Facts:

The case involves Eusebio Adame and seventy-seven other workers (petitioners) of La Fuerza, Inc. who, along with their labor union, the Assembly of Laborers & Tenants Organization (ALTO), sought to appeal a decision of the Court of Industrial Relations (CIR). This appeal was filed against La Fuerza, Inc., along with its officers, namely Go Yu Tiong, Prudencio Lim, Jose Mariano Lim, and Agapito Sales. The relevant facts began in April 1966 when ALTO organized a local chapter at La Fuerza, Inc. Following this, on June 1, 1966, the union formally proposed a collective bargaining agreement, which the management rejected on July 1, 1966. Around the same time, La Fuerza dismissed seventy employees. The management also closed its Binondo office and required workers at its Makati plant to submit health and police clearance certificates, warning that failure to comply would lead to dismissal.

On June 14, 1966, La Fuerza was ordered by the Mayor of Makati to close its plant for the al

...

Facts:

Background and Parties

• La Fuerza, Inc. operated a distillery with two principal locations: an office at 399 Muelle de Binondo, Manila and a plant at 2241 Pasong Tamo Extension, Makati, Rizal.
• The labor dispute involved a large number of workers (originally eighty, but seventy-eight remained for purposes of the appeal because Pablo Pagaran and Victoria Moring were deceased) and their labor union known as the Assembly of Laborers & Tenants Organization (ALTO).
• The union had organized a local at La Fuerza, Inc. as early as April 1966.

Early Union Activity and Employer Response

• On June 1, 1966, the union submitted a proposal for a collective bargaining agreement to La Fuerza, Inc.
• The company, through its counsel, rejected the union’s demands in a letter dated July 1, 1966.
• It appeared that management was strongly antipathetic to unionization among its employees.

Dismissals and Operational Developments

• Between May 31 and July 26, 1966, La Fuerza, Inc. dismissed a total of seventy employees as part of its response to the growing union activity.
• The firm closed its Binondo office on June 14, 1966.
• On the same day (June 14, 1966), a circular was issued at the Makati plant instructing workers to submit health and police clearance certificates within five days—with a warning that failure to comply would result in dismissal.
• The Makati local government intervened through orders by the Mayor (letters dated June 21 and 23, 1966) directing the closure of the plant for alleged noncompliance with the ordinance on health certificates.
• The Makati municipal health officer, on June 27, 1966, advised La Fuerza, Inc. to comply or face criminal proceedings, while some workers were arrested and subsequently charged for violating the ordinance.

Proceedings Before the Court of Industrial Relations (CIR)

• Multiple cases were filed and consolidated before the CIR:
• Case No. 2275-V: La Fuerza, Inc. sought authority to dismiss forty-one employees allegedly for not securing the required certificates, with the employees counterclaiming that the dismissals were intended to destroy the union.
• Case No. 4587-ULP: A complaint for unfair labor practice was filed by ALTO on behalf of unionized workers, noting the dismissal of employees due to union activities.
• Case No. 4728-ULP: A complaint alleging unfair labor practice related to the dismissal of initially twelve and later seventy union members.
• During a preventive mediation session on June 8, 1966, ALTO and La Fuerza reached an agreement that the representative for collective bargaining should be determined by the CIR; however, ALTO’s subsequent petition for a certification election (Case No. 1715-MC) was dismissed.
• At a joint hearing, Judge Joaquin M. Salvador, in his May 11, 1970 decision, ruled that:
• La Fuerza, Inc.’s petition for dismissal based on non-renewal of health certificates was without merit.
• La Fuerza, Inc. and its four officers were guilty of unfair labor practice for interfering with the employees’ union rights by coercing them to withdraw from ALTO and refusing collective bargaining.
• The decision ordered the reinstatement of the dismissed workers—with deductions for casual employees and periods relating to closures or imprisonment—and awarded various forms of damages.
• La Fuerza, Inc. and its officers moved for reconsideration, leading to a proposed revised resolution by Judge Salvador dated August 18, 1970, which notably eliminated the award of damages due to lack of supporting allegations and evidence.
• A dissenting opinion was rendered by Judge Arsenio I. Martinez (with Judges Bugayong and Tabigne concurring in dissent or with qualifications), which eventually became the resolution en banc on January 7, 1971.
• The en banc CIR resolution dismissed the three cases “without prejudice to whatever actions… should be ventilated in the regular courts.”

