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Ruga vs NLRC and DE GUZMAN Fishing Enterprises

G.R. No. L-72654-61


22 January 1990
Facts: Petitioners were the fishermen-crew members of 7/B Sandyman II, owned and
operated by private respondent De Guzman Fishing Enterprises which is primarily
engaged in the fishing business. They were paid in percentage commission basis in
cash by the cashier of private respondent, 13% of the proceeds of the sale of the
fish-catch if the total proceeds exceeded the cost of crude oil consumed during the
fishing trip, otherwise, 10% of the total proceeds of the sale. After some time, they
were dismissed alleging that they sold some of their fish-catch at midsea to the
prejudice of private respondent. Consequently, they filed illegal dismissal case to
the DOLE Arbitration Branch. De Guzman said that there was no employer-employee
relationship between them; rather it was a joint venture. After the parties failed to
reach an amicable settlement, the Labor Arbiter heard the case and dismissed the
cases filed by the petitioners on finding that it was really a joint venture. NLRC
affirmed.
Issue: a.) Whether or not there is an employee-employer relationship that exist; b.)
and that the decision of the Labor Arbiter is now final and executory for failure to
file their appeal within 10 calendar days from the receipt of the decision.
Held: a.) Yes. From the four (4) elements of employer-employee relationship, the
Court has generally relied on the so-called right-of-control test where the person for
whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end. According to the
testimony of Alipio Ruga, they are under the control and supervision of private
respondent's operations manager. Matters dealing on the fixing of the schedule of
the fishing trip and the time to return to the fishing port were shown to be the
prerogative of private respondent. While performing the fishing operations,
petitioners received instructions via a single-side band radio from private
respondent's operations manager who called the patron/pilot in the morning.
b.) Fundamental considerations of substantial justice persuade us to decide
the instant case on the merits rather than to dismiss it on a mere technicality. In so
doing, we exercise the prerogative accorded to this Court enunciated in Firestone
Filipinas Employees Association, et al. vs. Firestone Tire and Rubber Co. of the
Philippines, Inc., 61 SCRA 340 (1974), thus "the well-settled doctrine is that in labor
cases before this Tribunal, no undue sympathy is to be accorded to any claim of a
procedural misstep, the idea being that its power be exercised according to justice
and equity and substantial merits of the controversy."

Loyola Security and Detective Agency vs. NLRC


G.R. No. 113287
May 9, 1995
Facts: Private respondents Victor Prado, Sr. and Matilde Tuscano filed a complaint
against petitioners, the Loyola Security and Detective Agency and the latter's
general manager, Ruperto Acle, Jr., for illegal dismissal, illegal deduction
underpayment of wages, non-payment of overtime pay, legal holiday pay, premium
pay for holiday and rest day, and violation of P.D. No. 851. The Labor Arbiter ruled in
favor of private respondents and ordered an amount of P91,317.93 for both,
exclusive of attorney's fees. On appeal, the NLRC affirmed the decision of the Labor
Arbiter. Private respondents then filed a Motion for Issuance of a Writ of Execution.
However, they later filed a Joint Manifestation acknowledging complete satisfaction
of the award. Then, private respondents again filed a Motion for the Issuance of an
Alias Writ of Execution for the recovery of the balance of the award, claiming that
they received less than the award of the Labor Arbiter. The motion was granted.
Petitioners' motion for reconsideration was denied.
Issue: Whether or not the NLRC committed grave abused of discretion granting the
Alias Writ of Execution, notwithstanding the compromise settlement between the
parties.
Held:
No. It is petitioners' belief that the acts of Prado in entering into a
compromise agreement and in accepting an advance of P5,000.00 from petitioner
Acle constituted a novation of the award adjudged by the Labor Arbiter. The Labor
Code of the Philippines does not contain any provision on compromise agreements
or quitclaims in cases pending before the Labor Arbiter and the NLRC. However, the
New Rules of Procedure of NLRC in Section 2, Rule V (Proceedings Before Labor
Arbiter) provides that a compromise agreement shall also be signed by the counsel
before the Labor Arbiter and in the absence of the latter, he shall approve it if he is
satisfied. In the case at bar, the satisfaction of judgment dated October 19, 1990
was executed by the complainants without the assistance of their counsel and
without the approval of the Labor Arbiter (Sec. 2, Rule V The New Rules of NLRC).
There is also a great disparity with regards (sic) to the monetary award. Also,
respondent Prado executed the compromise agreement not only on his own behalf
but on behalf of respondent Tuscano. There is, however, no showing that respondent
Prado was duly authorized by respondent Tuscano to waive a part of the award
given her. This is not in accord with Article 1878 of the Civil Code of the Philippines
where a special power of attorney is necessary in novation, compromise, etc.
We find no grave abuse of discretion committed by NLRC inasmuch as its decision is
supported by the records of the case. Thus, we adopt the findings of NLRC to the
effect that the settlement entered into by the parties was without the assistance of
counsel or approval of the Labor Arbiter. Furthermore, the amount agreed upon as
settlement is a far cry from that awarded by the Labor Arbiter.

