Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission 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.
Editor’s notes from DOLE (1)
Sec. 22 of E.O. No. 126 (1987), as amended by EO No. 251, created the National Conciliation and Mediation Board (NCMB) to “absorb the conciliation, mediation, and voluntary arbitration functions of the Bureau of Labor Relations,” hence, the terms "Bureau" and "regional office of the Department of Labor" shall be understood to read as "Board" and Regional Branches of the NCMB," respectively. See Sec. 3, Rule V (Settlement of Dispute), of The Rules of Procedure of the Single Entry Approach (2011), issued pursuant to the provisions of D.O. No. 107 (2010), Guidelines on the Single Entry Approach Prescribing a 30-day Mandatory Conciliation-Mediation Services for All Labor and Employment Cases: “Sec. 3. Settlement Agreements on Monetary Claims. – Where the parties entered into a compromise of monetary claims arising from violation of labor standards law, the amount of the compromise shall be fair and reasonable, and not contrary to law, public morals and public policy. “The fairness/reasonableness of settlement agreements shall depend on the totality of the circumstances, the degree of voluntariness and credibility of the consideration. “The insistence of the requesting party to accept a given amount despite having knowledge of his/her rightful claims shall give rise to the presumption of absence of fraud, violence or coercion and his/her voluntariness to accept the settlement agreement. “The foregoing circumstances shall be fully disclosed in the settlement agreement.” See also Rule XII (Compromise Agreement) of D.O. No. 183 (2017), Revised Rules on the Administration and Enforcement of Labor Laws Pursuant to Article 128 of the Labor Code, as Renumbered, which provides: “Compromise Agreement. – Should the parties arrive at an agreement as to the mode of payment or compliance, said agreement shall be reduced in writing and signed by the parties in the presence of the Regional Director or his/her duly authorized representative. The Compromise Agreement shall be bind the parties provided that the person making the compromise did so voluntarily, with full understanding of the facts and of the consequences thereof, and for a consideration which is adequate and reasonable…”
Text and numbering follow the Department of Labor and Employment's 2022 edition of Presidential Decree No. 442, as amended and renumbered under DOLE Department Advisory No. 01, series of 2015. Former article numbers are shown in brackets. Notes are DOLE's editorial notes. Amendments after that edition are not included. For information and research only, and not legal advice. For certified copies, refer to the Official Gazette or the issuing agency.