Rights and conditions of membership in labor organizations

Being a member of a labor organization comes with rights and conditions.

1. Concept

The following are the rights and conditions of membership in a labor organization:

1) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;

2) The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;

3) The members shall directly elect their officers in the local union, as well as their national officers in the national union or federation to which they or their local union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirement for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization;

4) The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision in behalf of the general membership;

5) No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity;

6) No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;

7) No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;

8) Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

9) The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

10) Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.

   Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, That failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization;

11) The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;

12) The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:

a) At least once a year within thirty (30) days after the close of its fiscal year;

b) At such other times as may be required by a resolution of the majority of the members of the organization; and,

c) Upon vacating his office.

   The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor.

13) The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours;

14) 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 in 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.

15) 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; and,

16) It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws. (Article 250, P.D. 442, Labor Code)

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities. (Paragraph 2, Article 250, Ibid.)

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty. (Paragraph 3, Article 250, Ibid.)

Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts. (Paragraph 4, Article 250, Ibid.)

2. Check-offs and assessments

a. Check-offs

“Check-off” – refers to “a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from its employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the union.” (ABS-CBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Corp., G.R. No. 106518, 11 March 1999)

In check-off, the employer, on agreement with the Union, or on prior authorization from employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the union. It assures continuous funding; for the labor organization. As [the Supreme Court] has acknowledged, the system of check-off is primarily for the benefit of the union and only indirectly for the individual employees. (Gabriel v. Secretary of Labor, G.R. No. 115949, 16 March 2000)

1) Legal basis

The legal basis of check-off is thus found in statute or in contract. Statutory limitations on check-offs generally require written authorization from each employee to deduct wages; however, a resolution approved and adopted by a majority to the union members at a general meeting will suffice when the right to check-off has been recognized by the employer, including collection of reasonable assessments in connection with mandatory activities of the union, or other special assessments and extraordinary fees. (Holy Cross of Davao College, Inc. v. Hon. Joaquin, G.R. No. 110007 18 October 1996)

2) Pertains to local union

When so stipulated in a collective bargaining agreement, or authorized in writing by the employees concerned — the Labor Code and its Implementing Rules recognize it to be the duty of the employer to deduct sums equivalent to the amount of union dues from the employees’ wages for direct remittance to the union, in order to facilitate the collection of funds vital to the role of the union as representative of employees in a bargaining unit if not, indeed, to its very existence. And it may be mentioned in this connection that the right to union dues deducted pursuant to a check-off, pertains to the local union which continues to represent the employees under the terms of a CBA, and not to the parent association from which it has disaffiliated. (Ibid.)

2) Check-off of agency fee for non-members

The collection of agency fees in an amount equivalent to union dues and fees, from employees who are not union members, is recognized by Article [259] (e) of the Labor Code… (Del Pilar Academy v. Del Pilar Academy Employees Union, G.R. No. 170112, 30 April 2008)

a) Authorization not necessary

When so stipulated in a collective bargaining agreement or authorized in writing by the employees concerned, the Labor Code and its Implementing Rules recognize it to be the duty of the employer to deduct the sum equivalent to the amount of union dues, as agency fees, from the employees’ wages for direct remittance to the union. The system is referred to as check off. No requirement of written authorization from the non-union employees is necessary if the non-union employees accept the benefits resulting from the CBA. (Del Pilar Academy v. Del Pilar Academy Employees Union, supra. )

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. (Holy Cross of Davao College, Inc. v. Hon. Joaquin, G.R. No. 110007 18 October 1996)

DEL PILAR ACADEMY v. DEL PILAR ACADEMY EMPLOYEES UNION, G.R. No. 170112, 30 April 2008)

⦁ DEL PILAR admitted its failure to deduct the agency fees from the salaries of non-union employees, but justifies the non-deduction by the absence of individual written authorization. It posits that Article [259] (e) is inapplicable considering that its employees derived no benefits from the CBA. The annual salary increase of its employee is a benefit mandated by law, and not derived from the CBA. According to DEL PILAR, the Department of Education, Culture and Sports (DECS) required all educational institutions to allocate at least 70% of tuition fee increases for the salaries and other benefits of teaching and non-teaching personnel; that even prior to the execution of the CBA in September 1994, DEL PILAR was already granting annual salary increases to its employees. Besides, the non-union employees objected to the deduction; hence, a written authorization is indispensable to effect a valid check off. DEL PILAR urges this Court to reverse the CA ruling insofar as it ordered the deduction of agency fees from the salaries of non-union employees, arguing that such conclusion proceeds from a misplaced premise that the salary increase arose from the CBA.

