[G.R. No.
166421 September 5, 2006] complainants were illegally dismissed and that there was no basis for
PHILIPPINE JOURNALISTS, INC., BOBBY DELA CRUZ,
ARNOLD BANARES and ATTY. RUBY RUIZ BRUNO, Petitioners,
versus NATIONAL LABOR RELATIONS COMMISSION, HON.
COMMS. LOURDES JAVIER, TITO GENILO and ERNESTO
VERCELES, JOURNAL EMPLOYEES UNION, and THE COURT OF
APPEALS, Respondents
FACTS
The Philippine Journalists, Inc. (PJI) is a domestic corporation
engaged in the publication and sale of newspapers and magazines.
The exclusive bargaining agent of all the rank-and-file employees in
the company is the Journal Employees Union.
Sometime in April 2005, the Union filed a notice of strike before the
National Conciliation and Mediation Board (NCMB), claiming that PJI
was guilty of unfair labor practice. PJI was then going to implement a
retrenchment program due to “over-staffing or bloated work force
and continuing actual losses sustained by the company for the past
three years resulting in negative stockholders equity of P127.0
million.” The Secretary of the Department of Labor and Employment
(DOLE) certified the labor dispute to the National Labor Relations
Commission (NLRC) for compulsory arbitration pursuant to Article 263
(g) of the Labor Code.
The parties were required to submit their respective position papers.
PJI filed a motion to dismiss, contending that the Secretary of Labor
had no jurisdiction to assume over the case and thus erred in
certifying it to the Commission. The NLRC denied the motion. PJI,
thereafter, filed a Motion to Defer Further Proceedings, alleging,
among others, that the filing of its position paper might jeopardize
attempts to settle the matter extrajudicially, which the NLRC also
denied. The case was, thereafter, submitted for decision.
In its Resolution dated May 31, 2001, the NLRC declared that the 31
the implementation of petitioner’s retrenchment program. Thereafter,
the parties executed a Compromise Agreement dated July 9, 2001,
where PJI undertook to reinstate the 31 complainant-employees
effective July 1, 2001 without loss of seniority rights and benefits; 17
of them who were previously retrenched were agreed to be given full
and complete payment of their respective monetary claims, while 14
others would be paid their monetary claims minus what they received
by way of separation pay. The compromise agreement was submitted
to the NLRC for approval. The compromise agreement was approved
and was deemed closed and terminated.
However, the Union filed another Notice of Strike on July 1, 2002,
The Union claimed that 29 employees were illegally dismissed from
employment, and that the salaries and benefits of 50 others had been
illegally reduced. After the retrenchment program was implemented,
200 Union members-employees who continued working for petitioner
had been made to sign five-month contracts. The Union also alleged
that the company, through its legal officer, threatened to dismiss
some 200 union members from employment if they refused to
conform to a 40% to 50% salary reduction; indeed, the 29 employees
who refused to accede to these demands were dismissed on June 28,
2002. The Union prayed that the dismissed employees be reinstated
with payment of full backwages and all other benefits or their
monetary equivalent from the date of their dismissal on July 3, 2002
up to the actual date of reinstatement; and that the CBA benefits (as
of November 2002) of the 29 employees and 50 others be restored.
In its Resolution dated July 31, 2003, the NLRC ruled that the
complainants were not illegally dismissed. The May 31, 2001
Resolution declaring the retrenchment program illegal did not attain
finality as “it had been academically mooted by the compromise
agreement entered into between both parties on July 9, 2001.”
According to the Commission, it was on the basis of this agreement
that the July 25, 2002 Resolution which declared the case closed and
terminated was issued. Pursuant to Article 223 of the Labor Code, this
later resolution attained finality upon the expiration of ten days from
both parties’ receipt thereof. Thus, the May 31, 2001 Resolution could
not be made the basis to justify the alleged continued employment
regularity of the 29 complainants subsequent to their retrenchment.
The Union assailed the ruling of the NLRC before the CA via petition
for certiorari under Rule 65. In its Decision dated August 17, 2004,
the appellate court held that the NLRC gravely abused its discretion in
ruling for PJI. The compromise agreement referred only to the award
given by the NLRC to the complainants in the said case, that is, the
obligation of the employer to the complainants. The CA further held
that the act of respondent in hiring the retrenched employees as
contractual workers was a ploy to circumvent the latter’s security of
tenure. This is evidenced by the admission of PJI, that it hired
contractual employees (majority of whom were those retrenched)
because of increased, albeit uncertain, demand for its publications.
