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MANUEL L. QUEZON UNIVERSITY v.

NATIONAL LABOR RELATIONS
COMMISSION
G.R. No. 141673, 17 October 2001
RETIREMENT PAY

FACTS:
Petitioner Manuel L. Quezon University (MLQU) is a private educational institution
which established a retirement plan for its employees. Respondents Juat and Azurin,
who both work as instructors, received letters from the school informing them of their
eligibility to avail the said retirement plan.

However, Juat received under protest the two installments of her retirement pay in the
total amount of P71,674.91, when the alleged correct amount should be P149,401.62.
Azurin also received under protest the amount of P34,282.02 when he should have
received the total amount of P150,215.75 based on the last salary and benefits received
by him.

MLQU contended that Juat is not entitled to receive retirement benefits as she was only
a “part-time employee” of MLQU, much less to the payment of deficiency. The school
also failed and refused and continuously refuse to heed Azurin ’s demand. The parties
failed to reach an amicable settlement during the conciliatory proceedings.

ISSUE:
Whether or not respondent-teachers are entitled to the retirement benefits provided for
under Republic Act No. 7641, even if the petitioner has an existing valid retirement plan.
The Supreme Court ruled that they are so entitled.

RULING:
Yes. Republic Act No. 7641 intends to give the minimum retirement benefits to
employees not entitled thereto under collective bargaining and other agreements. Its
coverage applies to establishments with existing collective bargaining or other
agreements or voluntary retirement plans whose benefits are less than those prescribed
under the proviso in question.

The Court ordered petitioner University to pay the teachers their retirement differential
pay (i.e., the difference between the retirement pay under R. A. No. 7641 and the MLQU
Retirement Plan) plus legal interest of six percent (6%) per annum from the date of filing
of their complaints on March 27, 1997 up to actual payment.
Postigo vs. PTSI, G.R. No. 155146, January 24, 2006

DOCTRINE:

No provision in R.A. No. 7641 justifies the exclusion of employees in the public sector,
who are already enjoying retirement benefits under the GSIS law, from the New
Retirement Law. Section 2 of R.A. No. 7641 provides that "nothing in this Act shall
deprive any employee of benefits to which he may be entitled under existing laws or
company policies or practices."

FACTS:

Dr. Perla A. Postigo, et al., regular employees of the Philippine Tuberculosis Society,
Inc. (PTSI), retired on various dates from 1996 to 1998. Upon retirement from service,
some of them who were compulsory members of the GSIS obtained retirement benefits
from the GSIS. At the time the petitioners retired, Republic Act No. 7641 amended
Article 287 of the Labor Code, granting retirement pay to qualified employees in the
private sector, in the absence of any retirement plan or agreement with the company.
PTSI did not have a retirement plan for its employees, aside from its contribution to the
GSIS, so Postigo claimed from PTSI their retirement benefits under R.A. No. 7641.
PTSI denied their claims on the ground that the GSIS benefits removed them from the
coverage of the law. The Bureau of Working Conditions (BWC) of the Department of
Labor and Employment regarding, upon Postigo's inquiry, confirmed their entitlement to
the retirement benefits provided in R.A. No. 7641. Despite the same opinion rendered
and submitted by the PTSI's legal counsel, Atty. Rene V. Sarmiento, to its Board of
Directors, PTSI refused to pay the petitioners their retirement benefits. Postigo then filed
a complaint before the Labor Arbiter, where the Labor Arbiter ruled in their favor.
However, one petitioner, Dr. Tan who was awarded her terminal leave pay, was not
included in the award of retirement benefits. PTSI then appealed to the NLRC. Instead
of posting the required cash or surety bond equivalent to the amount of the award, PTSI
filed a Motion to Reduce Bond on the ground that the amount awarded by the Labor
Arbiter was erroneous. The NLRC dismissed the appeal for failure to post the required
cash or surety bond. The Court of Appeals reversed the decision of the NLRC.
Postigo et al. contend that despite their compulsory membership in the GSIS, they are
still covered by R.A. No. 7641 for the following reasons:

(1) PTSI is registered with the Securities and Exchange Commission as a non-stock
and non-profit corporation as a private entity and its employees are employees in the
private sector; and

(2) they are not included in the exemptions from coverage of Rep. Act No. 7641. PTSI
counters that as an employer in the public sector, it is not covered by R.A. No. 7641
which applies only to employees in the private sector.
ISSUE:

Whether or not Postigo et al. are entitled to benefits under Rep. Act No. 7641.

