The employee, a university faculty member, filed a case against his employer for illegal dismissal. The Labor Arbiter decided in his favor and awarded reinstatement, full backwages, damages, and attorney’s fees. The employer could not reinstate the employee, but it still appealed this decision to the National Labor Relations Commission (NLRC). Later on, however, the employee executed a quitclaim in favor of the employer.
Could the employee be estopped now from pursuing his claims for accrued wages under the ruling?
Is your answer a yes? …Not so fast, though.
In this case, what happened was that the employee received his retirement pay from the employer when the appeal was still pending. Now, although the NLRC initially affirmed (with modification) the decision of the Labor Arbiter, it reversed the same when it resolved a motion for reconsideration. In other words, NLRC held that the employee’s execution of the receipt and quitclaim respecting his benefits under the retirement plan estopped him from pursuing other claims arising from his employer-employee relationship with the University.
The Supreme Court rendered a decision in favor of the employee. It ruled that the execution of the quitclaim was not a settlement of the employee’s claim for accrued salaries. The Court said:
“We agree with the petitioner.
“The text of the receipt and quitclaim was clear and straightforward, and it was to the effect that the sum received by the petitioner represented ‘full payment of benefits … pursuant to the Employee’s retirement plan.’ As such, both the NLRC and the CA should have easily seen that the quitclaim related only to the settlement of the retirement benefits, which benefits could not be confused with the reliefs related to the complaint for illegal dismissal.“Worthy to stress is that retirement is of a different species from the reliefs awarded to an illegally dismissed employee. Retirement is a form of reward for an employee’s loyalty and service to the employer, and is intended to help the employee enjoy the remaining years of his life, and to lessen the burden of worrying about his financial support or upkeep. In contrast, the reliefs awarded to an illegally dismissed employee are in recognition of the continuing employer-employee relationship that has been severed by the employer without just or authorized cause, or without compliance with due process.”
Further reading:
- Crisanto F. Castro, Jr. v.
Ateneo De Naga University , Fr. Joel Tabora and Mr. Edwin Bernal, G.R. No. 175293, July 23, 2014.
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