Razon To Pantranco
Razon To Pantranco
The petitioner appealed from the decision to the respondent Under the Labor Code, as amended by R. A. No. 7641, the option of
Commission on 10 May 1994, or thirteen days after he received the the employer to retire an employee at age 60 no longer exists. Under
Labor Arbiter’s decision. He argued that the Labor Arbiter erred in the present rule, the option to retire upon reaching the age of 60
ruling that private respondent’s retirement plan applies to all its years or more but not beyond 65 is the exclusive prerogative of the
employees and that he had been fully paid his monetary claims. The employee if there is no provision on retirement in the CBA or any
private respondent moved to dismiss the appeal for having been filed agreement or if the employer has no retirement plan.
out of time, as the same should have been filed within ten days from
In this case, UM failed to show that Capili was a member of the
petitioner’s receipt of the Arbiter’s decision, or, at the latest, on 7 May
school’s retirement plan. The Court finds that it is not applicable to all
1994. On 21 November 1994, the private respondent filed a
employees of UM and its associated enterprises. It applies only to
Manifestation with Motion 10 alleging that on 6 October 1994, the
those who opted to become members thereof.
petitioner “received his retirement pay and other accrued benefits”
due from the private respondent, thus making the appeal moot and
academic. The petitioner filed a Counter-Manifestation wherein he
alleged that his “partial acceptance” of retirement benefits did not 2. Yes, the acceptance of retirement benefits will estop the
render the case moot and academic, and that having “long and employee from pursuing his case. By accepting the retirement
unjustly been denied of his retirement benefits since August 18, 1993 benefits, the employee is deemed to have opted to retire
[he could not] be expected to remain idle.” under the present rule stated above. This could only mean
that he has already acceded to his retirement, effective on
During the pendency of his appeal with the NLRC, he received full such date—when he reached the age of 60 years.
payment of his retirement benefits.
Eli’s Di Disenteng Opinion: Bat mo patitigilin kung ayaw niya. LUH. Pero
shunga din eh, ayaw tumigil, pero tumanggap ng benefits.
ALPHA C. JACULBE, petitioner, vs. SILLIMAN UNIVERSITY, 1. Whether respondent’s retirement plan imposing automatic
respondent. retirement after 35 years of service contravene the security of
tenure clause in the 1987 Constitution and the Labor Code?
FACTS:
2. Whether respondent committed illegal dismissal by retiring
Sometime in 1958, petitioner began working for respondent’s petitioner solely by reason of such provision in its retirement plan?
university medical center as a nurse. In a letter dated December
3, 1992, respondent, through its Human Resources Development
Office, informed petitioner that she was approaching her 35th
year of service with the university and was due for automatic RULING:
retirement on November 18, 1993, at which time she would be 57 1. Retirement plans allowing employers to retire employees who
years old. This was pursuant to respondent’s retirement plan for are less than the compulsory retirement age of 65 are not per se
its employees which provided that its members could be repugnant to the constitutional guaranty of security of tenure.
automatically retired “upon reaching the age of 65 or after 35 Article 287 of the Labor Code provides:
years of uninterrupted service to the university.” Respondent
required certain documents in connection with petitioner’s ART. 287. Retirement – Any employee may be retired upon
impending retirement. A brief exchange of letters between reaching the retirement age established in the collective
petitioner and respondent followed. Petitioner emphatically bargaining agreement or other applicable employment contract.
insisted that the compulsory retirement under the plan was xxx
tantamount to a dismissal and pleaded with respondent to be
By its express language, the Labor Code permits employers and
allowed to work until the age of 60 because this was the minimum
employees to fix the applicable retirement age at below 60 years.
age at which she could qualify for SSS pension. But respondent
stood pat on its decision to retire her, citing “company policy.” On However, after reviewing the assailed decision together with the
November 15, 1993, petitioner filed a complaint in the National rules and regulations of respondent’s retirement plan, we find that
Labor Relations Commission (NLRC) for “termination of service the plan runs afoul of the constitutional guaranty of security of
with preliminary injunction and/or restraining order.” On tenure contained in Article XIII, also known as the provision on
November 18, 1993, respondent compulsorily retired petitioner. Social Justice and Human Rights.
