G.R. No. 105710 - Jag and Haggar Jeans and Sportswear Corp. vs. National Labor Relations Commission

In September 1988, the Lakas Manggagawa sa Jag (Union), composed of the rank-and-file employees of Jag & Haggar Jeans and Sportswear Corporation (petitioner), staged a strike.
Petitioner filed a petition declaring the strike illegal.
Labor Arbiter Eduardo Madriaga rendered a decision on November 29, 1988, declaring the strike illegal for various reasons, including failure to observe the cooling-off period, improper conduct of the strike vote, and commission of illegal acts as supported by petitioner’s affidavits.
The Arbiter’s decision ordered the dismissal of union officers and rank-and-file employees who participated in the illegal strike, and it also enjoined both parties from altering the pre-strike status quo.

The affected union officers and members appealed the Arbiter’s decision to the NLRC.
On August 31, 1989, the NLRC reversed the Labor Arbiter’s ruling and ordered the reinstatement of the affected employees.
On May 31, 1990, acting on a motion for reconsideration, the NLRC modified its prior decision:

Certain union officers were declared to have lost their employment outright.
Union Board Members and Shop Stewards could be dismissed subject to payment of separation pay equivalent to one-half month for every year of service.
Union members were directed to report for work within ten days and be reinstated to their former or equivalent positions.

While motions for reconsideration and execution were pending, both parties negotiated a settlement.
On October 23, 1990, a Compromise Agreement was executed and signed by petitioner and the union (represented by its officers).

The Agreement provided for separation pay equivalent to one-half month’s basic pay for every year of service to the affected employees.
Additional financial assistance was provided:

ii. P2,000.00 to union members who were to be reinstated.

Out of 114 affected employees, 90 availed of the benefits under the Compromise Agreement.

On May 15, 1991, 24 affected employees moved for the execution of the NLRC decision from May 31, 1990.
Petitioner opposed the motion for execution by citing the Compromise Agreement, emphasizing that 90 employees had already accepted its benefits.
On September 12, 1991, Labor Arbiter Salimathar Nambi denied the motion for execution.
Of the 24 employees, 12 availed of the Agreement’s benefits while the remaining 12 did not and subsequently appealed the denial to NLRC.
On February 26, 1992, the NLRC set aside the earlier denial and directed petitioner to reinstate the union members with back wages from July 30, 1990, until reinstatement.
Petitioner filed a motion for reconsideration which was denied on April 22, 1992.
On May 19, 1992, petitioner filed a petition for certiorari with praying for a restraining order and/or writ of preliminary injunction, but it was dismissed on May 27, 1992, for technical deficiencies.
Petitioner later filed a motion for leave to refile its petition for certiorari (G.R. No. 105710), which was granted by the Third Division on June 29, 1992 through a temporary restraining order.
The case was eventually reassigned to the First Division for further proceedings.

The primary issue arose over whether the Compromise Agreement entered into by petitioner and the Union is binding upon all union members, particularly the private respondents who neither signed nor availed themselves of its benefits.
Petitioner argued that the ratification by a majority (102 out of 114 affected employees) implied consent of the union members.
Private respondents contended that individual consent or a special power of attorney was required before their rights, including the right to employment security under the Labor Code, could be waived.

Whether the Compromise Agreement, which was executed between the petitioner and the union officers, is binding upon all affected union members, particularly the private respondents who did not affirmatively ratify or avail themselves of its benefits.
Whether union representatives had the authority to compromise individual employment rights without securing the express consent of the dissenting employees.
Whether the waiver of the right to reinstatement, as provided in the compromise, is valid given the mandatory security of tenure protection under the Labor Code of the Philippines.