Alipio Ruga, et. al. vs.

NLRC
G.R. No. L-72654-61
January 22, 1990
Facts:
Petitioners were members of one of several fishing vessels owned and operated by private
respondent De Guzman Fishing Enterprises. For services rendered in the conduct of private
respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis.
As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the
total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received
ten percent (10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master
fisherman received a minimum income of P350.00 per week while the assistant engineer, second
fisherman, and fisherman-winchman received a minimum income of P260.00 per week.
One day, upon arrival at the fishing port, petitioners were told to proceed to the police station
for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of
private respondent. Petitioners denied the charge claiming that the same was a countermove to their
having formed a labor union and becoming members of Defender of Industrial Agricultural Labor
Organizations and General Workers Union. Despite the fact that no witnesses were presented to prove
the charge and no criminal charges were formally filed, private respondent refused to allow petitioners
to return to the fishing vessel to resume their work. Hence, petitioners filed their complaints.
Private respondent denied the employer-employee relationship between private respondent and
petitioners on the theory that private respondent and petitioners were engaged in a joint venture.
Issue: Whether or not there is an employer-employee relationship.
Ruling:
In determining the existence of an employer-employee relationship, the elements that are
generally considered are the following (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee
with respect to the means and methods by which the work is to be accomplished. From the four (4)
elements mentioned, the Supreme Court has generally relied on the so-called right-of-control test where
the person for whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end. The test calls merely for the existence of
the right to control the manner of doing the work, not the actual exercise of the right.
The conduct of the fishing operations was shown to be under the control and supervision of
private respondent's operations manager. Matters dealing on the fixing of the schedule of the fishing
trip and the time to return to the fishing port were shown to be the prerogative of private respondent.
While tenure or length of employment is not considered as the test of employment, nevertheless
the hiring of petitioners to perform work which is necessary or desirable in the usual business or trade
of private respondent for a period of 8-15 years since 1968 qualify them as regular employees within
the meaning of Article 281 of the Labor Code as they were indeed engaged to perform activities usually
necessary or desirable in the usual fishing business or occupation of private respondent.

Loyola Security and Detective Agency vs. NLRC

G.R. No. 113287
May 9, 1995
Facts:
Private respondents Victor Prado, Sr. and Matilde Tuscano filed a complaint against petitioners,
the Loyola Security and Detective Agency for illegal dismissal, illegal deduction underpayment of
wages, non-payment of overtime pay, legal holiday pay, premium pay for holiday and rest day, and
violation of P.D. No. 851. The Labor Arbiter ruled in favor of private respondents. NLRC affirmed the
decision when appealed.
Private respondents then filed a Motion for Issuance of a Writ of Execution. However, they filed
a Joint Manifestation acknowledging complete satisfaction of the award. Later, private respondents
again filed a Motion for the Issuance of an Alias Writ of Execution for the recovery of the balance of
the award, claiming that they received less than the award of the Labor Arbiter. The motion was
granted. Petitioners' motion for reconsideration was denied.
Issue: Whether or not entering into a compromise agreement and in accepting an advance constituted a
novation of the award.
Ruling:
The Labor Code of the Philippines does not contain any provision on compromise agreements
or quitclaims in cases pending before the Labor Arbiter and the NLRC. However, the New Rules of
Procedure of NLRC in Section 2, Rule V (Proceedings Before Labor Arbiter) provides that should the
parties arrive at any agreement as to the whole or any part of the dispute, the same shall be reduced to
writing and signed by the parties and their respective counsels, if any, before the Labor Arbiter. The
settlement shall be approved by the Labor Arbiter after being satisfied that it was voluntarily entered
into by the parties and after having explained to them the terms and consequences thereof.
A compromise agreement entered into by the parties not in the presence of the Labor Arbiter
before whom the case is pending shall be approved by him if, after confronting the parties, particularly
the complainants, he is satisfied that they understand the terms and conditions of the settlement and that
it was entered into freely, and voluntarily by them and the agreement is not contrary to law, morals and
public policies.

Ricky Garcia, et al. vs. NLRC

G.R. No. 119649
July 28, 1997
Facts:
Ninety-five workers, including the twenty-five petitioners herein, were assisted by a labor
federation, the National Organization of Workingmen (NOWM) in their suit against respondent
companies for illegal dismissal, regularization, underpayment of wages, holiday pay, premium pay etc.
They alleged that Armor Industrial Corporation, Gibson Contractor Services, Juner Contractor
Services, Libra Manpower Agency and Anjo Contractor, all labor-only contractors, recruited them
and supplied them to Globe Paper Mills and Keng Hua Paper Products where they performed activities
directly necessary to the companies principal business. The Labor Arbiter's decision favored them and
was affirmed by the NLRC. The disputed Compromise Agreement was executed and settled the case.
Respondent Commission rendered its Decision approving the Compromise Agreement, setting
aside the decision of the Labor Arbiter and dismissing the instant case. The NLRC held that the
complainants were fully aware of the award in their favor when they voluntarily entered into the
compromise agreement. They thus disregarded the judgment award and opted for the last and sincere
offer of respondent Globe Paper Mills instead of waiting out the appeal filed by respondents.
Respondent NLRC added that it cannot subscribe to complainants contention that they signed the
compromise agreement under the compulson of dire necessity and held that position as a mere
afterthought.
Issue: Whether or not the validity of a compromise agreement and quitclaims executed during the
pendency of appeal to the respondent Commission.
Ruling:
A compromise agreement is executed by parties who adjust their difficulties by mutual consent
in order to prevent or to put an end to a lawsuit. Additionally, each of the parties is motivated by the
hope of gaining, balanced by the danger of losing. Under the Labor Code, any compromise settlement
voluntarily agreed upon by the parties with the assistance of the Bureau of Labor Relations or the
regional office of the Department of Labor and Employment shall be final and binding upon the parties.
Even if contracted without the assistance of labor officials, compromise agreements between workers
and their employers have been upheld and considered as valid, accepted and even desirable means of
settling disputes.
Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer
and employee, obviously do not stand on the same footing. The employer drove the employee to the
wall. The latter must have to get hold of money. Because, out of job, he had to face the harsh
necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case
of adherence not of choice. One thing, sure however, is that petitioners did not relent their claim. They
pressed it. They are deemed not to have waived any of their rights.

