1) Llora Motors Inc. v.

Drilon
GR No. 82895, Nov 07, 1989
Facts: Sometime in September of 1968, private respondent Primitivo V. Alviar began his
employment with petitioner Llora Motors, Inc. as a truck driver, Mr. Alviar rendered
services to the company eight (8) hours a day (excluding overtime) seven days a week,
and for his labor received a salary computed on a per trip basis plus emergency cost of
living allowance (ECOLA). At the time he stopped working on 19 April 1985, Mr. Alviar
was 65 years of age.On 28 October 1985, private respondent Alviar filed with NLRC
Regional Arbitration Branch No. 1 (San Fernando, La Union) a complaint(docketed as
NLRC Case No. RAB-I-0096-85) for "Separation Pay and Non-Payment of Daily
Wages" against petitioners Llora Motors and Constantino Carlota, Jr., the company
manager. In a Position Paper he filed in support of his complaint, Mr. Alviar claimed
entitlement to, among other things, ECOLA underpayments from November 1982 up to
April 1985 in the amount of P4.709.54 as well as "retirement benefits," Complaint was
opposed by petitioners who, in their own Position Paper, alleged that all of the
employment benefits claimed by private respondent Alviar had already been fully paid.
On the matter of retirement benefits, it was contended that Mr. Alviar had not been
dismissed by Llora Motors, but that "[sometime in the early part of 1985, [Alviar] showed
utter lack of interest in his work [and] would be absent for no apparent reason"; that "[i]n
the meantime, Truck No. 802, assigned to complainant, laid idle and because of non-
use for sometime, it deteriorated so seriously"; that in the last week of April of 1985, Mr.
Alviar reported for work and was then informed that "while Truck 802 has not been
rehabilitated as yet, he could act as relief driver"; that "complainant did not like to be a
relief driver in the meantime for since then he did not report for work"; and that "it was
complainant who abandoned his work since the last week of April 1985 and never
reported since then." Neither had Mr. Alviar been retired, petitioners claimed, '"for the
simple reason that respondent corporation does not have any retirement plan [or] any
collective bargaining agreement with the employees for no union exists within the
company because the employees, drivers included, received more than the standard
benefits for their labor." Petitioners contended further that "records will show that
complainant had received retirement benefits from the Social Security System when he
retired therefrom in 1983."

Issue: Whether Alviar is entited to additional retirement benefits from the company.

Held: No. In the instant case, Llora Motors consistently resisted the demand for
separation pay or retirement benefits by private respondent Alviar, precisely pointing to
the fact that there was no collective bargaining agreement or other contractual basis or
any "established employer policy" that contemplated the grant of such retirement
benefits.
Clearly, there was in the instant case no consensual basis for the required payment of
additional retirement benefits. The Labor Arbiter and the NLRC had not declared private
respondent Alviar to have been illegally dismissed by petitioners. Neither was there any
pretense on the part of private respondent Alviar that labor-saving devices had been
installed, or that redundancy or retrenchment or cessation of operations had occurred in
Llora Motors or that he was afflicted by some disabling disease, or that, being entitled to
reinstatement, he could not be reinstated to his old position. Under these
circumstances, the portion of the Labor Arbiter's award which required petitioners to pay
an amount equivalent to a half month's pay for every year of service of Mr. Alviar cannot
be justified either as (additional) retirement benefits or as termination pay and hence
constituted an act without or in excess of jurisdiction.

2) Manuel L. Quezon University v. National Labor Relations Commission

G.R. No. 141673, 17 October 2001
Facts: Petitioner Manuel L. Quezon University (MLQU) is a private educational
institution which established a retirement plan for its employees. Respondents Juat and
Azurin, who are instructors, both received letters from the school informing them of their
eligibility to avail the said retirement plan. However, Juat received under protest the two
installments of her retirement pay in the total amount of P71,674.91, when the alleged
correct amount should be P149,401.62. Azurin also received under protest the amount
of P34,282.02 when he should have received the total amount of P150,215.75 based on
the last salary and benefits received by him.

MLQU contended that Juat is not entitled to receive retirement benefits as she was only
a “part-time employee” of MLQU, much less to the payment of deficiency. The school
also failed and refused and continuously refuse to heed Azurin’s demand. The parties
failed to reach an amicable settlement during the conciliatory proceedings.

Private respondent filed a complaint before the National Labor Relations Commission
(NLRC) to recover the balance of their retirement benefits under Republic Act No. 7641.

Issue: Whether respondent-teachers are entitled to the retirement benefits provided for
under Republic Act No. 7641, even if the petitioner has an existing valid retirement plan.

Held: Yes. Republic Act No. 7641 intends to give the minimum retirement benefits to
employees not entitled thereto under collective bargaining and other agreements. Its
coverage applies to establishments with existing collective bargaining or other
agreements or voluntary retirement plans whose benefits are less than those prescribed
under the proviso in question.

The Court ordered petitioner University to pay the teachers their retirement differential
pay (i.e., the difference between the retirement pay under R. A. No. 7641 and the
MLQU Retirement Plan) plus legal interest of six percent (6%) per annum from the date
of filing of their complaints on March 27, 1997 up to actual payment.

Republic Act No. 7641 is a curative social legislation. By their nature, curative statutes
may be given retroactive effect, unless it will impair vested rights. Republic Act No. 7641
has retroactive effect to include in its coverage the employees services to an employer
rendered prior to its effectivity. It applies to employees in the employ of employers at the
time the law took effect and who are eligible to benefits under that statute.

3) Philippine Airlines v. Airline Pilots Association of the Philippines

G.R. No. 143686. January 15, 2002
Facts: PAL and ALPAP, the exclusive bargaining representative of all commercial airline
pilots of PAL, stemmed from petitioner's act of unilaterally retiring airline pilot Captain
Albino Collantes under Section 2, Article VII, of the 1967 PAL-ALPAP Retirement Plan.
ALPAP claims illegal dismissal and union busting and filed a Notice of Strike with
DOLE. Pursuant to Article 263 (g) of the Labor Code, the Secretary of the DOLE
assumed jurisdiction over the labor dispute.
The Secretary issued the assailed order upholding PAL’s action of unilaterally retiring
Capt. Collantes and recognizing the same as a valid exercise of its option under the
CBA. He further ordered that the basis of the computation of Captain Collantes’
retirement benefits should be Article 287 of the Labor Code (as amended by Republic
Act No. 7641) and not Section 2, Article VII, of the PAL-ALPAP Retirement Plan and in
the exercise of its option to retire pilots, PAL should first consult the pilot concerned
before implementing his retirement.
CA: Denied appeal and motion for reconsideration.

Issues: 1) Whether the CBA or LC 287 should be the basis for computation of
retirement pay in this case. CBA.
2) Whether PAL has to first consult with the pilot concerned before retiring him. NO.

