EDI-Staff Builders v.

NLRC
GR# 145587 | October 26, 2007
Issue:
WON There was proper waiver

Facts:
EDI is a corporation engaged in Recruitment and Placement of OFWs. ESI is another Recruitment Agency
collaborating with EDI to process documentation and deployment to Saudi.

Eleazar Gran was an OFW recruited by EDI and deployed by ESI under Omar Ahmed Ali Bin Bechr (OAB) in
Saudi. OABm thru EDI asked for the CVs of qualified applicants as “Computer Specialist. The Fax also states
that if Gran agrees to the terms of employment, one of which was a monthly salary of $600, then EDI may
arrange for Gran’s Immediate Dispatch.

After Accepting OAB’s offer of Employment, Gran signed employment contract with Monthly Salary of $850
for 2 years. Later, He was terminated by OAB, on the following grounds (1) non-compliance with contract
requirements by Recruitment Agency etc.

Later, Gran received from OAB his final pay, and executed a Declaration releasing OAB from any Financial
Obligation or Otherwise towards him.

Upon his arrival in the Philippines, Grant filed complaint against ESI/EDI, OAB, Country Bankers, etc, for
Underpayment of Wages, Salaries, Illegal Dismissal, backwages.

OAB, and EDI/ESI contend that Gran may no longer claim backwages on account of quitclaim he signed.

Held:
No. Quitclaim is Null and Void
Quitclaims, releases and other waivers of benefits granted by laws or contracts in favor of workers should be
strictly scrutinized to protect the weak and the disadvantaged. The waivers should be carefully examined, in
regard not only to the words and terms used, but also the factual circumstances under which they have been
executed

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step
in to annul the questionable transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding undertaking

In this Case:
1) The Salary Paid to Gran upon his termination is unreasonably low. The payment of the money is
Even lower than his monthly Salary. In addition, it is very much less his claim ($16,150) which he is
legally entitled to.
 2) The “Declaration” is only for payment of Gran’s salary for services he rendered. If the Declaration is
a quitclaim, it should be much, much more than his monthly salary of $850. A quitclaim will
understandably be lower than the sum total of amounts and benefits awarded to employees, since it
is a compromise where employees will have to forfeit a certain portion of the amounts they are
claiming. The court may step in when such amount is unconscionably low/unreasonable enough
3) Gran did NOT voluntarily and Freely execute the document (He was forced to sign the declaration
and constrained to receive the amount, since he was told he was to leave Riyadh, he had no other
choice but to sign the Declaration as he needed the money for payment of his ticket.
4) The Declaration is a Contract of Adhesion that should be construed against Employer. An Adheson
contract is a Take it or Leave it situation.

Waiver in Saudi is Unenforceable under Philippine Laws in the Absence of Proof of the Applicable Law in
Saudi Arabia.

Requisites of Valid Waiver under Philippine Laws

1) Fixed Amount as Full and Final Compromise Settlement
2) The benefits of the employees if possible with corresponding amounts, which of the employees are
giving up in consideration of the fixed compromise amount
3) Statement that the employer has certainly explained to the employee in English, Filipino, or in the
dialect known to the employees -- that by signing the waiver or quitclaim, we are forfeiting or
relinquishing their right to receive the benefits which are due them under the law
4) Statement that the employee signed and executed the document voluntarily, and had fully
understood the content of the document and that their consent was freely given without any threat,
violence, dress, intimidation, or undue influence exerted on their person.

It is advisable that the stipulations be made in English AND Tagalog or in the dialect known to the employee.
There should be 2 witnesses to the execution of quitclaim who must also sign the quitclaim. The document
should be subscribed and sworn to under oath preferably before any administering official of the DOLE or its
regional office, the Bureau of Labor relations, the NLRC, or a labor attache in a foreign country. Such official
assist the parties regarding the execution over the quitclaim and waiver.

This compromise settlement becomes final and binding under Art. 227, LC:

Any compromise settlement voluntarily agreed upon with the assistance of the Bureau of Labor
relations or the regional office of the DOLE, shall be final and binding upon the parties and the NLRC, or any
court shall not assume jurisdiction over issues involved therein except in case of non compliance thereof, or if
there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

the foregoing rules on quitclaim or waiver shall apply only to those labor contracts of OFWs in absence of proof
of loss of the foreign country agreed upon to govern said contracts. Otherwise, foreign laws shall apply.