By Atty. Julius Gregory B. Delgado
DOMINGO NALDO, JR., ET AL. VS. CORPORATE PROTECTION SERVICES, PHILS., INC., ET AL., G.R. NO. 243139, APRIL 3, 2024: RELEASES AND QUITCLAIMS OBTAINED THROUGH DECEIT AND FRAUD RENDERED VOID
Petitioners Domingo Naldo, Jr., Rogelio Bentiez, Ronaldo Ledda, Isidro Alfonso, Jr., Bernaldo Fabulare, Armando De Luna and Nelson Villacentino (collectively the “Petitioners”) were security guards of respondent Corporate Protection Services, Phils, Inc. (CORPS) assigned in Tarlac and Cabanatuan City, Nueva Ecija. Petitioners filed a case before the Department of Labor and Employment – National Conciliation Mediation Board (NCMB) through the Single-Entry Approach (SEnA) assailing that CORPS underpaid them and certain amounts were deducted from their salaries, i.e., trust fund savings and cash bond. Petitioners also averred that during their employment with CORPS, they were made to work every day, including regular and special holidays and their scheduled rest days. They also alleged that they were required to be on duty for 12 hours a day. Despite the foregoing, Petitioners claim they did not receive regular or special holiday pay, rest day pay, service incentive leave pay, 13th month pay, and Emergency Cost of Living Allowance.
During the March 3, 2015 conciliation-mediation conference before the NCMB, CORPS offered them checks as refund of the trust fund savings and cash bonds deducted from their salaries. Petitioners refused since they also want the rest of the monetary claims. On the second conciliation-mediation conference on March 10, 2015, CORPS asked Petitioners to submit their resignation letters before handing checks, which they were told would cover all their monetary claims, were distributed. Relying on CORPS’ assurances that the new checks covered all their monetary claims, the Petitioners submitted their signed resignation letters. Petitioners were also made to sign separate quitclaims dated to March 3, 2015. Thereafter, CORPS distributed the checks.
Realizing that the checks were the same checks they were offered on the first conciliation-mediation conference, they insisted on returning the checks but were convinced by CORPS that the checks for other monetary claims would follow as their company was still in the process of validating and reconciling their monetary claims with company records. This was reflected in the Minutes of Proceedings.
Aside from the fact that they were not allowed to go back to work as they supposedly resigned already, CORPS reneged on their commitment to also pay them the rest of their monetary claims. Hence, they filed a case before the Labor Arbiter. The LA dismissed their case for lack of merit. The LA held that Petitioners voluntarily signed the letters of resignation and the quitclaims. The LA also stressed that the settlement before the SEnA Hearing Officer should be honored, otherwise, the integrity and viability of mediation and conciliation under the SEnA as a means of resolving labor grievances would be compromised. On appeal, the National Labor Relations Commission set aside the ruling of the LA and held that there was no illegal dismissal and there was a mere miscommunication between parties as to the monetary claims. The NLRC further held that the quitclaims were invalid as their money claims were uncertain at the time of their execution. Thus, NLRC ordered the case remanded to the LA to continue the proceedings for the determination of the monetary claims. Both parties filed Petitions for Certiorari which were both dismissed, hence, a Petition for Review on Certiorari before the Supreme Court.
The Supreme Court, citing Land and Housing Development Corp. vs. Esquillo, G.R. No. 152012, September 30, 2005, held that it is only where there is clear proof that the waiver was wrangled from an unsuspecting and gullible person, or the terms of settlement are unconscionable on its face that the law will step in to annul the questionable transaction. The Court held that were 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 quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. In Esquillo, the Supreme Court nullified the quitclaim as void ab initio as it obligates workers to forego of their benefits while at the same time exempting the employer from any liability.
Citing FF Cruz vs. Galandez, G.R. No. 236496, July 8, 2019, the Supreme Court held that for a deed of release, waiver and quitclaim to be valid, it must be shown that: (a) there was no fraud or deceit on the part of any parties; (b) that the consideration for the quitclaim is credible and reasonable; and (c) that the contract is not contrary to law, public order, public policy, morals and good customs, or prejudicial to a third person with a right recognized by the law. The Court also held in FF Cruz that the burden rests on the employer to prove that the quitclaim constitutes a credible and reasonable settlement of what an employee is entitled.
In the instant case, the Supreme Court held that the quitclaims are void as the Petitioners signed them with the honest belief, based on assurances made, that they would be paid their monetary claims in full. “In sum, this Court declares as VOID the quitclaims executed by petitioners in favor of CORPS on the ground that the latter employed deceit and/or fraud in making the former execute the same. Hence, the quitclaims will not operate to bar petitioners seeking their legitimate claims against CORPS in these proceedings.”
Finally, the Supreme Court also held that this is a case of constructive dismissal. The Court held that an illegal dismissal is one where the employer openly seeks to terminate the employee; in contrast, constructive dismissal is a dismissal in disguise. The Court held that in this case, CORPS through fraud, induced Petitioners into signing resignation letters and quitclaims. In doing so, CORPS attempted to disguise Petitioners; dismissal as voluntary termination of employment.