Marinelle C.

Bulos
Labor Law Review

7:30 -9:30 pm
Judge Villarosa

VALIDITY OF QUITCLAIM
FRANCISCO SORIANO, JR., petitioner,
vs.
NLRC and PLDT COMPANY,INCORPORATED, respondents.
G.R. No. 165594, April 23, 2007
CHICO-NAZARIO,J.:
FACTS: In 1981, petitioner Francisco Soriano, Jr. and certain individuals
namely Sergio Benjamin, Maximino Gonzales, and Noel Apostol were
employed by the respondent PLDT as switchman helpers in its Tondo
Exchange Office (TEO). Benjamin and Gonzales were later on promoted as
switchmen. Apostol on the other hand was elevated to the position of
frameman.
On separate letters dated July 15, 1996, PLDT informed the petitioner,
Benjamin, Gonzales, and Apostol that their respective position were deemed
redundant and that their services will be terminated on August 16, 1996.
They requested that they be transferred to another position but their
requests were denied since all the positions were already filled up.
The petitioner as well as the others executed a document entitled
Receipt, Release and Quitclaim in favor of the respondent PLDT. They
however placed a note of Under Protest beside their signature in the said
document. Thereafter they filed a joint complaint for illegal dismissal against
the respondent PLDT.
Labor Arbiter Lustria rendered a decision dismissing the complaint for
lack of merit. He stated that PLDT legitimately exercised the management
prerogative in terminating the said employees; that it complied with the
requirements of a valid redundancy program under Article 283 of the Labor
Code; and that the redundancy program was effected in good faith.
Petitioner, Benjamin, Gonzales, and Apostol filed an appeal to the NLRC. The
NLRC affirmed the decision of the Labor Arbiter. After denial of their motion
for reconsideration, they filed a petition for certiorari before the Court of
Appeals. Said court also dismissed the case for it found no grave abuse of
discretion.
On November 24, 2004, petitioner, Benjamin, Gonzales and Apostol
filed a petition for review on certiorari of the Court of Appeals decision and
resolution but the petition was denied due to failure to attach verification
and certification of non-forum shopping. However, on a motion for
reconsideration alleging that since the cause of action of each petitioner is
independent of the other, petitioner Francisco Soriano, Jr. could validly

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proceed with his own petition for review. Hence, the Court reinstated the
petition but excluded Benjamin, Gonzales and Apostol as petitioners.
ISSUE: Whether or not there is a valid quitclaim
HELD: Yes. The requisites for a valid quitclaim are: 1) that there was no
fraud or deceit on the part of any of the parties; 2) that the consideration for
the quitclaim is credible and reasonable; and 3) that 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.
It cannot be gainfully said that petitioner did not fully understand the
consequences of signing the Receipt, Release, and Quitclaim. There is no
showing that the execution thereof was tainted with deceit or coercion. By
own admission of the petitioner, he signed the quitclaim voluntarily,
compelled by personal circumstances, rather than by the respondent PLDT.
He has received his separation pay and benefited therefrom. Certainly, it
would result in unjust enrichment on the part of the petitioner if he is allowed
to question the legality of his dismissal from work. Further, the petitioner
received separation pay from the respondent PLDT, the amount of which was
more than the amount required under Article 283 of the Labor Code. Indeed,
there was a credible and reasonable consideration for his separation from
work.
It is settled that a legitimate waiver which represents a voluntary and
reasonable settlement of a workers claim should be respected as the law
between the parties. Thus, the petitioner is bound by the Receipt, Release
and Quitclaim and as such is precluded from assailing the validity of
dismissal.
QUITCLAIM/INVALID QUITCLAIMS
HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of
Hyatt Regency Manila, petitioner,
vs.
SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF
WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES
(SAMASAH-NUWHRAIN),respondent.
G.R. No. 165756, June 5, 2009
NACHURA,J.:
FACTS: The respondent SAMASAH-NUWHRAIN union is the certified
collective bargaining agent of the rank-and-file employees of Hyatt Regency
Manila, a hotel owned by petitioner HEPI.

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Judge Villarosa

On January 24, 2002, petitioner met with respondent Union to formally

discuss the downsizing program. The Union opposed the downsizing plan
because no substantial evidence was shown to prove that the hotel was
incurring heavy financial losses, and for being violative of the CBA, more
specifically the manning/ staffing standards agreed upon by both parties in
November 2001. Despite such opposition, the petitioner pushed through with
the retrenchment and declaration of redundant position.
The respondent union filed a notice of strike based on unfair labor
practice against HEPI. Conciliation proceedings were held between petitioner
and respondent, but to no avail. On June 14, 2002, Acting Labor Secretary
Manuel Imson issued an order certifying the labor dispute to the NLRC for
compulsory arbitration and directing the striking voters to return to work
within 24 hours. The Labor Arbiter declared the strike legal but on appeal,
the NLRC reversed the labor arbiters decision. Thus, the NLRC declared the
strike illegal, suspended all union officers for a period of 6 months and
dismissed the ULP charge against the HEPI. The union filed a petition for
certiorari with the CA questioning in the main the validity of NLRCs reversal
of the labor arbiters decision. While the petition was pending, the HEPI
issued separate notices of suspension against each of the 12 union officers
involved in the strike. The CA reversed the resolution of the NLRC and
reinstating the decision of the Labor Arbiter which declared the strike valid. It
also ordered the reinstatement of the 48 terminated employees. Hence, this
petition.
ISSUE: Whether or not the quitclaims signed by the terminated employees
are valid
HELD: The first batch of quitclaims is declared invalid and illegal for failure
to state the proper consideration. However, the second batch of quitclaims
signed by the 85 of the 160 terminated employees, following Hyatt Regency
Manilas permanent closure, is declared valid and binding.
The manifestations filed by petitioner with respect to quitclaims
executed by members of respondent Union state that 34 of the 48
employees terminated on account of the downsizing program have already
executed quitclaims on various dates. However the court took judicial notice
that 33 of these quitclaims failed to indicate the amounts received by the
terminated employees. The court invalidated and set aside these quitclaims.
However, the actual amount received by the terminated employees upon
signing the said documents shall be deducted from whatever remaining
amount is due to them to avoid double recovery of separation pay and other
monetary benefits. The court ordered the Labor Arbiter to effect the
necessary computation.

