Philippine Association of Labor Unions vs. Secretary of Labor

The registration requirement for labor organizations under Section 23 of Republic Act No. 875 is not a limitation on the constitutional right to assembly and association, which may be exercised with or without registration; registration is merely a condition sine qua non for the acquisition of legal personality and the statutory rights and privileges granted to legitimate labor organizations. The obligation to submit financial statements and non-subversive affidavits as a condition for the non-cancellation of a certificate of registration is a reasonable regulation validly exercised under the police power.

The petitioners were the Philippine Association of Labor Unions (PAFLU), the Social Security System Employees Association-PAFLU (SSSEA), and its officers and members. The SSSEA was a labor organization affiliated with PAFLU, holding Registration Certificate No. 1-IP169 issued on September 30, 1960. The respondents were the Secretary of Labor, the Director of Labor Relations, and the Registrar of Labor Organizations, who were tasked with enforcing Section 23 of Republic Act No. 875, the law governing the registration and cancellation of labor organizations in the Philippines.

The Social Security System Employees Association (SSSEA), affiliated with the Philippine Association of Free Labor Unions (PAFLU), was issued Registration Certificate No. 1-IP169 on September 30, 1960. On September 25, 1963, the Registrar of Labor Organizations issued a notice of hearing set for October 17, 1963, regarding the cancellation of the SSSEA's registration on two grounds: (1) failure to furnish the Bureau of Labor Relations with copies of verified financial reports covering the periods from September 24, 1960 to September 23, 1961 and September 24, 1961 to September 23, 1962, within sixty days of the end of its fiscal year; and (2) failure to submit the names, postal addresses, and non-subversive affidavits of the officers of the union within sixty days of their election in October 1961 and 1963, in conformity with Article IV(1) of its constitution and by-laws, in violation of Section 23 of Republic Act No. 875.

Counsel for the SSSEA moved to postpone the hearing to October 21, 1963, and to submit a memorandum and the documents specified in the notice. The motion was granted, but nobody appeared for the SSSEA on that date. The next day, October 22, 1963, Manuel Villagracia, Assistant Secretary of the SSSEA, filed a letter dated October 21, 1963, enclosing a joint non-subversive affidavit of the officers, a list of newly-elected officers from elections held on April 29, 1963, and a copy of the amended constitution and by-laws. The Registrar held that these were not the documents referred to in the notice of hearing and that there was no evidence to warrant dismissal of the proceeding. On October 23, 1963, the Registrar rendered a decision cancelling the SSSEA's registration certificate.

On October 28, 1963, Alfredo Fajardo, president of the SSSEA, moved for reconsideration and prayed for time until November 15 to submit the requisite papers. An opposition was filed by Paulino Escueta, a member of the SSSEA, on the ground that the latter had never submitted any financial statement to its members. The motion was heard on November 27, 1963. On December 4, 1963, the Registrar issued an order declaring that the SSSEA had failed to submit non-subversive affidavits of certain officers elected on January 30, 1962, and the names, postal addresses, and non-subversive affidavits of all officers supposedly elected in October, granting the SSSEA 15 days to comply, and holding in abeyance the resolution of the motion for reconsideration. Pending such resolution, on December 16, 1963, the PAFLU, the SSSEA, Alfredo Fajardo, and all the officers and members of the SSSEA commenced the present action.

The petitioners alleged that Section 23 of Republic Act No. 875 violates their freedom of assembly and association and is inconsistent with the Universal Declaration of Human Rights; that it unduly delegates judicial power to an administrative agency; that said Section should be deemed repealed by ILO-Convention No. 87; that respondents acted without or in excess of jurisdiction and with grave abuse of discretion in promulgating the decision beyond the 30-day period provided in Section 23(c); that there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law; that the decision had not been approved by the Secretary of Labor; and that the cancellation would cause irreparable injury. It was admitted that the SSSEA had not filed the non-subversive affidavits of some of its officers, although the organization averred that these persons were either resigned or on leave, without specifying who had resigned and who were on leave.

