Marcos v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Petitioners were regular employees of Insular Life Assurance Co., Ltd. who were dismissed on November 1, 1990, due to redundancy, and received a special redundancy benefit package after rendering long years of service. Petitioner Lopez questioned the redundancy package, asserting entitlement to service awards and other prorated bonuses earned. Petitioners executed a "Release and Quitclaim" with a written protest demanding service awards. The Department of Labor and Employment (DOLE) affirmed their entitlement to service awards, stating they are part of employee benefits based on company policy and demandable even if prorated. Despite the DOLE opinion, the company refused to pay the service awards, anniversary bonus, and performance bonus, which were limited to permanent and probationary employees as of specific dates, excluding the petitioners, prompting them to file a complaint. Procedural History: The Labor Arbiter ordered the respondent company to pay petitioners their service awards, anniversary bonuses, and prorated performance bonuses, plus attorney's fees. However, the National Labor Relations Commission (NLRC) set aside the Labor Arbiter's decision, upholding the validity of the "Release and Quitclaim" executed by the petitioners, finding they were aware of its nature, not under duress, and voluntarily accepted the redundancy benefit package. The Petition: Petitioners filed a petition for certiorari seeking to nullify the NLRC decision and resolution, arguing that the NLRC committed reversible error or grave abuse of discretion in affirming the validity of the "Release and Quitclaim" and consequently denying their claims for service awards and other bonuses.
Issue(s)
Whether the NLRC committed reversible error or grave abuse of discretion in affirming the validity of the "Release and Quitclaim" executed by the petitioners; and whether the petitioners, despite executing said release, effectively reserved their rights to demand service awards. Whether the petitioners are entitled to payment of their anniversary bonuses and prorated performance bonuses, considering the company's practices and the nature of these bonuses as part of their compensation.
Ruling
The petition is meritorious. The assailed decision and resolution of the National Labor Relations Commission are SET ASIDE, and the decision of Labor Arbiter Alex Arcadio Lopez is REINSTATED.
Ratio Decidendi
On the validity of the "Release and Quitclaim" and reservation of rights regarding service awards: The Supreme Court held that a signed release or quitclaim does not automatically waive claims, especially when the employee is at a disadvantage. Quitclaims are disfavored due to unequal footing between employer and employee. Here, the petitioners' express written reservation of their right to demand service awards when signing the release negates total voluntariness and constitutes a protest against waiving their rights (renuntiatio non praesumitur). Their subsequent action of seeking DOLE's opinion further underscores their intent to claim service awards. The Court also agreed with the labor arbiter that service awards are contractual, not mere gratuities, governed by the employee's manual, entitling the petitioners to service awards for 1990 based on their years of service, citing Insular Life Assurance Co., Ltd., et al. vs. NLRC, et al. On entitlement to anniversary and performance bonuses: Regarding anniversary and performance bonuses, the Court found no reason to deny prorated bonuses to petitioners who served most of the qualifying periods. The company's bonus practices cannot be arbitrary. While the company has the prerogative to determine bonus entitlement, it cannot unjustly enrich itself at the employee's expense. A bonus is not a gift but is paid for service, and a promise to pay a bonus is enforceable if the employee serves the stipulated time. Equity demands prorated performance and anniversary bonuses based on months served in 1990.
Main Doctrine
A deed of release or quitclaim cannot bar an employee from demanding benefits to which they are legally entitled, especially when executed under duress or economic necessity, and when the employee expressly reserves their rights.