Golden Donuts, Inc. vs. NLRC

G.R. Nos. 113666-68
January 19, 2000
Facts:
Private respondents were employees of petitioner Golden Donuts, Inc., and were the
complainants in three consolidated cases with the Labor Arbiter. The latter had rendered a decision
upholding the dismissal of private respondents and ruling that they were bound by the compromise
agreement entered into by the union with petitioners. Private respondents interposed an appeal to the
NLRC, claiming that the union had no authority to waive or compromise their individual rights and that
they were not bound by the compromise agreement entered into by the union with petitioners. NLRC
modified the decision of the Labor Arbiter and ordered Golden Donuts, Inc. to reinstate private
respondents to their former positions without loss of seniority rights and back-wages limited to three
years from the time of their dismissal up to the time of reinstatement.
Issues:
1. Whether or not a union may compromise or waive the rights to security of tenure and money claims
of its minority members, without the latters consent.
2. Whether or not the compromise agreement entered into by the union with petitioner company, which
has not been consented to nor ratified by respondents minority members has the effect of res judicata
upon them.
Ruling:
1.
No. First, even if a clear majority of the union members agreed to a settlement with the
employer, the union has no authority to compromise the individual claims of members who did not
consent to such settlement. Rule 138 Section 23 of the 1964 Revised Rules of Court requires a special
authority before an attorney may compromise his clients litigation. "The authority to compromise
cannot lightly be presumed and should be duly established by evidence." In the case at bar, minority
union members did not authorize the union to compromise their individual claims. Absent a showing of
the unions special authority to compromise the individual claims of private respondents for
reinstatement and back wages, there is no valid waiver of the aforesaid rights. As private respondents
did not authorize the union to represent them in the compromise settlement, they are not bound by the
terms thereof.
Second, whether minority union members who did not consent to a compromise agreement are
bound by the majority decision approving a compromise settlement has been resolved in the negative.
2.
The judgment of the Labor Arbiter based on the compromise agreement in question does not
have the effect of res judicata upon private respondents who did not agree thereto. "A compromise,
once approved by final orders of the court has the force of res judicata between the parties and should
not be disturbed except for vices of consent or forgery." A compromise is basically a contract perfected
by mere consent. "Consent is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract." A compromise agreement is not valid when a party
in the case has not signed the same or when someone signs for and in behalf of such party without
authority to do so.

Felipe Magbanua, et al. vs. Rizalino Uy

G.R. No. 161003
May 6, 2005
Facts:
Hearings were conducted to determine the amount of wage differentials due the eight
petitioners. The petitioners filed a Motion for Issuance of Writ of Execution. Respondent Uy filed a
Manifestation requesting that the cases be terminated and closed, stating that the judgment award as
computed had been complied with to the satisfaction of petitioners. Together with the manifestation is a
Joint Affidavit of petitioners attested to the receipt of payment from respondent and waiving all other
benefits due them in connection with their complaint.
Six of the petitioners filed a Manifestation requesting that the cases be considered closed and
terminated as they are already satisfied of what they have received from respondent. Together with said
Manifestation is a Joint Affidavit attesting that they have no more collectible amount from respondent
and if there is any, they are abandoning and waiving the same.
Issue: Whether or not the final and executory judgment of the Supreme Court could be subject to
compromise settlement.
Ruling:
There is no justification to disallow a compromise agreement, solely because it was entered into
after final judgment. The validity of the agreement is determined by compliance with the requisites and
principles of contracts, not by when it was entered into. Petitioners voluntarily entered into the
compromise agreement.
Circumstances also reveal that respondent has already complied with its obligation pursuant to
the compromise agreement. Having already benefited from the agreement, estoppel bars petitioners
from challenging it.

LABOR RELATIONS
Case Digests

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Alipio Ruga, et. al. vs. NLRC, G.R. No. L-72654-61, January 22, 1990
Loyola Security and Detective Agency vs. NLRC, G.R. No. 113287, May 9, 1995
Ricky Garcia, et al. vs. NLRC, G.R. No. 119649, July 28, 1997
Golden Donuts, Inc. vs. NLRC, G.R. Nos. 113666-68, January 19, 2000
Felipe Magbanua, et al. vs. Rizalino Uy, G.R. No. 161003, May 6, 2005

Submitted by: Celina May R. Tang, Block A

Professor: Atty Mila Raquid-Arroyo