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LHDC AND ABV VS.

ESQUILLO

G.R. No. 152012

FACTS: Esquillo was hired as a structural engineer by ABV Rock Group based in Jeddah. The Land & Housing
Development Corporation, a local placement agency, facilitated respondent’s employment papers.

Respondent’s employment contract was pre-terminated, allegedly, for the reason, ‘reduction of force.’
Respondent subsequently received an amount from 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 POEA which was referred to the NLRC.

The Labor Arbiter issued his Decision, ordering [petitioners] jointly and severally to pay Esquillo his salaries
corresponding to the unexpired portion of his contract. “When [petitioners] filed their joint appeal, the NLRC
reversed the aforecited decision and dismissed the [respondent’s] complaint for lack of merit. [Respondent’s] MR
was denied in a Resolution,

The CA ruled that despite the absence of a written categorical objection to the sufficiency of the payment received
as consideration for the execution of the quitclaim, jurisprudence supported the right of respondent to demand
what was rightfully his under our labor laws. Hence, he should have been allowed to recover the difference
between the amount he had actually received and the amount he should have received. The CA also found that
the NLRC had erroneously applied RA 8042 to the case. The appellate court held that respondent was entitled to
the salaries corresponding to the unexpired portion of his Contract, in addition to what he had already received.
Hence, this Petition.

ISSUE: WON Respondent, despite having executed a quitclaim, is entitled to a grant of his additional monetary
claims.

HELD: WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED.

YES

**At the outset, the Court notes the Manifestation of the OSG, recommending that “the decision of the NLRC be
annulled and set aside and that Esquillo be awarded the total amount of his salaries corresponding to the
unexpired portion of his contract of employment**

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.

Unfortunately for petitioners, jurisprudence does not support their stance. The fact that employees have signed a
release and/or quitclaim 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.

“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.

To determine whether the Release and Quitclaim is valid, one important factor that must be taken into account is
the consideration accepted by respondent; the amount must constitute a “reasonable settlement.” The NLRC
considered the amount of US$6,716 or SR23,153 reasonable, when compared with (1) $3,900, the three-month
salary that he would have been entitled to recover if RA 8042 were applied; and (2) US$9,447, his salaries for the
unexpired portion of his Contract.

It is relevant to point out, however, that respondent was dismissed prior to the effectivity of RA 8042. As
discussed at the outset, he is entitled to his salaries corresponding to the unexpired portion of his Contract. For
these reasons, the consideration stated in the Release and Quitclaim cannot be deemed a reasonable settlement;
hence, that agreement must be set aside.

To stress, "in case of doubt, laws should be interpreted to favor the working class -- whether in the government or
in the private sector -- in order to give flesh and vigor to the pro-poor and pro-labor provisions of our
Constitution."

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