Almirante: Quitclaim and release

Labor Case Digest

PETITIONER Julita Aldovino and six others applied for work at respondent Gold and Green Manpower Management and Development Services Inc., a local manning agency, whose foreign principal is respondent Sage International Development Company Ltd. Eventually, they were hired as sewers for Dipper Semi-Conductor Company Ltd., a Taiwan-based company. Their respective employment contracts provided an eight-hour working day, a fixed monthly salary and entitlement to overtime pay, among others.

Upon their arrival in Taiwan, they were made to sign another contract that provides that they would be paid on a piece-rate basis instead of a fixed monthly salary. Thus, they received less earnings than what was stipulated in the original contract. When they inquired on the schedule of payment on a piece-rate basis, they were turned down. On Jan. 19, 2009 they filed before a local court in Taiwan a complaint against their employers.

Eventually, the parties entered into a compromise agreement wherein petitioners were paid a reconciliation pay of NT$500,000 and another compensation of NT$1 million. Subsequently, petitioners executed an affidavit of quitclaim and release.

Upon their return to the Philippines, petitioners filed before the Labor Arbiter a case for illegal termination, underpayment of salaries and other money claims. One of their claims is the payment of their salaries for the unexpired portion of their employment contract. To this, respondents invoked the defense that the compromise agreement barred petitioners from holding them liable for claims.

Does respondents’ defense find merit?

Ruling: No.

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 (Sicangco v. NLRC, 305 Phil. 102, 108 (1994)).

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 (Fuentes v. NLRC, 249 Phil. 712 (1988)).

Here, the parties entered into the Compromise Agreement to terminate the case for underpayment of wages, which petitioners had previously filed against respondents in Taiwan. The object and foundation of the Compromise Agreement was to settle the payment of salaries and overtime premiums to which petitioners were legally entitled. Hence, it should not be construed as a restriction on petitioners’ right to prosecute other legitimate claims they may have against respondents.

Paragraph seven of the Compromise Agreement, which stipulates that petitioners “shall give up other rights of compensation...and shall not ask for any compensation based on any other causes,” cannot bar petitioners from filing this case and from being indemnified should respondents be adjudged liable. Blanket waivers exonerating employers from liability on the claims of their employees are ineffective (Dela Rosa liner Inc. v. Borela, 765 Phil. 251 (2015)).

Besides, at the time the parties’ Compromise Agreement was executed, respondents had just terminated petitioners from employment. Petitioners, 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 (Julita M. Aldovino, et al. vs. Gold and Green Manpower Management and Development Services Inc., G.R. 200811, June 19, 2019).


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