Held: 1) CBA. An employee’s retirement benefits under any collective bargaining and
other agreement shall not be less than those provided in the Labor Code.
PAL-ALPAP Retirement Plan (CBA):
SECTION 1. Normal Retirement. (a) Any member who completed twenty (20) years of
service as a pilot for PAL or has flown 20,000 hours for PAL shall be eligible for normal
retirement. The normal retirement date is the date on which he completes 20 years of
service, or on which he logs his 20,000 hours as a pilot for PAL. The member who
retires on his normal retirement shall be entitled to either (a) a lump sum payment of
P100,000 or (b) to such termination pay benefits to which he may be entitled to under
existing laws, whichever is the greater amount.
SECTION 2. Late Retirement. Any member who remains in the service of the Company
after his normal retirement date may retire either at his option or at the option of the
Company and when so retired he shall be entitled either (a) to a lump sum payment of
P5,000 for each completed year of service rendered as a pilot, or (b) to such termination
pay benefits to which he may be entitled under existing laws, whichever is the greater
amount.

Upon retirement, each pilot stands to receive the full amount of the contribution. In sum,
therefore, the pilot gets an amount equivalent to 240% of his gross monthly income for
every year of service he rendered to petitioner. This is in addition to the amount of not
less than P100,000 that he shall receive under the 1967 Retirement Plan.

Labor Code Art. 287: 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 plan providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years
or more, but not beyond sixty-five (65) years which is hereby declared as the
compulsory retirement age, who has served at least five (5) 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 at 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 13th month pay and the cash equivalent of not more than five (5) days of
service incentive leaves.

The retirement benefits that a pilot would get under the provisions of the above-quoted
Article 287 of the Labor Code are less than those that he would get under the applicable
retirement plans of petitioner.

2) NO. Retirement of an employee may be done upon initiative and option of the
management.
Where there are cases of voluntary retirement, the same is effective only upon the
approval of management. The fact that there are some supervisory employees who
have not yet been retired after 25 years with the company or have reached the age of
sixty merely confirms that it is the singular prerogative of management, at its option, to
retire supervisors or rank-and-file members when it deems fit. There should be no unfair
labor practice committed by management if the retirement of private respondents were
made in accord with the agreed option.
The requirement to consult the pilots prior to their retirement defeats the exercise by
management of its option to retire the said employees. It gives the pilot concerned an
undue prerogative to assail the decision of management. Due process only requires that
notice be given to the pilot of petitioner’s decision to retire him. Hence, the Secretary of
Labor overstepped the boundaries of reason and fairness when he imposed on
petitioner the additional requirement of consulting each pilot prior to retiring him.
Furthermore, when the Secretary of Labor and Employment imposed the added
requirement that petitioner should consult its pilots prior to retirement, he resolved a
question, which was outside of the issues raised, thereby depriving petitioner an
opportunity to be heard on this point.

G.R. No. 155146

4) DR. PERLA A. POSTIGO, et. al., Petitioners, v. PHILIPPINE TUBERCULOSIS

SOCIETY, INC., Respondent.

FACTS: Petitioners Dr. Perla A. Postigo, et al., were regular employees of the
respondent Philippine Tuberculosis Society, Inc. (PTSI). They retired on various dates
from 1996 to 1998. Upon retirement from service, some of the petitioners who were
compulsory members of the Government Service Insurance System (GSIS) obtained
retirement benefits from the GSIS.

At the time the petitioners retired, Article 287 of the Labor Code had been amended by
Republic Act No. 7641. Rep. Act No. 7641 granted retirement pay to qualified
employees in the private sector, in the absence of any retirement plan or agreement
with the company. As the respondent did not have a retirement plan for its employees,
aside from its contribution to the GSIS, petitioners claimed from the respondent their
retirement benefits under Rep. Act No. 7641. The respondent denied their claims on the
ground that the accommodation extended by the GSIS to the petitioners removed them
from the coverage of the law.

ISSUE: WON the petitioners are entitled to retirement benefits. YES

HELD: The implementing rules of Title II, Book VI of the Labor Code provides for the
coverage and exemptions of retirement benefits. Thus:

SECTION 1. General Statement on Coverage. This Rule shall apply to all employees in
the private sector, regardless of their position, designation or status and irrespective of
the method by which their wages are paid, except to those specifically exempted under
Section 2 hereof. As used herein, the term Act shall refer to Republic Act No. 7641
which took effect on January 7, 1993.

SEC. 2. Exemption. This Rule shall not apply to the following employees:

2.1 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.

Having determined the applicable implementing rules, we now proceed to resolve

whether the respondent is a private corporation or a public corporation; and
consequently, whether the petitioners are employees in the private sector or in the
public sector.

The respondent was incorporated as a non-profit, benevolent and non-stock corporation

under the Corporation Code. Having been created under the general corporation law
instead of a special charter, we hold that the respondent is a private and not a
governmental corporation. More so, Section 2(1), Article IX(B) of the 1987 Constitution
provides:

SECTION 2. (1) The civil service embraces all branches, subdivisions, instrumentalities,
and agencies of the Government, including government-owned or controlled
corporations with original charters.

Extant on the records is the respondents admission that although its employees are
compulsory members of the GSIS, said employees are not governed by the Civil
Service Law. If the respondent is truly a government-owned or controlled corporation,
and petitioners are employees in the public sector, then, they should have been covered
by said law. The truth, however, is that, the respondent is a non-profit but private
corporation organized under the Corporation Code, and the petitioners are covered by
the Labor Code and not by the Civil Service Law.

From the foregoing, it is clear to us that the petitioners are employees in the private
sector, hence entitled to the benefits of Rep. Act No. 7641.

NOTE: Even assuming that by virtue of their compulsory inclusion in the GSIS, the
petitioners became employees in the public sector, they are still entitled to the benefits
of Rep. Act No. 7641 since they are not covered by the Civil Service Law and its
regulations.
Neither do we find merit in the respondents argument that the rationale behind the
enactment of Rep. Act No. 7641 justifies the exclusion of employees in the public
sector, who are already enjoying retirement benefits under the GSIS law, from the New
Retirement Law.

We direct the respondents attention to Section 2 of Rep. Act No. 7641, to wit:

SEC. 2. Nothing in this Act shall deprive any employee of benefits to which he may be
entitled under existing laws or company policies or practices.

In addition, Rule II of the Rules Implementing Book VI of the Labor Code provides as
follows:

SEC. 8. Relation to agreements and regulations. Nothing in this Rule shall justify an
employer from withdrawing or reducing any benefits, supplements or payments as
provided in existing laws, individual or collective agreements or employment practices
or policies.

In Juco v. NLRC,[22] we clarified that employees of government-owned and controlled

corporations with special charters are covered under the Civil Service. On the other
hand, employees of government-owned and controlled corporations under the
Corporation Code are governed by the provisions of the Labor Code.

The Philippine Tuberculosis Society, Inc. (PTSI) belongs to the latter category and,
therefore, covered by Rep. Act No. 7641 which is an amendment to the Labor Code.
The accommodation under Rep. Act No. 1820 extending GSIS coverage to PTSI
employees did not take away from petitioners the beneficial coverage afforded by Rep.
Act No. 7641. Hence, the retirement pay payable under Article 287 of the Labor Code
as amended by Rep. Act No. 7641 should be considered apart from the retirement
benefit claimable by the petitioners under the social security law or, as in this case, the
GSIS law.

G.R. No. 80502 May 7, 1990

5) ENRIQUE RAZON, JR. and METROPORT SERVICES, INC., petitioners, vs.

NATIONAL LABOR RELATIONS COMMISSION and NICOLAS S.
GARZOTA, respondents.

