GR 84578; (September, 1989) (Digest)
G.R. No. 84578 September 7, 1989
JOSE VICENTE SANTIAGO, IV, petitioner, vs. BONIER DE GUZMAN, GUZMAN INSTITUTE OF TECHNOLOGY, LABOR ARBITER PERLITA B. VELASCO AND NATIONAL LABOR RELATIONS COMMISSION, respondents.
FACTS
Petitioner Jose Vicente Santiago IV filed a complaint for illegal dismissal against private respondents, alleging his termination without cause or notice. The parties subsequently submitted a Compromise Agreement for Labor Arbiter approval, wherein petitioner agreed to receive a sum as separation and service incentive leave pay and to release respondents from all money claims. The Labor Arbiter approved the agreement.
Shortly after receiving the approval order, petitioner filed a motion to correct errors in the compromise agreement and to resolve the issue of illegal dismissal. He contended there were mistakes in the computation of his benefits. Despite this, the Labor Arbiter issued an order declaring the case settled and terminated upon finding petitioner had received the payment. The NLRC affirmed this order, dismissing petitioner’s appeal as moot and academic.
ISSUE
Whether the Labor Arbiter and the NLRC committed grave abuse of discretion in approving and affirming the Compromise Agreement without addressing petitioner’s timely plea regarding computational errors and his claim for illegal dismissal.
RULING
Yes. The Supreme Court set aside the assailed orders and resolutions and remanded the case for trial on the merits. The Court emphasized that while compromise agreements are favored, they must be entered into voluntarily and with a clear understanding of their terms. The records showed petitioner, who appeared without counsel, immediately sought to correct the agreement upon learning of its approval, specifically alleging mistakes in the computation of his separation pay.
The Labor Arbiter and the NLRC gravely abused their discretion by ignoring these timely pleas and simply assuming petitioner understood the agreement’s full impact. The NLRC’s resolution, which speculated that petitioner’s acceptance of payment implied his assent to sever the employment relationship, was based on a false assumption. Under Article 24 of the Civil Code, the courts must be vigilant for the protection of a party who is at a disadvantage due to factors like ignorance. Petitioner’s prompt actions upon receipt of the order negated any presumption of a knowing and intelligent waiver of his right to contest the dismissal. The amount he received shall be deducted from any correct separation pay ultimately found due.