Caption:

Title of the case: Vengco v. Trajano

Citation: G.R. No. 74453
Date Promulgated: May 5, 1989
Respondents: Hon. Cresenciano B. Trajano, in his capacity as Director of the Bureau of Labor
Relations and Emmanuel Timbungco
Petitioners: Ambrocio Vengco, Ramon Moises, Eugenia Reyes, Rafael Wagas and 80 others per
attached list
Ponente: Justice Salvador Medialdea

Facts:
The Management of the Anglo-American Tobacco Corporation and the Kapisanan ng
Manggagawa sa Anglo-American Tobacco Corporation entered into a compromise agreement. In
the said agreement, 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 and other benefits.
The respondent union president have received the money that was paid through installments.
Herein, the petitioner union members alleged that Timbungco was not authorized by the union
workers to get the money and the 10% which was deducted to pay for attorney’s fees without
their written authorization.
Petitioners filed a complaint with the Ministry of Labor. Herein after, Med-Arbiter Rodriguez
issued an order to dismiss the complaint for the lack of merit.
Vengco, et. al appealed the order to the Bureau of Labor Relations. The instant appeal was
granted and the Med-Arbiter’s order was set aside. Timbungco is ordered to render a full
accounting of 150,000.00 and to publish the union’s bulleting board the list of all recipient union
members and the respective amounts they have received. Further, the respondent is expelled as
president of the FOITAF.
Timbungco filed a motion for reconsideration of the aforementioned decision while Vengco, et.
al. filed their opposition to the said motion.
The Officer-in-Charge Calaycay set aside the previous resolution.

Issue:
Whether or not the 10% attorney’s fees from petitioners’ backwages were validly deducted
Ruling:
No. The attorney’s fees was not validly deducted from Timbungco. Pursuant to Article
241 (o) of the Labor Code which states the rights and conditions of membership in a labor
organization. It states, 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.
A mandatory activity has been defined as a judicial process of settling dispute laid down
by the law. In the present case, the amicable settlement entered into by the management and the
union cannot be considered as a mandatory activity under the Code. Although the union had filed
a claim for emergency cost of living allowance and other benefits, this case never reached its
conclusion in view of the parties’ agreement. Further, it is not shown from the records that Atty.
Sebastian was instrumental in foregoing the said agreement on behalf of the union members.
The union never authorized, so they had no knowledge of the deduction of 10%
attorney’s fees until it was actually effected. Consequently, the deduction was not valid. The law
is requires the individual written authorization of each employee concerned, to make the
deduction of attorney’s fees valid. The Court found that the deduction of 10% for attorney’s fees
is illegal and void for failure to comply with the requirements provided by law and Timbangco’s
penalty of expulsion is justified. Hence, the petition is granted. The assailed orders of the OIC
and respondent Director Trajano are reversed and set aside.