Dacanay v. NLRC

G.R. No. 107277 (August 9, 1996)

SC rules NLRC can't hold private reps accountable; disputes need court resolution, employee consent.

Facts:

In 1973, the Filipino Employees Association, represented by private respondents Ruben Resus and Narciso Terrado, initiated a labor dispute against Facilities Management Corp. and Automation Industries, Inc. The action was for illegal dismissal and the payment of unpaid benefits. On February 3, 1975, the Labor Arbiter ruled in favor of the workers, granting their claims for unpaid wages. This decision was subsequently affirmed by the National Labor Relations Commission (NLRC) and later by the Secretary of Labor.

On June 6, 1980, the Office of the President awarded the workers a total of US$2,483,945.53, which included their claims for unpaid wages and additional benefits, as determined by a socio-economic analyst. However, on July 10, 1987, Resus and Terrado, through their counsel, filed a motion claiming that the decision had been fully satisfied. The Labor Arbiter granted this motion on August 12, 1987, declaring the claims satisfied.

In June 1988, some petitioners contended that they had not received the full amount of their claims and sought to reopen the case. The Labor Arbiter granted this motion, setting aside the previous satisfaction order despite opposition from Resus and Terrado, who argued that the case had been settled.

On December 20, 1989, the Labor Arbiter found Resus and Terrado jointly and severally liable with the employers for the claims of the petitioners, citing a lack of consent from individual complainants regarding the settlement. Resus and Terrado appealed this decision, asserting that the case was closed and claims satisfied.

On March 10, 1992, the NLRC ruled that Resus, Terrado, and their counsel were jointly and severally liable with the employers for the payment of the claims. However, upon a motion for reconsideration, the NLRC modified its decision on September 25, 1992, absolving Resus and Terrado from liability, stating that it lacked jurisdiction over the claims against them, which were based on contract.

Legal Issues:

The primary legal issue in this case was whether the NLRC had jurisdiction to hold private respondents (Resus and Terrado) jointly and severally liable with the employers for the claims of the petitioners.

Arguments:

Petitioners argued that the NLRC had previously found private respondents liable for the claims and that they should be held accountable for the damages sustained due to the improper settlement of the claims without the individual consent of the workers. They contended that the NLRC's initial ruling was valid and should be upheld.

In contrast, private respondents contended that the claims against them were based on contractual obligations and that the NLRC did not have jurisdiction over such matters. They maintained that the case had already been settled and that the claims of the petitioners had been satisfied.

Court's Decision and Legal Reasoning:

The court ultimately ruled that the NLRC did not have jurisdiction to hold private respondents liable for the claims of the petitioners. The court reasoned that while the NLRC had initially found private respondents liable for damages due to a breach of trust, the enforcement of such liability must be pursued in regular courts, as it pertained to contractual obligations rather than labor claims.

The court emphasized that the claims of the petitioners against private respondents were not incidental to the labor case and thus fell outside the jurisdiction of the NLRC. The court also noted that the employers did not assert that private respondents were jointly liable for the amounts owed to the petitioners, further supporting the conclusion that the NLRC's jurisdiction did not extend to the claims against Resus and Terrado.

Significant Legal Principles Established:

  1. The NLRC has no jurisdiction over claims based on contractual obligations or breaches of trust; such claims must be brought before regular courts.
  2. Money claims due to laborers cannot be settled or compromised without the specific individual consent of each laborer concerned.
  3. The liability of representatives or counsel in labor disputes is limited to damages for breach of trust, and any enforcement of such liability must be pursued in the appropriate judicial forum.