3 National Federation of Labor vs CA

2/5/2016 NFLvsCA:149464:October19,2004:J.CallejoSr:SecondDivision:Decision

http://sc.judiciary.gov.ph/jurisprudence/2004/oct2004/149464.htm 1/11

SECONDDIVISION

[G.R.No.149464.October19,2004]

NATIONAL FEDERATION OF LABOR (NFL), CENON BANGA, ROGELIO VILLACORTE, NAZARIOHATAM, JULIO CUGAL, JUANITO GAVIOLA, BONIFACIO MANLAPAZ, TOMAS FABILLAR,BERNARDSIASON,WILFREDOSANTOS,MARCIANONAPAL,FIDELABALOS,PEDROINANA,SIMPLICIOQUIMSON,HERMINIGILDODELOSSANTOS,FRANCISCOMANONGONG,RODRIGODOMINGO, MARCELINO GUILLANO, JR., VALERIANO BRIONES, RAMON PUNTOD, SIMONMORO, ROLANDO BANGA, PABLO NUEZ, ALBERTO LADERO, BENEDICTO SUMALINOG,ISMAEL MOLAS, FIDEL CONSTANCIA, CASIANO PLAD, MARCELO SUMALINOG, NESTORGARCIA, FELICIANO LOZANO, CORNELIO TUMAMBUS, ANASTACIO RODRIGUEZ GIPUNANUNDING, CRESENCIO LASIT, FEDERICO BASILIO, LEONARDO BARREDO, ABELARDOGARCIA, ESTANISLAO PUREZA, RAUL LINIANG, LEONCIO PALAR, NICASIO CABANERO,LEONARDOPULGAR,ROMUALDOBACTONG,ABDULBORJAL,MAGDINOANSOG,JACARIAASSANUDDIN, HERCULANO DAGOY, MARIO TULABING, ROBERTO MAHUSAY, BENGAYMAJID, ZOSIMO TUGAHAN, SALVADOR LUBIANO, ABDULMAJID ALIMUDDIN, POLICARPIOWAHING, EFREN CRUZ, MELCHOR LOMONGGO, ASPALON CUEVAS, MARCIAL SERUNDO,GENER MARTALLA, FRANCISCO BUHIAN, ROMULO GANGE, RICARDO CRUZ, ODITOTARROZA,CATALINOMOLEJON,EUSTACIOMANLAPAZ,BIENVENIDOALBURO,DIOSCOROMOLOS, JUAN SIMAURIO, LUCIANO BASACA, ROMANTICO SAN LUIS, PERPITO REVILLA,SERVANDO SINGSON, WILFREDO DEMCO, JIBRON GARCIA, JOSE SACRISTAN, MANUELSAYSON, GAUDIOSO DUMAYO, FELIX PLAZA, NESTOR GARCIA, ANDRES GAMUTAN,VALERIANO LUBIANO, WILFREDO MAHUSAY, DIONESIO SALISIG, ANTONIO SUMALINOG,PATRICIO RUALES, LEODEGARIO MANONGONG DONATO LADERO, WILFREDO BASILIO,EMMANUEL EVANGELISTA, BIENVENIDO CRUZ, CELESTINO BACOR, HENRY GARCIA,CRISTINO ESCUDERO, CECILIO MANAHAN, REYNALDO LOPEZ, ROGELIOAMPATIN,ALEXANDER REMILLETE, AURELIO CACHUELA, EUTIQUIO FRONTAL, FABIAN



