November 2009 - Philippine Supreme Court Resolutions
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[G.R. No. 185310 : November 23, 2009] ULTRA SECURITY SERVICES , PETITIONER, V. JERRY T. SUNGCANG, RESPONDENT. :
[G.R. No. 185310 : November 23, 2009]
ULTRA SECURITY SERVICES , PETITIONER, V. JERRY T. SUNGCANG, RESPONDENT.
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 23 November 2009:
G.R. No. 185310 - ULTRA SECURITY SERVICES, petitioner,v. JERRY T. SUNGCANG, respondent.
This case originated from the illegal dismissal case respondent Jerry T. Sungcang (respondent) filed against petitioner Ultra Security Services (petitioner); the respondent claimed that he had been constructively dismissed. The labor arbiter found the complaint unmeritorious and, on this basis, dismissed the case. On appeal, the National Labor Relations Commission (NLRC) reversed the labor arbiter's ruling, prompting the petitioner to elevate the case to the Court of Appeals (CA) on a Rule 65 petition for certiorari. The CA found no grave abuse of discretion and thereby effectively affirmed the NLRC's ruling.[1] The petitioner then appealed to this Court through the present Rule 45 petition, filed on December 23, 2008 and docketed as G.R. No. 185310.
While the case was pending, the parties entered into a compromise agreement dated March 24, 2009.[2] Under this agreement, the respondent received from the petitioner the amount of P170,000.00 as settlement, in consideration of which he signed a quitclaim and release deed bearing the same date.[3] The NLRC approved the compromise agreement on April 3, 2009.[4] Based on this settlement, the petitioner filed a motion to withdraw his Rule 45 appeal with us.[5]
The respondent's counsel [6] objects to the withdrawal of the petition, primarily on the ground that the respondent agreed to sign the compromise agreement without proper legal advice and without having been sufficiently informed of its contents. Counsel also belittles the NLRC intervention, stating that it no longer had jurisdiction over the case.[7]
We see no merit in the objection the respondent's counsel posed.
As a matter of policy, the law encourages amicable settlement as a mode of resolving disputes.[8] However, because of the usually uneven bargaining power between labor and management, it looks with a critical eye on releases and quitclaims entered into in the labor setting where the complaining employee, upon payment of a certain sum, signs a release and quitclaim in the employer's favor, thereby putting an end to the dispute. In fact, the matter of compromise agreements is specifically provided for under the Labor Code whose Article 227 provides:
In looking at compromise agreements, the Court has focused on two of the agreements' contractual elements, namely - the consideration for the agreement, and the element of consent. In many instances, we consider the interplay between these two aspects of the instrument and the impact of one on the other.
As a rule, we have invalidated releases where the consideration has been unreasonably lower than the amounts employees are entitled to in their claims.[9] On the matter of consent, we have frowned upon agreements where the workers involved are rank-and-file workers whose consent may be impaired because of their level of education, experience and awareness of our labor laws, or where settlements secured by unions do not appear to be duly authorized. To minimize the occurrence of these situations, Article 227 specifies the "assistance" of the DOLE, not as an added requirement for the validity of compromise agreements, but to ensure that workers are protected. Thereby, the law seeks to avoid the inequitable situations that may lead to defective agreements. Following the rule on contracts, a compromise agreement is valid and binding on the parties where the agreement was voluntarily entered into and represents a reasonable settlement of the parties' dispute. In the labor setting, courts only step in upon proof that one of the parties, usually the worker, is disadvantaged by his or her inability to fully understand the settlement and its consequences, or where the terms of settlement are facially unconscionable.[10]
We find, in this case, sufficient indicators pointing to the validity of the compromise agreement, although it was apparently made without the participation of the respondent's counsel.
Our examination of the two-page compromise agreement shows that it was couched in plain and simple language easily understandable by the respondent - a former Operations Department supervisor who worked in the petitioner's security agency. The respondent does not appear to us to be an uneducated and gullible individual whom petitioner could easily persuade to enter into a one-sided agreement. Before conflicts and suspicions marred the respondent's relations with the petitioner, the respondent consistently received very satisfactory performance ratings that resulted in several promotions. Our ruling in Habana v. NLRC [11] is particularly apt and applicable:
From these, we can reasonably infer that the respondent voluntarily and knowingly executed the release and quitclaim with full understanding of its terms and consequences, specifically, the sufficiency of the consideration and the full settlement of his claim against the petitioner. We also find that neither he nor his counsel can now plead lack of legal advice as the NLRC was precisely there to "assist" the parties as Article 227 of the Labor Code mandates. While not necessary as the case is already before this Court, the signing of the agreement before the NLRC nevertheless adds weight and credibility to the parties' consent and to the fairness of the resulting settlement.
WHEREFORE, premises considered, we GRANT petitioner Ultra Security Services' motion to withdraw its petition for review on certiorari, docketed as G.R. No. 185310. The compromise agreement, by itself a binding contract between the parties, now prevails in the adjustment and enforcement of the parties' claims in the present case.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Teresita Leonardo-De Castro (designated additional member per S.O. No. 776), Arturo D. Brion, Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 23rd day of November, 2009.
G.R. No. 185310 - ULTRA SECURITY SERVICES, petitioner,v. JERRY T. SUNGCANG, respondent.
