La Tondeña Workers Union vs. Secretary of Labor and Employment

The Bureau of Labor Relations (BLR) has the authority to examine the books of accounts and financial records of a labor organization, either as a duly authorized representative of the Secretary of Labor and Employment or by virtue of its own independent power under the Administrative Code of 1987 and Article 226 of the Labor Code, and the validity of a request for such examination is determined by the law in force at the time the request was filed.

Petitioner La Tondeña Workers Union (LTWU) was a duly registered labor organization and the collective bargaining agent for the rank-and-file workers of La Tondeña Inc. at its Tondo plant for over thirty years. On May 31, 1989, it lost a certification election to the Ilaw at Buklod ng Manggagawa (IBM). Prior to this, certain union members sought an audit of the union's funds, leading to administrative proceedings before the Department of Labor and Employment (DOLE) and the Bureau of Labor Relations (BLR) concerning the accountability of LTWU's officers.

Petitioner La Tondeña Workers Union (LTWU) was a duly registered labor organization that served as the bargaining agent for the rank-and-file workers of La Tondeña Inc. at its Tondo Plant for more than thirty years. On March 14, 1989, approximately 200 out of 1,015 LTWU members petitioned the National Capital Region Office of the Department of Labor and Employment (DOLE-NCR) for an audit or examination of the union's funds and financial records. An audit was subsequently ordered, and on April 17, 1989, the acting auditing examiner of DOLE-NCR submitted a report finding Ramon de la Cruz and Norma Marin, the union's president and treasurer respectively, accountable for P367,553.00 in union dues remitted by La Tondeña Inc.

De la Cruz and Marin appealed to then DOLE Secretary Franklin Drilon, complaining that they had not been heard before the report was made. The case was indorsed to the BLR Director, who, on September 29, 1989, set aside the DOLE-NCR findings because the officers had not been given a prior hearing. The BLR Director ordered another audit/examination of the union's books of accounts and financial records for the period 1986 to February 1989. Petitioner moved for reconsideration, arguing that the requirements of Article 274 of the Labor Code, as amended by Republic Act No. 6715—specifically a sworn written complaint supported by at least 20% of the total membership—must first be complied with before an audit could be ordered.

The BLR denied the motion in a resolution dated December 1, 1989, and ordered the officers to submit the financial records. The union, through its new president Danilo Manrique, moved for reconsideration, raising a jurisdictional question: that under Article 274, the power to examine union books is vested in the Secretary of Labor or his representative, and the BLR cannot be considered the Secretary's representative. The BLR denied this motion on January 22, 1990, warning that failure to produce the records within five days would result in a waiver of the right to present evidence. The union filed a petition for review with the DOLE Secretary, but the Secretary referred it back to the BLR. Meanwhile, the BLR proceeded with the examination and, because the union officers refused to comply, based its audit on the certification of La Tondeña Inc. On July 5, 1990, the BLR found the officers personally accountable for P367,553.00. The BLR subsequently denied the union's petition for review on November 21, 1990, deeming it moot and academic. The union then elevated the matter to the Supreme Court via a petition for certiorari, alleging grave abuse of discretion by the Secretary of Labor and the BLR Director.

• Jurisdiction of the BLR: Petitioner argued that under Article 274 of the Labor Code and Rule VIII-A of its implementing rules, the power to examine the books of accounts of a union is vested solely in the Secretary of Labor and Employment or his duly authorized representative, and the BLR Director cannot be considered a duly authorized representative.
• Delegation of Power: Petitioner maintained that the power to examine union books had already been delegated to union account officers pursuant to Rule 1, Section 1(ff) of the implementing rules, precluding the BLR from acting as the Secretary's representative.
• Validity of the Examination: Petitioner contended that the examination was invalidly ordered because the requirements of Article 274, as amended by Republic Act No. 6715, were not complied with, specifically the sworn written complaint supported by at least 20% of the total membership and the prohibition against conducting examinations during the freedom period.
• Due Process: Petitioner claimed that union officers Ramon de la Cruz and Norma Marin were denied due process by the BLR.

• Definition of Bureau: Respondents countered that union accounts examiners are actually officials of the BLR because the word "Bureau" in Rule 1, Section 1(ff) of the implementing rules refers to the Bureau of Labor Relations.
• Delegation by Indorsement: Respondents argued that by indorsing the case to the BLR, the Secretary of Labor and Employment clearly designated the BLR to act on his behalf.

• Authority to Examine Union Books: Whether the power to examine the books of accounts of the petitioner is vested in the Secretary of Labor and Employment or in the Bureau of Labor Relations.
• Delegation of Power: Whether the power to examine union books was delegated by the Secretary of Labor and Employment to the Bureau of Labor Relations.
• Validity of the Examination: Whether the examination of petitioner's books was validly ordered despite the fact that the requirements of Article 274 of the Labor Code, as amended, had not been complied with.
• Accountability of Union Officers: Whether the union officers were properly held accountable for union funds.

