G.R. No. 96821 - La Tondena Workers Union vs. Secretary of Department of Labor and Employment

La Tondena Workers’ Union (LTWU), a duly registered labor organization and longstanding bargaining agent for the workers of La Tondena Inc.’s Tondo Plant, was embroiled in an internal controversy following a certification election loss on May 31, 1989, to the rival union Ilaw at Buklod ng Manggagawa (IBM).
Prior to the election, on March 14, 1989, about 200 out of LTWU’s total 1,015 members petitioned the National Capital Region Office of the Department of Labor and Employment (DOLE-NCR) for an audit/examination of the union’s funds and financial records.

Responding to the petition, DOLE-NCR ordered an audit, and on April 17, 1989, the acting auditing examiner, Nepomuceno Leano II, submitted a report holding union officers—Ramon de la Cruz (president) and Norma Marin (treasurer)—accountable for union funds amounting to ₱367,553.00, based on union dues remitted by La Tondena Inc.
De la Cruz and Marin contended that they had not been given the opportunity to be heard prior to the report’s completion. They subsequently appealed to then-DOLE Secretary Franklin Drilon, who referred the matter to the Director of the Bureau of Labor Relations (BLR).

On September 29, 1989, the BLR Director set aside the findings and recommendations of the DOLE-NCR, emphasizing that the union officers were not heard before being held liable, and subsequently ordered another audit/examination of LTWU’s books covering the period from 1986 to February 1989.
Petitioners moved for reconsideration challenging the order on the ground that the procedural requirements under Article 274 of the Labor Code (as amended by R.A. 6715) were not complied with. These requirements included:

The necessity of a sworn written complaint;
The support of at least 20% of the union’s total membership; and
The prohibition of such inquiries during the “freedom period” or within 30 days preceding union elections.

The initial motion was denied in a resolution dated December 1, 1989, with a directive for union officers (Ramon de la Cruz, Danilo Manrique, Arturo Bautista, and Norma Marin) to submit all relevant financial records within ten days.

LTWU, through its new president Danilo Manrique, moved for reconsideration on jurisdictional grounds regarding whether the BLR had the authority to order an audit under Article 274, contending that such power was vested solely in the Secretary of Labor and Employment or his duly authorized representative.
The BLR, in its order dated January 22, 1990, denied this motion and reiterated its previous audit order with the additional warning that failure to comply would result in a waiver of the right to present evidence.
Notwithstanding LTWU’s petition for review of the December 1, 1989, and January 22, 1990 orders, the BLR proceeded with the examination based on certification by La Tondena Inc. concerning the remitted union dues.
On July 5, 1990, the BLR affirmed that the union officers were personally accountable for the ₱367,553.00 in union funds, and a subsequent petition for review filed by LTWU was denied on November 21, 1990, on the ground of being moot and academic.

LTWU elevated the case by filing a petition for certiorari alleging grave abuse of discretion on the part of both the Secretary of Labor and Employment and the BLR Director.
The petition raised several issues pertaining to the proper delegation of authority, the validity of the audit process in view of the statutory requirements, and the due process afforded to the union officers in the administrative proceedings.

Whether the power to examine the books of accounts of a labor union is vested exclusively in the Secretary of Labor and Employment or may be delegated to the Bureau of Labor Relations (BLR).
Whether the BLR’s conduct in this case was a valid exercise of authority delegated by the Secretary.

Whether the audit/examination of LTWU’s books of accounts was validly ordered even though it did not strictly comply with the procedural requirements under Article 274 of the Labor Code, as amended by R.A. 6715—specifically, the need for a sworn written complaint supported by at least 20% of the union’s membership and the restriction regarding the “freedom period.”

Whether, in view of the foregoing issues and the manner in which due process was observed, the union officers (notably Ramon de la Cruz and Norma Marin) were properly held personally accountable for the union funds amounting to ₱367,553.00.