G.R. No. 87297 ; August 5, 1991
Alfredo Veloso and Edito Liguaton, petitioners, vs. Department of Labor and Employment, Noah’s Ark Sugar Carriers and Wilson T. Go, respondents.

FACTS

Petitioners Alfredo Veloso and Edito Liguaton, along with co-employees, filed a complaint against their employer, Noah’s Ark Sugar Carriers, for unfair labor practices and various monetary claims. The Labor Arbiter decided in favor of the complainants on October 6, 1987. The employer’s motion for reconsideration, treated as an appeal, was dismissed by the Department of Labor and Employment (DOLE) on February 17, 1988, which affirmed the order but deleted awards to other employees due to settlement, while ordering execution for Veloso and Liguaton’s awards.
While the employer’s subsequent motion for reconsideration and recomputation was pending, Veloso, through his wife and with his counsel’s manifestation, signed a Quitclaim and Release on April 15, 1988, receiving P25,000. Liguaton similarly executed a Release and Quitclaim on July 19, 1988, acknowledging receipt of P20,000, and his counsel filed a motion to dismiss the complaint based thereon. Later, on September 20, 1988, both petitioners impugned these quitclaims, alleging they were signed under “extreme necessity.” The DOLE Undersecretary, in an Order dated December 16, 1988, denied their motion and approved the compromise agreements.

ISSUE

Whether the quitclaims and releases executed by the petitioners are valid and binding, thereby barring their claims for the original monetary awards.

RULING

The Supreme Court dismissed the petition, upholding the validity of the quitclaims. The legal logic centers on distinguishing between involuntary quitclaims, which the law disfavors, and legitimate, voluntary settlements. The Court found the exception, not the general rule against quitclaims, applicable here. Critically, the quitclaims were executed while the employer’s motion for reconsideration was still pending before the DOLE, not after a final adverse ruling. They were made with the knowledge and assistance of the petitioners’ respective counsels and were subsequently approved by the DOLE in its order.
The petitioners’ claim of “dire necessity” was insufficient to annul the agreements. The Court emphasized that there was no clear proof of force, trickery, or unconscionable terms. The fact that the amounts received were lower than the original execution award did not automatically render the settlement invalid, as that award was still subject to recomputation. The petitioners voluntarily accepted the sums, suggesting a reasonable compromise. The ruling applies Article 227 of the Labor Code, which states that compromise settlements voluntarily agreed upon with the assistance of the DOLE are final and binding, and courts shall not assume jurisdiction except in cases of fraud, misrepresentation, or coercion—none of which were established. Therefore, the petitioners are bound by their solemn and voluntary agreements.