ROGELIO REYES, Petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION, Fifth Division, and

UNIVERSAL ROBINA CORPORATION GROCERY DIVISION, Respondents.
G.R. No. 160233 August 8, 2007 citing Boie Takeda Chemicals vs. Dela Serna, 228 SCRA 329 [1993] & Phil.
Duplicators vs. NLRC, 241 SCRA 380 [1995]

Facts: Petitioner was employed as a salesman at private respondent's Grocery Division in Davao City on August 12,
1977. He was eventually appointed as unit manager of Sales Department-South Mindanao District, a position he held
until his retirement on November 30, 1997. Thereafter, he received a letter regarding the computation of his
separation pay. Insisting that his retirement benefits and 13th month pay must be based on the average monthly
salary of P42,766.19, which consists of P10,919.22 basic salary and P31,846.97 average monthly commission,
petitioner refused to accept the check issued by private respondent in the amount of P200,322.21. Instead, he filed a
complaint before the arbitration branch of the NLRC for retirement benefits, 13th month pay, tax refund, earned sick
and vacation leaves, financial assistance, service incentive leave pay, damages and attorney's fees.

Petitioner contends that the commissions form part of the basic salary, citing the case of Philippine Duplicators, Inc.
v. National Labor Relations Commission, wherein the Court held that commissions earned by salesmen form part of
their basic salary. Private respondent counters that petitioner knew that the overriding commission is not included in
the basic salary because it had not been considered as such for a long time in the computation of the 13th month
pay, leave commissions, absences and tardiness.

Issue: Whether or not the overriding commission is included in the computation of the retirement benefits and 13th
month pay?

Ruling: The Court in the Resolution dated February 15, 1995 in the Philippine Duplicators case had clarified any
seeming inconsistencies between Philippine Duplicators and Boie-Takeda.

The Court thus clarified that in Philippine Duplicators, the salesmen’s commissions, comprising a pre- determined
percentage of the selling price of the goods sold by each salesman, were properly included in the term basic salary
for purposes of computing the 13th month pay. The salesmen’s commissions are not overtime payments, nor profit-
sharing payments nor any other fringe benefit, but a portion of the salary structure which represents an automatic
increment to the monetary value initially assigned to each unit of work rendered by a salesman.

Contrarily, in Boie-Takeda, the so-called commissions paid to or received by medical representatives of Boie-Takeda
Chemicals or by the rank and file employees of Philippine Fuji Xerox Co., were excluded from the term basic salary
because these were paid to the medical representatives and rank-and-file employees as productivity bonuses, which
are generally tied to the productivity, or capacity for revenue production, of a corporation and such bonuses closely
resemble profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done
by each individual employee. Further, commissions paid by the Boie-Takeda Company to its medical representatives
could not have been sales commissions in the same sense that Philippine Duplicators paid the salesmen their sales
commissions. Medical representatives are not salesmen; they do not effect any sale of any article at all.

In this case, SC ruled that commissions should be excluded. The commissions which Reyes received were not part of
his salary structure but were profit-sharing payments and had no clear, direct or necessary relation to the amount of
work he actually performed. The collection made by the salesmen from the sale transactions was the profit of private
respondent from which petitioner had a share in the form of a commission.
ARCO METAL PRODUCTS, CO., INC., and MRS. SALVADOR UY, petitioners, vs. SAMAHAN NG MGA
MANGGAGAWA SA ARCO METAL-NAFLU (SAMARM-NAFLU), respondent.
G.R. No. 170734 May 14, 2008

Facts: Petitioner is a company engaged in the manufacture of metal products, whereas respondent is the labor
union of petitioner’s rank and file employees. Sometime in December 2003, petitioner paid the 13th month pay,
bonus, and leave encashment of three union members in amounts proportional to the service they actually rendered
in a year, which is less than a full twelve (12) months. Respondent protested the prorated scheme, claiming that on
several occasions petitioner did not prorate the payment of the same benefits to seven (7) employees who had not
served for the full 12 months. According to respondent, the prorated payment violates the rule against diminution of
benefits under Article 100 of the Labor Code. Thus, they filed a complaint before the National Conciliation and
Mediation Board (NCMB).

Issue: Whether or not the grant of 13th month pay, bonus, and leave encashment in full regardless of actual service
rendered constitutes voluntary employer practice and, consequently, whether or not the prorated payment of the
said benefits constitute diminution of benefits under Article 100 of the Labor Code.

Ruling: Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or
eliminated by the employer. The principle of non-diminution of benefits is founded on the Constitutional mandate to
"protect the rights of workers and promote their welfare and to afford labor full protection. Said mandate in turn is
the basis of Article 4 of the Labor Code which states that all doubts in the implementation and interpretation of this
Code, including its implementing rules and regulations shall be rendered in favor of labor.

Jurisprudence is replete with cases which recognize the right of employees to benefits which were voluntarily given
by the employer and which ripened into company practice. Thus in DavaoFruits Corporation v. Associated Labor
Unions, et al. where an employer had freely and continuously included in the computation of the 13th month pay
those items that were expressly excluded by the law, we held that the act which was favorable to the employees
though not conforming to law had thus ripened into a practice and could not be withdrawn, reduced, diminished,
discontinued or eliminated. In Sevilla Trading Company v. Semana, we ruled that the employer’s act of including non-
basic benefits in the computation of the 13th month pay was a voluntary act and had ripened into a company
practice which cannot be peremptorily withdrawn.

In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily and
consistently granting full benefits to its employees regardless of the length of service rendered. True, there were only
a total of seven employees who benefited from such a practice, but it was an established practice nonetheless.
Jurisprudence has not laid down any rule specifying a minimum number of years within which a company practice
must be exercised in order to constitute voluntary company practice. Thus, it can be six (6) years, three (3) years, or
even as short as two (2) years. Petitioner cannot shirk away from its responsibility by merely claiming that it was a
mistake or an error, supported only by an affidavit of its manufacturing group head. Hence, petition was denied.
 UNIVERSAL ROBINA SUGAR MILLING CORPORATION (URSUMCO) and/or RENATO CABATI, as
Manager, Petitioners, vs. AGRIPINO CABALLEDA and ALEJANDRO CADALIN, Respondents.
G.R. No. 156644 July 28, 2008

Facts: Petitioner Universal Robina Sugar Milling Corporation (URSUMCO) is a domestic corporation engaged in the
sugar milling business and petitioner Renato Cabati is URSUMCO's manager. Respondent Agripino Caballeda
(Agripino) worked as welder for URSUMCO from March 1989 until June 23, 1997 with a salary of P124.00 per day,
while respondent Alejandro Cadalin (Alejandro) worked for URSUMCO as crane operator from 1976 up to June 15,
1997 with a salary of P209.30 per day.

