VICTORIAS MILLING CO., INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION, CEBU CITY), REMY AGUIRRE, EDGARDO BASTAN, ROMEO BATOLINA, DANILO DURIAS, EFREN…

This case is a petition
for certiorari under
Rule 65 of the Revised Rules of Court.

Culled from the records and the decision of respondent National
Labor Relations Commission (“NLRC”), it would appear that, on 08
January 1981, Diosdado Dacayo and forty-five (45) other complainants filed,
against Victorias Milling Corporation and/or Pablo Espera, with the Bacolod
District Office of the Ministry of Labor and Employment (now Department of
Labor and Employment) various claims for –

(a) their conversion to
regular or permanent employees;

(b) the declaration of
Pablo Espera as a “labor only contractor;”

(c) the payment of wage
differentials, in relation to Wage Order No. 5, Series of 1980, for a period of
three (3) years;

(d) the payment of 13th
month pay differentials for the years 1978, 1979 and 1980;

(e) the payment of social
amelioration bonus for the years 1978, 1979 and 1980;

(f) the payment of
holiday pay for the years 1978, 1979 and 1980;

(g) the payment equivalent to five (5) days of salary for every year
of service as service incentive leave pay for the last three years
preceding the filing of the complaint;

(h) the payment of the
money value of fringe benefits granted to permanent employees under the
collective bargaining agreement;

(i) the payment of attorney’s fees computed at
ten percent (10%) of the total award and reimbursement of P100.00 during every
hearing paid by the complainants to
their counsel for appearance fees;

(j) the payment to each
complainant of P10,000.00 by way of moral damages plus P5,000.00 by way of
exemplary damages; and

(k) the imposition on the employer of fine or
penalty prescribed in Article 289 and Article 290 of the Labor Code.

On 17 June 1981, Atty. Cesar D. Sideño of the Chief Labor
Regulation Section recommended the payment, within ten (10) days, of only the
following items:

(1) holiday pay for three
(3) years;

(2) service incentive
leave pay equivalent to fifteen (15) days;

(3) 13th month pay for
three (3) years; and

(4) the deficiency in the
payment of emergency living allowance.

On 18 June 1981, Assistant Regional
Director Dante G. Ardivilla issued an order adopting in toto the above recommendation.^[1]
Complainants filed a motion for reconsideration. On 09 July 1981, the motion (treated as an appeal) was indorsed
to the Labor Appeal Review Staff Office of the Department of Labor and
Employment. On 07 March 1985, Deputy
Minister Vicente Leogardo, Jr., set aside the appealed order and entered a new
one remanding the case to the Arbitration Branch of the National Labor Relations
Commission, Bacolod City, for compulsory arbitration since the jurisdictional
issue of employer-employee relationship was still then an unsettled matter and
because the case involves evidentiary matters which could be best threshed out
in a formal hearing.^[2] The
case was docketed RAB VI-0149­-85.

Meanwhile, on 01 July 1985, the corporation terminated the
services of Juanito Abonales and twenty-five (25) other workers, some of whom
were complainants in RAB VI-0149-85. This incident gave rise to the filing of another complaint, docketed RAB
VI-0262-85, against the corporation and/or Pablo Espera for illegal
dismissal. The complainants prayed for
reinstatement, with backwages, and for payment of fringe benefits and of
various other money claims. The two
cases were consolidated.

On 17 November 1989, a decision was rendered by the Labor
Arbiter, thus:

“WHEREFORE, premises considered, judgment is hereby rendered:

“A. Declaring complainants as employees of respondent Victorias
Milling Company;

“B. Directing respondents
to:

