Lawyerly

GR No. 187621

2014-09-24

MOUNT CARMEL COLLEGE EMPLOYEES UNION v. MOUNT CARMEL COLLEGE

REYES, J.

Not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be substantial and the retrenchment must be reasonably necessary to avert such losses. The employer bears the burden of proving the existence or the imminence of substantial losses with clear and satisfactory evidence that there are legitimate business reasons justifying a retrenchment. Should the employer fail to do so, the dismissal shall be deemed unjustified.[32] (Emphasis ours)

GR No. 191475

2013-12-11

PHILIPPINE CARPET MANUFACTURING CORPORATION v. IGNACIO B. TAGYAMON

PERALTA, J.

"As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel."[45] To excuse respondents from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law.[46] The instant case falls under the first situation.

GR No. 191475

2013-12-11

PHILIPPINE CARPET MANUFACTURING CORPORATION v. IGNACIO B. TAGYAMON

PERALTA, J.

As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the employees' consent had been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities.[47] The circumstances show that petitioner's misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of the deeds of release, waiver and quitclaim.[48]

GR No. 182331

2012-04-18

MA. CORINA C. JIAO v. NLRC

REYES, J.

It is true that quitclaims executed by employees are often frowned upon as contrary to public policy.[34] Hence, deeds of release or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel.[35]

GR No. 163033

2009-10-02

SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO

PERALTA, J.

Also, SMC cannot take refuge in the Receipt and Release document signed by the respondent. Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.[34] The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer.[35]

GR No. 172212

2009-07-09

RAFAEL RONDINA v. CA FORMER SPECIAL 19TH DIVISION

QUISUMBING, J.

On the validity of the quitclaims, we note that both VA Calipay and the Court of Appeals declared the same valid due to the failure of the employees to disclaim their signatures therein or assert that they were forced to sign the same. The only question before us is the extent to which the amount reflected therein is to be credited to petitioner's monetary award as the only employee who appealed the appellate court's decision. However, we find that VA Calipay and the appellate court erred in concluding that petitioner voluntarily signed the quitclaim. Contrary to this assumption, the mere fact that petitioner was not physically coerced or intimidated does not necessarily imply that he freely or voluntarily consented to the terms thereof. Moreover, private respondents, not petitioner, have the burden of proving that the quitclaim was voluntarily entered into.[16] As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel.[17] Furthermore, there is a gross disparity between the amount actually received by petitioner as compared to the amount owing him as initially computed by VA Calipay. The amount of the settlement is indubitably unconscionable; hence, ineffective to bar petitioner from claiming the full measure of his legal rights.[18] In any event, we deem it appropriate that the amount he received as consideration for signing the quitclaim be deducted from his monetary award.

GR No. 170669

2009-02-04

MOBILIA PRODUCTS v. ALAN G. DEMECILLO

QUISUMBING, J.

Settled is the rule that the employer bears the burden of proving an allegation of the existence or imminence of substantial losses, which by its nature is an affirmative defense. It is the duty of the employer to prove with clear and satisfactory evidence that legitimate business reasons exist to justify retrenchment. Failure to do so inevitably results in a finding that the dismissal is unjustified. [25] Accordingly, where the retrenchment is illegal and of no effect, as in this case, the quitclaims were therefore not voluntarily entered into by the workers. Their consent had been vitiated by mistake or fraud. [26]

GR No. 169498

2008-12-11

OSCAR DELOS SANTOS v. CA

CHICO-NAZARIO, J.

The relaxation of procedural rules is even more imperative in the instant Petition where there is an undeniable need for this Court to settle threshold factual issues to finally give justice to the parties. It is true that this Court is not a trier of facts, but there are recognized exceptions to this general rule such as when the appellate court had ignored, misunderstood, or misinterpreted cogent facts and circumstances which, if considered, would change the outcome of the case; or when its findings were totally devoid of support; or when its judgment was based on a misapprehension of facts.[29]

GR No. 156644

2008-07-28

UNIVERSAL ROBINA SUGAR MILLING CORPORATION v. AGRIPINO CABALLEDA

NACHURA, J.

