REY PABLO D. SICANGCO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND METRO DRUG, INC., RESPONDENTS.

The usual complaint is that a lawyer coerced somebody into
signing the questioned document. In the
case at bar, it is the lawyer who claims to have been coerced.

Sometime in April 1985, Rey Pablo D. Sicangco was appointed
Senior Attorney in the Metro Drug Corporation (MDC). In 1986, he was promoted to the position of Assistant
Vice-President for Legal Affairs. Later
that same year, MDC was acquired by another company and subsequently renamed
Metro Drug Inc. (MDI). Sicangco
retained his position in MDI. As
Assistant Vice-President for Legal Affairs, he was in charge of labor
relations, personnel administration, and all other corporate concerns of MDI.

In 1989, Sicangco was assigned to the legal staff of the mother
company, First Pacific Metro Corporation, under the supervision of its general
counsel. In a letter dated June 2,
1989, the company informed him that his position would be declared redundant
effective July 2, 1989. He was assured
of benefits due him under the law.

Sicangco did not protest and instead successfully negotiated for
higher separation benefits. The
separation pay was only P93,436.10, but the company agreed to write off his
outstanding car loan of P162,000.00 as part of his separation package. On July 18, 1989, Sicangco was paid an extra
amount of P13,291.57, representing his pay adjustment and proportionate bonuses
for the period covering January to June 1989. All in all, the separation benefits awarded to him amounted to
P268,727.67.

In accordance with his agreement with the company and before the
declared redundancy of his position took effect, Sicangco tendered his
resignation.^[1]

On June 15, 1989, upon receipt of his separation benefits,
Sicangco signed a document entitled “Release, Waiver and Quitclaim.”^[2]
This document was prepared by him and the other lawyers of the company. Before he signed it, its contents were
explained to him by another company lawyer, Atty. Elmer Nitura.

On February 26, 1990, Sicangco filed an action against the
company for unfair labor practice and illegal dismissal. On April 5, 1990, he amended the complaint
to include a prayer for damages.

The Labor Arbiter declared Sicangco’s dismissal as illegal and
ordered his reinstatement with back wages, moral and exemplary damages, and
attorney’s fees.^[3]
However, the National Labor Relations Commission took the opposite view when the
decision was appealed to it.^[4]

The NLRC held that Sicangco’s termination from employment was due
to his voluntary resignation and not because of redundancy. It did not give credence to Sicangco’s claim
of “dire necessity” as the reason that compelled him to execute the
quitclaim. Sicangco’s allegation of
coercion and undue influence was also dismissed for lack of evidence. The NLRC said that by negotiating for a
bigger separation package, he was deemed to have waived whatever defects may
have attended the declaration of his redundancy.

The petitioner is now before us, praying for reversal of the
NLRC.

He contends that the respondent Commission gravely abused its
discretion when it ignored the illegality of the company’s declaration that his
position had become redundant. He
points out that just before the declaration, he received recognitions, salary
increases and bonuses from the respondent. He says that his position was singled out as redundant because of his
active involvement in the formation of a supervisors’ union in the company.

Sicangco also insists that he did not resign voluntarily but
signed the quitclaim out of “dire necessity.” He says he was suffering then from illnesses he acquired while still in the employ of the respondent company
and was also under great financial distress because of the funeral and
hospitalization expenses he shouldered for his family. His acceptance therefore of higher
separation benefits should not bar him from filing an illegal dismissal case
against his employer.

The Solicitor General, the NLRC, and respondent company have
filed their respective comments.

The Solicitor General agrees with the petitioner. He notes that none of the grounds
constituting redundancy was proved by the respondent company. The real reason for the petitioner’s
dismissal was his poor performance, but this never became the subject of any
hearing. He was therefore illegally
dismissed. The unilateral declaration
of redundancy by the respondent company left the petitioner with no other option
than to resign.

The Commission, on the other hand, maintains that this is not a
case of illegal dismissal but of voluntary resignation. In dismissal cases, the employee is not
given the option to resign, but in the case at bar the petitioner was given this
option before his position was declared redundant. Moreover, he received separation benefits. There is also no evidence on record that the
petitioner was forced by the company to sign the release, waiver and quitclaim.

The private respondent echoes the view of the Commission and, in
addition, contends that the issues raised in the petition are not reviewable in
a certiorari proceeding because they are all factual.

The resolution of this case hinges on the determination of the
true cause of the severance from employment of the petitioner from the
respondent company.