“1. pay jointly and severally complainants Edgardo Bastan, Remy
Aguirre, Romeo Batolina, Danilo Durias, Efren Gozon, Raul Guadalupe, Erwin
Gulmatico, Generoso Jarobil, Paulino Lucendo, Jaime Limaco, Remegio Mesa,
Benjamin Magdato, Nestor Mendez, Teddy Monserate, Jose Panes, Danilo Peroja,
Jerry Rama, Roger Rendon, Ranulfo Tabligan, Ronilo Saludo, and Reynaldo Publico
the amount of P4,153.44 each, representing their cost of living allowance,
differentials, service incentive leave pay and 13th month pay; complainants
Juanito Abonales, Nelson Escotido, Edison Erasmo, Alejandro Fernandez,
Bonifacio Husain Jr., Nelson Ko, Rodante Ledesma, Danilo Langrio, Gregorio
Langrio, Romeo Lauron, Alfredo Lauron, Reynaldo Lauron, John Peter Ninoy,
Gervacio Palomillo, Jose Razonable, Mario Tolentino, Edgardo Villegas and
Francis Vargas the amount of P16,479.61 each, representing their wage
differentials, ECOLA differentials, 13th month pay and service incentive leave
pay or a total of P383,855.22;

“2. pay P38,385.52 as attorney’s fees; and

“3. reinstate complainants Juanito Abonales, Hernani Alisoso, Ramon
Balladares Emmanuel Deocampo, Nestor Dignos, Rhesa Dignos, Nelson Escotido,
Edison Erasmo, Alejandro Fernandez, Bonifacio Husain, Jr., Nelson Ko, Rodante
Ledesma, Danilo Langrio, Gregorio
Langrio, Romeo Lauron, Alfredo Lauron, Reynaldo Lauron, John Peter Ninoy,
Gervacio Palomillo, Ricardo Peller, Jose Razonable, Mario Tolentino, Edgardo
Villegas and Francis Vargas to their former positions. Respondents are directed to issue a
certification that said complainants had been reinstated within 5 days from
receipt of this decision.

“The complaints of Richmundo Biantan, Rolando Martin, Nelson
Gonzales, Diosdado Dacayo, Rolando Ong, Loreto Jarobil, Perlito Jarobil,
Heriberto Garcia, Rolando Belarmino, Oliveros Bianid and Leonardo Tidoso are
hereby ordered dismissed with prejudice.

“All other claims are hereby ordered dismissed for lack of
merit.

“SO ORDERED.”^[3]

Both parties appealed the decision of the Labor Arbiter to the
NLRC.

Pending appeal, the complainants filed a motion for
reinstatement, which the Labor Arbiter granted in his order of 07 December
1989. The corporation, however, refused
to reinstate them, prompting the complainants to file a motion to hold the
responsible officer of the corporation for contempt. On 21 January 1991, the NLRC rendered the assailed decision
thusly:

“WHEREFORE, the decision of the Labor Arbiter is hereby
AFFIRMED with the following modification.

“Respondents are ordered:

“1. to pay jointly and severally

“(a) Romeo Tingson the
amount of P4,153.44 for cost of living allowance
differentials, service incentive leave pay and 13th month pay with attorney’s
fees equivalent to ten per cent (10%).

“(b) Hernani
Alisoso, Ramon Balladores, Emmanuel Deocampo, Nestor Dignos, Rheso Dignos and
Ricardo Peller the amount of P16,479.61 each, representing their wage
differentials, ECOLA differential, 13th month pay and service incentive leave
pay with attorney’s fees equivalent to
ten (10) percent.

“2. To
reinstate complainants in the Abonales et al. case immediately upon receipt of
a copy of this decision and pay their full backwages computed from July 1, 1985
with a maximum period of three years plus the attorneys fees equivalent to ten
(10) percent.

“The Labor Arbiter is hereby directed to continue hearing the
motion to cite responsible officer of respondents for contempt and resolve it
immediately.

“SO ORDERED.”^[4]

Hence, the instant
petition.

In its resolution of 25
November 1991, this Court resolved to require respondents to file their comment
on the petition. Private respondents
complied on 27 January 1992. Respondent
NLRC, through the Solicitor General, filed its comment on 11 February
1992. A reply to the comment was filed
on 14 July 1992. Private respondents
filed their rejoinder on 24 July 1992. In a resolution, dated 10 August 1992, this Court resolved to give due
course to the petition and to require the parties to submit their respective
memoranda.