⦁ The argument cannot be sustained.

⦁ Contrary to what DEL PILAR wants to portray, the grant of annual salary increase is not the only provision in the CBA that benefited the non-union employees. The UNION negotiated for other benefits, namely, limitations on teaching assignments to 23 hours per week, additional compensation for overload units or teaching assignments in excess of the 23 hour per week limit, and payment of longevity pay. It also negotiated for entitlement to summer vacation leave with pay for two (2) months for teaching staff who have rendered six (6) consecutive semesters of service. For the non-teaching personnel, the UNION worked for their entitlement to fifteen (15) days leave with pay.13 These provisions in the CBA surely benefited the non-union employees, justifying the collection of, and the UNION’s entitlement to, agency fees.

⦁ Accordingly, no requirement of written authorization from the non-union employees is needed to effect a valid check off. Article 248(e) makes it explicit that Article 241, paragraph (o),14 requiring written authorization is inapplicable to non-union members, especially in this case where the non-union employees receive several benefits under the CBA.

3) Wage deduction

a) Employer refuses or fails to deduct

No provision of law makes the employer directly liable for the payment to the labor organization of union dues and assessments that the former fails to deduct from its employees’ salaries and wages pursuant to a check-off stipulation. The employer’s failure to make the requisite deductions may constitute a violation of a contractual commitment for which it may incur liability for unfair labor practice. But it does not by that omission, incur liability to the union for the aggregate of dues or assessments uncollected from the union members, or agency fees for non-union employees. (Holy Cross of Davao College, Inc. v. Hon. Joaquin, supra.)

Check-offs in truth impose an extra burden on the employer in the form of additional administrative and bookkeeping costs. It is a burden assumed by management at the instance of the union and for its benefit, in order to facilitate the collection of dues necessary for the latter’s life and sustenance. But the obligation to pay union dues and agency fees obviously devolves not upon the employer, but the individual employee. It is a personal obligation not demandable from the employer upon default or refusal of the employee to consent to a check-off. The only obligation of the employer under a check-off is to effect the deductions and remit the collections to the union. The principle of unjust enrichment necessarily precludes recovery of union dues — or agency fees — from the employer, these being, to repeat, obligations pertaining to the individual worker in favor of the bargaining union. Where the employer fails or refuses to implement a check-off agreement, logic and prudence dictate that the union itself undertake the collection of union dues and assessments from its members (and agency fees from non-union employees); this, of course, without prejudice to suing the employer for unfair labor practice. (Ibid.)

4) Reasonable, not excessive

5) Co-terminus

Authorization to effect a check-off of union dues is co-terminous with the union affiliation or membership of employees. (Holy Cross of Davao College, Inc. v. Hon. Joaquin, supra.)

b. Assessments

Paragraph (n) refers to “levy” while paragraph (o) refers to “check-off” of a special assessment. Both provisions must be complied with. Under paragraph (n), the Union must 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, the secretary of the organization must record the minutes of the meeting which, in turn, must include, among others, the list of all the members present as well as the votes cast. (Palacol v. Ferrer-Calleja, G.R. No. 85333, 26 February 1990)

Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order that a special assessment may be validly checked-off. (Ibid.)

1) Requisites

Art. [250] has three (3) requisites for the validity of the special assessment for union’s incidental expenses, attorney’s fees and representation expenses. These are:

1) Authorization by a written resolution of the majority of all the members at the general membership meeting called for the purpose;

2) Secretary’s record of the minutes of the meeting; and

3) Individual written authorization for check off duly signed by the employees concerned. (Gabriel v. Secretary of Labor, supra.)

a) Authorization via written resolution of majority

ABS-CBN SUPERVISORS EMPLOYEES UNION MEMBERS v. ABS-CBN BROADCASTING CORP., G.R. No. 106518, 11 March 1999

⦁ [The Union] further contend that Article 241 (n) of the Labor Code, as amended, on special assessments, contemplates a general meeting after the conclusion of the collective bargaining agreement.

