G.R. No. L-41518 - Guerrero's Transport Services, Inc. vs. Blaylock Trans. Services Employees Association

On June 1, 1972, the U.S. Naval Base authorities at Subic, Zambales conducted a public bidding for a five-year contract to operate and manage transportation services inside the base.
Santiago Guerrero, owner-operator of Guerrero’s Transport Services, Inc. (petitioner), won the bidding, replacing Concepcion F. Blaylock, the then incumbent concessionaire doing business as "Blaylock Transport Services" whose 395 employees are union members of BTEA-KILUSAN.

Upon commencing operations on January 1, 1973, petitioner refused to employ the members of the respondent union.
On January 12, 1975, the respondent union filed a complaint with the National Labor Relations Commission (NLRC) in NLRC Case No. 214 to compel petitioner to employ its members pursuant to Article I, Section 2 of the RP-US Base Agreement dated May 27, 1968.

The NLRC initially dismissed the complaint on March 13, 1973, on jurisdictional grounds due to the asserted absence of an employer-employee relationship.
The respondent union subsequently appealed the NLRC decision to the Secretary of Labor, who remanded the case back to the NLRC, leading to a series of conferences and eventual issuance of a resolution on October 31, 1973 directing petitioner to absorb complainants subject to specified conditions.

Secretary of Labor Blas F. Ople affirmed the NLRC’s resolution on December 27, 1973 after petitioner’s appeal.
In subsequent correspondence during 1974 and early 1975, petitioner indicated partial compliance with the resolution, attributing deficiencies to some complainants’ failure to undergo processing as required by the U.S. Naval Base authorities.

On March 26, 1975, the respondent Labor Arbiter Francisco M. de los Reyes issued an order calling for further hearings to determine those entitled to reinstatement.
On June 20, 1975, the same Labor Arbiter ordered the reinstatement of 129 individuals to their former or substantially equivalent positions, preserving seniority and other rights.
A subsequent motion by the respondent union for the issuance of a writ of execution was filed on July 16, 1975; however, petitioner raised objections questioning the Labor Arbiter’s jurisdiction over the NLRC case.

On September 1, 1975, the Provincial Labor Office transmitted detailed information on petitioner’s compliance with the NLRC resolution to the Department of Labor.
On September 25, 1975, the Labor Arbiter, acting on the motion for execution, declared his previous orders final and executory, directing petitioner to reinstate the 129 complainants and to pay back wages totaling P592,110.00 covering a specific period.
On September 26, 1975, a writ was issued for the levy on petitioner’s properties, initiating enforced compliance.

On October 1, 1975, petitioner filed a petition for certiorari and prohibition with a preliminary injunction, contesting the jurisdiction and authority of the Labor Arbiter’s orders.
On October 20, 1975, during the hearing, the parties reached a Compromise Agreement whereby it was agreed that the determination of union members eligible for absorption by petitioner would be submitted to the Office of the Secretary of Labor and be deemed final.
This Compromise Agreement, approved by the Court on October 24, 1975, effectively superseded the earlier NLRC resolution and established the framework for the absorption process.

Pursuant to the Compromise Agreement, Secretary Ople issued an Order on November 13, 1975 directing the NLRC, through the Labor Arbiter, to implement the absorption of the union members meeting the stipulated criteria: (a) bona fide employees of Blaylock Transport Services at the time its concession expired, and (b) those who pass the final screening and approval by the U.S. Naval Base authorities.
On November 25, 1975, following a hearing to verify bona fides, the Labor Arbiter issued an Order listing 174 employees (with one duplicate name consolidated) eligible for the process, and transmitted the list to the U.S. Naval Base for immediate screening.

Petitioner argued that the Labor Arbiter lacked jurisdiction over NLRC Case No. 214, rendering his proceedings and orders null and void, particularly the award of back wages.
The Court, while addressing these contentions, focused on the binding nature of the Compromise Agreement and the specific obligations imposed on the petitioner by the Secretary of Labor’s Order.
Concurrences and separate opinions, notably by Justice Fernando, reflected sympathy for the labor union’s plight but affirmed adherence to the agreed terms and legal principles.

Whether the Labor Arbiter had the proper jurisdiction to issue orders on the employment and back wage award of union members in NLRC Case No. 214.
Whether the petition by petitioner contesting said jurisdiction was well-founded.

Whether the Compromise Agreement reached on October 20, 1975, and approved by the Court, has the force and effect of res judicata on the issues previously litigated.
The extent to which the agreement governs the obligations of petitioner regarding the absorption of the union members.

Whether the contractual and treaty obligations imposed by the RP-US Base Agreement mandate priority employment for the affected employees.
How the terms of such agreement interface with the administrative orders issued by the NLRC and the Secretary of Labor.

Whether the award of back wages to the 129 complainants by the Labor Arbiter was valid, considering the alleged non-compliance with the conditions set forth in the earlier NLRC resolution.
Whether the ordering of back wages exceeded the Labor Arbiter’s authority under the established framework.