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However, with respect to the second batch of quitclaims signed by 85

of the remaining 160 employees who were terminated following Hyatts
permanent closure, the court held that these are valid and binding
undertakings. The said documents indicate that the amount received by
each of the employees represents a reasonable settlement of their monetary
claims against petitioner and were even signed in the presence of the DOLE
representative. A quitclaim, with clear and unambiguous contents and
executed for a valid consideration received in full by the employees who
signed the same, cannot be later invalidated because its signatory claims
that was pressured into signing it on account of his dire financial need. When
it is shown that the person executing the waiver did so voluntarily, with full
understanding of what he was doing, and the consideration for the quitclaims
is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking.
QUITCLAIM
ARSENIO QUEVEDO,ET.AL.,petitioners,
vs.
BENGUET ELECTRIC COOPERATIVE, INCORPORATED (BENECO) and
GERARDO VERSOZA,respondents.
G.R. No. 168927, September 11, 2009
CARPIO, J.:
FACTS: Petitioners are former employees of respondent BENECO. Instead of
terminating petitioners employment outright for redundancy and paying
them the statutory benefits, BENECO offered petitioners the option to retire
under a newly created optional retirement program, Early Voluntary
Retirement (EVR) guaranteeing petitioners bigger benefits. After
unsuccessfully requesting BENECO to retain their services, petitioners
accepted BENECOs offer, received payments, and released BENECO from
further liability in individually executed contracts. Nearly four months
thereafter petitioners sued BENECO before the NLRC, Cordillera
Administrative Region, Baguio City for illegal dismissal. They claimed that
they had no intention of retiring from service but their hands were forced
because BENECO would have terminated their services. They questioned the
validity of BENECOs downsizing in light of BENECOs hiring of new
employees shortly after petitioners left the corporation.
The Labor Arbiter dismissed the petitioners complaint stating that
petitioners retired from services voluntarily. It gave no credence to the claim
of the petitioners of vitiated consent after noting petitioners educational
backgrounds and the extent of the benefits received. It also found that the

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newly hired employees of BENECO were project employees who performed

tasks unrelated to petitioners work.
Petitioners then appealed to the NLRC which rendered a judgment
granting the petitioners appeal and setting aside the ruling of the Labor
Arbiter and ordered BENECO to reinstate petitioners with full backwages less
benefits received. It gave credence to the petitioners claim of involuntary
retirement and held BENECO liable for dismissing petitioners without just
cause, as it failed to prove redundancy, and without due process, as BENECO
failed to notify the DOLE of petitioners termination.
After denial of BENECOs motion for reconsideration, it then filed an
appeal before the CA which rendered a decision reinstating the decision of
the Labor Arbiter. Hence, this petition.
ISSUE: Whether or not the petitioners are barred from filing this suit
HELD: Yes. The petitioners, by the terms of their waivers, are barred from
filing this suit.
To excuse the petitioners from complying with the terms of their
waivers, they must locate their case within any of the three narrow grounds:
(1) the employer used fraud or deceit in obtaining the waivers; (2) the
consideration the employer paid is incredible and unreasonable; (3) the
terms of the waiver are contrary to law, public order, public policy, morals or
good customs or prejudicial to a third person with a right recognized by law.
INVALID QUITCLAIMS
SAN MIGUEL CORPORATION, petitioner,
vs.
EDUARDO L. TEODOSIO, respondent.
G.R. No. 163033, October 2, 2009
PERALTA, J.:
FACTS: On September 5, 1991, respondent Eduardo Teodosio was hired by
San Miguel Corporation (SMC) as a casual forklift operator in its Bacolod City
Brewery. Respondent continuously worked from September 5, 1991 until
March 1992, after which he was asked to rest for a while. A month after, or
sometime in April 1992, respondent was rehired for the same position, and
after serving for about five to six months, he was again asked to rest. After
three weeks, he was again hired as forklift operator. He continued to work as
such until August 1993.

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Judge Villarosa

In an undated letter, respondent informed SMC that he was applying

for the vacant position of bottling crew as he was interested in becoming a
regular employee of SMC. Sometime in June 1995, SMC notified the
respondent that his employment shall be terminated a month after the date
of the letter in compliance with Employment with a Fixed Period Contract
which respondent was made to sign by SMC. In a letter respondent
expressed his dismay for his dismissal. He informed SMC that despite the
fact that he would be compelled to receive his separation pay and would be
forced to sign a waiver to that effect, this does not mean that he would be
waiving is right to question his dismissal, and to claim employment benefits
as provided in the CBA and company policies. Thereafter, respondent signed
a Receipt and Release document in favor of SMC and accepted his separation
pay, thereby releasing all his claims against the SMC.
Respondent filed a complaint against SMC before the NLRC, Regional
Arbitration Branch No. VI, Bacolod City for illegal dismissal which rendered a
decision dismissing the complaint concluding that the contract of
employment with a fixed period signed by respondent was a legitimate
exercise of management prerogative. Respondent then sought recourse
before the NLRC Fourth Division, Cebu City which dismissed the appeal and
affirmed the decision of the NLRC. Due to that, respondent filed to the CA a
petition for certiorari. The CA granted the petition filed by respondent
seeking to annul and set aside the decision and resolution of the NLRC.
Hence, this petition.
ISSUE: Whether or not there is a valid quitclaim
HELD: No. There is no valid quitclaim.
Generally, deeds of release, waivers, or quitclaims cannot bar
employees demanding benefits to which they are legally entitled or from
contesting the legality of their dismissal, since quitclaims are looked upon
with disfavor and are frowned upon as a contrary to public policy. Where,
however, the person making the waiver has done so voluntarily, with a full
understanding thereof, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding
undertaking. The burden of proving that the quitclaim or waiver was
voluntarily entered into rests on the employer.
SMC failed to discharge this burden. This is buttressed by the fact that
before the respondent signed the document, he already informed SMC that
even if he would be compelled to receive his separation pay and be forced to
sign a waiver to that effect, he was not waiving his right to question his
dismissal and to claim employment benefits. This clearly proves that
respondent did not freely and voluntarily consent to the execution of the
document.

