PACIFIC BANKING CORPORATION., petitioner, v. JACOBO C. CLAVE, Presidential Executive Assistant, JOAQUIN T.

VENUS, JR., Deputy Presidential Executive Assistant, PACIFIC BANKING CORPORATION EMPLOYEES
ORGANIZATION and JUANITO M. SAAVEDRA, respondents.
J. Aquino
March 7, 1984
G.R. No. 56965
Doctrine
Where the case was appealed to the Office of the President with respect to the CBA terms and conditions, not with
respect to attorneys fees, the Presidential Executive Assistant had no jurisdiction to make an adjudication on
Saavedras attorneys fees. Although the fees were a mere incident, nevertheless, the jurisdiction to fix the same and to
order the payment thereof was outside the pale of the Office of the Presidents appellate jurisdiction.
Summary
Pacific Banking and PABECO has been undergoing negotiations for a 3-year CBA since January 1979. In the
negotiations, Atty. Saavedra participated by filing some motions and a memorandum (claiming that he exerted effort to
expedite the case). Before the CBA was finalized, Atty. Saavedra filed a notice claiming his attorneys fees. The issue
of the payment of the attorneys fees is brought to the Office of the President. The said office (through Hon. Clave and
Hon. Venus Jr.) issued several resolutions (The first one being a refusal to intervene while the others ordered the bank
to deduct from the CBA benefits Atty. Saavedras attorneys fees). SC ruled that the OP have no jurisdiction to make
an adjudication on Atty. Saavedras attorneys fees and that pursuant to Art. 222 of the Labor Code the attorneys fees
should not be taken from the P345,000 since this is not a union fund.
Facts
Pacific Banking Corporation and Pacific Banking Corporation Employees Organization (PABECO) had been
undergoing negotiations since January 1979 for a collective bargaining agreement for the period of 1979 to
1981. Since theres a deadlock, the Minister of Labor assumed jurisdiction over the controversy.
Subsequently, the Deputy Minister rendered a decision directing the parties to execute a CBA following the
terms and conditions found in his decision.
In the CBA, the Union was represented by Paula Paug (Union President) and allegedly assisted as consultant
by National Union of Bank Employees or NUBEs President Jose Umali (PABECO was formerly affiliated
with NUBE). Atty. Juanito M. Saavedras earliest recorded participation in the case was on July 15 and 27,
1979 when he filed a motion for reconsideration and a supplemental motion (No action was taken on these
motions).
Both parties appealed to the Office of the President (OP). Meanwhile, the CBA negotiations ensued. In the 2 nd
phase, Union President Paug Participated. Atty. Saavedra filed a memorandum (claiming he exerted much
effort to expedite the decision). Consequently, the OP issued a resolution directing the parties to execute a
CBA containing the terms and conditions of employment embodied in the resolution.
June 3, 1980 CBA was finalized. According to the Unions counsel, monetary benefits worth P14 Million
was involved in this 3-year CBA. Before the CBAs finalization, Atty. Saavedra filed a notice of attorneys
lien on the case. Initially, the bank interposed no objection to the lawyers request in the interest of
harmonious labor-management relations (theoretically the actual ten percent attorneys fees may amount to
more than one million pesos).
OPs Resolutions Re: Propriety of Atty. Saavedras Attorneys Fee
1st Resolution (issued by Presidential Executive Assistant Jacobo Clave) Hon. Clave refused to intervene;
ruled that payment of attorneys fees was a question that should be settled by the union and its lawyer
themselves.
2nd Resolution Clarification of the 1st resolution. Hon. Clave directed that the attorneys fees may be
deducted from the total benefits and paid to Saavedra in accordance with Art. 1111 of the Labor Code.
3rd Resolution Hon. Clave held that it is the legal obligation of the bank to turn over to the union treasurer
ten percent of the award as Saavedras fees.
4th Resolution (issued by Deputy Presidential Executive Assistant Joaquin Venus Jr.) Hon. Venus Jr.
ordered the bank to pay the union treasurer the said attorneys fees less the amounts corresponding to the
protesting employees. He also ruled that Art. 2222 of the Labor Code (as amended by PD No. 1691) had no
retroactive effect on the case.
Pacific Banking assailed the resolutions issued by the OP in the SC via Petition for Certiorari. NUBE and
thirteen employees of the bank (PABECO members) intervened in the case and prayed that the said
resolutions be declared void and that the P345,000 be paid directly to the employees or union members.
Ratio/Issues

I.

Whether or not it is proper to deduct Atty. Saavedras Attorneys Fee from the benefits the employees will
get from the CBA. (NO)

Art. 111. Attorneys fees. (a) in cases in cases of unlawful withholding of wages the culpable party may be assessed attorneys fees equivalent
to ten percent of the amount of wages recovered.(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative
proceedings for the recovery of wages, attorneys fees which exceed ten percent of the amount of wages recovered.
2 ART. 222. Appearances and Fees. . . . (b) No attorneys fees, negotiation fees or similar charges of any kind arising from any collective
bargaining negotiations or conclusion of the collective agreement shall be imposed on any individual member of the contracting union: Provided,
however, that attorneys fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or
arrangement of any sort to the contrary shall be null and void.

(1) SEE DOCTRINE. Hon. Clave was right in adopting a hands-off attitude in his first resolution and holding
that the payment of the fees was a question between the lawyer and the union.
(2) Presidential Executive Assistant Clave should have noticed that article 111 refers to a proceeding for
the recovery of wages and not to CBA negotiations. The two are different or distinct proceedings.
(3) The case is also covered squarely by the mandatory and explicit prescription of Art. 222 which is another
guarantee intended to protect the employee against unwarranted practices that would diminish his
compensation without his knowledge and consent. Aside from Art. 222, Art. 2423 is also controlling.
(4) [FOCUS] It is established that Atty. Saavedra is entitled to the payment of his fees. However, Art. 222 of the
Labor Code asserts that the payment of the attorneys fees should be taken from a unions fund. In this
case, the amount of P345,000 is not considered as a union fund. This amount belongs to the employees (it is
the union which is obligated to Atty. Saavedra).
Held

Petition GRANTED. Resolutions REVERSED and SET ASIDE. Questioned amount (P345,000) and its increments
(if any) should be paid by the bank directly to its employees.
Prepared by: Ralph Cedie Fabon [Labor 2 | Atty. Daway]

ART. 242. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor
organization:
(n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written
resolution of a majority of all the members at a general membership meeting duly called for the purpose. The secretary of the organization shall
record the minutes of the meeting including 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. The record shall be attested to by the president; (o) Other than for mandatory activities under the Code, no
special assessment, attorneys fees, negotiation fees or any other extraordinary fees may be checked off from any amount due an employee
without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and
beneficiary of the deduction.