Execution of the Compromise Agreement does not Necessarily Bar Liability for Claims

Execution of the Compromise Agreement does not Necessarily Bar Liability for Claims

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. [Aldovino vs. Gold and Green Manpower Management and Development Services, Inc., G.R. No. 200811, June 19, 2019]

In Land and Housing Development Corporation vs. Esquillo, the Supreme Court (SC) held 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.

Along this line, 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.

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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.

In Am-Phil Food Concepts, Inc. vs. Padilla, this Court held that quitclaims do not negate charges for illegal dismissal the SC held that the law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities.

As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. The amounts already received by the retrenched employees as consideration for signing the quitclaims should, however, be deducted from their respective monetary awards.

Where the parties entered into the Compromise Agreement to terminate the case for underpayment of wages, which petitioners had previously filed against the agency in Taiwan, and the object is to settle the payment of salaries and overtime premiums to which petitioners were legally entitled, it cannot be construed as a restriction on workers’ right to prosecute other legitimate claims they may have against the agency and employer.

Blanket waivers exonerating employers from liability on the claims of their employees are ineffective. Besides, at the time the parties’ Compromise Agreement was executed, the employer and agency had just terminated workers from employment.

The workers, 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.

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