The Supreme Court has nullified a set of quitclaims after finding that the employer tricked its employees into signing them.
In a Decision penned by Associate Justice Antonio T. Kho, Jr., the Supreme Court’s Second Division found that Corporate Protection Services, Phils., Inc. (CORPS) constructively dismissed Domingo Naldo, Jr. et al. (employees). The Court ordered CORPS to reinstate the employees and pay them backwages and other benefits.
The employees were hired by CORPS as security guards. Despite reporting for 12 hours a day every day, including regular and special holidays, they did not receive regular or special holiday pay, as well as rest day pay, service incentive leave pay, 13th month pay, and emergency cost of living allowance.
During their conciliation-mediation conference before the National Conciliation Mediation Board to discuss their grievances, a representative of CORPS offered to pay all their money claims if the employees submitted signed resignation letters.
Relying on this, the employees complied. CORPS also made them sign separate quitclaims. Afterward, CORPS gave them checks but covering only the amounts of trust fund savings and cash bonds.
The employees tried to return the checks, but CORPS explained that the checks for the remaining money claims, which were still being processed, would follow.
When the employees showed up for work the next day, their supervisors prevented them, claiming they had already supposedly resigned.
By the end of the month, CORPS still had not given them checks for the remaining money claims, and they were not allowed to report for duty.
The employees filed a complaint against CORPS for nonpayment of salary and benefits and constructive illegal dismissal.
The Labor Arbiter dismissed the complaint, ruling that the employees voluntarily signed the quitclaims and the resignation letters and are thus barred from seeking further claims against CORPS.
Both the National Labor Relations Commission and the Court of Appeals ruled that the quitclaims and resignation letters were invalid.
The Supreme Court ruled in favor of the employees, finding that the quitclaims they signed were void for being executed by CORPS with an intent to defraud.
The Court reiterated that for a quitclaim to be valid, (a) there must be no fraud or deceit on the part of any parties; (b) the consideration for the quitclaim is credible and reasonable; and (c) the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law.
The employer bears the burden to prove that the quitclaim constitutes a credible and reasonable settlement of what an employee is entitled to recover, and that the one accomplishing it has done so voluntarily and with full understanding.
In the present case, the employees signed the quitclaims with the honest belief, based on CORPS’ assurances, that they would be paid their money claims in full, as supported by the minutes of their conciliation-mediation conference.
The minutes show that the CORPS representative expressly stated that management would reconcile the employees’ other claims. The Court found that both parties were aware that there were pending money claims to be reconciled and that the checks did not represent the entire amount due to the employees. The employees likewise did not accept the checks with the intention of forgoing all other money claims against CORPS.
The Court also ruled that CORPS constructively dismissed the employees, finding that CORPS, through fraud, induced them to sign the resignation letters and that CORPS attempted to disguise their dismissal as a voluntary termination of employment. (Courtesy of the Supreme Court Public Information Office)
FULL TEXT of G.R. No. 243139 (Naldo, Jr. et al. v. CORPS), April 3, 2024 at: https://sc.judiciary.gov.ph/243139-flordivina-m-gaspar-vs-m-i-y-real-estate-corp-and-melissa-ilagan-yudomingo-naldo-jr-rogelio-benitez-isidro-alfonso-jr-ronaldo-ledda-bernardo-fabulare-armando-de-luna-and-nelson-villacentino-vs/