GR 236496; (July, 2019) (Digest)
G.R. No. 236496 July 8, 2019
F.F. CRUZ & CO., INC., Petitioner vs. JOSE B. GALANDEZ, DOMINGO I. SAJUELA, and MARLON D. NAMOC, Respondents
FACTS
Respondents Galandez, Sajuela, and Namoc were employees of petitioner F.F. Cruz & Co., Inc. They were terminated in 2011 on the ground of retirement, which they contested as illegal dismissal. The Labor Arbiter and subsequently the National Labor Relations Commission (NLRC) ruled in favor of the respondents, declaring their dismissal illegal. The NLRC Decision ordered their reinstatement without loss of seniority rights and payment of full backwages, with the monetary award subject to re-computation until actual reinstatement.
In 2013, petitioner paid respondents the specific sum of ₱363,047.68, which was the NLRC’s initial computation of backwages and attorney’s fees. In consideration, respondents executed Notarized Quitclaim and Release documents. Petitioner then filed a Manifestation with the NLRC to declare the case closed, which the NLRC granted, approving the quitclaims as a full settlement. Respondents moved for reconsideration, arguing they were defrauded into signing, believing they would still be reinstated, and that they were without counsel during execution.
ISSUE
Whether the NLRC committed grave abuse of discretion in approving the quitclaims and declaring the case closed and terminated based on the payment of the initial computed backwages.
RULING
Yes, the NLRC committed grave abuse of discretion. The Supreme Court affirmed the Court of Appeals’ decision to remand the case for re-computation. The legal logic hinges on the nature of an award for illegal dismissal, which comprises two distinct reliefs: reinstatement and payment of full backwages until actual reinstatement. The NLRC Decision was clear that backwages were to be computed from dismissal until reinstatement, making the award inherently incomplete and executory until reinstatement was effected.
The quitclaims, while Notarized, could not validly extinguish the continuing obligation to pay backwages accruing after the fixed computation date. By accepting the payment for backwages computed only up to a prior date, respondents did not waive their right to backwages accruing thereafter, nor their right to reinstatement. A quitclaim is void if it extinguishes the worker’s right to a legally protected entitlement. Here, the payment corresponded only to a portion of the total backwages due, not the full award mandated by law. Therefore, the settlement was not a complete and valid satisfaction of the judgment. The case was remanded to the NLRC for proper re-computation of backwages up to reinstatement or, if reinstatement was no longer viable, for inclusion of separation pay.