Quitclaims, Motions, and Subsequent Proceedings

• Following the CIR resolution, a series of quitclaims and motions to dismiss were filed by a majority of the petitioners:
• Fifty-six petitioners (or dismissed employees) voluntarily executed deeds of quitclaim and release, manifesting their satisfaction with the CIR decision and waiving further claims.
• An accompanying opposition stated that these petitioners were satisfied with the CIR judgment, rendering the appeal moot and academic.
• Similar manifestations were filed by Pio Salaum (union president) and other employees.
• Petitioners’ counsel challenged the quitclaims on the ground that they had been obtained by means of deceit and misrepresentation, citing:
• Allegations that Agapito Sales, a personnel manager (or, according to respondents, a retained lawyer), had induced signatures by promising monetary benefits.
• The legal provisions of the Industrial Peace Act (Sec. 5[a] and Sec. 8) and Civil Code’s article on waiver of rights.
• Conflicting affidavits emerged:
• Twenty petitioners filed revocatory affidavits alleging they had been misled by respondent Sales in securing their signatures.
• Other affidavits and counter-manifestations by the respondents maintained that the quitclaims were executed voluntarily and without judicial coercion.
• Additional developments included:
• Motions to dismiss filed by some petitioners (including on grounds of satisfaction with the CIR decision) and verified motions to dismiss by others who claimed no cause to appeal.
• The issue of representation for petitioners, notably the case of Rodolfo Cagatin—a petitioner alleged to be non compos mentis and not properly represented—was also raised.
• Ultimately, of the seventy-eight petitioners, sixty-six sought to have their appeals dismissed via the quitclaims, leaving twelve petitioners persisting with the appeal.

Documentary and Testimonial Evidence

• The record included extensive testimony from company officers (e.g., Go Yu Tiong, Prudencio Lim, Jose Mariano Lim) and union figures (e.g., Pio Salaum) regarding:
• The company’s policies on health certifications.
• The internal communications and instructions disseminated to workers.
• The alleged involvement of respondent Sales in influencing the execution of quitclaims.
• Documentary evidence submitted by La Fuerza, Inc. comprised:
• Company letters, circulars, and notices regarding certificate requirements.
• Sanitary orders, municipal letters, and health inspection records.
• Various exhibits relating to the arrests, the dismissal of employees, and subsequent testimonies.

Issue:

The Validity and Effect of the Quitclaims

• Whether the quitclaims and motions to dismiss filed by the sixty-six petitioners, which purportedly demonstrate their satisfaction with the CIR’s decision, should be given effect despite twenty petitioners later retracting their signatures on grounds of misrepresentation.

The Meritorious Nature of the Appeal of the Remaining Petitioners

• Whether the twelve petitioners who maintained their appeal have presented sufficient merit in the contestation of the findings of unfair labor practice.
• Whether the employment-related issues—particularly concerning separation pay under the Termination Pay Law—should be addressed in the absence of reinstatement.

The Competency of Petitioners

• Whether a petitioner such as Rodolfo Cagatin, alleged to be non compos mentis and improperly represented, has the legal capacity to litigate the appeal without the appointment of a guardian ad litem.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

The Voluntary Nature of Quitclaims

• The Court reasoned that even if misrepresentation occurred, the fact that the majority of the petitioners voluntarily executed the quitclaims rendered them binding.

• The revocation by a minority did not undo the legal effect of a compromise reached by the considerable majority.

The Substantial Evidence on Unfair Labor Practices

• The CIR’s factual findings on unfair labor practices—supported by substantial evidence in the record—are given deference upon appeal.
• The reversal or modification of these findings is confined to legal questions rather than factual disputes.

Encouragement of Compromise and Settlement

• The Court underscored that both the Industrial Peace Act and prior decisions (e.g., Dionela vs. CIR, Betting Ushers Union vs. Jai Alai Corporation) encourage compromise in labor disputes.
• The compromise executed via quitclaims was recognized as legally binding on union members, including those who did not actively participate if the union itself had chosen to settle.

Legal Capacity and Due Process

• The ruling clarified that a petitioner who is non compos mentis (or otherwise incompetent) must be properly represented before proceeding with an appeal.
• This safeguard ensures that all parties are afforded full due process rights and prop

...continue reading