The following provisions in the Civil Code are pertinent:

Art. 1335. x x x There is
intimidation when one of the contracting parties is compelled by a reasonable
and well-grounded fear of an imminent and grave evil upon his person and
property, or upon the person or property of his spouse, descendants or
ascendants, to give his consent.

To determine the degree of the intimidation, the age, sex and
condition of the person shall be borne in mind. x x x

Art. 1337. There is undue
influence when a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice. The
following circumstances shall be considered: the confidential, family, spiritual, and other relations between the
parties, or the fact that the person alleged to have been unduly influenced was
suffering from mental weakness, or was ignorant or in financial distress.

Art. 1338. There is fraud
when, through insidious words or machinations, of one of the contracting
parties, the other is induced to enter into a contract which, without them, he
would not have agreed to. (Emphasis
supplied)

Contrary to Sicangco’s
allegations, there is no indication in the record that he was coerced
into resigning from the company. It
should be noted that the petitioner is a lawyer and specializes in labor
relations at that. There is every reason to suppose that he
knows his basic rights as an employee and, no less importantly, knows how to
protect these rights as a lawyer. In fact, he used this knowledge to
his advantage when he negotiated successfully for higher separation benefits.

The petitioner was not illegally dismissed. It would appear that when he was informed that
his position had become redundant, he decided to resign and was allowed to do
so before his redundancy took effect. We have said that there is nothing illegal with the practice of allowing
an employee to resign instead of being separated for just cause, so as not to
smear his employment record.^[5]

Moreover, the petitioner cannot renege on the release, waiver and
quitclaim he executed. His contention
that it was coerced, considered especially in the light of the fact that he is
a lawyer, must be rejected. Lawyers are
not easily coerced into signing legal documents.

Quitclaims executed by employees are commonly frowned upon as
contrary to public policy and ineffective to bar claims for the full measure of
the worker’s legal rights. Neither does
acceptance of benefits estop the employee from prosecuting his employer for
unfair labor practice acts. The reason
is plain. Employer and employee
obviously do not stand on the same footing.^[6]

Nevertheless, the above rule is not without exception, as this
Court held in Periquet v. NLRC:^[7]

Not all waivers and quitclaims are invalid as against public
policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of
mind. It is only where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person, or
the terms of settlement are unconscionable on its face, that the law will step
in to annul the questionable transaction. But where 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.

As for his excuse of “dire necessity,” Veloso v. DOLE,^[8]
commented on precisely this ground thus:

“Dire necessity” is not an acceptable ground for
annulling the releases, especially since it has not been shown that the
employees had been forced to execute them. It has not even been proven that the considerations for the quitclaims
were unconscionably low and that the petitioners had been tricked into
accepting them. x x x

It is inconceivable that as an experienced lawyer, the petitioner
would allow himself to be inveigled or coerced into signing away his
rights. He obviously has forgotten the
lesson in the old but still valid case of Vales v. Villa^[9] that –

x x x Courts cannot constitute themselves guardians of persons who
are not legally incompetent. Courts
operate not because one person has been defeated or overcome by another, but
because he has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts, use
miserable judgment and lose money by them – indeed, all they have in the world;
but not for that alone can the law intervene and restore. There must be, in addition, a violation of
law, the commission of what the law knows as an actionable wrong, before the
courts are authorized to lay hold of the situation and remedy it.

We find that the respondent Commission committed no grave abuse
of discretion in finding that the petitioner resigned voluntarily and that he
knowingly waived all rights of action against the respondent company in
exchange for the separation benefits he received from it.

WHEREFORE, the petition is DISMISSED and the challenged
decision of the National Labor Relations Commission is AFFIRMED, with costs
against the petitioner.

SO ORDERED.

Davide Jr., Quiason, and
Kapunan, JJ., concur.

Bellosillo, J., on official
leave.

^[1]
Records, p. 49; rollo, pp. 44, 88.

^[2]
Rollo, pp. 45-46.

^[3]
Rollo, p. 35.

^[4]
Rollo, pp. 85-94.

^[5]
Samaniego v. NLRC, 198 SCRA 111.

^[6]
Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179; AFP
Mutual Benefit Association v. AFP MBAI-EU, 97 SCRA 715; Mercury Drug Co.
v. CIR, 56 SCRA 694.

^[7]
186 SCRA 724.

^[8]
200 SCRA 205.

^[9]
35 Phil. 788.