G.R. No.

L-21321 April 29, 1966

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner-appellant,

vs.
THE HON. SECRETARY OF LABOR, respondent-appellee.

Cipriano Cid and Associates for petitioner-appellant.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General E. Umali and Solicitor R.
S. Goco for respondent-appellee.

CONCEPCION, J.:

Herein petitioner, Philippine Association of Free Labor Unions (PAFLU), is a duly registered labor
federation. It instituted this action for a declaratory relief in the Court of First Instance of Manila, to
overrule certain views entertained by respondent, Secretary of Labor. After appropriate proceedings
said Court rendered judgment for the respondent. Hence this appeal by petitioner, which maintains:

1. That a proviso in Section 23 (e) of Republic Act No. 875, as amended by Republic Act No.
1941, be declared unconstitutional and violative of Conventions 87 and 98 of the
International Labor Organization;

2. That the 10% minimum requirement in Section 17 of Republic Act No. 875 is a condition
sine qua non for the exercise of the visitorial powers of the respondent under Republic No.
1941;

3. That said visitorial power of respondent under this Act may be exercised only in aid or to
complement the functions and powers of the Court of Industrial Relations under said Section
17 of Republic Act No. 875; and

4. That said visitorial power is merely an adjunct of the right of union members to inspect
union books under said Section 17 of Republic Act No. 875.

Republic Act No. 1941, approved on June 22, 1957, amended Section 23(e) of Republic Act No. 875
to read as follows:

Provisions of Commonwealth Act Numbered Two Hundred and Thirteen providing for
registration, licensing, and cancellation of registration of organizations, associations, or union
of labor, as qualified and expended by the preceding paragraphs of this Act, are hereby
amended; Provided, however, that the Secretary of Labor or his duly authorized
representative is hereby empowered to inquire, from time to time, into the financial activities
of any legitimate labor organization and to examine its books of accounts and other financial
records to determine compliance or noncompliance with the laws and to aid in the
prosecution for any violation thereof.

The Secretary of Labor shall appoint such accounts examiners as may be necessary for
carrying out the purposes of this section. 1äwphï1.ñët

It is argued by petitioner herein that this proviso is inconsistent with Articles 3, 4, 7 and 8 of said
Convention 87, to which the Philippines is a party, reading:
 1. Workers' and employers' organizations shall have the right to draw up their constitutions
and rules, to elect their representatives in full freedom, to organize their administration and
activities and to formulate their programmes.

2. The public authorities shall refrain from any interference which would restrict this right or
impede the lawful exercise thereof. (Article 3)

Workers' and employers' organizations shall not be liable to be dissolved or suspended by

administrative authority. (Article 4)

The acquisition of legal personality by workers' and employers' organizations, federations

and confederations shall not be made subject to conditions of such a character as to restrict
the application of the provisions of Articles 2, 3, and 4 hereof. (Article 7)

3. The law of the land shall not be such as to impair, nor shall it be so applied to impair the
guarantees provided for in this Convention. (Article 8)

We are not aware of, and petitioner has not cited, any provision of Convention No. 98, which is
infringed by Republic Act No. 1941, except insofar as said Convention, like Convention No. 87,
provides for the time and procedure for denunciation by any of the contracting parties, thus
indicating that the latter, are, prior thereto, bound to comply with the provisions of both Conventions.

Moreover, petitioner assumes that an act of Congress is unconstitutional and/or invalid if it

contravenes an international agreement to which the Philippines is a party. Without passing upon the
validity or accuracy of this predicate, we find that petitioner's contention is untenable. Indeed, we see
no conflict between Republic No. 1941, on the one hand, and any of the provisions of said
Conventions. There is in said Republic Act No. 1941 nothing that may authorize respondent either to
interfere in the right of workers' and employers' organizations to draw up their constitutions, to freely
elect their representatives, to organize their administration and activities and to formulate their
programmes, or to dissolve or suspend said organizations, or to subject the acquisition of legal
personality thereof to such conditions as to restrict or impair the rights aforementioned.

