THIRD DIVISION
[G.R. No. 140269-70. September 14, 2000]
PHILIPPINE CARPET EMPLOYEES ASSOCIATION and JONATHAN
BARQUIN, petitioners, vs. PHILIPPINE CARPET MANUFACTURING CORPORATION,
RAUL RODRIGO AND MANUEL TROVELA, respondents.
D E C I S I O N
GONZAGA-REYES,
J.:
This Petition for Review
on Certiorari seeks the reversal of the Resolution of the Court of
Appeals[1] in CA G.R. SP No. 41985[2] dated January 29, 1999 which reversed and set aside
its Decision dated January 30, 1998 ordering the reinstatement of Jonathan
Barquin.
The following facts are
undisputed:
“The Philippine Carpet Employees Association (Union for brevity) is the certified sole and exclusive collective bargaining agent of all rank and file employees in Philippine Carpet Manufacturing Corporation, a local company engaged in the business of carpet and rug making. Jonathan Barquin is a union member who was hired by the company as casual worker (janitor) on July 15, 1995. Seven months later, on January 27, 1996, he was extended a probationary employment, as a helper in the Company’s weaving department.
On January 16, 1996, the Regional Tripartite Productivity Board
(NCR) promulgated Wage Order No. 4 and 4-A granting a two-tier increase in the
minimum wage as follows: (a) P16.00 effective February 2, 1996; and (b) P4.00
effective May 1, 1996.
On February 29, 1996, the Union wrote the company and its officers, asking for an across-the-board implementation of Wage Order No. 4 and 4-A. In the said letter, the Union invoked the Company’s ‘decades old practice of implementing wage orders across-the-board to all rank and file employees.
In a letter dated March 14, 1996, the company refused to grant the
Union’s request on the ground that the company is suffering from poor business
situation; that all the present workers/employees are earning above P145.00/day,
hence, not covered by Wage Order No. 4 and 4-A.
On March 18, 1996, the Union reiterated its demand for an across-the-board implementation, threatening legal action against the company in the event that the said demand is denied.
In a memorandum dated March 29, 1996, the Company reiterated its
position that the employees are not covered by Wage order No. 4 and 4-A for the
reason that nobody in the company is receiving a salary of P145.00 a
day.
In the meantime, Jonathan Barquin received a notice dated March 14,
1996 from the company, advising him that his services were to be terminated
effective at the close of working hours on April 13, 1996. In lieu of the 30-day notice requirement for
his termination, he was placed on forced leave status effective March 15, 1996
but was paid in full for the duration of the said leave. The company justified Baquin’s separation
from the service as a valid act of retrenchment. While the Union averred that the separation is tantamount to
illegal dismissal resorted to by the company to avoid compliance with the
provisions of Wage Order 4 and 4-A.”[3]
Failing to resolve the
issues in the mediation level, the parties agreed to submit the case for
voluntary arbitration. On August 3,
1996, the voluntary arbitrator, Angelita Alberto-Gacutan ruled that Jonathan
Barquin (BARQUIN) was hastily dismissed to avoid compliance with Wage Order
Nos. 4 and 4-A, but held that he is not entitled to reinstatement because he
received his separation pay and voluntarily signed the Deed of Release and
Quitclaim and acquiesced to his separation.
The dispositive portion of the Resolution[4]of the voluntary
arbitrator reads:
“WHEREFORE, PREMISES CONSIDERED, herein Voluntary Arbitrator renders judgment ordering Respondents:
1. To pay the minimum wage to
those receiving P145.00 a day or below the minimum wage of P161.00
as of February 2, 1996.
2. To pay Jonathan Barquin a salary differential based on the wage increase as of February 2, 1996 up to his separation from the service on April 13, 1996.
3. To apply the formula prescribed under section 11, Wage Order No. 4 and 4-A, thereby avoiding the possible distortion in the wage structure of the employees.
