6. G.R. No. 87297 August 5, 1991ALFREDO VELOSO and EDITO LIGUATONpetitioners,vs.DEPARTMENT OF LABOR AND EMPLOYMENT, NOAH'S ARK SUGAR CARRIERS AND WILSON T. GO,respondents.CRUZ,J.:pThe law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. On the other hand, there are legitimate waivers that represent a voluntary settlement of laborer's claims that should be respected by the courts as the law between the parties.In the case at bar, the petitioners claim that they were forced to sign their respective releases in favor of their employer, the herein private respondent, by reason of their dire necessity. The latter, for its part, insists that the petitioner entered into the compromise agreement freely and with open eyes and should not now be permitted to reject their solemn commitments.The controversy began when the petitioners, along with several co-employees, filed a complaint against the private respondent for unfair labor practices, underpayment, and non-payment of overtime, holiday, and other benefits. This was decided in favor of the complainants on October 6,1987. The motion for reconsideration, which was treated as an appeal, was dismissed in a resolution dated February 17, 1988, the dispositive portion of which read as follows:WHEREFORE, the instant appeal is hereby DISMISSED and the questioned Order affirmed with the modification that the monetary awards to Jeric Dequito, Custodio Ganuhay Conrado Mori and Rogelio Veloso are hereby deleted for being settled. Let execution push through with respect to the awards to Alfredo Veloso and Edito Liguaton.On February 23, 1988, the private respondent filed a motion for reconsideration and recomputation of the amount awarded to the petitioners. On April 15, 1988, while the motion was pending, petitioner Alfredo Veloso, through his wife Connie, signed a Quitclaim and Release for and in consideration of P25,000.00,1and on the same day his counsel, Atty. Gaga Mauna, manifested "Satisfaction of Judgment" by receipt of the said sum by Veloso.2For his part, petitioner Liguaton filed a motion to dismiss dated July 16, 1988, based on a Release and Quitclaim dated July 19,1988 ,3for and in consideration of the sum of P20,000.00 he acknowledged to have received from the private respondent.4These releases were later impugned by the petitioners on September 20, 1988, on the ground that they were constrained to sign the documents because of their "extreme necessity." In an Order dated December 16, 1988, the Undersecretary of Labor rejected their contention and ruled:IN VIEW THEREOF, complainants Motion to Declare Quitclaim Null and Void is hereby denied for lack of merit and the compromise agreements/settlements dated April 15, 1988 and July 19, 1988 are hereby approved. Respondents' motion for reconsideration is hereby denied for being moot and academic.Reconsideration of the order having been denied on March 7, 1989, the petitioners have come to this Court oncertiorari. They ask that the quitclaims they have signed be annulled and that writs of execution be issued for the sum of P21,267.92 in favor of Veloso and the sum of P26,267.92 in favor of Liguaton in settlement of their claims.Their petition is based primarily onPampanga Sugar Development Co., Inc. v. Court of Industrial Relations,5where it was held:... while rights may be waived, the same must not be contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. (Art. 6, New Civil Code) ...... The above-quoted provision renders the quitclaim agreements voidab initioin their entirety since they obligated the workers concerned to forego their benefits, while at the same time, exempted the petitioner from any liability that it may choose to reject. This runs counter to Art. 22 of the new Civil Code which provides that no one shall be unjustly enriched at the expense of another.The Court had deliberated on the issues and the arguments of the parties and finds that the petition must fail. The exception and not the rule shall be applied in this case.The case cited is not apropos because the quitclaims therein invoked were secured by the employer after it had already lost in the lower court and were subsequently rejected by this Court when the employer invoked it in a petition forcertiorari. By contrast, the quitclaims in the case before us were signed by the petitioners while the motion for reconsideration was still pending in the DOLE, which finally deemed it on March 7, 1989. Furthermore, the quitclaims in the cited case were entered into without leave of the lower court whereas in the case at bar the quitclaims were made with the knowledge and approval of the DOLE, which declared in its order of December 16, 1988, that "the compromise agreement/settlements dated April 15, 1988 and July 19, 1988 are hereby approved."It is also noteworthy that the quitclaims were voluntarily and knowingly made by both petitioners even if they may now deny this. In the case of Veloso, the quitclaim he had signed carried the notation that the sum stated therein had been paid to him in the presence of Atty. Gaga Mauna, his counsel, and the document was attested by Atty. Ferdinand Magabilin, Chief of the Industrial Relations Division of the National Capitol Region of the DOLE. In the case of Liguaton, his quitclaim was made with the assistance of his counsel, Atty. Leopoldo Balguma, who also notarized it and later confirmed it with the filing of the motion to dismiss Liguaton's complaint.The same Atty. Balguma is the petitioners' counsel in this proceeding. Curiously, he is now challenging the very same quitclaim of Liguaton that he himself notarized and invoked as the basis of Liguaton's motion to dismiss, but this time for a different reason. whereas he had earlier argued for Liguaton that the latter's signature was a forgery, he has abandoned that contention and now claims that the quitclaim had been executed because of the petitioners' dire necessity."Dire necessity" is not an acceptable ground for annulling the releases, especially since it has not been shown that the employees had been forced to execute them. It has not even been proven that the considerations for the quitclaims were unconscionably low and that the petitioners had been tricked into accepting them. While it is true that the writ of execution dated November 24, 1987, called for the collection of the amount of P46,267.92 each for the petitioners, that amount was still subject to recomputation and modification as the private respondent's motion for reconsideration was still pending before the DOLE. The fact that the petitioners accepted the lower amounts would suggest that the original award was exorbitant and they were apprehensive that it would be adjusted and reduced. In any event, no deception has been established on the part of the Private respondent that would justify the annulment of the Petitioners' quitclaims.The applicable law is Article 227 of the Labor Code providing clearly as follows:Art. 227. Compromise agreements. Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there isprima facieevidence that the settlement was obtained through fraud, misrepresentation or coercion.The petitioners cannot renege on their agreement simply because they may now feel they made a mistake in not awaiting the resolution of the private respondent's motion for reconsideration and recomputation. The possibility that the original award might have been affirmed does not justify the invalidation of the perfectly valid compromise agreements they had entered into in good faith and with full voluntariness. InGeneral Rubber and Footwear Corp. vs. Drilon,6we "made clear that the Court is not saying that accrued money claims can never be effectively waived by workers and employees." As we later declared inPeriquet v. NLRC:7Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. As in this case.We find that the questioned quitclaims were voluntarily and knowingly executed and that the petitioners should not be relieved of their waivers on the ground that they now feel they were improvident in agreeing to the compromise. What they call their "dire necessity" then is no warrant to nullify their solemn undertaking, which cannot be any less binding on them simply because they are laborers and deserve the protection of the Constitution. The Constitution protects the just, and it is not the petitioners in this case.WHEREFORE, the petition is DISMISSED, with costs against the petitioners. It is so ordered.7. G.R. No. 161003 May 6, 2005FELIPE O. MAGBANUA, CARLOS DE LA CRUZ, REMY ARNAIZ, BILLY ARNAIZ, ROLLY ARNAIZ, DOMINGO SALARDA, JULIO CAHILIG and NICANOR LABUEN,petitioners,vs.RIZALINO UY,respondent.D E C I S I O NPANGANIBAN,J.:Rights may be waived through a compromise agreement, notwithstanding a final judgment that has already settled the rights of the contracting parties. To be binding, the compromise must be shown to have been voluntarily, freely and intelligently executed by the parties, who had full knowledge of the judgment. Furthermore, it must not be contrary to law, morals, good customs and public policy.The CaseBefore us is a Petition for Review1under Rule 45 of the Rules of Court, assailing the May 31, 2000 Decision2and the October 30, 2003 Resolution3of the Court of Appeals (CA) in CA-GR SP No. 53581. The challenged Decision disposed as follows:"WHEREFORE, having found that public respondent NLRC committed grave abuse of discretion, the Court herebySETS ASIDEthetwo assailed ResolutionsandREINSTATESthe order of the Labor Arbiterdated February 27, 1998."4The assailed Resolution denied reconsideration.The FactsThe CA relates the facts in this wise:"As a final consequence of the final and executory decision of the Supreme Court inRizalino P. Uy v. National Labor Relations Commission, et. al.