On April 24, 1991, John Gokongwei, Jr., President of URSUMCO, issued a Memorandum establishing the company
policy on “Compulsory Retirement” (Memorandum) of its employees. The memorandum provides that all employees
corporate-wide who attain 60 years of age on or before April 30, 1991 shall be considered retired on May 31, 1991.

On April 29, 1993, URSUMCO and the National Federation of Labor (NFL), a legitimate labor organization and the
recognized sole and exclusive bargaining representative of all the monthly and daily paid employees of URSUMCO, of
which Alejandro was a member, entered into a Collective Bargaining Agreement (CBA). Article XV of the said CBA
particularly provided that the retirement benefits of the members of the collective bargaining unit shall be in
accordance with law.

Agripino and Alejandro (respondents), having reached the age of 60, were allegedly forced to retire by URSUMCO.
Agripino averred that URSUMCO illegally dismissed him from employment on June 24, 1997 when he was forced to
retire upon reaching the age of sixty (60) years old. Upon the termination of his employment, he accepted his
separation pay and applied for retirement benefits with the Social Security System (SSS). Earlier, on April 15, 1997,
Alejandro turned 60 years old. On May 28, 1997, he filed his application for retirement with URSUMCO, attaching his
birth and baptismal certificates. On July 23, 1997, he accepted his retirement benefits and executed a quitclaim in
favor of URSUMCO.

Thereafter, on August 6, 1997, Agripino filed a Complaint for illegal dismissal, damages and attorney’s fees before
the Labor Arbiter (LA) of Dumaguete City. He alleged that his compulsory retirement was in violation of the
provisions of Republic Act (R.A.) 7641 and, was in effect, a form of illegal dismissal.

On August 26, 1997, Alejandro likewise filed a Complaint for illegal dismissal, underpayment of retirement benefits,
damages and attorney’s fees before the LA, alleging that he was given only 15 days per year of service by way of
retirement benefits and further assails that his compulsory retirement was discriminatory considering that
there were other workers over sixty (60) years of age who were allowed to continuously report for work.

Issue: Whether respondents were illegally terminated on account of compulsory retirement or the same voluntarily
retired.

Ruling: SC ruled in favor of the respondents.

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former.
The age of retirement is primarily determined by the existing agreement between the employer and the employees.
However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287 of the Labor
Code as amended, the legally mandated age for compulsory retirement is 65 years, while the set minimum age for
optional retirement is 60 years.

In this case, it may be stressed that the CBA does not per se specifically provide for the compulsory retirement age
nor does it provide for an optional retirement plan. It merely provides that the retirement benefits accorded to an
employee shall be in accordance with law. Thus, we must apply Art. 287 of the Labor Code which provides for two
types of retirement: (a) compulsory and (b) optional. The first takes place at age 65, while the second is primarily
determined by the collective bargaining agreement or other employment contract or employer's retirement plan. In
the absence of any provision on optional retirement in a collective bargaining agreement, other employment contract,
or employer's retirement plan, an employee may optionally retire upon reaching the age of 60 years or more, but not
beyond 65 years, provided he has served at least five years in the establishment concerned. That prerogative is
exclusively lodged in the employee.
Indubitably, the voluntariness of the respondents' retirement is the meat of the instant controversy. Petitioners
postulate that respondents voluntarily retired particularly when Alejandro filed his application for retirement,
submitted all the documentary requirements, accepted the retirement benefits and executed a quitclaim in favor of
URSUMCO. Respondents claim otherwise, contending that they were merely forced to comply as they were no longer
given any work assignment and considering that the severance of their employment with URSUMCO is a condition
precedent for them to receive their retirement benefits.

Generally, the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured
into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of
employees. They are frowned upon as contrary to public policy. A quitclaim is ineffective in barring recovery of the
full measure of a worker's rights, and the acceptance of benefits therefrom does not amount to estoppels.

To be precise, only Alejandro was able to claim a partial amount of his retirement benefit. Thus, it is clear from the
decisions of the LA, NLRC and CA that petitioners are still liable to pay Alejandro the differential on his retirement
benefits. On the other hand, Agripino was actually and totally deprived of his retirement benefit.

Moreover, the petitioners, not the respondents, have the burden of proving that the quitclaim was voluntarily entered
into. In previous cases, we have considered, among others, the educational attainment of the employees concerned
in upholding the validity of the quitclaims which they have executed in favor of their employers.
 LOURDES A. CERCADO, Petitioner, vs. UNIPROM, INC., Respondent.
G.R. No. 188154 October 13, 2010

Facts: Petitioner Lourdes cerdaco was an employee of UNIPROM Inc. for 22 years since December 15, 1978. When
respondent came up with a retirement plan, sometime in 1980 and then amended in 2001, which provides that any
employee with a minimum of 20 years of service, regardless of age, may be retired at the option of the employer. In
December 2000, UNIPROM implemented a company-wide retirement program, including herein petitioner. She was
offered an early retirement package amounting to P171, 982.90 but Cercado rejected the offer.

UNIPROM exercised its option under the retirement plan and decided to retire petitioner effective February 15, 2001
so she was no longer given any work assignment after the said date. This prompted the petitioner to file a complaint
for illegal dismissal before the Labor Arbiter, alleging that UNIPROM did not have abona fide retirement plan, and
even if there was, she didn‘t consent thereto. Respondent averred that Cercado was automatically covered by the
retirement plan when she agreed to the company‘s rules and regulations, and that her retirement was an exercise of
management prerogative.

Issues: 1.) Whether or not UNIPROM has a bona fide retirement plan; 2.) Whether or not petitioner was validly
retired pursuant thereto

Ruling: Petition is meritorious.

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former.

1.) Yes, UNIPROM had a bona fide retirement plan. Article 287 of the Labor Code, as amended by R.A 7641, pegs the
age for compulsory retirement at 65 years old, while the minimum age for optional retirement is set at 60 years.
However, an employer is free to impose a retirement age earlier than the foregoing mandates. This has been upheld
in numerous cases as a valid exercise of management prerogative.

