Jag & Haggar Jeans And Sportswear Corporation v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: The Lakas Manggagawa sa Jag (Union), composed of rank-and-file employees of Jag & Haggar Jeans and Sportswear Corporation (petitioner), staged a strike in September 1988. Petitioner filed a petition to declare the strike illegal. Procedural History: Labor Arbiter Eduardo Madriaga declared the strike illegal and ordered the dismissal of union officers and members who participated in the illegal strike. The National Labor Relations Commission (NLRC) initially set aside the Labor Arbiter's decision and ordered reinstatement, but later modified it, declaring union officers to have lost employment, union board members and shop stewards dismissible with separation pay, and mere union members to be reinstated. Pending motions for reconsideration, petitioner and the Union executed a compromise agreement on October 23, 1990, providing for separation pay and financial assistance. Out of 114 affected employees, 90 availed of the benefits. Subsequently, 24 employees moved for the execution of the NLRC's May 31, 1990 decision. Labor Arbiter Salimathar Nambi denied the motion, but the NLRC, on February 26, 1992, set aside the denial and ordered petitioner to accept the union members to their former positions with back wages. Petitioner's motion for reconsideration was denied. The Petition: Petitioner filed a petition for certiorari with the Supreme Court to set aside the NLRC's February 26, 1992 Decision and its April 22, 1992 Resolution.
Issue(s)
Whether the Compromise Agreement entered into by petitioner and the Union is binding upon private respondents who did not sign it nor avail of its benefits, and whether union officers or the majority of union members have the authority to waive the accrued rights of dissenting minority members to employment or reinstatement without their express consent or special power of attorney. Whether the amended decision of the NLRC is binding on Domingo Namia and Rizalde Flores.
Ruling
The Supreme Court affirmed the NLRC's Decision dated February 26, 1992, with a modification regarding respondents Domingo Namia and Rizalde Flores. The Court held that the Compromise Agreement is not binding on private respondents who did not sign it or avail of its benefits. However, Domingo Namia and Rizalde Flores are bound by the amended decision of NLRC rendered on May 3, 1990, which allows their dismissal subject to separation pay, as they did not appeal this decision. The temporary restraining order was lifted except with respect to Domingo Namia and Rizalde Flores.
Ratio Decidendi
On the binding effect of the Compromise Agreement and the authority of union officers: The Court held that a compromise agreement, which involves the waiver of individual rights such as the right to employment or reinstatement, requires the express consent or a special power of attorney from each affected employee. This is because the right to employment is a personal right protected by the security of tenure provision of the Labor Code. The authority of attorneys or union representatives to bind their clients or members in compromise agreements is limited; they cannot enter into such agreements without a special power of attorney or express consent for the full or partial discharge of a client's claim. In this case, the Compromise Agreement provided for dismissal with separation pay and financial assistance, which was less advantageous than the NLRC's decision ordering reinstatement. Therefore, the private respondents who did not sign the agreement or avail of its benefits were not bound by its terms. The Court reiterated that the waiver of reinstatement must be exercised personally by the workers themselves, and neither the officers nor the majority of the union had the authority to waive the accrued rights of dissenting minority members. The Court cited General Rubber and Footwear Corporation v. Drilon and Esso Philippines, Inc. v. Malayang Manggagawa sa Esso (MME) to support this principle, emphasizing that individual members become the real parties in interest when favorable judgments accrue to them, and it is for them individually to accept or reject the fruits of litigation. The Court also noted that the authority to compromise cannot be presumed and must be duly established by evidence, citing General Rubber and Footwear Corporation v. Drilon and Kaisahan ng mga Manggagawa sa La Campana v. Sarmiento. The Court found no reason for the union members to enter into a compromise when the NLRC's decision ordering their reinstatement was more advantageous than their dismissal under the Compromise Agreement. On the binding effect of the NLRC's amended decision on Domingo Namia and Rizalde Flores: The Court noted that while Domingo Namia and Rizalde Flores were not bound by the Compromise Agreement, they were bound by the amended decision of the NLRC rendered on May 3, 1990. This amended decision provided that members of the union's board of directors could be dismissed by the petitioner subject to the payment of separation pay. Since these two respondents did not appeal the amended decision after the denial of their motion for reconsideration, they were deemed bound by it. This ruling distinguishes their situation from the other private respondents who were not signatories to the compromise agreement and were entitled to the benefits of the original NLRC decision ordering reinstatement.
Main Doctrine
A compromise agreement entered into by a union and management, which waives or surrenders individual employees' right to employment or reinstatement, requires the express consent or special power of attorney from each affected employee, and cannot be validly entered into by union officers or the majority of the union members on behalf of dissenting minority members.