Galicia et al vs NLRC
G.R. No. 119649
July 28, 1997
Facts: Ninety-five workers, including the twenty-five petitioners herein, were
assisted by a labor federation, the National Organization of Workingmen (NOWM) in
their suit against respondent companies for illegal dismissal, regularization,
underpayment of wages, holiday pay, premium pay etc. After several complainants
withdrew from the case, Labor Arbiter Ernesto S. Dinopol rendered his decision
declaring the thirty remaining complainants as regular employees of Keng Hua
Paper Products, Globe Paper Mills and Armor Industrial Corporation and ordering
their reinstatement. Respondent companies were ordered to pay backwages from
February 15, 1991 up to the date of actual reinstatement, in the total amount of
P3,223,261.00, with P107,380.00 for each complainant. Respondent companies
appealed the case to the NLRC. Compromise Agreement was executed by James Yu,
the Manager and Vice President of Globe Paper Mills and Teofilo Rafols, the National
President of NOWM representing the complainants. The agreement settled the case
for and in consideration of the total sum of P300,000.00. The next day, each of the
complainants signed a Quitclaim and Release which confirmed the compromise
agreement as well as receipt of their individual share amounting to P12,000.00
each. Private respondents submitted the Compromise Agreement and Joint Motion
to Dismiss before the respondent Commission which was then considering the case
on appeal from the decision of the Labor Arbiter. Herein petitioners later filed an
Opposition to the Motion to Dismiss where they demanded the difference of what
they actually received and the judgment award in their favor. The Commission
approved the Compromise Agreement, setting aside the decision of the Labor
Arbiter and dismissing the instant case. Motion for reconsideration was denied.
Issue: Whether or not a compromise agreement accepted due to dire necessity is
valid and binding considering the amount accepted was considerably low compared
to the award of the Labor Arbiter.
Held: Untenable. Considering that the amount accepted by petitioners herein was
very much less than the amount awarded by the Labor Arbiter for the quitclaim, a
measly P12,000.00 per worker and the total sum of P300,000, are inordinately low
and exceedingly unreasonable relative to the P107,380.00 per worker and total
P3,223,261.00 awarded by the Arbiter. Palpably inequitable, the quitclaim cannot
be considered an obstacle to the pursuit of their legitimate claims. Petitioners never
accepted as full compensation the meager amount they received when they signed
the quitclaim and release. In the Sinumpaang Salaysay they executed the next day,
they expressly declared their awareness that the amount they received was unjust

