Release, Waiver and Quitclaim Does not Bar the Employee from Claiming the benefits due him; Receipt of Separation Benefit does not Amount to Estoppel

Release, Waiver and Quitclaim as a general rule is frowned upon by the Courts. However, it is valid if 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.

Hence, it cannot bar the employee from claiming the benefits due him.

The post below has the same facts with the other posts to emphasize the ruling of the court on various important issues based on the same sets of facts.

Thus, the SC held:

Luis S. Doble, Jr. vs. ABB, Inc./Nitin Desal
G.R. No. 215627, June 5, 2017

Facts:

Luis S. Doble, Jr. (Doble), was initially hired by respondent ABB, Inc. as Junior Design Engineer. During almost nineteen (19) years of his employment with the respondent ABB, Doble rose through the ranks and promoted until he became Vice-President and Local Division Manager of Power System Division, the last position he held at the time of his dismissal.

Learn how to validly dismiss employees: Guide to Valid Dismissal of Employees Second Edition

As a matter of policy, ABB, Inc. conducts the yearly Performance and Development Appraisal of all its employees. On March 2, 2012, Doble was called by respondent ABB, Inc. Country Manager and President Nitin Desai, and was informed that his performance rating for 2011 is one (1) which is equivalent to unsatisfactory performance.

Subsequently, a company Executive Assistant informed Doble that he has a meeting with ABB, Inc. President Desai and Country Human Resource (HR) Manager Marivic Miranda in the Luzon Conference Room of ABB, Inc. During the meeting, ABB, Inc. President Desai explained to Doble that the Global and Regional Management have demanded for a change in leadership due to the extent of losses and level of discontent among the ranks of the PS Division.

Desai then raised the option for Doble to resign as Local Division Manager of the PS Division. Thereafter, HR Manager Miranda told Doble that he would be paid separation pay equivalent to 75% of his monthly salary for every year of service, provided he would submit a letter of resignation, and gave him until 12 :45 p.m. within which to decide.

Shocked by the abrupt decision of the management, Doble asked why he should be the one made to resign. Miranda said that it was the decision of the management, and left him alone in the conference room to decide whether or not to resign.

Doble narrated in his position paper that he was constructively dismissed and forced to resign. Miranda allegedly told her to prepare the resignation letter telling him that he would not be allowed to leave the company without finishing all the necessary papers he would not be permitted to return to the company on the following days. He said he could not do anything. Under the extreme pressure and threat of Mrs. Miranda, he went to his office and prepared the letter of resignation.

Doble submitted his letter of resignation where he originally indicated the phrase “As per your instruction.” However, he was made to revise the letter by deleting such phrase to which he did. The revised resignation letter was accepted by the company in writing .

ABB contended that when Mrs. Miranda offered the separation rate, Doble attempted to negotiate by proposing to get a resignation benefit equivalent to 1.5 month’s pay and said that if he is given said amount, there will be no issue, no labor case between him and ABB, Inc.

They told Doble that the request could not be accommodated, as the policy provides 75% month’s pay for every year of service. It was then suggested to him that he could talk to Mr. Desai regarding this request but he declined. At this point, he requested that the separation benefit be higher, as he anticipates that there will still be deductions thereon.

It was agreed by ABB management to extend a one-month pay per every year of service to Mr. Doble in consideration of his tenure of service with ABB. Unrelenting, he again negotiated the possibility of a higher amount. HR replied that this is ABB’s final and last offer. He then said that he would draft his letter of resignation.

Mr. Doble handed his resignation letter which as mentioned, with the phrase “as per your instruction”. HR expressed its strong disagreement with the wordings of the resignation letter and asked him to remove the phrase “as per your instruction.” ABB and HR never gave him any instruction/s to resign. It was emphasized to him that it was his decision to resign. Thus, Doble agreed to revise the letter. Also, contrary to Mr. Doble’ s assertion in his Position Paper, it was never imposed that he had deadline on the submission of the revised letter.

Doble then decided to purchase the company-issued vehicle through a written intent to purchase. Doble and Miranda met at McDonald’s Alabang Town Center for Doble to receive his check and sign all documents including the Release and Quitclaim.

Thereafter, Doble filed a Complaint for illegal dismissal with prayer for reinstatement and payment of backwages, other monetary claims and damages.

LA Ruling:

The Labor Arbiter held that Doble was illegally dismissed because his resignation was involuntary, and ordered ABB, Inc. and Desai to pay his backwages and separation pay, since reinstatement is no longer feasible.

Aggrieved by the Decision of the Labor Arbiter, ABB, Inc. and Desai filed an appeal, whereas Doble filed a partial appeal from the dismissal of his monetary claims.

NLRC Ruling:

The two (2) Commissioners of the NLRC Sixth Division voted to grant the appeal filed by ABB, Inc. and Desai, and to dismiss the partial appeal of Doble. They found that the resignation of Doble being voluntary, there can be no illegal dismissal and no basis for the award of other monetary claims, damages and attorney’s fees. However, one NLRC Commissioner dissented.

Doble filed a motion for reconsideration, but the NLRC denied the motion for lack of compelling reason to disturb its findings and conclusions. Dissatisfied with the NLRC Decision and Resolution, Doble filed a petition for certiorari before the Court of Appeals (CA).

CA Ruling:

In a minute Resolution, the CA dismissed outright the Petition for Certiorari because (1) “the assailed National Labor Relations Commission (NLRC) Decision and Resolution attached are mere ‘CERTIFIED PHOTOCOP(IES)’ and not duplicate originals or certified true copies;” and (2) “Doble’s counsel’s MCLE Compliance No. III-0006542′ xxx does not appear to have complied with the Fourth (IV) MCLE compliance period.”

The CA also denied Doble’s motion for reconsideration because (1) the NLRC Decision and Resolution attached to the petition were certified “photo” copies, unlike the specific requirement for a certified “true” copy, or a “clearly legible duplicate original or certified true copy” of the assailed disposition, and (2) Doble’s counsel conceded his inability to comply with the MCLE requirement.

Issue/s:

Whether or not deed of release of quitclaim bars an employee from demanding benefits to which he is legally entitled

Whether or not acceptance of separation benefits amounts to estoppel barring further claims

SC Ruling:

The SC found the petition devoid of substantive merit but partly meritorious on procedural grounds.

Under prevailing jurisprudence, a deed of release of quitclaim does not bar an employee from demanding benefits to which he is legally entitled. Employees who received their separation pay are not barred from contesting the legality of their dismissal, and the acceptance of such benefits would not amount to estoppel. The basic reason for this is that such quitclaims and/or complete releases are null and void for being contrary to public policy.

The SC held that not all quitclaims are invalid and 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 a 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.”

Cases abound where the Court gave effect to quitclaims executed by the employees when the employer is able to prove the following requisites: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and ( 4) the contract is not contrary to law, public order, public policy, morals or goods customs, or prejudicial to a third person with a right recognized by law. ABB, Inc. and Desai proved by substantial evidence the presence of all these requisites through the following documents:

the affidavit of ABB, Inc. ‘s HR Manager Miranda; (2) the Certificate o Employment; (3) photocopy of Bank of the Philippine Islands manager’s check in the amount of P2,009,822.72, representing the separation benefit; (4) Employee Final Pay Computation, showing payment of leave credits, rice subsidy and bonuses, amounting to P805,399.35; and (5) the Receipt, Release and Quitclaim for a consideration of the total sum of P2,815,222.07.