Duyag vs. Inciong (1980) J. Aquino Facts: Petitioners are arrestre checkers of E.

E. Razon, Inc as well as bona fide members of the Associated Port Checkers and Workers Union They filed with the DOLE regional Office a complaint containing several charges against the four respondents who are the president (for more than 20 years), treasurer, vice president and auditor of the union. The following are the charges: o Unauthorized increase in union dues According to the unions constitution and by-laws, the monthly union dues is Php10.00 Subsequently, there were numerous increases to said monthly dues (increased by Php2.00 on Sept. 1, 1970; by Php 5 on March 14, 1972; due was Php18 in 1973, and Php 19 in 1975). However, those two increases were backed by resolutions which are void because they were not approved by of all the members of the board of directors, as required by the unions constitution and by-laws. Also, a deduction of Php 8.50 was made from their mid-year bonus. Such was done without any board resolution authorizing said deduction. o Withholding of union members share in the profits amounting to Php 18, 640.09 E. Razon, Inc. the arrestre operator, paid to the union, several times, sums of money as its share of the profits (profit-share). Such sums of money were supposed to be wholly distributed among the union members. However, it was discovered that respondents withheld certain amounts from numerous profit-shares. Example: In 1973, E. Razon gave the union Php 25, 684.61 but the respondents distributed to the union members only a total of Php 19,974. Also, there was a time when a profit-share amounting to Php 22,559.50 was deposited in the account of Cooperative Credit Union, another union where respondent Manalad is also the president. Subsequently, only Php 20,848 was distributed. The respondents appropriated the balance. During the pendency of the case, however, respondents submitted a resolution wherein 90% of union members ratified the deductions from the mid-year bonus and profit-shares. Nonetheless, the Court still pointed out that at the time the deductions were made, no resolution existed. Hence, such deductions were illegal at the time they were made. o Disbursements exceeding Php 500 which were not authorized by the board of directors The board of directors are only allowed to authorize and approve disbursements from union fund on amounts not exceeding Php500 Documents prove that respondent Manalad made numerous disbursements of union funds in amounts exceeding Php500 without the requisite authorization of the board of directors. o Maladministration of welfare funds Manalad allowed the application of the finds of the unions Welfare Plan for numerous extraneous purposes, and such were not authorized by the board of directors. Also, the complainants allege that the 3 employees did not deserve the retirement benefits because they had been dismissed for prolonged absences and had ceased to be members of the Welfare Plan. o Membership in another union Respondents Manalad, Amparo and Puerto are also members of the Philippine Technical Clerical Commercial Employees Association, another labor union Said membership to another union is violative of the arrestre checkers union constitution. Pieces of evidence also lead to the conclusion that respondents improperly used the arrestre checkers union funds to fund the other union o Conflict of interest on the part of Manalad Manalad organized a family corporation (Comet Integrated Stevedoring Services, Inc.) whose rank-and-file employees are also members of the arrestre checkers union

In effect, Manalad is a labor leader while also being an employer. As head of the union, he issued customs passes for the checkers of his family corporation in order to facilitate their services to some shipping companies Med-arbiter decision o Increases in union dues and deduction from mid-year bonus are void o That the respondents had the modus operandi of withholding certain amounts from the profit-shares, and that they already have deducted a considerable amount given that they started such practice in 1966 o Ordered the removal of respondents as officers of the union and directed them to reimburse the amounts illegally collected On appeal, the Director of Labor Relations reversed the med-arbiter decision on the following grounds: o Resort to intra-union remedies is not necessary o Power to remove union officers rests in the members o The Bureau of Labor Relations has nothing to do with the tenure of union officers which is a political question o However, the Director ruled that his office has jurisdiction to look into the charge of illegal disbursements of union funds MR filed to the SOLE, who denied the same stating that the expulsion of union officers is the prerogative of the union members. Hence, this petition.

ISSUE + RULING: WON the Bureau of Labor Relations has jurisdiction to expel the union officers Yes, by virtue of Art. 242 of the Labor Code Respondents argument: the Bureau of Labor Relations may remove guilty unio n officers only when members could not do so under the unions constitution and by-laws and that the removal should be subject to review by the SOLE. Opinion of the Director of Labor Relations: power of removal belongs to union members since they were the ones who elected them; the med-arbiter and the Director are only tasked to assist the union members in enforcing its constitution and by-laws SC opinion: o The membership of Manalad and Puerto in another union is a sufficient ground for their removal under the constitution and by-laws of the union o Respondents violated the rights and conditions of membership in the union within the meaning of Article 242 Labor Code. Hence, their expulsion is justified. Effects of violation of the rights and conditions of union membership: either ground for cancellation of union registration or expulsion of officer from office, whichever is appropriate Said violation may be reported to be Bureau of Labor Relations by at least 30% of all the union members or any member or members specially concerned. In effect, the Bureau shall have the power to hear & decide any reported violation in order to impose the appropriate penalty. o After hearing and even without submitting the matter to the union members, erring union officials may be removed by the Director of Labor Relations as clearly provided in Art. 242 Thus, the Director erred in holding that since the issue of expulsion is a political one, only the union members can resolve it. o It is necessary and desirable that the Bureau of Labor Relations and the SOLE should exercise close and constant supervision over labor unions, particularly the handling of their funds, so as to forestall abuses and venalities. In the case at bar, the Director acted correctly in ordering an examination of the books and records of the union also in order to verify the charge against respondents.

DISPOSITION: 1. Med-Arbiters decision removing respondents as officers affirmed 2. Director of Labor relations decision instructing the Labor Organization Division to examine books of accounts of the union affirmed 3. Petitioners entitled to refund of union dues