Carolina's Lace Shoppe vs. Maquilan

The voluntariness of an employee's resignation must be measured by the employee's acts before and after the alleged resignation, and a quitclaim embedded in a resignation letter is invalid where it lacks the requisite stipulations — a fixed compromise amount, an enumeration of benefits being relinquished, a statement that the employer explained the effects of signing, and a statement that the employee signed voluntarily and understood the contents.

Gloria Maquilan and Joy Maquilan, mother and daughter, were employed by Carolina's Lace Shoppe (CLS), a sole proprietorship owned by Lourdes Ragas and managed by Claudine Mangasing, as sales clerk and header, respectively. In April 2008, the Department of Labor and Employment (DOLE) conducted an inspection of CLS's premises, during which employee Santiago Espultero disclosed to the labor inspector that he was receiving a daily wage of ₱250.00. Espultero was terminated shortly after the inspection, followed within a month by the dismissal of Gloria and then Joy, each of whom was made to sign a quitclaim in exchange for minimal separation pay.

Gloria Maquilan was employed by Carolina's Lace Shoppe (CLS) as a sales clerk in 2005, while her daughter Joy Maquilan was employed as a header in 2007. CLS is a sole proprietorship owned by Lourdes Ragas and managed by Claudine Mangasing. In April 2008, the Department of Labor and Employment (DOLE) conducted an inspection of CLS's premises. During the inspection, employee Santiago Espultero informed the labor inspector that he was receiving a daily wage of ₱250.00. Shortly thereafter, Espultero was terminated from employment by manager Mangasing, and was allegedly made to sign a quitclaim to receive ₱60,000.00 as separation pay despite his 17 years of service.

One month after the DOLE inspection, Gloria was dismissed from the service without any reason given. Like Espultero, she was allegedly made to sign a quitclaim to receive ₱15,000.00 as separation pay despite her three years of service. The same fate befell Joy, who was dismissed and forced to sign a quitclaim, receiving only ₱4,000.00 as separation pay. Gloria, Joy, Espultero, and Eminda B. Tagalo filed a complaint for illegal dismissal with money claims and damages against CLS, Mangasing, and Ragas, though only Gloria and Joy filed their position papers. Aside from their claim of illegal dismissal, Gloria and Joy averred that they worked on holidays and special holidays without holiday and premium pay, were not given five days service incentive leave despite working for more than one year, received 13th month pay not computed in accordance with minimum wage rates, and worked 10 hours a day without overtime pay.

Respondents countered that Gloria, Joy, and Espultero were not illegally dismissed but had voluntarily resigned, evidenced by their resignation letters. Gloria's resignation letter, dated May 31, 2008, stated that her resignation was effective at the close of office hours that same day and that she had received all benefits, salaries, 13th month, and service leave, with no more claims against the company — the letter itself serving as her clearance and quitclaim. Joy, for her part, did not execute a resignation letter but merely signed a standard clearance and quitclaim form, the entries of which — including her name, the effectivity date, and the computation of the amount paid — appeared to have been written by the same person, presumably one of CLS's employees. Gloria filed a complaint for illegal dismissal 12 days after her resignation, and Joy filed hers the day after signing the quitclaim. Both documents were notarized, though Gloria and Joy denied appearing before a notary public.

• Voluntariness of Resignation: Petitioners insisted that Gloria offered no evidence depicting that force or fraud was employed when the resignation letter with quitclaim was executed, and therefore the same was accomplished voluntarily.
• Defense of Resignation: Petitioners maintained that Gloria, Joy, and Espultero were not illegally dismissed but had voluntarily resigned, as evidenced by their resignation letters.

• Illegal Dismissal: Whether Gloria and Joy were illegally dismissed from employment.

• Illegal Dismissal: Yes. Gloria and Joy were illegally dismissed, their purported resignations and quitclaims having been executed involuntarily and lacking the stipulations required for a valid quitclaim under prevailing jurisprudence.

• Illegal Dismissal: The fundamental rule in illegal dismissal cases is that when an employer interposes the defense of resignation, the burden to prove that the employee indeed voluntarily resigned rests upon the employer. Citing Fortuny Garments/Johnny Co vs. Castro as discussed in Torreda vs. Investment and Capital Corporation of the Philippines, the Court applied the principle that the act of the employee before and after the alleged resignation must be considered to determine whether the employee intended to relinquish employment. As to Gloria, there was no indication prior to her resignation that she intended to leave; her alleged resignation took place after the DOLE inspection that revealed CLS's labor standards violations, and a month after the employee who reported such violations was terminated. Her filing of a complaint for illegal dismissal 12 days after her resignation was difficult to reconcile with voluntary resignation. As to Joy, there was no resignation letter at all, merely a quitclaim form whose entries appeared to have been written by someone other than Joy, and she filed her complaint the day after signing. The quitclaims signed by both employees were deficient in the basic contents required for validity under EDI-Staffbuilders International, Inc. vs. National Labor Relations Commission as reiterated in FASAP vs. Philippine Airlines, Inc.: they did not indicate a fixed amount as full and final compromise settlement, did not enumerate the benefits being relinquished with corresponding amounts, did not contain a statement that the employer explained the effects of signing, and did not contain a statement that the employees signed voluntarily and understood the contents. The resignation letter of Gloria was lopsidedly worded to free the employer from liabilities, revealing the absence of voluntariness. Although the documents were notarized, the presumption of regularity was rebutted by clear and convincing evidence: Gloria and Joy denied appearing before a notary public, did not understand the textual import of the documents, the consideration was not fixed, the executions were questionable, and they did not intend to resign. Under the law, there are no shortcuts in terminating the security of tenure of an employee.

