Titan Mega Bags Industrial Corp. v. SMC Quarry 2 Workers Union-February Six Movement

FIRST DIVISION

[G.R. No. 192752. September 2, 2019.]

TITAN MEGA BAGS INDUSTRIAL CORPORATION AND HERMAN MONTENEGRO, petitioners, vs.SMC QUARRY 2 WORKERS UNION-FEBRUARY SIX MOVEMENT, ET AL., respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedSeptember 2, 2019which reads as follows:

"G.R. No. 192752 (Titan Mega Bags Industrial Corporation and Herman Montenegro v. SMC Quarry 2 Workers Union-February Six Movement, et al.). — We affirm the conclusiveness of compromise settlements as a means to end labor disputes.

On December 8, 1998, respondents filed a complaint against petitioners for unfair labor practice and payment of benefits. 1

On December 29, 1999, Acting Executive Labor Arbiter (ELA) Pedro C. Ramos rendered a Decision 2 in favor of respondents, the dispositive portion of which reads: 3

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1) Declaring the existence of employer-employee relationship between the complainant workers and respondent herein;

2) Declaring respondents guilty of illegal lockout;

3) Ordering respondents to reinstate individual complainants to their position without loss of seniority rights and other privileges, either physically or in the payroll, at the option of respondents; and to pay them full backwages from the time the respondent company lockout its operation up to their actual reinstatement, the partial computation of which is shown in Annex "A"; and if their reinstatement is no longer possible, to pay their separation pay equivalent to one (1) month pay for every year of service;

4) Ordering respondents to pay the individual complainants their overtime pay and 13th month pay, as well as, their maternity and paternity leave benefits, the computation of which is shown in Annex "A";

5) Ordering respondents to pay attorney's fees to complainants equivalent to ten (10%) percent of the complainants' monetary award computed in the amount of P1,061,918.32;

6) Dismissing the claim [of] payment of damages for lack of legal basis.

SO ORDERED. 4

Thereafter, respondents moved for the execution of the reinstatement aspect of the Decision. On March 26, 2001, the Acting ELA issued an Order granting the motion and ordering the issuance of an alias writ of execution. 5

Petitioners filed separate appeals from the Decision dated December 29, 1999 and Order dated March 26, 2001. Subsequently, they posted a surety bond issued by Pioneer Insurance and Surety Corporation in the amount of P10,619,183.19 equivalent to the total monetary award of the ELA. 6

On May 31, 2001, the National Labor Relations Commission (NLRC) consolidated the appeals and ruled in favor of petitioners: 7

WHEREFORE, premises considered, judgment is hereby rendered SETTING ASIDE the portions of the Decision dated 29 December 1999: a) which declared respondents-appellants guilty of illegal lockout; b) which ordered respondents-appellants to reinstate individual complainants-appellees to their former positions without loss of seniority rights and other privileges, either physically or in the payroll, at the option of respondents; and to pay them full backwages from the time the respondent company lockout its operation up to their actual reinstatement, the partial computation of which is shown in Annex "A", and if their reinstatement is no longer possible, to pay their separation pay equivalent to one (1) month pay for every year of service; and c) which ordered respondents-appellants to pay the individual complainants their overtime pay x x x as well as their maternity and paternity leave benefits.

A new Decision is hereby issued DECLARING respondent SMC a labor-only contractor. Consequently, respondents-appellants shall be solidarily liable with SMC for the payment of the proportionate 13th month pay and ten (10%) percent thereof as attorney's fees in accordance with Article 111 of the Labor Code, as amended. Moreover, respondents-appellants are hereby directed to absorb complainants-appellees in the bargaining unit of respondent-appellant company or in lieu of absorption, to pay complainants-appellees separation pay of one (1) month being the minimum required by law.

In (sic) regard to the reinstatement aspect [ ] of the 29 December 1999 Decision of the Labor Arbiter, respondents-appellants are directed to pay complainants-appellees their accrued wages from 01 January 2000 to date of this resolution.

Respondents-appellants are hereby ordered to pay each individual complainants-appellees: x x x these awards:

 

I.
1. Absorption to respondent-appellant company or Separation Pay of	=	P4,888.00
2. Proportionate 13th Month Pay	=	4,073.33
3. Ten Percent Attorney's Fees of No. 2	=	407.33
		––––––––––
		P9,368.66
II.
Accrued wages from January 1, 2000 to May 25, 2001	=	P90,626.00
		––––––––––
		P99,994.66

 

Amounting to SIX MILLION EIGHT HUNDRED NINETY-NINE THOUSAND SIX HUNDRED THIRTY ONE and 54/100 (P6,899,631.54) PESOS.

