GR 156761; (October, 2006) (Digest)
G.R. No. 156761 ; October 17, 2006
LADY LYDIA CORNISTA-DOMINGO, ET AL., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL., respondents.
FACTS
The Philippine Veterans Bank was placed under liquidation by the Central Bank Monetary Board in 1985, resulting in the termination of all employees. Many employees, including petitioners, accepted separation benefits and executed quitclaims. The Supreme Court, in a 1990 consolidated decision, upheld the legality of the termination due to liquidation. Subsequently, Republic Act No. 7169 was enacted in 1992, authorizing the Bank’s rehabilitation and reopening. The Bank and the Philippine Veterans Bank Employees Union (PVBEU) then entered into a Compromise Agreement, ratified by a majority of union members, which provided for separation packages and extinguished all employment claims. The Bank resumed operations with a new workforce.
Petitioners, former employees and union members, filed cases seeking reinstatement and back wages, arguing that R.A. No. 7169 nullified the prior liquidation and termination. The Labor Arbiter dismissed their claims. The NLRC reversed, ordering reinstatement. The Court of Appeals then reinstated the Labor Arbiter’s decision, upholding the validity of the Compromise Agreement and dismissing the claims.
ISSUE
Whether the petitioners are entitled to reinstatement and back wages following the Bank’s rehabilitation under R.A. No. 7169 .
RULING
No. The Supreme Court denied the petition, affirming the Court of Appeals. The legal termination of employment in 1985 due to the valid order of liquidation was final and was not revived or nullified by the subsequent passage of R.A. No. 7169 . The law provided for rehabilitation but did not automatically restore prior employment relationships. The Bank’s right to reorganize and hire a new workforce upon reopening was recognized. Crucially, the Compromise Agreement between the Bank and the Union, duly ratified by the majority, constituted a valid and binding settlement that barred any further claims for reinstatement or back wages. The agreement had the effect of res judicata. Petitioners, as union members, were bound by this collective agreement executed in good faith by their bargaining agent. No vice of consent, such as fraud or coercion, was proven to vitiate the agreement. Their acceptance of separation benefits in 1985 and the subsequent compromise foreclosed their right to seek reinstatement.