DURAN, EXPEDITO BARRERA, CENISO BUENO JOVENCIO VELITA, VICENTE ELEMIA,ROGELIO MIRONTOS, CESAR ALAJAS, ANTONIO FORASTEROS, RESTITUTO DAMILES,WILFREDOORTIZ,GERUNDIO TORINO, TEOFISTOCALUNOD,ROGELIOCUEVAS,CASMIROBASILIO, ELMO PEDLO, RAFAEL LAURENO, AGAPITO CARINO, EDUARDO TUGAHAN,ANASTACIO TORINO, REIMBERTO ACOSTA, CESAR MALALIS, WINEFREDA SARENO,FILADELFO RABINA, ANGEL YU, VICENCIO SACRISTAN, JR., CESAR AWYAN, QUIRINORAMOS, ELEUTERIO INFANTE, JOSE MAGONCIA, JESUS GAROTE, GODOFREDO UYAO,EXEQUIEL GREGANA, SALUSTIANO FLORES, ADALAIDA PORLARES, SOFRIANO EDIM,ALFREDO CERIALES, GODOFREDO DEMCO, CIPRIANO PIOQUINTO, ANTONIO JOSEFORASTEROS, FILOMENO MOLAS, SOLIG TOTO, FRANCISCO SOLON, AMADO ENRIQUEZ,AMADOBUCOY,ARTUROAJON,FORTIBILLARNABI, JUANBAYOCA,WILFREDOORPIANA,VICTORIANOIMBOandSABDURANIMABLIA,petitionersvs.THEHON.COURTOFAPPEALS(8THDIV.),NATIONALLABORRELATIONSCOMMISSION,EXECUTIVELABORARBITERRHETTJULIUS J. PLAGATA, SIME DARBY PILIPINAS, INC., AMERICAN RUBBER COMPANY, INC.,SEANOKELLEYand/orEXPEDITODOQUILLO,SR.,respondents

DECISIONCALLEJO,SR.,J.:

ThisisapetitionforreviewoftheDecision[1]oftheCourtofAppealsinCAG.R.SPNo.56230,holdingthatthepetitionerswereproperlypaidtheirseparationpayaftertheclosureoftherubberplantationofSimeDarbyPilipinas,Inc.(SDPI)inLatuan,Isabela,Basilan.

TheAntecedents

American Rubber Company, Inc. (ARCI) is a domestic corporation existing in and incorporated under the laws of thePhilippines.Itwastheregisteredandbeneficialownerofa1,024hectarerubberplantationinLatuan,Isabela,Basila.OnJuly21, 1986, ARCI also had another rubber plantation in Tumajubong and Itoito. ACI entered into a Farm ManagementAgreement(FMA)withSDPI,anotherdomesticcorporation,involvingthe1,024hectarerubberplantationinLatuanandotherrubberplantations.SDPIwasgiventherighttomanage,administer,develop,cultivate,andimprovetherubberplantationsasan agroindustrial development project, specifically designed for planting rubber trees, processing of and marketing of its



productsandprovidingtechnicalexpertiseforaperiodoftwentyfiveyears,oruptotheyear2011.[2]

NationalFederationofLabor (NFL)was theduly registeredbargainingagentof thedailyandmonthlypaid rankandfileemployees of SDPI in the Latuan rubber plantation.[3] SDPI andNFL executed a collective bargaining agreement (CBA) inwhich theyagreed that in caseofpermanentor temporary layoff,workersaffectedwouldbeentitled to terminationpayasprovidedbytheLaborCode.The150petitionersweredailyandmonthlypaidemployeesofSDPIintheLatuanplantationandwere,likewise,membersofNFL.

OnJune15,1988,duringtheeffectivityoftheFMAbetweenARCIandSDPI,RepublicActNo.6657,otherwiseknownastheComprehensiveAgrarianReformLaw(CARL)of1988, tookeffect.[4]Section8 thereofmandated thatall landsofpublicdomain leased, held or possessed by multinational corporations or association or private nongovernmental corporations,devoted to agroindustrial enterprises shall be subjected to immediate compulsory acquisition and distribution upon theapplicable lease, management, grower or service contracts in effects as of August 29, 1987 or otherwise upon its validtermination,whichevercomessoonerbutnotlaterthanaftertenyearsfollowingtheeffectivityofRep.ActNo.6657.

PriortotheexpirationoftheJune30,1998deadline,SDPIdecidedtoterminatetheFMAwithARCIandceaseoperationofthe rubber plantation in Latuan, Isabela, Basilan, effective January 17, 1998.OnDecember 17, 1997, SDPI served formalnotices of termination to all the employees of the plantation effective January 17, 1998.[5] Simultaneously, a letter to theDepartmentofLaborofEmployment (DOLE)ofRegion IX,ZamboangaCity, respecting the terminationswassentbySDPI.SeparationpayfortheemployeeswascomputedpursuanttotheprovisionsoftheCBAbetweenSDPIandNFL,inrelationtotheLaborCodeofthePhilippines.