FACTS: Private respondent had been employed by petitioner company then known as
E. Razon, Inc. which was later renamed as Metroport Services, Inc. Because of failing
health and having qualified for compulsory retirement at age 65, private respondent,
then the company's chief accountant, submitted a letter request for retirement.
Petitioners withheld action on said request pending completion of the audit of company
books.

In the course of such audit, petitioners discovered that certain books of account
allegedly in the custody of private respondent as chief accountant were missing. The
employment of private respondent was terminated on the ground of loss of trust and
confidence. Meanwhile, the private respondent was employed again in Marina Port
Services, Inc.

LABOR ARBITER: ruled in favor of the private respondent on his complaint for illegal
dismissal and unpaid retirement benefits.

NLRC: sustained.

ISSUES: (1) WON the private respondent is entitled to retirement benefits. YES

(2) WON petitioner Enrique Razon, Jr. in his capacity as president and majority
stockholder should be held solidarily liable with co- petitioner Metroport Services, Inc.
for the payment of the disputed retirement claim. YES (just in case)

HELD: (1) It is the perception of petitioners that management is vested with discretion to
approve or disapprove an employee's claim for retirement benefits. They anchor this
view of Article II (B) of the Retirement Plan which states that "(a)ny official and
employee who is 65 years old, and upon discretion of management, shall be qualified or
subject to compulsory retirement from the company with benefits as provided in this
plan."

It must be stressed that the words "upon the discretion of management" are not
synonymous with absolute or unlimited discretion. In other words, management
discretion may not be exercised arbitrarily or capriciously especially with regards to the
implementation of the retirement plan. We believe that upon acceptance of employment,
a contractual relationship was established giving private respondent an enforceable
vested interest in the retirement fund. Having rendered twenty years of service with
Metroport Services, Inc., it can be said that private respondent has already acquired a
vested right to the retirement fund, a right which can only be withheld upon a clear
showing of good and compelling reasons.
In the case at bar, petitioners' rejection of the subject claim cannot be justifiably
sustained. The reported loss of confidence was due to the disappearance of certain
books of account which petitioners directly attributed to private respondent. Petitioners
were convinced that simply because private respondent could not produce the needed
books on demand, he was no longer worthy of their trust and confidence. They abruptly
dismissed him without giving him a chance to explain his side. In short, there was not
the slightest pretense at fair play. Had petitioners been less hasty and conducted an
investigation, they would have found out that a fire gutted the western portion of
petitioners' warehouse destroying records, books, vouchers and general ledgers. But
whatever documents might have been salvaged from that conflagration were lost during
the flood occurred later on. Thus, the resulting dismissal of private respondent was in
itself marked by arbitrariness and lack of due process.

The fact that private respondent sought employment elsewhere should not hinder him
from claiming his retirement benefits. It is an inexorable fact that at 65 years, he
reached the mandatory age for retirement and, therefore, qualified to retire.

(2) Under Sec. 31 of the Corporation Code, "directors or trustees who willfully and
knowingly vote for or assent to patently unlawful acts of the corporation or who are
guilty of gross negligence or bad faith in directing the affairs of the corporation . . . shall
be liable jointly and severally for all damages resulting therefrom suffered by the
corporation, its stockholders or members or other persons."

The manner of dismissal of private respondent by petitioner Enrique Razon, Jr. smacks
of high-handedness, caprice and arbitrariness. No regard was given to private
respondent's long and faithful service to the corporation, nor opportunity afforded him to
explain the loss imputed to him through a properly-conducted investigation. The
willingness and alacrity on the part of petitioner Enrique Razon, Jr. to terminate the
services of private respondent without taking into consideration private respondent's
service to the company and without affording him his right to due process, to our mind,
suffice to taint the act complained of with bad faith.

[G.R. No. 120802. June 17, 1997]

6) JOSE T. CAPILI, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, and

UNIVERSITY OF MINDANAO, respondents.

FACTS: Petitioner Jose T. Capili, Jr., was employed by private respondent University of
Mindanao (hereafter, UM) as a college instructor in 1982. On 2 July 1993, the private
respondent informed the petitioner that under the law and UM's retirement program he
would be eligible for retirement when he would reach the age of 60 years on 18 August
1993. The petitioner informed UM that he was not opting to retire but would continue to
serve until he reaches the compulsory retirement age of 65. UM reiterated its position
that under the universitys retirement plan, it could retire him. It argued that under
Section 4 cited by the petitioner, the employee has the option only in the absence of a
retirement plan.

Perceiving the schools insistence as constructive dismissal, the petitioner filed a

complaint for illegal dismissal.

Contention of Private Respondent: UM invoked Article 287 of the Labor Code which
provides that any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment
contract. It contended that it has a retirement plan under which it could retire the
petitioner upon his reaching the age of 60. UM also cited Policy Instruction No. 25
issued by the Secretary of Labor, which provides that in the absence of a retirement
plan any teacher or other employee in a private educational institution may retire or be
retired from the service upon reaching the age of 60 years.

Contention of the Petitioner: The petitioner maintained that private respondents

retirement plan applies only to members thereof, pursuant to Articles II and III of its
Rules and Regulations, and that since he is not a member of the Plan, he is not covered
by it. He further contended that Policy Instruction No. 25 was abrogated by Republic Act
No. 7641, and that pursuant to the new Rule II, Book VI of the Omnibus Rules
Implementing the Labor Code, he has the option whether or not to retire upon attaining
the age of 60 years.

Labor Arbiter: held for UM and dismissed the complaint.

NLRC: dismissed the appeal for lack of merit and affirmed the Labor Arbiters decision

ISSUES: (1) WON an instructor of a private educational institution may be compelled to

retire at the age of sixty years. NO

(2) WON his subsequent acceptance of retirement benefits would estop him from
pursuing his complaint questioning the validity of his forced retirement. YES

HELD: (1) The applicable law on the matter is Article 287 of the Labor Code of the
Philippines, as amended by R.A. No. 7641, which took effect on 7 January 1993.

The article provides for two types of retirement: (a) compulsory and (b) optional. The
first takes place at age 65, while the second is primarily determined by the collective
bargaining agreement or other employment contract or employers retirement plan. In
the absence of any provision on optional retirement in a collective bargaining
agreement, other employment contract, or employers retirement plan, an employee may
optionally retire upon reaching the age of 60 years or more, but not beyond 65 years,
provided he has served at least five years in the establishment concerned. That
prerogative is exclusively lodged in the employee.

The foregoing brings us to the next point of inquiry, viz., whether private respondent UM
has a retirement plan or collective bargaining agreement or other agreement vesting
upon UM the prerogative to retire an employee who reaches 60 years. UM insists that it
has a retirement plan and that the petitioner is covered by it. On the other hand, the
petitioner contends that the Plan covers only those who opted to become members
thereof.

We agree with the petitioner.

UM’s Retirement Plan is not applicable to all employees of UM and its associated
enterprises. It applies only to those who opted to become members thereof. Contracts
take effect only between the parties thereto. Since the Plan was prepared and approved
only by the responsible officials of UM and its associated enterprises, namely, the
Presidents of UM, Mt. Apo Science Foundation, and Davao Savings and Loan
Association, the Plan may thus be described as a contract of adhesion. Hence, the
above provisions on requirements of membership and eligibility must be strictly
construed against UM and its associated enterprises. UM cannot now be heard to claim
that the plan applies to all its employees or to those who did not even opt to become
members thereof.

