Compromise in labor cases

REFORMIST UNION OF R. B. LINER, INC., HEVER DETROS, ET AL., vs. NATIONAL LABOR RELATIONS COMMISSION, R.B. LINER, INC., ET. AL., G.R. No. 120482. January 27, 1997.



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The private respondents can no longer contest the legality of the strike held by the petitioners on 13 December 1989, as the private respondents themselves sought compulsory arbitration in order to resolve that very issue, hence their letter to the Labor Secretary read, in part:

This is to request your good office to certify for compulsory arbitration or to assume jurisdiction over the labor dispute (strike continuing) between R.B. Liner Inc . . . . and the Lakas Manggagawa sa Pilipinas . . .

The current strike by Lakas which started on December 13, 1989 even before Certification Election could be held could not be resolved by the NCR Conciliation-Mediation Division after six meetings/conferences between the parties. [23]

The dispute or strike was settled when the company and the union entered into an agreement on 19 January 1990 where the private respondents agreed to accept all employees who by then, had not yet returned to work. By acceding to the peaceful settlement brokered by the NLRC, the private respondents waived the issue of the illegality of the strike.

The very nature of compulsory arbitration makes the settlement binding upon the private respondents, for compulsory arbitration has been defined both as "the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties," [24] and as a mode of arbitration where the parties are "compelled to accept the resolution of their dispute through arbitration by a third party." [25] Clearly then, the legality of the strike could no longer be reviewed by the Labor Arbiter, much less by the NLRC, as this had already been resolved. It was the sole issue submitted for compulsory arbitration by the private respondents, as is obvious from the portion of their letter quoted above. The case certified by the Labor Secretary to the NLRC was dismissed after the union and the company drew up the agreement mentioned earlier. This conclusively disposed of the strike issue.

The Labor Code provides that the decision in compulsory arbitration proceedings "shall be final and executory ten (10) calendar days after receipt thereof by the parties." [26] The parties were informed of the dismissal of the case in a letter dated 14 February 1990, and while nothing in the record indicates when the said letter was received by the parties, it is reasonable to infer that more than ten days elapsed - - hence, the NLRC decision had already become final and executory - - before the private respondents filed their complaint with the Labor Arbiter on 13 July 1990. [27] A final judgment is no longer susceptible to change, revision, amendment, or reversal. [28] Neither the Labor Arbiter nor the NLRC, therefore, could review the same issue passed upon in NLRC Certified Case No. 0542, and their decisions to the contrary have been rendered in grave abuse of discretion amounting to excess of jurisdiction.

The agreement entered into by the company and the union, moreover, was in the nature of a compromise agreement, i.e., "an agreement between two or more persons, who for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of losing." [29] Thus, in the agreement, each party made concessions in favor of the other to avoid a protracted litigation. While we do not abandon the rule that "unfair labor practice acts are beyond and outside the sphere of compromises,"[30] the agreement herein was voluntarily entered into and represents a reasonable settlement, thus it binds the parties. [31] On this score, the Labor Code bestows finality to unvitiated compromise agreements:

Art. 227. Compromise agreements. - - Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation or coercion.

The agreement in this case complies with the above requisites, forged as it was under authority of the Labor Secretary, with representatives from both the union and the company signing the handwritten agreement to signify their consent thereto. The private respondents never. alleged in their answer [32] to the petitioners' complaint before the Labor Arbiter, nor in their complaint, [33] that the petitioners did: not comply with the agreement. The binding effect of the agreement on the private respondents is thus unimpaired.

The private respondents' cause likewise fails in light of Article 2037 of the Civil Code, which gives compromise agreements "the effect and authority of res judicata" upon the parties to the same, even when effected without judicial approval. [34] The Labor Arbiter and the NLRC therefore erroneously reviewed an issue which had already been laid to rest by the parties themselves and which, applying the principle ofres judicata they could no longer re-litigate. [35]

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