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Labor Law Review

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Judge Villarosa

QUITCLAIM AND WAIVER

FLAVIO S. SUAREZ, ET. AL., petitioners,
Vs.
NATIONAL STEEL CORPORATION, respondents.
G.R. No. 150180, October 17, 2008
LEONARDO-DE CASTRO, J.:
FACTS: Sometime in 1994, respondent suffered substantial financial losses
due to an increase in the volume of steel products manufactured by foreign
countries. With this development, respondent adopted an organizational
streamlining program that resulted in the retrenchment of 700 employees in
its main plant in Iligan City, among whom were herein petitioners. On July 18,
1994, respondent sent out individual notices to the 700 employees affected
by the retrenchment, including petitioners. After having been paid their
separation benefits, the employees, including herein petitioners, each
excluded and signed a release and quitclaim, written in English and
containing a translation in the Visayan dialect in the same document.
Pursuant to the new CBA, the retrenched employees were given the salary
differentials, for which they executed and signed another release and
quitclaim.
Labor Arbiter Nicodemus Palangan dismissed the complaint filed by
petitioners. They then filed an appeal before the NLRC. In a consolidated
resolution, NLRC granted the appeal and reversed the ruling of the Labor
Arbiter. Aggrieved, respondent elevated the matter to the CA which
rendered a decision granting respondents petition, and that petitioners are
no longer entitled to retirement benefits after having received the separation
pay, and were precluded from claiming such benefits because of their
quitclaims. Hence, this petition.
ISSUE: Whether or not there is a valid release and quitclaim
HELD: Yes. There is a valid release and quitclaim.
In Periquet vs NLRC, the Court ruled that not all waivers and quitclaims
are invalid as against public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement of the claims of the employee, it
is binding on the parties and may not later be disowned simply because of a
change of mind. Such legitimate waivers resulting from voluntary
settlements of laborers claims should be treated and upheld as the law
between the parties.

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Judge Villarosa

In the instant case, there is no showing that petitioners were forced or

duped by respondent into signing the release and quitclaim. In their sworn
quitclaim, they freely declared that they received full separation pay as well
as all other amounts due them by reason of their employment. Petitioners
further stated that they were voluntarily releasing respondent National Steel
Corporation from all claims in respect to their employment. They even
executed not just one but two sets of quitclaims. Each quitclaims was written
in English and in the Visayan dialect which petitioners very well understand.
The quitclaim represents a reasonable and fair settlement of
petitionersclaims as the separation package consisted of two months salary
for every year of service, leave balance credits, 13th month pay, uniform plus
rice subsidy differential, salary differential and signing bonus. Indeed,
nothing on the face of their quitclaim has been shown as unconscionable. In
the absence of evidence showing coercion or intimidation in its execution,
the court constrained to uphold the appellate courts conclusion that the
execution of the release and quitclaim was valid.
HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO. LTD.,ET. AL.,
petitioners,
vs.
FELICITO IBAEZ, ET. AL., respondents.
G.R. No. 170181, June 26, 2008
CHICO-NAZARIO,J.:
FACTS: Petitioner Hanjin is a foreign company duly registered with the SEC
to engage in the construction business in the Philippines. Petitioners Hak Kon
Kim were employed as Project Director and Supervisor, respectively, by
Hanjin.
On April 11, 2002, respondents filed a complaint before the NLRC for
illegal dismissal with prayer for reinstatement and full backwages. On April
15, 2002, Hanjin dismissed respondents from employment.
According to petitioners, respondents were hired as project employees
for the construction of the LRT/MRT Line 2 Package 2 and 3 Project. HANJIN
and respondents purportedly executed contracts of employment, in which it
was clearly stipulated that the respondents were to be hired as project
employees for a period of only three months but the contracts may be
renewed. Petitioners however failed to furnish said contract to the Labor
Arbiter. Petitioners further emphasized that prior to April 15, 2002, Hak Kon
Kim notified respondents of the companys intention to reduce its manpower.
Petitioners attached copies of the quitclaims which uniformly stated that the
employees received all wages and benefits that were due them and released

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Hanjin and its representatives from any claims in connection with their
employment.
The Labor Arbiter declared that respondents were regular employees
who had been dismissed without just and valid causes and without due
process. Petitioners appealed to the NLRC which reversed the Labor Arbiters
decision. NLRC gave probative value to the Termination Report submitted by
Hanjin to the DOLE, receipts signed by respondents for their completion
bonus upon phase completion, and the quitclaims executed by the
respondents in favor of Hanjin. On appeal, CA reversed the NLRC decision.
Hence, this petition.
ISSUE: Whether or not the quitclaims can bar respondents from demanding
HELD:
The quitclaims which the respondents signed cannot bar them from
demanding what is legally due them as regular employees. As a rule,
quitclaims and waivers are looked upon with disfavor and frowned upon as
contrary to public policy. They are thus ineffective to bar claims for the full
measure of a workers legal rights, particularly when the following conditions
are applicable: 1) where there is clear proof that the waiver was wangled
from an unsuspecting or gullible person,or 2) where the terms of settlement
unconscionable on its face. To determine whether the quitclaims signed by
respondents are valid, one important factor that must be taken into account
is the consideration accepted by respondents; the amount must constitute a
reasonable settlement equivalent to the full measure of their legal rights. In
this case, the quitclaims signed by respondents do not appear to have been
made for valuable consideration. Respondents, who are regular employees,
are entitled to backwages and separation pay and, therefore, the quitclaims
which they signed cannot prevent them from seeking claims to which they
are entitled.
CATHOLIC VICARIATE, BAGUIO CITY, petitioner,
vs.
HON. PATRICIA A. STO. TOMAS, ET.AL., respondents.
G.R. No. 167334, March 7, 2008
TINGA, J.:
FACTS: Petitioner contracted Kunwha Luzon Construction (KUNWHA) to
construct the retaining wall of the Baguio Cathedral. KUNWHA, in turn,
subcontracted CEREBA Builders (CEREBA) to do the formworks of the church.
The contract between KUNWHA and CEREBA lasted up to the completion of
the project. KUNWHA failed to pay CEREBA. Consequently, the latter failed to
pay its employees.

