Olaybar v. National Labor Relations Commission
REITERATIONFacts
1. The Antecedents: Petitioners, regular employees of Orient Marine and Fishing Resources, Inc., were dismissed on the ground of retrenchment. They filed separate complaints for illegal dismissal and unfair labor practice, seeking reinstatement and back wages. Initially, a Labor Arbiter dismissed their complaints but ordered the company to pay each petitioner P4,005.00 as separation pay. 2. Procedural History: While their appeal was pending before the National Labor Relations Commission (NLRC), the petitioners executed affidavits withdrawing their appeal after receiving their separation pay. These affidavits were made before the Labor Arbiter who initially ruled on their case. Unaware of this settlement, the NLRC initially ruled in favor of the petitioners, ordering reinstatement and back wages. However, after the private respondent opposed the motion for execution based on the settlement, the Labor Arbiter denied the execution. The NLRC then reversed itself, reinstating the Labor Arbiter's order denying execution, and subsequently denied a motion for reconsideration, upholding the settlement. 3. The Petition: The petitioners seek review of the NLRC's resolution, arguing that the NLRC committed grave abuse of discretion by declaring its earlier decision moot and academic. They contend that the NLRC's decision ordering reinstatement and back wages had already become final and executory and could not be set aside. They also assert that their affidavits withdrawing the appeal were violative of constitutional protections for labor, implying they were coerced or misled into signing them.
Issue(s)
Whether the NLRC committed grave abuse of discretion in declaring its decision of July 16, 1991, moot and academic. Whether the affidavits executed by the petitioners, stating their intention to withdraw their appeal after receiving separation pay, were valid and binding. Whether the settlement agreement, though not submitted to the NLRC, had the effect of res judicata; and the finality of the NLRC's July 16, 1991 decision.
Ruling
The petition is DISMISSED. The challenged resolutions and order of the National Labor Relations Commission dated September 28, 1992, and November 19, 1992, respectively, are AFFIRMED. Costs against petitioners.
Ratio Decidendi
On the issue of grave abuse of discretion and the validity of the settlement: The Court held that no grave abuse of discretion could be imputed to the NLRC. The Court reiterated the long-standing principle that compromises and settlements between parties are generally favored and are binding, provided they are free from fraud, mistake, or coercion. Citing McCarthy v. Barber Steamship Lines, the Court emphasized that such agreements, even if harsh, cannot be impeached if made freely. Article 227 of the Labor Code explicitly states that compromise settlements voluntarily agreed upon are final and binding, and the NLRC or courts shall not assume jurisdiction except in cases of non-compliance or prima facie evidence of fraud, misrepresentation, or coercion. Furthermore, Article 2037 of the Civil Code provides that a compromise has the effect and authority of res judicata upon the parties, even if not judicially approved. Therefore, when the NLRC rendered its decision on July 16, 1991, it unknowingly adjudicated a case that had already been closed and terminated by the parties themselves through their settlement. On the petitioners' contention regarding their affidavits and constitutional rights: The Court found the petitioners' volte-face and opportunism appalling. The separate affidavits, wherein petitioners expressed their intention to withdraw their appeal after receiving their separation pay, were voluntarily and knowingly made in the presence of Labor Arbiter Cordova, Jr. The alleged economic difficulties were not convincingly established as grounds to annul the agreements, nor was there proof of coercion. The Court viewed the petition as an obvious ploy to backtrack on their undertaking, especially after the labor tribunal had initially ruled in their favor. The Court also cited Periquet v. National Labor Relations Commission, which clarifies that not all waivers and quitclaims are invalid; if voluntarily entered into with full understanding and for a reasonable consideration, they are binding and may not be disowned simply due to a change of mind. The Court found no clear proof that the waivers were obtained through fraud, misrepresentation, or coercion, nor were the terms unconscionable. On the issue of res judicata and the finality of the NLRC's July 16, 1991 decision: The Court explained that while the NLRC's decision of July 16, 1991, had become final and executory, this was an adjudication made in ignorance of the fact that the dispute had already been settled by the parties. The principle of res judicata arising from the compromise settlement effectively rendered the subsequent NLRC decision moot and academic, as the parties had already legally concluded their dispute through their own agreement. The subsequent actions of the NLRC, particularly its resolution of September 28, 1992, correctly recognized the binding effect of the settlement and reversed its earlier order for execution.
Main Doctrine
A compromise settlement voluntarily agreed upon by the parties, even if not judicially approved, has the effect and authority of res judicata and is binding upon the parties, precluding them from reopening issues already settled, unless there is proof of fraud, misrepresentation, or coercion.