Goodrich v. Ativo (G.R. No. 188002; February 1, 2010)
CASE DIGEST: GOODRICH MANUFACTURING CORPORATION & MR. NILO CHUA GOY, Petitioners, vs. EMERLINA ATIVO, LOVITO SEBUANO, MICHAEL FERNANDEZ, JUNIFER* CASAS, ROLANDO ISLA, ELISEO DEL ROSARIO, MARK JON MARTIN, EDISON GAMIDO, WARRY BALINTON, ROBERT RAGO and ROBERTO MENDOZA, Respondents.
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 voluntarily resign from the company. Several employees, including respondents, decided to avail of the voluntary resignation option.
After being paid of their respective separation pays, respondents executed their waivers and quitclaims. The following day, however, some employees including respondents filed a complaint for illegal dismissal with prayer for payment of their full monetary benefits before the NLRC.
The LA rendered a decision holding that there was no illegal dismissal committed but ordered petitioner to pay respondents for their unpaid emergency cost of living allowance (ECOLA), 13th month pay, and service incentive leave (SIL) pay. On appeal, the NLRC ruled that the claims of respondents have already been paid and that complainants are not shown to have signed the deeds of waiver and quitclaim involuntarily, without understanding the implication and consequences thereof.
On further appeal, the CA ruled that the record is devoid of any indication that the petitioners were coerced into resigning from the company. Therefore, the waivers and quitclaims were deemed valid. Hence, this petition.
ISSUE: Are the release, waiver and quitclaim signed by respondents valid and binding?
May respondents still receive the deficiency amounts due them?
HELD: It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees.In certain cases, however, the Court has given effect to quitclaims executed by employees if the employer is able to prove the following requisites, to wit:
[1] the employee executes a deed of quitclaim voluntarily;
[2] there is no fraud or deceit on the part of any of the parties;
[3] the consideration of the quitclaim is credible and reasonable; and
[4] 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.
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 voluntarily resign from the company. Several employees, including respondents, decided to avail of the voluntary resignation option.
After being paid of their respective separation pays, respondents executed their waivers and quitclaims. The following day, however, some employees including respondents filed a complaint for illegal dismissal with prayer for payment of their full monetary benefits before the NLRC.
The LA rendered a decision holding that there was no illegal dismissal committed but ordered petitioner to pay respondents for their unpaid emergency cost of living allowance (ECOLA), 13th month pay, and service incentive leave (SIL) pay. On appeal, the NLRC ruled that the claims of respondents have already been paid and that complainants are not shown to have signed the deeds of waiver and quitclaim involuntarily, without understanding the implication and consequences thereof.
On further appeal, the CA ruled that the record is devoid of any indication that the petitioners were coerced into resigning from the company. Therefore, the waivers and quitclaims were deemed valid. Hence, this petition.
ISSUE: Are the release, waiver and quitclaim signed by respondents valid and binding?
May respondents still receive the deficiency amounts due them?
HELD: It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees.In certain cases, however, the Court has given effect to quitclaims executed by employees if the employer is able to prove the following requisites, to wit:
[2] there is no fraud or deceit on the part of any of the parties;
[3] the consideration of the quitclaim is credible and reasonable; and
[4] 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.
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.
The contents of the quitclaim documents that have been signed by the respondents are simple, clear and unequivocal. The records of the case are bereft of any substantial evidence to show that respondents did not know that they were relinquishing their right short of what they had expected to receive and contrary to what they have so declared.
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. DENIED.
The contents of the quitclaim documents that have been signed by the respondents are simple, clear and unequivocal. The records of the case are bereft of any substantial evidence to show that respondents did not know that they were relinquishing their right short of what they had expected to receive and contrary to what they have so declared.
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. DENIED.