35. Philippine Carpet Manufacturing Corp vs. Ignacio Tagyamon
quitclaim is not a bar to the pursuit of illegal dismissal case.
Doctrine The
PCMC contends that Retrenchment was a necessary management prerogative. Petitioners also stressed that respondents belatedly filed their complaint as they allowed almost three years to pass making the principle of laches applicable. applicable. Considering that respondents accepted their separation pay and voluntarily executed deeds of release, waiver and quitclaim, PCMC invoked the principle of estoppel on the part of respondents to question their separation from the service. Finally, as to Marcos, Ilao and Nemis, PCMC emphasized that they were not dismissed from employment, but in fact they voluntarily retired from employment to take advantage of the company’s program
law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. responsibilities — . — As As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the employees’ consent had been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. The circumstances show that petitioner’s misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of the deeds of release, waiver and quitclaim.
FACTS: Petitioner Philippine Carpet Manufacturing Corporation (PCMC ( PCMC ) is a corporation registered in the Philippines engaged in the business of manufacturing wool and yarn carpets and rugs. rugs.4 Respondents were its regular and permanent employees, but were affected by petitioner’s retrenchment and voluntary retirement programs. The alleged reason of PCMC for such action was because of less demand in the market of their products due to the uncompetitiveness competitiveness of their price On March 15, 2004, Tagyamon, Luna, Badayos, Dela Cruz, and Comandao, Comandao, received a uniformly worded Memorandum of dismissal stating that they are going to be retrenched because of the slump in market demand. As to Marcos, Ilao, and Nemis, they claimed that they were dismissed effective March 31, 2004, together with fifteen (15) other employees on the ground of lack of market/slump in demand. Due to what happened in September 11(world trade center bombing) and the war in the middle east. PCMC, however, claimed that they availed of the company’s voluntary retirement program and, in fact, voluntarily executed their respective Deeds of Release, Waiver, and Quitclaim. Thus, they filed a complaint for illegal dismissal against PCMC, Mr. Patricio Lim and Mr. David Lim. These cases were later consolidated. consolidated. Respondents: Respondents: Relied on on the ruling in Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas as to the validity of the company’s retrenchment program. They further explained that PCMC did not, in fact, suffer losses shown by its acts prior to and subsequent to their termination. They also insisted that their acceptance of separation pay and signing of
LA: LA: DISMISSED. Respondents voluntarily opted to retire, were subsequently hired on a contractual basis, terminated, and were paid separation benefits. The filing of the illegal dismissal case was a mere afterthought designed primarily for respondents to collect more money, money , taking advantage of the 2006 Supreme Court decision. NLRC: NLRC: AFFIRMED LA. It emphasized the application of the principle of laches for respondents’ inaction for an unreasonable period. period. CA: CA: REVERSED. The case was instituted prior to the expiration of the prescriptive period set by law which is four years. It stressed that said principle cannot be invoked earlier than the expiration of the prescriptive period. period. Citing the Court’s decision decis ion in the Philcea case, case, the CA applied the doctrine of stare decisis, in view of the similar factual circumstances of the cases. As to Ilao, Nemis and Marcos, while acknowledging their voluntary resignation, the CA found the same not a bar to the illegal dismissal case because they did so on the mistaken belief that PCMC was losing money ISSUE: 1. Whether laches has barred the action – NO, NO, it was filled within the 4 year prescriptive period set by the civil code 2. Whether Stare Decisis applies - NO 3. Whether or not the quitclaim is valid – NO. RATIO: 1.
Laches Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it.
Where the claim was filed within the [four year] statutory period, recovery therefore cannot be barred by laches. Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement commencement of actions at law." An action for reinstatement reinstatement by reason of illegal dismissal is one based on an injury to the complainants’ rights which should be brought within four years from the time of their dismissal pursuant to Article 1146 of the Civil Code. Respondents’ Respondents’ complaint filed almost 3 years after their alleged illegal dismissal was still well within the prescriptive period. Laches cannot, therefore, be invoked yet. yet. To be sure, laches may be applied only upon the most convincing evidence of deliberate inaction, for the rights of labourers are protected under the social justice provisions of the Constitution and under the Civil Code. a.
2.
NOTE: NOTE: NCC says within 4 years but according to the LC prescription is 3 years (so I guess the court interprets 3 years as x<4.
Under the doctrine of stare decisis, decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the parties may be different. Where the facts are essentially different, however, stare decisis does not apply, for a perfectly sound principle as applied to one set of facts might be entirely inappropriate when a factual variant is introduced. This case and the Philcea case involve the same period which is March to April 2004; the issuance of Memorandum to employees informing them of the implementation of the cost reduction program; the implementation of the voluntary retirement program and retrenchment program, except that this case involves different employees; the execution of deeds of release, waiver, and quitclaim, and the acceptance of separation pay by the affected employees. a. The employees in the Philcea case involved union members in relation to retrenchment , retrenchment , while in this case it case it involved employees who were designed to take the early retirement due to their
being misled that the company was suffering financial loses, however SGV found that Philippine Carpet actually ordered 20,000,000 worth of machineries, hired 100 new employees 3 months after they laid off or allegedly retrenched the workers and declared a 30.00 peso dividend per share to the stockholders. This clearly indicates that there was no financial loss (again stare decisis does not apply in this case because the parties are diff, here they were led to take early retirement, and in the other case, they were retrenched.) 3.
The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. responsibilities.—As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the employees’ consent had been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. The circumstances show that petitioner’s misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of the deeds of release, waiver and quitclaim. Economic necessity constrained respondents to accept petitioners’ monetary offer and sign the deeds of release, waiver and quitclaim. That respondents are supervisors and not rank-and-file employees does not make them less susceptible to financial offers, faced as they were with the prospect of unemployment. The Court has allowed supervisory employees to seek payment of benefits and a manager to sue for illegal dismissal even though, for a consideration, they executed deeds of quitclaims releasing their employers from liability. WHEREFORE, WHEREFORE , premises considered, the petition is hereby DENIED. DENIED. The Court of Appeals Decision dated July 7, 2009 and Resolution dated February 26, 2010 in CA-G.R. SP No. 105236 are AFFIRMED are AFFIRMED..
