The document summarizes a labor dispute case that was elevated to the Supreme Court regarding an employee, Marianito Ca. Esquillo, who was terminated without cause from his job in Saudi Arabia and signed a quitclaim releasing his employer from further claims. The Court of Appeals ruled in favor of Esquillo, finding that despite the quitclaim, he was still entitled to compensation for the unexpired portion of his employment contract based on existing labor laws. The Supreme Court affirmed this decision, noting that factual findings of labor officials are generally given deference and that employees terminated without cause have the right to compensation.
Original Description:
LABOR
Original Title
Land and Housing Development Corporation vs Esquillo
The document summarizes a labor dispute case that was elevated to the Supreme Court regarding an employee, Marianito Ca. Esquillo, who was terminated without cause from his job in Saudi Arabia and signed a quitclaim releasing his employer from further claims. The Court of Appeals ruled in favor of Esquillo, finding that despite the quitclaim, he was still entitled to compensation for the unexpired portion of his employment contract based on existing labor laws. The Supreme Court affirmed this decision, noting that factual findings of labor officials are generally given deference and that employees terminated without cause have the right to compensation.
The document summarizes a labor dispute case that was elevated to the Supreme Court regarding an employee, Marianito Ca. Esquillo, who was terminated without cause from his job in Saudi Arabia and signed a quitclaim releasing his employer from further claims. The Court of Appeals ruled in favor of Esquillo, finding that despite the quitclaim, he was still entitled to compensation for the unexpired portion of his employment contract based on existing labor laws. The Supreme Court affirmed this decision, noting that factual findings of labor officials are generally given deference and that employees terminated without cause have the right to compensation.
LAND AND HOUSING DEVELOPMENT CORPORATION vs ESQUILLO
G.R. No. 152012 Septeme! "0# 2005
DECISION
PANGANI$AN# J.:
Quitclaims, releases and other waivers of benefits granted by laws or contracts in favor of workers should be strictly scrutinized to protect the weak and the disadvantaged. The waivers should be carefully examined, in regard not only to the words and terms used, but also the factual circumstances under which they have been executed. T%e C&se Before us is a Petition for eview !"# under ule $% of the ules of &ourt, seeking to set aside the 'uly (), (**" +ecision !(# and the 'anuary (,, (**( esolution !-# of the &ourt of .ppeals /&.0 in &.12 3P 4o. %*5),. The dispositive portion of the +ecision reads as follows6
789::;<:, premises considered, the decision dated =ay -*, ",,) of public respondent is hereby ANNULLED and SET ASIDE and the decision, dated ;ebruary (), ",,) of >abor .rbiter .ndres ?avalla is REINSTATED and A''IRMED in toto. &osts against !herein petitioners#.@ !$# The assailed esolution denied petitionersA =otion for econsideration.
T%e '&(ts The antecedents are narrated by the &. as follows6
7!espondent# =arianito &. :sBuillo was hired as a structural engineer by !Petitioner# .BC ock 2roup /D.BCA0 based in 'eddah, Eingdom of 3audi .rabia. 9e commenced employment on 'uly (), ",F,, with an initial monthly salary of G3H",***.** that was gradually increased, on account of his good performance and the annual renewal of his employment contract, until it reached G3H",-**.**. Private respondent >and I 9ousing +evelopment &orporation /D>9+&A0, a local placement agency, facilitated !respondentAs# employment papers.
7.lthough !respondentAs# employment contract was supposed to be valid until 'uly (5, ",,%, it was pre1terminated, through an Jnter1<ffice =emo on 4otice of Termination, dated 4ovember "), ",,$, allegedly, for the reason, Dreduction of force.A Petitioner however, claims that the reason adduced was Dnegated by the fact that a lot of transferees from other sites were taken in and promotions as well as re1classifications in the lower ranks were done as shown by the list of fifteen /"%0 transferees from iyadh effective 4ovember %, ",,$, as well as letters of promotion and re1classification.A 9e further claimed that !Petitioner# .BC maliciously confiscated his DiBamaA or resident visa despite the fact that it was !respondentAs# previous employer, ;:.> JB&., which secured his DiBama.A &onseBuently, !respondent# was prevented from getting another Kob in 'eddah.