The validity then of UMs retirement of the petitioner upon the latters 60th birth
anniversary on 18 August 1993 could only be based on proof that the petitioner became
a member of its Retirement Plan at any time after his employment in 1982 but before 18
August 1993. The burden to prove such a fact was on UM, but the record fails to show
that UM has discharged that burden.

UMs belated attempt to prove that it is a school policy to retire employees who reach
the age of 60, pursuant to UMs Retirement Policies and Updated Retirement Policy
cannot sway this Court in UMs favor. These documents are mere scraps of paper, they
being only xerox copies. They have not been certified to be true copies or offered in
evidence before the Labor Arbiter and the NLRC. Neither have they even been referred
to in UMs comment in this case.
(2) A supervening event worked against the petitioner. On 30 April 1994, after receiving
the Labor Arbiters decision but before filing his appeal from that decision, the petitioner
received partial payment of his retirement pay and other accrued benefits from
respondent UM. During the pendency of his appeal with the NLRC, he received full
payment of his retirement benefits. By his acceptance of retirement benefits the
petitioner is deemed to have opted to retire under the third paragraph of Article 287 of
the Labor Code, as amended by R.A. No. 7641. Thereunder he could choose to retire
upon reaching the age of 60 years, provided it is before reaching 65 years, which is the
compulsory age of retirement.

Also worth noting is his statement that he had long and unjustly been denied of his
retirement benefits since August 18, 1993. Elsewise stated, he was entitled to
retirement benefits as early as 18 August 1993 but was denied thereof without justifiable
reason. This could only mean that he has already acceded to his retirement, effective
on such date - when he reached the age of 60 years.

NOTE (just in case matanong ni Commissioner Velasco): It may be noted that before
the effectivity of R.A. No. 7641, Article 287 of the Labor Code did not specifically
provide for the retirable age of employees in the private sector, thus:

ART. 287. 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 existing laws and other collective bargaining or other
agreement.

Section 13, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code
provided:

Sec. 13. In the absence of any collective bargaining agreement or other applicable
agreement concerning terms and conditions of employment which provides for
retirement at an older age, an employee may retire upon reaching the age of sixty (60)
years.

Notably, the option to retire at 60 years was the employees prerogative. However, the
Department of Labor and Employment had provided a separate rule for employees of
private educational institutions. Policy Instruction No. 25 promulgated on 1 June 1977
by the Secretary of Labor provided as follows:

For purposes of applying the retirement provisions of the Labor Code in private
educational institutions, and in consideration of the unique characteristics and peculiar
problems and work situations of such institutions, the following rules are hereby issued
for the information and guidance of all concerned:

I - If there is a retirement plan under a collective agreement or employer policy in private

educational institutions, any teacher and/or employee who retires or is retired from the
service pursuant to the same shall be entitled to all the retirement benefits provided
therein.

II - In the absence of any such company policy or collective agreement providing for a
retirement plan for teachers and other employees in private educational institutions, any
teacher and/or employee may retire or be retired from the service upon reaching the
age of sixty (60) years and shall be paid the equivalent of at least one month salary or
one-half month salary for every year of service, whichever is higher, a fraction of at least
six (6) months being considered as one whole year.

It is clear therefrom that in the absence of a collective bargaining agreement or

company policy providing for a retirement plan, the option to retire at age 60 could be
exercised by either the employee or the employer. This power of the employer no longer
exists under R.A. No. 7641, which unequivocally provides that the option to retire upon
reaching the age of 60 years or more but not beyond 65 is the exclusive prerogative of
the employee if there is no provision on retirement in a collective bargaining agreement
or any other agreement or if the employer has no retirement plan.

G.R. No. 156934 March 16, 2007

7) ALPHA C. JACULBE, Petitioner, vs. SILLIMAN UNIVERSITY, Respondent

Facts: Petitioner works for respondent’s university medical center as a nurse.

Respondent, through its Human Resources Development Office, informed petitioner

that she was approaching her 35th year of service with the university and was due for
automatic retirement on November 18, 1993, at which time she would be 57 years old.
This was pursuant to respondent’s retirement plan for its employees which provided that
its members could be automatically retired "upon reaching the age of 65 or after 35
years of uninterrupted service to the university."
A brief exchange of letters between petitioner and respondent followed. Petitioner
emphatically insisted that the compulsory retirement under the plan was tantamount to a
dismissal and pleaded with respondent to be allowed to work until the age of 60
because this was the minimum age at which she could qualify for SSS pension. But
respondent stood pat on its decision to retire her, citing "company policy."

Petitioner filed a complaint in the National Labor Relations Commission (NLRC) for
"termination of service with preliminary injunction and/or restraining order." On
November 18, 1993, respondent compulsorily retired petitioner.

the labor arbiter rendered a decision finding respondent guilty of illegal dismissal and
ordered that petitioner be reinstated and paid full backwages. On appeal, however, the
NLRC reversed the labor arbiter’s decision and dismissed the complaint for lack of
merit. The NLRC likewise denied petitioner’s motion for reconsideration. In the assailed
decision and resolution, the CA affirmed the NLRC.

Issue: 1) did respondent’s retirement plan imposing automatic retirement after 35 years
of service contravene the security of tenure clause in the 1987 Constitution and the
Labor Code?
2) did respondent commit illegal dismissal by retiring petitioner solely by reason of such
provision in its retirement plan?

Ruling: From the language of the foregoing retirement plan rules, the compulsory nature
of both membership in and contribution to the plan debunked the CA’s theory that
petitioner’s "voluntary contributions" were evidence of her willing participation therein. It
was through no voluntary act of her own that petitioner became a member of the plan.
In fact, the only way she could have ceased to be a member thereof was if she stopped
working for respondent altogether. Furthermore, in the rule on contributions, the
repeated use of the word "shall" ineluctably pointed to the conclusion that employees
had no choice but to contribute to the plan (even when they were on leave).

According to the assailed decision, respondent’s retirement plan "ha(d) been in effect
for more than 30 years." What was not pointed out, however, was that the retirement
plan came into being in 1970 or 12 years after petitioner started working for respondent.
In short, it was not part of the terms of employment to which petitioner agreed when she
started working for respondent. Neither did it become part of those terms shortly
thereafter, as the CA would have us believe.

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. In Pantranco North Express, Inc. v.
NLRC, to which both the CA and respondent refer, the imposition of a retirement age
below the compulsory age of 65 was deemed acceptable because this was part of the
CBA between the employer and the employees. The consent of the employees, as
represented by their bargaining unit, to be retired even before the statutory retirement
age of 65 was laid out clearly in black and white and was therefore in accord with Article
287.

In this case, neither the CA nor the respondent cited any agreement, collective or
otherwise, to justify the latter’s imposition of the early retirement age in its retirement
plan, opting instead to harp on petitioner’s alleged "voluntary" contributions to the plan,
which was simply untrue. The truth was that petitioner had no choice but to participate
in the plan, given that the only way she could refrain from doing so was to resign or lose
her job. It is axiomatic that employer and employee do not stand on equal footing, a
situation which often causes an employee to act out of need instead of any genuine
acquiescence to the employer. This was clearly just such an instance.

Not only was petitioner still a good eight years away from the compulsory retirement
age but she was also still fully capable of discharging her duties as shown by the fact
that respondent’s board of trustees seriously considered rehiring her after the effectivity
of her "compulsory retirement."