SO ORDERED.”[5]
Motion for
reconsideration[6]was denied prompting
both the petitioners and the respondents to appeal to the Court of Appeals
assailing the decision of the voluntary arbitrator. On January 30, 1998, the Court of Appeals ruled that the
respondent company failed to prove actual poor financial condition as just
cause for retrenchment nor prove that BARQUIN voluntarily signed the quitclaim;
thus the court affirmed with modification the decision of the voluntary
arbitrator and ordered BARQUIN’s reinstatement as follows:
“WHEREFORE, the appealed Resolution is hereby AFFIRMED with
modification that Jonathan Barquin shall be reinstated with payment of full
backwages and other benefits and privileges from the time he was dismissed up
to actual reinstatement.”[7]
A motion for
reconsideration filed by private respondent was partly granted; the Court of
Appeals reconsidered its earlier decision and set aside the order of
reinstatement of BARQUIN, on the ground that BARQUIN had the burden to prove
that his execution of the Deed of Release and Quitclaim was involuntary.[8] The Resolution of the Court of Appeals states:
“Accordingly, the motion for reconsideration is partly
granted. Our Decision is hereby partly
reconsidered by setting aside the reinstatement of Jonathan Barquin.”[9]
Motion for
reconsideration of this last Resolution filed by the herein petitioners was
denied[10] for lack of merit; hence this present appeal wherein
the petitioners state the issue as: “whether there being a finding of illegal
dismissal by the voluntary arbitrator and the Court of Appeals, the relief of
reinstatement follows as a matter of law as provided by Article 279 of the
Labor Code and jurisprudence.”[11] The following
arguments are raised in support of the petition.
A
THE DECISION OF THE HON. COURT REVERSING ITS EARLIER RULING OF
ORDERING FOR (sic) THE REINSTATEMENT OF JONATHAN BARQUIN IS CONTRARY TO THE
LABOR CODE (ARTICLE 279) AND JURISPRUDENTIAL LAW.
WHERE THERE IS A FINDING OF ILLEGAL DISMISSAL THE LAWFUL
CONSEQUENCE OF SUCH FINDING IS REINSTATEMENT IN ACCORDANCE WITH ARTICLE 279 OF
THE LABOR CODE AND JURISPRUDENTIAL LAW.
B
THE HON. COURT’S RULING IS CONTRARY TO THE DOCTRINE LAID DOWN IN
TREND LINE CASE, G.R. NO. 112923, BARQUIN WAS MISLED BY RESPONDENTS INTO
SIGNING THE QUITCLAIM BY PRETENDING THERE WAS A VALID RETRENCHMENT.
C
THE HON. COURT, IT IS RESPECTFULLY SUBMITTED COMMITTED GRAVE
ABUSE OF DISCRETION IN RULING THAT THERE IS A PRESUMPTION OF VOLUNTARINESS OF
EXECUTION OF QUITCLAIMS IN LABOR CASE (sic) CONTRARY TO THE DOCTRINE LAID DOWN
IN THE CASE OF SALONGA VERSUS NLRC, G.R. NO. 118120.
D
SIGNING QUITCLAIMS DOES NOT BAR THE PURSUIT OF ILLEGAL DISMISSAL
CASE.
