The CA Ruling
In a Decision
[33] dated April 30, 2019, the CA partly granted the Petition. It rejected SRMI's argument regarding its solidary liability, holding that the issue had been finally settled and may no longer be relitigated during the execution stage. However, it found grave abuse of discretion on the part of the NLRC in invalidating the compromise agreements. Accordingly, it deleted the award of backwages and separation pay to petitioners and considered the amounts in the compromise as
full payment. Finally, it also ordered the imposition of legal interest on the monetary awards.
The CA held that each of the petitioners voluntarily signed the compromise agreements and acknowledged that they understood the import of the document they signed. It faulted the NLRC for its conclusion that the ELA's note created an ambiguity in the compromise agreement that vitiated petitioners' consent, stating that the conclusion was speculative since petitioners did not even assert that their consent was vitiated. Further, in noting the disparity in the individual settlement amounts, the CA concluded that coupled with petitioners' continued employment with SRMI, the amounts received by each of them are reasonable.
Petitioners then filed a Partial Motion for Reconsideration
[34] on the deletion of the monetary awards, which the CA denied in a Resolution
[35] dated December 22, 2020. Hence, this petition.
The Issue Before the CourtThe Court resolves whether the CA erred in finding grave abuse of discretion on the part of the NLRC when it denied SRMI's Petition for Extraordinary Remedies.
Petitioners claim that the CA reversibly erred in ruling that the compromise agreements were valid. They argue that they need not allege vitiation of consent since the ELA was very clear in
not approving the compromise agreement and in explaining to petitioners that the settlement amounts would be treated as partial payment of the amounts due them in the final judgment. Further, they echo the NLRC's finding that the amounts stated in the individual agreements were unconscionable.
SRMI filed a Comment,
[36] insisting that petitioners voluntarily entered the compromise and that the amounts they received should be considered as the full satisfaction of their claims. According to SRMI, it was an error for the ELA, and the NLRC for affirming it, to change the tenor of the compromise agreements by informing petitioners that they are still entitled to other amounts from the execution of the final judgment.
The Court's RulingThe Petition has merit.
When the Court reviews a decision of the CA in a Petition for
Certiorari assailing a ruling of the NLRC, its scope of review is limited to the
correctness of the CA's finding of grave abuse of discretion.
[37] In labor cases, the NLRC gravely abuses its discretion when "its findings and conclusions are not supported by substantial evidence, which refers to that amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion," or when its ruling finds no basis in the evidence and applicable statutes and case law.
[38]As will be explained below, the CA erred in ascribing grave abuse of discretion in the NLRC ruling, considering that the latter is supported by substantial evidence and applicable case law.
To recall, the NLRC's invalidation of the compromise agreements is grounded on the following: (1) that the consideration of the compromise agreements is unconscionably low; and (2) that the ELA's notation created an ambiguity in the contracts, which made it doubtful that petitioners signed them with full understanding of their terms and conditions.
The NLRC held that the compromise agreements must be closely scrutinized because they are also quitclaims, which the law looks upon with disfavor. This is correct. As a rule, quitclaims executed by employees are frowned upon for being contrary to public policy,
[39] and "are largely ineffective to bar recovery of the full measure of a worker's rights, and the acceptance of benefits therefrom does not amount to estoppel."
[40] Thus, to determine whether a quitclaim is valid, the Court has held that the following must be present: (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.
[41] Absent these elements, a quitclaim may be invalidated. Consequently, an invalidated quitclaim does not have the effect of
res judicata between the parties.
The NLRC is correct that the considerations for these compromise agreements,
even when coupled with petitioners' continued employment by SRMI, are not reasonable. As tabulated
[42] by the NLRC, the amounts stated in the compromise agreements represent a small portion鈥攔anging from 5.20% to 23.42%鈥攐f what petitioners stand to receive under the final judgment:
PETITIONER | AMOUNT ALREADY RECEIVED-SETTLEMENT AMOUNT + 10% (IN PHP) | AWARD, PER FINAL COMPUTATION BY THE ELA (IN PHP, LESS ATTORNEY'S FEES) | PERCENTAGE |
| | | |
Leo Abad | | | |
Romeo P. Abella | 99,000.00 | | |
Marnie D. Agapay | | | |
Feleciano S. Bahan | | | |
Ruel R. Bahan | | | |
Angelito Caba帽as | | | |
Jovelito Maestrado, Jr. | | | |
Tony L. Montante | | | |
Alvin D. Pal | | | |
Venjie Plasquita | | | |
Frankie L. Sabio | 88,000.00 | 379,751.25 | 21.07 |
Marijul O. Undap | 22,000.00 | 384,251.25 | 5.20 |
| | | |
TOTAL AMOUNT | 1,012,000.00 | 6,004,936.25 | 16.85 |
There is no exact percentage that determines the reasonableness of a monetary consideration in quitclaims and compromise agreements. In several cases, the Court has deemed settlement amounts of varying percentages to be unreasonable, which shows that the reasonableness of a settlement amount is determined on a case-to-case basis rather than through a mathematical precision. In
Cadalin vs. CA,
[44] the Court ruled as unreasonable a settlement amount of USD 500.00, 6.25% of what the employee was legally entitled to. In
Galicia vs. NLRC,[45] a settlement amount that is 11.17% of what the employees were legally entitled to was likewise held unreasonable. The same conclusion was reached in
Castillon vs. Magsaysay Mitsui Osk Marine, Inc.[46] and
R&E Transport vs. Latag,[47] where the employees received 30.76% and 37%, respectively, of what they were legally entitled to.