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Respondent George Agbucay, along with 81 other employees, lodged a

complaint against CEREBA, KUNWHA and petitioner before the DOLE-CAR
Regional Office for nonpayment of wages, special and legal holiday premium
pay. The DOLE-CAR Regional Director issued an order holding CEREBA,
KUNWHA and petitioner jointly and severally liable to the 82 affected
workers. Petitioners filed a motion for reconsideration, this time Regional
Director dismissed the complaint by reason of the said settlement by
KUNWHA. On appeal, the Secretary of Labor reversed the ruling of the
Regional Director and held that pursuant to Articles 106 and 107 of the Labor
Code, the liability of KUNWHA, CEREBA and the Catholic Vicariate is solidary
nothwithstanding the absence of an employer-employee relationship.
On September 28, 2004, the CA affirmed the order of the Secretary of
Labor with modifications as to the amount awarded. On appeal, petitioner
questioned the validity of the quitclaims signed by the affected employees.
ISSUE: Whether or not the quitclaim is valid
HELD: No. The quitclaim is not valid.
Not all quitclaims are per se invalid or against public policy. A quitclaim
is said to be invalid and against public policy (1) where there is clear proof
that the waiver was wangled from unsuspecting or gullible person, or (2)
where the terms of settlement are unconscionable on their face. In such
cases, the court will step in to annul the questionable transaction. The
second exception obtains in the case at bar. As succinctly put by the
Secretary of Labor: As to the claim that this Office failed to show why the
quitclaims and releases were unconscionable, despite the fact that it was
executed before the DOLE-CAR Regional Office, the same is totally
misplaced. Clear from the record is that, except for the quitclaim signed by
complainant Felix Padilla, the monetary considerations indicated in the 22
Quitclaims and Releases were way below the total claims of each
complainants.
JOSE MAX S. ORTIZ, petitioner,
vs.
SAN MIGUEL CORPORATION, respondent.
G.R. No. 151983-84, July 31, 2008
CHICO-NAZARIO,J.:
FACTS: Petitioner is a member of the Philippine Bar who represented the
complainants in Aguirre Cases and Toquero Case instituted against herein
private respondent San Miguel Corporation sometime in 1992 and 1993.

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Private respondent on the other hand, is a corporation duly organized and

existing under and by virtue of the laws of the Republic of the Philippines. It
is primarily engaged in the manufacture and sale of food and beverage
particularly beer products. In line with its business, it operates breweries and
sales offices throughout the Philippines. The complainants in Aguirre Cases
and Toquero Case were employees at private respondents Sales Offices in
the provinces.
Aguirre Cases
Several employees from Bacolod, Cadiz, and Himamaylan Beer Sales
Offices filed with the Labor Arbiter separate complaints against private
respondent for illegal dismissal. On June 30, 1994, Labor Arbiter Reynaldo
Gulmatico rendered a decision finding all the complainants to have been
illegally dismissed. Unsatisfied with the decision, complainants appealed to
the NLRC which later on affirm the decision of the Labor Arbiter.
Toquero Case
Three other employees at the San Carlos Sales Office filed with the
Labor Arbiter a similar complaint for illegal dismissal against private
respondent in 1993. On December 26, 1994, Labor Arbiter Ray Allan Drilon
ruled that the three complainants were illegally dismissed. Likewise,
complainants in this case were not contented with Labor Arbiter Drilons
Decision and so they filed an appeal to the NLRC which rendered a decision
modifying the Labor Arbiters decision.
These two cases were consolidated by the Court. While the private
respondents petition were pending before the CA, all but one of the
remaining complainants in the Aguirre and Toquero Cases appeared before
Labor Arbiters Gulmatico and Drilon, and in the presence of two witnesses,
signed separate Deeds of Release, Waiver and Quitclaim in favor of private
respondent. Based on the Deeds they executed, the complainants agreed to
settle their claims against private respondent for amounts less than what the
NLRC actually awarded. The CA then rendered a decision affirming the NLRC
in the Aguirre Cases, only insofar as it concerned complainant Alfredo
Gadian, Jr., the only complainant who did not execute a Deed of Release,
Waiver and Quitclaim. With respect to the other complainants, their
complaints were dismissed on account of their duly executed Deeds of
Release and Quitclaim.
ISSUE: Whether or not the Deeds of Release, Waiver and Quitclaim for being
executed without the conformity of the petitioner, as complainants counsel,
are in violation of the requirements of the Labor Code