and insufficient to answer for their just claims and the award given by the Labor
Arbiter, but due to destitution caused by their protracted unemployment, they
decided to accept the P12,000.00 in the meantime. The Court also recognizes dire
necessity of laborers as ample justification to accept even insufficient sums of
money from their employers. We are not unaware that in some cases, such as
Olaybar v. NLRC, this ground was deemed unacceptable in refuting the agreement
in question. The main difference, however, lies in the existence of a voluntary
acceptance of the agreement and the reasonable consideration for it, making the
agreement intrinsically valid and binding, thus rendering the dire necessity
excuse immaterial and irrelevant.
Worth noting is the Solicitor Generals opinion in favor of granting the
petition. The OSG concluded that while petitioners may not have been tricked
into accepting the P12,000.00, to repeat, the undisputed and concurrent
circumstances of dire necessity and unconscionability obtaining in the case at bar
constitute more than sufficient ground to invalidate the compromise agreement.
Golden Donuts, Inc vs. NLRC
G.R. Nos. 113666-68
January 19, 2000
Facts: Complainants were members of the Kapisanan ng Manggagawa sa Dunkin
Donut-CFW (KMDD-CFW) whose CBS with the corporation expired. During the
freedom period, both panels were able to agree on the rules regarding the
negotiation, including the time, date and number of days the panels had to meet.
The management panel arrived late, thus prompting the union panel to walkout.
Despite the management request for a renegotiation the KMDD-CFW declared a
deadlock and strike. The counsel of the union and strikers, sensing the gravity of
penalties due to damages incurred during the strike, pleaded for a compromise.
Agreement was entered into by the KMDD-CFW and Golden Donuts, Inc.
withdrawing/dismissing with prejudice any and all cases, whether criminal, civil or
labor filed against each other and agree to execute affidavit of desistance and/or
Motion to Dismiss to ensure the dismissal of these cases. And upon execution of this
Agreement, the parties undertake not to file any other charges/complaints against
each other as this act constitutes a general waiver or release/quitclaim. Out of the
said 262 striking force, only the five (5) complainants disagreed and did not receive
the amount due, arguing that the compromise agreement was entered into by their
counsel and the President of the Union without their individual consent and/or
authority and that the same was not approved nor ratified by the majority of the
union membership.
Issue: Whether or not a compromise agreement entered into by the majority
member is binding to the minority even if it was entered without the consent nor
authority by the latter and it has the effect of res judicata upon them.
Held: Untenable. Even if a clear majority of the union members agreed to a
settlement with the employer, the union has no authority to compromise the
individual claims of members who did not consent to such settlement. Absent a
showing of the union's special authority to compromise the individual claims of
private respondents for reinstatement and back wages, there is no valid waiver of

the aforesaid rights and they are not bound by the terms thereof. Moreover union
members who did not consent to a compromise agreement are not bound by the
majority decision approving a compromise settlement. The judgment of the Labor
Arbiter based on the compromise agreement in question does not have the effect of
res judicata upon private respondents who did not agree thereto. "A compromise,
once approved by final orders of the court has the force of res judicata between the
parties and should not be disturbed except for vices of consent or forgery."A
compromise is basically a contract perfected by mere consent. "Consent is
manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract." A compromise agreement is not valid
when a party in the case has not signed the same or when someone signs for and in
behalf of such party without authority to do so. Private respondents were not parties
to the compromise agreement. Hence, the judgment approving such agreement
cannot have the effect of res judicata upon them since the requirement of identity
of parties is not satisfied. A judgment upon a compromise agreement has all the
force and effect of any other judgment, hence conclusive only upon parties thereto
and their privies.

Magbanua et. al. vs. Uy


G.R. No. 161003
May 6, 2005
Facts: As a final consequence of the final and executory decision of the SC in
Rizalino P. Uy v. NLRC, et. al., the wage differentials determined that are due to the
8 complainants amounted to P1,487,312.69. A Motion for Issuance of Writ of
Execution was filed. Then, Uy filed a Manifestation signed by the 8 petitioners
requesting that the cases be terminated and closed, stating that the judgment
award as computed had been complied with to the satisfaction of petitioners
together with a Joint Affidavit attesting to the receipt of payment from respondent
and waiving all other benefits due them in connection with their complaint. Months
later, petitioners filed an Urgent Motion for Issuance of Writ of Execution wherein
they confirmed that each of them received P40,000 from respondent. Respondent
opposed the motion on the ground that the judgment award had been fully
satisfied. Petitioners replied that they received only partial payments of the
judgment award. 6 of the 8 petitioners filed a Manifestation requesting that the
cases be considered closed and terminated as they are already satisfied of what
they have received (a total of P320,000) from respondent and attesting that they
have no more collectible amount from respondent and if there is any, they are
abandoning and waiving the same. The Labor Arbiter denied the motion for
issuance of writ of execution and considered the cases closed and terminated. On
appeal, the NLRC reversed the Labor Arbiter and directed the immediate issuance of
a writ of execution, holding that a final and executory judgment can no longer be
altered and that quitclaims and releases are normally frowned upon as contrary to
public policy.