As already stated, an employer is free to impose a retirement age less than 65 for as
long as it has the employees’ consent. Stated conversely, employees are free to accept
the employer’s offer to lower the retirement age if they feel they can get a better deal
with the retirement plan presented by the employer. Thus, having terminated petitioner
solely on the basis of a provision of a retirement plan which was not freely assented to
by her, respondent was guilty of illegal dismissal.

8) Cercado v. Uniprom Inc., G.R. No. 188154, October 13, 2010

Facts: Petitioner Lourdes A. Cercado (Cercado) started working for respondent

UNIPROM on December 15, 1978 as a ticket seller assigned at Fiesta Carnival,
Araneta Center, Quezon City. Later on, she was promoted as cashier and then as clerk
typist. UNIPROM instituted an Employees’ Non-Contributory Retirement Plan which
provides that any participant with twenty (20) years of service, regardless of age, may
be retired at his option or at the option of the company. It amended the retirement plan
in compliance with Republic Act (R.A.) No. 7641. Under the revised retirement plan,
UNIPROM reserved the option to retire employees who were qualified to retire under
the program.

UNIPROM implemented a company-wide early retirement program for its 41

employees, including herein petitioner, who, at that time, was 47 years old, with 22
years of continuous service to the company. She was offered an early retirement
package amounting to P171,982.90, but she rejected the same. UNIPROM exercised its
option under the retirement plan, and decided to retire Cercado effective at the end of
business hours on February 15, 2001. A check of even date in the amount of
P100,811.70, representing her retirement benefits under the regular retirement
package, was issued to her. Cercado refused to accept the check. UNIPROM
nonetheless pursued its decision and Cercado was no longer given any work
assignment after February 15, 2001. This prompted Cercado to file a complaint for
illegal dismissal before the Labor Arbiter (LA), alleging, among others, that UNIPROM
did not have a bona fide retirement plan, and that even if there was, she did not consent
thereto.

The National Labor Relations Commission (NLRC) affirmed the LA’s decision that
Cercado was illegally dismissed. However, the CA set aside the decisions of the LA and
the NLRC. Hence, this petition.

Issue/s: Whether UNIPROM has a bona fide retirement plan

Whether petitioner was validly retired pursuant thereto

Ruling: The assailed retirement plan of UNIPROM is not embodied in a CBA or in any
employment contract or agreement assented to by petitioner and her co-employees. On
the contrary, UNIPROM’s Employees’ Non-Contributory Retirement Plan was
unilaterally and compulsorily imposed on them. This is evident in the following
provisions of the 1980 retirement plan and its amended version in 2000:

ARTICLE III

ELIGIBILITY FOR PARTICIPATION

Section 1. Any regular employee, as of the Effective Date, shall automatically become a
Participant in the Plan, provided the Employee was hired below age 60.
Verily, petitioner was forced to participate in the plan, and the only way she could have
rejected the same was to resign or lose her job. The assailed CA Decision did not really
make a finding that petitioner actually accepted and consented to the plan. The law
demands more than a passive acquiescence on the part of employees, considering that
an employer’s early retirement age option involves a concession of the former’s
constitutional right to security of tenure.

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.

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.

Hence, consistent with the Court’s ruling in Jaculbe case, having terminated petitioner
merely on the basis of a provision in the retirement plan which was not freely assented
to by her, UNIPROM is guilty of illegal dismissal.

G.R. No. 151021 May 4, 2006

9) CAINTA CATHOLIC SCHOOL and MSGR. MARIANO T. BALBAGO, Petitioners,
vs.
CAINTA CATHOLIC SCHOOL EMPLOYEES UNION (CCSEU), Respondent.
FACTS:
On 6 March 1986, a Collective Bargaining Agreement (CBA) was entered into between
Cainta Catholic School (School) and the Cainta Catholic School Employees Union
(Union) effective 1 January 1986 to 31 May 1989.
The Union became inactive. It was only in 10 September 1993 that the Union held an
election of officers, with Mrs. Llagas being elected as President and Javier as Vice-
President, among others. Llagas was then the Dean of the Student Affairs while Javier
was occupying the position of Subject Area Coordinator.
On 15 October 1993, the School retired Llagas and Javier, who had rendered more than
twenty (20) years of continuous service, pursuant to Section 2, Article X of the CBA, to
wit:
An employee may be retired, either upon application by the employee himself or by the
decision of the Director of the School, upon reaching the age of sixty (60) or after having
rendered at least twenty (20) years of service to the School the last three (3) years of
which must be continuous.
The Union filed a notice of strike with the National Conciliation and Mediation Board
(NCMB). The Union struck and picketed the School’s entrances.
The School filed a petition directly with the NLRC to declare the strike illegal. The Union
filed a complaint for unfair labor practice before the NLRC.
The NLRC rendered a Resolution favoring the School. The NLRC ruled that the
retirement of Llagas and Javier is legal as the School was merely exercising an option
given to it under the CBA.
The Court of Appeals reversed the decision of the NLRC and construed the retirement
of Llagas and Javier as an act amounting to unfair labor practice. The appellate court
concluded that the retirement of the two (2) union officers was clearly to bust the
reactivated union.
ISSUE:
WON the forced retirement of Llagas and Javier was a valid exercise of management
prerogative. YES.
RULING:
We are impelled to reverse the Court of Appeals and affirm the validity of the
termination of employment of Llagas and Javier, arising as it did from a management
prerogative granted by the mutually-negotiated CBA between the School and the Union.
Pursuant to the existing CBA, the School has the option to retire an employee upon
reaching the age limit of sixty (60) or after having rendered at least twenty (20) years of
service to the School, the last three (3) years of which must be continuous. Retirement
is a different specie of termination of employment from dismissal for just or authorized
causes under Articles 282 and 283 of the Labor Code. While in all three cases, the
employee to be terminated may be unwilling to part from service, there are eminently
higher standards to be met by the employer validly exercising the prerogative to dismiss
for just or authorized causes. In those two instances, it is indispensable that the
employer establish the existence of just or authorized causes for dismissal as spelled
out in the Labor Code. Retirement, on the other hand, 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 and/or consents to sever his employment
with the former.
By their acceptance of the CBA, the Union and its members are obliged to abide by the
commitments and limitations they had agreed to cede to management. It should not be
taken to mean that retirement provisions agreed upon in the CBA are absolutely beyond
the ambit of judicial review and nullification. A CBA, as a labor contract, is not merely
contractual in nature but impressed with public interest. If the retirement provisions in
the CBA run contrary to law, public morals, or public policy, such provisions may very
well be voided. Certainly, a CBA provision or employment contract that would allow
management to subvert security of tenure and allow it to unilaterally "retire" employees
after one month of service cannot be upheld. Neither will the Court sustain a retirement
clause that entitles the retiring employee to benefits less than what is guaranteed under
Article 287 of the Labor Code, pursuant to the provision’s express proviso thereto in the
provision. Yet the CBA in the case at bar contains no such infirmities which must be
stricken down.
Under Article 287 of the Labor Code, a CBA may validly accord management the
prerogative to optionally retire an employee under the terms and conditions mutually
agreed upon by management and the bargaining union, even if such agreement allows
for retirement at an age lower than the optional retirement age or the compulsory
retirement age. The exercise by the employer of a valid and duly established
prerogative to retire an employee does not constitute unfair labor practice.