In this case, petitioner was retired by UNIPROM at the age of 47, after having served the company for 22 years,
pursuant to the company‘s retirement plan, which provides that employees who have rendered at least 20 years of
service can be retired at the option of the company. Respondent‘s retirement plan can be expediently stamped with
validity and justified under the all-encompassing phrase ―management prerogative‖.

2.) No, petitioner was not validly retired. Jurisprudence has upheld that it is axiomatic that a retirement plan giving
the employer the option to retire its employees below the ages provided by law must be assented to and accepted by
the latter, otherwise its adhesive imposition will amount to a deprivation of property without due process. In decided
cases, the retirement plans were either embodied in the CBA, or established after consultations and negotiations with
the employees’ bargaining representative. The consent of the employees to be retired even before the statutory
retirement age of 65 years was thus clear and unequivocal. Acceptance by the employees of an early retirement age
must be explicit, voluntary, free and uncompelled.
 RADIO MINDANAO NETWORK, INC. and ERIC S. CANOY, Petitioners, vs. DOMINGO Z. YBAROLA, JR.
and ALFONSO E. RIVERA, JR., Respondents.
G.R. No. 198662 September 12, 2012

Facts: Respondents Domingo Z. Ybarola, Jr. and Alfonso E. Rivera, Jr. were hired on June 15, 1977 and June 1,
1983, respectively, by Radio Mindanao Network (RMN). They eventually became account managers, soliciting
advertisements and servicing various clients of RMN.

On September 15, 2002, the respondents' services were terminated as a result of RMN's reorganization/restructuring;
they were given their separation pay — P631,250.00 for Ybarola, and P481,250.00 for Rivera. Sometime in December
2002, they executed release/quitclaim affidavits.

Dissatisfied with their separation pay, the respondents filed separate complaints (which were later consolidated)
against RMN and its President, Eric S. Canoy, for illegal dismissal with several money claims, including attorney's
fees. They indicated that their monthly salary rates were P60,000.00 for Ybarola and P40,000.00 for Rivera.

Issue: Whether the amounts the respondents received represented a fair and reasonable settlement of their claims

Ruling: The petitioners insist that the respondents' commissions were not part of their salaries, because they failed
to present proof that they earned the commission due to actual market transactions attributable to them. They
submit that the commissions are profit-sharing payments which do not form part of their salaries. We are not
convinced. If these commissions had been really profit-sharing bonuses to the respondents, they should have
received the same amounts.

Yet, as the NLRC itself noted, Ybarola and Rivera received P372,173.11 and P586,998.50 commissions, respectively,
in 2002. The variance in amounts the respondents received as commissions supports the CA's finding that the salary
structure of the respondents was such that they only received a minimal amount as guaranteed wage; a greater part
of their income was derived from the commissions they get from soliciting advertisements; these advertisements are
the "products" they sell. As the CA aptly noted, this kind of salary structure does not detract from the character of
the commissions being part of the salary or wage paid to the employees for services rendered to the company, as
the Court held in Philippine Duplicators, Inc. v. NLRC.

The petitioners' reliance on our ruling in Talam v. National Labor Relations Commission, regarding the "proper
appreciation of quitclaims," as they put it, is misplaced. While Talam, in the cited case, and Ybarola and Rivera, in
this case, are not unlettered employees, their situations differ in all other respects.

In Talam, the employee received a valuable consideration for his less than two years of service with the company; he
was not shortchanged and no essential unfairness took place. In this case, as the CA noted, the separation pay the
respondents each received was deficient by at least P400, 000.00; thus, they were given only half of the amount
they were legally entitled to. To be sure, a settlement under these terms is not and cannot be a reasonable one,
given especially the respondents' length of service — 25 years for Ybarola and 19 years for Rivera. The CA was
correct when it opined that the respondents were in dire straits when they executed the release/quitclaim affidavits.
Without jobs and with families to support, they dallied in executing the quitclaim instrument, but were eventually
forced to sign given their circumstances.
 ELEAZAR S. PADILLO, Petitioner vs. RURAL BANK OF NABUNTURAN, INC. and MARK S. OROPEZA,
Respondents.
G.R. No. 199338 January 21, 2013

Facts: On October 1, 1977, petitioner, the late Eleazar Padillo (Padillo), was employed by respondent Rural Bank of
Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems which arose sometime in 2003, the Bank
took out retirement/insurance plans with Philippine American Life and General Insurance Company (Philam Life) for
all its employees in anticipation of its possible closure and the concomitant severance of its personnel.

In this regard, the Bank procured Philam Plan Certificate of Full Payment No. 88204, Plan Type 02FP10SC,
Agreement No. PP98013771 (Philam Life Plan) in favor of Padillo for a benefit amount of P100,000.00 and which was
set to mature on July 11, 2009. During the latter part of 2007, Padillo suffered a mild stroke due to hypertension
which consequently impaired his ability to effectively pursue his work. On September 10, 2007, he wrote a letter
addressed to respondent Oropeza, the president of the bank, expressing his intention to avail of an early retirement
package. Despite several follow-ups, his request remained unheeded.

On October 3, 2007, Padillo was separated from employment due to his poor and failing health as reflected in a
Certification dated December 4, 2007 issued by the Bank. Not having received his claimed retirement benefits, Padillo
filed with the NLRC a complaint for the recovery of unpaid retirement benefits.

Issue: Whether or not Padillo is entitled to claim for separation and retirement benefits under the Labor Code?

Ruling: The Labor Code provision on termination on the ground of disease under Article 297 does not apply in this
case, considering that it was the petitioner and not the Bank who severed the employment relations. It was Padillo
who voluntarily retired and that he was not terminated by the Bank.

Under article 300 of the labor code, in the absence of any applicable agreement, an employee must (1) retire when
he is at least sixty (60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement
benefit of at least one-half (1/2) month salary for every year of service, with a fraction of at least six (6) months
being considered as one whole year. Notably, these age and tenure requirements are cumulative and non-compliance
with one negates the employee's entitlement to the retirement benefits under Article 300 of the Labor Code.

In this case, it is undisputed that there exists no retirement plan, collective bargaining agreement or any other
equivalent contract between the parties which set out the terms and condition for the retirement of employees, with
the sole exception of the Philam Life Plan which premiums had already been paid by the Bank. In the absence of any
applicable contract or any evolved company policy, Padillo should have met the age and tenure requirements set
forth under Article 300 of the Labor Code to be entitled to the retirement benefits provided therein.