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HELD: No. The Deeds of Release, Waiver and Quitclaim do not violate the
requirements of the Labor Code.
There is no specific provision in the Labor Code, as amended, which
requires the conformity of petitioner, as the complainants, counsel to make
their Deeds of Release, Waiver and Quitclaim valid. The only requisites for
the validity are the following: (1) that there was no fraud or deceit on the
part of any of the parties; (2) that the consideration for the quitclaim is
credible and reasonable; and (3) that 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. In this case, it cannot be questioned
that those requisites were completely satisfied, making the Deeds of
Release, Waiver and Quitclaim individually executed by the complainants.
VARORIENT SHIPPING CO., INC.and ARIA MARITIME CO., LTD,
petitioners,
vs.
GIL A. FLORES, respondent.
G.R. No. 161934, October 6, 2010
PERALTA,J.:
FACTS: On April 7, 1997, petitioners employed respondent, in behalf of its
foreign principal, Aria Maritime Co., Ltd. Of Piraeus, Greece, for position of
Chief Officer on board M/V Aria, per Contract of Employment. During his
employment, the master of the vessel sent respondent to the Centre Medical
de Ngodi at Doula, Cameroon, where he was treated for three days due to
the shooting pain in the lower extremities, particularly on his right foot. In
the Medical Certificate, the attending physician stated that he diagnosed
respondents pain on the right foot as sciatic neuralgia and administered
injection and acupuncture. Respondent was declared not fit to work.
On September 19, 1997, respondent filed a complaint against the
petitioner. Respondent sought the reimbursement of his medical expenses.
However, respondent withdrew his claim for disability benefits with
reservation to re-file a complaint should there be a recurrent of his injury.
Acting Executive Labor Arbiter Pedro C. Ramos dismissed respondents
complaint for lack of merit
The NLRC reversed and set aside the decision of the Labor Arbiter. On
petition for review by the petitioners, the CA affirmed the decision of the
NLRC.
ISSUE: Whether or not the Receipt and Quitclaim can be considered
substantial compliance to the contractual obligation by petitioners under the
standard employment contract

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HELD: No. A perusal of the provisions of the Receipt and Quitclaim shows
that respondent would be releasing and discharging petitioners from all
claims, demands, causes of action, and the like in an all-encompassing
manner, including the fact that he had not contracted or suffered any illness
or injury in the course of his employment and that he was discharged in good
and perfect health. These stipulations clearly placed respondent in a
disadvantageous position vis--vis the petitioners.
GOODRICH MANUFACTURING CORPORATION & MR. NILO CHUA GOY,
petitioners,
vs.
EMERLINA ATIVO, ET.AL., respondents.
G.R. No. 188002, February 1, 2010
VILLARAMA, JR.,J:
FACTS: Respondents are former employees of petitioner Goodrich
Manufacturing Corporation (Goodrich) assigned as machine or maintenance
operators for the different sections of the company. Sometime in the latter
part of 2004, on account of lingering financial constraints, Goodrich gave all
its employees the option to voluntary resign from the company. On
December 29, 2004, respondents were paid their separation pay. On January
3, 2005, respondents executed their respective waivers and quitclaims. The
following day, some of the employees including herein respondents filed
complaints against Goodrich for illegal dismissal.
Labor Arbiter Florentino R. Darlucio rendered a decision declaring
that there was no illegal dismissal. Dissatisfied, both parties appealed to the
NLRC which rendered a decision reversing and setting aside the Labor
Arbiters decision. It ruled that the considerations that the respondents
received are not unreasonable vis--vis the award granted to them in the
assailed decision; and that it was not shown that respondents signed the
deeds of waiver and quitclaim involuntarily, without understanding the
implication and consequences thereof. Respondents elevated the matter to
the CA. The CA rendered its decision in favor of the respondents. Hence, this
petition.
ISSUE: Whether or not the release, waiver and quitclaim signed by
respondents are valid and binding
HELD: Yes. The release, waiver and quitclaim signed by the respondents are
valid and binding.

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First, the contents of the quitclaim documents that have been

signed by the respondents are simple, clear and unequivocal. Second,
respondents claim that they were deceived because petitioners did not really
terminate their business since Mr. Chua Goy had set up another company
with the same line of business as Goodrich. Such contention, however, was
not proven during the hearing before the Labor Arbiter and the NLRC. Hence,
such claim is based only on respondents surmises and speculations which,
unfortunately, can never be used as a valid and legal ground to repudiate
respondents quitclaims. And third, the consideration received by the
respondents from Goodrich do not appear to be grossly inadequate vis--vis
what they should received in full.
FRANCIS RAY TALAM, petitioner,
vs.
NLRC, ET. AL., respondents.
BRION, J.:
FACTS: The respondent, The Software Factory Inc. is a domestic corporation
engaged in providing information technology and computer consultancy to
the public. It employed Talam as a full-time programmer. Respondents Teresa
Grapilon, TSFIs Office Manager and Wolfgang Hermie, Chief Executive
Officer, verbally informed Talam that his services with the company would be
terminated. After a month, Talam signed a Release and Quitclaim in
consideration and receipt of P89,954 in compensation and other benefits.
Later on, Talam questioned the legality of his separation from the service
through a complaint for illegal dismissal and illegal deduction before the
NLRC.
ISSUE: Whether or not the Release and Quitclaim should be nullified
HELD: No. The Release and Quitclaim should not be nullified.
The CA erred in glossing over the legal effect of Talams release and
quitclaim. It should not have been nullified. Talam was not an unlettered
employee. He was an information technology consultant and must have been
fully aware of the consequences of what he was entering into. The quitclaim
was a voluntary act as there is no showing that he was coerced into
executing the instrument. He received a valuable consideration for his less
than two years of service with the company. Thus, from all the indications,
the release and quitclaim was a valid and binding undertaking that should
have been recognized by the labor authorities and the CA.