Issue: Whether or not final judgement rendered by the Supreme Court could not be
a subject to compromise agreement and quitclaims/waivers executed without
assistance of counsel nor Labor arbiter is valid.
Held: Tenable. A compromise agreement that covered cases pending trial, on
appeal, and with final judgment is upheld. The Court noted that Article 2040
impliedly allowed such agreements; there was no limitation as to when these should
be entered into. Palanca v. Court of Industrial Relations sustained a compromise
agreement, notwithstanding a final judgment in which only the amount of back
wages was left to be determined. The Court found no evidence of fraud or of any
showing that the agreement was contrary to law, morals, good customs, public
order, or public policy.Gatchalian v. Arlegui upheld the right to compromise prior to
the execution of a final judgment. The Court ruled that the final judgment had been
novated and superseded by a compromise agreement. Also, Northern Lines, Inc. v.
Court of Tax Appeals recognized the right to compromise final and executory
judgments, as long as such right was exercised by the proper party litigants.
Moreover, the presence or the absence of counsel when a waiver is executed does
not determine its validity. There is no law requiring the presence of a counsel to
validate a waiver. The test is whether it was executed voluntarily, freely and
intelligently; and whether the consideration for it was credible and reasonable.
Where there is clear proof that a waiver was wangled from an unsuspecting or a
gullible person, the law must step in to annul such transaction. In the present case,
petitioners failed to present any evidence to show that their consent had been
vitiated.

Mindoro Lumber and Hardware vs. Bacay et. al


G.R. No. 158753
June 8, 2005

Facts: The private respondents are employees of petitioner, they filed a complaint
through then union president Bacay, against Mindoro Lumber before the Region IV
Office of the Department of Labor and Employment (DOLE) for non-payment of
overtime pay, legal holiday pay, 13th month pay, non-payment/underpayment of
minimum wage and allowances. It was thereafter determined that Mindoro Lumber
committed several violations, to wit: The private respondents executed a Samasamang Salaysay sa Pag-uurong ng Sakdal (Joint Affidavit of Withdrawal of
Complaint), declaring therein that by virtue of the amount each of them received
(which amount was either P3,000.00 or P6,000.00 per employee), they were
withdrawing their claim against Mindoro Lumber. Their counsel then filed a motion
to dismiss. The private respondents said that Bacay persuaded them to execute the
JAWC. They were then withdrawing the said JAWC for the amount was grossly
disproportionate to their entitlement under the law, and were authorizing Lanot, the
new president, to pursue their claim. Lanot then filed a motion before the DOLE-RO,
praying that the employees be paid the amounts due to each of them, and that the

