhile, there were some one hundred (100) members of the union who were unhappy over
the Agreement, who took the view that the Council's Order of 4 March 1985 bad become final
and executory upon the withdrawal of petitioner's Motion for Reconsideration and who would not
sign the instrument ratifying the Agreement. On 10 July 1985, these minority union members
with respondent union acting on their behalf, applied for a writ of execution of the Council's
Order. 6
Petitioner opposed the Motion for a writ of execution, contending that the Council's approval of
its deferred compliance with the implementation of the Wage Order, 7 together with the majority
ratification of the Agreement by the individual workers, 8 bound the non-ratifying union members
represented by respondent union.
Respondent union countered that the Agreement despite the majority ratification was not
binding on the union members who had not consented thereto, upon the ground that ratification
or non-ratification of the Agreement, involving as it did money claims, was a personal right under
the doctrine of "Kaisahan ng Manggagawa sa La Campana v. Honorable Judge Ulpiano
Sarmiento and La Campana." 9
Finding for the Union members represented by respondent union, the then Ministry (now
Department) of Labor and Employment, in an order dated 20 September 1985 issued by
National Capital Region Director Severo M. Pucan, directed the issuance of a writ of execution
and required petitioner to pay the minority members of respondent union their claims for
differential pay under Wage Order No. 6, which totalled P90,090.00. 10

Petitioner then moved to quash the writ of execution upon the ground that the Council's order
could not be the subject of a writ of execution, having been superseded by the Agreement. 11 In
another Order dated 15 January 1986. Director Pucan, reversed his previous order and
sustained petitioner's contention that the minority union members represented by respondent
union were bound by the majority ratification, holding that the Council's 20 September 1985
Order sought to be enforced by writ of execution should not have been issued. 12
Respondent union filed a Motion for Reconsideration, which was treated as an appeal to the
Minister of Labor. In a decision dated 19 December 1986, the Minister of Labor set aside the
appealed Order of Director Pucan. The Minister's decision held that:
It is undisputed that the 100 numbers did not sign and ratify the Return-toWork Agreement and therefore they cannot be bound by the waiver of
benefits therein. This, in essence, is the ruling of the High Tribunal in the La
Campana case. Accordingly, the benefits under Wage Order No. 6 due
them by virtue of the final and executory Order of the National Wages
Council dated March 4, 1985 subsists in their favor and can be subject for
execution.
xxx xxx xxx
The writ of execution dated September 20, 1985 ... was clearly based on the
final Order of the National Wages Council sought to be enforced in a Motion
for Execution filed by the union. While the Return-to-Work Agreement was
mentioned in the writ, the respondent allegedly failing 'to comply with the
above-stated Agreement which had become final and executory,' we find
the Agreement indeed not the basis for the issuance of the writ.
WHEREFORE, the Order of the Director dated January 15, 1986 is hereby
set aside. Let a writ of execution be issued immediately to enforce the
payment of the differential pay under Wage Order No. 6 from November 1,
1984 to May 29, 1985 of the 100 workers who did not sign any waiver, in
compliance with the final Order of the National Wages Council. The entire
record is hereby remanded to the Regional Director, National Capital
Region for this purpose.
SO ORDERED . 13 (Emphasis supplied)
Not pleased with the adverse decision of the Minister, petitioner filed the instant Petition
for Certiorari.
Petitioner argues once again that the National Wages Council's Order of 4 March 1985 did not
become final and executory because it had been superseded by the Return-to-Work Agreement
signed by petitioner corporation and the union. At the same time, petitioner also argues that the
Return-to-Work Agreement could not be enforced by a writ of execution, because it was a
contractual document and not the final and executory award of a public official or agency.
Petitioner's contention is more clever than substantial. The core issue is whether or not Article 4
of the Return-to-Work Agreement quoted above, could be deemed as binding upon all members
of the union, without regard to whether such members had or had not in fact individually signed
and ratified such Agreement. Article 4 of that Agreement provided for, apparently, a quid pro
quo arrangement: petitioner agreed to implement in full Wage Order No. 6 starting 30 May
1985 (and not 1 November 1984, as provided by the terms of Wage Order No. 6) and to
withdraw its previously filed Motion for Reconsideration with the National Wages Council; in turn,
the union and its members would refrain from requiring the company to pay the differential pay

