Goodyear Philippines Inc. vs. Angus, GR No.

185449, November 12, 2015

DOCTRINE: Retirement Pay and Separation Pay are not mutually exclusive in the absence of a specific prohibition in the
Retirement Plan or the Collecting Bargaining Agreement.

FACTS:
Angus was employed by Goodyear as Secretary to the Manager of Quality and Technology from 1966-2001. Goodyear
implemented cost-saving measures which included the streamlining of its workforce. On September 9, 2001, Angus received a letter
from Goodyear through Ramos, the Human Resource Director, stating that the position he is holding is already redundant and is no
longer necessary. The letter also provides that as company practice, termination due to redundancy or retrenchment is paid at 45
days pay per year of service.

Moreover, considering that Angus has rendered 34.92 years of service to the company and have reached the minimum age of 55 to
qualify early retirement, the management has decided to grant Angus early retirement benefit at 47 days per year of service.
Goodyear, in summarizing the benefits of Angus, stated that he will receive 47 days’ pay per year of service (which will come form
the Pension Fund), fractions of 13th and 14th months pay, longevity pay, emergency leave and any earned and unused vacation or
sick leave.

Angus responded to their letter, requesting that although he agrees with Management ’s decision for Angus to avail the
early retirement benefit, he asks for an additional 3 days for every year of service which will total to 50 days. An Establishment
Termination Report was filed by Goodyear with the Department of Labor and Employment. Angus accepted the checks which
covered only 47 days’ pay per year of service and other company benefits. However, he annotated on the acknowledgement receipt
that he received the same under protest and acceptance will be on the condition that she will be given an additional 3 days’ pay per
year of service. Since Angus refused to sign the Release and Quitclaim, Goodyear took back the checks.

Ramos wrote a letter to Angus, stating among others that the company has already offered her the most favorable
separation benefits due to redundancy. On January 17, 2002, Angus finally accepted the check amounting to P1,958,927.89 and
likewise executed a Release and Quitclaim. Angus filed before the Labor Arbiter a complaint for illegal dismissal with claims of
separation pay, damages, and attorney’s fees. The Labor Arbiter upheld the validity of Angus’ termination and declared that it was
already a payment of separation due to redundancy. The National Labor Relations Commission affirmed the decision of the Labor
Arbiter.

The Court of Appeals partially granted Angus’ petition, saying that she is entitled to separation pay in addition to the
retirement pay.

ISSUE: Whether Angus is entitled both separation pay and early retirement benefit

RULING:
Yes. Retirement pay and separation pay are not mutually exclusive. Retirement benefits are a form of reward to the
employee’s loyalty and service to the employer and are earned under existing laws, CBA, or company policies. Separation pay is
the amount given to the employee to provide during the period that he is looking for another employment and is recoverable only in
instances enumerated in Article 298 and 299 of the Labor Code or in illegal dismissal when reinstatement is not feasible. One of the
grounds in Article 298 is when the employee is terminated due to redundancy, therefore she is entitled to separation pay.

The Court held in several cases that an employee is entitled to recover both separation pay and retirement benefits in the
absence of a specific prohibition in the Retirement Plan of CBA. An employee’s right to receive separation pay in addition to
reitrement benefits depends upon the provisions of the company’s Retirement Plan and/or CBA.

The provision in Goodyear’s CBA, “The parties finally agree that an employee shall be entitled to only one (1) benefit,
whichever is higher” is not substantial evidence of the prohibition because it does not appear to be a substantial part of the CBA.
Assuming that it is, there was no proof that the CBA Goodyear presented as evidence is the same CBA material to the case. Upon
examination of the 2001-2004 CBA, there was no prohibition of restriction on the availment of benefits under the company’s
Retirement Plan and separation pay.

Lastly, a quitclaim cannot bar an employee from demanding benefits he is legally entitled.