G.R. No. 95940 July 24, 1996

10) PANTRANCO NORTH EXPRESS, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and URBANO SUÑIGA, respondents.
FACTS:
Private respondent was hired by petitioner in 1964 as a bus conductor. He eventually
joined the Pantranco Employees Association-PTGWO. He continued the petitioner's
employ until August 12, 1989, when he was retired at the age of fifty-two (52) after
having rendered twenty five years' service. The basis of his retirement was the
compulsory retirement provision of the collective bargaining agreement between the
petitioner and the aforenamed union. He received P49,300.00 as retirement pay.
He filed a complaint for illegal dismissal against petitioner. The Labor Arbiter find that he
was illegally and unjustly dismissed. NLRC affirmed the labor arbiter's decision.
ISSUE:
WON the CBA stipulation on compulsory retirement after twenty-five years of service is
legal and enforceable. YES.
RULING:
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. As a matter of fact,
one of the advantages of early retirement is that the corresponding retirement benefits,
usually consisting of a substantial cash windfall, can early on be put to productive and
profitable uses by way of income-generating investments, thereby affording a more
significant measure of financial security and independence for the retiree who, up till
then, had to contend with life's vicissitudes within the parameters of his fortnightly or
weekly wages. Thus we are now seeing many CBA's with such early retirement
provisions. And the same cannot be considered a diminution of employment benefits.
Being a product of negotiation, the CBA between the petitioner and the union intended
the provision on compulsory retirement to be beneficial to the employees-union
members, including herein private respondent. When private respondent ratified the
CBA with the union, he not only agreed to the CBA but also agreed to conform to and
abide by its provisions. Thus, it cannot be said that he was illegally dismissed when the
CBA provision on compulsory retirement was applied to his case.
Providing in a CBA for compulsory retirement of employees after twenty-five (25) years
of service is legal and enforceable so long as the parties agree to be governed by such
CBA.

*Note: 3rd issue lang talaga important, but make reference sa 1st and 2nd in case it's
asked

11) CAPITOL WIRELESS, INC., petitioner, vs. HONORABLE SECRETARY MA.

NIEVES R. CONFESOR and KILUSANG MANGGAGAWA NG CAPWIRE KMC-
NAFLU, respondents.
[G.R. No. 117174. November 13, 1996]

FACTS: Petitioner Capitol Wireless, Inc., and respondent Kilusang Manggagawa ng

Capwire KMC-NAFLU (Union) entered into a CBA on November 15, 1990 covering a
period of 5 years. Towards the end of the third year of their CBA the parties
renegotiated the economic aspects of the agreement. On July 18, 1993 when the
negotiations were on-going petitioner dismissed on the ground of redundancy 8 out of
its 11 couriers who were Union members.
As a consequence, respondent Union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB) on the ground of bargaining deadlock and
ULP, specifically, for illegal dismissal and violations of the CBA. Conciliation
proceedings were conducted by the NCMB but the same yielded negative results. The
respondent Union went on strike. On the same day, respondent Secretary assumed
jurisdiction over the controversy.
Respondent Secretary of Labor resolved the controversy in which the parties were
ordered to modify the fourth and fifth years of their CBA in accordance with the
dispositions she found just and equitable and the charge of unfair labor practice was
dismissed for lack of merit.
Petitioner imputes grave abuse of discretion on respondent Secretary of Labor for
holding that it failed to accord due process to the dismissed employees; in not applying
to the letter the ruling in Wenphil Corp. v. NLRC and, in awarding retirement benefits
beyond those granted by R.A. 7641
1st ISSUE: WON the implementation by petitioner of its redundancy program was
inconsistent with established principles of procedural due process. YES
HELD: Petitioner's violation of due process consists in its failure to apprise respondent
Union of any fair and reasonable criteria for implementation of its redundancy program.
In Asiaworld we laid down the principle that in selecting employees to be dismissed a
fair and reasonable criteria must be used, such as but not limited to: (a) less preferred
status (e.g., temporary employee), (b) efficiency and (c) seniority. Although the case of
Asiaworld dealt with retrenchment, still the principle is applicable to the present case
because in effecting the dismissals petitioner had to select from among its employees.
As has been made clear, even this Office recognized that an authorized cause for
dismissal did exist; what it could not countenance is the means employed by the
Company in making the cause effective. But no matter what kind of justification the
Company presents now, this has become moot, academic and irrelevant. The same
should have been communicated to the affected employees prior to or simultaneously
with the implementation of the redundancy, or at the very least, before the assailed
order was rendered.

In any event, the explanation being advanced by the Company now purportedly based
on areas of assignment loses significance from the more compelling viewpoint of
efficiency and seniority. For instance, during the period covered by the Companys own
time and motion analysis, Rogelio Varona delivered 96 messages but was dismissed;
Ressurecion Bordeos delivered only an average of 75 but was retained. In terms of
seniority, the Company itself states the Ms. Bordeos holds the same position/area as
Rogelio Varona, however, she was retained because she is more senior than the latter.
The Company should look at its own evidence again. Bordeos had only 16 years of
service. Varona had 19, Neves 18, and Valle, Basig and Santos 17, yet all five were
dismissed.
One should also consider that the redundancy was implemented at the height of
bargaining negotiations. The bargaining process could have been the best opportunity
for the Company to apprise the Union of the necessity for redundancy. For unknown
reasons, the Company did not take an advantage of it. Intended or not, the redundancy
reinforced the conditions for a deadlock, giving the Union members the impression that
it was being used by the Company to obtain a bargaining leverage.

2nd ISSUE: WON the Secretary of Justice erred in failing to apply te Whenpil ruling?
HELD: NO. The case is explicit that the measure of the award depends on the facts of
each case and the gravity of the omission committed by the employer. In fact, in the
recent case of Reta v. NLRC, the Court saw fit to impose P10,000.00 as penalty for the
employers failure to comply with the due process requirement. The ratiocination of
respondent Secretary of Labor should have put petitioners argument at rest
x x x x Wenphil, however, simply provides the authority to impose the indemnity; it is not
meant to be definitive as to the amount of indemnity applicable in all cases, this being
dependent on the particular circumstances of a case. Clearly, there is a recognition that
the amount of indemnity to be awarded is subject to the discretion of the agency making
the award, considering all attendant circumstances.