(GR No. 117983, September 6, 1996) which affirmed with modification the decision of the NLRC in NLRC Case No. V-0427-93, hearings were conducted [in the National Labor Relations Commission Sub-Regional Arbitration Branch in Iloilo City] to determine the amount of wage differentials due the eight (8) complainants therein, now [petitioners]. As computed, the award amounted toP1,487,312.69 x x x."On February 3, 1997, [petitioners] filed a Motion for Issuance of Writ of Execution."On May 19, 1997, [respondent] Rizalino 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]. Said Manifestation was also signed by the eight (8) [petitioners]. Together with the Manifestation is a Joint Affidavit dated May 5, 1997 of [petitioners], attesting to the receipt of payment from [respondent] and waiving all other benefits due them in connection with their complaint.x x x x x x x x x"On June 3, 1997, [petitioners] filed an Urgent Motion for Issuance of Writ of Execution wherein they confirmed that each of them receivedP40,000 from [respondent] on May 2, 1997."On June 9, 1997, [respondent] opposed the motion on the ground that the judgment award had been fully satisfied. In their Reply, [petitioners] claimed that they received only partial payments of the judgment award.x x x x x x x x x"On October 20, 1997, six (6) of the eight (8) [petitioners] filed a Manifestation requesting that the cases be considered closed and terminated as they are already satisfied of what they have received (a total ofP320,000) from [respondent]. Together with said Manifestation is a Joint Affidavit in the local dialect, dated October 20, 1997, of the six (6) [petitioners] attesting that they have no more collectible amount from [respondent] and if there is any, they are abandoning and waiving the same."On February 27, 1998, the Labor Arbiter issued an order denying the motion for issuance of writ of execution and [considered] the cases closed and terminated x x x."On appeal, the [National Labor Relations Commission (hereinafter NLRC)] reversed the Labor Arbiter and directed the immediate issuance of a writ of execution, holding that a final and executory judgment can no longer be altered and that quitclaims and releases are normally frowned upon as contrary to public policy."5Ruling of the Court of AppealsThe CA held that compromise agreements may be entered into even after a final judgment.6Thus, petitioners validly released respondent from any claims, upon the voluntary execution of a waiver pursuant to the compromise agreement.7The appellate court denied petitioners motion for reconsideration for having been filed out of time.8Hence, this Petition.9The IssuesPetitioners raise the following issues for our consideration:"1. Whether or not the final and executory judgment of the Supreme Court could be subject to compromise settlement;"2. Whether or not the petitioners affidavit waiving their awards in [the] labor case executed without the assistance of their counsel and labor arbiter is valid;"3. Whether or not the ignorance of the jurisprudence by the Court of Appeals and its erroneous counting of the period to file [a] motion for reconsideration constitute a denial of the petitioners right to due process."10The Courts RulingThe Petition has no merit.First Issue:Validity of the Compromise AgreementA compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and thus avoid or put an end to a lawsuit.11They adjust their difficulties in the manner they have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of losing.12Verily, the compromise may be either extrajudicial (to prevent litigation) or judicial (to end a litigation).13A compromise must not be contrary to law, morals, good customs and public policy; and must have been freely and intelligently executed by and between the parties.14To have the force of law between the parties,15it must comply with the requisites and principles of contracts.16Upon the parties, it has the effect and the authority ofres judicata, once entered into.17When a compromise agreement is given judicial approval, it becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a judgment.18It is immediately executory and not appealable, except for vices of consent or forgery.19The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an instance, execution becomes a ministerial duty of the court.20Following these basic principles, apparently unnecessary is a compromise agreement after final judgment has been entered. Indeed, once the case is terminated by final judgment, the rights of the parties are settled. There are no more disputes that can be compromised.Compromise Agreementsafter Final JudgmentThe Court is tasked, however, to determine thelegalityof a compromise agreement after final judgment, not theprudenceof entering into one. Petitioners vehemently argue that a compromise of a final judgment is invalid under Article 2040 of the Civil Code, which we quote:21"Art. 2040. If after a litigation has been decided by a final judgment, a compromise should be agreed upon, either or both parties beingunawareof the existence of the final judgment, the compromise may berescinded."Ignorance of a judgment which may be revoked or set aside is not a valid ground for attacking a compromise." (Bold types supplied)The first paragraph of Article 2040 refers to a scenario in which either or both of the parties areunawareof a courts final judgment at the time they agree on a compromise. In this case, the law allows either of them torescindthe compromise agreement. It is evident from the quoted paragraph that such an agreement is not prohibited or void or voidable. Instead, a remedy to impugn the contract, which is an action for rescission, is declared available.22The law allows a party to rescind a compromise agreement, because it could have been entered into in ignorance of the fact that there was already a final judgment. Knowledge of a decisions finality may affect the resolve to enter into a compromise agreement.The second paragraph, though irrelevant to the present case, refers to the instance when the courts decision is still appealable or otherwise subject to modification. Under this paragraph, ignorance of the decision is not a groundto rescinda compromise agreement, because the parties are still unsure of the final outcome of the case at this time.Petitioners argument, therefore, fails to convince. Article 2040 of the Civil Code does not refer to the validity of a compromise agreement entered into after final judgment. Moreover, an important requisite, which is lack of knowledge of the final judgment, is wanting in the present case.Supported by Case LawThe issue involving the validity of a compromise agreement notwithstanding a final judgment is not novel.Jesalva v. Bautista23upheld a compromise agreement that covered cases pending trial, on appeal, and with final judgment.24The Court noted that Article 2040 impliedly allowed such agreements; there was no limitation as to when these should be entered into.25Palanca v. Court of Industrial Relations26sustained a compromise agreement, notwithstanding a final judgment in which only the amount of back wages was left to be determined. The Court found no evidence of fraud or of any showing that the agreement was contrary to law, morals, good customs, public order, or public policy.27Gatchalian v. Arlegui28upheld the right to compromise prior to the execution of a final judgment. The Court ruled that the final judgment had been novated and superseded by a compromise agreement.29Also,Northern Lines, Inc. v. Court of Tax Appeals30recognized the right to compromise final and executory judgments, as long as such right was exercised by the proper party litigants.31Rovero v. Amparo,32which petitioners cited, did not set any precedent that all compromise agreements after final judgment were invalid. In that case, the customs commissioner imposed a fine on an importer, based on the appraised value of the goods illegally brought to the country. The latters appeal, which eventually reached this Court, was denied. Despite a final judgment, the customs commissioner still reappraised the value of the goods and effectively reduced the amount of fine. Holding that he had no authority to compromise a final judgment, the Court explained:"It is argued that the parties to a case may enter into a compromise about even a final judgment rendered by a court, and it is contended x x x that the reappraisal ordered by the Commissioner of Customs and sanctioned by the Department of Finance was authorized by Section 1369 of the [Revised Administrative Code].The contention may be correct as regards private parties who are the owners of the property subject-matter of the litigation, and who are therefore free to do with what they own or what is awarded to them, as they please, even to the extent of renouncing the award, or condoning the obligation imposed by the judgment on the adverse party. Not so, however, in the present case. Here, the Commissioner of Customs is not a private party and is not the owner of the money involved in the fine based on the original appraisal. He is a mere agent of the Government and acts as a trustee of the money or property in his hands or coming thereto by virtue of a favorable judgment. Unless expressly authorized by his principal or by law, he is not authorized to accept anything different from or anything less than what is adjudicated in favor of the Government."33(Bold types supplied)Compliance with theRule on ContractsThere 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. As provided by the law on contracts, a valid compromise must have the following elements: (1) the consent of the parties to the compromise, (2) an object certain that is the subject matter of the compromise, and (3) the cause of the obligation that is established.34In the present factual milieu, compliance with the elements of a valid contract is not in issue. Petitioners do not challenge the factual finding that they entered into a compromise agreement with respondent. There are no allegations of vitiated consent. Neither was there any proof that the agreement was defective or could be characterized as rescissible,35voidable,36unenforceable,37or void.38Instead, petitioners base their argument on the sole fact that the agreement was executed despite a final judgment, which the Court had previously ruled to be allowed by law.Petitioners voluntarily entered into the compromise agreement, as shown by the following facts: (1) they signed respondents Manifestation (filed with the labor arbiter) that the judgment award had been satisfied;39(2) they executed a Joint Affidavit dated May 5, 1997, attesting to the receipt of payment and the waiver of all other benefits due them;40and (3) 6 of the 8 petitioners filed a Manifestation with the labor arbiter on October 20, 1997, requesting that the cases be terminated because of their receipt of payment in full satisfaction of their claims.41These 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.Advantages