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EXECUTION OF THE COMPROMISE AGREEMENT AND EFFECT ON CLAIM OF EXEMPTION FROM LABOR LIABILITY
Waivers and quitclaims executed by employees are generally frowned upon for being contrary to public policy. This is based on the recognition that employers and employees do not stand on equal footing. [Aldovino vs. Gold and Green Manpower Management and Development Services, Inc., G.R. No. 200811, June 19, 2019]
In Land and Housing Development Corporation vs. Esquillo, the Supreme Court (SC) held that the reason why quitclaims are commonly frowned upon as contrary to public policy, and why they are held to be ineffective to bar claims for the full measure of the workers’ legal rights, is the fact that the employer and the employee obviously do not stand on the same footing.
The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of a job, he had to face the harsh necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent on their claim. They pressed it. They are deemed not to have waived any of their rights. Renuntiatio non praesumitur.
Along this line, quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claims arising from unfair labor practices of the employer. The basic reason for this is that such quitclaims and/or complete releases are against public policy and, therefore, null and void. The acceptance of termination does not divest a laborer of the right to prosecute his employer for unfair labor practice acts.
Quitclaims do not bar employees from filing labor complaints and demanding benefits to which they are legally entitled. They are “ineffective in barring recovery of the full measure of a worker’s rights, and the acceptance of benefits therefrom does not amount to estoppel.” The law does not recognize agreements that result in compensation less than what is mandated by law. These quitclaims do not prevent employees from subsequently claiming benefits to which they are legally entitled.
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In Am-Phil Food Concepts, Inc. vs. Padilla, this Court held that quitclaims do not negate charges for illegal dismissal the SC held that the law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities.
As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. The amounts already received by the retrenched employees as consideration for signing the quitclaims should, however, be deducted from their respective monetary awards.
Where the parties entered into the Compromise Agreement to terminate the case for underpayment of wages, which petitioners had previously filed against the agency in Taiwan, and the object is to settle the payment of salaries and overtime premiums to which petitioners were legally entitled, it cannot be construed as a restriction on workers’ right to prosecute other legitimate claims they may have against the agency and employer.
Blanket waivers exonerating employers from liability on the claims of their employees are ineffective. Besides, at the time the parties’ Compromise Agreement was executed, the employer and agency had just terminated workers from employment.
The workers, therefore, had no other choice but to accede to the terms and conditions of the agreement to recover the difference in their salaries and overtime pay. With no means of livelihood, they signed the Compromise Agreement out of dire necessity.
In the case of Aldovino, Gold and Green further justify the dismissal by arguing that complainants voluntarily severed their employment when they signed the Compromise Agreement.
The SC found this argument untenable. Under the Labor Code, employers may only terminate employment for a just or authorized cause and after complying with procedural due process requirements. Articles 297 and 300 of the Labor Code enumerate the causes of employment termination either by employers or employees.
In such case, records show that the termination of employment was effected merely because respondents no longer wanted their services. This is not an authorized or just cause for dismissal under the Labor Code. Employment contracts cannot be terminated on a whim.
Moreover, complainants did not voluntarily sever their employment when they signed the Compromise Agreement, which, again, cannot be used to justify a dismissal. Furthermore, they were not accorded due process. A valid dismissal must comply with substantive and procedural due process thus, there must be a valid cause and a valid procedure.
The employer must comply with the two (2)-notice requirement, while the employee must be given an opportunity to be heard. Here, complainants were only verbally dismissed, without any notice given or having been informed of any just cause for their dismissal.
The SC did not believe Gold and Green’s insistence that complainants voluntarily terminated their employment. Contrary to their assertion, petitioners were left with no choice but to accept the Compromise Agreement and to go back to the Philippines.
After accumulating a huge amount of debt to work abroad, complainants were burdened to continue working for Gold and Green that they were constrained to sign the piece-rate-based contract upon arriving in Taiwan. As a result, they were paid less than if they were paid on a monthly basis and, worse, they were deprived of their overtime premium. They inevitably defaulted on their loan obligations. To make matters worse, they were terminated from employment on a whim and were left homeless.
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