GR L 68126; (May, 1985) (Digest)
G.R. No. L-68126. May 13, 1985. MACTAN RURAL BANK, INC., petitioner, vs. HON. VICENTE LEOGARDO, JR., DEPUTY MINISTER OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR AND THE CHIEF OF THE EXECUTION ARM, MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7, CEBU CITY, LINA MANGUBAT, VIRGINIA REVILLES and ROSALINA PEÑASCOZA, respondents.
FACTS
The case originated from a labor dispute wherein the Regional Director of the Ministry of Labor and Employment (MOLE) in Cebu City issued a decision on November 13, 1980, in favor of the private respondents, Lina Mangubat, Virginia Revilles, and Rosalina Peñascoza. The decision presumably ordered their reinstatement with full backwages and other monetary benefits from the petitioner, Mactan Rural Bank, Inc. The bank challenged this order, leading to the elevation of the case to the Supreme Court.
Before the Court could rule on the merits, the parties, assisted by their respective counsel, voluntarily entered into a compromise agreement. They submitted this agreement to the Supreme Court for its approval. The agreement stipulated that reinstatement was no longer feasible as the employees’ former positions were occupied and the employees were already gainfully employed elsewhere or abroad. The employees acknowledged receipt of full backwages, allowances, and separation benefits from the bank in lieu of reinstatement.
ISSUE
Whether the Compromise Agreement voluntarily entered into by the parties should be approved by the Supreme Court.
RULING
The Supreme Court approved the Compromise Agreement and rendered judgment in accordance with its terms. The legal logic for this approval is grounded in the principle of party autonomy and the favored status of amicable settlements in labor disputes. The Court emphasized that compromise agreements are encouraged as a means to achieve speedy and inexpensive justice, and to promote industrial peace. The judiciary generally upholds such agreements provided they are not contrary to law, morals, good customs, public order, or public policy.
In this instance, the Court found the submitted agreement to be free from any such vitiating elements. The terms were clear: the employees received all monetary awards due under the original labor decision, plus additional separation benefits, in exchange for waiving all claims against the bank and foregoing reinstatement. The bank, in turn, released the employees from any liabilities. The agreement rationally addressed the impracticality of reinstatement given the changed circumstances of both parties. By approving the compromise, the Court gave effect to the mutual will of the parties, thereby terminating the litigation finally and executory. This resolution is consistent with the policy of the law to respect and enforce voluntary settlements that equitably resolve conflicts.