of CompromiseA reciprocal concession inherent in a compromise agreement assures benefits for the contracting parties. For the defeated litigant, obvious is the advantage of a compromise after final judgment. Liability arising from the judgment may be reduced. As to the prevailing party, a compromise agreement assures receipt of payment. Litigants are sometimes deprived of their winnings because of unscrupulous mechanisms meant to delay or evade the execution of a final judgment.The advantages of a compromise agreement appear to be recognized by the NLRC in its Rules of Procedure. As part of the proceedings in executing a final judgment, litigants are required to attend a pre-execution conference to thresh out matters relevant to the execution.42In the conference, any agreement that would settle the final judgment in a particular manner is necessarily a compromise.Novation of an ObligationThe principle of novation supports the validity of a compromise after final judgment. Novation, a mode of extinguishing an obligation,43is done by changing the object or principal condition of an obligation, substituting the person of the debtor, or surrogating a third person in the exercise of the rights of the creditor.44For an obligation to be extinguished by another, the law requires either of these two conditions: (1) the substitution is unequivocally declared, or (2) the old and the new obligations are incompatible on every point.45A compromise of a final judgment operates as a novation of the judgment obligation, upon compliance with either requisite.46In the present case, the incompatibility of the final judgment with the compromise agreement is evident, because the latter was precisely entered into to supersede the former.Second Issue:Validity of the WaiverHaving ruled on the validity of the compromise agreement in the present suit, the Court now turns its attention to the waiver of claims or quitclaim executed by petitioners. The subject waiver was their concession when they entered into the agreement. They allege, however, that the absence of their counsel and the labor arbiter when they executed the waiver invalidates the document.Not Determinativeof the Waivers ValidityThe presence or the absence of counsel when a waiver is executed does not determine its validity. There is no law requiring the presence of a counsel to validate a waiver. The test is whether it was executed voluntarily, freely and intelligently; and whether the consideration for it was credible and reasonable.47Where there is clear proof that a waiver was wangled from an unsuspecting or a gullible person, the law must step in to annul such transaction.48In the present case, petitioners failed to present any evidence to show that their consent had been vitiated.The law is silent with regard to the procedure for approving a waiver after a case has been terminated.49Relevant, however, is this reference to the NLRCs New Rules of Procedure:"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 counsel, or authorized representative, if any,50before 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 policy."51This provision refers to proceedings in a mandatory/conciliation conference during the initial stage of the litigation. Such provision should be made applicable to the proceedings in the pre-execution conference, for which the procedure for approving a waiver after final judgment is not stated. There is no reason to make a distinction between the proceedings in mandatory/conciliation and those in pre-execution conferences.The labor arbiters absence when the waivers were executed was remedied upon compliance with the above procedure. The Court observes that the arbiter made searching questions during the pre-execution conference to ascertain whether petitioners had voluntarily and freely executed the waivers.52Likewise, there was evidence that they made an intelligent choice, considering that the contents of the written waivers had been explained to them.53The labor arbiters absence when those waivers were executed does not, therefore, invalidate them.The Court declines to rule on the allegation that respondents counsels encroached upon the professional employment of petitioners lawyer when they facilitated the waivers.54The present action is not the proper forum in which to raise any charge of professional misconduct. More important, petitioners failed to present any supporting evidence.The third issue, which refers to the timely filing of petitioners Motion for Reconsideration filed with the CA, will no longer be discussed because this Courts decision has resolved the case on the merits.WHEREFORE, the Petition isDENIEDand the assailed DecisionAFFIRMED. Costs against petitioners.SO ORDERED.

8. G.R. No. 76427 February 21, 1989JOHNSON AND JOHNSON LABOR UNION-FFW, DANTE JOHNSON MORANTE, MYRNA OLOVEJA AND ITS OTHER INDIVIDUAL UNION MEMBERS,petitionersvs.DIRECTOR OF LABOR RELATIONS, AND OSCAR PILI,respondents.Rogelio R. Udarbe for petitioners.The Solicitor General for public respondent.Manuel V. Nepomuceno for private respondent.GUTIERREZ,JR., J.:The sole issue in this petition for review on certiorari is whether or not the public respondent committed grave abuse of discretion in ruling that the private respondent is entitled to the financial aid from the compulsory contributions of the petitioner-union afforded to its members who have been suspended or terminated from work without reasonable cause.The provision for the grant of financial aid in favor of a union member is embodied in the petitioner-union's Constitution and By-laws, Article XIII, Section 5, of which reads:A member who have (sic) been suspended or terminated without reasonable cause shall be extended a financial aid from the compulsory contributions in the amount of SEVENTY FIVE CENTAVOS (P0. 75) from each member weekly. (p. 18, Rollo)On May 6, 1985, the private respondent, a member of the petitioner-union was dismissed from his employment by employer Johnson & Johnson (Phil.) Inc., for non-disclosure in his job application form of the fact that he had a relative in the company in violation of company policies.On July 1985, a complaint was filed by the private respondent against the officers of the petitioner-union docketed as NRC- LRD-M-7-271-85 alleging, among others, that the union officers had refused to provide the private respondent the financial aid as provided in the union constitution despite demands for payment thereof The petitioner-union and its officers counter-alleged, in their answer, that the said financial aid was to be given only in cases of termination or suspension without any reasonable cause; that the union's executive board had the prerogative to determine whether the suspension or termination was for a reasonable cause or not; and that the union, in a general membership meeting, had resolved not to extend financial aid to the private respondent.While the grievance procedure as contained in the union's collective bargaining agreement was being undertaken, the private respondent, on August 26, 1985, filed a case for unfair labor practice and illegal dismissal against his employer docketed as NLRC-NCR Case No. 6-1912-85.On September 27, 1985, Med-Arbiter Anastacio L. Bactin issued an order dismissing for lack of merit the complaint of the private respondent against the petitioners for alleged violation of the union constitution and by-laws.On appeal, the then public respondent Director Cresenciano B. Trajano, on April 17, 1986, rendered the decision assailed in this petition. The dispositive portion of the said decision reads:WHEREFORE, premises considered, the appeal of complainant Oscar Pili is hereby granted and the Order appealed from is hereby set aside. Appellees, therefore, are hereby ordered to pay the complainant the sum of P0.75/week per union member to be computed from the time of the complainant's termination from employment to the time he acquired another employment should his complaint for illegal dismissal against the company be resolved in his favor; provided, that if his complaint against the company be dismissed, appellees are absolved from paying the complainant anything. (p. 115, Records)Both parties moved for reconsideration. The petitioners reiterated that since the private respondent's termination was for a reasonable cause, it would be unjust and unfair if financial aid were to be given in the event that the latter's case for illegal dismissal is decided against him. The private respondent, on the other hand, prayed for the amendment of the dispositive portion in order that the grant of financial aid be made without any qualifications.On June 16, 1986, a Manifestation and/or Opposition to the Motion for Reconsideration filed by the petitioners was filed by the private respondent stating that he was being discriminated against considering that one Jerwin Taguba, another union member, was terminated for dishonesty and loss of confidence but was granted financial aid by the petitioners while Taguba's complaint against the company was still pending with the National Labor Relation Commission.The public respondent separately resolved the above motions. On June 26, 1986, an order was issued denying the petitioners' motion for reconsideration. On August 19, 1986, the public respondent modified its decision dated April 17, 1986 and its aforestated order as follows:Considering that complainant Pili is similarly situated as Jerwin Taguba coupled with the need to obviate any discriminating treatment to the former, it is only just and appropriate that our Decision dated 17 April 1986 be modified in such a manner that respondents immediately pay the complainant the sum of P0.75/ week per union member to be computed from the time of his dismissal from the company, without prejudice to refund of the amount that shall be paid to Pili in the event the pending case is finally resolved against him.WHEREFORE, and as above qualified, this Bureau's Decision dated 17 April 1986 and the Order dated 26 June 1986 are hereby modified to the extent that the respondents are directed to immediately pay complainant the sum of P0.75/week per union member to be computed from the time of his termination from his employment until his case against the employer company shall have been finally resolved and/or disposed. (p. 53, Rollo)Meanwhile, on July 25, 1986, a motion for