Guerrero’s Transport Services v.

Blaylock
G.R. No. L41518 June 30, 1976 Ponente
petitioners GUERRERO'S TRANSPORT SERVICES, INC.
respondents BLAYLOCK TRANSPORTATION SERVICES EMPLOYEES ASSOCIATION-
KILUSAN (BTEAKILUSAN), LABOR ARBITER FRANCISCO M. DE LOS REYES and
JOSE CRUZ
summary The Union wanted to compel the winning bidder (Guerrero) to reinstate/re-employ
the members of their group who were ex-employees of the losing bidder Blaylock.
They based it on the RP-US base agreement and on the compromise agreement made.
The court adhered to the Union’s petition. A treaty has two (2) aspects — as an
international agreement between states, and as municipal law for the people of each
state to observe.
Being part of municipal law, the provision of the treaty forms part of the contract
between petitioner and the U.S. Naval Base authorities.
In view of said stipulation, the new contractor is, therefore, bound to give "priority"
to the employment of the qualified employees of the previous contractor.

facts of the case

 The United states Naval Base authorities at Subic, Zambales, conducted a public bidding for a five 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., over
Concepcion F. Blaylock, the then incumbent concessionaire doing business under the name of "Blaylock
Transport Services", whose 395 employees are members of respondent union BTEAKILUSAN.
 Guerrero refused to employ the members of the union.
 On January, 12, 1975, filed a complaint with the NLRC against Guerrero's Transport Services, Inc. and
Santiago Guerrero, to compel them to employ its members pursuant to Article 1, Section 2 of the RPUS
Base Agreement dated May 27, 1968.
 Provincial Director of the Labor Office in Zambales furnished, on August 2, 1974, a list of 46 members of
respondent union BTEAKILUSAN and former drivers of the Blaylock Transport Service, who are within
the coverage of the decision of the Secretary of Labor, and requesting petitioner to report its action on the
matter directly to the Chairman, NLRC, Manila
 Santiago A. Guerrero received a letter from Col. Levi L. Basilla, PC (GSC) Camp Olivas, San Fernando,
Pampanga, requesting compliance with the Order
 On June 20, 1975, Labor Arbiter De los Reyes ordered the reinstatement of 129 individuals "to their former
or substantially equivalent positions without loss of seniority and other rights and privileges"
o Guerrero says that the Orders were issued by the Labor Arbiter were without jurisdiction.
 LA declared said Orders final and executory and directed petitioner Guerrero's Transport Services, Inc. to
reinstate the 129 complainants and to pay them the amount of P4,290.00 each as backwages
 October 6, 1975, issued a TRO and required the respondents to file an answer within 10 days from notice.
 At the hearing of this case on October 20, 1975, a Compromise Agreement was arrived at by the parties
wherein they agreed to submit to the Office of the Secretary of Labor the determination of members of
the respondent union BTEAKILUSAN who shall be reinstated or absorbed by the herein petitioner in the
transportation service inside the naval base, which determination shall be considered final.
o The determination of WON 179 employees should be admitted was based on certain criteria 1.
issue
WON Guerrero can be compelled to abide by the treaty and the compromise agreement? YES

ratio
o Pursuant to Section 6 of Article I of the PhilippineU S. Labor Agreement of May 27, 1968, the United
States Armed Forces undertook, consistent with military requirements, "to provide security for
1
1) that they were bona fide employees of the Blaybock Transportation Service at the time its concession expired:
2) that the appellants shall pass final screening and approval by the appropriate authorities of the U.S. Base concerned..
1
 employment, and, in the event certain services are contracted out, the United States Armed Forces shall
require the contractor or concessioner to give priority consideration to affected employees for
employment.
o A treaty has two (2) aspects — as an international agreement between states, and as municipal law for
the people of each state to observe.
o Being part of municipal law, the provision of the treaty forms part of the contract between
petitioner and the U.S. Naval Base authorities.
o In view of said stipulation, the new contractor is, therefore, bound to give "priority" to the
employment of the qualified employees of the previous contractor. It is obviously in recognition of
such obligation that petitioner entered into the aforementioned Compromise Agreement
o Under the Compromise Agreement as embodied in the Resolution of this Court dated October 24, 1975, the
parties agreed to submit to the Secretary of Labor the determination as to who of the members of the
respondent union BTEAKILUSAN shall be absorbed or employed by the herein petitioner Guerrero's
Transport Services, Inc., and that such determination shall be considered as final.
o The CompromiseAgreement 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.
o 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.
o Since the resolution of the NLRC of October 31, 1973 required the absorption of the applicants subject to
the conditions therein contained, and there being no showing that such conditions were complied with, the
Labor Arbiter exceeded his authority in awarding back wages to the 129 complainants.