Unfortunately, while Padillo was able to comply with the five (5) year tenure requirement — as he served for twenty-
nine (29) years — he, however, fell short with respect to the sixty (60) year age requirement given that he was only
fifty-five (55) years old when he retired. Therefore, without prejudice to the proceeds due under the Philam Life Plan,
petitioners' claim for retirement benefits must be denied.
 GRACE CHRISTIAN HIGH SCHOOL, represented by its Principal, DR. JAMES TAN, Petitioner, vs.
FILIPINAS A. LAVANDERA, Respondent.
G.R. No. 177845 August 20, 2014

Facts: Filipinas was employed by petitioner Grace Christian High School (GCHS) as high school teacher since June
1977, with a monthly salary of 18,662.00 as of May 31, 2001.

On August 30, 2001, Filipinas filed a complaint for illegal (constructive) dismissal, non-payment of service incentive
leave (SIL) pay, separation pay, service allowance, damages, and attorney’s fees against GCHS and/or its principal,
Dr. James Tan. She alleged that on May 11, 2001, she was informed that her services were to be terminated
effective May 31, 2001, pursuant to GCHS’ retirement plan which gives the school the option to retire a teacher who
has rendered at least 20 years of service, regardless of age, with a retirement pay of one-half (½) month for every
year of service. At that time, Filipinas was only 58 years old and still physically fit to work. She pleaded with GCHS to
allow her to continue teaching but her services were terminated, contrary to the provisions of Republic Act No. (RA)
7641, otherwise known as the “Retirement Pay Law.”

The Labor Arbiter dismissed the illegal dismissal case but found the retirement benefits payable under GCHS plan to
be deficient. NLRC reversed LA’s award and held that retirement pay should be computed based on her monthly
salary at the time of her retirement. CA modified NLRC’s decision and ruled that the computation of “one-half month
salary” by equating it to”22.5 days”.

Issue: Whether or not the multiplier “22.5 days” is to be used in computing the retirement pay differentials of
Filipinas.

Held: Yes. RA 7641, which was enacted on December 9, 1992, amended Article 287 of the Labor Code, providing for
the rules on retirement pay to qualified private sector employees in the absence of any retirement plan in the
establishment. The said law states that “an employee’s retirement benefits under any collective bargaining
agreement (CBA) and other agreements shall not be less than those provided” under the same – that is, 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 – and that “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.”

Applicability of the 1/2 month salary provision

1. There is no CBA or other applicable agreement providing for retirement benefits to employees, or
2. There is a CBA or other applicable agreement providing for retirement benefits but it is below the
requirement set by law.

Verily, the determining factor in choosing which retirement scheme to apply is still superiority in terms of benefits
provided.

In the present case, GCHS has a retirement plan for its faculty and non-faculty members, which gives it the option to
retire a teacher who has rendered at least 20 years of service, regardless of age, with a retirement pay of one-half
(1/2) month for every year of service. Considering, however, that GCHS computed Filipinas’ retirement pay without
including one-twelfth (1/12) of her 13th month pay and the cash equivalent of her five (5) days SIL, both the NLRC
and the CA correctly ruled that Filipinas’ retirement benefits should be computed in accordance with Article 287 of
the Labor Code, as amended by RA 7641, being the more beneficent retirement scheme. They differ, however, in the
resulting benefit differentials due to divergent interpretations of the term “one-half (1/2) month salary” as used
under the law.

Moreover, the Court held that the award of legal interest at the rate of 6% per annum on the amount of P68,150.00
representing the retirement pay differentials due Filipinas should be reckoned from the rendition of the LA’s Decision
on March 26, 2002 and not from the filing of the illegal dismissal complaint.
 GOODYEAR PHILIPPINES, INC. and REMEGIO M. RAMOS, Petitioners, vs. MARINA L. ANGUS,
Respondent.
G.R. No. 185449 November 12, 2014

Facts: Angus was employed by Goodyear on November 16, 1966 and occupied the position of Secretary to the
Manager of Quality and Technology. In order to maintain the viability of its operations in the midst of economic
reversals, Goodyear implemented cost-saving measures which included the streamlining of its workforce. Angus’
position was declared as redundant or “no longer necessary”. In a letter by the HR:

“As Company practice, termination due to redundancy or retrenchment is paid at 45 days' pay
per year of service. Considering, that you have rendered 34.92 years of service to the
Company as of October 18, 2001, and have reached the required minimum age of 55 to
qualify for early retirement, Management has decided to grant you early retirement benefit at
47 days' per year of service.”

“The Company will pay you the following termination benefits on October 18, 2001: 47 days'
pay per year of service (which will come from the Pension Fund), fractions of 13th and 14th
months pay, longevity pay, emergency leave and any earned and unused vacation and/or sick
leave. The refund of your contributions to the Goodyear Savings Plan, as well as the
Company's share will be handled separately by Security Bank Corporation, the Administrator of
said Plan.”

Upon receipt, Angus responded through a letter of even date;

Dear Sirs:
With reference to the attached letter dated September 18, 2001, I accept Management
decision to avail early retirement benefit. However, I do not agree on the terms stated therein.
I suggest I be given a premium of additional 3 days for every year of service which is only
6.3% or a total of 50 days. I gathered it is Philippine industry's practice to give premium to
encourage employees to avail of the early retirement benefit.
Acceptance of this proposal will make my separation from Goodyear pleasant.

On November 20, 2001, Angus accepted the checks which covered payment of her retirement benefits computed at
47 days' pay per year of service and other company benefits. However, she put the following annotation in the
acknowledgement receipt thereof:

Received under protest — amount is not acceptable. Acceptance is on condition that I will be
given a premium of additional 3 days for every year of service.

Since my service was terminated due to redundancy, I now claim my separation pay as
mandated by law. This is a separate claim from my early retirement benefit.

Allegedly because of the above-quoted annotation, and also of Angus' refusal to sign a Release and Quitclaim,
petitioners took back the checks.

In response, Ramos wrote her a letter explaining that the company has already offered her the most favorable
separation benefits due to redundancy, that is, 47 days' pay per year of service instead of the applicable rate of 45
days' pay per year of service.

Angus reiterated her claim for both termination pay and early retirement benefits.

On January 17, 2002, Angus finally accepted a check in the amount of P1,958,927.89 purportedly inclusive of all
termination benefits computed at 47 days' pay per year of service. She likewise executed a Release and Quitclaim in
favor of Goodyear.