Meanwhile,whenthe150dailyandmonthlypaidrankandfileemployeesreceivedtheirindividualterminationletters,themembers of theNFLmet, on January 10, 1998, andapprovedResolutionNo. 1,Series of 1998, requestingSDPI that theseparationpaybenefits for itsmembersbesegregated from regularworkdays,vacation leave,unusedsick leaveandotherbenefits.[6]CenonS.Banga, theunionpresidentof thedailypaidrankandfileemployees,wroteEmmanuelA.Tamayo, theSeniorVicePresident ofSDPI, requesting the segregationof separationpaybenefits from theother receivables.[7]Healsosent,onthesamedate,alettertoSDPIseekingtheclarificationonthebasisofcomputationoftheirseparationpay.Hepointedoutthatseparationpayshouldbecomputedpursuanttothecompanypolicyofthirtydaysperyearofservice.HestressedthattheunionmemberswouldrefusetoreceivethecomputedseparationpayiflessthanthatpreviouslygiventoemployeeswhoseemploymenthadbeenterminatedbySDPIonpriordatespursuanttothecompanypolicy,[8]morespecificallyseparationpayequivalenttoonemonthforeveryyearofemploymentoftheemployees.

OnJanuary17,1998,eachofthepetitionersreceivedhisseparationpayequivalenttoonehalfmonthpayforeveryyearofservice,andotherbenefitswhichwerealllumpedinoneMetrobankcheck.[9]ThepetitionerssimultaneouslyexecutedindividualReleasedandQuitclaim[10] following theexplanation to thembyExecutiveLaborArbiter (ELA)RhettJuliusJ.Plagataof thenature and legal effects of the said quitclaims.[11] The Labor Arbiter also assured that each of the petitioners executed his



respecteddeedofquitclaimvoluntarily.However,onApril2,1998,thepetitionersfiledacomplaintforillegaldismissal,deficiencyinseparationpay,backwages,

reinstatement, legal interest,moraldamages,exemplarydamages,attorneys fees,andcostof litigationbefore theRegionalArbitrationBranchofZamboangaCityoftheNationalLaborRelationsCommission(NLRC),docketedasNLRCcaseNo.RAB09040012598.[12]Thecomplainantsraisedthefollowingissues:

(1)whetherornotthecomplainantswereillegallydismissedand(2)whetherornottheyareentitledtotheirclaimsforseparationpaydifferentials(nonpaymentoftheexactcomputationofseparationpay),legalinterest,moralandexemplarydamages,andattorneysfeesandcostsoflitigation.

Amatteralsoputistheeffectofthequitclaimandreleasesexecutedbythecomplaintsbeforetheundersignedon15and16January1998inconsiderationofpaymenttothembySDPIofseparationpaycomputedatonehalf(1/2)monthpayforeveryyearsofservice.[13]

On November 24, 1998, the ELA rendered a decision dismissing the complaints for lack of merit.[14] He ruled thetermination of the petitioners employment was based on authorized cause, namely, the closure of SDPI, Latuan rubberplantation, as a consequence of the implementation of CARL, which set the deadline for the compulsory distribution ofagricultural,includingagroindustriallandstenyearsaftertheeffectivityofthelaworJune30,1998.Consequently,pursuanttotheCBAbetween theSDPIandNFL in relation toArticle283of theLaborCode, thedismissedemployeesshould receiveseparationpayattherateofonehalfmonthpayperyearofserviceinsteadofarateequivalenttoonemonthforeveryyearofservice.Healsoheld that thepetitionershadno right to invokecompanypolicyofpayingseparationpayequivalent toonemonthpayforeveryyearofemploymentgrantedbySDPIforitsretrenchedemployeesinitsplantations.Healsoruledthatthepetitionerswereestoppedfromdemandingforseparationpaydifferentialsbecausetheyvoluntarilyandwillinglyexecutedtheirrespectivedeedsofquitclaim.

Aggrieved,thepetitionersappealedtotheNLRC,whichissuedaResolutiononMay19,1999affirmingthedecisionoftheELA.[15]TheNLRCruledthatpaymentofseparationpayincheckdidnotviolateArticle102oftheLaborCodewhichrequiredpaymentofwagesinlegaltenderbecause(a)thecheckisalegaltenderand(b)thestatementallowspaymentofwagesincheckinspecialcircumstances,asinthepresentcasewheretheindividualcomplaintswerepaidlargeamountsofmonetarybenefits.