This case originated from the illegal dismissal case respondent Jerry T. Sungcang (respondent) filed against petitioner Ultra Security Services (petitioner); the respondent claimed that he had been constructively dismissed. The labor arbiter found the complaint unmeritorious and, on this basis, dismissed the case. On appeal, the National Labor Relations Commission (NLRC) reversed the labor arbiter's ruling, prompting the petitioner to elevate the case to the Court of Appeals (CA) on a Rule 65 petition for certiorari. The CA found no grave abuse of discretion and thereby effectively affirmed the NLRC's ruling.[1] The petitioner then appealed to this Court through the present Rule 45 petition, filed on December 23, 2008 and docketed as G.R. No. 185310.
While the case was pending, the parties entered into a compromise agreement dated March 24, 2009.[2] Under this agreement, the respondent received from the petitioner the amount of P170,000.00 as settlement, in consideration of which he signed a quitclaim and release deed bearing the same date.[3] The NLRC approved the compromise agreement on April 3, 2009.[4] Based on this settlement, the petitioner filed a motion to withdraw his Rule 45 appeal with us.[5]
The respondent's counsel [6] objects to the withdrawal of the petition, primarily on the ground that the respondent agreed to sign the compromise agreement without proper legal advice and without having been sufficiently informed of its contents. Counsel also belittles the NLRC intervention, stating that it no longer had jurisdiction over the case.[7]
We see no merit in the objection the respondent's counsel posed.
As a matter of policy, the law encourages amicable settlement as a mode of resolving disputes.[8] However, because of the usually uneven bargaining power between labor and management, it looks with a critical eye on releases and quitclaims entered into in the labor setting where the complaining employee, upon payment of a certain sum, signs a release and quitclaim in the employer's favor, thereby putting an end to the dispute. In fact, the matter of compromise agreements is specifically provided for under the Labor Code whose Article 227 provides:
ART. 227. Compromise agreements. - Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission. or any court, shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.
In looking at compromise agreements, the Court has focused on two of the agreements' contractual elements, namely - the consideration for the agreement, and the element of consent. In many instances, we consider the interplay between these two aspects of the instrument and the impact of one on the other.
As a rule, we have invalidated releases where the consideration has been unreasonably lower than the amounts employees are entitled to in their claims.[9] On the matter of consent, we have frowned upon agreements where the workers involved are rank-and-file workers whose consent may be impaired because of their level of education, experience and awareness of our labor laws, or where settlements secured by unions do not appear to be duly authorized. To minimize the occurrence of these situations, Article 227 specifies the "assistance" of the DOLE, not as an added requirement for the validity of compromise agreements, but to ensure that workers are protected. Thereby, the law seeks to avoid the inequitable situations that may lead to defective agreements. Following the rule on contracts, a compromise agreement is valid and binding on the parties where the agreement was voluntarily entered into and represents a reasonable settlement of the parties' dispute. In the labor setting, courts only step in upon proof that one of the parties, usually the worker, is disadvantaged by his or her inability to fully understand the settlement and its consequences, or where the terms of settlement are facially unconscionable.[10]
We find, in this case, sufficient indicators pointing to the validity of the compromise agreement, although it was apparently made without the participation of the respondent's counsel.
Our examination of the two-page compromise agreement shows that it was couched in plain and simple language easily understandable by the respondent - a former Operations Department supervisor who worked in the petitioner's security agency. The respondent does not appear to us to be an uneducated and gullible individual whom petitioner could easily persuade to enter into a one-sided agreement. Before conflicts and suspicions marred the respondent's relations with the petitioner, the respondent consistently received very satisfactory performance ratings that resulted in several promotions. Our ruling in Habana v. NLRC [11] is particularly apt and applicable:
It must be emphasized as well that the petitioners are not ordinary laborers or rank-and-file personnel who may not be able to completely comprehend and realize the consequences of their acts. The petitioners are managerial employees holding responsible positions. They are educated individuals, xxx The quitclaim they executed in favor of the company amounts to a valid and binding compromise agreement.[12]
From these, we can reasonably infer that the respondent voluntarily and knowingly executed the release and quitclaim with full understanding of its terms and consequences, specifically, the sufficiency of the consideration and the full settlement of his claim against the petitioner. We also find that neither he nor his counsel can now plead lack of legal advice as the NLRC was precisely there to "assist" the parties as Article 227 of the Labor Code mandates. While not necessary as the case is already before this Court, the signing of the agreement before the NLRC nevertheless adds weight and credibility to the parties' consent and to the fairness of the resulting settlement.
WHEREFORE, premises considered, we GRANT petitioner Ultra Security Services' motion to withdraw its petition for review on certiorari, docketed as G.R. No. 185310. The compromise agreement, by itself a binding contract between the parties, now prevails in the adjustment and enforcement of the parties' claims in the present case.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Teresita Leonardo-De Castro (designated additional member per S.O. No. 776), Arturo D. Brion, Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 23rd day of November, 2009.
Very truly yours,
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
[1] Rollo, pp. 22-29.
[2] Id. at 63-64.
[3] Id. at 65.
[4] Id. at 66-67.
[5] Id. at 59-62.
[6] The Law Firm of Domingo Dizon Leonardo and Rodllas.
[7] See Manifestation, rollo, pp. 68-70.
[8] CONSTITUTION, Article XIII, Section 3; LABOR CODE, Articles 211 and 221.
[9] Fuentes v. NLRC, No. L-76835, November 24, 1988, 167 SCRA 767.
[10] See: Periquet v. NLRC, G.R. No. 91298, June 22, 1990, 186 SCRA 724.
[11] G.R.No. 121486, November 16, 1998, 298 SCRA 537, citing Samaniego v. NLRC, 198 SCRA 11 (1991).
[12] Id. at 559.