issuance of a writ of execution was filed by the private respondent in order to collect from the petitioners the amount of financial aid to which the former was entitled.On September 1, 1986, the petitioners moved for a reconsideration of the public respondent's resolution dated August 19, 1986 on the grounds that Taguba's affidavit cannot support the private respondent's claim that he is also entitled to the financial aid provided in the union's constitution and that the union cannot be compelled to grant the said aid in the absence of a special fund for the purpose.On October 28, 1986, the public respondent through Director Pura Ferrer-Calleja denied the petitioners' motion for reconsideration stating that Article XIII, Section 5 of the union's constitution and by-laws does not require a special fund so that all union members similarly situated as the private respondent must be entitled to the same right and privilege regarding the grant of financial aid as therein provided.On December 18, 1986, a writ of execution was issued by the public respondent in the following tenor:NOW THEREFORE, you are hereby directed to proceed to the premises of Johnson and Johnson (FFW) located at Edison Road, Bo. Ibayo, Paranaque, Metro Manila to collect from the said union through its Treasurer, Myrna Oloveja or to any responsible officer of the union the amount of Twenty Thousand Five Hundred Twenty Pesos (P20,520.00), more or less representing financial assistance to complainant under the union's constitution and by-laws. In case you fail to collect said amount in cash, you are to cause the satisfaction of the same on the union's movable or immovable properties not exempt from execution. You are to return this writ within fifteen (15) days from your compliance hereby together with your report thereon. You may collect your legal fees from the respondent union. (p. 55, Rollo)On December 24, 1986, the instant petition was filed with prayer for a preliminary injunction. The temporary restraining order issued by the Chief Justice on December 24, 1986 was confirmed in our resolution dated January 7, 1987.The grounds relied upon by the petitioners are as follows:A. THAT THE DECISION/ORDER IN QUESTION IS CONTRARY TO LAW.B. THAT RESPONDENT OFFICIAL ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION.C. THAT WITH RESPECT TO PETITIONING MEMBERS, THEY HAVE BEEN DEPRIVED OF THEIR CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW. (P. 13, Rollo)We find unmeritorious the contention of the petitioners that the questioned decision and order are contrary to law for being tantamount to compelling the union to disburse it funds without the authority of the general membership and to collect from its members without the benefit of individual payroll authorization.Section 5, Article XIII of the petitioner-union's constitution and by-laws earlier aforequoted is self-executory. The financial aid extended to any suspended or terminated union member is realized from the contributions declared to be compulsory under the said provision in the amount of seventy-five centavos due weekly from each union member. The nature of the said contributions being compulsory and the fact that the purpose as stated is for financial aid clearly indicate that individual payroll authorizations of the union members are not necessary. The petitioner-union's constitution and by-laws govern the relationship between and among its members. As in the interpretation of contracts, if the terms are clear and leave no doubt as to the intention of the parties, the literal meaning of the stipulations shall control. (See Government Service Insurance System v. Court of Appeals, 145 SCRA 311 [1986]). Section 5, Article XIII of the said constitution and by-laws is in line with the petitioner- union's aims and purposes which under Sec. 2, Article II includeTo promote, establish and devise schemes of mutual assistance among the members in labor disputes.Thus, there is no doubt that the petitioner-union can be ordered to release its funds intended for the promotion of mutual assistance in favor of the private respondent.We likewise find untenable the argument of the petitioners that the public respondent, in granting financial aid to the private respondent, in effect, substituted the decision of the petitioner-union to do otherwise and that in so doing, the public respondent gravely abused its discretion amounting to lack of jurisdiction. The union constitution is a covenant between the union and its members and among the members. There is nothing in their constitution which leaves the legal interpretation of its terms unilaterally to the union or its officers or even the general membership. It is noteworthy to quote the ruling made by the public respondent in this respect,to wit:The union constitution and by-laws clearly show that any member who is suspended or terminated from employment without reasonable cause is entitled to financial assistance from the union and its members. The problem, however, is that the constitution does not indicate which body has the power to determine whether a suspension or dismissal is for reasonable cause or not. To our mind, the constitution's silence on this matter is a clear recognition of the labor arbiter's exclusive jurisdiction over dismissal cases. After all, the union's constitution and by-laws is valid only insofar as it is not inconsistent with existing laws. ... . (BLR decision, p. 2; p. 115, Records)An aggrieved member has to resort to a government agency or tribunal. Considering that quasi-judicial agencies like the public respondent's office have acquired expertise since their jurisdiction is confined to specific matter, their findings of fact in connection with their rulings are generally accorded not only respect but at times even finality if supported by substantial evidence. (See Manila Mandarin Employees Union v. National Labor Relations Commission, 154 SCRA 368 [1987]) Riker v. Ople, 155 SCRA 85 [1987]; and Palencia v. National Labor Relations Commission, 153 SCRA 247 [1987]. We note from the records that the petitioners have conflicting interpretations of the same disputed provision one in favor of Jerwin Taguba and another against the private respondent.On the ancillary issue presented by the petitioners whether or not the petitioning union members have been deprived of their right to due process of law because they were never made parties to the case under consideration, we rule that the fact that the union officers impleaded since the inception of the case acted in a representative capacity on behalf of the entire union's membership substantially meets the requirements of due process with respect to the said union members. Moreover, the complaint filed against the union involves the interpretation of its constitution favoring an aggrieved member. The members are bound by the terms of their own constitution. A suit to enforce a union constitution does not have to be brought against each individual member, especially where several thousand members form the membership. If there is any violation of the right to due process in the case at bar it is as regards the private respondent since the petitioners-union has dispensed with due process in deciding not to extend financial aid to the private respondent in the absence yet of a ruling by the labor arbiter on whether his dismissal was for a reasonable cause or not.The remedy of the petitioners is to strike out or amend the objectionable features of their constitution. They cannot expect the public respondent to assist them in its non- enforcement or violation.WHEREFORE, PREMISES CONSIDERED, the instant petition is hereby DISMISSED in the absence of a showing of grave abuse of discretion on the part of the public respondent. The decision of the public respondent dated April 17, 1986 as modified in a resolution dated August 17, 1986 is AFFIRMED. The temporary restraining order issued by the Court on December 24,1986 is SET ASIDE.SO ORDERED.

9. G.R. No. L-43495-99 January 20, 1990TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE LUIS TRIBINO, FELIPE DURAN, MANUEL MANGYAO, MAMERTO CAHUCOM, NEMESIO BARRO, TEODULFO CAPAGNGAN, VICTORINO ABORRO, VIDAL MANTOS, DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN, TERESO ROMERDE, CONRADO ENGALAN, SALVADOR NERVA, BERNARDO ENGALAN, BONIFACIO CAGATIN, BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO HAMAYAN, ASUERO BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING, PRUDENCIO LADION, FULGENCIO BERSALUNA, ALBERTO PERALES, ROMEO MAGRAMO, GODOFREDO CAMINOS, GILDARDO DUMAS, JORGE SALDIVAR, GENARO MADRIO, SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY, ROGELIO CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN BALAZUELA, CONSTANCIO CHU, CRISPIN TUBLE, FLORENCIO CHIU, FABIAN CAHUCOM, EMILIANO VILLAMOR, RESTITUTO HANDAYAN, VICTORINO ESPEDILLA, NOEL CHUA, ARMANDO ALCORANO, ELEUTERIO TAGUIK, SAMSON CRUDA, DANILO CASTRO, CENON VALLENAS, DANILO CAWALING, SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO LAUROS, ANICETO BAYLON, EDISON ANDRES, REYNALDO BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO ORENCIO, ARMANDO LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO, PEDRO ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND BONIFACIO PUERTO,petitioners,vs.TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG, MARCELINO LONTOK JR., NATIONAL ASSOCIATION OF TRADE UNIONS (NATU), NATIONAL LABOR RELATIONS COMMISSION (NLRC), HON. DIEGO P. ATIENZA, GERONIMO Q. QUADRA, FEDERICO C. BORROMEO, AND HON. BLAS F. OPLE,respondents.Pacifico C. Rosal for petitioners.Marcelino Lontok, Jr. for private respondents.Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.MEDIALDEA,J.:This is a petition forcertiorariunder Rule 65 seeking to set aside the decisions of the public respondents Secretary of Labor and National Labor Relations Commission which reversed the Arbitrators rulings in favor of petitioners herein.The following factual background of this case appears from the record:On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated, referred to herein as respondent company, organized a local union called the Tropical Hut Employees Union, known for short as the THEU, elected their officers, adopted their constitution and by-laws and immediately sought affiliation with the National Association of Trade Unions (NATU). On January 3, 1968, the NATU accepted the THEU application for affiliation. Following such affiliation with NATU, Registration Certificate No. 5544-IP was issued by the Department of Labor in the name of the Tropical Hut Employees Union NATU. It appears, however, that NATU itself as a labor federation, was not registered with the Department of Labor.After several negotiations were conducted between THEU-NATU, represented by its local president and the national officers of the NATU, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-President and Marcelino Lontok, Jr., Vice President, and respondent Tropical Hut Food Market, Incorporated, thru its President and General Manager, Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded between the parties on April 1, 1968, the term of which expired on March 31, 1971. Said agreement' contained these clear and unequivocal terms:This Agreement made and entered into this __________ day of ___________, 1968, by and between:The Tropical Hut Food Market, Inc., a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with principal office at Quezon City, represented in this Act by its President, Cesar B. Azcona (hereinafter referred to as the Company)andThe Tropical Hut Employees Union NATU, a legitimate labor organization duly organized and existing in accordance with the laws of the Republic of the Philippines, and affiliated with the National Association of Trade Unions, with offices at San Luis Terraces, Ermita, Manila, and represented in this Act by its undersigned officers (hereinafter referred to as the UNION)Witnesseth:xxx xxx xxxArticle ICoverage and EffectivitySec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining agent for all its workers and employees in all matters concerning wages, hours of work, and other terms and conditions of employment.xxx xxx xxxArticle IIIUnion Membership and Union Check-offSec. 1 . . . Employees who are already members of the UNION at the time of the signing of this Agreement or who become so thereafter shall be required to maintain their membership therein as a condition of continued employment.xxx xxx xxxSec. 3Any employee who is expelled from the UNION for joining another federation or forming another union, or who fails or refuses to maintain his membership therein as required, . . . shall, upon written request of the UNION be discharged by the COMPANY. (Rollo, pp. 667-670)And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the terms of which are as follows:We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of which the TROPICAL HUT EMPLOYEES UNION is an affiliate as sole collective bargaining agent in all matters relating to salary rates, hours of work and other terms and conditions of employment in the Tropical Hut Food Market, Inc. and we hereby authorize the said company to deduct the amount ofFour (P 4.00)Pesos each every month as our monthly dues and to deliver the amount to the Treasurer of the Union or his duly authorized representatives. (Rollo, pp. 680-684)On May 21, 1971, respondent company and THEU-NATU entered into a new Collective Bargaining Agreement which ended on March 31, 1974. This new CBA incorporated the previous union-shop security clause and the attached check-off authorization form.Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed by the respondent company as Assistant Unit Manager. On July 24, 1973, he wrote the general membership of his union that for reason of his present position, he was resigning as President of the THEU-NATU effective that date. As a consequence thereof, his Vice-President, Jose Encinas, assumed and discharged the duties of the presidency of the THEU-NATU.On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by the incumbent officers of the local union informing the NATU that THEU was disaffiliating from the NATU federation. On December 20, 1973, the Secretary of the THEU, Nemesio Barro, made an announcement in an open letter to the general membership of the THEU, concerning the latter's disaffiliation from the NATU and its affiliation with the Confederation of General Workers (CGW). The letter was passed around among the members of the THEU-NATU, to which around one hundred and thirty-seven (137) signatures appeared as having given their consent to and acknowledgment of the decision to disaffiliate the THEU from the NATU.On January 1, 1974, the general membership of the so-called THEU-CGW held its annual election of officers, with Jose Encinas elected as President. On January 3, 1974, Encinas, in his capacity as THEU-CGW President, informed the respondent company of the result of the elections. On January 9, 1974, Pacifico Rosal, President of the Confederation of General Workers (CGW), wrote a letter in behalf of complainant THEU-CGW to the respondent company demanding the remittance of the union dues collected by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the respondent company.On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal Mantos, requiring the latter to assume immediately the position of President of the THEU-NATU in place of Jose Encinas, but the position was declined by Mantos. On the same day, Lontok, Jr., informed Encinas in a letter, concerning the request made by the NATU federation to the respondent company to dismiss him (Encinas) in view of his violation of Section 3 of Article III of the Collective Bargaining Agreement. Encinas was also advised in the letter that NATU was returning the letter of disaffiliation on the ground that:1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine National Trade Union Center in conjunction with the NATU and other established national labor centers, retail clerks and employees such as our members in the Tropical Hut pertain to Industry II which by consensus, has been assigned already to the jurisdiction of the NATU;2. The right to disaffiliate belongs to the union membership who on the basis of verified reports received by have not even been consulted by you regarding the matter;3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless is unacceptable in view of Article V, Section 1, of the NATU Constitution which provides that "withdrawal from the organization shall he valid provided three (3) months notice of intention to withdraw is served upon the National Executive Council." (p. 281,Rollo)In view of NATU's request, the respondent company, on the same day, which was January 11, 1974, suspended Encinas pending the application for clearance with the Department of Labor to dismiss him. On January 12, 1974, members of the THEU-CGW passed a resolution protesting the suspension of Encinas and reiterated their ratification and approval of their union's disaffiliation from NATU and their affiliation with the Confederation of General Workers (CGW). It was Encinas' suspension that caused the filing of NLRC Case No. LR-2511 on January 11, 1974 against private respondents herein, charging them of unfair labor practice.On January 15,1974, upon the request of NATU, respondent company applied for clearance with the Secretary of Labor to dismiss the other officers and members of THEU-CGW. The company also suspended them effective that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual complainants against private respondents for unfair labor practices.On January 19, 1974, Lontok, acting as temporary chairman, presided over the election of officers of the remaining THEU-NATU in an emergency meeting pending the holding of a special election to be called at a later date. In the alleged election, Arturo Dilag was elected acting THEU-NATU President together with the other union officers. On February 14, 1974, these temporary officers were considered as having been elected as regular officers for the year 1974.On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary of National Defense, complaining of the unfair labor practices committed by respondent company against its members and requesting assistance on the matter. The aforementioned letter contained the signatures of one hundred forty-three (143) members.On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file employees of the company that they will be given forty-eight (48) hours upon receipt of the notice within which to answer and affirm their membership with THEU-NATU. When the petitioner employees failed to reply, Arturo Dilag advised them thru letters dated February 26, March 2 and 5, 1974, that the THEU-NATU shall enforce the union security clause set forth in the CBA, and that he had requested respondent company to dismiss them.Respondent company, thereafter, wrote the petitioner employees demanding the latter's comment on Dilag's charges before action was taken thereon. However, no comment or reply was received from petitioners. In view of this, Estelita Que, President/General Manager of respondent company, upon Dilag's request, suspended twenty four (24) workers on March 5, 1974, another thirty seven (37) on March 8, 1974 and two (2) more on March 11, 1974, pending approval by the Secretary of Labor of the application for their dismissal.As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered case were filed by petitioners against Tropical Hut Food Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo Dilag.It is significant to note that the joint letter petition signed by sixty-seven (67) employees was filed with the Secretary of Labor, the NLRC Chairman and Director of Labor Relations to cancel the words NATU after the name of Tropical Hut Employee Union under Registration Certificate No. 5544 IP. Another letter signed by one hundred forty-six (146) members of THEU-CGW was sent to the President of the Philippines informing him of the unfair labor practices committed by private respondents against THEU-CGW members.After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the Labor Arbiter, Arbitrator Daniel Lucas issued an order dated March 21, 1974, holding that the issues raised by the parties became moot and academic with the issuance of NLRC Order dated February 25, 1974 in NLRC Case No. LR-2670, which directed the holding of a certification election among the rank and file workers of the respondent company between the THEU-NATU and THEU-CGW. He also ordered: a) the reinstatement of all complainants; b) for the respondent company to cease and desist from committing further acts of dismissals without previous order from the NLRC and for the