Dissatisfied,thepetitionersfiledamotionforreconsiderationoftheresolution,contendingthattheNLRCdeniedthesaidmotionforlackofmerit.IntheabsenceofanyprovisionintheCBA,theexistingcompanypolicyorpracticeshouldhavebeenappliedinthecomputationoftheseparationpayofthemonthlypaidemployees.Theenotedthat inseveral instances,SDPIhad paid separation pay computed at onemonth per year of service. TheNLRC denied themotion in aResolution datedAugust23,1999.[16]

Distressed,thepetitionersfiledapetitionforcertiorariunderRule65ofthe1997RulesofProcedurebeforetheCourtofAppeals(CA)docketedasCAG.R.SPNo.56230.Thepetitionersallegedthat:



(I)

THERESPONDENTNLRCCOMMITEDGRAVEABUSEOFDISCRETIONAMOUNTINGTOLACKOREXCESSOFJURISDICTION,MORESPECIFICALLY,INNOTRULINGTHATTHEELIMINATIONORDIMINUTIONOFEMPLOYEEBENEFITSISPROHIBITEDUNDERARTICLE100OFTHELABORCODE,ASAMENDED.

(II)

THERESPONDENTNLRCCOMMITTEDGRAVEABUSEOFDISCRETIONAMOUNTINGTOLACKOREXCESSOFJURISDICTION,MORESPECIFICALLY,WHENITRULEDTHATPETITIONERWORKERSWEREESTOPEDFROMCLAIMINGTHEBALANCEOFTHEIRSEPARATIONPAYORBENEFITS.

(III)

THERESPONDENTNLRCCOMMITTEDGRAVEABUSEOFDISCRETIONAMOUNTINGTOLACKOREXCESSOFJURISDICTION,MORESPECIFICALLY,WHENITRULEDTHATCHECKISLEGALTENDER.[17]

InitsManifestationandMotion,theOfficeoftheSolicitorGeneral(OSG)agreedthatthepetitionersweredismissedbasedonauthorizedcause.However,itassertedthattheywereentitledtoseparationpayequivalenttoonemonthpayforeveryyearof service. Citing the case ofRobles v. Zambales ChromiteMining Co., [18] the OSG opined that to hold that payment ofseparation pay equivalent to onemonth pay applies only in cases of retrenchment and notwhen the termination is due tocessationofbusinessoperationsnotduetoseriousbusiness losses,wouldcreateadistinctionwhichwasnotcontemplatedunderthelaw.AccordingtotheOSG,Section9,ImplementingRulesofBookVI,whichprovidesthatincaseofterminationsbasedonbusinessclosures,separationpayshallbecomputedatonehalfmonthpayperyearofservice,cannotprevailovertheprovisionsofthelaw.

TheOSGfurtheredthatthepetitionerswerenotbarredfromrecoveringthebalanceoftheirseparationpaybecausetheywere compelled to sign the quitclaims prepared by the respondentSDPI. The signingwasmade a condition to enable thepetitionerstoreceivetheirseparationpayandothermonetarybenefitswithoutunduedelay.

OnMay7,2001,theCArenderedadecisionaffirmingthedecisionoftheNLRCanddismissingthepetition.ApplyingArticle283of theLaborCode, theCAruled thatseparationpaydue tobusinessclosuresnotdue tobusiness

lossesshallbeequivalenttoonemonthpayoratleastonehalfmonthpayforeveryyearofservice,whicheverishigher.CitingthecasesofPhilippineTobaccoFlueCuring&RedryingCorporationv.NLRC[19]andNaguiat v.NLRC,[20] theCAheld thatseparation pay of employees dismissed based on business closures should be one half their respective monthly wage,multipliedby thenumberofyears theyactually renderedservice,provided that theyworked forat leastsixmonthsduringagivenyear.

