SC declares firm’s quitclaims void due to intent to defraud

The Supreme has declared void a set of quitclaims for being executed by an employer with the intent to defraud.

In a 17-page decision promulgated in April, the SC Second Division reversed and set aside the ruling of the Court of Appeals that found that the National Labor Relations Commission (NLRC) did not commit grave abuse when it ruled that the five petitioners were not illegally dismissed.

The SC found that the employees were constructively dismissed. It also ordered the company to reinstate them and pay them back wages and other benefits.

“This Court declares as void the quitclaims executed by petitioners in favor of [the company] on the ground that the latter employed deceit and/or fraud in making the former execute the same,” it said.

"Hence, the quitclaims will not operate to bar petitioners from seeking their legitimate claims… in these proceedings,” it added.

The case stemmed from the petitioner's complaint that they were unpaid by the corporation and that certain amounts were being deducted from their salaries.

They were hired as security guards by the corporation and worked 12 hours daily, including during regular and special holiday and rest days.

Despite this, they said they did not receive regular or special holiday pay, rest day pay, service incentive leave pay, 13th month pay, and emergency cost of living allowance from their employer.

During their conciliation-mediation conference before the National Conciliation Mediation Board to discuss their grievances, the company’s representatives offered to pay all their money claims if they were to submit signed resignation letters.

The employees then complied. They were also made to sign separate quitclaims. 

In ruling in favor of the petitioners, the SC said that for a quitclaim to be valid, there must be no fraud or deceit, the consideration must be credible and reasonable, and the contract is not contrary to law, public orders, public policy, morals or good customs, or prejudicial to a third person.

“Regardless of whether the quitclaims were executed before or after the petitioners were given the checks or before whom they were executed, such quitclaims are void as they were signed by the petitioners with the honest belief, based on assurances made, that they would be paid their money claims in full,” the Court said. — BM, GMA Integrated News