G.R. No. 167225, October 22, 2014
Radio Mindanao Network, Inc. vs. Michael Maximo R. Amurao III

FACTS

Petitioner Radio Mindanao Network, Inc. (RMN) hired respondent Michael Maximo R. Amurao III as a radio broadcaster and production manager. On April 25, 2002, RMN’s president informed Michael and other personnel that due to a reformatting/restructuring program, their services were deemed ended effective June 15, 2002, but they would be paid separation benefits. A formal letter dated May 14, 2002, was furnished to Michael, which he initially refused to sign. Subsequently, Michael accepted RMN’s offer, executed an Affidavit of Release/Quitclaim dated May 30, 2002, and received the sum of ₱311,922.00 as consideration. The quitclaim stated that he released RMN from any and all claims incident to his employment and that he had read and thoroughly understood its terms. On October 14, 2002, Michael filed a complaint for illegal dismissal with money claims. The Labor Arbiter declared the dismissal illegal and the quitclaim void for lack of voluntariness, ordering reinstatement, backwages, and damages. The NLRC affirmed the illegality of dismissal but held the quitclaim null and void, deducting the amount received from monetary benefits and deleting the damages. The Court of Appeals denied RMN’s petition for certiorari.

ISSUE

Whether the Affidavit of Release/Quitclaim executed by the employee was valid and binding.

RULING

Yes, the quitclaim was valid and binding. The Supreme Court reversed the decisions of the lower tribunals. The Court held that not all quitclaims are invalid per se; they are invalid only where there is clear proof the waiver was wrangled from an unsuspecting or gullible person, or where the terms are unconscionable on their face. Here, the requisites for validity were satisfied: (1) Michael, a radio broadcaster and production manager in a responsible position, acknowledged in the quitclaim that he read and thoroughly understood its terms and signed it voluntarily; the language was clear and uncomplicated. (2) The settlement pay of ₱311,922.00 was credible and reasonable, and Michael did not assail it as unconscionably low. (3) The requirement to sign the quitclaim as a condition for the release of settlement pay did not prove coercion; it was a legitimate step by RMN to protect its interest after paying a substantial amount. (4) The quitclaim represented a voluntary and reasonable settlement. Since the quitclaim was freely and voluntarily signed, it released RMN from any liability. The Court dismissed the complaint for illegal dismissal.