G.R. No. 154110; November 23, 2007
FELIZARDO B. SARAPAT, AMELITA DURIAN and FERMIN G. CASTILLO, Petitioners, vs. SYLVIA SALANGA and LIWAYWAY SILAPAN, Respondents.

FACTS

Petitioners are officers of the Philippine Veterans Bank Employees Union-NUBE (PVBEU-NUBE). Following the bank’s closure and subsequent reopening without rehiring the original employees, the union secured a ₱35,000,000.00 compromise settlement with the bank. The agreement authorized a 5% special assessment fee from each member’s share to defray litigation expenses. Respondents, union members, petitioned the DOLE for a financial audit, specifically requesting an accounting of this 5% assessment. Despite directives, petitioners failed to submit supporting documents for the claimed expenses.
The Bureau of Labor Relations (BLR) took cognizance of the audit. Petitioners eventually submitted only a summary “Statement of Receipts and Disbursements” totaling ₱2,580,189.00, listing items like representation, gasoline, and legal fees, but without any supporting official receipts, vouchers, or other proof of actual disbursement. The BLR found this insufficient to justify the assessment.

ISSUE

Whether the BLR committed grave abuse of discretion in holding petitioners solidarily liable to restitute the collected 5% special assessment fee for failure to substantiate the corresponding litigation expenses.

RULING

The Supreme Court ruled in the negative, affirming the decisions of the BLR and the Court of Appeals. The legal logic centers on the fiduciary duty of union officers and the requisite standard of proof for union assessments. Union officers, as trustees of union funds, bear the burden of proving that special assessments collected from members are actually used for the authorized purpose. The Court emphasized that mere lists or summaries of expenses are inadequate.
Petitioners’ submission of an unverified statement, devoid of receipts, vouchers, or other corroborating documents, failed to meet this burden. It did not constitute substantial evidence to prove that the collected 5% fee was legitimately spent for litigation. Consequently, the BLR’s finding of insufficiency was not tainted with grave abuse of discretion; it was a reasonable exercise of its authority to ensure accountability. The order for restitution was a proper remedy for the unauthorized collection, as the assessment could not be justified without proof of the expenses it was meant to cover. The Court upheld the directive to cease further deductions and the solidary liability of the officers for the unsubstantiated amounts.