Moreover, the petitioners, not the respondents, have the burden of proving that the quitclaim was voluntarily entered into.[36] In previous cases, we have considered, among others, the educational attainment of the employees concerned in upholding the validity of the quitclaims which they have executed in favor of their employers.[37] However, in Becton Dickinson Phils., Inc. v. National Labor Relations Commission,[38] we held:There is no nexus between intelligence, or even the position which the employee held in the company when it concerns the pressure which the employer may exert upon the free will of the employee who is asked to sign a release and quitclaim. A lowly employee or a sales manager, as in the present case, who is confronted with the same dilemma of whether signing a release and quitclaim and accept what the company offers them, or refusing to sign and walk out without receiving anything, may do succumb to the same pressure, being very well aware that it is going to take quite a while before he can recover whatever he is entitled to, because it is only after a protracted legal battle starting from the labor arbiter level, all the way to this Court, can he receive anything at all. The Court understands that such a risk of not receiving anything whatsoever, coupled with the probability of not immediately getting any gainful employment or means of livelihood in the meantime, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in exchange of some amount of money which may be way below what he may be entitled to based on company practice and policy or by law.

GR No. 177576

2008-07-21

UNIVERSAL STAFFING SERVICES v. NLRC

NACHURA, J.

USSI cannot take refuge in the final settlement signed by Morales on January 1, 2003 to escape liability. Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.[20] The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer.[21]

GR NO. 152531

2007-07-27

RODELIA S. FUNGO v. LOURDES SCHOOL OF MANDALUYONG

SANDOVAL-GUTIERREZ, J.

Resignation is the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment.[11] It would have been illogical therefore for the petitioner to resign and then file a complaint for illegal dismissal. Resignation is inconsistent with the filing of the complaint.[12]

GR NO. 162233

2006-03-10

RONALDO B. CASIMIRO v. STERN REAL ESTATE INC. REMBRANDT HOTEL

CALLEJO, SR., J.

Article 283 [41] of the Labor Code of the Philippines authorizes retrenchment as one of the valid causes to dismiss employees as a measure to avoid or minimize business losses. [42] Retrenchment is the "termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation." [43] Simply put, it is a reduction in manpower, a measure utilized by an employer to minimize losses incurred in the operation of its business. It is a management prerogative consistently recognized and affirmed by this Court. [44] In Danzas Intercontinental, Inc. v. Daguman, [45] we enumerated the requirements for a valid retrenchment which the employer must prove by clear and convincing evidence:x x x (1) that retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) that the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) that the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher; (4) that the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of tenure; and (5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. [46]

GR NO. 147002

2005-04-15

PHILIPPINE TELEGRAPH v. NLRC

CALLEJO, SR., J.

Under the first requisite, it is imperative and incumbent on the part of the employer to sufficiently and convincingly establish business reverses of the kind or in the amount that would justify retrenchment.[15] To justify retrenchment, the employer must prove serious business losses, as not all business losses suffered by an employer would justify retrenchment under the aforesaid Article 283.[16] The loss referred to in the said provision cannot be of just any kind or amount, otherwise, a company could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted employees.[17] As consistently held by this Court, to guard against abuse, any claim of actual or potential business losses must satisfy the following established standards, to wit; (a) the losses incurred are substantial and not de minimis; (b) the losses are actual or reasonably imminent; (c) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (d) the alleged losses, if already incurred, or the expected imminent losses sought to be forestalled are proven by sufficient and convincing evidence.[18]

GR NO. 152039

2005-04-08

F.F. MARINE CORPORATION v. SECOND DIVISION NLRC

TINGA, J.

Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees.[31] (emphasis supplied)

	GR No. 187621 2014-09-24	MOUNT CARMEL COLLEGE EMPLOYEES UNION v. MOUNT CARMEL COLLEGE REYES, J.
Not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be substantial and the retrenchment must be reasonably necessary to avert such losses. The employer bears the burden of proving the existence or the imminence of substantial losses with clear and satisfactory evidence that there are legitimate business reasons justifying a retrenchment. Should the employer fail to do so, the dismissal shall be deemed unjustified.[32] (Emphasis ours)
	GR No. 191475 2013-12-11	PHILIPPINE CARPET MANUFACTURING CORPORATION v. IGNACIO B. TAGYAMON PERALTA, J.
"As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel."[45] To excuse respondents from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law.[46] The instant case falls under the first situation.
	GR No. 191475 2013-12-11	PHILIPPINE CARPET MANUFACTURING CORPORATION v. IGNACIO B. TAGYAMON PERALTA, J.
As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the employees' consent had been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities.[47] The circumstances show that petitioner's misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of the deeds of release, waiver and quitclaim.[48]
	GR No. 182331 2012-04-18	MA. CORINA C. JIAO v. NLRC REYES, J.
It is true that quitclaims executed by employees are often frowned upon as contrary to public policy.[34] Hence, deeds of release or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel.[35]
	GR No. 163033 2009-10-02	SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO PERALTA, J.
Also, SMC cannot take refuge in the Receipt and Release document signed by the respondent. Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.[34] The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer.[35]
	GR No. 172212 2009-07-09	RAFAEL RONDINA v. CA FORMER SPECIAL 19TH DIVISION QUISUMBING, J.
On the validity of the quitclaims, we note that both VA Calipay and the Court of Appeals declared the same valid due to the failure of the employees to disclaim their signatures therein or assert that they were forced to sign the same. The only question before us is the extent to which the amount reflected therein is to be credited to petitioner's monetary award as the only employee who appealed the appellate court's decision. However, we find that VA Calipay and the appellate court erred in concluding that petitioner voluntarily signed the quitclaim. Contrary to this assumption, the mere fact that petitioner was not physically coerced or intimidated does not necessarily imply that he freely or voluntarily consented to the terms thereof. Moreover, private respondents, not petitioner, have the burden of proving that the quitclaim was voluntarily entered into.[16] As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel.[17] Furthermore, there is a gross disparity between the amount actually received by petitioner as compared to the amount owing him as initially computed by VA Calipay. The amount of the settlement is indubitably unconscionable; hence, ineffective to bar petitioner from claiming the full measure of his legal rights.[18] In any event, we deem it appropriate that the amount he received as consideration for signing the quitclaim be deducted from his monetary award.
	GR No. 170669 2009-02-04	MOBILIA PRODUCTS v. ALAN G. DEMECILLO QUISUMBING, J.
Settled is the rule that the employer bears the burden of proving an allegation of the existence or imminence of substantial losses, which by its nature is an affirmative defense. It is the duty of the employer to prove with clear and satisfactory evidence that legitimate business reasons exist to justify retrenchment. Failure to do so inevitably results in a finding that the dismissal is unjustified. [25] Accordingly, where the retrenchment is illegal and of no effect, as in this case, the quitclaims were therefore not voluntarily entered into by the workers. Their consent had been vitiated by mistake or fraud. [26]
	GR No. 169498 2008-12-11	OSCAR DELOS SANTOS v. CA CHICO-NAZARIO, J.
The relaxation of procedural rules is even more imperative in the instant Petition where there is an undeniable need for this Court to settle threshold factual issues to finally give justice to the parties. It is true that this Court is not a trier of facts, but there are recognized exceptions to this general rule such as when the appellate court had ignored, misunderstood, or misinterpreted cogent facts and circumstances which, if considered, would change the outcome of the case; or when its findings were totally devoid of support; or when its judgment was based on a misapprehension of facts.[29]
