G.R. No. L-76271 June 28, 1988
CEFERINO G. LLOBRERA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION & EL GRECO SHIPPING ENTERPRISE AND/OR GENERAL CONTRACTING AND SUPPORTING ENTERPRISES, respondents.

FACTS

Petitioner Ceferino Llobrera, a Master Mariner, was employed by General Contracting and Importing Enterprises (Gencon) through its local agent, El Greco Shipping Enterprises. He served as Captain on board MT SARA HASHIM from September 3 to December 6, 1983. Upon his resignation and repatriation, Llobrera filed a complaint with the Philippine Overseas Employment Administration (POEA) for illegal deductions, non-payment of overtime pay, salary differential, and leave pay. He alleged that Gencon forced him to sign an erroneous statement of wages under threat of imprisonment or non-payment, resulting in underpayment. The private respondents, despite service of summons, failed to file any responsive pleadings or present evidence before the POEA.
The POEA ruled in Llobrera’s favor, ordering the respondents to pay him US$1,624.46. The POEA found his evidence, including payroll reports and communications from El Greco admitting authorized overtime, credible and uncontroverted. The NLRC, however, reversed the POEA decision upon appeal by the private respondents. The NLRC gave weight to a “quit claim” or final settlement signed by Llobrera, holding that in the absence of prima facie evidence of fraud or duress, it was valid and binding.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in reversing the POEA’s decision and upholding the validity of the quit claim signed by the petitioner.

RULING

Yes, the NLRC committed grave abuse of discretion. The Supreme Court reinstated the POEA decision. The legal logic centers on the vitiated consent behind the quit claim and the consequences of the respondents’ failure to participate in the proceedings. A quit claim executed by an employee is void if secured under duress or intimidation. The Court found the circumstances compelling: Llobrera, alone in a foreign country, signed under the threat of jail or being sent home unpaid, constituting economic intimidation that vitiated his free will. Such a document cannot be considered incontestable.
Furthermore, the NLRC erred in relying on this document to overturn the POEA’s factual findings. The private respondents waived their right to present evidence by failing to file an answer or attend POEA hearings. This failure is deemed an admission of the complainant’s allegations under procedural rules. The POEA’s decision was based on substantial evidence, including documents submitted by Llobrera and the admission by respondent El Greco in its communications. The NLRC’s conclusion was speculative, as it disregarded the uncontroverted evidence and the coercive context of the settlement. When the NLRC’s findings are not supported by substantial evidence and it disregards established facts, it commits grave abuse of discretion warranting correction by certiorari.