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REAL PARTY-IN-INTEREST
UNITED PARAGON MINING CORPORATION, petitioner,
vs.
CA, ET. AL., respondents.
G.R. No. 150959, August 4, 2006
GARCIA,J.:
FACTS: Private respondent Cesario F. Ermita was a regular employee
working as a foreman of petitioner United Paragon Mining Corporation
(UPMC). He received a letter terminating his employment due to his infliction
of bodily injuries on a co-employee and unlawfully possessing a deadly
weapon, a bolo. Having failed to reach settlement, the matter was referred to
a voluntary arbitrator which rendered a decision in favor of Cesario.
Unsatisfied with the decision of the voluntary arbitrator and after denial of
their motion for reconsideration, UPMC, thru its Personnel Superintendent
Feliciano M. Daniel, elevated the case to the CA which then dismissed the
petition for certiorari.
ISSUE: Whether or not the Personnel Superintendent who signed the
termination letter may file a petition in behalf of the UPMC
HELD: No. The Personnel Superintendent who signed the termination letter
may not file a petition in behalf of the UPMC.
True it is that Cesarios complaint for illegal dismissal was filed against
the corporation and Daniel. However, Daniel was merely a nominal party in
that proceedings, as in fact he was impleaded thereat in his capacity as
UPMCs Personnel Superintendent who signed the termination letter.
Cesarios complaint contains no allegation whatsoever for specific claim or
charge against Daniel in whatever capacity. As it is, Daniel was not in anyway
affected by the outcome of the illegal dismissal case because only the
corporation was made liable therein to Cesario. Being not a real party-ininterest, Daniel has no right to file the petition in behalf of the corporation
without any authority from its board of directors. It is basic in law that a
corporation has a legal personality entirely separate and distinct from that of
its officers and the latter cannot act for and on its behalf without being so
authorized by its governing board.

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REDUCTION OF WORKING HOURS

LINTON COMMERCIAL CO., INC. and DESIREE ONG, petitioners,
vs.
ALEX A. HELLERA, ET. AL., respondents.
G.R. No. 163147, October 10, 2007
TINGA,J.:
FACTS: Linton is a domestic corporation engaged in the business of
importation, wholesale, retail and fabrication of steel and its byproducts.Petitioner Desiree Ong is Lintons vice president. Linton issued a
memorandum informing the employees that effective January 12, 1998, the
company would implement a new compressed workweek of three days on a
rotation basis. Linton proceeded with the implementation of the new policy
without waiting for approval by DOLE. Sixty-eight workers filed a complaint
for illegal reduction of workdays with the Arbitration Branch of the NLRC.
Workers pointed out that Linton implemented the reduction of work hours
without observing Article 283 of the Labor Code, which required submission
of notice to DOLE one month prior to the implementation, since Linton filed
only the establishment termination report enacting the compressed
workweek on the very date of its implementation.
Labor Arbiter rendered a decision finding petitioners guilty of illegal
reduction of work hours. Petitioners appealed to the NLRC which then
reversed the decision of the Labor Arbiter. Workers elevated the case to the
CA which rendered a decision that the employees were constructively
dismissed because the short period of time between the submission of the
establishment termination report informing DOLE of its intention to observe a
compressed workweek and the actual implementation thereat was a
manifestation of Lintons intention to eventually retrench the employees.
ISSUE: Whether or not there was an illegal reduction of work
HELD: Yes. There was an illegal reduction of work.
The Court cited the case Philippine Graphic Arts, Inc. v. NLRC where
the Court upheld for the validity of the reduction of working hours, taking
into consideration the following: the arrangement was temporary, it was a
more humane solution instead of a retrenchment of personnel, there was
notice and consultations with the workers and supervisors, a consensus were
reached on how to deal with deteriorating economic conditions and it was
sufficiently proven that the company was suffering from losses.

REHABILITATION

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PHILIPPINE AIRLINES, INC., petitioner,

vs.
HEIRS OF BERNARDIN J. ZAMORA, respondents.
G.R. No. 164267, November 23, 2007
QUISUMBING, J.:
FACTS: Zamora was a cargo representative assigned at the International
Cargo Operations - Import Operations Division (ICO-IOD)of petitioner
Philippine Airlines, Inc. He alleged that sometime in December 1993, his
immediate supervisor instructed him to alter some entries in the Customs
Boatnote and Inbound Handling Report to conceal Abuyuans smuggling and
pilferage activities. On November 6, 1995, Zamora received a memorandum
informing him of his transfer to Domestic Cargo Operations (DCO) but
Zamora refused. Meantime Zamora wrote to the management requesting
that an investigation be conducted on the smuggling and pilferage activities.
On the other hand, petitioner Philippine Airlines, Inc. claimed that
sometime in October 1995, Zamora had an altercation with Abuyuan to the
point of fistfight. To diffuse the tension between the parties, petitioner
decided to temporarily transfer Zamora to the DCO. Zamora refused and
continued reporting to the ICO-IOD. As a result, he was reported absent at
the DCO. After being served with notices, Zamora was terminated.
HELD: The petitioner had been placed by the SEC under a Permanent
Rehabilitation Receiver.
No other action may be taken, including the rendition of judgment
during the state of suspension. It must be stressed that what are
automatically stayed or suspended are the proceedings of a suit and not just
the payment of claims during the execution stage after the case had become
final and executory. Once the process of rehabilitation, however, is
completed, this Court will proceed to complete the proceedings on the
suspended actions.
Furthermore, the actions that are suspended cover all claims against the
corporation whether for damages founded on a breach of contract of
carriage, labor cases, collection suits or any other claims of a pecuniary
nature.No exception in favor of labor claims is mentioned in the law.

JUANITO A. GARCIA and ALBERTO J. DUMAGO, petitioners,

vs.

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PHILIPPINE AIRLINES, INC., respondent.