complainant Tropical Hut Employees UNION-CGW to file representation cases on a case to case basis during the freedom period provided for by the existing CBA between the parties (pp. 91-93,Rollo).With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case, Arbitrator Cleto T. Villatuya rendered a decision dated October 14, 1974, the dispositive portion of which states:Premises considered, a DECISION is hereby rendered ordering respondent company to reinstate immediately the sixty three (63) complainants to their former positions with back wages from the time they were illegally suspended up to their actual reinstatement without loss of seniority and other employment rights and privileges, and ordering the respondents to desist from further committing acts of unfair labor practice. The respondent company's application for clearance filed with the Secretary of Labor to terminate the subject complainants' services effective March 20 and 23, 1974, should be denied.SO ORDERED. (pp. 147-148,Rollo)From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-2511 and LR-2521 and by Arbitrator Cleto Villatuya in NLRC Cases Nos. LR-2971, LR-3015, and the unnumbered case, all parties thereto, namely, petitioners herein, respondent company, NATU and Dilag appealed to the National Labor Relations Commission.In a decision rendered on August 1, 1975, the National Labor Relations Commission found the private respondents' appeals meritorious, and stated,inter alia:WHEREFORE, in view of the foregoing premises, the Order of Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and the decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971, 3015 and the unnumbered Case are hereby REVERSED. Accordingly, the individual complainants are deemed to have lost their status as employees of the respondent company. However, considering that the individual complainants are not presumed to be familiar with nor to have anticipated the legal mesh they would find themselves in, after their "disaffiliation" from National Association of Trade Unions and the THEU-NATU, much less the legal consequences of the said action which we presume they have taken in all good faith; considering, further, that the thrust of the new orientation in labor relations is not towards the punishment of acts violative of contractual relations but rather towards fair adjustments of the resulting complications; and considering, finally, the consequent economic hardships that would be visited on the individual complainants, if the law were to be strictly enforced against them, this Commission is constrained to be magnanimous in this instant, notwithstanding its obligation to give full force and effect to the majesty of the law, and hereby orders the respondent company, under pain of being cited for contempt for failure to do so, to give the individual complainants a second chance by reemploying them upon their voluntary reaffirmation of membership and loyalty to the Tropical Hut Employees Union-NATU and the National Association of Trade Unions in the event it hires additional personnel.SO ORDERED. (pp. 312-313,Rollo)The petitioner employees appealed the decision of the respondent National Labor Relations Commission to the Secretary of Labor. On February 23, 1976, the Secretary of Labor rendered a decision affirming the findings of the Commission, which providedinter alia:We find, after a careful review of the record, no sufficient justification to alter the decision appealed from except that portion of the dispositive part which states:. . . this Commission . . . hereby orders respondent company under pain of being cited for contempt for failure to do so, to give the individual complainants a second chance by reemploying them upon their voluntary reaffirmation of membership and loyalty to the Tropical Hut Employees UNION-NATU and the National Association of Trade Union in the event it hires additional personnel.Compliance by respondent of the above undertaking is not immediately feasible considering that the same is based on an uncertain event,i.e., reemployment of individual complainants "in the event that management hires additional personnel," after they shall have reaffirmed their loyalty to THEU-NATU, which is unlikely.In lieu of the foregoing, and to give complainants positive relief pursuant to Section 9, Implementing Instruction No. 1. dated November 9, 1972, respondent is hereby ordered to grant to all the individual complainants financial assistance equivalent to one (1) month salary for every year of service.WHEREFORE, with the modification as above indicated, the Decision of the National Labor Relations Commission is hereby affirmed.SO ORDERED.(pp. 317-318,Rollo)From the various pleadings filed and arguments adduced by petitioners and respondents, the following issues appear to be those presented for resolution in this petition to wit: 1) whether or not the petitioners failed to exhaust administrative remedies when they immediately elevated the case to this Court without an appeal having been made to the Office of the President; 2) whether or not the disaffiliation of the local union from the national federation was valid; and 3) whether or not the dismissal of petitioner employees resulting from their unions disaffiliation for the mother federation was illegal and constituted unfair labor practice on the part of respondent company and federation.We find the petition highly meritorious.The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21, 1975, which states:Art. 222. Appeal . . .xxx xxx xxxDecisions of the Secretary of Labormaybe appealed to the President of the Philippines subject to such conditions or limitations as the President may direct. (Emphasis ours)The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory requirement before resort to courts can be had, but an optional relief provided by law to parties seeking expeditious disposition of their labor disputes. Failure to avail of such relief shall not in any way served as an impediment to judicial intervention. And where the issue is lack of power or arbitrary or improvident exercise thereof, decisions of the Secretary of Labor may be questioned in acertiorariproceeding without prior appeal to the President (Arrastre Security Association TUPAS v. Ople, No. L-45344, February 20, 1984, 127 SCRA 580). Since the instant petition raises the same issue of grave abuse of discretion of the Secretary of Labor amounting to lack of or in excess of jurisdiction in deciding the controversy, this Court can properly take cognizance of and resolve the issues raised herein.This brings Us to the question of the legality of the dismissal meted to petitioner employees. In the celebrated case ofLiberty Cotton Mills Workers Union v.Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512, We held that the validity of the dismissals pursuant to the union security clause in the collective bargaining agreement hinges on the validity of the disaffiliation of the local union from the federation.The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. This right is consistent with the constitutional guarantee of freedom of association (Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824, June 19, 1985, 137 SCRA 42).All employees enjoy the right to self organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining and to engage in concerted activities for their mutual aid or protection. This is a fundamental right of labor that derives its existence from the Constitution. In interpreting the protection to labor and social justice provisions of the Constitution and the labor laws or rules or regulations, We have always adopted the liberal approach which favors the exercise of labor rights.Relevant on this point is the basic principle We have repeatedly in affirmed in many rulings:. . . The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of the locals into the national union (PAFLU) was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their member. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence. (Adamson & Adamson, Inc. v. CIR, No. L-35120, January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955, December 29, 1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.,supra).The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is merely to stress that the THEU is NATU's affiliate at the time of the registration. It does not mean that the said local union cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its own interests independently of the federation. A local union owes its creation and continued existence to the will of its members and not to the federation to which it belongs.When the local union withdrew from the old federation to join a new federation, it was merely exercising its primary right to labor organization for the effective enhancement and protection of common interests. In the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union a local may sever its relationship with its parent (People's Industrial and Commercial Employees and Workers Organization (FFW) v. People's Industrial and Commercial Corporation, No. 37687, March 15, 1982, 112 SCRA 440).There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly forbidden to disaffiliate from the federation (pp. 62, 281,Rollo), The alleged non-compliance of the local union with the provision in the NATU Constitution requiring the service of three months notice of intention to withdraw did not produce the effect of nullifying the disaffiliation for the following grounds: firstly, NATU was not even a legitimate labor organization, it appearing that it was not registered at that time with the Department of Labor, and therefore did not possess and acquire, in the first place, the legal personality to enforce its constitution and laws, much less the right and privilege under the Labor Code to organize and affiliate chapters or locals within its group, and secondly, the act of non-compliance with the procedure on withdrawal is premised on purely technical grounds which cannot rise above the fundamental right of self-organization.Respondent Secretary of Labor, in affirming the decision of the respondent Commission, concluded that the supposed decision to disaffiliate was not the subject of a free and open discussion and decision on the part of the THEU-NATU general membership (p. 305,Rollo). This, however, is contradicted by the evidence on