ALFREDO VELOSO AND EDITO LIGUATON, PETITIONERS, VS. DEPARTMENT OF LABOR & EMPLOYMENT, NOAH’S ARK SUGAR CARRIERS AND WILSON T. GO, RESPONDENTS.

The law looks with disfavor upon quitclaims and releases by
employees who are inveigled or pressured into signing them by unscrupulous
employers seeking to evade their legal responsibilities.  On the other hand, there are legitimate
waivers that represent a voluntary settlement of laborer’s claims that should
be respected by the courts as the law between the parties.

In the case at bar, the
petitioners claim that they were forced to sign their respective releases in
favor of their employer, the herein private respondent, by reason of their dire
necessity.  The latter, for its part,
insists that the petitioner entered into the compromise agreement freely and
with open eyes and should not now be permitted to reject their solemn
commitments.

The controversy began when the petitioners, along with several
co-employees, filed a complaint against the private respondent for unfair labor
practices, underpayment, and non-payment of overtime, holiday, and other
benefits.  This was decided in favor of the complainants on October 6, 1987.  The motion for reconsideration, which was
treated as an appeal, was dismissed in a resolution dated February 17, 1988, the dispositive
portion of which read as follows:

WHEREFORE, the instant appeal is hereby DISMISSED and the
questioned Order affirmed with the modification that the monetary awards to Jeric Dequito, Custodio Ganuhay, Conrado Mori and Rogelio
Veloso are hereby deleted for being settled.  Let execution push through with respect to
the awards to Alfredo Veloso and Edito
Liguaton.

On February 23, 1988,
the private respondent filed a motion for reconsideration and recomputation of the amount awarded to the
petitioners.  On April 15, 1988, while the motion was pending,
petitioner Alfredo Veloso, through his wife Connie,
signed a Quitclaim and Release for and in consideration of P25,000.00,^[1]
and on the same day his counsel, Atty. Gaga Mauna, manifested “Satisfaction of
Judgment” by receipt of the said sum by Veloso.^[2]
For his part, petitioner Liguaton filed a motion to
dismiss dated July 16, 1988,
based on a Release and Quitclaim dated July
19, 1988,^[3]
for and in consideration of the
sum of P20,000.00 he acknowledged to have received from the private respondent.^[4]

These releases were later impugned by the petitioners on September 20, 1988, on the ground that they were
constrained to sign the documents because of their “extreme
necessity.” In an Order dated December
16, 1988, the Undersecretary of Labor rejected their contention and
ruled:

IN VIEW THEREOF, complainants Motion to Declare Quitclaim Null and
Void is hereby denied for lack of merit and the compromise
agreements/settlements dated April 15,
1988 and July 19, 1988
are hereby approved.  Respondents’ motion for reconsideration is
hereby denied for being moot and academic.

Reconsideration of the order having been denied on March 7, 1989, the petitioners have come to this Court on certiorari.  They
ask that the quitclaims they have signed be annulled and that writs of
execution be issued for the sum of P21,267.92 in favor of Veloso
and the sum of P26,267.92 in favor of Liguaton in settlement
of their claims.

Their petition is based primarily on Pampanga
Sugar Development Co., Inc. v. Court of Industrial Relations,^[5]
where it was held:

x x
x while rights may be waived, the same must
not be contrary to law, public order, public policy, morals or good customs or
prejudicial to a third person with a right recognized by law.  (Art. 6, New Civil Code) x x x.

x x
x The above-quoted provision renders the
quitclaim agreements void ab initio in their entirety since they
obligated the workers concerned to forego their benefits, while at the same
time, exempted the petitioner from any liability that it may choose to
reject.  This runs counter to Art. 22 of
the new Civil Code which provides that no one shall be unjustly enriched at the
expense of another.

The Court has deliberated
on the issues and the arguments of the parties and finds that the petition must
fail.  The exception and not the rule
shall be applied in this case.