***3rd ISSUE:WON the retirement benefits granted by respondent Secretary of Labor

are in excess of what is required of it under the law and what the Union demands?
HELD: NO. R.A. 7641 grants to the employee retirement pay equivalent to 21.82 days
per year of service only but respondent Secretary of Labor granted the equivalent of
22.5 days. To this, 6 more days were granted for compulsory retirement and 3 days for
optional retirement. The existing provisions of the CBA, the respective proposals of the
parties, and the award of respondent Secretary of Labor are reproduced hereunder
EXISTING PROVISIONS OF THE CBA
a. Normal Retirement
compulsory upon reaching 60 years of age or after 35 years of continuous service,
whichever comes first, provided that those who reach 55 or have 10 years of
uninterrupted service may be retired at employees or Compulsory option.
PETITIONER'S PROPOSAL
a. Normal Retirement
60 years old R.A. 7641
b. Optional Retirement
55 years old or 10 years of continuous service months basic salary for every year of
continuous service plus 1 day equivalent pay
UNIONS PROPOSAL
a. Normal Retirement
150 % of basic salary
b. Optional Retirement
50 % of basic salary commencing in the 5th year of service
SECRETARYS AWARD
a. Compulsory Retirement
An employee shall be compulsory retired upon reaching the age of sixty 60, or after 35
years of continuous service, whichever comes first.
An employee shall be entitled to a retirement benefit of month salary plus 6 days
multiplied by the number of years in service.
b. Optional Retirement
At his option, an employee may retire upon reaching the age of 55 or more if he has
served for at least 5 years;
Provided, however, that any employee who is under 55 years old may retire if he has
rendered at least 10 years of continuous service.
Such an employee shall be entitled to a retirement benefit of month salary plus 3 days
multiplied by the number of years in service.
For purposes of computing compulsory sand optional retirement benefits and to align
the current retirement plan with the minimum standards of Art. 287 of the Labor Code,
as amended by R.A. 7641, and Sec. 5 (5.2) of its implementing rules, 1/2 month salary
means 22.5 days salary, exclusive of leave conversion benefits.
Article 287 of the Labor Code, as amended by R.A. 7641, provides
Art. 287. 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 existing laws and any collective bargaining agreement
and other agreements: provided, however, That an employees 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 plan providing for retirement benefits
of employees in the establishment, an employee upon reaching the age of 60 years or
more, but not beyond 65 years which is hereby declared the compulsory retirement age,
who has served at least 5 years in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least 1/2 month salary for every year of
service, a fraction of at least 6 months being considered as one whole year.
Unless the parties provide for broader inclusions, the term 1/2 month salary shall mean
15 days plus 1/12 of the 13th month pay and the cash equivalent of not more than 5
days of service incentive leaves.
The records fail to disclose that petitioner bothered to inform the Court how it arrived at
21.82 days as basis in the computation of the retirement pay. Anyway, it is clear in the
law that the term 1/2 month salary means 22.5 days: 15 days plus 2.5 days
representing 1/12 of the 13th month pay plus 5 days of service incentive leave. In this
regard, there is no reason for petitioner to complain that the retirement benefits granted
by respondent Secretary of Labor exceeded the requirements of law.
With respect to the additional 6 days for compulsory retirement and 3 days for optional
retirement, these may appear in excess of the requirements of the law and the demand
of respondent Union. Yet, it should be noted that the law merely establishes the
minimum retirement benefits as it recognizes that an employee may receive more under
existing laws and any CBA or other agreements. Besides, respondent Secretary of
Labor had to break the bargaining deadlock. After taking into account all the
circumstances, public respondent found it expedient to strike a reasonable middle
ground between the parties respective positions. Unless there are cogent reasons, and
we do not find any, this Court will not alter, modify or reverse the factual findings of the
Secretary of Labor because, by reason of her official position, she is considered to have
acquired expertise as her jurisdiction is confined to specific matters.

12) R & E TRANSPORT, INC., and HONORIO ENRIQUEZ, petitioners, vs. AVELINA P.
LATAG, representing her deceased husband, PEDRO M. LATAG, respondents.
[G.R. No. 155214. February 13, 2004]

FACTS: Pedro Latag was a regular employee of La Mallorca Taxi since 1961. When La
Mallorca ceased from business operations, he transferred to [petitioner] R & E
Transport, Inc. He was receiving an average daily salary of P500.00 as a taxi driver.
Latag got sick in January 1995 and he was granted partial disability benefits. When he
recovered, he reported for work in September 1998 but was no longer allowed to
continue working on account of his old age.
Latag filed a case for payment of his retirement pay before the NLRC. Latag however
died on April 30, 1999. Subsequently, his wife, Avelina Latag, substituted him.
Labor Arbiter: on January 10, 2000, ordered petitioner to pay retirement pay on the
amount of P277, 500
On January 22, 2000, the wife was offered the amount of P38, 000 which she accepted
and she signed an already prepared quitclaim and release and a joint motion to dismiss
the case.
On January 24, 2000, petitioners filed the quitclaim and motion to dismiss. The labor
arbiter did not dismiss the case. The NLRC dismissed their appeal for failure to file a
bond. The CA ruled that the LA decision had already become final and executory.
1st ISSUE: What is the number of creditable years of service for Retirement Benefits?
HELD: 14 YEARS.
According to the findings of the LA and CA, the 23 years of employment of Pedro with
La Mallorca Taxi must be added to his 14 years with R & E Transport, Inc., for a total of
37 years. On the other, we also have the findings of the NLRC that Pedro must be
credited only with his service to R & E Transport, Inc., because the evidence shows that
the aforementioned companies are two different entities.
After a careful and painstaking review of the evidence on record, we support the NLRCs
findings. The labor arbiters conclusion -- that Mallorca Taxi and R & E Transport, Inc.,
are one and the same entity -- is negated by the documentary evidence presented by
petitioners. Their evidence sufficiently shows the following facts: 1) R & E Transport,
Inc., was established only in 1978; 2) Honorio Enriquez, its president, was not a
stockholder of La Mallorca Taxi; and 3) none of the stockholders of the latter company
hold stocks in the former.
While Latag claims that he worked as taxi driver since March 1961 since the days of the
La Mallorca Taxi, which was later renamed R & E Transport, Inc., [petitioners] limit the
employment period to 14 years.
In resolving this matter, the SC took note of the ID of Latag as well as his SSS doc
showing tge date of his initial coverage.
Furthermore, basic is the rule that the corporate veil may be pierced only if it becomes a
shield for fraud, illegality or inequity committed against a third person.
Respondent has not shown by competent evidence that one taxi company had stock
control and complete domination over the other or vice versa. In fact, no evidence was
presented to show the alleged renaming of La Mallorca Taxi to R & E Transport, Inc.
The seven-year gap between the time the former closed shop and the date when the
latter came into being also casts doubt on any alleged intention of petitioners to commit
a wrong or to violate a statutory duty. Hence, the basis for computing retirement pay
should not be 37 years as held by the CA, but only for 17 years.

2nd ISSUE: What is the amount of retirement pay due?

HELD:P105,000 less the P38,850 which has already been received by respondent.
Art. 287. Retirement. -
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 sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in 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 at least six (6) months being considered as one
whole year.
Unless the parties provide for broader inclusions, the term one half-month salary shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves.
xxxxxxxxx
Since Pedro was paid according to the boundary system, he is not entitled to the 13th
month 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 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 five hundred pesos (P500)
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.
3rd ISSUE: WON the quitclaim is valid?
HELD: The appellate court committed no error when it ruled that the document was
invalid and could not bar her from demanding the benefits legally due her husband. This
is not say that all quitclaims are invalid per se. Courts, however, are wary of schemes
that frustrate workers rights and benefits, and look with disfavor upon quitclaims and
waivers that bargain these away.
Courts have stepped in to annul questionable transactions, especially where there is
clear proof that a waiver, for instance, was wangled from an unsuspecting or a gullible
person; or where the agreement or settlement was unconscionable on its face. A
quitclaim is ineffective in barring recovery of the full measure of a workers rights, and
the acceptance of benefits therefrom does not amount to estoppel. Moreover, a
quitclaim in which the consideration is scandalously low and inequitable cannot be an
obstacle to the pursuit of a workers legitimate claim.