HELD:

Yes. Extant on the records is PTSI's admission that although its employees are
compulsory members of the GSIS, said employees are not governed by the Civil
Service Law, pursuant to Section 2(1), Article IX(B)of the 1987 Constitution. PTSI is a
non-profit but private corporation organized under the Corporation Code, and the
petitioners are covered by the Labor Code and not by the Civil Service Law. It is clear to
us that the petitioners are employees in the private sector, hence entitled to the benefits
of R.A. No. 7641.
Even assuming that by virtue of their compulsory inclusion in the GSIS, the petitioners
became employees in the public sector, they are still entitled to the benefits of R.A. No.
7641 since they are not covered by the Civil Service Law and its regulations. The
Supreme Court does not find merit in PTSI's argument that the rationale behind the
enactment of R.A. No. 7641 justifies the exclusion of employees in the public sector,
who are already enjoying retirement benefits under the GSIS law, from the New
Retirement Law. Section 2 of R.A. No. 7641 provides that "nothing in this Act shall
deprive any employee of benefits to which he may be entitled under existing laws or
company policies or practices." In Juco v. NLRC, it was clarified that employees of
government-owned and controlled corporations with special charters are covered under
the Civil Service. On the other hand, employees of government-owned and controlled
corporations under the Corporation Code are governed by the provisions of the Labor
Code. PTSI belongs to the latter category and is covered by R.A. 7641. The
accommodation under Rep. Act No. 1820 extending GSIS coverage to PTSI employees
did not take away from Postigo et al. the beneficial coverage afforded by Rep. Act No.
7641. Hence, the retirement pay payable under Article 287 of the Labor Code as
amended by Rep. Act No. 7641 should be considered apart from the retirement benefit
claimable by the petitioners under the social security law or, as in this case, the GSIS
law.
JOSE T. CAPILI v. NLRC and UNIVERSITY OF MINDANAOG.R. No. 120802, 17 June
1997
RETIREMENT PAY

FACTS:
Capili was an instructor at UM, a private educational institution. In 1993, the school
informed Capilithat he would be eligible for retirement when he would reach the age of
60 years. Capili answeredthat he was not opting to retire but would continue to serve
until he reaches the age of 65.When the school reiterated its position that it could retire
him, Capili filed a complaint questioninghis forced retirement. UM invoked Article 287 of
the Labor Code which provides that any employeemay be retired upon reaching the
retirement age established in the collective bargaining agreementor other applicable
employment contract. It contended that it has a retirement plan, known as theUniversity
of Mindanao & Associated Enterprises Retirement Plan. Capili contended that he was
nota member of said retirement plan, therefore it is not applicable to him.Later, after
receiving the Labor Arbiter’s decision but before filing his appeal, Capili received
partialpayment of his retirement pay. During the pendency of his apppeal with the
NLRC, he received fullpayment of his retirement benefits.

ISSUE:
1.Whether or not an employee can be compelled to retire at the age of sixty years.

2.Whether or not the subsequent acceptance of retirement benefits estops an employee
frompursuing his complaint questioning the validity of his forced retirement.

RULING:
1.No, an employee cannot be compelled to retire at the age of sixty years in the
absence of aprovision on retirement in the CBA or if the employer has no retirement
plan.Under the Labor Code, as amended by R. A. No. 7641, the option of the employer
to retire anemployee at age 60 no longer exists. Under the present rule, the option to
retire upon reachingthe age of 60 years or more but not beyond 65 is the exclusive
prerogative of the employee if thereis no provision on retirement in the CBA or any
agreement or if the employer has no retirementplan.In this case, UM failed to show that
Capili was a member of the school’s retirement plan. TheCourt finds that it is not
applicable to all employees of UM and its associated enterprises. Itapplies only to those
who opted to become members thereof.

