Case Digest: Jag & Haggar Jeans v. NLRC, G.R. No. 105710, February 23, 1995

 Labor Law | Appeal 

• Lakas Manggagawa sa Jag (Union) composed of the rank-and-file employees of Jag & Haggar Jeans and Sportswear Corporation, staged a strike.
• Petitioner filed a petition to declare the strike illegal.
• LA: Declared the strike illegal and ordered the dismissal of the officers and members of the Union who took part in the illegal strike.
• NLRC: Initially set aside the Labor Arbiter's decision and ordering the reinstatement of the affected employees. 
• Later modified the decision, declaring certain union officers dismissed and allowing other members to return to work.
• A compromise agreement was executed by petitioner and the Union providing for separation pay and financial assistance. 
• 102 out of 114 affected employees, availed of the benefits under the Agreement.
• The remaining affected employees moved for the execution of the NLRC decision.
• NLRC: Directed petitioner to accept the remaining 12 union members to their former or equivalent position with back wages.

WoN the Compromise Agreement entered into by petitioner and the Union is binding upon private respondents. NO 

Petitioner contends that the Compromise Agreement was deemed ratified by the union members considering that 102 out of the 114 affected employees already availed of and received the benefits under the said agreement and that private respondents were represented in all stages of the proceedings without them questioning the authority of their union officers and their counsel. It cites the case of Betting Ushers Union (PLUM) v. Jai-alai, 101 Phil. 822 (1957) wherein we ruled that the "will of the majority should prevail over the minority" and which ruling was reiterated in Dionela v. Court of Industrial Relations, 8 SCRA 832 (1963) and Chua v. National Labor Relations Commison, 190 SCRA 558 (1990).

On the other hand, private respondents allege that for a compromise agreement to be binding upon them, a special power of attorney or their express consent was necessary for what was being waived or surrendered under the agreement was their right to an employment. Such right is protected under the security of tenure provision of the Labor Code of the Philippines and cannot be lost without due process of law (Rollo, p. 62).

"Settlement of disputes by way of compromise whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced, is an accepted, nay desirable practice encouraged by the courts of law and administrative tribunals" (Santiago v. De Guzman, 177 SCRA 344 [1989]).

The authority of attorneys to bind their clients is governed by Section 7, Rule IV of the New Rules of Procedure of the National Labor Relations Commission, which provides:

Authority to bind party. — Attorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure; but they cannot, without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim (Emphasis supplied).

It will be noted that the Compromise Agreement provides in paragraphs 2 and 3 thereof that:

2. The union Board Members and Shop Stewards may be dismissed by respondent-appellee subject to the payment of separation pay equivalent to one-half month for every year of service; and

3. The mere union members are directed to report for work within 10 days from receipt of this Decision and management is ordered to accept them to their former or equivalent position (Rollo, pp. 16-17).

The Decision dated May 8, 1990 ordered the reinstatement of the union members to their former or equivalent position while in the case of the Union board members and shop stewards, petitioner was given the option to dismiss them subject to the payment of separation pay. However, in the Compromise Agreement, not only the union officers, board members and shop stewards were considered dismissed from the service but also the union members subject to the payment of separation pay and financial assistance.

The waiver of reinstatement, like waivers of money claims, must be regarded as a personal right which must be exercised personally by the workers themselves. "For a waiver thereof to be legally effective, the individual consent or ratification of the workers or employees involved must be shown. Neither the officers nor the majority of the union had any authority to waive the accrued rights pertaining to the dissenting minority members, . . . . The members of the union need the protective shield of this doctrine not only vis-a-vis their employer but also, at times, vis-a-vis the management of their own union, and at other times even against their own imprudence or impecuniousaess" (General Rubber and Footwear Corporation v. Drilon, 169 SCRA 808 [1989]).

We have ruled that ". . . when it comes to individual benefits accruing to members of a union from a favorable final judgment of any court, the members themselves become the real parties in interest and it is for them, rather than for the union, to accept or reject individually the fruits of litigation" (Esso Philippines, Inc. v. Malayang Manggagawa sa Esso (MME), 75 SCRA 73 [1977]).

The authority to compromise cannot lightly be presumed and should be duly established by evidence (General Rubber and Footwear Corporation v. Drilon, supra; Kaisahan ng mga Manggagawa sa La Campana v. Sarmiento, 133 SCRA 220, [1984]).

We also find no reason for the union members to enter into a compromise when the decision of NLRC ordering their reinstatement is more advantageous to them than their being dismissed from their jobs under said Compromise Agreement.

The Compromise Agreement does not apply to private respondents who did not sign the Compromise Agreement, nor avail of its benefits.

However, while respondents Domingo Namia and Rizalde Flores are not bound by the terms of the Compromise Agreement, they are bound by the amended decision of NLRC rendered on May 3, 1990 which provides that members of the board of directors of the union may be dismissed by petitioner subject to the payment of separation pay. The two respondents did not appeal the amended decision after the denial by NLRC of their motion for reconsideration thereof.

WHEREFORE, the Decision dated February 26, 1992 of the NLRC is AFFIRMED with the modification stated above with respect to respondents Domingo Namia and Rizalde Flores. The temporary restraining order is lifted except with respect to aforementioned respondents.