7!espondent# subseBuently received the amount of twenty1three thousand, one hundred fifty1three 3audi iyals /3(-,"%-.**0 from !Petitioner# .BC, as final settlement of his claims and was issued an exit visa that reBuired him to immediately go back to the Philippines.
7.s a result of the foregoing, !respondent# filed a complaint for breach of contract andLor illegal dismissal, before the Philippine <verseas :mployment .dministration which was referred to the 4ational >abor elations &ommission, 3ub1 egional .rbitration Branch 4o. JC, 3an Pablo &ity, and docketed as 3.B1JC1$1**%-1,51>. The parties were reBuired to file their position papers and responsive pleadings.
7Jn their position paper, !petitioners# maintained that !respondentAs# dismissal was for valid cause, that is, reduction of force. +ue to the 2ulf 8ar, the proKects of !Petitioner# .BC were reduced and it was forced to Dterminate the contracts of workers whose Kob were not so immediate and urgent and retain only those workers whose skills were needed Kust to maintain the proKects.A !espondent# was informed, one month in advance, of the pre1termination of his contract, and he was paid his salary, overtime pay, bonus and other benefits in the total amount of G3H5,)"5.** or 3audi iyals 3(%,",(.**. 8ith respect to the alleged confiscation of !respondentAs# DiBama,A !petitioners# alleged that the law reBuires its surrender to the 3audi authorities upon the termination of the employeeAs contract of employment.
7Gpon the submission of the case for resolution, the 9on. >abor .rbiter .ndres ?avalla issued his +ecision, dated ;ebruary (), ",,), decreeing, as follows6
D89::;<:, premises considered, Kudgment is hereby rendered ordering !petitioners# Kointly and severally to pay !respondent# his salaries corresponding to the unexpired portion of his contract from +ecember ",, ",,$ up to 'uly (5, ",,% in the total amount of 4J4: T9<G3.4+ ;<G 9G4+:+ ;<TM 3:C:4 G.3. +ollars /G3H,,$$).**0 and ten percent /"*N0 of his monetary award as attorneyAs fees both in Philippine currency to be computed at the prevailing rate at the time of payment.
D.ll other claims of !respondent# are hereby dismissed for lack of merit.
D3< <+::+.A
78hen !petitioners# filed their Koint appeal, docketed as 4>& 4& &. 4o. *"(5%*1,), !the 4>&# in a +ecision, dated =ay -*, ",,), reversed the aforecited decision and dismissed the !respondentAs# complaint for lack of merit. !espondentAs# motion for reconsideration was denied in a esolution, dated 'uly "*, ",,).@ !%#
R)*+,- o. t%e Co)!t o. Appe&*s
The &ourt of .ppeals ruled that despite the absence of a written categorical obKection to the sufficiency of the payment received as consideration for the execution of the Buitclaim, Kurisprudence supported the right of respondent to demand what was rightfully his under our labor laws. 9ence, he should have been allowed to recover the difference between the amount he had actually received and the amount he should have received.
The &. also found that the 4>& had erroneously applied . F*$( to the case. The appellate court held that respondent was entitled to the salaries corresponding to the unexpired portion of his &ontract, in addition to what he had already received.
9ence, this Petition. !5# T%e Iss)es Petitioners raise the following issues for this &ourtAs consideration6
7.. 8hether or not the 9onorable &ourt of .ppeals committed reversible error when it took cognizance of an issue of fact which was raised for the first time on appeal.