2.Yes, the acceptance of retirement benefits will estop the employee from pursuing his
case. By accepting the retirement benefits, the employee is deemed to have opted to
retire under the present rule stated above. This could only mean that he has already
acceded to his retirement,effective on such date—when he reached the age of 60
years.
Retirement: Jaculbe vs Silliman University

Sometime in 1958, petitioner began working for respondent’s university medical center
as a nurse.

In 1992, respondent’s human resources department informed petitioner that she was
approaching her 35th year of service with the university and was due for automatic
retirement on November 18, 1993, at which time she would be 57 years old. This was
pursuant to respondent’s retirement plan for its employees, which provided that its
members could be automatically retired "upon reaching the age of 65 or after 35 years
of uninterrupted service to the university."

Petitioner emphatically insisted that the compulsory retirement under the plan was
tantamount to a dismissal and pleaded with respondent to be allowed to work until the
age of 60 because this was the minimum age at which she could qualify for SSS
pension. But respondent stood pat on its decision to retire her, citing "company policy."

On November 15, 1993, petitioner filed a complaint in the NLRC termination of service
and on November 18, 1993, respondent compulsorily retired petitioner.

The labor arbiter rendered a decision finding respondent guilty of illegal dismissal and
ordered that petitioner be reinstated with paid full backwages. On appeal, however, the
NLRC reversed the labor arbiter’s decision. The NLRC likewise denied petitioner’s
motion for reconsideration. In the assailed decision and resolution, the CA affirmed the
NLRC. Hence, this petition.

Issues: 1) Did respondent’s retirement plan imposing automatic retirement after 35
years of service contravene the security of tenure clause in the 1987 Constitution and
the Labor Code?
2) Did respondent commit illegal dismissal by retiring petitioner solely by reason of such
provision in its retirement plan?

Ruling: Retirement plans allowing employers to retire employees who are less than the
compulsory retirement age of 65 are not per se repugnant to the constitutional guaranty
of security of tenure.

By its express language, the Labor Code permits employers and employees to fix the
applicable retirement age at below 60 years.

However, after reviewing the assailed decision together with the rules and regulations of
respondent’s retirement plan, we find that the plan runs afoul of the constitutional
guaranty of security of tenure. The CA, in ruling against petitioner, premised its decision
to uphold the retirement plan on her voluntary participation therein (The contract fixing
for retirement age as allowed under Article 287 of the Labor Code does not exclusively
refer to CBA which provides for an agreed retirement age. The said provision explicitly
allows, as well, other applicable employment contract to fix retirement age.).

The records disclose that the private respondent’s Retirement Plan has been in effect
for more than 30 years. The said plan is deemed integrated into the employment
contract between private respondent and its employees as evidenced by the latter’s
voluntary contribution through monthly salary deductions.

The Supreme Court, however, finds that it was through no voluntary act of her own that
petitioner became a member of the plan and the repeated use of the word "shall"
ineluctably pointed to the conclusion that employees had no choice but to contribute to
the plan. Furthermore, the respondent’s retirement plan came into effect after petitioner
started working for the company. In short, it was not part of the terms of employment to
which petitioner agreed when she started working for respondent. The truth was that
petitioner had no choice but to participate in the plan, given that the only way she could
refrain from doing so was to resign or lose her job—no agreement of any kind involving
such was entered into by the parties.