• Burden of Proof in Resignation Defense — When an employer interposes the defense of resignation, the burden to prove that the employee indeed voluntarily resigned rests upon the employer. The Court applied this by examining the acts of Gloria and Joy before and after their alleged resignation, finding no intent to voluntarily relinquish employment.
• Test for Voluntariness of Resignation — The act of the employee before and after the alleged resignation must be considered to determine whether the employee intended to relinquish employment. If the employer introduces evidence purportedly executed by an employee as proof of voluntary resignation and the employee specifically denies the authenticity and due execution of said document, the employer is burdened to prove the due execution and genuineness of such document. The Court found that Gloria's termination following the DOLE inspection and her filing of a complaint 12 days later, as well as Joy's filing the day after signing the quitclaim, belied voluntariness.
• Requisites of a Valid Quitclaim — To prevent disputes on the validity and enforceability of quitclaims and waivers, said agreements should contain: (1) a fixed amount as full and final compromise settlement; (2) the benefits of the employees, if possible with corresponding amounts, which the employees are giving up in consideration of the fixed compromise amount; (3) a statement that the employer has clearly explained to the employee in English, Filipino, or in the dialect known to the employees that by signing the waiver or quitclaim, they are forfeiting or relinquishing their right to receive the benefits due them under the law; and (4) a statement that the employees signed and executed the document voluntarily, and had fully understood the contents and that their consent was freely given without any threat, violence, duress, intimidation, or undue influence. The quitclaims of Gloria and Joy failed to satisfy these requisites.
• Presumption of Regularity of Notarized Documents — The presumption of regularity as regards notarized documents is not absolute and may be rebutted by clear and convincing evidence to the contrary. The Court held the presumption inapplicable because Gloria and Joy denied appearing before a notary public, did not understand the documents, the consideration was not fixed, the executions were questionable, and they did not intend to resign.

• "In illegal dismissal cases, the fundamental rule is that when an employer interposes the defense of resignation, the burden to prove that the employee indeed voluntarily resigned necessarily rests upon the employer." — This passage states the controlling allocation of burden of proof in illegal dismissal cases where resignation is alleged, and is the foundational principle upon which the Court's analysis proceeds.
• "The act of the employee before and after the alleged resignation must be considered to determine whether in fact, he or she intended to relinquish such employment." — This passage articulates the test for voluntariness of resignation, requiring examination of the totality of the employee's conduct surrounding the alleged resignation.
• "Resignation letters which are in the nature of a quitclaim, lopsidedly worded to free the employer from liabilities reveal the absence of voluntariness." — This passage defines the doctrinal standard for identifying involuntary resignations disguised as quitclaims, a formulation frequently invoked in labor disputes.
• "Under the law, there are no shortcuts in terminating the security of tenure of an employee." — This passage encapsulates the Court's overarching principle protecting security of tenure, emphasizing that employers cannot circumvent procedural and substantive due process requirements through contrived resignations or quitclaims.

• Doble, Jr. vs. ABB, Inc./Nitin Desai, 810 Phil. 210 (2017) — Cited for the proposition that the burden to prove voluntary resignation rests on the employer when resignation is interposed as a defense.
• Fortuny Garments/Johnny Co vs. Castro, 514 Phil. 317 (2005) — Cited as the source of the principle, as discussed in Torreda, that the employee's acts before and after the alleged resignation must be considered to determine voluntariness.
• Torreda vs. Investment and Capital Corporation of the Philippines, G.R. No. 229881, September 5, 2018 — Followed for the test on voluntariness of resignation and the principle that there are no shortcuts in terminating security of tenure.
• Mobile Protective & Detective Agency vs. Ompad, 497 Phil. 621 (2005) — Followed for the ruling that resignation letters in the nature of quitclaims, lopsidedly worded to free the employer from liabilities, reveal the absence of voluntariness, and that filing a complaint for illegal dismissal shortly after resignation is inconsistent with voluntary resignation.
• FASAP vs. Philippine Airlines, Inc., G.R. No. 178083, March 13, 2018 — Followed for the reiteration of the basic contents of a valid and effective quitclaim as laid down in EDI-Staffbuilders.
• EDI-Staffbuilders International, Inc. vs. National Labor Relations Commission, 563 Phil. 1 (2007) — Followed as the originating precedent for the four-part test on the requisite contents of a valid quitclaim.
• Spouses Martires vs. Chua, 707 Phil. 34 (2013) — Cited for the principle that the presumption of regularity of notarized documents is not absolute and may be rebutted by clear and convincing evidence.

• Rule 45, Rules of Court — Governed the petition for review on certiorari filed by petitioners before the Supreme Court, assailing the CA decision and resolution.
• Rule 65, Rules of Court — Governed the petition for certiorari filed by Gloria and Joy before the Court of Appeals, challenging the NLRC's ruling.
• Section 7, Rule V, 2005 Revised Rules of Procedure of the NLRC — Applied by the Labor Arbiter in dismissing the cases of complainants Eminda Tagalo and Santiago Espultero.

Carpio, Senior Associate Justice (Chairperson), Caguioa, and Lazaro-Javier, JJ., concurred. Perlas-Bernabe, J., was on leave.