record. Moreover, We are inclined to believe Arbitrator Villatuya's findings to the contrary, as follows:. . . . However, the complainants refute this allegation by submitting the following: a) Letter dated December 20, 1.973 signed by 142 members (Exhs. "B to B-5") resolution dated January 12, 1974, signed by 140 members (Exhs. "H to H-6") letter dated February 26, 1974 to the Department of Labor signed by 165 members (Exhs. "I to I-10"); d) letter dated January 30, 1974 to the Secretary of the National Defense signed by 144 members (Exhs. "0 to 0-5") and; e) letter dated March 6, 1974 signed by 146 members addressed to the President of the Philippines (Exhs. "HH to HH-5"), to show that in several instances, the members of the THEU-NATU have acknowledged their disaffiliation from NATU. The letters of the complainants also indicate that an overwhelming majority have freely and voluntarily signed their union's disaffiliation from NATU, otherwise, if there was really deception employed in securing their signatures as claimed by NATU/ Dilag, it could not be possible to get their signatures in five different documents. (p. 144,Rollo)We are aware of the time-honored doctrine that the findings of the NLRC and the Secretary of Labor are binding on this Court if supported by substantial evidence. However, in the same way that the findings of facts unsupported by substantial and credible evidence do not bind this Court, neither will We uphold erroneous conclusions of the NLRC and the Secretary of Labor when We find that the latter committed grave abuse of discretion in reversing the decision of the labor arbiter (San Miguel Corporation v. NLRC, L-50321, March 13, 1984, 128 SCRA 180). In the instant case, the factual findings of the arbitrator were correct against that of public respondents.Further, there is no merit in the contention of the respondents that the act of disaffiliation violated the union security clause of the CBA and that their dismissal as a consequence thereof is valid. A perusal of the collective bargaining agreements shows that the THEU-NATU, and not the NATU federation, was recognized as the sole and exclusive collective bargaining agent for all its workers and employees in all matters concerning wages, hours of work and other terms and conditions of employment (pp. 667-706,Rollo). Although NATU was designated as the sole bargaining agent in the check-off authorization form attached to the CBA, this simply means it was acting only for and in behalf of its affiliate. The NATU possessed the status of an agent while the local union remained the basic principal union which entered into contract with the respondent company. When the THEU disaffiliated from its mother federation, the former did not lose its legal personality as the bargaining union under the CBA. Moreover, the union security clause embodied in the agreements cannot be used to justify the dismissals meted to petitioners since it is not applicable to the circumstances obtaining in this case. The CBA imposes dismissal only in case an employee is expelled from the union for joining another federation or for forming another union or who fails or refuses to maintain membership therein. The case at bar does not involve the withdrawal of merely some employees from the union but of the whole THEU itself from its federation. Clearly, since there is no violation of the union security provision in the CBA, there was no sufficient ground to terminate the employment of petitioners.Public respondents considered the existence of Arturo Dilag's group as the remaining true and valid union. We, however, are inclined to agree instead with the Arbitrator's findings when he declared:. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the original THEU-NATU has a very doubtful and questionable existence not to mention that the alleged president is performing supervisory functions and not qualified to be abona fidemember of the rank and file union. (p. 146,Rollo)Records show that Arturo Dilag had resigned in the past as President of THEU-NATU because of his promotion to a managerial or supervisory position as Assistant Unit Manager of respondent Company. Petitioner Jose Encinas replaced Dilag as President and continued to hold such position at the time of the disaffiliation of the union from the federation. It is therefore improper and contrary to law for Dilag to reassume the leadership of the remaining group which was alleged to be the true union since he belonged to the managerial personnel who could not be expected to work for the betterment of the rank and file employees. Besides, managers and supervisors are prohibited from joining a rank and file union (Binalbagan Isabela Sugar Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions (PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700). Correspondingly, if a manager or supervisor organizes or joins a rank and file union, he will be required to resign therefrom (Magalit, et al. v. Court of Industrial Relations, et al., L-20448, May 25, 1965,14 SCRA 72).Public respondents further submit that several employees who disaffiliate their union from the NATU subsequently retracted and reaffirmed their membership with the THEU-NATU. In the decision which was affirmed by respondent Secretary of Labor, the respondent Commission stated that:. . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW whose signatures appeared in the "Analysis of Various Documents Signed by Majority Members of the THEU-CGW, (Annex "T", Complainants), which incidentally was relied upon by Arbitrator Villatuya in holding that complainant THEU-CGW commanded the majority of employees in respondent company, ninety-three (93) of the alleged signatories reaffirmed their membership with the THEU-NATU and renounced whatever connection they may have had with other labor unions, (meaning the complainant THEU-CGW) either through resolution or membership application forms they have unwittingly signed." (p. 306,Rollo)Grantingarguendo, that the fact of retraction is true, the evidence on record shows that the letters of retraction were executed on various dates beginning January 11, 1974 to March 8, 1974 (pp. 278-280,Rollo). This shows that the retractions were made more or less after the suspension pending dismissal on January 11, 1974 of Jose Encinas, formerly THEU-NATU President, who became THEU-CGW President, and the suspension pending their dismissal of the other elected officers and members of the THEU-CGW on January 15, 1974. It is also clear that some of the retractions occurred after the suspension of the first set of workers numbering about twenty-four (24) on March 5, 1974. There is no use in saying that the retractions obliterated the act of disaffiliation as there are doubts that they were freely and voluntarily done especially during such time when their own union officers and co-workers were already suspended pending their dismissal.Finally, with regard to the process by which the workers were suspended or dismissed, this Court finds that it was hastily and summarily done without the necessary due process. The respondent company sent a letter to petitioners herein, advising them of NATU/Dilag's recommendation of their dismissal and at the same time giving them forty-eight (48) hours within which to comment (p. 637,Rollo). When petitioners failed to do so, respondent company immediately suspended them and thereafter effected their dismissal. This is certainly not in fulfillment of the mandate of due process, which is to afford the employee to be dismissed an opportunity to be heard.The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of discretion or arbitrainess, for what is at stake is not only the employee's name or position but also his means of livelihood. Thus, the discharge of an employee from his employment is null and void where the employee was not formally investigated and given the opportunity to refute the alleged findings made by the company (De Leon v. NLRC, L-52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be adjudged guilty of unfair labor practice for having dismissed its employees in line with a closed shop provision if they were not given a proper hearing (Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of Free Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).In view of the fact that the dispute revolved around the mother federation and its local, with the company suspending and dismissing the workers at the instance of the mother federation then, the company's liability should be limited to the immediate reinstatement of the workers. And since their dismissals were effected without previous hearing and at the instance of NATU, this federation should be held liable to the petitioners for the payment of their backwages, as what We have ruled in the Liberty Cotton Mills Case (supra).ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of respondent Secretary of Labor is REVERSED and SET ASIDE, and the respondent company is hereby ordered to immediately reinstate all the petitioner employees within thirty (30) days from notice of this decision. If reinstatement is no longer feasible, the respondent company is ordered to pay petitioners separation pay equivalent to one (1) month pay for every year of service. The respondent NATU federation is directed to pay petitioners the amount of three (3) years backwages without deduction or qualification. This decision shall be immediately executory upon promulgation and notice to the parties.