After the parties submitted their position papers, the labor arbiter
rendered a decision finding respondent guilty of illegal dismissal The CA, in ruling against petitioner, premised its decision to
and ordered that petitioner be reinstated and paid full backwages. uphold the retirement plan on her voluntary participation therein:
On appeal, however, the NLRC reversed the labor arbiter’s
The petitioner in this case may, however, argue that the
decision and dismissed the complaint for lack of merit. The NLRC
Pantranco case is not applicable in the case at bar as the
likewise denied petitioner’s motion for reconsideration. In the
controversy in the said case involves a compulsory retirement on
assailed decision and resolution, the CA affirmed the NLRC
the basis of the length of service rendered by the employee as
ISSUE: agreed in an existing CBA, whereas in the present case, the
private respondent compulsorily retired the petitioner not based Membership in the Plan starts on the day a person is hired on a
on a CBA but on the retirement scheme provided for in the private full-time basis by the University.
respondent’s retirement plan. Nonetheless, this argument must
fail. The contract fixing for retirement age as allowed under Article SECTION 3 – TERMINATION OF MEMBERSHIP
287 of the Labor Code does not exclusively refer to CBA which Termination of membership in the Plan shall be upon the death of
provides for an agreed retirement age. The said provision the member, resignation or termination of employee’s contract by
explicitly allows, as well, other applicable employment contract to the University, or retirement from the University.
fix retirement age.
According to the assailed decision, respondent’s retirement plan
The records disclose that the private respondent’s Retirement Plan “had been in effect for more than 30 years.” What was not
has been in effect for more than 30 years. The said plan is pointed out, however, was that the retirement plan came into
deemed integrated into the employment contract between private being in 197018 or 12 years after petitioner started working for
respondent and its employees as evidenced by the latter’s respondent. In short, it was not part of the terms of employment
voluntary contribution through monthly salary deductions. to which petitioner agreed when she started working for
Previous retirees have already enjoyed the benefits of the respondent. Neither did it become part of those terms shortly
retirement plan, and ever since the said plan was effected, no thereafter, as the CA would have us believe.
questions or disagreement have been raised, until the same was
made to apply to the petitioner. xxx Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee
The problem with this line of reasoning is that a perusal of the whereby the latter, after reaching a certain age agrees to sever
rules and regulations of the plan shows that participation therein his or her employment with the former.
was not voluntary at all.
In this case, neither the CA nor the respondent cited any
Rule III of the plan, on membership, stated: agreement, collective or otherwise, to justify the latter’s
SECTION 1 – MEMBERSHIP imposition of the early retirement age in its retirement plan,
opting instead to harp on petitioner’s alleged “voluntary”
All full-time Filipino employees of the University will automatically contributions to the plan, which was simply untrue. The truth was
become members of the Plan, provided, however, that those who that petitioner had no choice but to participate in the plan, given
have retired from the University, even if rehired, are no longer that the only way she could refrain from doing so was to resign or
eligible for membership in the Plan. A member who continues to lose her job. It is axiomatic that employer and employee do not
serve the University cannot withdraw from the Plan. stand on equal footing, a situation which often causes an
employee to act out of need instead of any genuine acquiescence
xxx xxx xxx to the employer. This was clearly just such an instance.
SECTION 2 – EFFECTIVITY OF MEMBERSHIP Not only was petitioner still a good eight years away from the
compulsory retirement age but she was also still fully capable of
discharging her duties as shown by the fact that respondent’s LOURDES A. CERCADO, petitioner, vs. UNIPROM, INC.,
board of trustees seriously considered rehiring her after the respondent.
effectivity of her “compulsory retirement.”
