G.R. No. 108713 October 28, 1994
Angelito Olaybar, Antonio Villaluna, Jr., Eric Lubrico, Jessie de la Vega, Carlos Roperos, Luis Plotena, Jessie Abalona, Miguel Octavio, Sam Guillena, and Ramon Estember, Jr., petitioners, vs. National Labor Relations Commission, Fourth Division, Cebu City, and Orient Marine and Fishing Resources, Inc., Roberto Ordoñez, respondents.

FACTS

Petitioners were regular employees of private respondent Orient Marine and Fishing Resources, Inc., who were dismissed on the ground of retrenchment. They filed separate complaints for illegal dismissal and unfair labor practice before the Regional Arbitration Branch No. 6 in Bacolod City. In a decision dated March 4, 1991, Labor Arbiter Buenaventura C. Cordova, Jr., dismissed the complaints but ordered the payment of separation pay of P4,005.00 to each petitioner. Petitioners appealed this decision to the National Labor Relations Commission (NLRC). Pending appeal, on various dates in May, June, and July 1991, petitioners executed separate affidavits stating their intention to withdraw their appeal as they had already received the separation pay awarded by Labor Arbiter Cordova, Jr. These affidavits were subscribed and sworn to before Labor Arbiter Cordova, Jr., who explained the legal consequences to them. However, these affidavits were not submitted to the NLRC. Unaware of the settlement, the NLRC rendered a decision on July 16, 1991, in favor of petitioners, ordering their reinstatement and payment of full back wages. An Entry of Judgment was issued on August 12, 1991, declaring the NLRC decision final and executory. Petitioners moved for execution. Private respondent opposed, arguing the decision was moot due to the prior settlement and payment. Labor Arbiter Cesar D. Sideno denied the motion for execution on January 7, 1992, considering the cases closed by settlement. Petitioners appealed to the NLRC, which initially nullified Labor Arbiter Sideno’s order but, upon reconsideration, reinstated it in a resolution dated September 28, 1992, holding that petitioners’ voluntary acceptance of the separation pay rendered the subsequent NLRC decision moot.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in declaring its July 16, 1991 decision and subsequent resolution moot and academic due to the compromise settlement and payment received by petitioners pending appeal.

RULING

No, the NLRC did not commit grave abuse of discretion. The Supreme Court affirmed the challenged NLRC resolutions. The Court held that the separate affidavits executed by petitioners, voluntarily withdrawing their appeal after receiving the separation pay, constituted a legitimate compromise settlement. The law favors compromises, and the Labor Code recognizes the final and binding effect of voluntarily agreed-upon settlements. The affidavits were executed knowingly and voluntarily before Labor Arbiter Cordova, Jr. The settlement had the effect of res judicata, closing the case between the parties. Consequently, the NLRC’s July 16, 1991 decision, rendered without knowledge of the settlement, adjudicated a matter already terminated. Petitioners’ attempt to disown the settlement after a favorable but later reversed NLRC ruling was an opportunistic volte-face. Not all waivers or quitclaims are invalid; they are binding if voluntarily entered into with full understanding and for a reasonable consideration, as in this case. The petition was dismissed for lack of merit.