Thus, having terminated petitioner solely on the basis of a provision of a retirement plan
which was not freely assented to by her, respondent was guilty of illegal dismissal.
Pantranco North Express, Inc., vs. NLRC & Urbano Suñiga
259 SCRA 161 (1996)

Facts: Private respondent was hired by petitioner in 1964 as a bus conductor. He
eventually joined the Pantranco Employees Association-PTGWO. He continued in
petitioner's employ until August 12, 1989, when he was retired at the age of fifty-two
(52) after having rendered twenty five years' service. The basis of his retirement was the
compulsory retirement provision of the collective bargaining agreement between the
petitioner and the aforenamed union. On February 1990, private respondent filed a
complaint for illegal dismissal against petitioner with NLRC. The complaint was
consolidated with two other cases of illegal dismissal having similar facts and issues,
filed by other employees, non-union members.

Labor Arbiter rendered his decision finding that the three complainants were illegally
and unjustly dismissed and order the respondent to reinstate them to their former or
substantially equivalent positions without loss of seniority rights with full back wages
and other benefits. Petitioner appealed to public respondent, which issued the
questioned Resolution affirming the labor arbiter's decision in toto.

Issue: Whether or not the CBA stipulation on compulsory retirement after twenty-five
years of service is legal and enforceable.

Ruling: The Court rules that the CBA stipulation is legal and enforceable.

The bone of contention in this case is the provision on compulsory retirement after 25
years of service.

Article XI, Section 1 (e) (5) of the May 2, 1989 Collective Bargaining Agreement 8
between petitioner company and the union states:

Section 1. The COMPANY shall formulate a retirement plan with the following main
features:

(e) The COMPANY agrees to grant the retirement benefits herein provided to regular
employees who may be separated from the COMPANY for any of the following reasons:

(5) Upon reaching the age of sixty (60) years or upon completing twenty-five (25) years
of service to the COMPANY, whichever comes first, and the employee shall be
compulsory retired and paid the retirement benefits herein provided."

The said Code provides: Art. 287. Retirement. — Any employee may be retired upon
reaching the retirement age established in the Collective Bargaining Agreement or other
applicable employment contract. In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned under existing laws and any
collective bargaining or other agreement."

The Court agrees with petitioner and the Solicitor General. Art. 287 of the Labor Code
as worded permits employers and employees to fix the applicable retirement age at
below 60 years. Moreover, providing for early retirement does not constitute diminution
of benefits. In almost all countries today, early retirement, i.e., before age 60, is
considered a reward for services rendered since it enables an employee to reap the
fruits of his labor — particularly retirement benefits, whether lump-sum or otherwise —
at an earlier age, when said employee, in presumably better physical and mental
condition, can enjoy them better and longer.

As a matter of fact, one of the advantages of early retirement is that the corresponding
retirement benefits, usually consisting of a substantial cash windfall, can early on be put
to productive and profitable uses by way of income-generating investments, thereby
affording a more significant measure of financial security and independence for the
retiree who, up till then, had to contend with life's vicissitudes within the parameters of
his fortnightly or weekly wages. Thus we are now seeing many CBAs with such early
retirement provisions. And the same cannot be considered a diminution of employment
benefits.

Being a product of negotiation, the CBA between the petitioner and the union intended
the provision on compulsory retirement to be beneficial to the employees-union
members, including herein private respondent. When private respondent ratified the
CBA with the union, he not only agreed to the CBA but also agreed to conform to and
abide by its provisions. Thus, it cannot be said that he was illegally dismissed when the
CBA provision on compulsory retirement was applied to his case.

Incidentally, we call attention to Republic Act No. 7641, known as "The Retirement Pay
Law", which went into effect on January 7, 1993. Although passed many years after the
compulsory retirement of herein private respondent, nevertheless, the said statute
sheds light on the present discussion when it amended

Art. 287 of the Labor Code, to make it read as follows: Retirement. — Any employee
may be retired upon reaching the retirement age establish in the collective bargaining
agreement or other applicable employment contract.

In the absence of a retirement plan or agreement providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years
or more, but not beyond sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said establishment may
retire . . ."

The aforequoted provision makes clear the intention and spirit of the law to give
employers and employees a free hand to determine and agree upon the terms and
conditions of retirement. Providing in a CBA for compulsory retirement of employees
after twenty-five (25) years of service is legal and enforceable so long as the parties
agree to be governed by such CBA. The law presumes that employees know what they
want and what is good for them absent any showing that fraud or intimidation was
employed to secure their consent thereto.

