Radio Communications of the Philippines, Inc. v. Secretary of Labor and Employment
REITERATIONFacts
The Antecedents: Petitioner RCPI applied for exemption from Wage Order No. 1, which was opposed by respondent URCPICLA-FUR. The National Wages Council disapproved the application and ordered RCPI to pay a mandatory living allowance. This decision was affirmed by the Office of the President and this Court. Respondent union filed motions for execution, claiming a 15% and later 20% "union service fee" from the total backpay due to its members for successfully prosecuting their claim. Procedural History: Petitioner entered into a compromise agreement with Buklod ng Manggagawa sa RCPI-NFL (BMRCPI-NFL), the new bargaining agent, without the knowledge and consent of URCPICLA-FUR. This agreement acknowledged RCPI's liability and stipulated payment terms, including a 10% attorney's fee to Atty. Rodolfo Capocyan, to be deducted from the remaining 70% of the backpay. URCPICLA-FUR opposed the joint motion to dismiss based on this compromise, asserting the invalidity of the agreement and its right to the service fee. The Regional Director issued an order awarding URCPICLA-FUR and FUR 15% of the total backpay as union service fees, directing RCPI to deposit the amount. RCPI paid the employees in full without deducting the fee, claiming the order was moot. The Regional Director later issued an order declaring the alias writ of execution fully satisfied. Subsequently, another order from the Regional Director held RCPI and its employees jointly and severally liable for the 15% union service fee and ordered garnishment. The Secretary of Labor modified this, holding RCPI solely liable for 10% of the awarded amounts as attorney's fees, citing the employer's liability for compelling litigation. The Petition: Petitioner RCPI filed a petition for certiorari, assailing the orders of the public respondents for allegedly acting with grave abuse of discretion amounting to lack of jurisdiction in holding petitioner solely liable for the "union service fee."
Issue(s)
Whether the public respondents acted with grave abuse of discretion amounting to lack of jurisdiction in holding the petitioner solely liable for "union service fee" to respondent URCPICLA-FUR. Whether a labor union, not being a member of the Bar, is entitled to attorney's fees or "union service fee." Whether the compromise agreement novated the prior decision of the National Wages Council.
Ruling
The petition is dismissed. The order of the Secretary of Labor dated August 16, 1986, is affirmed.
Ratio Decidendi
On the issue of grave abuse of discretion in holding petitioner solely liable for union service fee: The Court held that the contention of petitioner that the challenged order was issued with grave abuse of discretion for imposing an additional obligation not contemplated in the original decision is bereft of merit. While the original decision did not expressly provide for attorney's fees, this deficiency was deemed supplied or modified by the compromise agreement. The agreement contained an unqualified admission by petitioner acknowledging the 10% attorney's fee. Considering that the respondent union was found responsible for the successful prosecution of the case, its right to fees for services rendered, termed "union service fee," is indubitable. The Court found the compromise agreement to be suspect, especially since it was concluded behind the back of the private respondent and involved a lawyer and another union who had no prior involvement in the recovery of benefits. The petitioner's actions, such as paying employees in full without deducting the service fee despite notice of the order, and the purported payment to a fictitious Atty. Rodolfo Capocyan, indicated fraudulent intent to deprive the respondent union of its rightful fees. On the entitlement of a labor union to attorney's fees or union service fee: The Court found the pretension that the respondent union is not entitled to attorney's fee or union service fee because it is not a member of the Bar to be untenable and in disregard of the liberalized scheme of representation for labor under the Labor Code. Article 222 of the Labor Code allows non-lawyers to represent their organization or members thereof. The respondent union was the counsel on record for the RCPI employees from the National Wages Council up to the Supreme Court, thus having a valid claim for attorney's fees, which it termed "union service fee." The Court noted that the claim was basically for attorney's fees, and RCPI admitted that the union service fee was "for Compensation for services rendered by the union." On whether the compromise agreement novated the prior decision: The Court viewed the compromise agreement with skepticism, noting it was executed without the consent of the private respondent and attempted to novate a final and executory decision. The Court found that there could have been no valid novation because the pre-existing obligation and the new one were not absolutely incompatible. Instead, the compromise agreement expressly recognized the obligations under the judgment and provided a method for their satisfaction, effectively giving RCPI more time to comply. The judgment was not satisfied until the terms of the agreement were fully complied with. The Court also pointed out that the compromise agreement's provision for a 10% attorney's fee to Atty. Capocyan was a diversion of funds that properly pertained to the private respondent, especially since Atty. Capocyan was found to be a fictitious character. The Court concluded that the petitioner's actions, including the compromise agreement and the payment to employees, were part of a fraudulent scheme to deprive the respondent union of its fees.
Main Doctrine
A labor union, even if not a member of the Bar, can claim attorney's fees or 'union service fee' for successfully prosecuting a case on behalf of its members, as this is sanctioned by Article 222 of the Labor Code, and such claim is chargeable against the employer who compelled the employees to litigate.