Naldo, Jr. vs. Corporate Protection Services, Phils., Inc.

A resignation and quitclaim procured by an employer’s fraudulent misrepresentation that all outstanding money claims will be paid are void; the resulting cessation of employment constitutes constructive dismissal, entitling the employee to reinstatement, full backwages, and damages. The employer bears the burden of proving that the resignation was voluntary and that the quitclaim was executed with a full understanding of its import, free from fraud or deceit, and for a credible and reasonable consideration. Further, conciliation-mediation under the Single-Entry Approach (SEnA) is not an independent action and does not bar a subsequent labor complaint or amount to forum shopping.

Petitioners, seven security guards employed by CORPS and assigned to Tarlac and Cabanatuan City, had long-standing grievances over underpayment of wages, non‑payment of overtime, holiday pay, rest day pay, service incentive leave pay, 13th month pay, and ECOLA, as well as deductions for trust fund savings and cash bond. In January 2015 they filed a Request for Assistance with the DOLE‑NCMB under the SEnA mechanism. During two conciliation-mediation conferences in March 2015, CORPS initially offered checks representing only the trust fund and cash bond refund, which petitioners rejected. On March 10, 2015, CORPS’ representative told them to sign resignation letters and quitclaims, assuring them that the checks to be distributed would cover all their money claims. They complied, but the checks were the same limited-amount instruments, and CORPS promised the balance would follow after validation—a promise reflected in the Minutes of Proceedings. Petitioners were nonetheless prevented from returning to work the next day and never received the additional payments.

Employment and Grievances: - Petitioners were security guards of CORPS with hiring dates ranging from 2005 to 2010 and latest monthly salaries between P15,000.00 and P15,300.00. - They alleged systematic underpayment, monthly deductions of P200.00 to P1,000.00 for trust fund savings and P200.00 for cash bond, and non‑payment of overtime pay, regular and special holiday pay, rest day pay, service incentive leave pay, 13th month pay, and ECOLA throughout their employment. They claimed they were made to work 12‑hour days including holidays and rest days without proper compensation.

SEnA Conciliation‑Mediation: - In January 2015, petitioners filed a Request for Assistance with the DOLE‑NCMB under the Single-Entry Approach (SEnA), citing non‑payment/underpayment of wages, overtime pay, service incentive leave pay, holiday pay, and SSS, PhilHealth, and Pag‑IBIG contributions. - During the March 3, 2015 conference, CORPS, through representative Benjamin Sesgundo, offered checks covering only the trust fund savings and cash bond refund. Petitioners refused to accept them and to sign quitclaims, insisting on full payment of all money claims. - At the March 10, 2015 conference, Sesgundo told petitioners to submit signed resignation letters before receiving checks that would purportedly cover all their claims. Relying on this assurance, petitioners signed resignation letters and separate quitclaims antedated to March 3, 2015. - The checks distributed were the same ones previously offered, covering only the trust fund and cash bond amounts. Petitioners protested, but CORPS assured them that checks for the remaining money claims would follow after validation and reconciliation. The Minutes of Proceedings for March 10, 2015 recorded that management would “validate (DTR) with company records w/in this month of March … and will wait for R3 & other claims to be reconciled by mgt.”

Prevention from Returning to Work: - When petitioners attempted to report for work the following day, supervisors barred them, stating they had already resigned. By the end of March 2015, CORPS had neither paid the additional claims nor allowed petitioners to resume duty.

Filing of Complaints and Prior Proceedings: - Petitioners filed complaints with the NLRC for money claims, later amended to include constructive illegal dismissal. CORPS filed a perjury complaint against them, which the Quezon City Prosecutor dismissed for insufficiency of evidence. - The Labor Arbiter dismissed the complaints, finding the resignations and quitclaims voluntary and emphasizing the need to uphold SEnA settlements. - The NLRC reversed the LA, holding that petitioners had no intention to resign but that no illegal dismissal occurred; it invalidated the quitclaims, ordered reinstatement, and remanded for computation of money claims. - The Court of Appeals affirmed the NLRC, ruling that forum shopping did not lie, that the resignations were not voluntary (the CA noted CORPS “lured” petitioners into signing), but that no constructive dismissal could be declared; it upheld the remand.

• Constructive Dismissal: Petitioners argued that they were constructively dismissed because CORPS forced them to resign through deceit and false promises; the employer failed to discharge its burden of proving voluntariness, and the CA’s own factual findings established that the resignations were involuntary. They maintained that as illegally dismissed employees they were automatically entitled to backwages, moral and exemplary damages, and attorney’s fees.
• Invalidity of Quitclaims: Petitioners contended that the quitclaims were void, having been obtained through fraud and signed under the false belief that all money claims would be paid; the consideration was neither credible nor reasonable.
• No Forum Shopping: Petitioners asserted that filing a complaint with the NLRC after undergoing SEnA conciliation-mediation did not constitute forum shopping, as SEnA is a mandatory prerequisite to litigation under RA 10396.