• Freedom of Association: Petitioners argued that Section 23 of Republic Act No. 875 violates their freedom of assembly and association guaranteed in the Bill of Rights.
• International Law: Petitioners argued that Section 23 is inconsistent with the Universal Declaration of Human Rights and should be deemed repealed by ILO-Convention No. 87.
• Undue Delegation of Judicial Power: Petitioners argued that Section 23 unduly delegates judicial power to an administrative agency.
• Lack of Jurisdiction: Petitioners argued that respondents acted without or in excess of jurisdiction and with grave abuse of discretion in promulgating the decision dated October 22, 1963, beyond the 30-day period provided in Section 23(c) of Republic Act No. 875.
• Lack of Approval: Petitioners argued that the decision complained of had not been approved by the Secretary of Labor.
• Irreparable Injury: Petitioners argued that the cancellation of the SSSEA's certificate of registration would cause irreparable injury.

• Traversal of Allegations: Respondents traversed some allegations of fact and the legal conclusions made in the petition.
• Controversion of Factual Averments: Respondents controverted the petitioners' averment that certain officers had resigned or were on leave, noting that the SSSEA had not specified who had resigned and who were on leave.

• Freedom of Association: Whether Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and association guaranteed in the Bill of Rights.
• International Law Compliance: Whether Section 23 is inconsistent with the Universal Declaration of Human Rights and ILO-Convention No. 87.
• Undue Delegation of Judicial Power: Whether the determination of whether the requirements of paragraph (b) have been met constitutes judicial power that cannot be delegated to an administrative agency.
• Applicability of the 30-Day Period: Whether the 30-day period prescribed in Section 23(c) applies to cancellation proceedings.
• Directory Nature of Time Provisions: Whether the 30-day period for rendering a decision is mandatory or merely directory.
• Requirement of Secretary's Approval: Whether the decision of the Registrar cancelling a registration certificate requires the approval of the Secretary of Labor.
• Exhaustion of Administrative Remedies: Whether the petitioners failed to exhaust administrative remedies and whether the action was premature.

• Freedom of Association: No. The registration requirement is not a limitation on the right to assembly or association, which may be exercised with or without registration; it is merely a condition sine qua non for the acquisition of legal personality by labor organizations.
• International Law Compliance: No. Section 23 does not impinge upon the right of organization guaranteed in the Declaration of Human Rights or run counter to Articles 2, 4, 7, and Section 2 of Article 8 of ILO-Convention No. 87.
• Undue Delegation of Judicial Power: No. The determination of whether the requirements of paragraph (b) have been met is not judicial power; it is incidental to the exercise of the power granted by law to administrative agencies.
• Applicability of the 30-Day Period: No. The 30-day period invoked by the petitioners is inapplicable to the decision complained of; it refers to proceedings for registration, not cancellation, which is governed by paragraph (d) of Section 23.
• Directory Nature of Time Provisions: The 30-day period is directory, not mandatory; a judgment promulgated after the expiration of the period is not null and void.
• Requirement of Secretary's Approval: No. There is no law requiring the approval by the Secretary of Labor of the decision of the Registrar decreeing the cancellation of a registration certificate.
• Exhaustion of Administrative Remedies: Yes. The petitioners failed to exhaust administrative remedies, and the action was premature because the motion for reconsideration was still pending resolution.

• Freedom of Association: The Court held that the theory that Section 23 unduly curtails the freedom of assembly and association is devoid of factual basis. Registration is not a limitation to the right of assembly or association, which may be exercised with or without registration. Registration is merely a condition sine qua non for the acquisition of legal personality by labor organizations and the possession of the rights and privileges granted by law to legitimate labor organizations. The Constitution does not guarantee these rights and privileges, which are mere statutory creations. The registration requirement is a valid exercise of the police power because the activities of labor organizations affect public interest. The obligation to submit financial statements is a reasonable regulation for the benefit of the members, considering that the organization generally solicits funds and collects huge amounts of money on behalf of its members.

