The university hired Atty. C to teach commercial law subjects in its Commerce Department during the second semester of school year 1979 to 1980. Atty. C was subsequently given teaching loads in the College of Engineering and the College of Arts and Sciences. He later taught subjects as a pioneering professor in its College of Law.
On 21 November 2008, Atty. C wrote a letter applying for early retirement, under the university’s Personnel Policy and Procedure and the Retirement Pay Law. He was informed that his retirement application could not be approved as the university did not grant retirement benefits to its part-time teachers.
On 25 June 2010, Atty. C filed a complaint against the university for retirement benefits before the Arbitration Branch of the National Labor Relations Commission.
The university contended that the provision on retirement benefits under Article 3021Formerly Article 287 of the Labor Code of the Philippines does not apply to part-time teachers, because they cannot acquire regular permanent status. A “regular permanent status” is a precondition for entitlement to retirement benefits.
Is the university’s contention correct?
The Court ruled that the university’s contention was not correct. Atty C. is entitled to retirement benefits.
Article 302 of the Labor Code of the Philippines specifically states that “any employee may be retired upon reaching the retirement age[,]” and that in case of retirement, in the absence of a retirement agreement, an employee who reaches the retirement age “who has served at least five (5) years . . . may retire and shall be entitled to retirement pay[.]” No exception is made for part-time employees.
The only exemptions specifically identified by the law and its Implementing Rules are:
employees of the National Government and its political subdivisions, including government-owned and/or controlled corporations, if they are covered by the Civil Service Law and its regulations; and
employees of retail, service and agricultural establishments or operations regularly employing not more than 10 employees.2De La Salle Araneta University v. Bernardo, G.R. No. 190809, February 13, 2017, 805 PHIL 580-607
According to the Court, the law encompasses all private sector employees, save for those specifically exempted. Part-time employees, not being among those exempted from coverage, may qualify for retirement benefits.
In the present case, Atty C was found to have rendered service in favor of the university for 22 years. Thus, he was ruled to be entitled to retirement benefits.
Further reading:
Father Saturnino Urios University (FSUU), Inc. v. Curaza, G.R. No. 223621, June 10, 2020.
Quintin was hired in June 1990 by AMA Education System (AMA) as a Mathematics and CAD Instructor. Eight years later, he was promoted as its School Registrar and was able to work as such until April 1999. While serving as School Registrar, he was promoted to the position of School Administrator/Chief Operations Officer of AMA’s College in Biñan, Laguna in January 1999.
Quintin alleged that sometime in 2008, he applied for retirement relying on a long-standing policy of AMA Education System in granting early retirement benefits to its employees. While the said application for early retirement was being processed, Quintin was requested to continue his employment until after the enrollment period. Later, he was informed of the approval of his application, and the processing of the payment of his benefits.
On June 3, 2008 Quintin was compelled to leave immediately for the USA to avoid the cancellation of his visa as a permanent resident.
On September 3, 2010, while on vacation in the Philippines, Quintin filed a complaint for payment of retirement benefits/separation pay against AMA.
AMA contended that Quintin’s request in 2008 for early retirement was disapproved. Before the denial could be communicated to him, Quintin had already left the country without submitting a resignation letter and following the standard company policy on proper turn over of work and accomplishment of clearance. AMA added that it was willing and ready to release to Quintin his last salary and 13th month pay in the total amount of PhP28,046.34, less an unliquidated amount for the 2008 graduation.
Quintin retorted that he underwent an exit interview, clearance procedures, and turn over of work accountabilities. Quintin then claimed that his basic monthly salary was PhP51,310.00 and not PhP25,000.00. He also denied that he received the unliquidated budget for the 2008 graduation. Lastly, Quintin argued that while it had no written retirement plan, AMA had a long-standing practice of granting early retirement, separation pay, or cash gift or benefit to those who have not reached the compulsory retirement age or mandatory twenty-year service requirement.
Was Quintin entitled to retirement benefits?
The Supreme Court ruled that Quintin was entitled to retirement benefits from AMA.
The Court stated that Article 3021formerly Article 287 of the Labor Code of the Philippines provides for the voluntary retirement age of 60 years old and mandatory retirement age of 65 years old. In addition to the age requirements, the employee must have served at least five years in the company. The statutory retirement benefit is pegged at one-half month salary for every year of service or a fraction thereof. The employer however, is free to grant other retirement benefits and impose different age or service requirements, provided that the benefits shall not be lesser than those provided in Article 302.
