Two-Fold Reason for Excluded Materials in Labor Disputes

In the present case, we find that the CA did indeed consider the statements the parties made during conciliation; thus, the CA erred by considering excluded materials in arriving at its conclusion. The reasons behind the exclusion are two-fold.

First, since the law favors the settlement of controversies out of court, a person is entitled to buy his or her peace without danger of being prejudiced in case his or her efforts fail; hence, any communication made toward that end will be regarded as privileged. Indeed, if every offer to buy peace could be used as evidence against a person who presents it, many settlements would be prevented and unnecessary litigation would result, since no prudent person would dare offer or entertain a compromise if his or her compromise position could be exploited as a confession of weakness.
Second, offers for compromise are irrelevant because they are not intended as admissions by the parties making them. A true offer of compromise does not, in legal contemplation, involve an admission on the part of a defendant that he or she is legally liable, or on the part of a plaintiff, that his or her claim is groundless or even doubtful, since it is made with a view to avoid controversy and save the expense of litigation. It is the distinguishing mark of an offer of compromise that it is made tentatively, hypothetically, and in contemplation of mutual concessions.

While we agree with the petitioner that the CA should not have considered the agreements and/or statements made by the parties during the conciliation proceedings, the CAs conclusion on illegal dismissal, however, was not grounded solely on the parties statements during conciliation, but was amply supported by other evidence on record, which we discuss below. Based on these other pieces of evidence, the respondent was illegally dismissed; hence, our ruling regarding the statement made during conciliation has no effect at all on our final conclusion.

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