On February 5, 2002, Angus filed with the Labor Arbiter a complaint for illegal dismissal with claims for separation
pay, damages and attorney's fees against petitioners.

In her Position Paper, Angus claimed that her termination by reason of redundancy was effected in violation of the
Labor Code for it was not timely reported to the DOLE and no separation pay was given to her; that the separation
pay to which she is entitled by law is entirely different from the retirement benefits that she received; that nothing in
the company's Retirement Plan under the CBA, the CBA itself or the Employment Contract prohibits the grant of more
than one kind of separation pay; and, that she was only forced to sign a quitclaim after accepting her retirement
benefits.

On the other hand, petitioners asseverated in their Position Paper that Angus was validly dismissed for an authorized
cause; that she voluntarily accepted her termination benefits and freely executed the corresponding quitclaim; that
her receipt of early retirement benefits equivalent to 47 days' pay for every year of service, which amount is higher
than the regular separation pay, had effectively barred her from recovering separation pay due to redundancy.

Issue: Is the petitioner entitled to separation pay AND early retirement benefit?

Ruling: Angus is entitled to both separation pay and early retirement benefit due to the absence of a specific
provision in the CBA prohibiting recovery of both.

An employee is entitled to recover both separation pay and retirement benefits in the absence of a specific
prohibition in the Retirement Plan or CBA. An employee's right to receive separation pay in addition to retirement
benefits depends upon the provisions of the company's Retirement Plan and/or CBA.

Petitioners allege that there is a provision in the last CBA against the recovery of both retirement benefits and
separation pay. To support their claim, petitioners submitted a copy of what appears to be a portion of the company
CBA entitled "Retirement Plan, Life Insurance, Physical Disability Pay and Resignation Pay." Section 1, Article XI
thereof provides that the availment of retirement benefits precludes entitlement to any separation pay.

Angus presented the parties' 2001-2004 CBA, it did not contain any restriction on the availment of benefits under the
company's Retirement Plan AND of separation pay.

The amount Angus received from petitioners represented only her retirement pay and not separation.

Petitioners also argue that Angus is not entitled to retirement pay because she does not meet the requirements
enumerated in the Retirement Plan provision of the CBA. The Court disagrees. While it is obvious that Angus is not
entitled to compulsory retirement as she has not yet reached the age of 60, there is no denying, that she is qualified
for early retirement. Under the provision of the Retirement Plan of the CBA, a worker who is at least 50 years old and
with at least 15 years of service, and who has been recommended by the President of the Union for early retirement
and duly approved by the Human Resources Director, shall be entitled to lump sum retirement benefits. Angus has
met all these requirements.

Retirement benefits and separation pay are not mutually exclusive. Retirement benefits are a form of reward for an
employee's loyalty and service to an employer and are earned under existing laws, CBAs, employment contracts and
company policies. Separation pay is that amount which an employee receives at the time of his severance from
employment, designed to provide the employee with the wherewithal during the period that he is looking for another
employment and is recoverable only in instances enumerated under Articles 283 and 284 of the Labor Code or in
illegal dismissal cases when reinstatement is not feasible. In the case at bar, Article 283 clearly entitles Angus to
separation pay apart from the retirement benefits she received from petitioner.
 BANCO DE ORO UNIBANK, INC., Petitioner, v. GUILLERMO C. SAGAYSAY, Respondent.
G.R. No. 214961, September 16, 2015

Facts: On May 16, 2006, respondent Guillermo Sagaysay was hired by petitioner Banco De Oro Unibank, Inc., (BDO)
as Senior Accounting Assistant 5 in its San Jose, Nueva Ecija, branch as a result of a merger with United Overseas
Bank (UOB), with BDO as the surviving bank. Sagaysay was previously employed in UOB from 2004 to 2006 or for
two (2) years. Prior thereto, he worked for Metropolitan Bank and Trust Co. (Metrobank) from 1976 to 2004 for a
period of 28 years.

On January 8, 2010 BDO informed Sagaysay that, pursuant to the retirement policy of the bank which mandated its
retirement age to be sixty (60), he would be formally retired effective September 1, 2010, a few days after his 60th
birthday. Sagaysay sent several requests to extend his employment but these requests were denied. Sagaysay then
signed Release, Waiver and Quitclaim, dated October 22, 2010, for and in consideration of P98,376.14.

On January 10, 2011, Sagaysay filed a complaint for illegal dismissal with prayer for reinstatement and payment of
backwages, moral damages, exemplary damages, and attorney's fee against BDO before the Labor Arbiter (LA). He
claimed that despite his appeal, BDO compulsory retired him on September 1, 2010. As a result, he and his family
suffered damages in the amount of P2,225,403.00 which he would have received if he was made to retire at the age
of sixty-five.

The Labor Arbiter ruled that Sagaysay was illegally dismissed because he was forced to avail of an optional
retirement at the age of sixty (60) which was contrary to the provisions of Article 287 of the Labor Code. The NLRC
reversed and set aside the ruling of the LA and concluded that when Sagaysay accepted his employment with BDO,
he assented to the provisions of the retirement plan. The CA rendered the assailed decision which reversed the NLRC
ruling. It opined that Sagaysay was forced to participate in the retirement plan. Equally, the quitclaim he executed
was not given credence because his subsequent filing of a complaint for illegal dismissal manifested that he had no
intention to relinquish his employment

Issue: Whether the retirement plan is valid and effective and the mandatory retirement age of 60 is also binding.

Ruling: The petition essentially centers on whether the June 1, 1994 retirement plan is valid and effective against
Sagaysay. To resolve this issue, a review of the relevant laws and jurisprudence regarding the compulsory retirement
age is warranted.

Article 287 of the Labor Code is the primary provision which governs the age of retirement. Doubtless, under this
provision, the retirement age is primarily determined by the existing agreement or employment contract. Only in the
absence of such an agreement shall the retirement age be fixed. Retirement plans allowing employers to retire
employees who have not yet reached the compulsory retirement age of 65 years 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 60 years or below, provided that the employees' retirement benefits
under any CBA and other agreements shall not be less than those provided therein.

After a judicious study of records, the Court is convinced that Sagaysay was undeniably informed and had consented
to the retirement plan of BDO before his compulsory retirement.

For four years, from the time he was employed until his retirement and having actual knowledge of the BDO
retirement plan, Sagaysay had every opportunity to question the same, if indeed he knew it would not be beneficial
to him. Yet, he did not express his dissent. In fact, he recognized in one of his emails that "the time has come that
BDO Retirement Program will be implemented to those reaching the age of sixty (60).