THE SIGNING OF QUITCLAIM DOES NOT BAR THE PURSUIT OF ILLEGAL
DISMISSAL CASE IN ACCORDANCE WITH JURISPRUDENCE – EMILIANO A. RIZALDE VERSUS
NATIONAL LABOR RELATIONS COMMISSION, G.R. NO. 96982, SEPT. 21, 1999 (THIRD
DIVISION).[12]
The only issue posed now concerns the
reinstatement of BARQUIN. In essence,
the petitioners maintain that since both the voluntary arbitrator and the Court
of Appeals found that petitioner, BARQUIN, was illegally dismissed, he is
entitled to reinstatement as a matter of right pursuant to Article 279 of the
Labor Code[13] The petitioners also contend that contrary to the
finding of both the Court of Appeals and the voluntary arbitrator, BARQUIN did
not voluntarily sign the Deed of Release and Quitclaim.[14] It was the fact that the respondent company misled
him into signing said deed by leading him to believe in bad faith that there
was a valid retrenchment, which made him sign the quitclaim. Petitioners further argue that at any rate,
quitclaims are not favored in this jurisdiction and it is incumbent upon the
employer to prove voluntariness; that by signing the quitclaim and by accepting
separation pay to tide him over while pursuing the case, BARQUIN did not renounce
any right nor will the signing of the quitclaim prevent him from pursuing his
case.
Respondents, on the other
hand, maintain that the finding of both the voluntary arbitrator and the Court
of Appeals that BARQUIN freely and voluntarily signed and executed the Deed of
Release and Quitclaim is a factual finding which is conclusive and should be
given great weight and respect by this Court.
Moreover, the respondents claim that the consideration therein was a
fair and full settlement of the amount legally due to BARQUIN who never alleged
that he was physically threatened or intimidated into signing the quitclaim.
In essence, the
petitioners’ position is that as a consequence of a finding that BARQUIN’s
dismissal was illegal as he was misled by the company into believing that there
was a valid retrenchment, which representation made him sign the quitclaim, he
is entitled to reinstatement and backwages[15] The respondent company, on the other hand, points
out that the crux of the controversy boils down to the resolution of the issue
of the validity of the Deed of Release and Quitclaim signed by BARQUIN, and
both the voluntary arbitrator and the Court of Appeals ruled that it was freely
and intelligently signed by him.
The petition is
meritorious.
It is not disputed that
the respondent company was guilty of illegal dismissal in terminating BARQUIN’s
employment. As a rule, an illegally
dismissed employee is entitled to 1) either reinstatement or separation pay if
reinstatement is no longer viable, and 2) backwages.[16]
In holding that although
BARQUIN was illegally dismissed he was not entitled to reinstatement, both the
Court of Appeals and the voluntary arbitrator upheld the validity of the Deed
of Release and Quitclaim that BARQUIN signed after concluding that he voluntarily
signed the same for the reason that the respondent company did not coerce or
intimidate him into signing and receiving his separation pay, and consequently
ruled that he waived his right to reinstatement. The Court of Appeals added that the burden of proof to show that
the quitclaim was signed and executed involuntarily is on the party who assails
it inasmuch as a person is presumed to intend the consequences of his voluntary
act and that a person takes ordinary care of his concerns and that private
transactions have been fair and regular.[17] Respondents posit that such a factual finding is
conclusive upon this Court.
We disagree.
The validity of
quitclaims executed by laborers has long been recognized in this
jurisdiction. In Periquet vs.
National Labor Relations Commission[18], this Court ruled that not all waivers and quitclaims
are invalid as against public policy.[19] If the agreement was voluntarily entered into and
represents a reasonable settlement of the claims of the employee, it is binding
on the parties and may not later be disowned simply because of a change of mind.[20] Such legitimate waivers resulting from voluntary
settlements of laborer’s claims should be treated and upheld as the law between
the parties.[21] However, when as in this case, the voluntariness of
the execution of the quitclaim or release is put into issue, then the claim of
employee may still be given due course.[22] The law looks with disfavor upon quitclaims and
releases by employees pressured into signing the same by unscrupulous employers
minded to evade legal responsibilities.[23]
In the present case, both
the Court of Appeals and the voluntary arbitrator erred in concluding that
BARQUIN voluntarily signed the Deed of Release and Quitclaim. Records reveal that the respondent company
informed BARQUIN that his services were being terminated on the ground of
retrenchment as the company was constrained to reduce the number of its
personnel “due to the tremendous drop of production output since about the last
quarter of 1994 up to the present”.[24] However, this claim was rejected by both the
voluntary arbitrator and the Court of Appeals, which ruled that the respondent
company failed to prove that it was suffering from actual poor financial
condition and that it was “doubtful if the retrenchment of one helper in the
production department earning P145.00 a day would avert losses of the
company”[25] Instead, the voluntary arbitrator found that the
respondent company had an ulterior motive behind BARQUIN’s dismissal and that
only he was singled out and retrenched by the respondent company. The voluntary arbitrator went as far as
saying that BARQUIN’s hasty dismissal in the guise of retrenchment was a feeble
attempt at circumventing the law.[26] It was shown that BARQUIN was the only employee
earning P145.00 a day and was qualified to receive the mandated wage
increase granted by Wage Order Nos. 4 and 4-A.