(increase in pay) due under Wage Order No. 6 corresponding to the preceding seven-month
period from 1 November 1984 to 29 May 1985.
Thus, Kaisahan ng Mangagawa sa La Campana v. Sarmiento, (supra) is practically on all fours
with the instant case. In La Campana, what was at stake was the validity of a compromise
agreement entered into between the union and the company. In that compromise agreement,
the union undertook to dismiss and withdraw the case it had filed with the then Court of Industrial
Relations, and waived its right to execute any final judgment rendered in that case. The CIR had
in that case, rendered a judgment directing reinstatement of dismissed workers and payment of
ten (10) years backwages. The Secretary of Labor held that that compromise agreement was
void for lack of ratification by the individual members of the union. The Supreme Court upheld
the decision of the Secretary of Labor, stating among other things that:
Generally, a judgment on a compromise agreement puts an end to a
litigation and is immediately executory. However, the Rules [of Court]
require a special authority before an attorney can compromise the litigation
of [his] clients. The authority to compromise cannot lightly be presumed and
should be duly established by evidence. (Esso Philippine, Inc. v. MME, 75
SCRA 91).
As aptly held by the Secretary of Labor, the records are bereft of showing
that the individual members consented to the said agreement. Now were the
members informed of the filing of the civil case before the Court of First
Instance. If the parties to said agreement acted in good faith, why did they
not furnish the Office of the president with a copy of the agreement when
they knew all the while that the labor case was then pending appeal
therein? Undoubtedly, the compromise agreement was executed to the
prejudice of the complainants who never consented thereto, hence, it is null
and void. The judgment based on such agreement does not bind the
individual members or complainants who are not parties thereto nor
signatories therein.
Money claims due to laborers cannot be the object of settlement or
compromise effected by a union or counsel without the specific individual
consent of each laborer concerned. The beneficiaries are the individual
complainants themselves. The union to which they belong can only assist
them but cannot decide for them. Awards in favor of laborers after long
years of litigation must be attended to with mutual openness and in the best
of faith. (Danao Development Corp. v. NLRC, 81 SCRA 487-505). Only thus
can we really give meaning to the constitutional mandate of giving laborers
maximum protection and security. It is about time that the judgment in Case
No. 584-V(7) be fully implemented considering the unreasonable delay in
the satisfaction thereof. This unfortunate incident may only weaken the
workingmen's faith in the judiciary's capacity to give them justice when
due. 14
xxx xxx xxx
(Emphasis supplied)
In the instant case, there is no dispute that private respondents had not ratified the Return-toWork Agreement. It follows, and we so hold, that private respondents cannot be held bound by
the Return-to-Work Agreement. The waiver of money claims, which in this case were accrued
money claims, by workers and employees must be regarded as a personal right, that is, a right
that must be personally exercised. For a waiver thereof to be legally effective, the individual

consent or ratification of the workers or employees involved must be shown. Neither the officers
nor the majority of the union had any authority to waive the accrued rights pertaining to the
dissenting minority members, even under a collective bargaining agreement which provided for a
"union shop." The same considerations of public policy which impelled the Court to reach the
conclusion it did in La Campana, are equally compelling in the present case. The members of
the union need the protective shield of this doctrine not only vis-a-vis their employer but also, at
times, vis-a-vis the management of their own union, and at other times even against their own
imprudence or impecuniousness.
It should perhaps be made clear that the Court is not here saying that accrued money claims
can never be effectively waived by workers and employees. What the Court is saying is that, in
the present case, the private respondents never purported to waive their claims to accrued
differential pay. Assuming that private respondents had actually and individually purported to
waive such claims, a second question would then have arisen: whether such waiver could be
given legal effect or whether, on the contrary, it was violative of public policy. 15 Fortunately, we
do not have to address this second question here.
Since Article 4 of the Return-to-Work Agreement was not enforceable against the nonconsenting union members, the Order of the National Wages Council dated 4 March 1985
requiring petitioner to comply with Wage Order No. 6 from 1 November 1984 onward must be
regarded as having become final and executory insofar as the non-consenting union members
were concerned. Enforcement by writ of execution of that Order was, therefore, proper. It follows
further that the decision of 19 December 1986 of the respondent Minister of Labor, far from
constituting a grave abuse of discretion or an act without or in excess of jurisdiction, was fully in
accordance with law as laid down in La Campana and here reiterated.
WHEREFORE, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs
against petitioner.