Conflict of Laws Case Digest: Guerrero's Transport Services vs BETEA-Kilusan, et.al.

GUERRERO'S TRANSPORT SERVICES, INC. vs.

BLAYLOCK TRANSPORTATION SERVICES EMPLOYEES ASSOCIATION-KILUSAN (BTEA-KILUSAN), LABOR ARBITER FRANCISCO M. DE LOS REYES and JOSE CRUZ

FACTS

In 1972, the US Naval Base authorities in Subic conducted a public bidding for a 5-year contract for the right to operate and/or manage the transportation services inside the naval base. This bidding was won by Santiago Guerrero, owner-operator of Guerrero’s Transport Services, Inc. (Guerrero), over Concepcion Blayblock, the then incumbent concessionaire doing business under the name of Blayblock Transport Services Blayblock. Blayblock’s 395 employees are members of the union BTEA-KILUSAN (the Union).

When Guererro commenced its operations, it refused to employ the members of the Union. Thus, the Union filed a complaint w/ the NLRC against Guerrero to compel it to employ its members, pursuant to Art. 1, Sec. 2 of the RP-US Base Agreement. The case was dismissed by the NLRC upon Guerrero’s MTD on jurisdictional grounds, there being no employer-employee relationship between the parties. Upon appeal, the Sec. of Labor remanded the case to the NLRC. The NLRC issued a Resolution ordering Guererro to “absorb all complainants who filed their applications on or before the deadline” set by Guerrero, except those who may have derogatory records w/ the US Naval Authorities in Subic.  The Sec. of Labor affirmed.

Guerrero claims that it substantially complied w/ the decision of the Sec. of Labor affirming the NLRC Resolution, & that any non-compliance was attributable to the individual complainants who failed to submit themselves for processing & examination. The Labor Arbiter ordered the reinstatement of 129 individuals. The Union filed a Motion for Issuance of Writ of Execution. The order wasn’t appealed so it was declared final & executory

Subsequently, the parties arrived at a Compromise Agreement wherein they agreed to submit to the Sec. of Labor the determination of members of the Union who shall be reinstated by Guerrero, w/c determination shall be final. The agreement is deemed to have superseded the Resolution of the NLRC. The Sec. of Labor ordered the absorption of 175 members of the Union subject to 2 conditions.

ISSUE

Whether or not the said members of the Union were entitled to be reinstated by Guerrero.

RULING

YES. Pursuant to Sec. 6 of Art. I of the RP-US Labor Agreement, the US Armed Forces undertook, consistent w/ military requirements, "to provide security for employment, and, in the event certain services are contracted out, the US Armed Forces shall require the contractor or concessioner to give priority consideration to affected employees for employment.

A treaty has 2 aspects — as an international agreement between states, and as municipal law for the people of each state to observe. As part of the municipal law, the aforesaid provision of the treaty enters into and forms part of the contract between Guerrero and the US Naval Base authorities. In view of said stipulation, the new contractor (Guerrero) is, therefore, bound to give "priority" to the employment of the qualified employees of the previous contractor (Blaylock). It is obviously in recognition of such obligation that Guerrero entered into the aforementioned Compromise Agreement.

Under the Compromise Agreement, the parties agreed to submit to the Sec. of Labor the determination as to who of the members of the Union shall be absorbed or employed by Guerrero, and that such determination shall be considered as final. The Sec. of Labor issued an Order directing the NLRC, through Labor Arbiter Francisco de los Reyes, to implement the absorption of the 175 members into Guerrero's Transport Services, subject to the following conditions:

a)    that they were bona fide employees of the Blaylock Transport Service at the time its concession expired; and

b)    that they should pass final screening and approval by the appropriate authorities of the U.S. Naval Base concerned.

For this purpose, Guerrero is ordered to submit to and secure from the appropriate authorities of the U.S. naval Base at Subic, Zambales the requisite screening and approval, the names of the members of the Union.

Considering that the Compromise Agreement of the parties is more than a mere contract and has the force and effect of any other judgment, it is, therefore, conclusive upon the parties and their privies. For it is settled that a compromise has, upon the parties, the effect and authority of res judicata and is enforceable by execution upon approval by the court.