G.R. No. 143385 - The Learning Child, Inc. vs. Lazaro

The dispute arose from a complaint for alleged illegal dismissal filed by Respondents-Appellees, Annie Lazaro and Gorgonia Ledesma, against Petitioners-Appellants, The Learning Child, Inc. and Regina Alfonso, before the Labor Arbiter.
The complaint sought reinstatement, full backwages, and moral and exemplary damages.

The National Labor Relations Commission (NLRC) rendered a decision on January 19, 1999, finding the Petitioners-Appellants liable.
On May 24, 2000, the Court of Appeals affirmed the NLRC resolution by confirming the liability of the Petitioners-Appellants in the amount of Two Hundred Ninety-One Thousand and Sixty Pesos (PhP 291,060.00).
Subsequently, on June 16, 2000, the Petitioners, through counsel, filed a motion for a thirty (30) day extension (up to July 17, 2000) to file a petition for review on certiorari challenging the Court of Appeals' decision.

On the granted extension date, July 17, 2000, Petitioners, with the conformity of the Respondents, filed a Manifestation with Motion for the approval of an attached Compromise Agreement.
The filing was accompanied by several annexes:

Annex “B” – A Special Power of Attorney executed by the Acting Corporate Secretary of The Learning Child, Inc. to appoint the law office of Zulueta, Puno, and Associates as its attorney-in-fact.
Annex “C” – A Special Power of Attorney executed by petitioner Maria Regina Alfonso appointing the same law office.
Annex “D” – A Secretary’s Certificate affirming the Board of Directors’ resolution to appoint the law office for handling the settlement.

Petitioners-Appellants agreed to pay the Respondents-Appellees the amount of Two Hundred and Sixty Thousand Pesos (PhP 260,000.00) as full and complete settlement of the claims.
Respondents-Appellees accepted the settlement amount as full settlement and agreed to waive any present and future claims related to the instant case.

An agreement that any pending cases or counterclaims related to the same matter would be dismissed with prejudice.
Petitioners-Appellants’ agreement not to file their previously intended petition for review on certiorari, which included an application for a Temporary Restraining Order or Writ of Preliminary Injunction.

The Agreement explicitly stated that its terms and conditions were not contrary to law, good morals, public order, or public policy.

The Compromise Agreement was submitted for judicial approval along with the motion.
The decision approved the Agreement, set aside the NLRC Resolution dated January 19, 1999, and the Court of Appeals Decision dated May 24, 2000, thereby closing and terminating the case.

Whether the Compromise Agreement entered into by the parties is valid and enforceable, particularly regarding the waiver of further claims and the dismissal of pending actions.
Whether the Agreement, in its substance, is contrary to law, good morals, public order, or public policy.

Whether the Court has the authority to set aside previous decisions by the NLRC and the Court of Appeals based on the parties’ settlement agreement.
Whether the judicial review of the Compromise Agreement caters to the interests of justice amidst the settlement of disputed claims.

The sufficiency and propriety of the annexed documents (Special Powers of Attorney and Board Resolution) in evidencing the parties’ capacity and authority to enter into the settlement.
Whether the filing of a Manifestation with Motion, accompanied by the Compromise Agreement, complies with the procedural rules governing settlement and compromise in labor disputes.