Cornista-Domingo v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Philippine Veterans Bank (Bank) was placed under receivership by the Central Bank's Monetary Board in April 1983, leading to a retrenchment and reorganization program. Subsequently, the Monetary Board ordered the Bank's liquidation in June 1985, terminating all employees. While many accepted separation pay and executed quitclaims, some challenged their termination. The Supreme Court, in G.R. No. 67125, upheld the Monetary Board's authority to liquidate the Bank and the legality of the employees' separation, ruling they were not illegally dismissed but lawfully separated. Procedural History: Following the Bank's liquidation, Congress enacted Republic Act No. 7169 in January 1992, authorizing its reopening and rehabilitation. A Rehabilitation Committee was formed, with a mandate to select and organize an initial workforce, giving preference to veterans and their dependents. Several employees initiated cases, arguing that R.A. No. 7169 nullified the liquidation and their termination. Labor Arbiter Eduardo J. Carpio dismissed these claims. The National Labor Relations Commission (NLRC) reversed this decision, ordering reinstatement. The Bank and the Union appealed to the Supreme Court. Subsequently, the Bank and the Union entered into a Compromise Agreement, which was approved by the Labor Arbiter. However, some employees contested this agreement. The Supreme Court referred the consolidated cases to the Court of Appeals (CA). The Petition: The petitioners seek review via certiorari of the CA's consolidated decision, which declared the NLRC's reinstatement order void and reinstated the Labor Arbiter's decision dismissing the claims. The petitioners argue that R.A. No. 7169 granted them the right to reinstatement and back wages, and that the Compromise Agreement was invalid. They contend the CA erred in upholding the validity of the Compromise Agreement, asserting it was not binding on employees who did not ratify it or who were allegedly deceived into accepting payments. The Supreme Court, however, found that the Bank's liquidation legally severed the employer-employee relationship, and the subsequent rehabilitation did not revive it. The Court also affirmed the validity of the Compromise Agreement, noting that a majority of the Union members ratified it and accepted its benefits, thus estopping them from repudiating it.
Issue(s)
Whether the enactment of R.A. No. 7169 granting the rehabilitation of the Philippine Veterans Bank revived the employer-employee relationship that was severed by its lawful liquidation. Whether the petitioners are entitled to reinstatement and back wages despite being lawfully separated from employment. Whether the Compromise Agreement entered into by the Bank and the Union, and subsequently ratified by a majority of the Union members, is valid and binding on all employees, including those who contested it.
Ruling
The petition is DENIED. The Court of Appeals committed no reversible error in rendering its challenged decision of December 21, 2001 and Resolution of January 8, 2003.
Ratio Decidendi
On the revival of the employer-employee relationship by R.A. No. 7169: The Court held that the enactment of R.A. No. 7169 did not nullify the Monetary Board Resolution No. 612, which placed the Bank under liquidation and caused the termination of employment. The Bank's subsequent rehabilitation was not an ordinary rehabilitation but a legislative fiat to breathe life into it. The Court reiterated its pronouncement in Philippine Veterans Bank Employees Union-NUBE v. Philippine Veterans Bank that the employees were lawfully separated, not illegally dismissed. The employer-employee relationship, permanently severed by the Bank's closure and liquidation, could not be revived by its rehabilitation. The Court emphasized that the Bank's present state of finances and the cost of backwages and benefits would cripple its rehabilitation efforts, contrary to the intent of R.A. No. 7169. On the entitlement to reinstatement and back wages: Reinstatement is a relief accorded only to an employee who was illegally dismissed. Since the employees were lawfully separated due to the Bank's liquidation, they are not entitled to reinstatement or back wages. The Court clarified that while R.A. No. 7169 provided for preference to veterans and their dependents in hiring, this did not create a right to demand reinstatement for previously separated employees. The Rehabilitation Committee was given discretion to select and organize the initial manning force. Giving in to the demand for wholesale reinstatement with back wages would be a fatal blow to the Bank's rehabilitation, contravening the intent of R.A. No. 7169. On the validity and binding effect of the Compromise Agreement: The Court affirmed the validity of the Compromise Agreement. A labor union has the authority to represent its members and enter into compromise agreements on their behalf. The agreement was ratified by a substantial majority of the Union members, and those who accepted benefits thereunder, executing quitclaims, waivers, and releases, are bound by its terms under the principles of res judicata and estoppel. The Court noted that the Union is a closed shop union, giving it sole authority to negotiate. The ratification by the majority binds the minority. The absence of the Labor Arbiter during the signing was cured by the subsequent submission of the agreement for approval, satisfying the requirement that the parties understood the terms and entered into it freely and voluntarily. Furthermore, the acceptance of benefits by most petitioners bars them from repudiating the agreement, as they cannot adopt an inconsistent position. The Court found no proof of fraud, misrepresentation, or coercion, thus upholding the agreement as a valid and binding contract.
Main Doctrine
The enactment of Republic Act No. 7169 authorizing the reopening and rehabilitation of the Philippine Veterans Bank did not nullify the prior Monetary Board Resolution placing the bank under liquidation and the subsequent termination of its employees. The employer-employee relationship, severed by lawful separation due to liquidation, cannot be revived by rehabilitation. Reinstatement is a relief only for illegal dismissal, not for lawful separation. A compromise agreement, once approved and substantially complied with, binds the parties, including the minority, and acceptance of benefits thereunder creates estoppel.