Daabay v.
Coca-Cola Bottlers Phils
G.R. No. 199890 August 19, 2013
Being intended as a mere measure of equity and social justice, the
NLRC's award was then akin to a financial assistance or separation
pay that is granted to a dismissed employee notwithstanding the
legality of his dismissal. Jurisprudence on such financial assistance
and separation pay then equally apply to this case. The Court has
ruled, time and again, that financial assistance, or whatever name it
is called, as a measure of social justice is allowed only in instances
where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. We
explained
in Philippine Long Distance Telephone Company v. NLRC:
[S]eparation pay shall be allowed as a measure of social justice only
in those instances where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his
moral character. Where the reason for the valid dismissal is, for
example, habitual intoxication or an offense involving moral turpitude,
like theft or illicit sexual relations with a fellow worker, the employer
may not be required to give the dismissed employee separation pay,
or financial assistance, or whatever other name it is called, on the
ground of social justice.
Considering that Daabay was dismissed on the grounds of serious
misconduct, breach of trust and loss of confidence, the award based
on equity was unwarranted.
PIÑERO v. NLRC
G.R. No. 149610. August 20, 2004
The Court notes that petitioner Piero turned 60 years old and retired
on March 1, 1996 (2 years from the day of decision of the NLRC)
after 29 years of service, rendering his dismissal from service moot
and academic. However, in view of the propriety of his termination as
a consequence of the illegal strike, he is no longer entitled to
payment of retirement benefits because he lost his employment
status effective as of the date of the decision of the Labor Arbiter.
An employee who is dismissed for cause is generally not entitled to
any financial assistance. Equity considerations, however, provide an
exception. Although meriting termination of employment, Piero’s
infraction is not so reprehensible nor unscrupulous as to warrant
complete disregard of his long years of service. Moreover, he has no
previous derogatory records. Weighed on the scales of justice,
conscience and reason tip in favor of granting financial assistance to
support him in the twilight of his life after long years of service. Under
the circumstances, social and compassionate justice dictate that
petitioner Piero be awarded financial assistance equivalent to one-
half (1/2) months pay for every year of service computed from his
date of employment up to the date when he was declared to have
lost his employment status. Indeed, equities of this case should be
accorded due weight because labor law determinations are not only
secundum rationem butalso secundum caritatem.
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Sta. Catalina College v. NLRC and Hilaria Tercero
G.R. No. 144483. November 19, 2003
Hilaria cannot be credited for her services in 1955-1970 in the
determination of her retirement benefits. For, after her one year leave
of absence expired in 1971 without her requesting for extension
thereof as in fact she had not been heard from until she resurfaced in
1982 when she reapplied with petitioner school, she abandoned her
teaching position as in fact she was employed elsewhere in the
interim and effectively relinquished the retirement benefits
accumulated during the said period.
It was error too for the CA to conclude that since petitioner school did
not award separation pay and Hilaria's share of her retirement
contributions when she "temporarily" stopped working after she left
her teaching position in 1971, employer-employee relation between
them was not severed. It bears noting that an employee who is
terminated for just cause is generally not entitled to separation pay.
Moreover, the PERAA, petitioner school's substitute retirement plan,
was only established in 1972, such that when Hilaria abandoned her
work in 1971, there were no retirement contributions to speak of. As
Hilaria was considered a new employee when she rejoined petitioner
school upon re-applying in 1982, her retirement benefits should thus
be computed only on the basis of her years of service from 1982 to
1997.
The P12,000.00 gratuity pay earlier awarded to Hilaria should not be
deducted from the retirement benefits due her, the same is in order.
Gratuity pay is separate and distinct from retirement benefits. It is
paid purely out of generosity. Retirement benefits, on the other hand,
are intended to help the employee enjoy the remaining years of his
life, releasing him from the burden of worrying for his financial
support, and are a form of reward for his loyalty to the employer.
Pantranco North Express v. NLRC
G.R. No. 95940. July 24, 1996
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. And the
same cannot be considered a diminution of employment benefits.
It is also further argued that, being a union member, private
respondent is bound by the CBA because its terms and conditions
constitute the law between the parties. The parties are bound not
only to the fulfillment of what has been expressly stipulated but also
to all the consequences which according to their nature, may be in
keeping with good faith, usage and law. It binds not only the union
but also its members.
R and E Transport v. Latag
G.R. No. 155214. February 13, 2004
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
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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 500 pesos
per day. We thus compute his retirement pay as follows: P500 x 15
days x 14 years of service equals P105,000. Compared with this
amount, the P38,850 he received, which represented just over one
third of what was legally due him, was unconscionable.