ThethresholdissueiswhetherornottheCAerredinholdingthatthepetitionersareentitledtoseparationpayequivalentto



onehalfmonthpayforeveryyearofemploymentwiththeprivaterespondent.Thepetitioners contend that theprivate respondent isboundby itspolicyof grantingseparationpayequivalent toone

monthpayforeveryyearofservicetoitsretrenchedemployeesintheTumajubongandLatuanplantationspriortotheclosureofLatuanrubberplantationwheretheywereemployed.TheyaverthattheseparationpayequivalenttoonehalfmonthpayforeveryyearofservicewiththeprivaterespondentisproscribedbyArticle100oftheLaborCodeofthePhilippines,towit:

ART.100.Prohibitionagainsteliminationordiminutionofbenefits.Nothinginthisbookshallbeconstruedtoeliminateorinanywaydiminishsupplements,orotheremployeebenefitsbeingenjoyedatthetimeofpromulgationofthisCode.

Thepetitionersposit thatArticle100of theLaborCodeof thePhilippinesshouldprevailoveranyprovisionsof theCBAbetweentheNFLandtheprivaterespondent.Theyassert that theybelieved ingoodfaith that theprivaterespondentwouldfollowandimplementitspolicywhichhadbeenineffectevenbeforetheprivaterespondentandtheNFLexecutedtheirCBA.They contend that had theNFL and/or itsmembers been informed, before the execution of the saidCBA, that the privaterespondentwouldnotfollowitspolicywhentheplantationstoppeditsoperation,forsure,NFLand/oritsmemberswouldhaveinsistedintheinclusionintheCBAofaprovisiongrantingeachofthemseparationpayequivalenttoonemonthpayforeveryyearofservice.Ontheotherhand,theCAruledthat:

WeagreewithrespondentSDPIthatitspastpaymentofseparationpayatone(1)monthpayforeveryyearofservicecannotbetakenasprecedentorcompanypracticeapplicabletoindividualcomplaintshereinduetodifferentfactualsetting.Firstly,therewasnoprovisionintheCBAbetweentherespondentSDPIandtherankandfileemployeesinTumajubongRubberPlantationfixingtherateofseparationpayforanyworkerwhowasterminatedforauthorizedcause.Secondly,theTumajubongRubberPlantationandLatuanRubberPlantationwhereindividualcomplaintshereinwereassignedweretwoentities,separateanddistinctfromeachother.Thirdly,theworkersintheLatuanRubberPlantationalludedtohavebeenterminatedfromemploymentonApril1,1994inpursuanceofthestaffreductionprogramwereactuallyseparatedfromtheserviceduetoredundancy,and,assuch,theywereentitledtoseparationpayequivalenttoone(1)monthpayforeveryyearofserviceunderArticle283oftheLaborCode.Fourthly,RustomDemocritoandothercomplainingworkersintheearlyNLRCCaseNo.M00145793(RAB09110029790)werepaidoftheirseparationpayatone(1)monthpayperyearofservicebyvirtueofacompromisesettlement.

Ifatall,respondentSDPI,throughMr.OrtallaandotherrepresentativesintheCBAnegotiations,haveintendedtouniformlygrantseparationpayatone(1)monthpayperyearofservicetoallworkerswhowereterminatedfromemploymentduetoauthorizedcauseaswhatcomplainantswouldwanttomakeitappear,thepartiestotheCBAcouldhaveexpresslymadeaprovisiontothateffecttoeraseanydoubttothecontrary.[21]

WeagreewiththeNLRCandtheCA.Article283of theLaborCodeprovides thatemployeeswhoaredismisseddue toclosures thatarenotdue tobusiness

insolvency should be paid separation pay equivalent to onemonth pay or to at least onehalfmonth pay for every year ofservice,whicheverishigher.Afractionofatleastsixmonthsshallbeconsideredonewholeyear,thus:



ART.283.Closureofestablishmentandreductionofpersonnel.Theemployermayalsoterminatetheemploymentofanyemployeeduetoinstallationoflaborsavingdevices,redundancy,retrenchmenttopreventlossesortheclosingorcessationofoperationoftheestablishmentorundertakingunlesstheclosingisforthepurposeofcircumventingtheprovisionsofthisTitle,byservingawrittennoticeontheworkersandtheMinistryofLaborandEmploymentatleastone(1)monthbeforetheintendeddatethereof.Incaseofterminationduetoinstallationoflaborsavingdevicesorredundancy,theworkeraffectedtherebyshallbeentitledtoatleasthisone(1)monthpayortoatleast(1)monthpayforeveryyearofservice,whicheverishigher.Incaseofretrenchmenttopreventlossesandincasesofclosureorcessationofoperationsofestablishmentorundertakingnotduetoseriousbusinesslossesorfinancialreverses,theseparationpayshallbeequivalenttoone(1)monthpayortoatleastonehalf(1/2)monthpayforeveryyearofservice,whicheverishigher.Afractionofatleastsix(6)monthsshallbeconsideredone(1)wholeyear.

