Journalists, Inc. v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Journalists, Inc. (PJI) faced a labor dispute when the Journal Employees Union filed a notice of strike alleging unfair labor practices, specifically in relation to PJI's planned retrenchment program due to alleged overstaffing and financial losses. The Secretary of Labor and Employment certified this dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration. Initially, the NLRC denied PJI's motion to dismiss and a motion to defer proceedings. Subsequently, in a Resolution dated May 31, 2001, the NLRC declared the retrenchment of 31 employees illegal, citing evidence such as office renovations, merit increases, and a company-sponsored Christmas party that contradicted PJI's claims of financial distress. The NLRC ordered the reinstatement of the illegally dismissed employees with backwages and attorney's fees, totaling P6,447,008.57. Procedural History: Following the NLRC's initial resolution, PJI and the Union executed a Compromise Agreement on July 9, 2001, which was approved by the NLRC on July 25, 2002. This agreement led to the reinstatement of 31 employees and the payment of their monetary claims, with the case being declared closed and terminated. However, the Union subsequently filed another Notice of Strike on July 1, 2002, citing the dismissal of 29 employees, violation of CBA benefits, non-payment of various allowances and bonuses, and non-payment of backwages to reinstated employees. The DOLE Secretary again certified this dispute to the NLRC. In a Resolution dated July 31, 2003, the NLRC ruled that the 29 complainants were not illegally dismissed, finding that the earlier retrenchment had been mooted by the compromise agreement and that the employees had subsequently entered into fixed-term contracts, thereby waiving their claims. The NLRC dismissed this case for lack of merit. The Union then assailed the NLRC's ruling before the Court of Appeals (CA) via a petition for certiorari. The CA granted the petition, ordering the reinstatement of the 29 dismissed employees with full backwages and payment of their rightful CBA benefits, remanding the case to the NLRC for computation. The Petition: Journalists, Inc., along with its President Bobby Dela Cruz, Executive Vice-President Arnold Banares, and Chief Legal Officer Atty. Ruby Ruiz Bruno, filed a Petition for Certiorari under Rule 65 (later treated as a Petition for Review under Rule 45) with the Supreme Court. They contend that the Court of Appeals committed grave abuse of discretion by adopting the NLRC's May 31, 2001 Resolution, which they argue was abandoned and rendered moot by the subsequent compromise agreement and the NLRC's July 25, 2002 Resolution that closed and terminated the case. Petitioners also argue that the CA erred by acting as a trier of facts and by extending awards to 50 individuals who were not parties to the case. The core of their argument is that the compromise agreement, once approved, should have definitively settled the dispute, rendering the CA's reversal of the NLRC's decision improper and a violation of due process.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in applying the May 31, 2001 NLRC Resolution to the second case, despite it being allegedly abandoned and mooted by the subsequent compromise agreement and its approval. Whether the Court of Appeals committed grave abuse of discretion by trying facts and evidence not presented before the NLRC. Whether the Court of Appeals committed grave abuse of discretion in granting awards to 50 other persons who were not parties to the case.
Ruling
The petition is denied, and the assailed Decision and Resolution of the Court of Appeals are affirmed. Costs against the petitioners.
Ratio Decidendi
On the issue of the Court of Appeals' alleged grave abuse of discretion in applying the May 31, 2001 NLRC Resolution: The Court held that a compromise agreement, once approved by the NLRC, has the force and effect of res judicata and becomes immediately executory, implying a waiver of the right to appeal. However, the compromise agreement in this case, as approved by the NLRC, specifically limited the issues to be resolved to the monetary claims of certain employees. The agreement did not affect the NLRC's earlier pronouncement in its May 31, 2001 Resolution that PJI's retrenchment program lacked a valid basis. Therefore, the CA correctly held that the compromise agreement pertained only to the monetary obligations and did not render the earlier resolution moot and academic. The Court reiterated that a compromise agreement cannot bind parties who did not voluntarily participate and give specific individual consent. The ruling in Golden Donuts, Inc. v. National Labor Relations Commission was cited to emphasize that a union cannot compromise the individual claims of members who did not consent, and a judgment approving a compromise agreement does not have the effect of res judicata upon non-signatories. On the issue of the Court of Appeals allegedly trying facts and evidence not presented: The Court clarified that in exercising its power to review NLRC decisions, the CA can examine factual findings and legal conclusions. The CA is not proscribed from examining evidence anew to determine if the NLRC's findings are supported by the evidence and if the conclusions are accurate. The CA's findings were found to be in accord with the evidence on record, particularly regarding PJI's scheme of hiring retrenched employees as contractual workers on short-term contracts with lower salaries, which circumvented security of tenure and violated the prohibition against diminution of benefits. The Court also affirmed the CA's ruling that employees are not barred from pursuing claims despite accepting separation pay and signing quitclaims if there is a showing of undue pressure or duress, as such quitclaims are against public policy. On the issue of the Court of Appeals granting awards to 50 other persons not parties to the case: While the petition was filed by 29 complainants, the CA's order to pay benefits to the 29 and 50 employees, less amounts already received, was based on the evidence and the nature of the dispute. The CA's decision to remand the case to the NLRC for computation of monetary awards suggests that the determination of who among the 50 employees were entitled to benefits was part of the process of resolving the overall dispute arising from the illegal retrenchment and subsequent actions of PJI. The CA's broad order aimed to ensure that all affected employees, whose claims were intertwined with the main dispute, received their rightful benefits.
Main Doctrine
A compromise agreement, once approved by the National Labor Relations Commission (NLRC), becomes part of the judgment and has the force and effect of res judicata, binding only upon the parties who voluntarily entered into it and gave specific individual consent. It cannot bind non-signatories or parties who did not participate in the settlement. The NLRC's approval of a compromise agreement does not render its prior resolution moot and academic if the agreement specifically limits the issues to be resolved, particularly monetary claims, and does not affect the pronouncements on the legality of the employer's actions.