CAPITOL WIRELESS, INC. vs. HONORABLE SECRETARY MA. NIEVES R.
CONFESOR and KILUSANG MANGGAGAWA NG CAPWIRE KMC-NAFLU
G.R. No. 117174. November 13, 1996
Facts:
Petitioner Capitol Wireless, Inc., and respondent Kilusang Manggagawa ng Capwire
KMC-NAFLU (Union) entered into a Collective Bargaining Agreement (CBA) on 15 November
1990 covering a period of five (5) years. Towards the end of the third year of their CBA the
parties renegotiated the economic aspects of the agreement. On 18 July 1993 when the
negotiations were on-going petitioner dismissed on the ground of redundancy eight (8) out of its
eleven (11) couriers who were Union members.
As a consequence, respondent Union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB) on the ground of bargaining deadlock and unfair
labor practice, specifically, for illegal dismissal and violations of the CBA. Conciliation
proceedings were conducted by the NCMB but the same yielded negative results. On 20 August
1993 respondent Union went on strike. On the same day, respondent Secretary assumed
jurisdiction over the controversy.
In the conference held on 14 September 1993 the parties agreed to confine the scope of
the dispute to the following issues: (a) unfair labor practice, consisting of CBA violations and
acts inimical to the workers right to self-organization; (b) redundancy, affecting the dismissed
employees; and (c) CBA deadlock, which includes all items covered by respondent Unions
proposals.
On 2 May 1994 respondents Secretary of Labor resolved the controversy in this manner:
(1) the parties were ordered to modify the fourth and fifth years of their CBA in accordance with
the dispositions she found just and equitable the same to be retroactive to 1 July 1993 and
effective until 30 June 1995 or until superseded by a new agreement; (2) all other provisions of
the existing CBA were deemed retained but all new demands of respondent Union that were not
passed upon by her deemed denied; (3) the dismissal of the eight (8) employees on the ground of
redundancy was upheld, but due to defective implementation by petitioner the latter was ordered
to pay each of the former an indemnity equivalent to two (2) months salary based on their
adjusted rate for the fourth year in addition to the separation benefits due them under the law and
the CBA, and if still unpaid, petitioner to pay the same immediately; and (4) the charge of unfair
labor practice was dismissed for lack of merit.
Issues:
Did the petitioner violate due process in the dismissal of the employees when it failed to appraise
respondent Union of any fair and reasonable criteria for implementation of its redundancy
program?
Are the dismissed employees entitled to 2 months salary?
Laws:
Article 287 of the Labor Code, as amended by R.A. 7641
Case History:
Conciliation proceedings were conducted by the NCMB but the same yielded negative results.
Respondent Secretary assumed jurisdiction over the controversy

Ruling of the Supreme Court:
First issue: Yes.
Its violation of due process consists in its failure, as found by respondent Secretary of
Labor, to apprise respondent Union of any fair and reasonable criteria for implementation of its
redundancy program. In Asiaworld we laid down the principle that in selecting employees to be
dismissed a fair and reasonable criteria must be used, such as but not limited to: (a) less preferred
status (e.g., temporary employee), (b) efficiency and (c) seniority. Although the case of
Asiaworld dealt with retrenchment, still the principle is applicable to the present case because in
effecting the dismissals petitioner had to select from among its employees.
We agree with respondent Secretary of Labor in her observation and conclusion that the
implementation by petitioner of its redundancy program was inconsistent with established
principles of procedural due process.
Second Issue: Yes.
Article 287 of the Labor Code, as amended by R.A. 7641, provides
“Retirement. Any employee may be retired upon reaching the retirement age established
in the collective bargaining agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits as
he may have earned under existing laws and any collective bargaining agreement and other
agreements: provided, however, That an employees retirement benefits under any collective
bargaining and other agreements shall not be less than those provided herein.
In the absence of a retirement plan or agreement plan providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years or more,
but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age,
who has served at least five (5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2) month salary
shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves x x x x (italics supplied).”
The records fail to disclose that petitioner bothered to inform the Court how it arrived at
21.82 days as basis in the computation of the retirement pay. Anyway, it is clear in the law that
the term one-half (1/2) month salary means 22.5 days: 15 days plus 2.5 days representing one-
twelfth (1/12) of the 13th month pay plus 5 days of service incentive leave. In this regard, there
is no reason for petitioner to complain that the retirement benefits granted by respondent
Secretary of Labor exceeded the requirements of law.
R&E Transport Inc. vs. Latag Case Digest
R&E Transport, Inc. & Honorio Enriquez vs. Avelina Latag
G.R. No. 155214
February 13, 2004

