Assigned Person: X.B.K.

Bataan
Case: 240. Gamogamo vs. PNOC Shipping & Transport Corporation, 2002
Topic: Retirement Pay

DOCTRINE: For the purpose of computing an employee’s retirement pay, prior

service rendered in a government agency cannot be tacked in and added to the
creditable service later acquired in a government-owned and controlled corporation
without original charter since the totalization of service credits is only resorted to
when the retiree does not qualify for benefits in either or both of the Systems (Sec. 3
of RA 7699).

PLAINTIFFS DEFENDANTS

Cayo F. Gamogamo PNOC Shipping & Transport Corp.

ACTION SEQUENCE: A complaint for full payment of his retirement benefits filed
before LA; LA denied; NLRC reversed; and CA reversed.

FACTS: Gamogamo was first employed as Dental Aid in DOH year 1963 for 14 years.
Transferred to Luzon Stevedoring Corp as company dentist year 1977. Thereafter
PNOC acquired and took over the shipping business of Luzon Stevedoring and
Gamogamo was absorbed by the latter. In 1993, former–Pres. FVR issued a
memorandum approving the privatization of PNOC subsidiaries, including
Respondent, pursuant to EO No. 37. PNOC implemented a manpower reduction
program under which retrenched employees shall receive a two-month pay for every
year of service. In 1995, Gamogamo requested to be included in the program but it
was denied for having a permanent position and he was already due for mandatory
retirement in April 1995 under his retirement plan. Eventually, petitioner retired
after serving the Respondent and Luzon Stevedoring for 17 years and 4 months
upon reaching his 60th birthday, on 1 April 1995. Gamogamo filed a complaint at
the NLRC for the full payment of his retirement benefits claiming his service with the
DOH should have been included in the computation of his years of service or an
accumulated service of 32 years. LA dismissed but NLRC reversed. But CA reversed
the decision of the NLRC. Hence, this appeal before the SC arguing that his
government service with the DOH should be recognized and tacked in to his length
of service with Respondent because LUSTEVECO, which was later bought by
Respondent, and Respondent itself, were government-owned and controlled
corporations and were, therefore, under the Civil Service Law.

ISSUE: Whether, for the purpose of computing an employee’s retirement pay, prior
service rendered in a government agency can be tacked in and added to the
creditable service later acquired in a government-owned and controlled corporation
without original charter.

RULING: No, for the purpose of computing an employee’s retirement pay, prior
service rendered in a government agency cannot be tacked in and added to the
creditable service later acquired in a government-owned and controlled corporation
without original charter.
Section 4.1 of Article IV of the PNOC’s Retirement scheme provides that the normal
retirement date of an employee shall be the first day of the month next following the
employee’s sixtieth (60th) birthday. To be eligible for the retirement benefit described
under Sec. 4.2, the employee must have rendered at least ten (10) years of
continuous service with the Company. In case the retiring employee has rendered
less than ten (10) years of service with the Company, he shall be entitled to one (1)
month’s final monthly basic salary (12/12) for every year of service.

Further, Section 4.2 of the same Article holds that the retirement benefit shall be
payable in lump sum upon retirement which shall be determined on the basis of the
retiree’s final monthly basic salary (14/12) as follows: (a) One (1) month’s pay for
every year of service for those who have completed at least twenty (20) years of
continuous service with the Company; (b) One and one-half (1 1/2) months’ pay for
every year of service for those who have completed twenty-one (21) to thirty (30)
continuous years of service with the Company; (c) Two (2) months’ pay for every year
of service for those who have completed at least thirty-one (31) years of service with
the Company.

More so, the totalization of service credits is only resorted to when the retiree does
not qualify for benefits in either or both of the Systems (Sec. 3 of RA 7699). Here,
petitioner is qualified to receive benefits granted by the Government Security
Insurance System (GSIS), if such right has not yet been exercised. It is clear
therefrom that the creditable service referred to in the Retirement Plan is the
retiree’s continuous years of service with Respondent.

DISPOSITIVE PORTION: WHEREFORE, no reversible error on the part of the

Respondent Court of Appeals having been shown, the petition in this case is
DENIED and the appealed decision in CA-G.R. SP No. 51152 is hereby AFFIRMED.
Costs against petitioner. SO ORDERED.