The Court then discussed Article 1002ARTICLE 100. Prohibition against Elimination or Diminution of Benefits. — Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code. of the Labor Code of the Philippines. According to the Court, the said Article expressly prohibits the elimination or reduction of benefits received by employees. However, the basis for the grant of said benefit must be shown through an express policy, written contract, or an unwritten policy that has ripened into a company practice. To be considered a practice, it must be consistently and deliberately made by the employer over a significant period of time.3Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-NLU, 639 Phil. 633, 641 (2010). The Court added that it has not defined what constitutes a “significant period of time.” Jurisprudence4Metropolitan Bank and Trust Co. v. National Labor Relations Commission, 607 Phil. 359 (2009). explains that the matter is decided according to the peculiar facts and circumstances of each case, the common denominator of which is the regularity and deliberateness of the grant of benefits over a significant period of time.
In the present case, the Court found that Quintin was able to prove through substantial evidence the existence of an established company practice of granting early retirement to its employees who have rendered at least ten years of service, regardless of age. Specifically, the Court admitted the affidavits of Salvacion and Elsa, two former AMA employees, who both attested in their separate affidavits that they were former employees of AMA who were granted retirement benefits. The Court noted that although they did not personally confirm the award of their early retirement, the affidavits showed that they occupied managerial positions and were privy to the policies of the school and to the movements or retirement of their subordinate personnel. Nonetheless, the Court found that the affidavits revealed the following:
Salvacion was AMA’s School Director in Quezon City, while Elsa was its Registrar of the Basic Education Department, also in Quezon City;
Salvacion worked for AMA for 11 years and Elsa was with AMA for 18 years;
AMA granted an early retirement program to its employees who had rendered at least 10 years of service;
Both received early retirement benefits of one-month salary for every year of service pursuant to the early retirement program of AMA; and
Eight other employees were able to avail of the early retirement program.
On the other hand, the Court also found that AMA merely denied that it had any existing early retirement policy and the grant of Salvacion and Elsa’s requests were isolated cases. However, the Court stressed that AMA did not submit controverting evidence to refute Salvacion and Elsa’s statements in their affidavits as to the grant of early retirement benefits to its other employees. Notably, AMA did not explain why Salvacion and Elsa’s requests for early retirement were granted but Quintin’s request was denied.
The Court held that Quintin substantially proved that AMA had a consistent company practice of granting early retirement to its employees who have rendered at least 10 years of service. For the Court, Quintin is entitled to retirement benefits.
Further reading:
Beltran v. AMA Computer College-Biñan, G.R. No. 223795, April 3, 2019.
The employee, a university faculty member, filed a case against his employer for illegal dismissal. The Labor Arbiter decided in his favor and awarded reinstatement, full backwages, damages, and attorney’s fees. The employer could not reinstate the employee, but it still appealed this decision to the National Labor Relations Commission (NLRC). Later on, however, the employee executed a quitclaim in favor of the employer.
Could the employee be estopped now from pursuing his claims for accrued wages under the ruling?
Is your answer a yes? …Not so fast, though.
In this case, what happened was that the employee received his retirement pay from the employer when the appeal was still pending. Now, although the NLRC initially affirmed (with modification) the decision of the Labor Arbiter, it reversed the same when it resolved a motion for reconsideration. In other words, NLRC held that the employee’s execution of the receipt and quitclaim respecting his benefits under the retirement plan estopped him from pursuing other claims arising from his employer-employee relationship with the University.
The Supreme Court rendered a decision in favor of the employee. It ruled that the execution of the quitclaim was not a settlement of the employee’s claim for accrued salaries. The Court said:
“We agree with the petitioner.
“The text of the receipt and quitclaim was clear and straightforward, and it was to the effect that the sum received by the petitioner represented ‘full payment of benefits … pursuant to the Employee’s retirement plan.’ As such, both the NLRC and the CA should have easily seen that the quitclaim related only to the settlement of the retirement benefits, which benefits could not be confused with the reliefs related to the complaint for illegal dismissal.
“Worthy to stress is that retirement is of a different species from the reliefs awarded to an illegally dismissed employee. Retirement is a form of reward for an employee’s loyalty and service to the employer, and is intended to help the employee enjoy the remaining years of his life, and to lessen the burden of worrying about his financial support or upkeep. In contrast, the reliefs awarded to an illegally dismissed employee are in recognition of the continuing employer-employee relationship that has been severed by the employer without just or authorized cause, or without compliance with due process.”
Further reading:
Crisanto F. Castro, Jr. v. Ateneo De Naga University, Fr. Joel Tabora and Mr. Edwin Bernal, G.R. No. 175293, July 23, 2014.