• International Law Compliance: The Court cited B.S.P. vs. Araos, where it was held that there is no incompatibility between Republic Act No. 875 and the Universal Declaration of Human Rights. The cancellation of the SSSEA's registration certificate would not entail a dissolution of the association or its suspension; the existence of the SSSEA would not be affected, although its juridical personality and statutory rights and privileges would be suspended.

• Undue Delegation of Judicial Power: The Court held that the determination of whether the requirements of paragraph (b) have been met is not judicial power. All officers of the government are supposed to act on the basis of facts as they see them. This is especially true as regards administrative agencies given the power to investigate and render decisions concerning details related to the execution of laws. The Court quoted Justice Reyes (J.B.L.) in Lovina vs. Moreno, stating that the determination of questions of fact by executive officials is validly conferable upon them provided the party affected is given opportunity to be heard.

• Applicability of the 30-Day Period: The Court held that the 30-day period invoked by the petitioners is inapplicable to the decision complained of. Said period is prescribed in paragraph (c) of Section 23, which refers to proceedings for the registration of labor organizations, not to the cancellation of said registration, which is governed by paragraph (d) of the same section.

• Directory Nature of Time Provisions: The Court held that legal provisions prescribing the period within which a decision should be rendered are directory, not mandatory, unless the intention to the contrary is manifest. The Court quoted Black: "When a statute specifies the time at or within which an act is to be done by a public officer or body, it is generally held to be directory only as to the time, and not mandatory, unless time is of the essence of the thing to be done, or the language of the statute contains negative words, or shows that the designation of the time was intended as a limitation of power, authority or right."

• Requirement of Secretary's Approval: The Court held that there is no law requiring the approval by the Secretary of Labor of the decision of the Registrar decreeing the cancellation of a registration certificate. The language of paragraph (d) of Section 23 suggests that, once the conditions therein specified are present, the office concerned "shall" have no choice but to issue the order of cancellation.

• Exhaustion of Administrative Remedies: The Court held that there is nothing for the Secretary of Labor to approve or disapprove since the motion for reconsideration of the Registrar's decision was still pending resolution. This circumstance shows that the present action is premature and that petitioners have failed to exhaust the administrative remedies available to them. They could ask the Secretary of Labor to disapprove the Registrar's decision or object to its execution or enforcement.

• Registration as Condition Sine Qua Non for Legal Personality — Registration under Section 23(b) of Republic Act No. 875 is not a limitation on the constitutional right to assembly or association, which may be exercised with or without registration. Registration is merely a condition sine qua non for the acquisition of legal personality by labor organizations and the possession of the rights and privileges granted by law to legitimate labor organizations. The Court applied this doctrine to uphold the cancellation of the SSSEA's registration, holding that the cancellation would not affect the existence of the association but only its juridical personality and statutory rights.

• Police Power and Labor Organizations — The registration requirement for labor organizations is a valid exercise of the police power because the activities in which labor organizations are engaged affect public interest, which should be protected. The obligation to submit financial statements as a condition for the non-cancellation of a certificate of registration is a reasonable regulation for the benefit of the members of the organization. The Court applied this doctrine to reject the petitioners' claim that Section 23 unduly curtailed their freedom of association.

• Directory Nature of Time Provisions — Legal provisions prescribing the period within which a decision should be rendered are directory, not mandatory, unless the intention to the contrary is manifest. A judgment promulgated after the expiration of the period is not null and void, although the officer who failed to comply with the law may be dealt with administratively. The Court applied this doctrine to reject the petitioners' claim that the decision was invalid for being promulgated beyond the 30-day period.