Respondent's authority under said Act is limited to an inquiry into the financial activities of any
legitimate labor organization and to the examination of "its books of accounts and
other financial records to determine compliance with the laws and to aid in the prosecution for any
violations thereof". Certainly, none of the provisions of Conventions 87 and 98 seek to protect or
shield labor organizations which violate said laws. Upon the other hand, Republic Act No. 1941
merely tries to forestall the misuse of funds of the union by officers thereof, by restoring to the
Secretary of Labor a visitorial power he had under Commonwealth Act No. 213, which had not been
included in Republic Act No. 875. Needless to say, if respondent should use the powers under
Republic Act No. 1941 in such an arbitrary or oppressive manner as to impair the rights of the
workers or of their organization, then the remedy would be to challenge the action thus taken, "not to
invalidate the law" — in the language used in Philippine Association of Colleges and Universities vs.
Secretary of Education (51 Off. Gaz., 6230).

With respect to the second, third and fourth points raised by herein petitioner, the opening paragraph
of Section 17 of Republic Act No. 875 provides:

It is hereby declared to be the public policy of the Philippines to encourage the following
internal labor organization procedure. A minimum of ten per cent of the members of a labor
organization may report an alleged violation of those procedures in their labor organization to
the Court. If the Court finds, upon investigation, evidence to substantiate the alleged violation
 and that efforts to correct the alleged violation through the procedures provided by the labor
organization's constitution or by-laws have been exhausted, the Court shall dispose of the
complaint as in "unfair labor practice" cases.

Then paragraph (a) prohibits arbitrary or excessive initiation fees; paragraph (b) grants to members
the right to full and detailed reports of all financial transactions; paragraph (e) disqualifies those
convicted of any crime involving moral turpitude for any position involving the collection, custody,
management, control or disbursement of funds; paragraph (f) forbids the collection of fees or dues,
or the disbursement of any funds of the organization without authority therefor pursuant to its
constitution and by-laws; paragraph (g) requires that every payment of fees, dues or other
contributions by a member be evidenced by a receipt signed by the person making the collection
and entered upon the records of the organization; paragraph (h) prohibits the application of funds for
any purpose or object other than those expressly stated in the constitution or by-laws of the
organization or those expressly authorized by resolution of a majority of its members; paragraph (i)
directs that every expenditure of funds be evidenced by a receipt of the payee, with specification of
the date, place and purpose of the payment, and that said receipt be part of the records of the
organization; paragraph (j) forbids the payment to the officers of any other compensation; in addition
to the salaries and expenses specifically provided in the constitution and by-laws, except in
pursuance of a resolution approved in a meeting by a majority vote; paragraph (k) regulates the
duties of the treasurer and every officer responsible for the accounts of the organization or for the
collection, disbursement, custody or control of its funds, moneys and other properties; and
paragraph (l) provides that the books of accounts and other records of financial activities shall be
open to inspection by any officer or member of the organization.

Section 17 of said Act deals with the "Rights and Conditions of Membership in Labor Organizations".
Pursuant thereto, the members of a labor organization may, upon petition of at least ten per cent of
the members thereof, predicated upon an alleged violation of the "procedures" prescribed in said
section, compel the Court of Industrial Relations to investigate whether or not the organization has in
fact committed such violation and to take appropriate measures in connection therewith. Upon the
other hand, Republic Act No. 1941 is concerned with the authority of the Department of Labor to
inquire into the financial activities of said organization in order "to determine compliance or non-
compliance with the laws and to aid in the prosecution for any violation thereof". This authority is not
dependent upon the request of said members. Much less does it require a request backed up by
10% of the members of the organization.

Indeed, Section 17 refers to proceedings before the Court of Industrial Relations, whereas violations
of the laws in connection with financial activities of labor organizations may warrant prosecution
before ordinary courts of justice for crimes which are beyond the jurisdiction of the Court of Industrial
Relations. Hence, the functions of respondent under Republic Act No. 1941 are not merely
complementary to those of the Court of Industrial Relations and to the right of inspection of members
of labor organizations, except only in the broad abstract sense that every provision of Republic Act
No. 875 tends to carry out or promote the accomplishment of its lofty objectives.

It may not be amiss to note that the authority of the Department of Labor to cancel the registration
and permit of a labor organization upon the ground that the same does not meet the requirements of
paragraph (c) of Section 23 of Republic Act No. 875, is based upon paragraph (d) of said section,
not upon paragraph (e) thereof as amended by Republic Act No. 1941. Moreover, the order of
cancellation of the registration and permit, which may not be issued except after due notice and
hearing, is appealable to the Court of Appeals, or to the Supreme Court, depending upon the issues
raised in the appeal.
Wherefore, the decision appealed from is hereby affirmed, with costs against petitioner herein. It is
so ordered.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concur.