GR 113666; (January, 2000) (Digest)
G.R. No. 113666-68. January 19, 2000.
GOLDEN DONUTS, INC. and LEOPOLDO PRIETO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, AGAPITO MACANDOG, LEONISA M. HONTIVEROS, ROSITA D. TAMARGO, LUCITA TEGIO and ALMA MAGTARAYO, respondents.
FACTS
Private respondents were employees of Golden Donuts, Inc. and members of the Kapisanan ng Manggagawa sa Dunkin Donut-CFW. After their collective bargaining agreement expired, a series of failed negotiations ensued, culminating in a union strike on December 18, 1989. The company declared the strike illegal, citing various grounds including alleged violence and procedural defects, and filed a complaint. Subsequently, the union, through its counsel and president, entered into a compromise agreement with management on July 16, 1990. This agreement provided for the withdrawal of all cases and the payment of separation pay to 262 striking workers in exchange for a general waiver.
The five private respondents, however, dissented. They did not receive the separation pay and filed consolidated complaints for illegal dismissal. They argued the compromise agreement was invalid as it was executed without their individual consent and was not ratified by the majority of the union membership. The Labor Arbiter dismissed their complaints, but the National Labor Relations Commission (NLRC) reversed this, ordering their reinstatement with back wages and awarding separation pay.
ISSUE
Whether the compromise agreement is valid and binding upon the dissenting employees, thereby constituting a lawful basis for their termination.
RULING
The Supreme Court denied the petition and affirmed the NLRC’s ruling with modification, deleting the award of separation pay. The legal logic centers on the principle of mutual consent in contracts and the nature of a compromise agreement. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. For it to be valid, there must be a meeting of the minds between the parties.
The Court found no such meeting of the minds between the dissenting employees and the company. The agreement was negotiated by union representatives, but the five complainants expressly rejected it, refused to sign, and did not receive the offered monetary consideration. Their non-participation and overt dissent rendered the compromise unenforceable against them. Consequently, the termination of their employment, which was predicated solely on their inclusion in the invalidated agreement, lacked a legal basis. Their dismissal was therefore illegal, entitling them to reinstatement and back wages. The award of separation pay was deleted as it is inconsistent with the remedy of reinstatement absent a finding of strained relations.