SO ORDERED. 8

Both parties moved for reconsideration of the Resolution. The NRLC denied both motions in another Resolution dated September 24, 2001. 9

The parties then filed separate petitions for certiorari under Rule 65 of the Rules of Court before the Court of Appeals (CA). 10 Initially, the CA granted petitioner's prayer for issuance of a writ of preliminary injunction enjoining the enforcement of the NLRC Resolutions. 11 But in a later Decision dated October 15, 2004, the CA lifted the writ when it affirmed the NLRC Resolution with the following modifications: 12

1. Petitioners Titan and Montenegro are declared guilty of Illegal Lockout;

2. In lieu of absorption, petitioners Titan and Montenegro are directed to pay the individual private respondents:

a. Full backwages from the time of illegal lockout up to the time of finality of this decision;

b. Separation pay equivalent to one month pay for every year of service;

c. Attorney's fees equivalent to 10% of the amount of wages recovered.

xxx xxx xxx 13

Petitioners filed a motion for reconsideration but the CA denied the same. Thus, petitioners filed a petition for review on certiorari under Rule 45 before this Court, docketed as G.R. Nos. 166775-76. The Court denied the petition and affirmed the CA Decision. 14

Respondents once again filed a manifestation and motion for the issuance of a writ of execution of the reinstatement aspect of the ELA's Decision dated December 29, 1999, and consequently, the case was referred back to the ELA for execution of judgment. 15 Respondents also filed an urgent motion to order the bonding company to release partial payment out of the supersedeas bond. 16

Subsequently, Fiscal Examiner II Ma. Irene T. Trinchera (Fiscal Examiner Trinchera) submitted a computation of the award amounting to P48,479,550.50 based on the CA Decision. 17

On September 6, 2005, ELA Lita V. Aglibut issued an Order directing petitioners to pay the reinstatement wages of respondents, the dispositive portion of which reads:

WHEREFORE, finding the complainants' motion in order, this Office hereby orders Pioneer Insurance & Surety Corporation to immediately release the amount of P5,831,426.50 representing the garnished accrued reinstatement wages of the 69 complainants, and deposit the same to the Cashier of the Commission for proper disposition to the following individual complainants:

xxx xxx xxx

Further, let a writ of execution issue directing the Sheriff to enforce the remaining balance on the accrued reinstatement wages in the amount of P421,767.50 and to deposit the amount to the Cashier of the Commission for disposition to the same complainants.

SO ORDERED. 18

On September 26, 2005, petitioners filed an appeal before the NLRC praying for the nullification of the September 6, 2005 Order of the ELA.

Meanwhile, on October 3, 2005, the parties filed a joint motion for approval of agreement for partial payment of judgment award before the NLRC, Regional Arbitration Branch IV and duly attested by ELA Fatima Jambaro-Franco. 19 The joint motion provides:

The parties, through their duly authorized representatives and assisted by their respective counsels, unto this Honorable Office most respectfully manifest that they have amicably reached a partial settlement of the judgment award under terms and conditions mutually agreed upon as follows:

1. By way of full compliance with the September 6, 2005 Order of the Honorable Executive Labor Arbiter Lita V. Aglibut ("the Executive Labor Arbiter") as regardsreinstatement wages and in partial payment of the judgment award per the Court of Appeals' October 15, 2004 Decision, and in order to avoid inconvenience, delay and unnecessary expenses, the parties have agreed as follows:

1.1 Respondents shall pay the entire amount of SIX MILLION TWO HUNDRED FIFTY THREE THOUSAND ONE HUNDRED NINETY FOUR PESOS (Php6,253,194.00) in seven installments by post dated checks to wit:

 

October 15, 2005	-	Php1,000,000.00
November 15, 2005	-	Php1,000,000.00
December 15, 2005	-	Php1,000,000.00
January 15, 2006	-	Php875,950.00
February 15, 2006	-	Php875,950.00
March 15, 2006	-	Php875,950.00
April 15, 2006	-	Php625,319.40
		––––––––––––––
Total	-	Php6,253,194.00

 

1.2 The first six (6) checks shall be in the name of and made payable to SMC QUARRY 2 WORKERS UNION FSM Local Chapter No. ___ and the last check shall be in the name of and payable to Atty. Benjamin C. Alar, complainants' counsel of record.

1.3 The seven (7) postdated checks shall be delivered simultaneously to the union representatives and their legal counsel upon signing of this Agreement.