• Forum Shopping: CORPS argued that petitioners were guilty of forum shopping because they had already received checks and executed quitclaims and a compromise agreement during the SEnA proceedings, with the assistance of a conciliator-mediator; the settlement should bar a subsequent complaint for the same money claims.
• Validity of Quitclaims and Resignations: CORPS maintained that the quitclaims and resignation letters were voluntarily executed before the SEnA officer and were therefore binding; the resignations were valid and there was no constructive dismissal.
• Full Settlement: CORPS asserted that the checks issued to petitioners covered all their money claims, and the quitclaims constituted an acknowledgment of full payment that released the company from any further liability.

• Forum Shopping: Whether petitioners are guilty of forum shopping by filing an NLRC complaint after availing themselves of SEnA conciliation-mediation and executing quitclaims.
• Validity of Quitclaims: Whether the quitclaims signed by petitioners during the SEnA proceedings are legal and binding, thereby barring their money claims.
• Constructive Dismissal and Entitlement to Reliefs: Whether the Court of Appeals erred in ruling that petitioners were not constructively dismissed and consequently not entitled to backwages, moral and exemplary damages, and attorney’s fees, including the sub‑issue of the validity of the resignation letters.

• Forum Shopping: No forum shopping was committed. Conciliation-mediation under SEnA is a mandatory condition precedent to the filing of a labor complaint; it is not an independent action, and thus the elements of identity of parties, rights asserted, and reliefs founded on the same circumstances were not all present. No res judicata attached because the NCMB proceeding did not result in a judgment on the merits by a court, and even assuming an amicable settlement was reached, it remained unfulfilled.
• Validity of Quitclaims: The quitclaims were declared void. A valid quitclaim requires that there be no fraud or deceit, that the consideration be credible and reasonable, and that the contract not be contrary to law, public policy, morals, or good customs. CORPS employed deceit by falsely representing that the checks covered all money claims when, as shown by the Minutes of Proceedings, both parties knew additional claims were still pending and would be reconciled. The consideration was grossly inadequate, and enforcing the quitclaims would unjustly deprive petitioners of statutory benefits, contravening Article 22 of the Civil Code. The burden to prove voluntariness and reasonableness was not discharged.
• Constructive Dismissal and Entitlement to Reliefs: Constructive dismissal was established. The employer bears the burden of proving that a resignation was voluntary by clear, positive, and convincing evidence. CORPS failed to do so. The totality of circumstances—the false promise of full payment, the execution of resignation letters as a condition for receiving checks, and the subsequent exclusion from work—showed that the resignations were involuntary and procured through fraud. An involuntary resignation obtained by deceit constitutes constructive dismissal. Consequently, petitioners are entitled to reinstatement; full backwages (including 13th month pay) from March 10, 2015 until finality of the decision; moral damages of P50,000.00 each; exemplary damages of P20,000.00 each; and attorney’s fees equivalent to 10% of the total monetary award. Bad faith attended the dismissal, as CORPS schemed to absolve itself of liability and even filed a baseless perjury complaint. These awards are additional to the overtime pay, holiday pay, rest day premium, and service incentive leave pay determined by the LA in its December 27, 2016 Decision.

• Validity of Quitclaims and Waivers — Quitclaims, waivers, or releases executed by employees are strictly scrutinized and generally disfavored. For a quitclaim to be valid, the employer must prove that: (a) no fraud or deceit attended its execution; (b) the consideration is credible and reasonable; and (c) the contract is not contrary to law, public order, public policy, morals, or good customs. A quitclaim is void if it obliges workers to forego benefits and exempts the employer from liability, resulting in unjust enrichment under Article 22 of the Civil Code. The burden of proving voluntariness and reasonableness rests on the employer. (Applied to invalidate quitclaims signed in reliance on false assurances of full payment of money claims.)
• Constructive Dismissal by Involuntary Resignation — Constructive dismissal exists when an employee’s continued employment is rendered impossible, unreasonable, or unlikely by the employer’s acts, or when there is a demotion or diminution of pay. A resignation obtained through fraud, deceit, or intimidation is involuntary and constitutes constructive dismissal. The test is whether a reasonable person in the employee’s position would have felt compelled to give up employment. The employer must prove the voluntariness of resignation by clear, positive, and convincing evidence; the mere existence of a resignation letter does not satisfy this burden. (Applied where petitioners were tricked into resigning by a false promise of full payment and were thereafter barred from work.)
• Forum Shopping and SEnA — Forum shopping requires identity of parties, rights asserted, and reliefs founded on the same facts, such that a judgment in one action would constitute res judicata in the other. Conciliation-mediation under the Single-Entry Approach is a mandatory prerequisite to filing a labor complaint; it is not an independent action and does not result in a court judgment on the merits, and therefore a subsequent NLRC complaint does not amount to forum shopping. (Applied to reject the charge that the prior SEnA proceeding barred the NLRC case.)

