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Vengco vs Trajano Facts: 1.

Sometime in the latter part of 1981, the Management of the Anglo-American Tobacco Corporation and the Kapisanan ng Manggagawa sa Anglo-American Tobacco Corporation (FOITAF) entered into a compromise agreement whereby the company will pay to the union members the sum of P150,000.00 for their claims arising from the unpaid emergency cost of living allowance (ECOLA) 2. Respondent Emmanuel Timbungco who is the union president received the money which was paid in installments. Thereafter, he distributed the amount among the union members. Petitioners Ambrocio Vengco, Ramon Moises, Rafael Wagas and 80 others (Vengco, et al., for short) who are union members noted that Timbungco was not authorized by the union workers to get the money; and that ten percent (10%) of the P150,000.00 had been deducted to pay for attorney's fees without their written authorization in violation of Article 242(o) of the Labor Code. 3. Vengco, et al. filed a complaint with the Ministry of Labor praying for: "(1) the expulsion of Emmanuel Timbungco as president of the union for violation of (the) union constitution and by-laws and the rights and conditions of union members under the Labor Code; (2) an order to require Timbungco to render an accounting of how the P150,000.00 was distributed; and (3) an order to require private respondent to publish in the bulletin board the list of the members and the corresponding amount they each received from the P150,000.00." 4. Timbungco alleged among others, that he was authorized by a resolution signed by the majority of the union members to receive and distribute the P150,000.00 among the workers; that the computation of the benefits was based on the payroll of the company; that the ten percent (10%) attorney's fees was in relation to the claim of the local union for payment of emergency cost of living allowance before the Ministry of Labor which is totally distinct and separate from the negotiation of the CBA 5. Timbungco was found guilty by the BLR and expelled as president of the organization. Issue: Whether Respondent is guilty of illegally deducting 10% attorneys fees from petitioner? Held:

Article 241 (o) of the Labor Code provides:

ART. 241. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor organization. x x x. (o) Other than for mandatory activities under the Code, no special assessment, attorney's 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 an employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction.
It is very clear from the above-quoted provision that attorney's fees may not be deducted or checked off from any amount due to an employee without his written consent except for mandatory activities under the Code. A mandatory activity has been defined as a judicial process of settling dispute laid down by the law. In the instant case, the amicable settlement entered into by the management and the union can not be considered as a mandatory activity under the Code. It is true that the union filed a claim for emergency cost of living allowance and other benefits before the Ministry of Labor. But this case never reached its conclusion in view of the parties' agreement. It is not also shown from the records that Atty. Benjamin Sebastian was instrumental in forging the said agreement on behalf of the union members. The Kapisayahan which respondent maintain gave him the authority to deduct is not valid. It merely indicated the intention of the workers to get their claim on the first week of December, 1981 and to inform Timbungco of their intention. This statement can not be construed to confer upon Timbungco the authority to receive the fringe benefits for the workers. Absent such authority, Timbungco should not have kept the money to himself but should have turned it over to the Union Treasurer. He, therefore, exceeded his authority as President of the Union.