The Court agrees with the NLRC that the amounts stated in the compromise agreements are
not reasonable. On this score, the Court notes that an earlier resolution in
Yu vs. SRMI.[48] rejected the employees' argument that the settlement amounts were unreasonable. The Court held in that case, that the claim of PHP 300,000.00 in backwages was not
supported by evidence as it lacked a specific computation for each of the employees involved. Hence, the Court could not determine with certainty the reasonableness of the settlement. This is not the case here, as the ELA attached to his Order a tabulated computation
[49] of the amounts to which the employees are entitled. From this, and as can be seen from the table above, it is immediately clear that the settlement amounts are startlingly lower than what petitioners are legally entitled to. The NLRC, therefore, did not commit grave abuse of discretion in denying the petition for extraordinary remedies and invalidating the compromise agreements.
On whether the ELA's notation created an ambiguity that affected petitioners' full understanding of the terms and conditions of the compromise, the Court, considering that the compromise agreements are invalid for having unreasonable considerations, sees no further reason in ruling on the issue.
As stated earlier, the NLRC did not gravely abuse its discretion in invalidating the compromise agreements, as its findings are supported by substantial evidence. Notably, in its computation
[50] of the monetary awards, the ELA subtracted the amounts already received by petitioners and
ruled that they are entitled to the following amounts:
PETITIONER | AMOUNT ALREADY RECEIVED UNDER THE COMPROMISE (In PHP, PLUS 10% ATTORNEY'S FEES) | MONETARY AWARD, MINUS AMOUNTS ALREADY RECEIVED (IN PHP) | 10% ATTORNEY'S FEES | TOTAL AMOUNT |
| | | | |
Leo Abad | | 296,251.25 | | 325,876.38 |
Romeo P. Abella | | | 40,733.50 | 448,068.50
|
Marnie D. Agapay | 88,000.00 | 296,251.25 | 29,625.13 | 325,876.38 |
Feleciano S. Bahan | | | 28,525.13 | 313,776.38 |
Ruel R. Bahan | 88,000.00 | 296,251.25 | 29,625.13 | 325,876.38 |
Angelito Caba帽as | 88,000.00 | | | |
Jovelito Maestrado, Jr. | 88,000.00 | 296,251.25 | 29,625.13 | 325,876.38 |
Tony L. Montante | | | | |
Alvin D. Pal | | | | 889,444.88
|
Venjie Plasquita | | | | 325,876.38
|
Frankie L. Sabio | 88,000.00 | 291,751.25 | 29,175.13 | 320,926.38 |
Marijul O. Undap | | | | 398,476.38 |
TOTAL AMOUNT | | | | 5,492,229.93 |
ACCORDINGLY, the Petition is
GRANTED. The Decision dated April 30, 2019 and Resolution dated December 22, 2020 of the Court of Appeals in CA-G.R. SP No. 08742-MIN are
REVERSED and
SET ASIDE.
The Resolutions dated September 27, 2017 and March 9, 2018 of the National Labor Relations Commission in NLRC No. MER 07-015027-2017 are
AFFIRMED.
Respondent San Roque Metals, Inc. is held solidarily liable with Prudential Customs Brokerage Services, Inc. to
PAY petitioners Leo A. Abad, Romeo Abella, Marnie Agapay, Feleciano S. Bahan, Ruel R. Bahan, Angelito Caba帽as, Jovilito G. Maestrado, Jr., represented by his mother, Nenita Maestrado, Tony L. Montante, Alvin D. Pal, Venjie Plasquita, Frankie L. Sabio, and Marijul O. Undap their monetary awards by virtue of the final judgment in NLRC Case No. RAB-13-08-00212-2011, minus the amounts already received by them. Moreover, the total monetary awards shall bear legal interest at the rate of 6% per annum from finality of this Decision until full payment.
[51]SO ORDERED.Leonen, SAJ. (Chairperson), Lazaro-Javier, M. Lopez and
J. Lopez, JJ., concur.
[1] Rollo, pp. 3-89.
[2] Id. at 636-665. Penned by Associate Justice Walter S. Ong and concurred in by Associate Justices Edgardo A. Camello and Florencio M. Mamauag, Jr. of the Twenty-First Division, Court of Appeals, Cagayan De Oro City. April 30, 2019.
