Palacol v.

Calleja
Facts:
-

Manila CCBPI Sales Force Union is the CB agent of all regular salesmen,
regular helpers, and relief helpers of the Manila Plant and Sales Office of
Coca-Cola Bottlers Phils.
Under the new CBA, employees were granted a general salary increase to be
given in lump sum
The Union President submitted to Coca-Cola the ratification by the union
members of the new CBA and authorization for the company to deduct union
dues equivalent to Php 20/month + 10% by way of special assessment from
the CBA lump-sum pay granted
As per the Unions Board resolution, the special assessment was for putting
up a cooperative and credit union, purchase vehicles and other items needed
for the officers and the general membership, and payment for services
rendered by union officers, consultants. However, there was a proviso stating
that the matter of allocation shall be at the discretion of the incumbent
President
The Authorization and CBA ratification was obtained through a secret
referendum, with 672 members authorizing the 10% special assessment (170
opposed). However, two more groups of members (170 and 185)
subsequently manifested their intention of withdrawing or disauthorizing the
deduction of any amount from their CBA lump sum
At this point, there were a total of 528 objectors, with the remainder of 272
supporters
Coca-Cola filed with the BLR an action for interpleader in order to resolve the
conflicting claims of the parties
Palacol et al, filed a motion/complaint for intervention, claiming to be among
those union members who either did not sign any individual written
authorization or those who subsequently withdrew their signatures
o 10% special assessment was a violation of Art. 241(o) 1 in relation to
Art. 222(b)2
Union countered that the deductions not only have the popular indorsement
and approval of the general membership, but likewise complied with the legal
requirements of Art. 241(n)3 and (o) since the board resolution had been duly

1 Art. 241. Rights and conditions of membership in a labor organization.(o) Other than for mandatory
activities under the Code, no special assessments, attorney's fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to 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;

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 attorney's
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.

3 Art. 241. 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

approved in a general membership meeting and that the collection of a

special fund for labor education and research is mandated
- Med-Arbiter: return the amount to personnel, deduction was unauthorized
- BLR, on appeal: special assessment was authorized
Issue(s):
w/n the deduction of the special assessment by the Union was made in accordance
with the LC
Held:
No. Union has failed to comply with the procedure to legitimize the special
assessment under Art. 241(n). It did not submit to the company a written resolution
of a majority of all the members at a general membership meeting duly called for
the purpose. In addition, it had the minutes recorded by a union director instead of
the union secretary. Neither did those minutes list the members present as well as
the votes cast.
What the Union did holding 3 local membership meetings on separate occasions,
on different dates, and at various venues was contrary to the requirements of a
general membership meeting. Likewise, merely submitting the minutes of the local
membership meetings to the company to authorize the deduction instead of the
written resolution adopted at the general meeting fell short of the legal
requirements. Therefore, the levy of the special assessment under (n) is invalid.

On the purpose of the levy:

Only the collection of a special fund for labor and education research is mandated.
The two other purposes (purchase of vehicles and other items, and payment of
services rendered by union officers) should be supported by the regular union dues.
Moreover, the payment of services is prohibited by Art. 222(b), falling under the
category of similar charge. The additional proviso giving the President unlimited
discretion to allocate the proceeds is also susceptible of abuse and must be
disallowed.

Can a special assessment be validly deducted by a labor union from the lump-sum
pay of its members, granted under a collective bargaining agreement (CBA),
notwithstanding a subsequent disauthorization of the same by a majority of the
union members?
No. Even assuming that it was validly levied, and granting that individual written
authorizations were obtained by the Union, there can be no valid check-off
considering that the majority of the union members had already withdrawn their
list of all members present, the votes cast, the purpose of the special assessment or fees and the
recipient of such assessments or fees. The record shall be attested to by the president;

individual authorizations. A withdrawal of individual authorizations is equivalent to

no authorization at all (cf. Galvadores v. Trajano).

Re: the form of the withdrawals:

Union disauthorizations are not valid for being collective in form
SC there is nothing in the law which requires that the disauthorization must be in
individual form