7B. 8hether or not the 9onorable &ourt of .ppeals committed reversible error in its () 'uly (**" +ecision and (, 'anuary (**( esolution by affirming the () ;ebruary ",,) +ecision of the >abor .rbiter which rendered as null and void and without binding effect the release and Buitclaim executed by the respondent in favor of the petitioners, and, thereafter, granted the respondent monetary award.@ !)#
Jn the main, the issue is whether respondent, despite having executed a Buitclaim, is entitled to a grant of his additional monetary claims.
T%e Co)!t/s R)*+,- The Petition has no merit.
.t the outset, the &ourt notes the =anifestation of the <ffice of the 3olicitor 2eneral /<320, recommending that 7the decision dated =ay -*, ",,) of the 4>& be annulled and set aside and that !espondent# :sBuillo be awarded the total amount of his salaries corresponding to the unexpired portion of his contract of employment.@ !F# M&+, Iss)e0 Entitlements of a DismissedEmployee Who Has Executed a Quitclaim
The factual findings of labor officials, who are deemed to have acBuired expertise in matters within their respective Kurisdictions, are generally accorded not only respect but finality. !,# Jn the present case, the labor arbiter found respondentAs dismissal to be illegal and devoid of any Kust or authorized cause. The factual findings of the 4>& and the &. on this matter were not contradictory. 9ence, the &ourt finds no reason to deviate from their factual finding that respondent was dismissed without any legal cause.
Jndeed, an employee cannot be dismissed except for cause, as provided by law, and only after due notice and hearing. !"*# :mployees who are dismissed without cause have the right to be reinstated without loss of seniority rights and other privilegesO and to be paid full back wages, inclusive of allowances and other benefits, plus proven damages. 8ith regard to contract workers, in cases arising before the effectivity of . F*$( /the =igrant 8orkers and <verseas ;ilipinos .ct !""# 0, it is settled that if 7the contract is for a fixed term and the employee is dismissed without Kust cause, he is entitled to the payment of his salaries corresponding to the unexpired portion of his contract.@ !"(# Jn the present case, the &ontract of respondent was until 'uly (5, ",,%. 3ince his dismissal from service effective +ecember "F, ",,$, was not for a Kust cause, he is entitled to be paid his salary corresponding to the unexpired portion of his &ontract, in the total amount of G3H,,$$).
8e now go to the elease and Quitclaim signed by respondent. The document, which was prepared by Petitioner .BC ock 2roup, !"-# states6
7E4<8 .>> =:4 BM T9:3: P:3:4T36
That for and in consideration of the sum of 3audi iyals 36 T8:4TM T9:: T9<G3.4+ <4: 9G4+:+ ;J;TM T9:: /3(-,"%-0 receipt of which is hereby acknowledged to my full and complete satisfaction, J, =.J.4JT< &. :3QGJ>>< do discharge my employer, .BC <&E 2<GP EB, ':++.9, I its recruitment agent, the >.4+ I 9<G3J42 +:CAP. &<P., from any and all claims, demands, debts, dues, actions, or causes of action, arising from my employment with aforesaid companyLfirmLentity.
7J hereby certify that J am of legal age, that J fully understand this instrument and agree that this is a full and final release and discharge of the parties referred to herein, and J 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 companiesLentities.
J4 8JT4:33 89::<;, J 9.C: 9::G4T< 3:T =M 9.4+3 T9J3 (, day of 4<C, ",,$ at ':++.9.
3J24:+ =.J.4JT< &. :3QGJ>><.@ !"$#
Petitioners claim that the foregoing elease and Quitclaim has forever released them from 7any and all claims, demands, dues, actions, or causes of action@ arising from respondentAs employment with them. They also contend that the validity of the document can no longer be Buestioned. Gnfortunately for petitioners, Kurisprudence does not support their stance. The fact that employees have signed a release andLor Buitclaim does not necessarily result in the waiver of their claims. The law strictly scrutinizes agreements in which workers agree to receive less compensation than what they are legally entitled to. That document does not always bar them from demanding benefits to which they are legally entitled. !"%# The reason for this policy was explained, inter alia, in Marcos v. National Labor Relations Commission, which we Buote6
78e have heretofore explained that the reason why Buitclaims 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 workersA 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 Kob, he had to face the harsh necessities of life. 9e thus found himself in no position to resist money proffered. 9is, then, is a case of adherence, not of choice. <ne 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.
