Case Digest: Kaisahan ng mga Manggagawa sa La Campana v. Sarmiento, No. L-47853, November 16, 1984

Labor Law | Bureau of Labor Relations

• Kaisahan ng mga Manggagawa sa La Campana filed a petition for better working conditions and other benefits including the reinstatement of nine dismissed workers.
• La Campana refused to grant the demands and no conciliation was reached. 
• Court of Industrial Relations (CIR): Issued a return-to-work order and enjoined the company from further laying off or dismissing laborers and hiring new employees without express authority from the court.
• Series of cases were subsequently filed: 584-V(1-7) involving contempt, dismissals, rotations, and violations of return-to-work orders by the company.
• CIR: Found the company guilty of unfair labor practices and issued orders for reinstatement and back wages for dismissed workers.
• The case went through levels of appeal, including the NLRC, Secretary of Labor, and the Office of the President.
• The union, assisted by counsel, entered into a Compromise Agreement waiving all claims and counterclaims of whatever nature arising out of or in connection with the case.
• CFI: Approved the compromise agreement.
• Issued an order restraining the sheriff from implementing the writ of execution until further orders.

WoN the compromise agreement is valid. NO

The complainants, now petitioners, question the jurisdiction of the Court of First Instance, in issuing the restraining order, contending that all matters arising out of employer-employee relations as well as those arising from unfair labor practice are exclusively vested upon the National Labor Relations Commission not upon the regular courts. Petitioners further alleged that the restraining order cannot and should not prejudice them because the union officers did not have the authority to compromise Case No. 584-V(7) much less represent or act for or in behalf of the individual members of the union in as much as the officers who signed the compromise agreement were not in any way involve in the labor case since they became members and eventually officers only long after the dismissal of petitioners and the subsequent institution of Case No. 584-V(7); and that to allow the union officers to compromise or withdraw the case without the knowledge of the individual complainants who are real parties in interest would in effect be a patent subversion of justice and fair play.

In its COMMENT, respondent company submits that petitioners have no legal personality nor capacity to question any order or decision emanating from Civil Case No. Q-20414 since they are not parties in the said case and should have intervened therein if they have legal interest in the subject matter.

We find merit in the petition.

The order of the then Court of First Instance dated October 20, 1976 sought to restrain the deputy sheriffs from implementing or enforcing the writ of execution issued in CIR Case No. 584-V(7). The first question that confronts US is whether or not the Court of First Instance has jurisdiction to restrain the enforcement of the judgment in CIR Case No. 584-V(7).

The defunct Court of Industrial Relations was vested by law with powers that generally pertain to courts of justice, one of which, is the power to control, in the furtherance of justice, the conduct of its ministerial officers and of all other persons in any manner connected with a case before it. Its successor, the National Labor Relations Commission, through its Commissioner or any Labor Arbiter, may issue writs of execution requiring a sheriff or a proper officer to execute final decisions, orders, or awards of the Commission, Labor Arbiters or Arbitrators, and appoint sheriffs and take any measure under existing laws and decrees as may be necessary to ensure compliance with their decisions, orders or awards.

Within the framework of the facts aforementioned, the Sheriff is undoubtedly acting in his capacity as a ministerial officer of the CIR or the NLRC, as the case may be, and therefore the power of control over him lies in the said agencies. To sanction the assumption by the Court of First Instance of jurisdiction by issuing a restraining order directed against said sheriff, will in effect curtail the powers vested by law with the industrial court or labor agency.

The complaint before the Court of First Instance made particular reference to the fact that there was an existing labor dispute between plaintiff company and the labor union. The Court of First Instance should have exercised caution in issuing the restraining order prayed for, since the very face of the complaint clearly indicate that CIR Case No. 584-V(7) principally involved an employer-employee relationship. The criterion to determine which court has the jurisdiction to issue injunction in labor dispute is whether the acts complained of arose out of, or are connected or interwoven with the cases which fall within the exclusive jurisdiction of the CIR (now vested with the National Labor Relations Commission). To allow the Court of First Instance to pass upon the issue of damages "would be to sanction split jurisdiction which is prejudicial to the orderly administration of justice."  Furthermore, there was an utter disregard of repeated pronouncement by this Court against grant of ex-parte injunctions and restraining orders. Injunctions in Labor disputes are not favored and may issue only after strict compliance with statutory requirements. Under the circumstances, the Court of First Instance should have dismissed the complaint or at least, should have suspended action thereon until after the labor dispute had been finally settled. It must be recalled that the complaint was filled by the company during the pendency of the labor case before the Office of the President. Respondent court acted with grave abuse of discretion amounting to lack of jurisdiction in taking action over the complaint and in issuing a restraining order.