Patently,incasesofclosuresorcessationofoperationsofestablishmentorundertakingnotduetoseriousbusinesslossesorfinancialreverses,theseparationpayofemployeesshallbeequivalenttoonemonthpayortoatleastonehalfmonthpayforeveryyearofservice,whichever ishigher.[22] Innocasewillanemployeeget less thanonemonthseparationpay if theseparation from theservice isdue to theabovestatedcauses,provided thathehasalreadyserved forat leastsixmonths.Thus,ifanemployeehadbeenintheserviceforatleastsixmonths,heisentitledtoafullmonthspayashisterminationpayifhisseparationfromthejobisduetoanyofthecausesenumeratedabove.However,ifhehastohiscredittenyearsofservice,heisentitledtofivemonthspay,thisbeinghigherthanonemonthpay.Stateddifferently,thecomputationofterminationpayshould be based on either onemonth or onehalfmonth pay,whicheverwill yield to the employees higher separation pay,takingintoconsiderationhislengthofservice.[23]

Inthiscase,thepetitionershadservedtherespondentSDPIforaperiodlongerthansixmonths.Hence,theirseparationpaycomputedatonehalfpayperyearofserviceismorethantheminimumonemonthpay.

Pursuanttothe1995CBAbetweentheSDPIanditsLatuandailypaidrankandfileemployees,permanentortemporarylayoffworkersaffectedwouldbeentitled to terminationpayasby theLaborCode.[24]Thepartiesdidnot incorporate in theCBA a specific provision providing that employees terminated from employment due to the closure of business operationswouldbeentitledtoseparationpayequivalenttoonemonthpayforeveryyearofservice.ThepartiesoptedtobeboundbytheprovisionsoftheLaborCodeandnotbycompanypolicy.TheemployeesoftheprivaterespondentwhoweremembersoftheNFLratifiedtheCBAwhichhadbeeninforceandeffectforthreeyearsbeforetheclosureoftheplantation,withouttheNFLinitiatingtherevisionthereof.

It bears stressing that a collective bargaining agreement refers to the negotiated contract between the legitimate labororganization and the employer concerning wages, hours of work and all other terms and conditions of employment in thebargainingunit.[25]Duringthenegotiations,theparties,managementandunionmeetandconvenepromptlyandexpeditiouslyingoodfaithforthepurposeofnegotiatinganagreement.[26]Hadthedailypaidrankandfileemployeesdeemedthesametobeadiminutionoftheirbenefits,theyshouldhaverejectedtheCBA.ThepetitionersneverassailedtheCBAasprejudicialtothemorforhavingbeeninviolationofArticle100oftheLaborCode.Unlessannulled,theCBA,asacontractgoverningtheemployerandtheemployeesrespectingthetermsofemployment,shouldprevail.



Therecordsrevealthatthereisnosubstantialevidencetosupporttheclaimthatasimilarpracticehadbeenmadeinthecaseofmonthlypaidemployees.NeitheristhereanyevidencethataCBAexistbetweenmonthlypaidrankandfileemployeesandtheSDPI.Consequently,Article283oftheLaborCode,whichgrantsseparationpayequivalenttoonemonthpayoronehalfmonthpayforeveryyearofservice,whichever ishigher,totheemployeesretrenchedduetobusinessclosures,shouldapply.

We find that the petitioners contention, that they were impelled to execute the deed of quitclaim and receive theirseparationpayandmonetarybenefitsbecause,otherwise,theyandtheirfamilieswouldhavestarved,isimplausible.WeagreewiththefollowingratiocinationoftheELA:

Beforehand,however,itmustbestressedthatwhenthecomplainantswerepaidseparationbenefitsandexecutedtheirquitclaimsandreleasesbeforetheundersignedon15and16January1998,theundersignedverifiedandconfirmedthattheydidsovoluntarilyandwillingly,afterhavingbeenmadetounderstandtheconsequencesthereof.Andtheyreceivedtheirseparationbenefitsandexecutedtheirquitclaimsandreleasesdespitethefactthattheyhadaskedforbutwerenotgrantedahigherrateofseparationpaythattheirunionofficerswerepresentatthattimethattheyweremadetounderstandtheconsequencesoftheirreceivingtheseparationbenefitsprofferedtothemandtheirexecutionofquitclaimsandreleases.