G.R. No. 164856, August 29,2007
QUISUMBING, J.:
FACTS: Petitioners Alberto J. Dumago and Juanito A. Garcia were employed
by respondent Philippine Airlines, Inc. (PAL) as Aircraft Furnishers Master C
and Aircraft Inspector, respectively. Shabu paraphernalia was found inside
the company-issued locker of Ronaldo Broas. Petitioners were found near the
section where the shabu paraphernalia was found. A Notice of Administrative
Charge was served on petitioners. They were allegedly caught in the act of
sniffing shabu.
On October 9, 1995, petitioners were dismissed for violation of some of
the provisions under the PAL Code of Discipline. Both simultaneously filed a
case for illegal dismissal and damages.
In the meantime, the SEC placed PAL under an interim Rehabilitation
Receiver due to severe financial losses.
The Labor Arbiter rendered a decision finding the respondents guilty of
illegal suspension and illegal dismissal. Meanwhile, the SEC replaced the
Interim Rehabilitation Receiver with a Permanent Rehabilitation Receiver.
Despite such, the Labor Arbiter issued a Writ of Execution commanding the
sheriff to proceed. PAL then elevated the case to the CA which ruled that the
Labor Arbiter issued the writ of execution and the notice of garnishment
without jurisdiction. Hence, this petition.
ISSUE: Whether or not in light of new developments concerning PALs
rehabilitation, petitioners are entitled to execution of the Labor Arbiters
order of reinstatement even if PAL is under receivership
HELD: No. The Court ruled that the instant proceedings are suspended.
Since petitioners claim against PAL is a money claim for their wages
during the pendency of PALs appeal to the NLRC, the same should have
been suspended pending the rehabilitation proceedings. The Labor Arbiter,
the NLRC, as well as the Court of Appeals should have abstained from
resolving petitioners case for illegal dismissal and should instead have
directed them to lodge their claim before PALs receiver.
PHILIPPINE AIRLINES, INCORPORATED, petitioner,
vs.
PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA),
respondent.

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G.R. No. 142399, June 19, 2007

CHICO-NAZARIO, J.:
FACTS: The respondent PALEA, the collective bargaining agent of the rank
and file employees of PAL, entered into a CBA with PAL. PALEA however
assailed matter regarding the payment of 13th month pay. It is of the view
that all employees, whether regular or non-regular, should be paid with the
said benefit. In response, PAL informed PALEA that rank and file employees
who were regularized after 30 April 1988 were not entitled to the 13th month
pay as they were already given the Christmas bonus in December of 1988,
per the Implementing Rules of Presidential Decree No. 851. PALEA then filed
a complaint for unfair labor practice before the NLRC. The union argued that
"the cut-off period for regularization should not be used as the parameter for
granting [the] 13thmonth pay considering that the law does not distinguish
the status of employment but (sic) the law covers all employees."
The SEC had mandated the rehabilitation of PAL. On 17 May 1999, the
SEC approved the "Amended and Restated Rehabilitation Plan" of PAL and
appointed a "permanent rehabilitation receiver for the latter."
ISSUE: Whether or not the case may proceed despite PAL is still undergoing
rehabilitation
HELD: No. The suspension of action for claims against a corporation under
rehabilitation receiver or management committee embraces all phases of the
suit, be it before the trial court or any tribunal or before this Court.
Furthermore, the actions that are suspended cover all claims against a
distressed corporation whether for damages founded on a breach of contract
of carriage, labor cases, collection suits or any other claims of a pecuniary
nature.
In actual fact, allowing such actions to proceed would only increase the
work-load of the management committee or the rehabilitation receiver,
whose precious time and effort would be dissipated and wasted in defending
suits against the corporation, instead of being channeled toward
restructuring and rehabilitation.
All told, the Court is constrained to suspend the progress, development and
other proceedings in the present petition.

PHILIPPINE AIRLINES, INCORPORATED, ET. AL., petitioners,

vs.
BERNARDIN ZAMORA, respondent.

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G.R. No. 166996, February 6, 2007

CHICO-NAZARIO,J.:
FACTS: Respondent Zamora had been dismissed from service for having
been found by PALs management to be liable for insubordination, neglect of
customer, disrespect of authority and absence without official leave.
Respondent filed a complaint against petitioners before the NLRC. The Labor
Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC set
aside the decision of the Labor Arbiter and ordered the immediate
reinstatement of the respondent.
PAL is under receivership during the hearing of this case.
ISSUE: Whether or not the claim of Zamora be enforced despite the fact that
PAL is under receivership
HELD: No. In the case at bar, the appellate courts pronouncement that in
"disallowing the enforcement to the claim - it would unnecessarily add to the
burden of management, does not justify the aggravation caused in the delay
in execution of the judgment in favor of Zamora," is quite myopic. In actual
fact, allowing such actions to proceed would only increase the work-load of
the management committee or the rehabilitation receiver, whose precious
time and effort would be dissipated and wasted in defending suits against
the corporation, instead of being channeled toward restructuring and
rehabilitation.
REINSTATEMENT
PREMIERE DEVELOPMENT BANK, petitioner,
vs.
ELSIE ESCUDERO MANTAL, respondent.
G.R. No. 167716, March 23, 2006
YNARES-SANTIAGO,J.:
FACTS: On November 24, 2000, the branch manager, Rosario Detalla,
instructed respondent with the following words in the vernacular, "Elsie, baka
may mag-confirm sa Bank Guarantee ng GIA Fuel, sabihin mo OKAY NA, may
kulang pa lang dokumento." Later that day, respondent was summoned to
the head office to explain what she knew about the the falsified guarantee
which she confirmed with Emmie Crisostome of Filpride Energy Corporation.
Respondent was asked to execute a resignation letter, but she declined. The
following day, respondent received a notice of termination.

