Waiver & Release versus the Statutory Right to a Certificate of Employment (COE)
(Philippine labour-law perspective, updated to June 2025)
1. Overview
In Philippine practice, two very different post-employment documents often become intertwined:
| Concept | Purpose | Issuer | Typical Timing |
|---|---|---|---|
| Waiver / Quitclaim / Release | Discharge employer from further liability arising from the employment relationship (e.g., illegal-dismissal claims, wage differentials, damages). | Employee (voluntarily—but often prepared by the employer). | At, or shortly after, separation. |
| Certificate of Employment (COE) | Provide an official, neutral record of one’s employment history and last compensation, so the worker can move on to the next job or pursue other transactions. | Employer (a statutory duty, on request). | “Within 3 working days” from the employee’s request (per DOLE Labor Advisory No. 06-20 / 2020). |
Because employers sometimes withhold the COE until a quitclaim is signed, it is crucial to understand why the two must be treated separately and what the law and jurisprudence actually say.
2. Legal Bases
| Topic | Primary Sources | Key Points |
|---|---|---|
| Right to COE | Labor Code (as renumbered, Art. 277 [old 284]); DOLE Labor Advisory No. 06-20 (31 Jan 2020); DOLE Department Order No. 174-17 (contracting/ sub-contracting) |
– Any employee, “current or former,” may demand a COE. – Employer must issue it within 3 working days of request, free of charge. – Minimum contents: complete name of employee, position(s) held, inclusive dates, last pay. – Reason for separation may not be inserted unilaterally; it may appear only “[u]pon request of the employee.” |
| Waiver/Quitclaim/Release | Civil Code Arts. 6, 1306, 1390-1396 (consent, object, cause, vitiation); Labor Code Art. 22 (prohibition on elimination of minimum labour standards); Supreme Court decisions: Prudential Bank v. Sta. Maria (G.R. 150197, 25 Apr 2006); Midsayap Water v. Datumanong (G.R. 174938, 04 Nov 2009); Nielsen v. CA (G.R. 233572, 26 Apr 2021), among many others. |
– Quitclaims are not per se void, but they are looked upon with disfavor and may be nullified when executed involuntarily, for a grossly inadequate consideration, or through mistake/fraud. – Any waiver of statutory rights (e.g., minimum wages, SSS, PAG-IBIG, COE issuance, security of tenure) is invalid. – Even a facially valid quitclaim cannot bar future claims if the consideration is “unconscionably low.” |
3. Common Misconceptions Debunked
| Myth | Reality |
|---|---|
| “No quitclaim, no COE.” | Unlawful. The COE is a statutory entitlement that cannot be made conditional on the signing of a waiver/quitclaim. Refusal exposes the employer to an Unfair Labor Practice charge and administrative fines under the Labor Code and DOLE rules. |
| “Once I sign a waiver, I can’t sue anymore.” | Not necessarily. Courts routinely set aside quitclaims that (a) were signed under duress, (b) exchange rights for a pittance, or (c) waive non-negotiable statutory benefits. |
| “The COE can include derogatory remarks.” | Only if requested by the employee (e.g., to explain a gap). Otherwise, the COE must be neutral and factual. Adding gratuitous negative statements exposes the employer to civil liability for damages and may constitute bad-faith interference with employment prospects. |
4. Detailed Comparison
| Aspect | Waiver / Quitclaim / Release | Certificate of Employment |
|---|---|---|
| Who prepares/signs | Drafted by employer, signed by employee. | Prepared and signed by employer’s authorized officer (HR Head, etc.). |
| Voluntariness required | Yes; any coercion invalidates it. | Not applicable—statutory mandate. |
| Consideration | Valid only if there is a reasonable settlement amount over and above statutory benefits. | Issued free of charge. |
| Waivable? | Employee may waive contractual or contingent claims but never minimum labor standards or future crimes (e.g., illegal dismissal if vitiated). | Non-waivable statutory right. |
| Typical disputes | – Adequacy of compensation – Duress/pressure – Scope (does it cover 13th-month, service incentive leave, etc.?) |
– Employer refusal or delay in issuance – Insertion of negative statements – Charging a fee for “processing.” |
| Legal remedy | File complaint for illegal dismissal / monetary claims before the NLRC or Labor Arbiter; seek nullification of quitclaim. | File money-claims* complaint (Art. 129/ 229) or initiate a DOLE Single-Entry Approach (SEnA) for immediate mediation; may also invoke Art. 118 (Unfair Labor Practice) if refusal is malicious. |
*Although a COE is non-monetary, the NLRC/Labor Arbiter still has jurisdiction because the right stems from the Labor Code and is “incidental to employment.”
5. Jurisprudential Highlights on Quitclaims
Prudential Bank v. Sta. Maria (2006) Holding: A quitclaim does not bar an employee from questioning the legality of dismissal if the amount paid is much less than what the worker is legally entitled to.
Midsayap Water District v. Datumanong (2009) Holding: Release documents are ineffective when the employee’s consent is vitiated by necessities of poverty and fear of financial ruin.
Nielsen v. Court of Appeals (2021) Holding: To be valid, a waiver must be clear, voluntary, and intelligently executed, with a consideration “reasonable and credible, and not unconscionable.”
The consistent thread: Philippine courts prize substance over form; even a notarially executed quitclaim can be struck down if it defeats the public policy of protecting labor (Const., Art. XIII §3).
6. Administrative Enforcement of the COE Right
- Labor Advisory No. 06-20 empowers DOLE Regional/Field Offices to summarily fine obstinate employers ₱1,000–₱10,000 per offense.
- Workers can file an SEnA Request for Assistance to compel immediate issuance—often resolved within 30 days.
- Persistent refusal may rise to serious misconduct sanctionable under Art. 303 of the Labor Code (interference with employee self-organization and employment).
7. Practical Guidance for HR & Employees
For Employers
- Develop a standard COE template (neutral, factual) and a SOP to release it within three working days.
- Separate the settlement/quitclaim process from COE issuance. Never link the two.
- Offer quitclaim consideration that meets or exceeds statutory and equitable entitlements—document computations transparently.
For Employees
Request the COE in writing (email or HR ticket) to start the 3-day clock.
If presented with a quitclaim, review:
- Does it waive only amounts already fully paid?
- Is the consideration fair?
- Was there any pressure or threat?
If in doubt, sign “under protest” or negotiate, then file a SEnA request or NLRC complaint if rights are impaired.
8. Key Take-Aways
- The Certificate of Employment is a non-negotiable statutory right.
- A waiver/quitclaim is a private settlement whose validity hinges on voluntariness and reasonable consideration.
- One cannot be traded for the other; conditioning COE issuance on signing a quitclaim is prohibited coercion.
- Philippine jurisprudence affirms labor’s constitutional protection: courts will not uphold documents that sacrifice statutory rights or are tainted by duress.
Bottom line: Protecting both employer and employee interests means keeping the COE and the quitclaim in their proper, separate lanes—and honoring each according to the law’s letter and spirit.