Serrano v. Severino Santos Transport
G.R. No. 187698. August 9, 2010
Admittedly, petitioner worked for 14 years for the bus company which
did not adopt any retirement scheme. Even if petitioner as bus
conductor was paid on commission basis then, he falls within the
coverage of R.A. 7641 and its implementing rules. As thus correctly
ruled by the Labor Arbiter, petitioner's retirement pay should include
the cash equivalent of the 5-day SIL and 1/12 of the 13th month pay.
The affirmance by the appellate court of the reliance by the NLRC on
R & E Transport, Inc. is erroneous. In said case, the Court held that a
taxi driver paid according to the "boundary system" is not entitled to
the 13th month and the SIL pay, hence, his retirement pay should be
computed on the sole basis of his salary.
For purposes, however, of applying the law on SIL, as well as on
retirement, the Court notes that there is a difference between drivers
paid under the "boundary system" and conductors who are paid on
commission basis. It bears emphasis that under P.D. 851 or the SIL
Law, the exclusion from its coverage of workers who are paid on a
purely commission basis is only with respect to field personnel
Kimberly Clark Phils. V. Dimayuga et. al
G.R. No. 177705. September 18, 2009
It is settled that entitlement of employees to retirement benefits must
specifically be granted under existing laws, a collective bargaining
agreement or employment contract, or an established employer
policy. No law or collective bargaining agreement or other applicable
contract, or an established company policy was existing during
respondents' employment entitling them to the P200,000 lumpsum
retirement pay. Petitioner was not thus obliged to grant them such
pay.
Court finds that the economic assistance was a bonus over and
above the employees' salaries and allowances. The grant of
economic assistance to all monthly employees under regular status
as of November 16, 2002 was thus well within petitioner's
prerogatives. In any event, assuming that Nora and Rosemarie are
entitled to the economic assistance, they had signed release and
quitclaim deeds upon their resignation in which they waived. While
quitclaims executed by employees are commonly frowned upon as
being contrary to public policy and are ineffective to bar claims for
the full measure of their legal rights, where the person making the
waiver has done so voluntarily, with a full understanding thereof, and
the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as being a valid and binding
undertaking. In the case at bar, Nora and Rosemarie are Accounting
graduates. They have not alleged having been compelled to sign the
quitclaims, nor that the considerations thereof are unconscionable.
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Magdadaro v. PNB
G.R. No. 166198. July 17, 2009
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. Retirement is provided for under Article
287 of the Labor Code, as amended by Republic Act No. 7641, or is
determined by an existing agreement between the employer and the
employee.
Petitioner voluntarily availed of the SSIP. He accomplished the
application form and submitted it to the PAIRD. He only questioned
the approval of his retirement on a date earlier than his preferred
retirement date. Whether petitioner's early retirement within the SSIP
period will improve or impair the delivery of bank services is a
business decision properly within the exercise of management
prerogative. It is clear that it is within respondent's prerogative to set
the date of effectivity of retirement and it may not be necessarily
what is stated in the application. We see no grave abuse of
discretion on the part of respondent in the exercise of this
management prerogative.
Laya v. Philippine Veterans Bank
G.R. No. 205813. January 10, 2018
Petitioner was not validly retired at age 60. It is notable that the
retirement program in question herein was established solely by PVB
as the employer. Although PVB could validly impose a retirement
age lower than 65 years for as long as it did so with the employees'
consent, the consent must be explicit, voluntary, free, and
uncompelled. The law required the employees' consent to be
express and voluntary in order for them to be bound by the
retirement program providing for a retirement age earlier than the
age of 65 years.
Obviously, 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. To construe from the petitioner's
acceptance of his appointment that he had acquiesced to be retired
earlier than the compulsory age of 65 years would, therefore, not be
warranted. This is because retirement should be the result of the
bilateral act of both the employer and the employee based on their
voluntary agreement that the employee agrees to sever his
employment upon reaching a certain age. That the petitioner might
be well aware of the existence of the retirement program at the time
of his engagement did not suffice. His implied knowledge, regardless
of duration, did not equate to the voluntary acceptance required by
law in granting an early retirement age option to the employee. The
law demanded more than a passive acquiescence on the part of the
employee, considering that his early retirement age option involved
conceding the constitutional right to security of tenure.
