Resignation and Execution of Quitclaim as Defense in an Illegal Dismissal Case Should Comply with Legal Requirements

Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether he or she, in fact, intended to sever his or her employment. (page 317, Guide to Valid Dismissal of Employees, 2^nd Edition, by Atty. Elvin B. Villanueva citing Gan vs. Galderma Philippines, Inc., G.R. No. 177167, January 17, 2013 citing Nationwide Security and Allied Services, Inc. v. Valderama, G.R. No. 186614, February 23, 2011, 644 SCRA 299, 307- 308. See also BMG Records (Phils.), Inc. v. Aparecio, G.R. No. 153290, September 5, 2007.)

There are several cases wherein an employee claims to have been made to resign from work and execute a quitclaim which result in the filing of illegal dismissal. When the labor dispute arises the employer raises the defense of resignation and execution of quitclaim.

What is the outlook of the Supreme Court in cases like this?

In the case of Fortuny Garments vs. Castro (514 Phil. 317 (2005).), the case of Torreda vs. Investment and Capital Corporation of the Philippines (G.R. No. 229881, September 5, 2018) discusses how an employee’s, act of severing from employment may be measured. The act of the employee before and after the alleged resignation must be considered to determine whether in fact, he or she intended to relinquish such employment.

Verily, the acts preceding and subsequent to the employee’s resignation must be taken into consideration. The Court looks into the incidents BEFORE and AFTER the resignation.

Hence, in one case a resignation was preceded by a DOLE inspection which yielded to an information that the company was not giving its employees their due wages. A month after such inspection, like the employee who reported such labor standards violation, the employee was separated from employment by virtue of a resignation letter. In this regard, there was no clear intention on the part of the employee to relinquish employment. (See Carolina’s Lace Shoppe vs. Gloria Maquilan and Joy Maquilan, G.R. No. 219419. April 10, 2019)

As to acts after resignation, the employee filed a complaint for illegal dismissal and money claims 12 days thereafter. On this note, the Court reiterated that such act of filing said complaint is difficult to reconcile with voluntary resignation.

Further, the resignation letter executed contains provisions on quitclaim which free the employer of liabilities.

In the case of Mobile Protective & Detective Agency vs. Ompad (497 Phil. 621, 630 (2005)), the SC ruled that resignation letters which are in the nature of a quitclaim, lopsidedly worded to free the employer from liabilities reveal the absence of voluntariness. Moreover, the quitclaim contained in the resignation letter does not contain stipulations required for its efficacy.

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Likewise, in the case of Flight Attendants and Stewards Association of the Philippines (FASAP) vs. Philippine Airlines, Inc., the SC reiterated the ruling in EDI-Stajjbuilders International, Inc. vs. National Labor Relations Commission which laid down the basic contents of a valid and effective quitclaim.

Thus, in order to prevent disputes on the validity and enforceability of quitclaims and waivers of employees under Philippine laws, said agreements should contain the following:

1. A fixed amount as full and final compromise settlement;
2. The benefits of the employees if possible with the corresponding amounts, which the employees are giving up in consideration of the fixed compromise amount;
3. A statement that the employer has clearly explained to the employee in English, Filipino, or in the dialect known to the employees – that by signing the waiver or quitclaim, they are forfeiting or relinquishing their right to receive the benefits which are due them under the law; and
4. A statement that the employees signed and executed the document voluntarily, and had fully understood the contents of the document and that their consent was freely given without any threat, violence, duress, intimidation, or undue influence exerted on their person.

In the case where the quitclaim does not indicate that the amount received constitutes full and final settlement there was no compliance with the requirements. The quitclaim that is also couched in general terms and the tenor of the same does not show that the employee understood the importance of the same considering that on the same day of resignation the employee immediately relieved the employer from liabilities indicates involuntariness in resignation. The same impression arises where there was also no indication that the employee intended to give up her claimed benefits in consideration of a fixed compromise amount. (See Carolina’s Lace Shoppe vs. Gloria Maquilan and Joy Maquilan, G.R. No. 219419. April 10, 2019)

Notarization of quitclaim does not guarantee the validity thereof.

While the resignation letter and quitclaim signed by employee appear to have been notarized, the fact of such notarization is not a guarantee of the validity of the contents. The presumption of regularity as regards notarized documents is not absolute and may be rebutted by clear and convincing evidence to the contrary. (Carolina’s Lace Shoppe vs. Gloria Maquilan and Joy Maquilan, G.R. No. 219419. April 10, 2019).