7.long this line, we have more trenchantly declared that Buitclaims andLor 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 Buitclaims andLor 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. 8hile 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
78e have pointed out in Veloso, et al. vs. Department of Labor and Employment, et al., that6
D8hile rights may be waived, the same must not be contrary to law, public order, public policy, morals or good customs or preKudicial to a third person with a right recognized by law.
D.rticle 5 of the &ivil &ode renders a Buitclaim agreement void ab initio where the Buitclaim obligates the workers concerned to forego their benefits while at the same time exempting the employer from any liability that it may choose to reKect. This runs counter to .rt. (( of the &ivil &ode which provides that no one shall be unKustly enriched at the expense of another.A@ !"5#
Jn Periquet v. NLRC, this &ourt set the guidelines and the current doctrinal policy regarding Buitclaims and waivers, as follows6
74ot all waivers and Buitclaims are invalid as against public policy. Jf 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. Jt 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 Buestionable 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 Buitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.@ !")#
9ence, Buitclaims 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 subseBuently changed their minds. !"F# &onsistent with this doctrine, a tribunal has the duty of scrutinizing Buitclaims brought to its attention by either party, in order to determine their validity. Jn the present case, petitioners themselves offered the elease and Quitclaim as a defense. :ven though respondent 11 in his pleadings before the labor arbiter 11 was silent on the matter, he nonetheless filed this case and Buestioned his dismissal immediately, a few days after setting foot in the Philippines. Jn asking for payment for the unexpired portion of his employment &ontract, he was eloBuently taking issue with the validity of the Buitclaim. 9is actions spoke loudly enoughO words were not necessary.
To determine whether the elease and Quitclaim is valid, one important factor that must be taken into account is the consideration accepted by respondentO the amount must constitute a 7reasonable settlement.@ The 4>& considered the amount of G3H5,)"5 or 3(-,"%- reasonable, when compared with /"0 H-,,**, the three1month salary that he would have been entitled to recover if . F*$( were appliedO and /(0 G3H,,$$), his salaries for the unexpired portion of his &ontract.
Jt is relevant to point out, however, that respondent was dismissed prior to the effectivity of . F*$(. .s discussed at the outset, he is entitled to his salaries corresponding to the unexpired portion of his &ontract. This amount is exclusive of the 3(-,"%- that he received based on the 4ovember (,, ",,$ ;inal 3ettlement. The latter amount was comprised of overtime pay, vacation pay, indemnity, contract reward and notice pay 11 items that were due him under his employment &ontract. ;or these reasons, the consideration stated in the elease and Quitclaim cannot be deemed a reasonable settlementO hence, that agreement must be set aside.
That respondent is a professional structural engineer did not make him less susceptible to disadvantageous financial offers, faced as he was with the prospect of unemployment in a country not his own. 7This &ourt has allowed supervisory employees to seek payment of benefits and a manager to sue for illegal dismissal even though, for a consideration, they executed deeds of Buitclaims releasing their employers from liability.@ !",#
To stress, 7in case of doubt, laws should be interpreted to favor the working class 11 whether in the government or in the private sector 11 in order to give flesh and vigor to the pro1poor and pro1labor provisions of our &onstitution.@ !(*#
89::;<:, the Petition is DENIED and the assailed +ecision and esolution AFFIRED. &osts against petitioners.
Antonio A. S. Valdez, Petitioner, vs. Regional Trial Court, Branch 102, Quezon City, and Consuelo M. Gomez-Valdez, Respondents. G.R. No. 122749 July 31, 1996