The NLRC ruling is reinstated.

 MAUREEN P. PEREZ, Petitioner, v. COMPARTS INDUSTRIES, INC., Respondent.
G.R. No. 197557, October 05, 2016

Facts: Perez (petitioner) started her employment with CII (respondent) on 16 July 1988 and became a regular
employee thereof on 01 September 1988. After years of working and after several promotions, she was eventually
appointed as Marketing Manager. She held this position from 1998 up to 10 January 2009, the date when she
resigned from her work.
CII has a retirement program for its managerial employees or officers covered by "Comparts Industries, Inc.
Employees Retirement Plan" (Retirement Plan) that took effect on 01 June 1999 and was amended on 25 January
2001. Included therein are provisions relating to optional or early retirement and optional retirement benefits.

Prior to her resignation, Perez manifested to CII sometime in November 2007 her intention to avail of the optional
retirement program since she was already qualified to retire under it. Her application was denied. In January 2008,
while vacationing in the United States of America (USA), she again filed an application for optional retirement to take
advantage of a job offered to her in the said country. Still, her application was denied. CII justified its denial of
Perez's application saying that, under the Retirement Plan, it has the option to grant or deny her application for
optional retirement and considering that it is experiencing financial crisis, it has no choice but to disallow her
intention.

Perez maintains that she is entitled to separation pay: (1) primarily through the optional retirement program under
the Retirement Plan having rendered more than twenty (20) years of service to CII, (2) through a similar optional
retirement program under the CBA which has been likewise extended to other managerial/middle management
employees in several instances, or (3) a retrenchment program undertaken by CII because of the global financial
crisis.

Issue: Whether or not petitioner is entitled to optional retirement program.

Ruling: First and foremost, the Court emphasized that termination of employment by the employee, as in this
instance, does not entitle the employee to separation pay. Separation pay is that amount which an employee
receives at the time of his severance from employment, designed to provide the employee with the wherewithal
during the period that he is looking for another employment and is recoverable only in instances enumerated under
Articles 283 and 284 of the Labor Code or in illegal dismissal cases when reinstatement is not feasible.

Second, in the matter of Perez's entitlement to optional retirement benefits, the Court agrees with the NLRC and the
appellate court that as a managerial employee, she is covered by the Retirement Plan for CII Officers which took
effect in 1999 and was amended in 2001.

A Retirement Plan in a company partakes the nature of a contract, with the employer and the employee as the
contracting parties. It creates a contractual obligation in which the promise to pay retirement benefits is made in,
consideration of the continued faithful service of, the employee for the requisite period. Being a contract, the
employer and employee may establish such stipulations, clauses, terms and conditions as they may deem
convenient.

Observably, as stipulated in the Retirement Plan, it is not enough that an employee of CII who wants to optionally
retire meets the conditions for optional retirement. CII has to give its consent for the optional retirement to operate.
In this case, Perez's application for optional retirement was denied several times as CII still needs her services.
Perez's unilateral act of retiring without the consent of CII does not bind the latter with the provisions of the
Retirement Plan. Therefore, CII is not liable to give Perez the optional retirement benefits provided therein.

Clearly, the age of retirement is primarily determined by the existing agreement or employment contract. In the
absence of such agreement, the retirement age shall be fixed by law. Under the law, the mandated compulsory
retirement age is set at 65 years, while the minimum age for optional retirement is set at 60 years.
 DE LA SALLE ARANETA UNIVERSITY, PETITIONER, vs. JUANITO C. BERNARDO, RESPONDENT.
G.R. No. 190809, February 13, 2017

Facts: On February 26, 2004, Bernardo filed a complaint against DLS-AU and its owner/manager, Dr. Oscar Bautista
(Dr. Bautista), for the payment of retirement benefits.

Bernardo alleged that he started working as a part-time professional lecturer at DLS-AU (formerly known as the
Araneta University Foundation) on June 1, 1974 for an hourly rate of P20.00. Bernardo taught for two semesters and
the summer for the school year 1974-1975. Bernardo then took a leave of absence from June 1, 1975 to October 31,
1977 when he was assigned by the Philippine Government to work in Papua New Guinea.

When Bernardo came back in 1977, he resumed teaching at DLS-AU until October 12, 2003, the end of the first
semester for school year 2003-2004. Bernardo's teaching contract was renewed at the start of every semester and
summer.

However, on November 8, 2003, DLS-AU informed Bernardo through a telephone call that he could not teach at the
school anymore as the school was implementing the retirement age limit for its faculty members. As he was already
75 years old, Bernardo had no choice but to retire. At the time of his retirement, Bernardo was being paid P246.50 per
hour.

Bernardo immediately sought advice from the DOLE regarding his entitlement to retirement benefits after 27 years of
employment. In letters dated January 20, 2004 and February 3, 200, the DOLE, through its Public Assistance Center
and Legal Service Office, opined that Bernardo was entitled to receive benefits under Republic Act No. 7641,
otherwise known as the "New Retirement Law," and its Implementing Rules and Regulations.

Yet, Dr. Bautista, in a letter dated February 12, 2004, stated that Bernardo was not entitled to any kind of separation
pay or benefits. Dr. Bautista explained to Bernardo that as mandated by the DLS-AU's policy and Collective Bargaining
Agreement (CBA), only full-time permanent faculty of DLS-AU for at least five years immediately preceding the
termination of their employment could avail themselves of the post--employment benefits. As part-time faculty
member, Bernardo did not acquire permanent employment under the Manual of Regulations for Private Schools, in
relation to the Labor Code, regardless of his length of service.

Issues: 1.) Are part-time employees excluded from the coverage of those entitled to retirement benefits under RA
7641? 2.) Has a claim for retirement benefits filed beyond the period provided for under Art. 291 of the Labor Code
prescribed?

Ruling: 1) Yes. Bernardo’s employment with DLS-AU had always been for a fixed-term and his contracts of
employment with the school were valid, legal, and binding. Based on RA 7641, its Implementing Rules and Secretary
Quisumbing’s Labor Advisory, Bernardo, as a part-time employee of DLS-AU, is entitled to retirement benefits. The
general coverage of RA 7641 is broad enough to encompass all private sector employees, and part-time employees
are not among those specifically exempted from the law.

