Employers and employees, beware of invalid quitclaims

The problem often confronting employers and employees is that sometimes DOLE, NLRC, the Court of Appeals, and the Supreme Court do not honor some waivers, quitclaims, resignations, and other voluntary agreements. This is a paradox some people simply cannot understand.

Why would the government refuse to give its imprimatur on voluntary settlements and compromises, when we all know public policies and laws encourage the parties in a dispute to come to agreement by themselves? That way they save the government the effort and time to arbitrate over a dispute that is personal in nature and does not involve national interests.

But that is not the case. Under the Civil Code, the relationship between capital and labor is not merely contractual in character. It is impressed with public interests. This is because under the Philippine Constitution, the State is mandated to afford full protection to labor, whether here or abroad. Thus, the State can intervene. And even when the complainant or the worker has already signed a quitclaim, waiver, or voluntary renunciation of all his rights, it can be nullified for being contrary to law, public policy, morals, or good conduct.

The Supreme Court reiterated this legal doctrine in the recent case of Juan Hernandez vs Crossworld Marine Services, Inc. (GR 209098, 14 November 2016). Based on the Supreme Court decisions, there are basically two reasons for disallowing quitclaims; one is consent not freely given by the employee, such as when there was force and intimidation, duress, deceit, misrepresentation, undue influence or moral ascendancy. These are the most common causes for declaration of nullity of such quitclaims. The second has to do with the consideration of the settlement being unconscionably low or shocking. Worse, when there was no consideration at all.

So, my advice to employers and employees is to bring quitclaims, waivers, and resignations to DOLE, NLRC, or NCMB and have them duly attested to and witnessed, subscribed, or sworn to before the regional director, labor arbiter, conciliator, or any other duly authorized government official. This is to foreclose the possibility of the document being annulled. It is good to settle a case and enter into compromise agreements. But to protect both parties, their agreements must enjoy the official imprimatur of the government, so they will be bound by the terms and conditions of the compromise agreement.

The evil sought to be avoided by the law is when management uses its superior resources, knowledge, and influence to coerce the worker into signing grossly disadvantageous settlements and waivers. Other than this, voluntary waivers should be respected and even encouraged.