On 19 April 1994, petitioner and private respondents filed a
joint motion to dismiss the petition based on compromise settlement. The agreement is here reproduced in full:

“COMPROMISE
AGREEMENT

“COME NOW, the parties assisted by their respective counsels,
and to this Honorable Commission, very respectfully state:

“1. That the Decision
in the above-captioned cases of the Labor Arbiter, Hon. Merlin D. Deloria dated
October 17, 1989 as modified by the Honorable Commission per its decision dated
Jan. 20, 1991 is now pending review by certiorari before the Third
Division of the Honorable Supreme Court, docketed as G.R. Nos. 102567-68
entitled ‘Victorias Milling Company, Inc. vs. National Labor Relations
Commission, et al.;

“2. That in the
interest of harmonious employer-employee relationship and industrial peace, the
parties have mutually and voluntarily agreed as they do hereby mutually and
voluntarily agree to once and for all terminate these consolidated cases;

“3. That with
respect to the Abonales, et al., vs. Victorias Milling Co., Inc., et al., RAB
VI Case No. 0262-85, the parties hereto mutually agree to forego the
computation of all the adjudged amounts including all backwages and other
benefits of the individual complainants; instead, respondent company shall pay
the individual complainant a lump-sum of FORTY FIVE THOUSAND PESOS (P45,000.00)
each which shall be considered as full and complete settlement of all money
claims of the complainants in the case;

“4. That as part of
the consideration of this compromise agreement, respondent company shall
effective April 1, 1994, accord regular employment to and allow the following
complainants, namely, Juanito Abonales, Hernani Alisoso, Ramon Balladares,
Emmanuel Deocampo, Rhesa Dignos, Edison Erasmo, Nelson Escutido, Alejandro
Fernandez, Bonifacio Husain, Jr., Nelson Ko, Rodante Ledesma, Danilo Langrio,
Gregorio Langrio, Alfredo Lauron, Reynaldo Lauron, Romeo Lauron, John Peter
Ninoy, Gervacio Palomillo, Ricardo Peller, Jose Razonable, Mario Tolentino,
Francis Vargas and Edgardo Villegas to enjoy all the benefits provided for
under the existing collective bargaining agreement to a regular employee;

“5. That as to the
Dacayo, et al., vs. Victorias Milling Company, Inc., et al., case, Victorias
Milling Company, Inc., binds itself to respect and comply with the monetary
award of FOUR THOUSAND ONE HUNDRED FIFTY THREE & 44/100 ONLY (P4,153.44)
each to complainants Remy Aguirre, Edgardo Bastan, Romeo Batolina, Danilo
Durias, Efren Gozon, Raul Guadalupe, Erwin Gulmatico, Generoso Jarobil, Paulino
Lucendo, Jaime Limaco, Remegio Mesa, Benjamin Magdato, Nestor Mendez, Teddy
Monserate, Jose Panes, Danilo Peroja, Reynaldo Publico, Jerry Rama, Roger
Rendon, Ronilo Saludo, Ranulfo Tabligan, and Romeo Tingson plus 10% attorney’s
fees of PESOS: NINE THOUSAND ONE HUNDRED THIRTY SEVEN & 56/100 ONLY (P9,137.56)
which monetary awards in the total amount of PESOS: ONE HUNDRED THOUSAND FIVE
HUNDRED THIRTEEN & 24/100 ONLY (P100,513.24) shall be paid upon execution
hereof;

“6. That all the
complainants in both consolidated cases in consideration of this compromise
agreement hereby voluntarily and intelligently waive, quitclaim and release
respondent Victorias Milling Company, Inc. from whatever amount/s and/or
benefits that may be due and owing and hereby forego whatever amount/s,
benefits or award that may be rendered in their favor by the Honorable Supreme
Court in G.R. Cases Nos. 102567-68, it being understood that the foregoing
considerations are the full, complete and final settlement of all their claims,
demands or awards in both consolidated cases; in the same manner, respondent
company shall forego whatever decision the Honorable Supreme Court may decide
in its favor;

“7. That the
respondent company shall shoulder the attorney’s fees in the Abonales, et al.,
case; and

“8. That the
foregoing terms and conditions of this compromise agreement have been
translated by their counsel in the local dialect and understood and voluntarily
accepted by the complainants.

