Afterthought

This case illustrates the effect of a compromise agreement entered into by the parties. It involves Alfredo who was employed on June 1, 1989 as security assistant by a government owned and controlled corporation (PNOC-EDC). When Alfredo’s employment was terminated one year later allegedly due to a company wide reorganization necessitating the abolition of his position, Alfredo filed in the NLRC a complaint for illegal dismissal against the PNOC-EDC.

On August 27, 1991, the Labor Arbiter ruled in favor of Alfredo and ordered his immediate reinstatement. While PNOC-EDC appealed the ruling to the NLRC, Alfredo was immediately reinstated pending appeal pursuant to Article 223 paragraph 3 of the Labor Code but to another position of the same rank and salary which had nothing to do with security and in different places, first as General Services Assistant and then as Pipeline Foreman. Then later on, upon his request, he was assigned to almost the same position of Security Assistant which he used to occupy, but in another place.

With the thawing of the relations between the company and Alfredo, the latter signified his openness to the settlement of the case pending appeal. Thus on January 28, 1993, Alfredo and the Company agreed to settle the case by virtue of which Alfredo received P124,824.31. As a consequence of this agreement, both Alfredo and the Company filed a Joint Motion to Dismiss whereby the parties agreed that "all other claims, damages and causes of action arising out of the instant case are waived". The NLRC thus dismissed the case and on March 29, 1993, an Entry of Finality of Judgment was issued.

On December 10, 1993 however, Alfredo filed a motion for issuance of a writ of execution of the labor arbiter’s decision on August 21, 1991. He wanted to be reinstated to his old position in his province where he would be near his family. He said that his reinstatement was not a faithful compliance of the labor arbiter’s decision as he was assigned at a far away place causing him to be separated from his family. Alfredo said that only the monetary consideration of the decision of August 27 1991 has been satisfied, while the reinstatement aspect remained unsatisfied, so the decision should be given full force and effect since the record shows that he was never reinstated to his former position. It was Alfredo’s contention that while the parties had reached a settlement, the labor arbiter’s decision finding his dismissal illegal was not vacated and therefore could still be enforced. Was Alfredo correct?

No. Whether or not Alfredo was validly reinstated per ruling of the labor arbiter dated August 27, 1991, is beside the point in view of the fact that the Joint Motion to Dismiss filed by the parties contained a clause whereby they agreed that "all other claims, damages and caused of action arising out of the instant case are waived". This clause is in the nature of a compromise agreement, i.e., an agreement between two or more persons, who for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers in the hope of gaining, balanced by the danger of losing. Such agreement transcends its identity as a mere contract binding only upon the parties thereto, as it becomes a judgment that judges have the ministerial and mandatory duty to implement and enforce.

In this case when both parties agreed to waive "all other claims, damages and cause of action" arising out of the original case filed by Alfredo, they did not agree to dismiss the appeal pending before the NLRC. Particularly, Alfredo relinquished his claim for reinstatement as contained in the decision of the labor arbiter by receiving the amount of P124,824.31 while the Company acquiesced to have its appeal before the NLRC dismissed just to put an end to the labor dispute. The order of the labor arbiter reinstating Alfredo to his former position has already been superseded by the agreement of both parties to waive all other claims, damages and causes of action. Alfredo’s allegations of invalid reinstatement is a mere afterthought in a fascinating attempt to extricate himself from an assignment at a place far away from his family (PNOC-EDC etc. vs. Abella G.R. 153904, January 17, 2005).

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