FACTS:
2. Yes.
Petitioner Lourdes A. Cercado (Cercado) started working for
As already stated, an employer is free to impose a retirement age respondent UNIPROM, Inc. (UNIPROM) on December 15, 1978 as
less than 65 for as long as it has the employees’ consent. Stated a ticket seller assigned at Fiesta Carnival, Araneta Center, Quezon
conversely, employees are free to accept the employer’s offer to City. Later on, she was promoted as cashier and then as clerk
lower the retirement age if they feel they can get a better deal typist. On April 1, 1980, UNIPROM instituted an Employees’ Non-
with the retirement plan presented by the employer. Thus, having Contributory Retirement Plan4 which provides that any participant
terminated petitioner solely on the basis of a provision of a with twenty (20) years of service, regardless of age, may be
retirement plan which was not freely assented to by her, retired at his option or at the option of the company. On January
respondent was guilty of illegal dismissal. 1, 2001, UNIPROM amended the retirement plan in compliance
with Republic Act (R.A.) No. 7641.5 Under the revised retirement
At this point, reinstatement is out of the question. Petitioner is plan, UNIPROM reserved the option to retire employees who were
now 71 years old and therefore well over the statutory qualified to retire under the program. Sometime in December
compulsory retirement age. For this reason, we grant her 2000, UNIPROM implemented a company-wide early retirement
separation pay in lieu of reinstatement. It is also for this reason program for its 41 employees, including herein petitioner, who, at
that we modify the award of backwages in her favor, to be that time, was 47 years old, with 22 years of continuous service to
computed from the time of her illegal dismissal on November 18, the company. She was offered an early retirement package
1993 up to her compulsory retirement age. amounting to P171,982.90, but she rejected the same. UNIPROM
Eli’s Di Disenteng Opinion: Haba na nga ng ruling, cocomment pako. exercised its option under the retirement plan, and decided to
Less talk, less mistake. retire Cercado effective at the end of business hours on February
15, 2001. A check of even date in the amount of P100,811.70,
representing her retirement benefits under the regular retirement
package, was issued to her. Cercado refused to accept the check.
UNIPROM nonetheless pursued its decision and Cercado was no
longer given any work assignment after February 15, 2001. This
prompted Cercado to file a complaint for illegal dismissal before
the Labor Arbiter (LA), alleging, among others, that UNIPROM did
not have a bona fide retirement plan, and that even if there was,
she did not consent thereto. For its part, respondent UNIPROM
averred that Cercado was automatically covered by the retirement
plan when she agreed to the company’s rules and regulations, and
that her retirement from service was a valid exercise of a
management prerogative. After submission of the parties’ position Hence, consistent with the Courts ruling in Jaculbe, having
papers, the LA rendered a decision7 finding petitioner to be terminated petitioner merely on the basis of a provision in the
illegally dismissed. Respondent company was ordered to reinstate retirement plan which was not freely assented to by her,
her with payment of full backwages. The National Labor Relations UNIPROM is guilty of illegal dismissal. Petitioner is thus entitled to
Commission (NLRC) affirmed the LA’s decision, adding that there reinstatement without loss of seniority rights and to full
was no evidence that Cercado consented to the alleged retirement backwages computed from the time of her illegal dismissal in
plan of UNIPROM or that she was notified thereof. On certiorari, February 16, 2001 until the actual date of her reinstatement. If
the CA set aside the decisions of the LA and the NLRC. reinstatement is no longer possible because the position that
petitioner held no longer exists, UNIPROM shall pay backwages as
ISSUE Whether or not the respondent’s company policy was a computed above, plus, in lieu of reinstatement, separation pay
bona fide retirement plan. equivalent to one-month pay for every year of service. This is
HELD: We disagree with the CAs conclusion that the retirement consistent with the preponderance of jurisprudence relative to the
plan is part of petitioners employment contract with respondent. award of separation pay in case reinstatement is no longer
It must be underscored that petitioner was hired in 1978 or 2 feasible.
years before the institution of UNIPROMs retirement plan in 1980. Eli’s Di Disenteng Opinion: Bakit kasi pinipilit paalisin yung taong ayaw
Logically, her employment contract did not include the retirement pang umalis. GIGIL AKO.
plan, much less the early retirement age option contained therein.