said JAWC be declared null and void. The RD dismissed the case while the DOLE-Sec
granted it and remanded the case to the DOLE-RO which issued writ of execution.
ISSUES:
(a) whether or not the Sama-samang Salaysay sa Pag-uurong ng
Sakdal constitutes a valid compromise agreement as defined under Article 227 of the
Labor Code of the Philippines, as amended; and (b) whether or not the acknowledgment
of the respondents that they each received the amount of either P3,000.00 or P6,000.00
embodied in the said Salaysay constitutes a valid quitclaim.
Held: a. No. The petitioner points out that while the Sama-samang Salaysay sa Paguurong ng Sakdal was executed without the assistance of the Bureau of Labor
Relations (BLR) or the DOLE Regional Office, the November 4, 1999 Order of the
Regional Director, nonetheless shows that when Eduardo Bacay appeared before
the said office, he was assisted by counsel. The assistance of the BLR or the
regional office of the DOLE in the execution of a compromise settlement is a basic
requirement; without it, there can be no valid compromise settlement. In this case,
the petitioner admits that the purported compromise settlement was executed by
the private respondents without such required assistance. The closest form of
assistance adverted to by the petitioner in this case was that of Bacays counsel
when the latter appeared before the Office of the Regional Director to file the
following: the Sama-samang Salaysay sa Pag-uurong ng Sakdal executed by the
private respondents; a Sinumpaang Salaysay executed by Bacay withdrawing the
complaint; and the Motion to Dismiss. Such assistance, however, is not the
"assistance" required by Article 227. As such, the Sama-samang Salaysay sa Paguurong ng Sakdal executed by the respondents cannot qualify as a valid
compromise settlement.
2.) No. The petitioner is correct in saying that there are legitimate waivers that
represent a voluntary and reasonable settlement of a workers claim which should
be respected by the courts as the law between the parties. Indeed, not all
quitclaims are per se invalid or against public policy, except (1)where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person, or (2)
where the terms of settlement are unconscionable on their faces; in these cases,
the law will step in to annul the questionable transactions. Such quitclaims are
regarded as ineffective to bar the workers from claiming the full measure of their
legal rights. In the case at bar,the private respondents individual claims, ranging
from P6,744.20 to P242,626.90, are grossly disproportionate to what each of them
actually received under the Sama-samang Salaysay sa Pag-uurong ng Sakdal. The
amount of the settlement is indubitably unconscionable; hence, ineffective to bar
the workers from claiming the full measure of their legal rights.
EDI-Staffbuilders International, Inc. (EDI) vs NLRC
G.R. No. 145587
October 26, 2007
Facts: Petitioner EDI is a corporation engaged in recruitment and placement of
OFWs. Private respondent Gran was an OFW recruited by EDI, and deployed by ESI
to work for OAB, in Riyadh, Kingdom of Saudi Arabia. After being terminated by
OAB, Gran received from OAB the total amount of SR 2,948.00 representing his final
pay, and on the same day, he executed a Declaration releasing OAB from any
financial obligation or otherwise, towards him. Upon arrival in the Philippines, he

instituted a complaint and the Labor Arbiter ruled that the dismissal was valid.
Respondents ESI-EDI Staffbuilders Int'l., Inc. and OAB are ordered jointly and
severally liable by the NLRC to pay the complainant Eleazar Gran US$16,150.00r
representing his salaries for the unexpired portion of his contract.
Issue: Whether or not the waiver and quitclaim executed a valid Declaration, thus
barred the respondent from claiming for backwages.
Held: Untenable. The Court finds the waiver and quitclaim null and void for the
following reasons First, the salary paid to Gran upon his termination, in the amount
of SR 2,948.00, is unreasonably low which is lower than his monthly salary.
Secondly, The Declaration reveals that the payment of SR 2,948.00 is actually the
payment for Gran's salary for the services he rendered to OAB as Computer
Specialist. Third, The factual circumstances surrounding the execution of the
Declaration would show that Gran did not voluntarily and freely execute the
document. He was just forced as he was told to leave the country and he needed
the money. Fourth, the Declaration is a contract of adhesion which should be
construed against the employer, OAB. An adhesion contract is contrary to public
policy as it leaves the weaker partythe employeein a "take-it-or-leave-it"
situation. Certainly, the employer is being unjust to the employee as there is no
meaningful choice on the part of the employee while the terms are unreasonably
favorable to the employer.
Also, the Declaration purporting to be a quitclaim and waiver is
unenforceable under Philippine laws in the absence of proof of the applicable law of
Saudi Arabia. In the absence of proof of the laws of the foreign country agreed upon
to govern said contracts, It is advisable that the stipulations be made in English and
Tagalog or in the dialect known to the employee. There should be two (2) witnesses
to the execution of the quitclaim who must also sign the quitclaim. The document
should be subscribed and sworn to under oath preferably before any administering
official of the Department of Labor and Employment or its regional office, the
Bureau of Labor Relations, the NLRC or a labor attach in a foreign country.

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