Theirvoluntaryacceptanceofseparationbenefitsandexecutionofquitclaimsandreleases,tothemindoftheundersigned,nowbarsthecomplainantsfromaskingformore.Iftheywerenotamenabletothecomputationoramountthereof,theyshouldhaveacceptedthesame.Butbysoacceptingtheseparationbenefits,theytherebyenteredintoacompromisethereonwithSDPI.Thisisso,eveniftheexistenceofcompanypolicyorpracticeonthebasisofwhichthecomplainantsaskforseparationpaydifferentials,isassumedtobetrue.

Whileitistruethatquitclaimsarefrownedupontheinlaborclaims,thisholdstrueonlywhentheconsiderationthereforisunconscionablylow.Where,however,theconsiderationissubstantial,theefficacyandvaliditythereofhasbeenupheld,moreso,wherethequitclaimwasvoluntarilyandwillinglyexecuted,asintheinstantcase.

Theamountofseparationpaypaidtoandreceivedbythecomplainants,wasonehalfofwhattheywanted.Tothemindoftheundersigned,thatconstitutedsubstantialconsiderationforthequitclaimsthecomplainantsvoluntarilyexecuted.Thisisparticularlyso,consideringthattheseparationpaythecomplainantsreceived(onehalfmonthpayforeveryyearofservice)wastheminimumprescribedbylaw,asembodiedinArticle283oftheLaborCode,asamended.

AsheldinPeriquetvs.NationalLaborRelationsCommission,186SCRA724(1990):

Notallwaiversandquitclaimsareinvalidasagainstpublicpolicy.Iftheagreementwasvoluntarilyenteredintoandrepresentsareasonablesettlement,itisbindingonthepartiesandmaynotbedisownedsimplybecauseofachangedofmind.Itisonlywherethereisaclearproofthatthewaiverwaswangledfromanunsuspectingorgullibleperson,orthetermsofthesettlementareunconscionableonitsface,thatthelawwillstepintoannulthequestionabletransaction.Butwhereitisshownthatthepersonmakingthewaiverdidsovoluntarily,withfullunderstandingofwhathewasdoing,andtheconsiderationforthequitclaimiscredibleandreasonable,thetransactionmustrecognizedasavalidandbindingundertaking.



ThisrulingwassubsequentlyreiteratedandappliedinSamaniegovs.NationalLaborRelationsCommission,198SCRA(1991)andVelosovs.DepartmentofLaborandEmployment,200SCRA201(1991).

Accordingly,thecomplainantsarenotentitledto,andcannotanymorebegrantedseparationpaydifferentials.

Itbearsstressinganewthatthecomplainantswerepaidsubstantialamountsofseparationpayinthepresenceoftheundersigned,beforewhomtheyexecutedandcorrespondingquitclaimsandreleasesandtowhomtheyaffirmedthevoluntarinessandtheirwillingnessastotheexecutionthereofandreceiptofseparationbenefitsprofferedtothembySDPIatthattime,withunderstandingastothecontentsofthequitclaimsandreleasesandtheconsequencesoftheirsaidacts.

Inthelightoftheforegoingdiscussion,theothermoneyclaimsofthecomplainantsmustalsobesetaside.[27]

Wedonot agreewith the claimof the petitioners that the payment of separation pay and other benefits in check is inviolationofArticle102oftheLaborCode,whichprovides:

Art.102.FormsofPayment.Noemployersshallpaythewagesofanemployeebymeansofpromissorynotes,vouchers,coupons,tokens,tickets,chitsoranyobjectotherthanlegaltender,evenwhenexpresslyrequestedbytheemployee.

PaymentofwagesbycheckormoneyordershallbeallowedwhensuchpaymentiscustomaryonthedateofeffectivityofthisCode,orisnecessarybecauseofspecialcircumstancesasspecifiedinappropriateregulationstobeissuedbytheSecretaryofLabororastipulationinacollectivebargainingagreement.