[2] Considering that respondents have questioned the correctness and accuracy of the computation submitted by Fiscal Examiner II, Ma. Irene T. Trinchera, subject of the June 16, 2005 Order of the Executive Labor Arbiter, the parties shall further negotiate on the balance of the judgment award.

[3] In the event the parties fail to reach an agreement on the balance, the parties shall submit the issue for the resolution of the Executive Labor Arbiter.

[4] Respondents agreed to maintain the bond issued by Pioneer Insurance and Surety Corporation as bondsman until final settlement of the instant case.

[5] The parties manifest that they have entered into this Agreement in good faith and for the best interest of all concerned, and as such, respectfully and jointly move for the approval of the terms and conditions thereof.

PRAYER FOR RELIEF

WHEREFORE, foregoing premises considered, the parties jointly pray for the approval of the Agreement for Partial Payment under the terms and conditions laid down herein.

The parties pray for such further or other reliefs as may be just and equitable under the premises.

Quezon City, October 3, 2005.

xxx xxx xxx 20 (Emphases supplied.)

On June 30, 2006, the NLRC denied petitioners' appeal for failure to show that a reversible error had been committed by the ELA. 21 Petitioners filed a motion for reconsideration which was denied by the NLRC in a Resolution dated August 24, 2006. 22 Thus, they filed a petition for certiorari before the CA, 23 which, however, dismissed the same through its Decision 24 dated April 7, 2010.

The CA noted that while petitioners' appeal was pending before the NLRC, petitioners and respondents executed a "Joint Agreement for Partial Payment of Judgment Award dated October 3, 2005" 25 which was filed before the NLRC, Regional Arbitration Board. It contained, among others, the parties': (1) agreement on their compliance with the September 6, 2005 Order of the ELA relative to the reinstatement of wages; (2) agreement on the partial payment of the judgment award, per CA Decision dated October 15, 2004; (3) agreement to negotiate further on the balance of the judgment award of the ELA; and (4) agreement to maintain the bond of Pioneer Insurance and Surety Corporation until final settlement of the case. The Joint Agreement encompassed and had effectively resolved or settled all the issues raised in the petition and thus, rendered the latter moot and academic. 26 It was a bilateral act explicitly recognized by Article 1306 of the Civil Code as a juridical agreement in the nature of a compromise agreement and to date, has not been repudiated by any of the parties. 27

Petitioners filed a motion for reconsideration but this was denied by the CA in its Resolution 28 dated June 29, 2010.

Hence, this petition which raises the main issue of whether the CA erred in ruling that the issues raised in the petition for certiorari of petitioners have been rendered moot and academic by the Joint Agreement dated October 3, 2005. 29

Petitioners argue that while the factual finding that petitioners are guilty of illegal lockout and thus, have the corresponding obligation to pay respondents' monetary claims, is no longer in dispute considering our denial of the petition for review on March 16, 2005 in G.R. Nos. 166775-76, the current dispute pertains to the legality or propriety of the monetary award of P48,479,550.50 as computed by Fiscal Examiner Trinchera. 30 The Joint Agreement of the parties specifically acknowledged that petitioners do not recognize the validity and legality of the monetary award as indicated in the CA Decision, and which was affirmed by this Court in G.R. Nos. 166775-76. However, respondents persistently sought the execution of the entire amount of Fiscal Examiner Trinchera's computation over petitioners' vehement objections. 31

Petitioners also argue that the CA erred in failing to resolve the petition on the merits considering that the computation made by Fiscal Examiner Trinchera was manifestly erroneous and in total disregard of prevailing law and jurisprudence. The period of computing backwages should be limited only from the date of the dismissal up to the day when respondents' plant ceased operations, i.e., on October 13, 1998 as finally affirmed in the Decision dated October 15, 2004 of the CA. It is undisputed that the cause of respondents' dismissal was the cessation of operations of the company's plant due to drastic reduction of production orders and losses. 32 Thus, computing backwages beyond October 13, 1998, the date of cessation of operations of the company's plant, would not only be unjust but would also be confiscatory and violative of respondents' constitutionally protected property rights. 33 Moreover, the computation should not have been based on current wage levels but should have been computed based only on the wage rate at the time of the closure of the company because it is at this date the respondents' services were also terminated without regard to whatever subsequent wage rate increases have been imposed by law. 34

We deny the petition.

The law defines a compromise as "a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced." 35 As a contract, a compromise is perfected by mere consent. 36

In the case at bar, the parties' consent to the agreement they reached jointly was evident, and the CA correctly observed that it has never been repudiated by either party. 37 Clearly, therefore, a contract of compromise was perfected.