The CA pointed out that this was done almost immediately after
implementing the retrenchment program. Another “telling feature” is
the fact that the said employees were re-hired for five-month
contracts only, and were later offered regular employment with
salaries lower than what they were previously receiving. The CA also
ruled that the dismissed employees were not barred from pursuing
their monetary claims despite the fact that they had accepted their
separation pay and signed their quitclaims.
ISSUE
The primary issue before the Court is whether an NLRC Resolution,
which includes a pronouncement that the members of a union had
been illegally dismissed, is abandoned or rendered “moot and
academic” by a compromise agreement subsequently entered into
between the dismissed employees and the employer and if such a
compromise agreement constitutes res judicata to a new
complaint later filed by other union members-employees, not
parties to the agreement, who likewise claim to have been illegally
dismissed.
HELD
Article 227 of the Labor Code of the Philippines authorizes
compromise agreements voluntarily agreed upon by the
parties, in conformity with the basic policy of the State “to
promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of settling labor or
industrial disputes.”
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
noncompliance thereof or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation, or
coercion.
Thus, a judgment rendered in accordance with a compromise
agreement is not appealable, and is immediately executory
unless a motion is filed to set aside the agreement on the
ground of fraud, mistake, or duress, in which case an appeal
may be taken against the order denying the motion. Under
Article 2037 of the Civil Code, “a compromise has upon the parties the
effect and authority of res judicata,” even when effected without
judicial approval; and under the principle of res judicata, an issue
which had already been laid to rest by the parties themselves can no
longer be relitigated.
Adjective law governing judicial compromises annunciate that once
approved by the court, a judicial compromise is not appealable and it
thereby becomes immediately executory but this rule must be
understood to refer and apply only to those who are bound by the
compromise and, on the assumption that they are the only parties to
the case, the litigation comes to an end except only as regards to its void ab initio (ACD Investigation Security Agency, Inc. v. Pablo D.
compliance and the fulfillment by the parties of their respective Daquera, G.R. No. 147473, March 30, 2004).”
obligations thereunder.
In the case at bar, the employees were faced with impending
In any event, the compromise agreement cannot bind a party who did termination. As such, it was but natural for them to accept whatever
not voluntarily take part in the settlement itself and gave specific monetary benefits that they could get.
individual consent. It must be remembered that a compromise
agreement is also a contract; it requires the consent of the parties,
and it is only then that the agreement may be considered as
voluntarily entered into.

A careful perusal of the wordings of the compromise agreement will

show that the parties agreed that the only issue to be resolved was
the question of the monetary claim of several employees.
The findings of the appellate court are in accord with the evidence on
record, and we note with approval the following pronouncement:

Respondents alleged that it hired contractual employees majority of

whom were those retrenched because of the increased but uncertain
demand for its publications. Respondent did this almost immediately
after its alleged retrenchment program. Another telling feature in the
scheme of respondent is the fact that these contractual employees
were given contracts of five (5) month durations and thereafter, were
offered regular employment with salaries lower than their previous
salaries. The Labor Code explicitly prohibits the diminution of
employee’s benefits. Clearly, the situation in the case at bar is one of
the things the provision on security of tenure seeks to prevent.

Lastly, it could not be said that the employees in this case are barred
from pursuing their claims because of their acceptance of separation
pay and their signing of quitclaims. It is settled that “quitclaims,
waivers and/or complete releases executed by employees do not stop
them from pursuing their claims – if there is a showing of undue
pressure or duress. The basic reason for this is that such quitclaims,
waivers and/or complete releases being figuratively exacted through
the barrel of a gun, are against public policy and therefore null and
G.R. No. 78131 January 20, 1988EDUARDO TANCINCO, OSCAR E. BARTOLO,
DANIEL DE LEON, EDDIE POE, VIRGILIO SAN PEDRO, MA.LUISA QUIBIN, FE
MUDLONG and HENRY MADRIAGA,
petitioners, vs.
DIRECTOR PURA FERRER-CALLEJA, EDWIN LACANILAO, BOYET DALMACIO,
JOSEFINO ESGUERRA,TESSIE GATCHALIAN, LITO CUDIA and DING
PAGAYON,
respondents.