13) UNIVERSITY OF THE EAST vs. HON. MINISTER OF LABOR AND U.E. FACULTY
ASSOCIATION

FACTS: The president of the UE announced the phase-out of the College of Secretarial
Education and the High School Department respectively on the grounds of lack of
economic viability and financial losses. The respondent UE Faculty Association
opposed the phase-out, contending that such action contravened the law because it
constitutes union busting. The private respondent filed a notice of strike with the Bureau
of Labor Relations (BLR). BLR conducted several conciliation proceedings but when no
amicable settlement was reached, the respondent Minister issued an order assuming
jurisdiction over the case and directing the BLR to receive evidence in connection with
the dispute.

Respondent Minister of Labor ruled that the phase-out of the two departments was
arbitrary and ordered UE to pay all affected faculty members of the College Secretarial
Education and the High School Department a separation pay. In addition to the
termination pay, the University is likewise directed to pay retirement benefits to all
affected faculty members who, in accordance with the collective bargaining agreement,
are retireable prior to or at the time of the phase-out.

ISSUE: Whether or not the respondent Minister of Labor and Employment committed
grave abuse of discretion amounting to lack of jurisdiction in awarding both retirement
benefits and separation pay to the faculty members affected by the phase-out.

RULING: NO. We rule for the respondents. If there is no provision contained in the
collective bargaining agreement to the effect that benefits received under the
Termination Pay Law shall preclude the employee from receiving other benefits from the
agreement, then said employee is entitled to the benefits embodied in the agreement in
addition to whatever benefits are mandated by statute. In the case at bar, there is no
such provision. We cannot presume that it forms an implicit part of either the CBA or the
law. Separation pay arising from a forced termination of employment and benefits given
as a contractual right due to many years of faithful service are not necessarily
antagonistic to each other, especially where there are strong equitable considerations
as in this case. Article VII-8.2 of the CBA provided:

Art. VIII-8.2. In case of unusual circumstances, such as decrease in enrollment,

or the closure of any College or Department of the University, etc., which may
warrant the reduction of the number of faculty members in any rank, faculty
members whose services are terminated shall be granted the retirement benefits,
if they are entitled thereto, provided that the services of those with less years of
service shall be terminated first. Those who have not yet met the requirements
for retirement as to length of service will also be considered as retired and will be
given the retirement pay provided in the Rules on retirement of the University
based on the actual length of their services. This retirement privilege, however,
shall not apply to faculty members who may be transferred from one College or
Department to another of the University.

Clearly, the only situation contemplated in the CBA wherein an employee shall be
precluded from receiving retirement benefits is when said employee is not separated
from service but transferred instead from one college or department to another. There is
no provision to the effect that teachers who are forcibly dismissed are not entitled to
retirement benefits if the MOLE awards them separation pay. Furthermore, since the
above provision has become in effect part of the petitioner's policy, the same should be
enforced separately from the provisions of the Termination Pay Law.

The case of Soberano v. Clave, supra, cited by herein petitioner does not apply to the
case at bar. In Soberano, the employees concerned either voluntarily retired or were
retired upon reaching the age of sixty pursuant to their collective bargaining agreement.
We, thus, ruled that voluntary or compulsory retirement under such an agreement
cannot in any sense be deemed a dismissal without cause as to justify the application of
the Termination Pay Law. In the present case, the herein faculty members were
"retired" or considered "as retired" not because of the mutual agreement of the
employer and employee pursuant to the collective bargaining agreement but against the
employees' will and over their vehement charges of discrimination. It was the unilateral
act of the employer, petitioner herein, which "retired" then because they were supposed
to be responsible for the university' continued hemorrhaging. In the former case, the
employees voluntarily retired with benefits while in the latter, the faculty members were
actually dismissed against their will and on the basis of unproved causes. Both law and
equity are on the side of the teachers.
14) CONRADO M. AQUINO, NAPOLEON B. AROMIN, ROBERTO A. GASPAN and
NICARDO P. BLANQUISCO, vs. NATIONAL LABOR RELATIONS COMMISSION AND
OTIS ELEVATOR COMPANY

FACTS: The petitioners were employees of private respondent Otis Elevator Company
when they were informed of the termination of their employment in line with the need of
the company "to streamline its operations, consolidate certain functions, reduce its
manpower and cut non-essential spending."

Accordingly, petitioners were paid their separation pay, based on Section 4, Article VII
of the Collective Bargaining Agreement between the company and its employees
providing thus:

All employees in the bargaining unit separated without cause shall be granted
separation pay of not less than one (1) month's latest basic rate for every year of
service subject to the existing provisions of the Retirement Plan.

In justifying their subsequent demand for retirement benefits before the Labor Arbiter,
the petitioners invoked Section 1, Article XIV, of the CBA in relation to Section 5.2,
Article V, of the company's Retirement Plan, which provides:

The COMPANY shall maintain the present group retirement plan which is
attached hereto as Annex "A" and made an integral part of this contract. (Sec. 1,
Art. XIV).

xxx xxx xxx

5.2. A Participant who is terminated from employment and who has rendered at
least ten (10) years of service shall be entitled to receive in lump sum all or a
portion of his accrued benefit credits as of his date of termination

The Labor Arbiter ruled in favor of the petitioners mainly on the ground that the
company was estopped from withholding retirement benefits from them after having
granted similar benefits to the employees earlier mentioned. In reversing the appealed
decision, the NLRC declared that the case cited by the petitioners was exceptional and
could not be considered a precedent.

ISSUE: Having received the separation pay, were the petitioners still entitled to the
retirement benefits?

RULING: Yes. We have carefully examined the record, and particularly the Collective
Bargaining Agreement and the Retirement Plan, and have found no specific prohibition
against the payment of both benefits to the employee.

This is not to say that one whose services are terminated not only because he has
retired but for another cause resulting in retirement is always entitled to both separation
pay and retirement benefits. It should be obvious that if, say, an employee is dismissed
for dishonesty, he is not entitled to separation pay or, for that matter, even retirement
benefits. But in the case before us, the petitioners have not been separated for cause,
in the sense that they have committed an offense warranting their removal. They were
separated for reasons not imputable to them, as the letter above quoted categorically
declared:

Finally, we want to assure you that your retrenchment is through no fault of your
own but mainly due to prevention of further losses. In behalf of the Company, we
express our sincere appreciation for your services and loyalty and wish you every
success in your future undertakings.

In arriving at our conclusion, we are guided by the principle that any doubt concerning
the rights of labor should be resolved in its favor, pursuant to the social justice policy.
The Court feels that if the private respondent really intended to make the separation pay
and the retirement benefits mutually exclusive, it should have sought inclusion of the
corresponding provision in the Retirement Plan and the Collective Bargaining
Agreement so as to remove all possible ambiguity regarding this matter.

We realize that the retirement benefits of the petitioners come up to a substantial figure,
considering their respective lengths of service with the company. These benefits, added
to the separation pay they have already received, make up a tidy sum indeed. The
point, however, is that the petitioners are entitled to this amount under the provisions of
the CBA and the Retirement Plan freely entered into by the parties. These instruments
are binding agreements, not being contrary to law, morals, good customs, public order
or public policy, and must therefore be upheld.