G.R. No. 102845 . February 4, 1994.
LOADSTAR SHIPPING CO., INC., petitioner, vs. GERARDO H. GALLO, ARNALDO GRIJALDO, RUBEN L. ANGELES, ARNOLD F. BARAQUIN, PASTOR CALCITA, ROGELIO PADOL and THE NATIONAL LABOR RELATIONS COMMISSION, respondents.

FACTS

Private respondents were employees of petitioner Loadstar Shipping Co., Inc., assigned to a vessel permanently moored due to its unseaworthy condition. In May 1987, petitioner called private respondents to its office to settle monetary obligations. Private respondents received payments and executed individual Release and Quitclaim documents along with disembarkation orders and inventories. In July 1987, private respondents filed a complaint for illegal dismissal, underpayment of wages, and non-payment of overtime pay, thirteenth-month pay, and allowances. They claimed they were called to receive unpaid sick and vacation leave pay, were forced to sign folded documents under threat of taking back the money, and later discovered they were dismissed due to the quitclaims. Petitioner countered that the separation was lawful due to the vessel’s unserviceable condition and that all monetary benefits, evidenced by the quitclaims, had been paid. The Labor Arbiter ruled that private respondents were not illegally dismissed but were separated due to the vessel’s condition, ordering petitioner to pay separation pay and service incentive leave pay, minus amounts already received under the quitclaims. The NLRC initially affirmed this decision on November 17, 1989. Private respondents filed a motion for reconsideration, but petitioner was not furnished a copy. The NLRC gave due course to the motion and issued an Order on September 24, 1991, setting aside its earlier resolution and modifying the Labor Arbiter’s decision by disallowing deductions of amounts already received by private respondents. Petitioner discovered this order only later and filed a petition for certiorari.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in issuing its Order dated September 24, 1991, which modified the Labor Arbiter’s decision by disallowing deductions of amounts received by private respondents under their Release and Quitclaim documents.

RULING

Yes, the Supreme Court granted the petition for certiorari. The Court ruled that the NLRC committed grave abuse of discretion in its September 24, 1991 Order. The Court found that the quitclaim documents were voluntarily executed and constituted a valid settlement, as the amounts received were substantial and there was no clear evidence of fraud or deceit. The NLRC’s factual findings in the assailed order were unsupported by substantial evidence and whimsically disregarded the evidence, including its own prior affirmation of the Labor Arbiter’s decision which recognized the validity of the deductions. Furthermore, the NLRC gave due course to the motion for reconsideration despite the absence of proof of service on petitioner, violating its own procedural rules. The Court reinstated the Labor Arbiter’s decision dated September 22, 1988, as affirmed by the NLRC resolution of November 17, 1989, which ordered payment of separation pay and service incentive leave pay minus the amounts already received under the quitclaims. The Temporary Restraining Order was made permanent.