[3] Id. at 682-686. Penned by Associate Justice Edgardo A. Camello and concurred in by Associate Justices Evalyn M. Arellano-Morales and Angelene Mary W. Quimpo-Sale of the Twenty-First Division, Court of Appeals, Cagayan De Oro City. December 22, 2020.
[4] Id. at 490-506. Penned by Commissioner Elbert C. Restauro and concurred in by Presiding Commissioner Bario-Rod M. Talon of the Eighth Division, National Labor Relations Commission, Cagayan De Oro City. September 27, 2017 and March 9, 2018.
[5] Id. at 442-453. Issued by Executive Labor Arbiter Exequiel M. Dayot III.
[6] Id. at 91-126. Docketed as NLRC Case No. RAB-13-08-00212-11.
[7] Id. at 202-215. Penned by Executive Labor Arbiter Nicodemus G. Palangan.
[8] Id. at 234-246 and 251-265. Docketed as NLRC No. MAC 06-012619-2012.
[9] Id. at 293-304. Penned by Commissioner Dominador E. Medroso and concurred in by Presiding Commissioner Bario-Rod M. Talon and the dissent of Commissioner Proculo T. Sarmen of the Eighth Division, NLRC, Cagayan de Oro City.
[10] Id. at 327-330.
[11] Not attached to the
rollo. Docketed as CA-G.R. SP No. 05604 MIN.
[12] Rollo, pp. 331-344. Penned by Associate Justice Maria Filomena D. Singh (now a Member of this Court) and concurred in by Associate Justices Edgardo T. Lloren and Pablito A. Perez of the Special Twenty-颅Third Division, Court of Appeals, Cagayan De Oro City.
[13] Id. at 343-344.
[14] Not attached to the
rollo. Docketed as G.R. Nos. 221137 and 220991, respectively.
[15] Rollo, pp. 348-349.
[16] Id. at 350.
[17] Id. at 351-353.
[18] Id. at 354-400.
[19] "Ruel S. Bahan" in some parts of the
rollo.
[20] "Jovelito E. Maestrado, Jr." in some parts of the
rollo.
[21] Rollo, p 356; 360; 364; 368; 372; 376; 380; 384; 388; 392; and 396. The third page of petitioner Marijul O. Undap's signed compromise agreement is not attached to the
rollo.
[22] Id. at 410-413.
[23] Id. at 414-421.
[24] Id. at 419.
[25] Rollo, pp. 442-453.
[26] Id. at 448-451.
[27] Id. at 452-453.
[28] Id. at 454-483.
[29] Id. at 484-489.
[30] Id. at 490-506.
[31] Id. at 525-532.
[32] Id. at 52-532 (including annexes).
[33] Id. at 637-665.
[34] Id. at 666-681 (including an annex).
[35] Id. at 682-686.
[36] Id., unpaginated.
[37] Reuyan v. INC Navigation Co. Phils., Inc., G.R. No. 250203, December 7, 2022 [Per J. Kho, Jr., Second Division],
citing Pelagio v. Philippine Transmarine Carriers, Inc., 848 Phil. 808 (2019), 895 SCRA 546, 554-555 [Per J. Perlas-Bernabe, Second Division],
citing University of Santo Tomas (UST) v. Samahang Manggagawa ng UST, 809 Phil. 212, 219-220 (2017) [Per J. Perlas-Bernabe, First Division].
[38] Id.,
citing Paiton v. Armscor Global Defense, Inc., G.R. No. 255656, April 25, 2022 [Per J. Kho, Jr., Third Division],
citing Jolo's Kiddie Carts v. Caballa, University of Santo Tomas (UST) v. Samahang Manggagawa ng UST, 809 Phil. 212, 219-220 (2017) [Per J. Perlas-Bernabe, First Division].
[39] Castillon v. Magsaysay Mitsui Osk Marine, Inc., 872 Phil. 92 (2020) [Per J. Leonen, Third Division].
[40] Inter-Orient Maritime Incorporated v. Candava, 712 Phil. 628 (2013) [Per J. Perlas-Bernabe, Second Division].
[41] Id.,
citing Goodrich Manufacturing v. Ativo, 625 Phil. 102 (2010) [Per J. Villarama, Jr., First Division].
[42] Rollo, p. 500.
[43] Erroneously written as "P80,0007" in the NLRC Decision,
id. at 500.
See id at 364 for the correct amount.
[44] 593 Phil. 170 (2008), [Per J. Nachura, Third Division].
[45] 342 Phil. 342 (1997) [Per J. Romero, Second Division].
[46] 872 Phil. 92 (2020) [Per J. Leonen, Third Division].
[47] 467 Phil. 355 (2004), [Per J. Panganiban, First Division].
[48] G.R. No. 214249, October 17, 2018 [Special Second Division].
[49] Rollo, pp. 452-453.
[50] Id. at 452-453.
[51] Nacar v. Gallery Frames, 716 Phil. 267 (2013), [Per J. Peralta,
En Banc].