Bacolod City,
Philippines this 30th day of March, 1994.

(Sgd.)                                                                      (Sgd.)

JUANITO ABONALES                                                      HERNANI
ALISOSO

(Sgd.)                                                                  (Sgd.)

RAMON BALLADARES                                                    EMMANUEL DE OCAMPO

(Sgd.)                                                                        (Sgd.)

NENA T. DIGNOS                                                             RHESA
DIGNOS

-in behalf of her late husband

Nestor Dignos

(Sgd.)                                         
            (Sgd.)

EDISON ERASMO                                                           NELSON ESCUTIDO

(Sgd.)                                                                  (Sgd.)

ALEJANDRO FERNANDEZ                                             BONIFACIO
HUSAIN, JR.

(Sgd.)                                                                              (Sgd.)

NELSON KO                                                                    RODANTE
LEDESMA

(Sgd.)                                                                   
            (Sgd.)

DANILO LANGRIO                                                            GREGORIO
LANGRIO

(Sgd.)                                                                                (Sgd.)

ALFREDO LAURON                                                        REYNALDO
LAURON

(Sgd.)                                                                                (Sgd.)

ROMEO LAURON                                                            JOHN
PETER NINOY

(Sgd.)                                                                                 (Sgd.)

GERVACIO PALOMILLO                                                  RICARDO PELLER

(Sgd.)                                                                                (Sgd.)

JOSE RAZONABLE                                                         MARIO
TOLENTINO

(Sgd.)                                                                                (Sgd.)

FRANCIS VARGAS                                                          EDGARDO
VILLEGAS

(Sgd.)

REYNALDO
J. GULMATICO

As
attorney-in-fact

of Remy Aguirre,
Edgardo Bastan,

Romeo Batolina,
Danilo Durias,

Efren Gozon, Raul
Guadalupe, Erwin Gulmatico

Generoso Jarobil,
Paulino Lucendo, Jaime Limaco,

Remegio Mesa,
Benjamin Magdato, Nestor Mendez,

Teddy Monserate,
Jose Panes, Danilo Peroja,

Reynaldo Publico,
Jerry Rama, Roger Rendon,

Ronilo Saludo,
Ranulfo Tabligan and

Romeo Tingson

Assisted by:

(Sgd.)

ATTY.
RAUL R. MIRANDA, SR.

Counsel
for the Complainants

VICTORIA MILLING
COMPANY, INC.

BY:

(Sgd.)

CARLOS
H. TUPAS, JR.

Executive
Vice-President

Assisted by:

DECENA,
TABAT, JARDELEZA

&
TAÑOSO LAW OFFICES

BY:

(Sgd.)

PATRICK M. DECENA

(Sgd.)

HERNANE T. JARDELEZA”^[5]

We do not find the
compromise agreement to be opposed to law, morals, good custom, public order and
public policy. In line with the State
policy of encouraging an amicable settlement of disputes between parties and of
fostering a shared responsibility between labor and management, it pleases the
Court to sustain the above agreement.

WHEREFORE, the compromise agreement is APPROVED and the
parties are ENJOINED to faithfully comply with the covenants, terms and
conditions thereof. This resolution is
immediately executory. No costs.

SO ORDERED.

Feliciano, (Chairman), Bidin, Romero, and Melo, JJ., concur.

---

^[1]
Rollo, p. 94.

^[2]
Rollo, p. 134.

^[3]
Rollo, pp. 265-267.

^[4]
Rollo, pp. 52-53.

^[5]
Rollo, pp. 583-587.