• Exhaustion of Administrative Remedies — A party must exhaust administrative remedies before resorting to the courts. The Court applied this doctrine to dismiss the petition as premature, since the petitioners' motion for reconsideration of the Registrar's decision was still pending resolution.

• "The registration prescribed in paragraph (b) of said section is not a limitation to the right of assembly or association, which may be exercised with or without said registration. The latter is merely a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the possession of the 'rights and privileges granted by law to legitimate labor organizations'." — This passage articulates the core ratio decidendi distinguishing the constitutional right to associate from the statutory privilege of registration, which is central to the Court's rejection of the petitioners' constitutional challenge.

• "Such requirement is a valid exercise of the police power, because the activities in which labor organizations, associations and union of workers are engaged affect public interest, which should be protected." — This passage establishes the police power justification for the registration requirement, a key doctrinal holding frequently cited in subsequent labor law jurisprudence.

• "When a statute specifies the time at or within which an act is to be done by a public officer or body, it is generally held to be directory only as to the time, and not mandatory, unless time is of the essence of the thing to be done, or the language of the statute contains negative words, or shows that the designation of the time was intended as a limitation of power, authority or right." — This quotation from Black on the Construction and Interpretation of Laws states the canonical formulation of the directory nature of time provisions, which the Court adopted as its own.

• B.S.P. vs. Araos, L-10091, January 29, 1958 — Cited as controlling precedent for the proposition that there is no incompatibility between Republic Act No. 875 and the Universal Declaration of Human Rights.
• Lovina vs. Moreno, L-17821, November 29, 1963 — Cited for the principle that the determination of questions of fact by executive officials is validly conferable upon them provided the party affected is given opportunity to be heard.
• Tauseco vs. Arteche, 57 Phil. 227; Querubin vs. Court of Appeals, 82 Phil. 226; Gutierrez vs. Aquino, L-14252, February 28, 1959; Estrella vs. Edanio, L-18883, May 18, 1962 — Cited as precedents for the rule that legal provisions prescribing the period within which a decision should be rendered are directory, not mandatory.
• Herrera vs. Barretto, 25 Phil. 245; Uy Chu vs. Imperial, 44 Phil. 27; Manila Post Publishing Co. vs. Sanchez, 81 Phil. 614; Alvarez vs. Ibañez, 83 Phil. 104; Ricafort vs. Hon. Wenceslao Fernan, 101 Phil. 575; Cueto vs. Ortiz, L-11555, May 31, 1960; Pagkakaisa Samahang Manggagawa ng San Miguel Brewery at mga Kasangay vs. Enriquez, L-12999, July 26, 1960 — Cited as precedents for the prematurity of the action.
• Montes vs. Civil Service Board of Appeals, 101 Phil. 490; Ang Tuan Kai vs. Import Control Comm., 91 Phil. 143; Coloso vs. Board, 92 Phil. 938; Miguel vs. Reyes, 93 Phil. 542; Calo vs. Fuertes, L-16537, June 29, 1962 — Cited as precedents for the doctrine of exhaustion of administrative remedies.

• Section 23, Republic Act No. 875 — The provision governing the registration and cancellation of labor organizations. The Court applied paragraphs (b), (c), and (d) to determine the requirements for registration, the procedure for cancellation, and the inapplicability of the 30-day period to cancellation proceedings.
• Article IV(1), Constitution and By-laws of the SSSEA — The provision requiring the submission of names, postal addresses, and non-subversive affidavits of officers within sixty days of their election, which the SSSEA failed to comply with.
• Articles 2, 4, 7, and Section 2 of Article 8, ILO-Convention No. 87 — The international convention provisions invoked by the petitioners, which the Court held were not violated by Section 23 of Republic Act No. 875.
• Universal Declaration of Human Rights — The international instrument invoked by the petitioners, which the Court held was not inconsistent with Republic Act No. 875, citing B.S.P. vs. Araos.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee, and Barredo, JJ., concurred.