GANCAYCO,
J.:
This special civil action for certiorari seeks to annul the Resolution of
February 12, 1987 and the Decision of December 10, 1986 of the Bureau of
Labor Relations
* Secretary, acertain Mr. Cornelio A. Sy made a unilateral ruling excluding
in BLR Case No. A922186, setting aside the order of July 25, 1986
whichdecreed the inclusion and counting of the 56 segregated votes for the
determination of the results of the election of officers of Imperial Textile
Mills Inc.Monthly Employees Association (ITM-MEA).
Private respondents are the prime organizers of ITM-MEA. While said
respondents were preparing to file a petitionfor direct certification of the
Union as the sole and exclusive bargaining agent of ITM's bargaining unit,
the union'sVice-President, Carlos Dalmacio was promoted to the position of
Department Head, thereby disqualifying him for union membership. Said
incident, among others led to a strike spearheaded by Lacanilao group,
respondentsherein. Another group however, led by herein petitioners
staged a strike inside the company premises. After four (4) days the strike
was settled. On May 10, 1986 an agreement was entered into by the
representatives of themanagement, Lacanilao group and the Tancinco
group the relevant terms of which are as follows:"1. That all monthly-paid
employees shall be United under one union, the ITM Monthly Employees
Association (ITM-MEA), to be affiliated with ANGLO;2. That the
management of ITM recognizes ANGLO as the sole and exclusive bargaining
agent of allthe monthly-paid employees;3. That an election of union officers
shall be held on 26 May l986, from 8:00 a.m. to 5:00 p.m.;4. That the last
day of filing of candidacy shall be on l9 May l986 at 4:00 p.m.;5. That a final
pre-election conference to finalize the list of qualified voters shall be held
on 19 May1986, at 5:00 p.m.;"
1
On May 19, 1986, a pre-election conference was held, but the parties failed
to agree on the list of voters. Duringthe May 21, 1986 pre-election
conference attended by MOLE officers, ANGLO through its National
some 56 employees consisting of the Manila officeemployees, members of
Iglesia ni Kristo, non-time card employees, drivers of Mrs. Salazar and the
cooperativeemployees of Mrs. Salazar. Prior to the holding of the election of
union officers petitioners,
2
through a letter addressed to the Election Supervisor, MOLE San Fernando
Pampanga, protested said ruling but no action was taken. OnMay 26, 1986,
the election of officers was conducted under the supervision of MOLE
wherein the 56 employees in questionparticipated but whose votes were
segregated without being counted. Lacanilao's group won. Lacanilao
garnered 119 voteswith a margin of three (3) votes over Tancinco
prompting petitioners to make a protest. Thereafter, petitioners filed a
formalprotest with the Ministry of Labor Regional Office in San Fernando,
Pampanga
3
claiming that the determination of thequalification of the 56 votes is
beyond the competence of ANGLO. Private respondents maintain the
contrary on the premisethat definition of union's membership is solely
within their jurisdiction.
On the basis of the position papers submitted by the parties MOLE's Med
Arbiter
4 challenged voters were not yet union members at the time of the election
issued an order dated July 25,1986 directing the opening and counting of
the segregated votes.
5 The decisiondirected among others the proclamation of Lacanilao's group
From the said order private respondents appealed to theBureau of Labor
Relations (BLR) justifying the disenfranchisement of the 56 votes. Private
respondents categorized thechallenged voters into four groups namely, the
Manila Employees, that they are personal employees of Mr. Lee; the Iglesia
niKristo, that allowing them to vote will be anomalous since it is their policy
not to participate in any form of union activities;the non-time card
employees, that they are managerial employees; and the employees of the
cooperative as non-ITMemployees.
6
On December 10, 1986, BLR rendered a decision
7
holding the exclusion of the 56 employees as arbitrary,whimsical, and
wanting in legal basis
8
but set aside the challenged order of July 26, 1986 on the ground that 51
**
of 56
per April 24, 1986 list submitted before the Bureau.
9
as the duly elected officers and for ITM-MEA to absorb in thebargaining unit
the challenged voters unless proven to be managerial employees.
10
Petitioners' motion for reconsiderationwas likewise denied.
