Unicane Workers Union v. National Labor Relations Commission

G.R. No. 107545 (September 9, 1996)

SC mandates appeal bond, nullifies unconscionable quitclaim; upholds labor arbiter’s ruling.

Facts:

The case involves a labor dispute between the Unicane Workers Union-CLUP and Unicane Food Products Manufacturing Corporation, along with its owner-manager, Benido Ang. On June 1, 1990, the union filed a complaint against the company for various labor violations, including non-compliance with the Minimum Wage Law, non-payment of service incentive leaves, and wages for services rendered during rest days and holidays. The company responded with a motion to dismiss, arguing that the union had not shown that individual complainants authorized the suit and that the claims had already been paid.

While the motion to dismiss was pending, 36 workers were dismissed by Ang, prompting the union to file an additional complaint for illegal dismissal. The company claimed that its operations were seasonal and that the dismissals were justified due to a temporary shutdown. The labor arbiter ultimately ruled in favor of the workers, ordering their reinstatement and awarding them a total of P2,169,956.22 for various claims, including back wages and other monetary benefits.

The company appealed the decision but did not post the required cash or surety bond. Instead, it filed a motion for reconsideration, requesting to file the bond after the monetary award was recomputed. During the appeal, the workers executed a Quitclaim and Release through their representative, Francisco Viola, which settled their claims for P100,000. The union opposed this settlement, arguing it was unconscionable given the original award.

The National Labor Relations Commission (NLRC) ruled in favor of the company, approving the quitclaim and release and dismissing the appeal for lack of merit. The union then filed a petition for certiorari, claiming that the NLRC had acted with grave abuse of discretion.

Legal Issues:

  1. Can an appeal of a monetary award be perfected without an appeal bond?
  2. Is the quitclaim and release (i.e., the compromise agreement) valid and binding?

Arguments:

Petitioners' Arguments:

  • The NLRC acted with grave abuse of discretion by vacating the labor arbiter's decision, which had become final and executory due to the absence of an appeal bond.
  • The quitclaim and release executed by Viola was contrary to law, morals, public policy, and public order, as the amount settled was unconscionably low compared to the original award.

Respondents' Arguments:

  • The NLRC argued that technicalities should not impede the equitable resolution of the parties' rights and obligations.
  • They maintained that Viola was authorized to act on behalf of the complainants and that the quitclaim was valid and binding.

Court's Decision and Legal Reasoning:

The Supreme Court ruled in favor of the petitioners, finding that the NLRC had exceeded its jurisdiction and committed grave abuse of discretion.

  1. Perfection of Appeal: The Court emphasized that the posting of a cash or surety bond is a jurisdictional requirement for the perfection of an appeal of a monetary award. The law clearly states that an appeal by the employer can only be perfected upon the posting of such a bond. The absence of a bond rendered the appeal invalid, and the NLRC's decision to allow the appeal without it constituted grave abuse of discretion.

  2. Validity of the Quitclaim and Release: The Court found the quitclaim and release to be contrary to law and public policy. The settlement amount of P100,000 was grossly inadequate compared to the labor arbiter's award of over P2 million. The Court noted that the quitclaim could not be valid if it was obtained through fraud or if the terms were unconscionable. The actions of Viola, who acted beyond his authority and without the knowledge of the complainants, were deemed fraudulent. The Court held that the quitclaim was null and void, reinforcing the principle that the state must protect labor against inequitable settlements.

Significant Legal Principles Established:

  • The requirement of a cash or surety bond for the perfection of an appeal in labor cases is mandatory and jurisdictional.
  • Compromise agreements or quitclaims that are unconscionable or obtained through fraud are void and contrary to public policy, emphasizing the state's protective stance towards labor rights.