• Authority to Examine Union Books: Yes. The BLR has the authority to examine union books, both as a duly authorized representative of the Secretary of Labor and by virtue of its own independent power under the Administrative Code of 1987 and Article 226 of the Labor Code.
• Delegation of Power: Yes. The delegation of authority to union accounts examiners is not exclusive, and the Secretary of Labor must be presumed to have authorized the BLR to act on his behalf by indorsing the case to it.
• Validity of the Examination: Yes. The request for examination was validly made because it was filed before the effectivity of Republic Act No. 6715, and the validity of the request is determined as of the time of its filing.
• Accountability of Union Officers: Yes. The officers were not denied due process; having refused to submit the books despite warnings, the BLR was justified in using the company's certification as the basis for its findings, which are supported by substantial evidence.

• Authority to Examine Union Books: The "union accounts examiners of the Bureau" mentioned in the implementing rules are officials of the BLR, as "Bureau" is defined as the Bureau of Labor Relations. Furthermore, the BLR possesses independent authority to conduct examinations under Section 16, Book IV, Title VII, Chapter 4 of the Administrative Code of 1987, which empowers the BLR to set policies and procedures relating to the examination of financial records of labor organizations. Article 226 of the Labor Code also grants the BLR original and exclusive authority to act on intra-union conflicts, which includes the examination of accounts.
• Delegation of Power: The delegation to union accounts examiners is not exclusive. By indorsing the case to the BLR on two occasions, the Secretary of Labor must be presumed to have authorized the BLR to act on his behalf.
• Validity of the Examination: The requirements of a sworn written complaint and support of at least 20% of the membership were inserted into Article 274 by Republic Act No. 6715, which took effect on March 21, 1989. The members' letter requesting the examination was made on March 14, 1989, seven days before the law's effectivity. At that time, Article 274 did not contain these requirements. The validity of the request must be determined as of the time of its filing. The subsequent examination ordered by the BLR was valid as a continuation of proceedings already begun in the DOLE-NCR.
• Accountability of Union Officers: The officers were given every opportunity to defend themselves, including a warning that refusal to submit the books would result in a waiver of their right to present evidence. Because they persisted in their refusal, the BLR was justified in basing its examination on the certification of La Tondeña Inc. regarding the remitted union dues. The findings of fact of administrative agencies, when supported by substantial evidence, will not be disturbed.

• Validity of Administrative Requests Determined by Law at Time of Filing — The validity of a request for examination of union accounts must be determined as of the time of its filing. Thus, if the request was made before the effectivity of a law imposing stricter requirements, the request remains valid under the old law.
• Substantial Evidence in Administrative Findings — The findings of fact of administrative agencies, when supported by substantial evidence, will not be disturbed by the courts.
• BLR's Independent Visitorial Power — The Bureau of Labor Relations has independent authority to examine the financial records of labor organizations under the Administrative Code of 1987 and Article 226 of the Labor Code, in addition to its authority as a representative of the Secretary of Labor.

• "The validity of the request for examination of union accounts must be determined as of the time of its filing. Hence we hold that the request of the 200 union members in this case was validly made and conferred jurisdiction on the DOLE-NCR to conduct the examination of the books of accounts of the petitioners." — This passage articulates the ratio decidendi for the validity of the audit request, establishing that the applicable law is that in force when the request is filed.
• "The examination subsequently ordered by the BLR, although made after the effectivity of R.A. 6715, was validly conducted because it was simply a continuation of proceedings already began in the DOLE-NCR." — This clarifies that subsequent stages of an administrative proceeding remain valid even if initiated after a legal amendment, provided the original request was valid.
• "As they did not heed the warning, we think the BLR was justified in using, as basis of its examination, the certification of La Tondeña, Inc. as to the amount remitted by it to the LTWU as union dues. This, at any rate, is a factual matter and the rule is that the findings of facts of administrative agencies, when supported by substantial evidence, will not be disturbed." — This underscores the principle of substantial evidence supporting administrative findings and the consequences of refusing to comply with administrative orders.

• Article 274, Labor Code — Governs the visitorial powers of the Secretary of Labor and Employment to inquire into the financial activities of legitimate labor organizations. The Court applied the version of this article in force at the time the members' request was filed, which did not require a sworn complaint or 20% membership support.
• Rule VIII-A, Implementing Rules of the Labor Code — Details the exercise of visitorial power and the period of inquiry or examination. The Court interpreted the definition of "Bureau" to include the Bureau of Labor Relations.
• Section 16, Book IV, Title VII, Chapter 4, Administrative Code of 1987 — Empowers the BLR to set policies and procedures relating to the examination of financial records of labor organizations, providing the BLR with independent authority to conduct the audit.
• Article 226, Labor Code — Grants the BLR original and exclusive authority to act on inter-union and intra-union conflicts, which the Court held includes the examination of union accounts.
• Republic Act No. 6715 — Amended Article 274 of the Labor Code to add requirements for the examination of union accounts, but its provisions were not applied retroactively to the members' request filed before its effectivity.

Narvasa, C.J., Regalado and Puno, JJ., concur.