	GR No. 156644 2008-07-28	UNIVERSAL ROBINA SUGAR MILLING CORPORATION v. AGRIPINO CABALLEDA NACHURA, J.
Moreover, the petitioners, not the respondents, have the burden of proving that the quitclaim was voluntarily entered into.[36] In previous cases, we have considered, among others, the educational attainment of the employees concerned in upholding the validity of the quitclaims which they have executed in favor of their employers.[37] However, in Becton Dickinson Phils., Inc. v. National Labor Relations Commission,[38] we held:There is no nexus between intelligence, or even the position which the employee held in the company when it concerns the pressure which the employer may exert upon the free will of the employee who is asked to sign a release and quitclaim. A lowly employee or a sales manager, as in the present case, who is confronted with the same dilemma of whether signing a release and quitclaim and accept what the company offers them, or refusing to sign and walk out without receiving anything, may do succumb to the same pressure, being very well aware that it is going to take quite a while before he can recover whatever he is entitled to, because it is only after a protracted legal battle starting from the labor arbiter level, all the way to this Court, can he receive anything at all. The Court understands that such a risk of not receiving anything whatsoever, coupled with the probability of not immediately getting any gainful employment or means of livelihood in the meantime, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in exchange of some amount of money which may be way below what he may be entitled to based on company practice and policy or by law.
	GR No. 177576 2008-07-21	UNIVERSAL STAFFING SERVICES v. NLRC NACHURA, J.
USSI cannot take refuge in the final settlement signed by Morales on January 1, 2003 to escape liability. Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.[20] The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer.[21]
	GR NO. 152531 2007-07-27	RODELIA S. FUNGO v. LOURDES SCHOOL OF MANDALUYONG SANDOVAL-GUTIERREZ, J.
Resignation is the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment.[11] It would have been illogical therefore for the petitioner to resign and then file a complaint for illegal dismissal. Resignation is inconsistent with the filing of the complaint.[12]
	GR NO. 162233 2006-03-10	RONALDO B. CASIMIRO v. STERN REAL ESTATE INC. REMBRANDT HOTEL CALLEJO, SR., J.
Article 283 [41] of the Labor Code of the Philippines authorizes retrenchment as one of the valid causes to dismiss employees as a measure to avoid or minimize business losses. [42] Retrenchment is the "termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation." [43] Simply put, it is a reduction in manpower, a measure utilized by an employer to minimize losses incurred in the operation of its business. It is a management prerogative consistently recognized and affirmed by this Court. [44] In Danzas Intercontinental, Inc. v. Daguman, [45] we enumerated the requirements for a valid retrenchment which the employer must prove by clear and convincing evidence:x x x (1) that retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) that the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) that the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher; (4) that the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of tenure; and (5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. [46]
	GR NO. 147002 2005-04-15	PHILIPPINE TELEGRAPH v. NLRC CALLEJO, SR., J.
Under the first requisite, it is imperative and incumbent on the part of the employer to sufficiently and convincingly establish business reverses of the kind or in the amount that would justify retrenchment.[15] To justify retrenchment, the employer must prove serious business losses, as not all business losses suffered by an employer would justify retrenchment under the aforesaid Article 283.[16] The loss referred to in the said provision cannot be of just any kind or amount, otherwise, a company could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted employees.[17] As consistently held by this Court, to guard against abuse, any claim of actual or potential business losses must satisfy the following established standards, to wit; (a) the losses incurred are substantial and not de minimis; (b) the losses are actual or reasonably imminent; (c) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (d) the alleged losses, if already incurred, or the expected imminent losses sought to be forestalled are proven by sufficient and convincing evidence.[18]
	GR NO. 152039 2005-04-08	F.F. MARINE CORPORATION v. SECOND DIVISION NLRC TINGA, J.
Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees.[31] (emphasis supplied)

EMCO PLYWOOD CORPORATION v. PERFERIO ABELGAS