Article 255 of the New Labor Code, as amended by Section 4 of Batas Pambansa Blg. 227, provides:

"Art. 255. Injunction prohibited. — No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code."

Under Art. 218, of the Code, as amended by Sec. 3, B.P. Blg. 227, the Commission shall have the power and authority to enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts in any labor dispute which may cause grave or irreparable damage to any party provided that said injunction shall be issued only after due notice and hearing.

Under Art. 264 of the Code as amended by Sec. 5, B.P. Blg. 227, the Minister of Labor and Employment shall assume jurisdiction or decide a labor dispute which in his opinion is likely to cause strikes or lockouts adversely affecting the national interest or he may certify the same to the commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout.

It is therefore crystal clear, that the NLRC which took the place of the defunct CIR has exclusive jurisdiction over all matters and incidents prior to and after a decision has been rendered arising out of and in connection with a labor dispute, thus respondent Court of First Instance cannot enjoin the enforcement of any decision or awards rendered by the Commission.

We now come to the issue of whether or not petitioners-members have the necessary legal personality to bring suit against respondents for their (members) failure to intervene in Civil Case No. Q-20414.

Although petitioners-members are not the original parties in Civil Case No. Q-20414, they should not be deprived of their right to question the order of the Court of First Instance approving the Compromise Agreement since they are the ones who will stand to suffer and will be greatly prejudiced by the dismissal of the case. Petitioners’ failure to intervene in the Civil Case is not without remedy. They can still avail of the writ of certiorari since the order in question would result in an immediate and direct injury to their respective interests. The labor union as a body does not in reality have a material interest in the outcome of the case. It is indeed the individual members who would be adversely affected in the event of the dismissal of the case after an extended litigation. One would hardly imagine the hardships suffered by the union members during all these years.

"Our consistent holding 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 the litigation . . . Those who stand to benefit from Our decision are entitled if they so desire, to take advantage thereof regardless of whatever stand the other members otherwise affected thereby may take." 

It has been held time and again that courts may set aside technicalities, all in the interest of substantial justice.

Anent the issue of the validity of the Compromise Agreement allegedly entered into by and between the Union represented by its Secretary, Clarita de la Cruz, and the company, represented by its Vice-President Ricardo Tantongco, the Secretary (now Minister) of Labor held that said agreement is void there being no ratification by the individual members of the union and that the presence of complainants during the proceedings before the Labor Arbiter and the presentation of evidence relative to the prosecution of their case are eloquent indication of their interest in pursuing their claims which negate the assertion that they have consented to the withdrawal thereof. We find no cogent reason to disturb the findings of the Secretary of Labor absent any showing of abuse of discretion, it appearing that such findings are supported by substantial evidence.

Generally, a judgment on a compromise agreement puts an end to a litigation and is immediately executory. However, the Rules require a special authority before an attorney can compromise the litigation of their clients. The authority to compromise cannot lightly be presumed and should be duly established by evidence. 

As aptly held by the Secretary of Labor, the records are bereft of showing that the individual members consented to the said agreement. Now were the members informed of the filing of the civil case before the Court of First Instance. If the parties to said agreement acted in good faith, why did they not furnish the Office of the President with a copy of the agreement when they knew all the while that the labor case was then pending appeal therein? Undoubtedly, the compromise agreement was executed to the prejudice of the complainants who never consented thereto, hence, it is null and void. The judgment based on such agreement does not bind the individual members or complainants who are not parties thereto nor signatories therein.

Money claims due to laborers cannot be the object of settlement or compromise effected by a union or counsel without the specific individual consent of each laborer concerned. The beneficiaries are the individual complainants themselves. The union to which they belong can only assist them but cannot decide for them. Awards in favor of laborers after long years of litigation must be attended to with mutual openness and in the best of faith. Only thus can we really give meaning to the constitutional mandate of giving laborers maximum protection and security. It is about time that the judgment in Case No. 584-V(7) be fully implemented considering the unreasonable delay in the satisfaction thereof. This unfortunate incident may only weaken the workingmen’s faith in the judiciary’s capacity to give them justice when due.

The fact that petitioners ceased to be connected with the company and that reinstatement may no longer be possible is no obstacle to the grant of the money claims to the petitioners considering that the claims had already been adjudicated by final judgment and all that was being sought is its enforcement.

WHEREFORE, the petition is granted. The decision dated November 14, 1975 and the October 20, 1976 and December 14, 1977 Orders issued in Civil Case No. Q-20414 are hereby declared NULL and VOID for want of jurisdiction and accordingly set aside.

The Ministry of Labor is hereby directed to cause the implementation of the judgment in CIR Case No. 584-V(7) in accordance with the above pronouncement