GR 186475; (June, 2013) (Digest)
G.R. No. 186475; June 26, 2013
POSEIDON INTERNATIONAL MARITIME SERVICES, INC., Petitioner, vs. TITO R. TAMALA, FELIPE S. SAURIN, JR., ARTEMIO A. BO-OC and JOEL S. FERNANDEZ, Respondents.
FACTS
The respondents were hired by petitioner Poseidon for its principal, Van Doorn Fishing Pty, Ltd., to work on fishing vessels in Cape Verde Islands under 12-month contracts. The fishing operations ceased abruptly in November 2004. On May 25, 2005, the respondents’ immediate employer on board, Snappertuna, executed an agreement with them for payment of 100% of their salaries for the unexpired portion of their contracts. The following day, however, Poseidon, Van Doorn, and the vessel operators entered a separate “letter of acceptance” reducing this to 50%. Upon arrival in Manila, the respondents received the 50% settlement, signed quitclaims and cash vouchers, but later filed a complaint for illegal dismissal and full payment of their salaries, claiming the quitclaims were executed under dire economic need.
ISSUE
Whether the quitclaims and the “letter of acceptance” signed by the respondents constitute a valid and binding settlement that bars their claim for full payment of salaries for the unexpired portion of their employment contracts.
RULING
The Supreme Court ruled that the quitclaims and settlement are invalid and do not bar the respondents’ claim. The legal logic is anchored on the principle that quitclaims executed by employees are generally frowned upon as contrary to public policy, especially where the consideration is unconscionable or the execution is vitiated by undue pressure. The Court found the reduction to 50% of the legally stipulated salaries for the unexpired term to be unreasonable and tantamount to a waiver of a right granted by law, which cannot be countenanced. The cessation of fishing operations constituted a termination due to discontinuance of voyage under the Philippine Overseas Employment Administration Standard Terms, entitling the seafarers to earned wages and termination pay. The subsequent agreement imposing a 50% cut effectively diminished this statutory entitlement. Moreover, the financial distress alleged by the seafarers, coupled with the disparity in bargaining power, casts doubt on the voluntariness of the waiver. Consequently, the earlier May 25, 2005 agreement for 100% payment, which aligns with legal mandates, should prevail. The Court thus ordered the payment of the remaining 50% balance of the respondents’ salaries for the unexpired portion of their contracts.