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ISSUE: Whether or not respondent is entitled to a reinstatement

HELD: Yes. Under Article 279 of the Labor Code, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges, inclusive of allowances, and other
benefits or their monetary equivalent from the time the compensation was
withheld up to the time of actual reinstatement.
CITY TRUCKING, INC. / JOHN EDLES, petitioners,
vs.
ANTONIO BALAJADIA, respondent.
G.R. No. 160769, August 9, 2006
PUNO,J.:
FACTS: Respondent Antonio Balajadia is employed as a helper mechanic and
part of the maintenance staff of the petitioner City Trucking, Inc. On
December 31, 2000, the San Mateo landfill was closed down. In January
2001, while respondent Balajadia was performing his work, Honorato Edles,
the chief mechanic and cousin of petitioner John Edles, informed him that he
may continue to work for petitioners, but he should not expect to be paid his
salary, unless petitioners get to collect from their clients. A few days later,
Rowena Edles, the company secretary and sister of petitioner John Edles,
asked respondent why he was still working when he had already been
terminated from employment. Thus, beginning January 7, 2001, respondent
stopped reporting for work.
ISSUE: Whether or not the CA erred when it ordered the reinstatement of
respondent
HELD: Yes. Reinstatement is no longer viable where the business of the
employer has closed, or where the relations between the employer and the
employee have been so severely strained that it is not advisable to order
reinstatement, or where the employee decides not to be
reinstated. Respondent expressly prayed for an award of separation pay in
lieu of reinstatement from the very start of the proceedings at the PACU and
the NLRC. By so doing, he forecloses reinstatement as a relief by implication.
ASIAN TERMINALS, INC. formerly MARINA PORT SERVICES, INC.
petitioner,
vs.
RENATO VILLANUEVA, ET. AL., respondents.
G.R. No. 143219, November 28, 2006

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CARPIO, J.:
FACTS: Respondents were employees of Marina Port Services, Inc. (MPSI)
and members of the Associated Workers Union of the Philippines (AWU). In a
letter dated 9 June 1993 to MPSI, the AWU president sought the dismissal
from service of respondents who were expelled from AWU. On 11 June 1993,
the MPSI issued a memorandum to respondents terminating them effective
immediately pursuant to the closed-shop provision of the MPSI-AWU
Collective Bargaining Agreement.
Labor Arbiter Ernesto Dinopol rendered a decision ordering MPSI to
reinstate respondents to their former or equivalent position. However,
respondents alleged that MPSI did not reinstate them to their former
positions or equivalent positions. Respondents alleged that they were
deliverymen at the time of their dismissal and not CRE or casual rotation
employee.
ISSUE: Whether or not there is reinstatement by the petitioner MPSI
HELD: None. Reinstatement means restoration to a state or condition from
which one had been removed or separated. The person reinstated assumes
the position he had occupied prior to his dismissal. Reinstatement
presupposes that the previous position from which one had been removed
still exists, or that there is an unfilled position which is substantially
equivalent or of similar nature as the one previously occupied by the
employee.
Reinstatement means restoration to the former position occupied prior
to dismissal or to substantially equivalent position. Reinstatement does not
mean promotion. Promotion is based primarily on an employees
performance during a certain period. Just because their contemporaries are
already occupying higher positions does not automatically entitle
respondents to similar positions.

MT. CARMEL COLLEGE, petitioner,

vs.
JOCELYN RESUENA,ET. AL., respondents.
G.R. No. 173076, October 10, 2007

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CHICO-NAZARIO,J.:
FACTS: Respondents were employees of the petitioner Mt Carmel College.
On 21 November 1997, respondents, together with several faculty members,
non-academic personnel, and other students, participated in a protest action
against petitioner. Petitioner, thru Rev. Fr. Modesto Malandac, issued a
memorandum directing respondents to explain in writing why they should
not be dismissed for loss of trust and confidence for joining the protest action
against the school administration. Petitioner maintained that respondents
were occupying positions of highly confidential nature. After a hearing,
petitioner issued written notices of termination to respondents on 7 May
1998. Respondents were terminated by petitioner on 15 May 1998.
ISSUE: Whether or not reinstatement in the instant case is self-executory
HELD: No. As contemplated by Article 224 of the Labor Code, the Secretary
of Labor and Employment or any Regional Director, the Commission or any
Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu proprio or on
motion of any interested party, issue a writ of execution on a judgment
within five (5) years from the date it becomes final and executory.
Consequently, under Rule III of the NLRC Manual on the Execution of
Judgment, it is provided that if the execution be for the reinstatement of any
person to a position, an office or an employment, such writ shall be served
by the sheriff upon the losing party or upon any other person required by law
to obey the same, and such party or person may be punished for contempt if
he disobeys such decision or order for reinstatement.
JOHNSON & JOHNSON (PHILS.), ET. AL., petitioners,
vs.
JOHNSON OFFICE & SALES UNION-FEDERATION OF FREE WORKERS
(FFW), ET. AL., respondents.
G.R. No. 172799, July 6, 2007
TINGA,J.:
FACTS: Respondents Ma. Jesusa Bonsol and Rizalinda Hirondo filed a
complaint for illegal dismissal against the petitioners Johnson & Johnson
(Phils.), Inc. and Janssen Pharmaceutica, one of the formers divisions. Labor
Arbiter dismissed the complaint, prompting respondents to elevate the
matter to the NLRC. The NLRC ruled that the violations of company
procedure committed by respondents did not constitute serious misconduct
or willful disobedience warranting their dismissal; hence, respondents were
entitled to reinstatement.

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ISSUE: Whether or not the petitioners have the prerogative to choose

whether to reinstate respondents to their former position or just pay their
monetary award
HELD: No. Petitioners have no prerogative to choose whether to reinstate or
just pay monetary award
Well-entrenched is the rule that an illegally dismissed employee is
entitled to reinstatement as a matter of right. Over the years, however, case
law developed that where reinstatement is not feasible, expedient or
practical, as where reinstatement would only exacerbate the tension and
strained relations between the parties, or where the relationship between the
employer and employee has been unduly strained by reason of their
irreconcilable differences, particularly where the illegally dismissed employee
held a managerial or key position in the company, it would be more prudent
to order payment of separation pay instead of reinstatement. In other words,
the payment of separation compensation in lieu of the reinstatement of an
employee who was illegally dismissed from work shall be allowed if and only
if the employer can prove the existence of circumstances showing that
reinstatement will no longer be for the mutual benefit of the employer and
employee.

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