Excessively low compromise agreements are invalid — SC
Excessively low compromise agreements are invalid — SC The Supreme Court (SC) has ruled that compromise agreements and settlements that offer employees excessively low amounts are invalid. In a decision promulgated in May, the SC Second Division invalidated the compromise agreement between two companies and several illegally dismissed employees. The SC said the petitioners were 12 out of 35 employees earlier declared as illegally dismissed by the two companies. The court ordered the companies to pay the employees backwages and separation pay. According to the SC, the employees later agreed to receive settlement amounts ranging from 5.20% to 23.42% of the backwages and separation pay they were entitled. The National Labor Relations Commission (NLRC) ruled that the agreements were invalid because the amounts given to the petitioners were unreasonable. However, the Court of Appeals found that the agreements were valid as they were voluntarily signed by the petitioners. This prompted th