Paymentbycheckpaymentofwagesbybankchecks,postalchecksormoneyordersisallowedwheresuchmannerofwagepaymentiscustomaryonthedateoftheeffectivityoftheCode,whereitisstipulatedinacollectivebargainingagreement,orwhereallofthefollowingconditionsaremet:

1.Thereisabankorotherfacilityforencashmentwithinaradiusofone(1)kilometerfromtheworkplace2. The employer, or any of his agents or representatives, does not receive any pecuniary benefit directly or indirectly from the

arrangement3. The employee are given reasonable time during banking hours to withdraw their wages from the bank which time shall be

consideredascompensablehoursworkedifdoneduringtheworkinghoursand4.Thepaymentbycheckiswiththewrittenconsentoftheemployeesconcernedifthereisnocollectiveagreementauthorizingthe

paymentofwagesbybankchecks.[28]

The termwagewas defined in Article 97(f) of the Labor Code as the remuneration or earnings, however, designated,capableofbeingexpressed in termsofmoney,whether fixedorascertainedona time, task,piece,orcommissionbasis,orothermethodofcalculatingtheunwrittencontractofemploymentforworkdoneortobedone,orforservicesrenderedortoberendered and includes the fair and reasonable value, as determined by theSecretary of Labor, of board, lodging, or other



facilitiescustomarily furnishedby theemployer to theemployee.[29]Wagesshallbepaidonlybymeansof legal tender.Theonlyinstancewhenanemployerispermittedtopaywagesinformsotherthanlegaltender,thatisbychecksormoneyorder,iswhenthecircumstancesprescribedinthesecondparagraphofArticle102arepresent.

Inthepresentcase,thepetitionersseparationpay,otherbenefits,andthewagesfromJanuary1to17werepaidincheck.Strictlyspeaking,SDPIviolatedtheLaborCodewhenitincludedwagesfromJanuary1to17,1998inthecheck.Considering,however, the amount of othermonetary benefits to be paid, payment in checkwas themost convenient form for both thepetitioners and the respondent. Further, as pointed out by the respondents, the petitioners are deemed estopped fromquestioningthelegalityofpaymentofwagesfromJanuary1to17,1998incheckbecausethesamewasraisedforthefirsttimeonlyintheirappealbeforetheNLRC.

INLIGHTOFALLTHEFOREGOING,thepetitionisDENIED.ThedecisionandresolutionoftheCourtofAppealsinCAG.R.SPNo.56230areAFFIRMED.

SOORDERED.Puno,(Chairman),AustriaMartinez,andTinga,JJ.,concur.ChicoNazario,J.,onleave.

[1]PennedbyAssociateJusticeEliezerR.delosSantos,withAssociateJusticesGodardoA.JacintoandBernardoP.Abesamis(retired),concurring.[2]Rollo,pp.5455.[3]Supra.[4]ComprehensiveAgrarianReformLawof1988Annotated,VenancioAgustin,1990ed.,p.145.[5]Rollo,p.169.[6]Id.at92.[7]Id.at91.[8]Id.at94.[9]Id.at170.[10]Id.at268and278.[11]CARollo,p.41.



[12]Id.at271272.[13]Id.at42.[14]Rollo,p.65.[15]Id.at75.[16]Id.at104.[17]CARollop.10.[18]104Phil.688(1958).[19]300SCRA37(1998).[20]269SCRA564(1997).[21]Rollo,p.73.[22]MacAdamsMetal EngineeringWorkersUnionIndependent v.MacAdamsMetal Engineering,414 SCRA 411 (2003)Tanjuan v. Philippine Postal

SavingsBank,Inc.411SCRA168(2003).[23]HandbookonWorkersStatutoryMonetaryBenefits.[24]CARollo,p.43.[25]Section1(pp),RuleI,BookVoftheOmnibusRulesImplementingtheLaborCode.[26]Article252oftheLaborCode.[27]Rollo,pp.6364.[28]Section2,RuleVIII,BookIII,OmnibusRulesImplementingtheLaborCode.[29]PhilippineAirlines,Inc.v.NLRC,263SCRA638(1996)

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3 National Federation of Labor vs CA