Dear PAO,

My former employer decided to close the company and cease operations. The management required me to sign a quitclaim before releasing my final pay and separation pay. I was forced to sign it because my brother was in the hospital, and we needed the money for his discharge. I recently found out that I am still entitled to other monetary benefits that were not included in my final pay. Can I still file a monetary claim against my former employer?

Jang

Dear Jang,

Quitclaims are legal documents signed by employees renouncing, waiving, or releasing any claim, right, or interest they may have against their employers. The case of F.F. Cruz & Co., Inc. vs. Galandez, (G.R. No. 236496, July 8, 2019, Ponente: Associate Justice Estela M. Perlas-Bernabe) elucidated: “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. In so doing, the parties adjust their difficulties in the manner they have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of losing.”

Furthermore, the Court ruled in the same case: “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.

It is important to note, however, that the Court may uphold the 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 Jiao vs. National Labor Relations Commission (G.R. No.182331, April 8, 2012, Ponente: Associate Justice Bienvenido L. Reyes) the Supreme Court ruled: “It is true that quitclaims executed by employees are often frowned upon as contrary to public policy. Hence, deeds of release or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. However, the Court, in other cases, has upheld quitclaims if found to comply with the following requisites: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) 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.”

Thus, you may still file a monetary claim against your former employer if the amount you received does not represent the full settlement of your claims against them.

We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated. We appreciate your trust and support.

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