Alba Patio de Makati v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: On April 30, 1973, the Court of Industrial Relations (CIR) declared Alba Patio de Makati, et al. guilty of unfair labor practices and ordered them to cease and desist, reinstate four individual complainants with full back wages, and pay their shares in service charges. This decision was affirmed by the Supreme Court on March 16, 1984. Procedural History: The National Labor Relations Commission (NLRC), through Labor Arbiter Antonio Tria Tirona, directed the computation of the award, which amounted to P196,270.84. Private respondents moved for execution. Petitioners opposed, arguing back wages should be limited to three years and requiring an accounting of other income. On October 31, 1984, Labor Arbiter Tirona issued an order closing and terminating the case based on a "Satisfaction of Judgment, Release and Quit-claim" for P54,000.00, purportedly executed by Lucio Cagano as attorney-in-fact for the complainants, including Bonifacio Aclado and Hermogenes Cagano (represented by his father, Esteban Cagano). This quitclaim was notarized by Atty. Eugenio Tumulak, counsel for Lucio Cagano. The Petition: On December 10, 1985, Bonifacio Aclado informed his counsel he had not been reinstated or paid. On December 11, 1985, his counsel filed a motion for execution. Ruperto Cruz later filed a similar motion and sought to annul the October 31, 1984 order, stating he had not executed a special power of attorney for Lucio Cagano. Petitioners opposed, arguing the NLRC lost jurisdiction. On September 6, 1988, the NLRC set aside the Labor Arbiter's order, deeming the settlement void and ordering enforcement of the original CIR decision. Petitioners filed the present certiorari petition.
Issue(s)
Whether the National Labor Relations Commission (NLRC) retained jurisdiction to set aside the Labor Arbiter's order of October 31, 1984, which declared the case closed and terminated based on a "Satisfaction of Judgment, Release and Quit-claim", and the validity of the quitclaim itself. Whether the "Satisfaction of Judgment, Release and Quit-claim" executed by Lucio Cagano as attorney-in-fact for the complainants was valid and binding, considering the alleged lack of proper authority and the gross disparity between the awarded amount and the settlement amount.
Ruling
The petition is dismissed. The temporary restraining order is lifted. The NLRC's Order dated September 6, 1988, setting aside the Labor Arbiter's order of October 31, 1984, is affirmed.
Ratio Decidendi
On the NLRC's Jurisdiction and the Validity of the Quitclaim: The Supreme Court affirmed the NLRC's decision to set aside the Labor Arbiter's order, holding that the order approving the "Satisfaction of Judgment, Release and Quit-claim" was void. A final and executory judgment, such as the CIR decision affirmed by the Supreme Court, cannot be altered or subverted. The quitclaim, which reduced a P196,270.84 award to P54,000.00, was deemed grossly disproportionate, unconscionable, and inequitable, thus contrary to law and public policy. The Court emphasized that labor justice should not be thwarted by technicalities, and the NLRC correctly exercised its jurisdiction to prevent a miscarriage of justice. The NLRC's action was necessary to give meaning to the Supreme Court's affirmation of the CIR decision and to show respect for the administration of justice. The Court reiterated that quitclaims and releases signed by employees are normally frowned upon as contrary to public policy, especially when they result in a significant reduction of legally awarded benefits. On the Authority of the Attorney-in-Fact and the Validity of the Settlement: The NLRC correctly found the special power of attorney executed by Esteban Cagano for his deceased son, Hermogenes Cagano, to be null and void, as Esteban had no legal authority to act for a deceased person or represent minor children without court authorization. Furthermore, the broad authority granted to the attorney-in-fact was to negotiate an amount "due in accordance with law." The settlement for a "minuscule sum" was found to be clearly contrary to the granted authority and violative of law and public policy. The Court noted that the counsel for the complainants, Atty. Felipe Fuentes, Jr., was not present when the quitclaim was filed, raising further questions about its validity and the protection of the complainants' interests. The Labor Arbiter's precipitate approval of the settlement, without conscientiously examining its veracity and reliability, was criticized.
Main Doctrine
A settlement or quitclaim that grossly disproportionately reduces a final and executory judgment award, especially when executed under questionable circumstances and without the full consent of all parties or their counsel, is void and may be set aside by the National Labor Relations Commission to uphold labor justice and prevent a miscarriage of justice. The NLRC retains jurisdiction to pass upon such issues to prevent the subversion of a final and executory judgment.