2010 Labor Law, Q1

TRUE OR FALSE. Explain your answer briefly.
1. Deeds of release, waivers and quitclaims are always valid and binding. (2%)
2. The relations between employer and employee are purely contractual in nature. (2%)
3. As a general rule, direct hiring of Overseas Filipino Workers (OFWs) is not allowed. (2%)

Quick check

Under what condition is a deed of release or quitclaim considered legally valid and binding?

Why are employer-employee relations not considered purely contractual in nature under Philippine law?

What is the general rule regarding the direct hiring of Overseas Filipino Workers by foreign employers under Article 18?

Which entity or authority generally processes foreign recruitment for OFWs in compliance with the direct hiring ban?

Which foreign employers are legally exempt from the general ban on direct hiring of Overseas Filipino Workers?

Learn more about these topics

1. Validity of Quitclaims
Under settled labor jurisprudence, deeds of release, waivers, and quitclaims are not inherently invalid, but they are scrutinously examined by courts and labor tribunals. A quitclaim is rendered null and void when it is executed under duress, coercion, fraud, or misrepresentation, or when the consideration paid is unconscionably low or unreasonable. Furthermore, quitclaims cannot waive future claims or statutory minimum labor standards established by law. To be held valid and binding, a quitclaim must be voluntarily executed, feature reasonable consideration, and involve a genuine, fully informed compromise.

2. Employer Employee Relations
Under Article 1700 of the Civil Code, relations between capital and labor are not merely contractual but are deeply impressed with public interest, requiring state protection for working classes. Consequently, employment contracts are subject to special labor laws, police power regulations, and mandatory statutory standards regarding wages, working conditions, and security of tenure that private contractual stipulations cannot bypass, modify, or undermine. Contractual provisions that attempt to waive statutory labor rights, reduce legal minimum wages, or authorize arbitrary dismissal without due process are automatically void for being contrary to law and public policy.

3. Direct Hiring Prohibition
Under Article 18 of the Labor Code, direct hiring of Overseas Filipino Workers by foreign employers is generally prohibited to safeguard migrant workers against exploitation, illegal recruitment, and unfair labor practices. Foreign principals must recruit and hire Filipino workers exclusively through licensed recruitment agencies or entities authorized by the Department of Migrant Workers. The narrow statutory exceptions to the direct hiring ban apply only to members of the diplomatic corps, international organizations, foreign government officials, and highly technical or managerial professionals approved through official exemption permits issued by the department.

About these questions and answers
The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

They are not official answers, have no connection with the Supreme Court, the Office of the Bar Confidant, or any bar review institution, and are not endorsed by any of them. Official answer keys, where released, should be preferred over anything here.Nothing on this page is legal advice, and reading it creates no lawyer-client relationship. Do not rely on any suggested answer in an actual legal matter. Consult counsel on your own facts.Suggested answers reflect the law and jurisprudence the author considers applicable as of the date shown.

Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026