⦁ Subject Article does not state that the general membership meeting should be called after the conclusion of a collective bargaining agreement. Even granting ex gratia argumenti that the general meeting should be held after the conclusion of the CBA, such requirement was complied with since the May 24, 1991 General Membership Meeting was held after the conclusion of the Collective Bargaining Agreement, which was signed and concluded on December 7, 1989.

⦁ Considering that the three requisites afforesaid for the validity of a special assessment were observed or met, we uphold the validity of the ten percent (10%) special assessment authorized in Article XII of the CBA.

b) Secretary’s record of the minutes of the meeting

PALACOL v. FERRER-CALLEJA, G.R. No. 85333, 26 February 1990)

⦁ As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of paragraph (n). It held local membership meetings on separate occasions, on different dates and at various venues, contrary to the express requirement that there must be a general membership meeting. The contention of the Union that “the local membership meetings are precisely the very general meetings required by law” is untenable because the law would not have specified a general membership meeting had the legislative intent been to allow local meetings in lieu of the latter.

⦁ It submitted only minutes of the local membership meetings when what is required is a written resolution adopted at the general meeting. Worse still, the minutes of three of those local meetings held were recorded by a union director and not by the union secretary. The minutes submitted to the Company contained no list of the members present and no record of the votes cast. Since it is quite evident that the Union did not comply with the law at every turn, the only conclusion that may be made therefrom is that there was no valid levy of the special assessment pursuant to paragraph (n) of Article [251] of the Labor Code.

c) Individual written authorization for check-off

PALACOL v. FERRER-CALLEJA, G.R. No. 85333, 26 February 1990)

⦁ Even assuming that the special assessment was validly levied pursuant to paragraph (n), and granting that individual written authorizations were obtained by the Union, nevertheless there can be no valid check-off considering that the majority of the union members had already withdrawn their individual authorizations. A withdrawal of individual authorizations is equivalent to no authorization at all. Hence, the ruling in Galvadores that “no check-offs from any amounts due employees may be effected without an individual written authorization signed by the employees…” is applicable.

⦁ The Union points out, however, that said disauthorizations are not valid for being collective in form, as they are “mere bunches of randomly procured signatures, under loose sheets of paper.” The contention deserves no merit for the simple reason that the documents containing the disauthorizations have the signatures of the union members. The Court finds these retractions to be valid. There is nothing in the law which requires that the disauthorization must be in individual form.

⦁ Moreover, it is well-settled that “all doubts in the implementation and interpretation of the provisions of the Labor Code… shall be resolved in favor of labor.” And as previously stated, labor in this case refers to the union members, as employees of the Company. Their mere desire to establish a separate bargaining unit, albeit unproven, cannot be construed against them in relation to the legality of the questioned special assessment. On the contrary, the same may even be taken to reflect their dissatisfaction with their bargaining representative, the respondent-Union, as shown by the circumstances of the instant petition, and with good reason.

[A]ttorney’s fees may not be deducted or checked off from any amount due to an employee without his written consent. (Gabriel v. Secretary of Labor, supra.)

References

⦁ Book V, Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

⦁ Book V, Omnibus Rules Implementing the Labor Code

⦁ DOLE Department Order No. 40, Series of 2003

⦁ DOLE Department Order No. 40-A-I, Series of 2003

⦁ DOLE Department Order No. 40-B, Series of 2003

⦁ DOLE Department Order No. 40-C, Series of 2004

⦁ DOLE Department Order No. 40-D, Series of 2005

⦁ DOLE Department Order No. 40-F-3, Series of 2008

⦁ DOLE Department Order No. 40-G-03, Series of 2010

⦁ DOLE Department Order No. 40-I, Series of 2015

⦁ DOLE Department Order No. 15, Series of 2015

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/Updated: February 9, 2023