10. G.R. No. 131235 November 16, 1999UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL,petitioners,vs.Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and Employment (DOLE), EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA,respondents.PANGANIBAN,J.:There is a right way to do the right thing at the right time for the right reasons,1and in the present case, in the right forum by the right parties. While grievances against union leaders constitute legitimate complaints deserving appropriate redress, action thereon should be made in the proper forum at the proper time and after observance of proper procedures. Similarly, the election of union officers should be conducted in accordance with the provisions of the union's constitution and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective bargaining unit may take part in a duly convened certification election, only bona fide members of the UST Faculty Union (USTFU) may participate and vote in a legally called election for union officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law.The CaseThe Petition forCertioraribefore us assails the August 15, 1997 Resolution2of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows:WHEREFORE, premises considered, judgment is hereby rendered declaring the election of USTFU officers conducted on October 4, 1996 and its election results as null and voidab initio.Accordingly, respondents Gil Gamilla,et alare hereby ordered to cease and desist from acting and performing the duties and functions of the legitimate officers of [the] University of Santo Tomas Faculty Union (USTFU) pursuant to [the] union's constitution and by-laws (CBL).The Temporary Restraining Order (TRO) issued by this Office on December 11, 1996 in connection with the instant petition, is hereby made and declared permanent.3Likewise challenged is the October 30, 1997 Resolution4of Director Bitonio, which denied petitioners' Motion for Reconsideration.The FactsThe factual antecedents of the case are summarized in the assailed Resolution as follows:Petitioners-appellees [herein Private Respondents] Marino,et.al. (appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year Collective Bargaining Agreement with its employer, the University of Santo Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998.On 21 September 1996, appellee Collantes, in her capacity as Secretary General of USTFU, posted a notice addressed to all USTFU members announcing a general assembly to be held on 05 October 1996. Among others, the general assembly was called to elect USTFU's next set of officers. Through the notice, the members were also informed of the constitution of a Committee on Elections (COMELEC) to oversee the elections. (Annex "B", petition)On 01 October 1996, some of herein appellants filed a separate petition with the Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that the COMELEC was not constituted in accordance with USTFU's constitution and by-laws (CBL) and that no rules had been issued to govern the conduct of the 05 October 1996 election.On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presidents (See paragraph VI, Respondents' Comment and Motion to Dismiss), issued notices allowing all faculty members to hold a convocation on 04 October 1996 (See Annex "C" Petition; Annexes "4" to "10", Appeal). Denominated as [a] general faculty assembly, the convocation was supposed to discuss the "state of the unratified UST-USTFU CBA" and "status and election of USTFU officers" (Annex "11", Appeal)On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a temporary restraining order against herein appellees enjoining them from conducting the election scheduled on 05 October 1996.Also on 04 October 1996, and as earlier announced by the UST secretary general, the general faculty assembly was held as scheduled. The general assembly was attended by members of the USTFU and, as admitted by the appellants, also by "non-USTFU members [who] are members in good standing of the UST Academic Community Collective Bargaining Unit" (See paragraph XI, Respondents' Comment and Motion to Dismiss). On this occasion, appellants were elected as USTFU's new set of officers by acclamation and clapping of hands (See paragraphs 40 to 50, Annex "12", Appeal).The election of the appellants came about upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the USTFU CBL and "the rules of the election be suspended and that the election be held [on] that day" (See paragraph 39, Idem.)On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and the nullification of the results of the 04 October 1996 election. Appellees alleged that the holding of the same violated the temporary restraining order issued in Case No. NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees characterized the election as spurious for being violative of USTFU's CBL, specifically because the general assembly resulting in the election of appellants was not called by the Board of Officers of the USTFU; there was no compliance with the ten-day notice rule required by Section 1, Article VIII of the CBL; the supposed elections were conducted without a COMELEC being constituted by the Board of Officers in accordance with Section 1, Article IX of the CBL; the elections were not by secret balloting as required by Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly was convened by faculty members some of whom were not members of USTFU, so much so that non-USTFU members were allowed to vote in violation of Section 1, Article V of the CBL.On 24 October 1996, appellees filed another urgentex-partemotion for a temporary restraining order, this time alleging that appellants had served the former a notice to vacate the union office. For their part, appellants moved to dismiss the original petition and the subsequent motion on jurisdictional grounds. Both the petition and the motion were captioned to be for "Prohibition, Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order." According to the appellants, the med-arbiter has no jurisdiction over petitions for prohibition, "including the ancillary remedies of restraining order and/or preliminary injunction, which are merely incidental to the main petition for PROHIBITION" (Paragraph XVIII3, Respondents' Comment and Motion to Dismiss). Appellants also averred that they now constituted the new set of union officers having been elected in accordance with law after the term of office of appellees had expired. They further maintained that appellees' scheduling of the 5 October 1996 elections was illegal because no rules and regulations governing the elections were promulgated as required by USTFU's CBL and that one of the members of the COMELEC was not a registered member of USTFU. Appellants likewise noted that the elections called by the appellees should have been postponed to allow the promulgation of rules and regulations and to "insure a free, clean, honest and orderly elections and to afford at the same time the greater majority of the general membership to participate" (See paragraph V, Idem). Finally, appellants contended that the holding of the general faculty assembly on 04 October 1996 was under the control of the Council of College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance and that they received the Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001 only on 07 October 1996 and were not aware of the same on 04 October 1996.On 03 December 1996, appellants and UST allegedly entered into another CBA covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants' Rejoinder to the Reply and Opposition).Consequently, appellees again moved for the issuance of a temporary restraining order to prevent appellants from making further representations that [they] had entered into a new agreement with UST. Appellees also reiterated their earlier stand that appellants were usurping the former's duties and functions and should be stopped from continuing such acts.On 11 December 1996, over appellants' insistence that the issue of jurisdiction should first be resolved, the med-arbiter issued a temporary restraining order directing the respondents to cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors of USTFU.In the meantime, appellants claimed that the new CBA was purportedly ratified by an overwhelming majority of UST's academic community on 12 December 1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated as appellees' petition for prohibition on the ground that this had become moot and academic.5Petitioners appealed the med-arbiter's Decision to the labor secretary,6who transmitted the records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized to resolve appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor Code.7The Assailed RulingAgreeing with the med-arbiter that the USTFU officers' purported election held on October 4, 1994 was void for having been conducted in violation of the union's Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners' contention that it was a legitimate exercise of their right to self-organization. He ruled that the CBL, which constituted the covenant between the union and its members, could not be suspended during the October 4, 1996 general assembly of all faculty members, since that assembly had not been convened or authorized by the USTFU.Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the recognition of the newly "elected" set of officers by UST or by the alleged ratification of the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio:This submission is flawed. The issue at hand is not collective bargaining representation but union leadership, a matter that should concern only the members of USTFU. As pointed out by the appellees, the privilege of determining who the union officers will be belongs exclusively to the members of the union. Said privilege is exercised in an election proceeding in accordance with the union's CBL and applicable law.To accept appellants' claim to legitimacy on the foregoing grounds is to invest in appellants the position, duties, responsibilities, rights and privileges of USTFU officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer from interfering with the employees in the latter' exercise of their right to self-organization. To allow appellants to become USTFU officers on the strength of management's recognition of them is to concede to the employer the power of determining who should be USTFU's leaders. This is a clear case of interference in the exercise by USTFU members of their right to self-organization.8Hence, this Petition.9The IssuesThe main issue in this case is whether the public respondent committed grave abuse of discretion in refusing to recognize the officers "elected" during the October 4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the following questions:10(1) Whether the Collective Bargaining Unit of all the faculty members in that General Faculty Assembly had the right in that General Faculty Assembly to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of the union[.](2) Whether the suspension of the provisions of the Constitution and By-Laws of the USTFU in that General Faculty Assembly is valid pursuant to the constitutional right of the Collective Bargaining Unit to engage in "peaceful concerted activitie