508 Phil. 478
PANGANIBAN, J.:
"WHEREFORE, premises considered, the decision dated May 30, 1997 of public respondent is hereby ANNULLED and SET ASIDE and the decision, dated February 27, 1997 of Labor Arbiter Andres Zavalla is REINSTATED and AFFIRMED in toto. Costs against [herein petitioners]."[4]The assailed Resolution denied petitioners' Motion for Reconsideration.
The antecedents are narrated by the CA as follows:
"[Respondent] Marianito C. Esquillo was hired as a structural engineer by [Petitioner] ABV Rock Group ('ABV') based in Jeddah, Kingdom of Saudi Arabia. He commenced employment on July 27, 1989, with an initial monthly salary of US$1,000.00 that was gradually increased, on account of his good performance and the annual renewal of his employment contract, until it reached US$1,300.00. Private respondent Land & Housing Development Corporation ('LHDC'), a local placement agency, facilitated [respondent's] employment papers.
"Although [respondent's] employment contract was supposed to be valid until July 26, 1995, it was pre-terminated, through an Inter-Office Memo on Notice of Termination, dated November 17, 1994, allegedly, for the reason, 'reduction of force.' Petitioner however, claims that the reason adduced was 'negated by the fact that a lot of transferees from other sites were taken in and promotions as well as re-classifications in the lower ranks were done as shown by the list of fifteen (15) transferees from Riyadh effective November 5, 1994, as well as letters of promotion and re-classification.' He further claimed that [Petitioner] ABV maliciously confiscated his 'iqama' or resident visa despite the fact that it was [respondent's] previous employer, FEAL IBC., which secured his 'iqama.' Consequently, [respondent] was prevented from getting another job in Jeddah.
"[Respondent] subsequently received the amount of twenty-three thousand, one hundred fifty-three Saudi Riyals (SR23,153.00) from [Petitioner] ABV, as final settlement of his claims and was issued an exit visa that required him to immediately go back to the Philippines.
"As a result of the foregoing, [respondent] filed a complaint for breach of contract and/or illegal dismissal, before the Philippine Overseas Employment Administration which was referred to the National Labor Relations Commission, Sub-Regional Arbitration Branch No. IV, San Pablo City, and docketed as SRAB-IV-4-0053-96-L. The parties were required to file their position papers and responsive pleadings.
"In their position paper, [petitioners] maintained that [respondent's] dismissal was for valid cause, that is, reduction of force. Due to the Gulf War, the projects of [Petitioner] ABV were reduced and it was forced to 'terminate the contracts of workers whose job were not so immediate and urgent and retain only those workers whose skills were needed just to maintain the projects.' [Respondent] was informed, one month in advance, of the pre-termination of his contract, and he was paid his salary, overtime pay, bonus and other benefits in the total amount of US$6,716.00 or Saudi Riyals SR25,192.00. With respect to the alleged confiscation of [respondent's] 'iqama,' [petitioners] alleged that the law requires its surrender to the Saudi authorities upon the termination of the employee's contract of employment.
'Upon the submission of the case for resolution, the Hon. Labor Arbiter Andres Zavalla issued his Decision, dated February 27, 1997, decreeing, as follows:'WHEREFORE, premises considered, judgment is hereby rendered ordering [petitioners] jointly and severally to pay [respondent] his salaries corresponding to the unexpired portion of his contract from December 19, 1994 up to July 26, 1995 in the total amount of NINE THOUSAND FOUR HUNDRED FORTY SEVEN U.S. Dollars (US$9,447.00) and ten percent (10%) of his monetary award as attorney's fees both in Philippine currency to be computed at the prevailing rate at the time of payment."When [petitioners] filed their joint appeal, docketed as NLRC NCR CA No. 012650-97, [the NLRC] in a Decision, dated May 30, 1997, reversed the aforecited decision and dismissed the [respondent's] complaint for lack of merit. [Respondent's] motion for reconsideration was denied in a Resolution, dated July 10, 1997."[5]
'All other claims of [respondent] are hereby dismissed for lack of merit.
'SO ORDERED.'
Ruling of the Court of Appeals
The Issues
"A. Whether or not the Honorable Court of Appeals committed reversible error when it took cognizance of an issue of fact which was raised for the first time on appeal.In the main, the issue is whether respondent, despite having executed a quitclaim, is entitled to a grant of his additional monetary claims.
"B. Whether or not the Honorable Court of Appeals committed reversible error in its 27 July 2001 Decision and 29 January 2002 Resolution by affirming the 27 February 1997 Decision of the Labor Arbiter which rendered as null and void and without binding effect the release and quitclaim executed by the respondent in favor of the petitioners, and, thereafter, granted the respondent monetary award."[7]
The Court's Ruling
Main Issue:
Entitlements of a Dismissed
Employee Who Has Executed a Quitclaim
"KNOW ALL MEN BY THESE PRESENTS:Petitioners claim that the foregoing Release and Quitclaim has forever released them from "any and all claims, demands, dues, actions, or causes of action" arising from respondent's employment with them. They also contend that the validity of the document can no longer be questioned.
That for and in consideration of the sum of Saudi Riyals SR: TWENTY THREE THOUSAND ONE HUNDRED FIFTY THREE (SR23,153) receipt of which is hereby acknowledged to my full and complete satisfaction, I, MARIANITO C. ESQUILLO do discharge my employer, ABV ROCK GROUP KB, JEDDAH, & its recruitment agent, the LAND & HOUSING DEV'P. CORP., from any and all claims, demands, debts, dues, actions, or causes of action, arising from my employment with aforesaid company/firm/entity.
"I hereby certify that I am of legal age, that I fully understand this instrument and agree that this is a full and final release and discharge of the parties referred to herein, and I further agree that this release may be pleaded as absolute and final bar to any suit or suits or legal proceedings that may hereafter be prosecuted by me against aforementioned companies/entities.
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HANDS THIS 29 day of NOV, 1994 at JEDDAH.SIGNED
MARIANITO C. ESQUILLO."[14]
"We have heretofore explained 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.In Periquet v. NLRC, this Court set the guidelines and the current doctrinal policy regarding quitclaims and waivers, as follows:
"Along this line, we have more trenchantly declared that 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. While there may be possible exceptions to this holding, we do not perceive any in the case at bar.x x x x x x x x x
"We have pointed out in Veloso, et al. vs. Department of Labor and Employment, et al., that:'While rights may be waived, the same must not be contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law.
'Article 6 of the Civil Code renders a quitclaim agreement void ab initio where the quitclaim obligates the workers concerned to forego their benefits while at the same time exempting the employer from any liability that it may choose to reject. This runs counter to Art. 22 of the Civil Code which provides that no one shall be unjustly enriched at the expense of another.'"[16]
"Not all waivers and quitclaims are invalid as 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 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. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking."[17]Hence, quitclaims in which employees voluntarily accept a reasonable amount or consideration as settlement are deemed valid. These agreements cannot be set aside merely because the parties have subsequently changed their minds.[18] Consistent with this doctrine, a tribunal has the duty of scrutinizing quitclaims brought to its attention by either party, in order to determine their validity.