2) Bernardo’s right to retirement benefits and the obligation of DLS-AU to pay such benefits are already established
under Article 302 [287] of the Labor Code, as amended by RA 7641. However, there was a violation of Bernardo’s right
only after DLS-AU informed him that the university no longer intended to offer him another contract of employment,
and already accepting his separation from service, Bernardo sought his retirement benefits, but was denied by the
school. Therefore, the cause of action for Bernardo’s retirement benefits only accrued after the refusal of DLS-AU to
pay him the same, clearly expressed in Dr. Bautista’s letter dated February 12, 2004. Hence, Bernardo’s complaint, filed
with the NLRC on February 26, 2004, was filed within the three-year prescriptive period provided under Article 291 of
the Labor Code.
Editha M. Catotocan, petitioner, vs. Lourdes School of Quezon City, Inc./Lourdes School, Inc. and Rev.
Fr. Cesar F. Acuin, OFM CAP, Rector, respondents.
G.R. No. 213486 April 26, 2017

Facts: Petitioner Catotocan started her employment in Lourdes School of Quezon City (LSQC) in 1971 as a music
teacher. By the school year 200-2006, she had already served for 35 years.

LSQC has a retirement plan providing for retirement at 60 years old or separation pay depending on the number of
years of service. In relation to its retirement policy, LSQC issued Administrative Order No. 2003-004. The said order
provides that “An employee may apply for retirement or be retired by the school when he/she reaches the age of
sixty (60) years or when he/she completes thirty (30) years of service, whichever comes first.”

Petitioner and other co-employees assailed the said order. They argued that they do not deserve to be retired and be
rehired when they are, in fact, very much capable of doing their duties and responsibilities.

LSQC retired Petitioner sometime in June 2006 after completing 35 years of service. Full retirement benefits were
given to her computed based on the latest salary multiplied by the total years of service. Under the school's
retirement policy, 60% of her retirement benefit was paid in lump sum by the trustee bank, and the balance was to
be paid in equal monthly pensions over the next three (3) years. 60% of that amount, or Five Hundred Seventy-One
Thousand Seven Hundred and One Philippine Pesos (Php571,701.00) was credited to her savings account, which she
opened in accordance with the school's retirement policy.

Petitioner was told that if she desires, she may signify in writing her intent to continue serving the school on a
contractual basis. She responded by submitting a "Letter of Intent" on February 14, 2006. Petitioner was rehired for
two school years as a guidance counselor. When she re-applied for the third time, LSQC no longer considered her
application. Petitioner filed a complaint for illegal dismissal. Both LA and NLRC dismissed Catotocan’s complaint.
Likewise, the CA dismissed the petition.

Issue: Whether or not the receipt of Catotocan of her retirement benefits will not stop her from pursuing an illegal
dismissal complaint against LSQC.

Ruling: SC denied the petition. LSQC’s retirement plan is 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 60 years or below, provided that the employees' retirement benefits under any CBA and other
agreements shall not be less than those provided therein.

Catotocan's subsequent actions after her "retirement" are actually tantamount to her consent to LSQC's retirement
policy of retiring her from service upon serving the school for at least thirty (30) continuous years.
(1) after being notified that she was being retired from service by LSQC, she opened a savings account with
BDO, the trustee bank;
(2) she accepted all the proceeds of her retirement package: the lump sum and all the monthly payments
credited to her account until June 2009; and
(3) upon acceptance of the retirement benefits, there was no notation that she is accepting the retirement
benefits under protest or without prejudice to the filing of an illegal dismissal case.

Moreover, petitioner’s correspondence with the respondent following her "retirement” shows her voluntary assent to
the latter’s retirement policy. Said letter stipulates that “re-hiring was exclusive only for those employees who have
availed of the retirement benefits or who have been retired by the school but who has not yet reached 65 years of
age.

Thus, since petitioner has availed of this contractual employment which is exclusively offered only to LSQC's qualified
retirees for three (3) consecutive years following her retirement, she can no longer dispute that she has indeed
legitimately retired from employment, and was not illegally dismissed.

Furthermore, petitioner’s availment of the re-hiring program of LSQC for qualified retirees for 3 consecutive years is a
supervening event that would reveal that she has already voluntarily and freely signified her consent to the
retirement policy despite her initial opposition to it.
 PHILIPPINE AIRLINES, INC., PETITIONER, V. ARJAN T. HASSARAM, RESPONDENT.
G. R. No. 217730, June 05, 2017

Facts: Hassaram filed a case against PAL for illegal dismissal and the payment of retirement benefits, damages, and
attorney's fees. He claimed that he had applied for retirement from PAL in August 2000 after rendering 24 years of
service as a pilot, but that his application was denied. Instead, PAL informed him that he had lost his employment in
the company as of 9 June 1998, in view of his failure to comply with the Return to Work Order Issued by the
Secretary of Labor against members of the Airline Pilots Association of the Philippines (ALPAP) on 7 June 1998.

Hassaram argued that he was not covered by the Secretary's Return to Work Order; hence, PAL had no valid ground
for his dismissal. In the course of the trial it was found that Hassaram's purported receipt of retirement benefits in
the amount of P4,456,817.75 pursuant to the PAL-ALPAP Plan.

PAL likewise alleged that, as a consequence of this newly discovered payment, any claim made by Hassaram for
retirement benefits should be deemed extinguished.

Issues: 1.) Whether the amount received by Hassaram under the PAL-ALPAP Retirement Plan should be deemed
part of his retirement pay together with PAL Pilots' Retirement Benefit Plan which is another retirement plan aside
from PAL-ALPAP; 2.)Whether Hassaram is entitled to receive retirement benefits under Article 287 of the Labor Code.

Ruling: The Supreme Court ruled that Hassaram is entitled to both retirement plans but seeing Hassaram has
received his benefits under the Plan, he is now entitled to claim only his remaining benefits under the CBA, i.e., the
amount of P120,000 (24 years x P5,000) for his 24 years of service to the company. Since the PAL-ALPAP retirement
fund raised from contributions exclusively from [PAL] of amounts equivalent to 20% of each pilot's gross monthly
pay, pilot gets an amount equivalent to 240% of his gross monthly income for every year of service he rendered to
petitioner. This is in addition to the amount of not less than P100,000.00 that he shall receive under the 1967
Retirement Plan.

As to the issue of whether or not Hassaram is entitled to receive retirement benefits under Article 287 of the Labor
Code, the petitioner would only be receiving a retirement pay equivalent to at least one-half (1/2) of his monthly
salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Which
means that, 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 and the remaining 5 days for service incentive leave.