The Joint Agreement as a consensual contract became binding between the parties upon its execution. 38 From then on, it has become the source of the rights and obligations of the parties. 39 It also has the effect and authority of resjudicata, from the time it was validly entered into, even without judicial approval. 40

Hence, in Olaybar v. NLRC, 41 We held that the Labor Code recognizes the conclusiveness of compromise settlements as a means to end labor dispute. Article 227 provides that "any compromise settlement, including those involving labor standards laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is primafacie evidence that the settlement was obtained through fraud, misrepresentation or coercion." 42

We held further that in a suppletory manner, Article 2037 43 of the Civil Code states that a compromise has upon the parties the effect and authority of resjudicata, and this is true even if the compromise is not judicially approved.

Here, the Joint Agreement has been duly attested by the LA and the validity of which has not been assailed by any of the parties. Having the force of law between the parties upon its execution, the Joint Agreement has consequently rendered petitioners' contentions moot and academic. 44 It might be true that the parties have not agreed on the accuracy of the computation of Fiscal Examiner Trinchera, but it is clear from the Joint Agreement that it was precisely due to this disagreement that the parties bound themselves to further negotiate on the balance of the judgment award after payment of a total of P6,253,194.00. Petitioners argue that notwithstanding the Joint Agreement, respondents persistently seek the execution of the entire amount of Fiscal Examiner Trinchera's computation. The remedy of petitioners, however, lies in enforcing the Joint Agreement and not in continuing to question the ELA's Order dated September 6, 2005, which the parties have already obligated themselves to fully comply with in the Joint Agreement.

WHEREFORE, the petition is DENIED. The Court of Appeals' Decision dated April 7, 2010 and the Resolution dated June 29, 2010 in CA-G.R. SP No. 97099 are AFFIRMED.

The compliance Atty. Carlos Luis Fernandez of Laguesma Magsalin Consulta & Gastrado, counsel for petitioners, with the Show Cause Resolution dated June 3, 2019 and said counsel's manifestation as compliance with the Resolution dated July 17, 2017, with motion to withdraw as counsel for petitioners for reasons stated therein, and requesting that copies of all motions, orders, writs and other processes of the Court be served directly to Titan Mega Bags Industrial Corporation, 6/F One Corporate Plaza, 845 A. Arnaiz Avenue, Makati City 1200, is NOTED.

SO ORDERED."

Very truly yours,

(SGD.) LIBRADA C. BUENA

Division Clerk of Court

 

Footnotes

1.Rollo, p. 46.

2.Id. at 311-320.

3.Id. at 319-320.

4.Id.

5.Rollo, p. 47.

6.Id. at 47-48.

7.Id. at 123-163.

8.Id. at 160-162.

9.Id. at 49.

10.Id. at 49-50.

11.Id. at 50.

12.Id.

13.Rollo, pp. 50, 396.

14.Id. at 50-51.

15.Id. at 51.

16.Id.

17.Supra note 14.

18.Rollo, pp. 251-253.

19.Id. at 52.

20.Id. at 55-57.

21.Id. at 52.

22.Id. at 53.

23.Id.

24.Rollo, pp. 44-60; penned by Associate Justice Antonio L. Villamor with Associate Justices Jose C. Reyes, Jr. and Rodil V. Zalameda, concurring.

25.Id. at 54.

26.Id. at 57-59.

27.Id. at 58.

28.Id. at 62-63.

29.Id. at 26.

30.Id. at 31.

31.Id. at 31-32.

32.Id. at 33.

33.Id. at 34.

34. Id. at 35.

35. Mayuga v. Court of Appeals, G.R. No. L-46953, September 28, 1987, 154 SCRA 309, 319.

36. Id.

37. Rollo, pp. 57-59.

38. See Santos Ventura Hocorma Foundation, Inc. v. Santos, G.R. No. 153004, November 5, 2004, 441 SCRA 472, 480.

39. Id.

40. Republic of the Philippines v. Florend, G.R. No. 166866, March 27, 2008, 549 SCRA 527, 535-536.

41. G.R. No. 108713, October 28, 1994, 237 SCRA 819, 823-824; cited in J-Phil. Marine, Inc. v. NLRC, G.R. No. 175366, August 11, 2008, 561 SCRA 676, 680.

42. Id. at 824.

43. Art. 2037. A compromise has upon the parties the effect and authority of resjudicata; but there shall be no execution except in compliance with a judicial compromise.

44. Rollo, p. 59.