Acceptance by the employees of an early retirement age option must
be explicit, voluntary, free, and uncompelled. While an employer may
unilaterally retire an employee earlier than the legally permissible
ages under the Labor Code, this prerogative must be exercised
pursuant to a mutually instituted early retirement plan. In other
words, only the implementation and execution of the option
may be unilateral, but not the adoption and institution of the
retirement plan containing such option. For the option to be valid,
the retirement plan containing it must be voluntarily assented to by
the employees or at least by a majority of them through a bargaining
representative.
The pertinent rule on retirement plans does not presume consent or
acquiescence from the high educational attainment or legal
knowledge of the employee. In fact, the rule provides that the
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acquiescence by the employee cannot be lightly inferred from his
acceptance of employment.
Tolentino v. PAL
G.R. No. 218984. January 24, 2018
An employee who knowingly defies a return-to-work order issued by
the Secretary of Labor is deemed to have committed an illegal act
which is a just cause to dismiss the employee under Article 282 of
the Labor Code. Thus, Tolentino, who did not deny his participation
in the strike and his failure to promptly comply with the return-to-work
order of the Secretary of Labor, could not claim any retirement
benefits because he did not retire — he simply lost his employment
status.
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. It is clear, therefore, Tolentino had not
retired from PAL — it was not a result of a voluntary agreement.
Tolentino lost his employment status because of his own actions.
For purposes of the retirement plan, the computation of Tolentino's
length of service to the company should be reckoned from the date
he was rehired after his own voluntary application as a new pilot. His
services from October 1971 to June 1998 cannot be tacked to his
new employment starting in July 1998 because the first employment
had already been finally terminated — not due to his voluntary
resignation or retirement, but because of termination due to just
causes.
Dela Salle Araneta University v. Bernardo
G.R. No. 190809. February 13, 2017
Secretary Quisumbing's Labor Advisory further clarifies that the
employees covered by Republic Act No. 7641 shall "include part-time
employees, employees of service and other job contractors and
domestic helpers or persons in the personal service of another."
Based on Republic Act No. 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 Republic Act No. 7641 is broad enough to encompass
all private sector employees, and part-time employees are not
among those specifically exempted from the law.
For the availment of the retirement benefits under Article 302 [287] of
the Labor Code, as amended by Republic Act No. 7641, the following
requisites must concur: (1) the employee has reached the age of 60
years for optional retirement or 65 years for compulsory retirement;
(2) the employee has served at least five years in the establishment;
and (3) there is no retirement plan or other applicable agreement
providing for retirement benefits of employees in the establishment.
Bernardo — being 75 years old at the time of his retirement, having
served DLS-AU for a total of 27 years, and not being covered by the
grant of retirement benefits in the CBA — is unquestionably qualified
to avail himself of retirement benefits under said statutory provision.
Bernardo's employment was extended beyond the compulsory
retirement age and the cause of action for his retirement benefits
accrued only upon the termination of his extended employment with
DLSAU. Even granting arguendo that Bernardo's cause of action
already accrued when he reached 65 years old, we cannot simply
overlook the fact that DLS-AU had repeatedly extended Bernardo's
employment even when he already reached 65 years old. DLS-AU
still knowingly offered Bernardo, and Bernardo willingly accepted,
contracts of employment to teach for semesters and summers in the
succeeding 10 years. Since DLS-AU was still continuously engaging
his services even beyond his retirement age, Bernardo deemed
himself still employed and deferred his claim for retirement benefits,
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under the impression that he could avail himself of the same upon
the actual termination of his employment. The equitable doctrine of
estoppel is thus applicable against DLS-AU.

UDMC v. Bernadas
G.R. No. 209468. December 13, 2017

Retirement encompasses even the concept of death. This Court has

considered death as a form of disability retirement as "there is no
more permanent or total physical disability than death." Compulsory
retirement and death both involve events beyond the employee's
control. Petitioner admits that respondent Cesario was already
qualified to receive his retirement benefits, having been employed by
petitioner for 23 years. While the choice to retire before the
compulsory age of retirement was within respondent Cesario's
control, his death foreclosed the possibility of him making that
choice.
Petitioner's optional retirement plan is premised on length of service,
not upon reaching a certain age. It rewards loyalty and continued
service by granting an employee an earlier age to claim his or her
retirement benefits even if the employee has not reached his or her
twilight years. It would be the height of inequity to withhold
respondent Cesario's retirement benefits despite being qualified to
receive it, simply because he died before he could apply for it. In any
case, the CBA does not mandate that an application must first be
filed by the employee before the right to the optional retirement
benefits may vest. Thus, this ambiguity should be resolved in favor of
the retiree.

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