Good afternoon!

Well settled is the rule that the employer is prohibited from making any deductions from the wages of his employees. One
of the exceptions to such rule is deductions made for agency fees from non-union members who accept the benefits under
the CBA negotiated by the bargaining union. The pertinent provision of the Labor Code provides;

Article 259[248]. Unfair Labor Practices of Employers. – It shall be unlawful for an employer to commit any
of the following unfair labor practice:

(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. Nothing in this Code or in any
other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a
condition for employment, except those employees who are already members of another union at the time
of the signing of the collective bargaining agreement.

Employees of an appropriate collective bargaining agent may be assessed a reasonable fee equivalent to the
dues and other fees paid by members of the recognized bargaining agent, if such non-union members
accept the benefits under the collective agreement: Provided, that the individual authorization required
under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized
collective bargaining agent.

As held in the case of Holy Cross of Davao College Inc. vs. Joaquin, 331 Phil. 680, 692 (1996) and reiterated in the case
of Del Pilar Academy vs. Del Pilar Academy Union, G.R. No. 170112, April 30, 2008;

“The employee's acceptance of benefits resulting from a collective bargaining agreement justifies the
deduction of agency fees from his pay and the union's entitlement thereto. In this aspect, the legal basis of
the union's right to agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the
established principle that non-union employees may not unjustly enrich themselves by benefiting from
employment conditions negotiated by the bargaining union.”

The Supreme Court in the above case said that such form of deduction does not require written authorization of the
non-bargaining union member concerned.

After all, a non-bargaining union member has the option to accept or reject the benefits flowing from the CBA. The
moment the non-bargaining union member accepts the benefits from the CBA, the duty of the employer to check-
off the amount of the agency fees from the former’s wage begins.

The only limitations provided for under the Labor Code are; (1) the agency fee should be reasonable in amount;
and (2) the agency fee should be equivalent to the dues and other fees paid by members of the recognized collective
bargaining agent.