Dear PAO,

I lost my job because my employer closed our company. I was required to sign a quitclaim before they released my final pay as an employee. I had no choice but to sign it since I needed to pay my children’s tuition and monthly bills. Can I still file a monetary claim against my former employer because they did not give me all the money I am entitled to for my service?

Ronnie

Dear Ronnie,

Quitclaims, waivers, or releases are documents signed by employees to absolve their employers from any liability. In the case of F.F. Cruz & Co., Inc. v. Galandez (GR 236496, July 8, 2019, Ponente: Associate Justice Estela Perlas Bernabe), the Supreme Court elucidated the following:

“At the outset, quitclaims are contracts in the nature of a compromise where parties make concessions, a lawful device to avoid litigation. It is a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable settlement and the one accomplishing it has done so voluntarily and with a full understanding of its import.”

For a deed of release, waiver, and quitclaim to be valid, it must be shown that (a) there was no fraud or deceit on the part of any parties; (b) that the consideration for the quitclaim is credible and reasonable; and (c) that the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law. It is always the employer and not the employee who has the burden of proving that a waiver or quitclaim executed was voluntarily entered into by the employee.

Thus, you may still file a monetary claim against your former employer if the amount you received does not represent the fair settlement of your claims against them. It is important to note, however, that the Supreme Court may uphold a quitclaim when the person making the waiver has done so voluntarily, with a full understanding of its terms and with the payment of credible and reasonable compensation. Hence, in the case of Radio Mindanao Network, Inc. v. Amurao (GR 167225, Oct. 22, 2014, Ponente: Chief Justice Lucas Bersamin), the Supreme Court ruled:

“Not all quitclaims are per se invalid or against public policy. A quitclaim is invalid or contrary to public policy only: (1) where there is clear proof that the waiver was wrangled from an unsuspecting or gullible person; or (2) where the terms of settlement are unconscionable on their face. In instances of invalid quitclaims, the law steps in to annul the questionable waiver. Indeed, there are legitimate waivers that represent the voluntary and reasonable settlements of laborers’ claims that should be respected by the Court as the law between the parties. Where the party has voluntarily made the waiver, with a full understanding of its terms as well as its consequences, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking and may not later be disowned simply because of a change of mind. A waiver is essentially contractual.”

This opinion is solely based on the facts you have narrated and our appreciation of the same. Thus, our opinion may vary when the facts are changed or further elaborated. We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attomey’s Office. Questions for Chief Acosta may be sent to [email protected].