By Atty. Julius Gregory B. Delgado

SOUTH COTABATO INTEGRATED PORT SERVICES, INC. (SCIPSI) VS. BUREAU OF LABOR RELATIONS, ET AL., G.R. NO. 235569 (DECEMBER 13, 2023): NON-REMITTANCE OF COLLECTED UNION MEMBER DUES UNDER A CHECK-OFF PROVISION OF THE COLLECTIVE BERGAINING AGREEMENT NOT AN INTRA-UNION DISPUTE COGNIZABLE BY THE MED-ARBITER BUT AMOUNTS TO AN UNFAIR LABOR PRACTICE COGNIZABLE BEFORE THE LABOR ARBITER

The case stems from a Petition filed by Makar Port Labor Organization (MPLO), through its President, Mario Marigon (Marigon), for Unfair Labor Practice against South Cotabato Integrated Port Services, Inc. (SCIPSI) before the Department of Labor and Employment (DOLE) Regional Office No. 12, in Koronadal City, South Cotabato. MPLO was the exclusive bargaining agent of the rank-and-file employees of SCIPSI from October 12, 1999 to February 2007. Marigon alleged that SCIPSI used to collect monthly dues from the members of the MPLO through salary deduction and remit the same to the union by virtue of their Collective Bargaining Agreement (CBA). However, from August 2006 to February 2007, SCIPSI withheld collections despite demands from MPLO and the clarification issued by the DOLE Regional Director. Marigon maintains that the illegal withholding of the union dues amounts to harassment and interference in the affairs of the union. 

On the other hand, SCIPSI countered that since Marigon was dismissed from the Company, he had no legal capacity to sue on behalf of the MPLO and demand remittance of the union dues collected from August 2006 to February 2007. SCIPSI averred that while it was willing to remit the collected union dues, it was not clear who was the duly authorized person to receive the same since MPLO has a new set of officers. Finally, SCIPSI argued that since it amounts to Unfair Labor Practice, the cause of action had already prescribed considering that the complaint was filed only on August 16, 2010.

The Med-Arbiter issued an Order directing MPLO to determine and specify who is authorized to receive unremitted union dues. SCIPSI was also ordered to release in favor of MPLO the unremitted union dues collected in favor of MPLO from August 2006 to February 11, 2010. Upon reaching the Board of Labor Relations (BLR), the BLR upheld the ruling of the Med-Arbiter and rendered that the case does not involve ULP but an intra-union dispute because it is a dispute between two (2) factions of MPLO. Dissatisfied with the ruling, SCIPSI filed a Petition for Certiorari before the Court of Appeals but was dismissed since the appellate court affirmed the findings of the Med-Arbiter and BLR that the dispute is an intra-union dispute. Also, the Court of Appeals held that SCIPSI filed a wrong remedy since the decision of the BLR is appealable to the Secretary of Justice.

On a Petition for Review on Certiorari under Rule 45, the Supreme Court reversed and set aside the ruling of the Court of Appeals. The Supreme Court held that the act of withholding collected union dues from the salaries of the employees by way of check-off as allowed under the CBA is a form of Unfair Labor Practice, particularly Par. (a) of Article 259 [248] which makes it unlawful for the employer “to interfere with, restrain or coerce employees in the exercise of their right to self-organization”. The Court held that an employer incurs liability under Article 259 (a) when it engages in acts that reasonably tend to interfere with the employees’ right to self-organization. Direct evidence of intimidation or coercion by the employer is not required, if it can be reasonably inferred that the anti-union conduct of the employer has an adverse effect on self-organization and collective bargaining.

The Supreme Court cited the case of Holy Cross of Davao College, Inc. vs. Joaquin, G.R. No. 110007 (October 18, 1996), when it held that an employer may even be held for ULP when it fails to deduct union dues and assessments from employees’ salaries by virtue of a check-off provision of the CBA. The Court explained in that case that an employer’s full compliance with the check-off provision in the CBA is vital to union’s role of advocating for the interests of the members of the bargaining unit. 

The Supreme Court clarified that the instant dispute cannot be an intra-union dispute which refers to any conflict between and among union members, including grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union’s constitution and by-laws, or disputes arising from chartering or affiliation of union. DOLE Department Order No. 40-03, as amended by DOLE Department Order No. 40-F-03-08, enumerates the instances of intra-union dispute and the instant case does not fall to any of these cases.

Finally, the Court held, “It bears reiterating that the process of check-off, which involves the deduction of fees from the employees and the subsequent remittance of the collected amount to the bargaining representative, assures that latter of continuous funding. Without such funds, the union, in this case MPLO, would not be effective in discharging its duties and responsibilities as the exclusive bargaining representative of its members. Ineluctably, an allegation of unlawful withholding by the employer of the collected union members’ fees under a check-off provision in the CBA establishes a case of ULP. As such, the Med-Arbiter cannot exercise jurisdiction over the case since Article 224 of the Labor Code expressly vests jurisdiction over ULP cases on the Labor Case.”