G.R. No. L-47853 November 16, 1984
KAISAHAN NG MGA MANGGAGAWA SA LA CAMPANA, ET AL., petitioners, vs. HON. JUDGE ULPIANO SARMIENTO and LA CAMPANA, INCORPORATED, respondents.

FACTS

The petitioners, a labor union, filed a case in 1951 with the defunct Court of Industrial Relations (CIR) against La Campana, Inc. for unfair labor practices, including illegal dismissals. The CIR rendered a partial decision in 1956 finding the company guilty and ordering the reinstatement of dismissed workers with backwages. The company’s appeal was dismissed by the Supreme Court in 1957. Subsequently, the CIR issued orders for the company to deposit computed backwages and reinstate workers. However, the company’s owner died, and the estate’s administrator, Ricardo Tantongco, moved to dismiss the claims, arguing they were money claims that should be filed in the probate court. The CIR denied this and proceeded with execution.
While the labor case was pending appeal with the Office of the President, the company’s counsel and the union’s counsel, without the knowledge or consent of the individual worker-claimants, entered into a compromise agreement. This agreement was approved by the Court of First Instance (CFI) in a separate civil case, effectively settling the claims for a lesser amount. The petitioners later discovered this and challenged the CFI’s jurisdiction and the validity of the compromise.

ISSUE

The primary issue is whether the Court of First Instance had jurisdiction to approve the compromise agreement that settled the final and executory judgment of the CIR, and whether such an agreement, entered into without the individual consent of the worker-beneficiaries, is valid.

RULING

The Supreme Court granted the petition, annulling the CFI’s orders. The Court held that the CFI had no jurisdiction over the subject matter. The CIR’s decision in the labor case had long become final and executory. Jurisdiction to execute and enforce that final judgment remained exclusively with the CIR (and later its successor agency, the Ministry of Labor). The CFI could not validly entertain a separate civil action that sought to compromise or alter that final judgment; doing so constituted an encroachment on the CIR’s authority.
Furthermore, the compromise agreement was declared null and void. Money claims adjudicated in favor of individual laborers cannot be compromised by a union or its counsel without the specific, informed consent of each laborer concerned. The beneficiaries of the judgment are the individual workers themselves. The union may assist but cannot decide for them. The records showed the individual complainants were neither informed of the civil case nor consented to the settlement, which was executed to their prejudice. The Court emphasized the constitutional mandate to give laborers maximum protection, and such secret compromises undermine that protection. The Ministry of Labor was directed to implement the original CIR judgment.