Dissatisfied with the turn of events narrated above petitioners elevated the
case to this Court by way of the instantpetition for certiorari under Rule 65
of the Rules of Court. Petitioners allege that public respondent director of
Labor Relations committed grave abuse of discretion in ordering the Med-
Arbiter to disregard the 56 segregatedvotes and proclaim private
respondents as the duly elected officers of ITM-MEA whereas said
respondent ruledthat the grounds relied upon by ANGLO for the exclusion
of voters are arbitrary, whimsical and without legal basis.The petition is
impressed with merit. The record of the case shows that public respondent
categorically declaredas arbitrary, whimsical and without legal basis the
grounds
11
relied upon by ANGLO in disenfranchising the 56 votersin question.
However, despite said finding public respondent ruled to set aside the
Resolution of July 25, 1986 of the Med- Arbiter based on its own findings
12
that 51 of the 56 disenfranchised voters were not yet union members at the
time of theelection of union officers on May 26, 1986 on the ground that
their names do not appear in the records of the Unionsubmitted to the
Labor Organization Division of the Bureau of Labor on April 24, 1986.
The finding does not have a leg to stand on. Submission of the employees
names with the BLR as qualifiedmembers of the union is not a condition
sine qua non
to enable said members to vote in the election of union'sofficers. It finds no
support in fact and in law. Per public respondent's findings, the April 24,
1986 list consists of 158 union members only
13
wherein 51 of the 56 challenged voters' names do not appear. Adopting
however a roughestimate of a total number of union members who cast
their votes of some 333
14
and excluding therefrom the 56 challengedvotes, if the list is to be the basis
as to who the union members are then public respondent should have also
disqualifiedsome 175 of the 333 voters. It is true that under article 242(c) of
the Labor Code, as amended, only members of the unioncan participate in
the election of union officers. The question however of eligibility to vote
may be determined through the useof the applicable payroll period and
employee's status during the applicable payroll period. The payroll of the
month nextpreceding the labor dispute in case of regular employees
15
and the payroll period at or near the peak of operations in caseof
employees in seasonal industries.
16
In the case before Us, considering that none of the parties insisted on the
use of the payroll period-list as votinglist and considering further that the 51
remaining employees were correctly ruled to be qualified for
membership,their act of joining the election by casting their votes on May
26, 1986 after the May 10, 1986 agreement is a clear manifestation of their
intention to join the union. They must therefore be considered
ipso facto
members thereof Said employees having exercised their right to unionism
by joining ITM-MEA their decision is paramount. Their names could not have
been included in the list of employee submitted on April 24, 1986 to the
Bureau of Labor for the agreement to join the union was entered into only
on May 10, 1986. Indeed the election was supervised by theDepartment of
Labor where said 56 members were allowed to vote. Private respondents
never challenged their right to vote then.The Solicitor General in his
manifestation agreed with petitioners that public respondent committed a
grave abuseof discretion in deciding the issue on the basis of the records of
membership of the union as of April 24, 1986when this issue was not put
forward in the appeal.It is however the position of private respondents that
since a collective bargaining agreement (CBA) has beenconcluded between
the local union and ITM management the determination of the legal
question raised hereinmay not serve the purpose which the union envisions
and may destroy the cordial relations existing between themanagement and
the union.We do not agree. Existence of a CBA and cordial relationship
developed between the union and the managementshould not be a
justification to frustrate the decision of the union members as to who
should properly representthem in the bargaining unit. Neither may the
inclusion and counting of the 56 segregated votes serve to disturb
theexisting relationship with management as feared by herein private
respondents. Respondents themselves pointedout that petitioners joined
the negotiating panel in the recently concluded CBA. This fact alone is
conclusiveagainst herein petitioners and hence will estop them later if ever,
from questioning the CBA which petitionersconcurred with. Furthermore,
the inclusion and counting of the 56 segregated votes would not necessarily
meansuccess in favor of herein petitioners as feared by private respondents
herein. Otherwise, could this be the veryreason behind their fears why they
made it a point to nullify said votes?WHEREFORE, premises considered, the
petition for certiorari is GRANTED. The temporary restraining order issued
by this Court on May 13, 1987 is hereby made permanent. The questioned
Resolution of February 12,1987 and the Decision of December 10, 1986 are
hereby set aside for being null and void and the Order of July25, 1986 of the
Mediator Arbiter is hereby declared immediately executory.Cost against
private respondents.SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Paras, JJ., concur