G.R. No. 186475 - Poseidon International Maritime Services, Inc. vs. Tamala

In 2004, Poseidon International Maritime Services, Inc. (Poseidon) hired four seafarers on behalf of Van Doorn Fishing Pty, Ltd. (Van Doorn) and its partners (Dinko Tuna Farmers Pty. Ltd. and Snappertuna Cv. Lda.) to man fishing vessels in the Cape Verde Islands.
The contracts, with details on contracting dates, positions, vessel assignments, contract duration, basic monthly salaries, guaranteed overtime pay, and vacation leave pay, were duly approved and formed the basis of the employment relationship.

The fishing operations began on September 17, 2004, but abruptly stopped on November 20, 2004, and did not resume.
On May 25, 2005, while still on board, the immediate employer Goran Ekstrom of Snappertuna and the respondents executed an agreement providing that the respondents would receive 100% of their unpaid salaries for the non-expired portion of their contracts, computed in accordance with Philippine laws.
On May 26, 2005, Poseidon, Van Doorn, along with representatives from Snappertuna and Dinko, entered into a subsequent agreement (letter of acceptance) that reduced the agreed amount to 50% of the respondents’ unpaid salaries (settlement pay).

The settlement pay was disbursed on June 10, 2005, following which the respondents signed waivers and quitclaims acknowledging receipt of these payments.
On November 16, 2005, the respondents filed a complaint before the Labor Arbitration Branch of the NLRC for illegal termination of employment, non-payment of salaries for the remaining contract period, overtime, and vacation leave pay, as well as for moral, exemplary damages, and attorney’s fees.
The core of the respondents’ claim rested on the May 25, 2005 agreement, arguing that the subsequent waiver and quitclaim should not bar their right to recover the full measure of their unpaid wages.

The Labor Arbiter dismissed the complaint in May 2006, holding that the respondents’ waivers and quitclaims were voluntarily and knowingly executed, thereby binding them to the settlement pay.
The NLRC affirmed the Labor Arbiter’s decision in its December 29, 2006 decision and subsequently denied a motion for reconsideration on February 12, 2007, which led the respondents to file a petition for certiorari before the Court of Appeals under Rule 65.
On September 30, 2008, the Court of Appeals set aside the NLRC’s ruling, finding the waivers and quitclaims invalid due to alleged coercion and undue influence, and awarded the respondents the difference between the unpaid salaries under the original May 25, 2005 agreement and the 50% settlement pay.
Poseidon later filed a petition for review on certiorari challenging the Court of Appeals' decision.

Whether the respondents’ waivers and quitclaims, having been executed after receiving the 50% settlement pay, were voluntary, knowing, and thus binding on the respondents.
Whether the evidence supports that the respondents, being well-informed and mature individuals, consented freely without coercion or undue influence.

Whether Section 10 of R.A. No. 8042 (which provides for the payment of money claims in cases of illegal dismissal) applies to the respondents’ claim for unpaid salaries.
Whether the termination of the respondents’ employment was an illegal dismissal or a legitimate exercise of the management prerogative due to a business decision (cessation of operations).

Whether the failure to observe the procedural requisites under Article 283 of the Labor Code by the employer (i.e., serving the requisite notice prior to termination) entitles the respondents to nominal damages.
Whether the Court of Appeals erred in imputing grave abuse of discretion on the part of the NLRC by giving weight to the unendorsed May 25, 2005 agreement over the executed waivers and quitclaims.