G.R. No. 158753; June 8, 2005
Mindoro Lumber and Hardware, Petitioner, vs. Eduardo D. Bacay, et al., Respondents.

FACTS

The respondents, employees of petitioner Mindoro Lumber and Hardware, filed a complaint with the DOLE for various monetary claims, including underpayment of wages and non-payment of holiday and overtime pay. Following a DOLE inspection that confirmed violations, the employees executed individual affidavits detailing their claims, which ranged from ₱6,744.20 to ₱242,626.90 per person. Subsequently, on September 2, 1998, they executed a “Sama-samang Salaysay sa Pag-uurong ng Sakdal” (Joint Affidavit of Withdrawal), stating they were withdrawing their complaint after each received either ₱3,000 or ₱6,000 from the company. Their counsel then filed a motion to dismiss the case.
Later, the employees, with a new union president, executed another joint affidavit in June 1999. They alleged that their former president, Eduardo Bacay, who had already resigned and settled his own case, persuaded them to sign the withdrawal affidavit. They claimed the amounts received were grossly disproportionate to their lawful entitlements. They sought to withdraw the earlier affidavit of withdrawal and authorized their new president to pursue their claims. The DOLE Regional Director dismissed the case, upholding the validity of the withdrawal affidavit. The employees appealed to the Secretary of Labor.

ISSUE

Whether the “Sama-samang Salaysay sa Pag-uurong ng Sakdal” (quitclaim) is valid and binding upon the employee-respondents, thereby barring them from pursuing their monetary claims.

RULING

The Supreme Court ruled the quitclaim is invalid and does not bar the claims. The Court affirmed the Secretary of Labor’s finding that the amounts received by the employees (₱3,000 or ₱6,000 each) were grossly disproportionate to their computed individual claims, which ranged from ₱6,744.20 to ₱242,626.90. The legal logic is grounded in public policy and established jurisprudence that quitclaims and waivers are ineffective to bar recovery for the full measure of workers’ rights when the consideration is unconscionably low.
The Court emphasized that for a compromise or waiver to be valid, it must not be contrary to law, morals, good customs, public order, or public policy. A waiver is void when the settlement amount is far less than the amount legally due, as it suggests exploitation or a lack of voluntary consent due to dire necessity. The glaring disparity between the paltry sums received and the substantial lawful entitlements rendered the quitclaim unconscionable. Consequently, the employees are not estopped from claiming their full benefits. The case was remanded to the DOLE Regional Office for appropriate proceedings to compute and award the valid claims, subject to deduction of the amounts already received.