The case cited is not apropos
because the quitclaims therein invoked were secured by the employer after it
had already lost in the lower
court and were subsequently rejected by this Court when the employer invoked it
in a petition for certiorari.  By
contrast, the quitclaims in the case before us were signed by the petitioners
while the motion for reconsideration was still pending in the DOLE, which
finally denied it on March 7, 1989.  Furthermore, the quitclaims in the cited case
were entered into without leave of the lower court whereas in the case at bar the quitclaims were made with the knowledge and approval
of the DOLE, which declared in its order of December 16, 1988, that “the
compromise agreement/settlements dated April 15, 1988 and July 19, 1988 are hereby approved.”

It is also noteworthy that the quitclaims were voluntarily and
knowingly made by both petitioners even if they may now deny this.  In the case of Veloso,
the quitclaim he had signed carried the notation that the sum stated therein
had been paid to him in the presence of Atty. Gaga Mauna, his counsel, and the
document was attested by Atty. Ferdinand Magabilin,
Chief of the Industrial Relations Division of the National Capitol Region of
the DOLE.  In the case of Liguaton, his quitclaim was made with the assistance of his
counsel, Atty. Leopoldo Balguma,
who also notarized it and later confirmed it with the filing of the motion to
dismiss Liguaton’s complaint.

The same Atty. Balguma is the
petitioners’ counsel in this proceeding. 
Curiously, he is now challenging the very same quitclaim of Liguaton that he himself notarized and invoked as the basis
of Liguaton’s motion to dismiss, but this time for a
different reason.  Whereas he had earlier
argued for Liguaton that the latter’s signature was a
forgery, he has abandoned that contention and now claims that the quitclaim had
been executed because of the petitioners’ “dire necessity.”

“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.  While it is true that the writ of execution
dated November 24, 1987,
called for the collection of the amount of P46,267.92 each for the petitioners, that amount was still subject to recomputation
and modification as the private respondent’s motion for reconsideration was
still pending before the DOLE.  The fact
that the petitioners accepted the lower amounts would suggest that the original
award was exorbitant and they were apprehensive that it would be adjusted and
reduced.  In any event, no deception has
been established on the part of the private respondent that would justify the
annulment of the petitioners’ quitclaims.

The applicable law is Article 227 of the Labor Code providing
clearly as follows:

Art. 227.  Compromise
agreements. – Any compromise settlement, including those involving labor
standard laws, voluntarily agreed upon by the parties with the assistance of
the Bureau or the regional
office of the Department of Labor, shall be final and binding upon the
parties.  The National Labor Relations
Commission or any court shall not assume jurisdiction over issues involved
therein except in case of non-compliance thereof or if there is prima facie
evidence that the settlement was
obtained through fraud, misrepresentation or coercion.

The petitioners cannot renege on their agreement simply because they may now feel they made a mistake
in not awaiting the resolution of the private respondent’s motion for
reconsideration and recomputation.  The possibility that the original award might
have been affirmed does not justify the invalidation of the perfectly valid
compromise agreements they had entered
into in good faith and with full voluntariness.  In General Rubber and Footwear Corp. v. Drilon,^[6]
we “made clear that the Court is not saying that accrued money claims can
never be effectively waived by workers and employees.” As we later
declared 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 in this case.

We
find that the questioned quitclaims were voluntarily and knowingly
executed and that the petitioners should not be relieved of their waivers on
the ground that they now feel
they were improvident in agreeing to the compromise.  What they call their “dire necessity” then is no warrant to
nullify their solemn undertaking, which
cannot be any less binding on them simply because they are laborers and
deserve the protection of the Constitution. 
The Constitution protects the just, and it is not the petitioners in
this case.

WHEREFORE, the petition is DISMISSED, with costs against the petitioners.  It is so ordered.

Narvasa, (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Rollo, p. 9.

^[2]
Original Records, p. 163.

^[3]
Rollo, p.
11.

^[4]
Ibid., p. 10.

^[5]
114 SCRA 725.

^[6]
169 SCRA 808.

^[7]
186 SCRA 724.