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Article 299. Termination by Employee.

(a) An employee may terminate without just cause the employee-employer relationship by serving a
written notice on the employer at least one (1) month in advance. The employer upon whom no such
notice was served may hold the employee liable for damages.
(b) An employee may put an end to the relationship without serving any notice on the employer for
any of the following just causes:
1. Serious insult by the employer or his representative on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;
3. Commission of a crime or offense by the employer or his representative against the person of the
employee or any of the immediate members of his family; and
4. Other causes analogous to any of the foregoing.

Article 300. When Employment Not Deemed Terminated. – The bona fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by
the employee of a military or civic duty shall not terminate employment. In all such cases, the
employer shall reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.

Voluntary Resignation is defined as the act of an employee who “finds himself in a

situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the
service and he has no other choice but to disassociate himself from his employment.”

Resignation is withdrawable, even if the employee has called it “irrevocable.” (Custodio, July
19, 1990)

But after it is accepted or approved by the employer, its withdrawal needs the employer’s
consent.

A demotion or a forced resignation may cause a complaint of construction dismissal.

Article 301. 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 the existing laws and any collective bargaining agreement and other
agreements: Provided, however, That an employee’s 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 providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but
not beyond (65) sixty-five years which is hereby declared the compulsory retirement age, who has
served at least (5) five 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 a t 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 13 th-month pay and the cash equivalent of not
more than five (5) days of service incentive leaves.
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An underground mining employee upon reaching the age of fifty (50) years or more, but not
beyond sixty (60) years which is hereby declared the compulsory retirement age for underground
mine workers, who has served at least five (5) years as underground mine workers, may retire and
shall be entitled to all the retirement benefits provided for in this Article. (RA 8558, approved on
February 26, 1998)
Retail, service and agricultural establishments or operations employing not more than ten (10)
employees or workers are exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal provisions of
302 of this Code.

What is retirement?
A: It is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employees whereby the latter after reaching a certain age agrees and/or consents to sever his
employment with the former. (Soberano v. Sec. of Labor, G.R. Nos. L‐43753‐56 and L‐50991, Aug.
29, 1980)

Q: What are the kinds of retirement schemes?

A:
1. Compulsory and contributory in nature;
2. One set up by the agreement between the employer and employees in the CBA or other agreements
between them (other applicable employment contract);
3. One that is voluntarily given by the employer, expressly as announced company policy or impliedly
as in the failure to contest the employee’s claim for retirement benefits.

Q: Who are covered by the LC provisions on retirement?

A:
GR: All employees in the private sector:
1. Regardless of their position, designation or status; and
2. Irrespective of the method by which their wages are paid. (Sec.1, Rule II, Book VI, IRR)
XPN:
1. Employees of the National Government and its political subdivisions, including GOCCs (if they are
covered by the Civil Service Law)
2. Domestic helpers and persons in the personal service of another
3. Employees of retail, service, and agricultural establishments or operations employing not more
than 10 employees (Sec.2, Rule II, Book VI, IRR)
Q: What is the retirement age?
A: It is the age of retirement that is specified in the:
1. CBA; or
2. Employment contract; or
3. Retirement plan (Sec. 3, Rule II, Book VI, IRR).
4. Optional retirement age for underground mining employees: 50‐60 years provided they have at
least served for a period of 5 years. (Art.285 as amended by R.A. 8558)
Q: What is the retirement age in the absence of a retirement plan or other applicable
agreement?
A:

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1. Optional – 60 years old / 5 years in service (includes authorized absences, vacations, regular
holidays, mandatory military or civic service)
Note: The option to retire upon reaching the age of 60 years or more but not beyond 65 is the
exclusive prerogative of the employee (employee) if there is no provision on retirement in a CBA or
any other agreement or if the employer (employer) has no retirement plan. (R.A. 7641; Capili v.
NLRC, G.R. No. 117378, Mar. 26, 1997)
2. Compulsory – 65 years old, regardless of years of service (company is not bound to dismiss
employee; it is automatic). (Sec. 4, Rule II, Book VI, IRR)
Note: Retirement benefits, where not mandated by law, may be granted by agreement of the
employees and their employer or as a voluntary 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
worrying for his financial support, and are a form of reward for his loyalty and service to the employer
(Aquino v. NLRC, G.R. No. 87653, Feb. 11, 1992)
Q: Is compulsory retirement age below 60 allowed?
A: Yes. Art. 287 permits employer and employee to fix the applicable retirement age at below 60. The
same is legal and enforceable so long as the parties agree to be governed by such CBA. (Pantranco
North Express v. NLRC, G.R. No. 95940, July 24, 1996)
Q: What is the rule for extension of service of retiree upon his reaching the compulsory
retirement age?
A: Upon the compulsory retirement of an employee or official in the public or private service, his
employment is deemed terminated. The matter of extension of service of such employee or official is
addressed to the sound discretion of the employer. (UST Faculty Union v. NLRC, G.R. No. 89885,
Aug. 6,1990)
Q: What are retirement benefits?
A: In the absence of an applicable agreement or retirement plan – A retiree is entitled to a
retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at least 6
months being considered as 1 whole year. (Sec.5.1, Rule II, Book VI, IRR)
Q: What comprises ½ month salary or retirement pay?
A: Unless parties provide for broader inclusions:
1. 15 days salary based on latest salary rate;
2. Cash equivalent of not more than 5 days of service incentive leaves (22.5/year of service)
3. 1/12 of the 13th month pay
4. All other benefits as may be agreed upon by the employer and employee. (Sec.5.2, Rule II, Book VI,
IRR)
Note: Under Sec. 26 of R.A. No. 4670,otherwise known as Magna Carta for Public School Teachers,
public school teachers having fulfilled the age and service requirements of the applicable retirement
laws shall be given one range salary raise upon the retirement, which shall be the basis of the
computation of the lump sum of the retirement pay and monthly benefit thereafter.
Q: Can Art. 287 of the LC (on retirement) as amended by R.A. 7641 be applied
retroactively?
A: Yes, provided:
1.The claimant for retirement benefits was still the employee of the employer at the time the statute
took effect; and
2.The claimant was in compliance with the requirements for eligibility under the statute for such
retirement benefits. (PSVSIA v. NLRC, G.R. No. 115019, April 14, 1997)

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Q: Are the provisions of the retirement plan binding as part of the employment
contract?
A: Yes. The retirement plan forms part of the employment contract since it is made known to the
employees and accepted by them, and such plan has an express provision that the company has the
choice to retire an employee regardless of age, with 20 years of service, said policy is within the
bounds contemplated by the LC. Moreover, the manner of computation of retirement benefits
depends on the stipulation provided in the company retirement plan. (Progressive Dev’t Corporation
v. NLRC, G.R. No. 138826, Oct.30, 2000)

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