G.R. No. 102570 February 1, 1993
ST. GOTHARD DISCO PUB & RESTAURANT, ROLAND WERRO AND EMILY WERRO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, IZRA MATULAC, HELIODORO JUDILLA, CRISPIN HERNANDEZ, RICARDO ELINON, RAMON BASILLA, PAULINE MAGLUCOT, ZOSIMO QUEQUE, ELENA BERAME, MAXIMA DIZON, LUZVIMINDA MONTERON, MAULITO TALON, GINA POLOYAPOY, MARCELINO CAGAS, CHARLOTTE DAVID, REYNALDO VIVERO, ULDARICO LAHOPIAS, JUDITH RACAZA, LOURDES MORALES, MA. ELENA PALAR-PELAR, PERLA GONZALES, WARLITO MATULAC, REBECCA AGTOTO, ERNESTO NOVILLA, CHONA LAUGO, GEMMA DORIS BAGUIO, GENARA TIANO, IRENEO NERI, AIDA LARGO, respondents.

FACTS

Petitioner St. Gothard Disco Pub & Restaurant, a single proprietorship owned and managed by spouses Roland and Emily Werro, ceased operations after typhoon “RUFING” damaged its building in Cebu City on November 13, 1990, cutting off electrical and water supply. The lease was eventually terminated due to accumulated unpaid rentals. Twenty-eight employees filed claims for separation pay and 13th month pay. On April 29, 1991, Labor Arbiter Gabino A. Velasquez, Jr. awarded a total of P234,758.93 to the claimants. The Werros appealed to the NLRC but failed to post the required cash or surety bond equivalent to the monetary award. The NLRC dismissed their appeal on July 15, 1991, for non-perfection of the appeal due to the absence of the bond. The NLRC denied their motion for reconsideration. The petitioners filed a petition for certiorari with the Supreme Court, which was initially dismissed for procedural deficiencies but later reinstated. Meanwhile, the NLRC issued an Entry of Judgment and granted the employees’ motion for execution. The petitioners submitted to the Supreme Court copies of quitclaims and release documents signed by most of the private respondents, purportedly settling their claims for lesser amounts.

ISSUE

1. Whether the NLRC correctly dismissed the petitioners’ appeal for failure to post the required appeal bond.
2. Whether the quitclaims executed by the private respondents are valid and constitute a bar to the enforcement of the Labor Arbiter’s decision.

RULING

1. Yes, the NLRC correctly dismissed the appeal. The posting of a cash or surety bond equivalent to the monetary award in the judgment appealed from is a mandatory requirement for the perfection of an employer’s appeal under Article 223 of the Labor Code and Rule VI of the New Rules of Procedure of the NLRC. The petitioners’ excuse that they misunderstood the rules and expected the Labor Arbiter to notify them of the bond amount is untenable, as the law and the notice attached to the decision clearly stated the requirement.
2. No, the quitclaims are not valid compromises. While the Labor Code encourages amicable settlements, the implementing rules require that such settlements be approved by the Labor Arbiter before whom the case is pending, after ensuring they were voluntarily entered into and explaining the terms and consequences. The submitted quitclaims were executed before Labor Arbiters who had no participation in the case, and thus were not validly approved. Furthermore, quitclaims executed by employees who are driven by economic necessity are often against public policy and do not constitute a waiver of rights. However, to prevent unjust enrichment, the amounts already received by the private respondents under these quitclaims should be deducted from the amounts due them under the NLRC decision.
The Supreme Court DISMISSED the petition for certiorari but ordered the recomputation of the awards to the private respondents, deducting the payments they received under the quitclaims.