An increase in his salary would cause a wage distortion in the wage
structure of the company, which would necessitate the adjustment of the wages
of its other employees.[27] It is therefore reversible error to hold, despite
such findings, that BARQUIN voluntarily signed the quitclaim for the only
logical conclusion that can be drawn is that the respondent company feigned
that it was suffering business losses in order to justify retrenchment and
consequently enable it to terminate the services of BARQUIN in order to prevent
the wage distortion. Respondent
company’s lack of candor and good faith in informing BARQUIN that he was being
terminated due to a valid retrenchment and not because it sought to avoid
compliance with the mandated wage increases amounted to a deception which led
BARQUIN to the mistaken belief that that there was legal ground for
retrenchment and prompted him to acquiesce to his termination and sign the
quitclaim. Petitioners correctly point
out that such an act has been declared by this Court in the case of Trendline
Employees Association-Southern Philippines Federation of Labor vs. NLRC[28] as tainted with bad faith and should not be countenanced
as being prejudicial and oppressive to labor.[29] Verily, had the respondent company not misled
BARQUIN into believing that there was a ground to retrench, it is not difficult
to believe that he would have thought twice before signing the quitclaim inasmuch
there was no reason for the termination of his employment.
Contrary to the
assumption of both the Court of Appeals and the voluntary arbitrator, the mere
fact that BARQUIN was not physically coerced or intimidated does not
necessarily imply that he freely or voluntarily consented to the terms of the
quitclaim. Under Article 1330 of the
Civil Code, consent may be vitiated not only through intimidation or violence
but also by mistake, undue influence or fraud. Mistake may invalidate consent when it refers
to the substance of the thing which is the object of the contract or to those
conditions which have principally moved one or both parties to enter into
contract[30]; there is fraud when, through insidious words or
machinations of one of the contracting parties, the other is induced to enter
into a contract which, without them, he would not have agreed to.[31]
Moreover, as correctly
pointed out by the petitioners, this Court has ruled in Salonga vs. National
Labor Relations Commisison[32] that it is the employer (respondent company)
and not BARQUIN who has the burden of proving that the quitclaim was
voluntarily entered into by him.[33] The Court of
Appeals therefore erred in ruling that the burden of proof to show that the
Deed of Release and Quitclaim was signed and executed voluntarily was on
BARQUIN.
BARQUIN’s consent to the
quitclaim cannot be deemed as being voluntarily and freely given inasmuch as
his consent was vitiated by mistake or fraud, we have no recourse but to annul
the same. There being no valid quitclaim,
BARQUIN is entitled to receive the benefits granted an employee whose dismissal
on the ground of retrenchment is declared illegal. BARQUIN is therefore entitled to reinstatement to his former
position without loss of seniority rights and other privileges, as there is no
evidence to show that reinstatement is no longer possible.[34] He is also entitled to backwages computed from the
time of his dismissal up to the time of actual reinstatement, without
qualification or deduction.[35] However, the amount BARQUIN received as separation
pay if any when he signed the Deed of Release and Quitclaim should be deducted
from this monetary award.[36]
ACCORDINGLY, the instant petition is GRANTED and the
decision of the Court of Appeals in CA G.R. SP No. 41985 is REVERSED and
SET ASIDE. Respondent
Philippine Carpet Manufacturing Corporation is hereby ordered to reinstate
Jonathan Barquin to his former position without loss of seniority rights and
other privileges and to pay him backwages computed from the time of his dismissal
up to the time of actual reinstatement, without qualification or deduction
except for the amount previously received by him as separation pay.