Facts: Pedro Latag was a regular employee of La Mallorca Taxi since March 1, 1961.
When La Mallorca ceased from business operations, Latag transferred to R & E
Transport, Inc. He was receiving an average daily salary of five hundred pesos
(P500.00) as a taxi driver. Latag got sick in January 1995 and was forced to apply for
partial disability with the SSS, which was granted. When he recovered, he reported for
work in September 1998 but was no longer allowed to continue working on account of
his old age. Latag thus asked Felix Fabros, the administrative officer of [petitioners], for
his retirement pay pursuant to Republic Act 7641 but he was ignored.

Thus, on December 21, 1998, Latagfiled a case for payment of his retirement pay
before the NLRC. Latag however died on April 30, 1999. Subsequently, his wife, Avelina
Latag, substituted him. On January 10, 2000, the Labor Arbiter rendered a decision in
favor of Latag.

Issue: Whether or not Latag is entitled to retirement benefits considering she signed a
waiver of quitclaim.

Ruling: The respondent is entitled to retirement benefits despite of the waiver of
quitclaims. There is no dispute the fact that the late Pedro M. Latag is entitled to
retirement benefits. Rather, the bone of contention is the number of years that he should
be credited with in computing those benefits. The findings of the NLRC that Pedro must
be credited only with his service to R & E Transport, Inc., because the evidence shows
that the aforementioned companies are two different entities. After a careful and
painstaking review of the evidence on record, the court supports the NLRC's findings.

As to the Quitclaim and Waiver signed by Respondent Latag, the CA committed no error
when it ruled that the document was invalid and could not bar her from demanding the
benefits legally due her husband. This is not say that all quitclaims are invalid per se.
Courts, however, are wary of schemes that frustrate workers' rights and benefits, and
look with disfavor upon quitclaims and waivers that bargain these away.

Undisputably, Pedro M. Latag was credited with 14 years of service with R & E
Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act No. 7641, 30
provides: Retirement. — In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an employee upon reaching the
age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in said
establishment, may retire and shall be entitled to retirement pay equivalent to at least
one-half (1/2) month salary for every year of service, a fraction of at least six (6) months
being considered as one whole year. Unless the parties provide for broader inclusions,
the term one half-month salary shall mean fifteen (15) days plus one-twelfth (1/12) of
the 13th month pay and the cash equivalent of not more than five (5) days of service
incentive leaves

The rules implementing the New Retirement Law similarly provide the above-mentioned
formula for computing the one-half month salary. Since Pedro was paid according to the
"boundary" system, he is not entitled to the 13th month 32 and the service incentive
pay; hence, his retirement pay should be computed on the sole basis of his salary.

