G.R. No. 113658 March 31, 1995
PABLO A. COYOCA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and SEAFARERS SHIPPING, INC., respondents.

FACTS

Petitioner Pablo A. Coyoca started working for private respondent Seafarers Shipping, Inc. in 1974. His last contract was for ten months, effective October 17, 1989, as First Engineer on board the M/V Ficus. On February 14, 1990, he was discharged due to an illness (a stroke) contracted while on board. On March 13, 1990, he received P42,315.00 for medical/disability benefits and signed a “Receipt and Release” document discharging the private respondent from all claims connected with the illness. Petitioner subsequently filed a complaint with the POEA for separation pay under Article 284 and incentive pay under Article 95 of the Labor Code. The POEA dismissed the complaint, citing the Receipt and Release. The NLRC affirmed the POEA’s decision.

ISSUE

Whether the petitioner is entitled to separation pay and incentive pay despite having signed a Receipt and Release upon receiving disability benefits.

RULING

The Supreme Court dismissed the petition for lack of merit. The Court held:
1. The petitioner was not illegally dismissed; he was discharged due to a medically established illness (stroke) resulting in permanent partial disability.
2. The “Receipt and Release” document was a valid general release, clearly worded to discharge all liabilities and claims related to the illness. In the absence of proof of vitiated consent or unconscionable consideration, the petitioner is bound by its terms. His subsequent letter affirmed his understanding and agreement to the final settlement.
3. The petitioner’s employment contract and the governing POEA rules did not provide for separation benefits. The contract provided for compensation for permanent partial disability, which was paid.
4. The petitioner’s claim of being a regular employee entitled to Labor Code benefits is unmeritorious. The cited case (Worth Shipping) is distinguishable, as the private respondent here was merely a recruitment agency without operational control over the vessel. While a recruitment agency can be solidarily liable for unpaid wages or benefits from the foreign principal, the principal here did not fail to pay. The contested separation pay is an additional claim beyond the disability benefits already settled under the contract and the Release.