• “Necessitous men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them.” — Quoted to explain why quitclaims are examined with caution and why the law intercedes when inequality of bargaining power is exploited.
• “[F]or 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. The burden rests on the employer to prove that the quitclaim constitutes a credible and reasonable settlement of what an employee is entitled to recover, and that the one accomplishing it has done so voluntarily and with a full understanding of its import.” — The controlling standard for testing quitclaims, dispositive in voiding the documents here.
• “Constructive dismissal is defined as quitting or cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution or pay and other benefits. … The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his employment/position under the circumstances.” — Applied to conclude that the fraudulent inducement to resign left petitioners with no real choice.
• “For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer must prove that the resignation was voluntary, and its evidence thereon must be clear, positive and convincing. The employer cannot rely on the weakness of the employee’s evidence.” — The burden‑shifting rule that CORPS failed to satisfy.

• Land and Housing Development Corp. v. Esquillo, 508 Phil. 478 (2005) — Followed for the rule that quitclaims are void if they compel workers to forego benefits and exempt the employer from liability; reiterated that the employer must prove voluntariness and reasonable consideration.
• Doble, Jr. v. ABB, Inc., 810 Phil. 210 (2017) — Followed for the definition of constructive dismissal, the test of voluntariness of resignation, and the allocation of the burden of proof to the employer.
• Grande v. Philippine Nautical Training College, 806 Phil. 601 (2017) — Followed for the requirement that the employer prove resignation was voluntary by clear, positive, and convincing evidence, and that the totality of circumstances must be examined.
• Torreda v. Investment and Capital Corporation of the Philippines, 839 Phil. 1087 (2018) — Followed as authority that an involuntarily executed resignation, such as one forced under threat of termination, is void and constitutes constructive dismissal; extended to resignations procured by deceit.
• SHS Perforated Materials, Inc. v. Diaz, 647 Phil. 580 (2010) — Followed for the holding that unlawful withholding of salary forcing an employee to resign amounts to constructive dismissal.
• Al-Masiya Overseas Placement Agency, Inc. v. Viernes, 869 Phil. 123 (2020) — Followed for the principle that making an employee sign a resignation letter as a condition for the release of entitlements constitutes constructive dismissal.
• F.F. Cruz & Co., Inc. v. Galandez, 856 Phil. 150 (2019) — Followed for the specific requisites of a valid quitclaim.
• London v. Baguio Country Club Corp., 439 Phil. 487 (2002) and Heirs of Mampo v. Morada, 888 Phil. 583 (2020) — Cited for the elements of forum shopping.
• Ponce v. King Lian, 107 Phil. 263 (1960) — Cited for the principle that conciliation proceedings do not yield a “decision” or “judgment” on the merits that would trigger res judicata.

• Article 234 (now renumbered), Labor Code of the Philippines, as amended by Republic Act No. 10396 — The provision making conciliation-mediation a mandatory prerequisite to the filing of a labor complaint. Applied to hold that the prior SEnA proceeding was not a separate action and could not give rise to forum shopping or res judicata.
• Article 22, New Civil Code — The prohibition against unjust enrichment. Applied to reinforce the invalidity of the quitclaims that would have allowed the employer to escape liability for statutory benefits while retaining the benefit of petitioners’ services.
• Article 111, Labor Code — The provision authorizing attorney’s fees in cases of unlawful withholding of wages. Applied as basis for the award of attorney’s fees equivalent to 10% of the total monetary award.
• DOLE Department Order No. 107-10, Series of 2010, and Republic Act No. 10396 — The legal framework institutionalizing the Single-Entry Approach (SEnA) as a mandatory conciliation-mediation mechanism for labor disputes. Cited to establish the nature of SEnA as a condition precedent, not an independent action.

Leonen, S.A.J. (Chairperson), Lazaro-Javier, M. Lopez, and Singh, JJ., concur. (Lopez, J., no part due to his prior action in the Court of Appeals; Singh, J., designated additional Member per Raffle dated March 11, 2024.)