No pronouncement as to
costs.
SO ORDERED.
Melo, (Chairman),
Vitug, Panganiban, and Purisima, JJ., concur.
[1] Eleventh
Division composed of the ponente J. Ruben T. Reyes and the
members: J. Quirino D. Abad
Santos, Jr. (Chairman) and J. Hilarion L. Aquino concurring.
[2] The
case was consolidated with CA G.R. SP No.
42711, a Petition for Certiorari filed by herein respondents,
which was dismissed by the Court of Appeals for being filed out of time.
[3] Decision
of the Court of Appeals dated January 30, 1998, pp. 3-5; Rollo, 33-35.
[4] Rollo,
57-68.
[5] Resolution
of the Voluntary Arbitrator dated August 3, 1996, p. 10; Rollo, 66.
[6] Rollo,
69-70.
[7] Decision
of the Court of Appeals dated January 30, 1998, p. 21; Rollo, 51.
[8] Resolution
of the Court of Appeals dated January 29, 1999; Rollo, 19-25.
[9] Rollo,
25.
[10] Resolution of the Court
of Appeals dated October 1, 1999; Rollo, 28-29.
[11] Petitioners’ Memorandum,
5; Rollo, 167.
[12] Memorandum of Petitioners. pp. 5, 8, 9 and 10; Rollo,
pp. 167, 170, 171 and 172.
[13] Art.
279. – Security of Tenure. – In case of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee
who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges, and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of
his actual reinstatement.
[14] Rollo,
159.
[15] Both
petitioners and respondent have executed the decision of the Court of Appeals
and the voluntary arbitrator insofar as backwages for the wage distortion is
concerned. The issue presented on
backwages in this present petition refers to backwages due in the event of a
finding of illegal dismissal. See
Petitioners’ Memorandum; Rollo, 167.
[16] Serrano
National Labor Relations Commission, G.R. No. 117040, January 27, 2000, 23;
Garcia vs. National Labor Relations Commission, G.R. No. 116568,
September 3, 1999, 13.
[17] Resolution
of the Court of Appeals dated January 29, 1999, pp. 5-6; Rollo; 23-24.
[18] 186
SCRA 724 [1990].
[19] Ibid,
730.
[20] Ibid.
[21] Labor
Congress of the Philippines vs. NLRC, 292 SCRA 469, 477 [1998].
[22] Talla
vs. National Labor Relations Commission, 175 SCRA 479, 480-481 [1989].
[23] Labor
Congress of the Philippines vs. NLRC, Supra.
[24] Rollo,
56.
[25] Decision
of the Court of Appeals dated January 30, 1998 at p. 18; Rollo, 48.
[26] Resolution
of the voluntary arbitrator, 8; Rollo, 64.
[27] Decision
of the Court of Appeals dated January 30, 1998 at p. 19-20; Rollo,
49-50.
[28] 272
SCRA 172 [1997] – In said case, the Supreme Court ruled that the act of
Trendline Department Store in leading its employees to believe that it was
suffering business losses was an act of bad faith and that there was no valid
retrenchment warranting the dismissal of the employees of Trendline.
[29] Ibid,
181.
[30] Article
1331, Civil Code.
[31] Article
1338, Civil Code.
[32] 254
SCRA 111 [1996].
[33] Ibid,
114.
[34] See
note 16.
[35] Ibid.
[36] Lopez Sugar Corporation vs. Federation of Free
Workers, 189 SCRA 179, 193 [1990].