Employer's non-remittance of union dues: Is it an intra-union dispute or unfair labor practice?

Is the charge filed against an employer for non-remittance of union dues collected from members of two factions of a labor union within a company an intra-union dispute or an unfair labor practice and who has jurisdiction over the case?

The Supreme Court (SC) said: “The charge constitutes an unfair labor practice on the part of the employer, being in the nature of interference as it curtails the employees' right to self-organization.”

And since the complaint is an unfair labor practice, it is the labor arbiter who has jurisdiction over the case and not a mediator-arbiter, the SC said in a decision written by Chief Justice Alexander G. Gesmundo.

The issues were settled by the SC as it granted the petition filed by South Cotabato Integrated Port Services, Inc. (SCIPSI) and the firm’s General Manager Gabriel Munasque.

SCIPSI challenged the Court of Appeals’ (CA) decision that upheld the ruling of the Bureau of Labor Relations (BLR) which affirmed the order issued by a mediator arbiter in the case filed by Mario C. Marigon, then president of Makar Port Labor Organization (MPLO).  Marigon was dismissed as an employee in 2007.

Marigon filed the case against SCIPSI on Aug. 16, 2010 before the Region 12 office of the Department of Labor and Employment (DOLE).  He claimed SCIPSI unlawfully refused to turn over to MPLO the union dues collected from August 2006 to February 2007 despite the provision in their collective bargaining agreement (CBA) with the firm from Oct. 12, 1999 to February 2007.

On Dec. 13, 2010, Med-Arbiter Jasmin M. Demetillo granted Marigon’s petition as she directed SCIPSI to release the unremitted union dues in favor of MPLO.  She also ordered SCIPSI to determine the duly authorized person or union officer to receive the collected union dues considering that Marigon is not a party-in-interest in the case because of his dismissal from employment.

On March 25, 2011, Saranggani Marine and General Workers Union-Trade Unions of the Philippines and Allied Services (SAMAGEWU-TUPAS), filed a motion to annul the Dec. 13, 2010 order of Demetillo.

SAMAGEWU-TUPAS claimed that it is the sole and exclusive bargaining agent of SCIPSI’s rank-and-file employees who executed a CBA effective Dec. 5, 2006 until Dec. 5, 2011. It also claimed that Marigon had no authority to institute the case and represent MPLO.

On April 5, 2011, Demetillo dismissed SAMAGEWU-TUPAS’ intervention with a ruling that the new union had no legal interest to protect in the unremitted collection of union dues, and that her order had attained finality.

On appeal, the Bureau of Labor Relations (BLR) upheld the med-arbiter’s jurisdiction as the case involved an intra-union dispute between two factions within MPLO: the Colomida-Las Piñas group and the Marigon group. BLR’s ruling was affirmed by the CA prompting SCIPSI to file the petition before the SC.

In its petition, SCIPSI told the SC that Marigon was dismissed from employment on Dec. 5, 2007, he had no legal capacity to sue on behalf of MPLO, and demand remittance of the union dues collected from August 2006 to February 2007.

The firm also said 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 had a new set of officers. It added that the charge of unfair labor practice had already prescribed since more than one year had passed from the time that it collected the union dues, while Marigon filed the complaint only in 2010.

Granting SCIPSI’s petition, the SC said the jurisdiction is determined by the allegations in the complaint, irrespective of whether the plaintiff (Marigon for MPLO) is entitled to recover on his claims.

The SC said the allegations in the complaint filed by Marigon involved unfair labor practice, which generally refers to acts that violate the worker’s right to self-organization, and it is the labor arbiter who has jurisdiction pursuant to Article 224 of the Labor Code.

Among other types of unfair labor practice are interfering with, restraining, or coercing employees in the exercise of their right to self-organization, it said.

“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,” it pointed out.

An intra-union dispute, on the other hand involves conflicts 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, it said.

It reiterated its previous decision which ruled that an employer may be liable for unfair labor practice when it fails to deduct union dues and assessments from the employees’ salaries by virtue of a check-off provision in the CBA.

It stressed that “an employer’s full compliance with the check-off provision in the CBA is vital to the union’s role of advocating for the interests of the members of the bargaining unit.”

The SC also said:

“It was erroneous for the CA and the BLR to declare that the case involved an intra-union dispute between two factions within MPLO. Both the CA and the BLR failed to consider that the issue as to which of the two groups had the right to receive the collected union dues only arose after Med-Arbiter Demetillo issued the Dec.13, 2010 Order or during its execution stage.

“Else stated, the matter of intra-union controversy would not have arisen if not for the Dec. 13, 2010 Order of Med-Arbiter Demetillo.

“Med-Arbiter Demetillo should have dismissed Marigon's Petition since a complaint is not deemed as filed if done by a person who was not authorized to do so. An unauthorized complaint does not produce any legal effect.

“It is settled rule that a decision rendered by a tribunal without the
appropriate jurisdiction is null and void. Evidently, the Dec. 13, 2010 Order of Med-Arbiter Demetillo was null and void for lack of jurisdiction.

“As such, the Order ‘is a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever it exhibits its head.’ It cannot acquire finality nor create any right or impose any duties.

“Accordingly, the Petition is granted. The Jan. 31, 2017 Decision and Nov. 9, 2017 Resolution of the Court of Appeals in CA G.R. SP No. 128607 are hereby reversed and set aside. A new one is hereby entered dismissing the Petition docketed as Case No. RO12-SG-IN-001-16-08-10 entitled ‘Makar Port Labor Organization, represented by its President, Mario C Marigon, complainant, versus South Cotabato Integrated Port Services, Inc. and/or Gabriel Munasque, as General Manager, respondents,’ for lack of jurisdiction. So ordered.”