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ACCEPTANCE OF SEPARATION PAY DOES NOT ESTOP THE EMPLOYEE FROM FILING THE ACTION FOR ILLEGAL RETRENCHMENT
Separation pay is required for valid retrenchment. However, when the employee accepts separation but thereafter files a case for illegal dismissal challenging the validity of retrenchment, the acceptance of separation pay does not negate such action.
In the case of (Team Pacific Corporation vs. Parente, G.R. No. 206789, July 15, 2020), Parente went to the Department of Labor and Employment, where she was advised to first accept her separation pay before filing a complaint. Thus, after she had been required to process her clearance and sign several documents, Parente received her separation pay.
When she filed the case, the NLRC ruled that Parente’s acts of receiving the notice of termination, processing her clearance, accepting her separation pay, and receiving her employment certificate were conclusive on her. It ruled that Parente had been estopped from suing Team Pacific, which believed that she voluntarily accepted her dismissal.
However, the Court of Appeals held that Parente was not estopped from questioning her dismissal just because she accepted her separation pay. It ruled that waivers and quitclaims are frowned upon, especially as to employees who may have been pressured by employers seeking to evade legal responsibilities.
The CA also noted how Parente was in no position to resist the money offered as she had just given birth, as well as the Department of Labor and Employment’s advice that she accept her separation pay before filing a complaint. It found that by proceeding with the illegal dismissal case, Parente showed that she did not sleep on her rights.
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This Supreme Court (SC) held that Parente was not barred by estoppel.
Neither accepting separation pay nor signing a waiver and quitclaim bars the employee from contesting the legality of the dismissal. Such acts are generally taken with a grain of salt, considering that employees are usually at an economic disadvantage and are often left with no choice, since they are suddenly faced with the pressure to meet financial burdens. In American Home Assurance Company vs. National Labor Relations Commission:
“The fact that private respondent signed a document of waiver and quitclaim does not bar him from pursuing the P50,000.00 bonus under the SERP. His receipt of the separation pay and the execution of the release documents cannot militate against him. That acceptance of separation pay does not amount to estoppel, and the satisfaction receipt does not result in a waiver. The law does not consider as valid any agreement to receive less compensation than what a worker is entitled to recover nor prevent him from demanding benefits to which he is entitled. Quitclaims executed by employees are thus commonly frowned upon as contrary to public policy and 
ineffective to bar claims for the full measure of the workers’ legal rights, considering the economic disadvantage of the employee and the inevitable pressure upon him by financial necessity.”
Filing a complaint for illegal dismissal likewise negates any claim that the dismissal was voluntarily accepted. In Molave Tours Corporation vs. National Labor Relations Commission:
“The fact that private respondent immediately filed a complaint for illegal dismissal against petitioner and repudiated his alleged resignation completely negated petitioner’s claim that respondent Bolocon voluntarily resigned. By vigorously pursuing the litigation of his action against petitioner, private respondent clearly manifested that he has no intention of relinquishing his employment, which act is wholly incompatible to petitioner’s assertion that he voluntarily resigned.”
In the case where the Department of Labor and Employment had advised the employee to first accept her separation pay before filing her complaint, to accept her separation pay, she had to process her clearance and sign the waivers and quitclaims, and not long after, she filed the case, there can be no estoppel.
Notably, the employee, Parente, in the case of Team Pacific was dismissed when she had just given birth. Her dismissal’s effectivity was set on the date she was supposed to return from her maternity leave. She was at a clear disadvantage, having found herself without a job and a source of income right at a time when finances were crucial.
Thus, Parente’s acceptance of her separation pay and the execution of her waiver and quitclaim cannot be deemed as her waiving her right to file a complaint. She was not estopped from contesting the legality of her dismissal.
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