It is accepted that taxi drivers do not receive fixed wages, but retain only those sums in
excess of the "boundary" or fee they pay to the owners or operators of their vehicles.
Thus, the basis for computing their benefits should be the average daily income. In this
case, the CA found that Pedro was earning an average of five hundred pesos (P500)
per day. We thus compute his retirement pay as follows: P500 x 15 days x 14 years of
service equals P105,000.
UE vs. MINISTRY OF LABOR AND UE FACULTY ASSOCIATION (1987)

FACTS:
Labor and Employment directing the University of the East to pay the faculty members concerned
retirement benefits in accordance with their collective bargaining agreement, in addition to the
payment of separation pay according to the Termination Pay Law.
The then president of the University of the East (UE) announced the phase-out of the College of
Secretarial Education and the High School Department respectively on the grounds of lack of
economic viability and financial losses.
The respondent UE Faculty Association opposed the phaseout, contending that such action
contravened the law because it constitutes union busting. The private respondent filed a notice of
strike with the Bureau of Labor Relations (BLR).
BLR conducted several conciliation proceedings but when no amicable settlement was reached, the
respondent Minister issued an order assuming jurisdiction over the case and directing the BLR to
receive evidence in connection with the dispute.
Respondent Minister of Labor ruled that the phaseout of the two departments was arbitrary and
ordered UE to pay all affected faculty members of the College Secretarial Education and the High
School Department a separation pay. In addition to the termination pay, the University is likewise
directed to pay retirement benefits to all affected faculty members who, in accordance with the
collective bargaining agreement, are retireable prior to or at the time of the phase-out."
Petitioner arguesns that the award of separation pay pursuant to the Termination Pay Law
necessarily excludes retirement benefits.

Issue: Whether the Minister of Labor and Employment committed grave abuse of discretion in
awarding both retirement benefits and separation pay to the faculty members affected by the phase-
out.

HELD: NO. We rule for the respondents.
Separation pay arising from a forced termination of employment and benefits given as a contractual
right due to many years of faithful service are not necessarily exclude each other.

Clearly, the only situation contemplated in the CBA wherein an employee shall be precluded from
receiving retirement benefits is when said employee is not separated from service but transferred
instead from one college or department to another. There is no provision to the effect that teachers
who are forcibly dismissed are not entitled to retirement benefits if the MOLE awards them separation
pay. Furthermore, since the above provision has become in effect part of the petitioner's policy, the
same should be enforced separately from the provisions of the Termination Pay Law.
Aquino vs. NLRCG.R. No. 87653 February 11, 1992

Facts:

The petitioners were employees of private respondent Otis Elevator Company when
they were informed of the termination of their employment in line with the need of the
company "to streamline its operations, consolidate certain functions, reduce its
manpower and cut non-essential spending."

Accordingly, petitioners were paid their separation pay, The separation pay was based
on section 4 Article VII of the Collective bargaining Agreement between the company
and its employees providing thus: All employees in the bargaining unit separated
without cause shall be granted separation pay of not less than one 1 month latest basic
rate for every year of service subject to the existing provisions of th reetirement plan.

For its part, the respondent company argued that separation pay and retirement
benefits were mutually exclusive; hence, the petitioners could no longer claim the latter
after having receivedthe former.

Issue:
Whether or not petitioners are entitled to retirement benefits.

Held:

Separation pay is a statutory right desined to provide the employment with the
wherewithal during the period that he is looking for another employment.

Retirement benefits, where not mandated by law, may be granted by agreement of the
employees and their employer or as a volunatary act on the part of the employer.

Retirement benefits are intended to help the employee enjoy the remaining years of his
life, lessening the burden of worring for his financial support, and are a form of reward of
his loyalty and service to the employer. Any doubt concerning the rights of labor should
be resolved to its favor pursuant to the social justice policy.

The petitioners are covered by the retirement plan because they have contributed to the
retirement fund, have been separated by reason of the retrenchment, and have served
the company for more than the prescribed minimum period of ten years.

However, it overlooks sub-section c of the same section 14, which clearly provides that:
c This section shall apply where the employee retires at the age of sixty or more.

The private respondent has not shown that the petitioners were sixty years or older at
the time of their separation and therefore covered by the said section. Having itself
involved that provision, the company had the obligation to prove that the petitioners
came under its terms.The private respondent asserts in its statement of facts that it
gave the petitioners a choice between accepting the separation pay and the retirement
benefits and they opted for the former.This is not borne by the record. In its letter
advising the petitioners of the termination of their services, the company merely
informed them that they would be given separation pay or retirement