Comparing the benefits under the two (2) retirement schemes, it can readily be perceived that the 22.5 days’ worth
of salary for every year of service provided under Article 287 of the Labor Code cannot match the 240% of salary or
almost two and a half worth of monthly salary per year of service provided under the PAL Pilots' Retirement Benefit
Plan, which will be further added to the P125,000.00 to which the petitioner is entitled under the PAL-ALPAP
Retirement Plan. Clearly then, it is to the petitioner's advantage that PAL's retirement plans were applied in the
computation of his retirement benefits.
 MARIA DE LEON TRANSPORTATION, PETITIONER, V. DANIEL MACURAY, RESPONDENT.
G.R. NO 214920 JUNE 6, 2018

Facts: Daniel Macuray was a bus driver for Maria De Leon Transportation for eighteen years driving the Laoal-Manila-
Laoag route and receives a monthly commission of Php 20,000.00 per month. On November 11, 2011 he filed a
complaint for illegal dismissal against Maria De Leon Transportation. According to Macuray, the dispatcher of Maria
De Leon Transportation did not assign a bus to him for no reason which he continually followed up for a month for
no avail. When he returned, the dispatcher informed him that he was considered as AWOL or absent without leave.
He still went back and made follow ups for six months but nobody attended to him. He felt betrayed by the company
because after serving them for eighteen years there was no explanation on the status on his employment and he did
not receive any benefits and the transportation company still owed him his salary for three months in 2009.

The company’s contention was Macuray permanently abandoned his work on March 31, 2009 and that he was already
engaged in driving his family truck. According to Maria De Leon Transportation, the dispatcher who informed
Macuray that he was considered absent without leave had no power to terminate or declare him absent without leave,
Macuray also did not approach or inquire to the management regarding his employment status even though Elias
Dimaya the director of the bus company lives in the same compound as him. Furthermore, Macuray was not
dismissed since the company allowed their drivers to stop reporting for work for short periods of time and would
allow them to drive the buses again if they have a reasonable explanation for their absence. This has been a company
practice to allow the drivers to take time off from the stress and boredom of driving long trips.

The Labor Arbiter dismissed the case for lack of merit. The National Labor Relations Commission affirmed the Labor
Arbiter’s decision with the modification of the award of Php 50,000.00 as financial assistance to Macuray. The Court
of Appeals ruled in favor of Macuray

Issues: Whether Daniel Macuray was illegally dismissed.

Whether Macuray is entitled to benefits for the service he has rendered to the company for eighteen years.

Ruling: Daniel Macuray was not illegally dismissed and he should be entitled to the benefits. Daniel Macuray simply
availed of the company practice of taking a break or sabbatical to recover from the stress of driving long distances
and to look for geener pastures whenever possible. After working for the company for eighteen years and availing of
the said company practice only upon reaching the age of 58 which is approaching the retirement age, he should be
rewarded for his loyalty. Thus, the company should not be should not be help for the monetary claims filed by
Macuray except for those that were due to him such as the retirement benefits and the unpaid salary/commission for
three months. Macuray is entitled for the retirement benefits since he was not dismissed from work citing Article 287
of the Labor Code. Macuray is entitled to Php 180,000.00 as retirement benefits should there be an absence of a
retirement plan or agreement. Macuray shoud also be entitled to atterneys’s fees amounting to Php 20,000.00 citing
Article 2208 of the Civil Code.
 Laya vs. Court of Appeals, GR No. 205813, January 10, 2018,

Facts: Alfredo was the Chief Legal Counsel of Philippine Veterans Bank with a rank of Vice President. He was then informed that his
retirement would be effective on July 1, 2007. He then requested for the extension of his tenure for two more years but it was
denied. With the unexpected retirement, he filed a complaint for illegal dismissal against the Philippine Veterans Bank and to
Ricardo Balbido, the president of the said bank. Laya argued that he was not aware of the existence of the bank’s retirement plan.

The Labor Arbiter dismissed the complaint but ordered the Philippine Veterans Bank to pay Laya the amount of Php 200.00 as
reasonable indemnity. The National Labor Relation Commission affirmed the ruling of the Labor Arbiter. The Court of Appeals ruled
that Laya could not have been unaware of the retirement program which was in effect since January 1, 1996 and the lowering of
the retirement age was a recognized exception under article 287 of the Labor Code.

Issue: Whether the petitioner was validly retired by Philippine Veterans Bank at the age of 60.

Ruling: No. Aflredo Laya was not validly retired at the age of 60. the CA simply concluded that the petitioner's acceptance of the
employment offer had carried with it his acquiescence, which implied his knowledge of the plan. Under article 287 of the Labor
Code, the employers and employees may agree to fix the retirement age in their collective bargaining agreements or their
employment contracts, provided that the retirement benefits are not lower than those provided by the law. The mere mention of
the retirement plan in the letter of appointment did not sufficiently inform the petitioner of the contents or details of the retirement
program which only stated “Membership in the Provident Fund Program/Retirement Program, citing Cercado v. Uniprom Inc.
“acceptance by the employees of an early retirement age option must be explicit, voluntary, free, and uncompelled”. Having thus
automatically become a member of the retirement plan through his acceptance of employment as Chief Legal Officer of PVB, the
petitioner could not withdraw from the plan except upon his termination from employment. The plan was in the nature of a contract
of adhesion since it was solely established by the Philippine Veterans Bank and approved by the president. With the plan being a
contract of adhesion, to consider him to have voluntarily and freely given his consent to the terms thereof as to warrant his being
compulsorily retired at the age of 60 years is factually unwarranted. Company retirement plans must not only comply with the
standards set by the prevailing labor laws but must also be accepted by the employees as commensurate to their faithful services to
the employer within the requisite period. With the petitioner having been thus dismissed pursuant to the retirement provision that
he had not knowingly and voluntarily agreed to, PVB was guilty of illegal dismissal as to him. Being an illegally dismissed employee,
he was entitled to the reliefs provided under Article 279 of the Labor Code. However, petitioners reinstatement is no longer feasible
since he reached the compulsory retirement age of 65 years old, he should be granted separation pay in accordance to the
Philippines Veterans Bank’s retirement plan. Hence, his full back wages should be computed from July 18, 2007 — the date when
he was illegally dismissed — until his compulsory retirement age of 65 years on June 11, 2012. Philippine Veterans Bank illegally
dismissed the petitioner and he should be paid backwages, separation pay and costs of the suits.